Tesla board members study possibility of taking company private

Members of Tesla Inc.’s board of directors confirmed Wednesday they are evaluating Elon Musk’s plan to take the electric car company private, a plan the founder, chief executive and chairman announced Tuesday in a tweet.

In a statement Wednesday, six board members — all of Tesla’s directors except Musk, his cousin Kimball Musk and Steve Jurvetson, who is on a leave of absence amid sexual harassment allegations at another company — said Musk approached the board last week to discuss going private, a conversation that included how Musk might finance such a transaction.

“This included discussion as to how being private could better serve Tesla’s long-term interests, and also addressed the funding for this to occur,” directors said in Wednesday’s statement. “The board has met several times over the last week and is taking the appropriate next steps to evaluate this.”

Musk not only said he might take the company private but also suggested a price for such a transaction: $420 a share, valuing the Palo Alto, Calif., automaker at more than $70 billion. Musk is the company’s largest shareholder, with a stake of about 20 percent, but he might have to come up with more than $50 billion to close a deal at that price.

Though it wasn’t clear whether Musk’s tweet was serious, Tesla shares jumped on the news, climbing 11 percent Tuesday to $379.57, a price that suggests investors believe a deal at Musk’s tweeted price is possible but not a sure thing.

Going private could be advantageous for Tesla, which continues to burn through cash and has struggled to meet production goals for its Model 3 sedan.

As a public company, Tesla’s books are public, giving investors and Musk’s critics a front-row seat to the company’s financial troubles.

If Musk takes the company private, those books would be closed.