Elon Musk hires Morgan Stanley to help take Tesla Inc. private
SANFRANCISCO/NEWYORK:ELON Musk has hired Morgan Stanley to assist him in his potential bid to take Tesla Inc. private, according to a person familiar with the matter.
Morgan Stanley is advising Musk, not the company, its board or a special board committee formed to to evaluate a potential take-private proposal, said the person, who asked not to be identified because the matter is private. The bank suspended coverage of the stock on Tuesday without explanation.
Musk, 47, shocked the financial world August 7 when the chief executive officer tweeted that he wanted to take the electric-car maker private and had “funding secured.” In a blog post, he later indicated that no such financing deal had been closed. The tweet has drawn a subpoena from the Securities and Exchange Commission, according to a person familiar with the matter.
By adding Morgan Stanley to Goldman Sachs Group Inc., Musk has tied up the top two merger advisers in the US this year. Both banks have been lead underwriters on most of the company’s stock and convertible debt offerings.
Morgan Stanley is among Tesla’s 20 largest shareholders, with a 0.6% stake. Its Tesla analyst, Adam Jonas, has historically been one of the more bullish researchers of the stock.
If they succeed in taking Tesla private, the equity will become much more challenging for investors to buy or sell, said Jim Osman, CEO of The Edge Group, which analyses special situations.
“The hiring of Morgan Stanley and GS is unfortunate for investors wanting to take a long-term view of holding the stock,” he said. “Many funds and investors won’t be able to participate should the stock go private. Whilst we are a fan of Musk, GS and MS will have to think of something very creative to let the investors share in any future value creation.”
The Palo Alto, Californiabased automaker didn’t immediately respond to a request for comment.