Tesla board evaluating CEO's bid to take company private

Daniel Fowler
August 8, 2018

Tesla Inc said on Wednesday its board is evaluating chief executive Elon Musk's idea of taking the company private after he brought the matter up for discussion last week.

An acquisition of Palo Alto, California-based Tesla by overseas investors would likely trigger a national-security review by the Committee on Foreign Investment in the U.S. The panel, which has stepped up its scrutiny and blocked some deals lately, could impose conditions, including limits on control of the company and information sharing.

Musk is already CEO of another private company: SpaceX.

The statement, issued by six of Tesla's nine-member board, suggests Musk's controversial tweets, which led to the company's stock being suspended from trading for a time on Tuesday, were less spontaneous than originally believed and not designed simply to punish Tesla stock short-sellers. The company declined to comment beyond pointing to an all-employee email sent Tuesday by Musk.

Tesla Inc Chief Executive Officer Elon Musk'splan to take the electric vehicle maker private raised doubts among Wall Street analysts about the billionaire' s ability to gather enough financial backing to complete the deal. Shares rocketed up 11 percent after Musk's grand reveal Tuesday, with some expecting they would hit $420 - the price Musk had promised shareholders would receive once the company had finalized its go-private transformation.

Follow Tesla's stock price in real-time here.

Paul Manafort trial Day 7
Both Gates and Manafort were indicted last October by a federal grand jury on 12 charges, including conspiracy against the U.S. Asked if he got any personal benefit from Mr Manafort's falsified loan applications, Gates responded: "No, I did not".

Some on Wall Street shared that view. The fund then reportedly proceeded to buy large amounts of Tesla stock on secondary markets, according to the Financial Times, and is now one of Tesla's eight biggest shareholders. But going private could also complicate Tesla's effort to build a mainstream electric auto by removing the easy access to capital the Wall Street darling has enjoyed. But I didn't walk away from it thinking, .

Any buy-out would require a shareholder vote.

The key question following Musk's Tuesday tweet-storm was whether current investors, as represented by the board of directors, were interested in such a proposal.

Two of the potential stumbling blocks to Musk's plan include the stock price premium not being enough to get the existing shareholders on board to support the sale and coming up short on the announced funding to complete the transition.

Days after Tesla opened up the Model 3 configurator to all potential buyers, not just reservation holders who got a place in line over a year ago, uncomfortable math lingers over the automaker's.

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