Tesla board endorses Musk’s plan to consider going private
The Tesla board of directors confirmed Wednesday that it may authorize a plan to turn the publicly traded automaker into a private company.
The announcement came less than a day after CEO Elon Musk stunned investors with a series of tweets revealing that he wants the company to go private.
The board said Musk launched a private discussion about the possibility last week.
“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,” six members of the board said in a statement. “The board has met several times over the last week and is taking the appropriate next steps to evaluate this.”
Members of the electric vehicle maker’s board signing the statement were Brad Buss, Robyn Denholm, Ira Ehrenpreis, Antonio Gracias, Linda Johnson Rice and James Murdoch.
Tesla board member Kimbal Musk, Elon’s brother, recused himself as a non-independent member. Tesla board member Steve Jurvetson is on leave from the board and did not sign the statement.
Mike Ramsey, an automotive analyst for Gartner, said it’s not surprising that the board is cooperating with Musk.
“In essence this board has been in lockstep with Elon for a long time,” Ramsey said in an email. “While there are a few ‘independent’ directors, many are long-time, close friends and early investors. I don’t anticipate that the board will push back against his wishes.”
Musk said in an email to Tesla employees Tuesday that he believes going private is “the best path forward.”
“As a public company, we are subject to wild swings in our stock price that can be a major distraction for everyone working at Tesla, all of whom are shareholders. Being public also subjects us to the quarterly earnings cycle that puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term,” he wrote.
“Finally, as the most shorted stock in the history of the stock market, being public means that there are large numbers of people who have the incentive to attack the company.”