Tesla directors confirm talks with Musk over plans to delist

TESLA directors have confirmed Elon Musk’s plans to delist Tesla in a $420-ashare buyout – with speculation shares in the electric car company he cofounded could climb far above the mooted price.

Six board members said they had discussed Tesla being taken private with Mr Musk and held several meetings about a potential $72bn (£56bn) move.

In a statement, directors including 21st Century Fox boss James Murdoch said: “Last week, Elon opened a discussion with the board about taking the company private. This included discussion as to how being private could better serve Tesla’s long-term interests, and addressed the funding for this. The board has met several times over the last week and is taking the appropriate next steps to evaluate this.”

Billionaire Mr Musk sent Tesla shares surging on Tuesday when he tweeted he was “considering taking Tesla private at $420. Funding secured.” Tesla shares rose 11pc in that day’s trading, valuing the company at $64.7bn. Tesla shares edged back 2.4pc to $370.34 yesterday.

Their failure to meet the $420 indicates market uncertainty over whether the buyout will happen. However, some believe investors will demand a higher price, a move that could send Tesla shares soaring.

This is because of the huge level of “shorting” in Tesla stock, where speculators bet that the shares will fall. However, if they rise, then they are forced to scramble to buy shares to control their losses, fuelling even bigger rises in the share price.

“We think some shareholders may demand a steeper premium,” said Baird analyst Ben Kallo.

Meanwhile, Wall Street’s Securities and Exchange Commission yesterday contacted Tesla to ask whether Mr Musk’s claims on Twitter were factual and why the news was not broken in a traditional regulatory filing, according to a report in The Wall Street Journal last night. The regulator declined to comment.