WALL STREET TO MUSK: SHOW ME THE MONEY
Tesla CEO yet to reveal source of US$82b he needs to take company private
WALL Street and Washington have the same question for Elon Musk: Where’s the money? Two days after he vowed on Twitter that he had “funding secured” for a spectacular US$82 billion (RM334 billion) deal to take Tesla Inc private, he has offered no evidence to back up the statement.
No one has stepped forward publicly — or privately — to say they’re behind the plan.
People with or close to 15 financial institutions and technology firms said they weren’t aware of financing having been locked in before Musk’s tweet.
All of which could be problematic as the Securities and Exchange Commission (SEC) starts investigating the matter.
Regulators have asked the company if what Musk tweeted was factual and why such a disclosure was made via social media rather than in a filing, according to the Wall Street Journal, citing sources.
“When Musk tweeted this, was he saying this was something that was definitely going to happen? Something that might happen?” said Ira Matetsky, a partner at Ganfer & Shore in New York, outlining questions the SEC might ask.
Tesla closed down 2.4 per cent to US$370.34 on Wednesday — well below the US$420 at which Musk said shareholders would be bought out.
Musk’s personal stake in Tesla is almost 20 per cent, meaning he would need roughly US$70 billion to take it out of the market.
It was possible Musk could persuade some large institutional and strategic investors to either newly become or remain shareholders in the private company, which could reduce his funding needs, said Toni Sacconaghi, an analyst at Bernstein.
Meanwhile, Tesla’s board of directors said on Wednesday it would evaluate possibly taking the electric car maker private.
A statement from the Tesla board said directors had met “several times” to discuss the idea after Musk raised going private as a better solution for the carmaker’s long-term growth.
The board “is taking the appropriate next steps to evaluate this,” the statement added.