Musk reveals Saudi fund would take Tesla private

DETROIT — Saudi Arabia’s sovereign wealth fund would be the main source of money for Tesla CEO Elon Musk’s grand plan to take the company private, but the deal isn’t done yet, Musk disclosed in a blog yesterday.

The fund approached Musk about going private multiple times during the past two years, and Musk says he left a July 31 meeting with no question that the deal could be closed. That’s why he tweeted on Aug. 7 that he had “funding secured” to take the company private.

It is that phrase that may lead to trouble for Musk.

If the tweet is deemed by regulators to be a factual statement, and it was taken as such by investors who drove shares up 11 percent on that day, Musk could be at risk for securities fraud if it wasn’t entirely true.

Already there are reports that the U.S. Securities and Exchange Commission is looking into Musk’s tweet.

Funding for the deal would come from the ultraconservative kingdom’s Public Investment Fund, one of the world’s largest sovereign wealth funds. Founded in 1971, the fund has some $250 billion in investments across the world, according to the Sovereign Wealth Fund Institute, based in Las Vegas. Its holdings include a $3.5 billion stake in the ridesharing app Uber.

A fund spokesman declined to comment last night in Riyadh.

Musk’s blog, posted before the markets opened yesterday, didn’t impress investors much. Shares gained 92 cents to close at $356.41.

Musk wrote that at the July 31 meeting, the fund’s managing director “strongly expressed his support” for taking the electric car and solar panel maker private. “I understood from him that no other decision makers were needed and that they were eager to proceed,” Musk wrote in the blog.

But the deal appeared to be far from finished. Since the meeting, the men have continued discussions and the managing director has expressed support “subject to financial and other due diligence and their internal review process for obtaining approvals,” Musk wrote.

The wealth fund recently bought nearly 5 percent of Tesla’s shares.