Elon Musk says Saudi Arabia could finance bid to take Tesla private

Elon Musk says Saudi Arabia could finance bid to take Tesla private

Elon Musk said Monday that a meeting last month with Saudi Arabia's sovereign wealth fund prompted his desire to take Tesla private.

Two investors have filed a suit against Tesla CEO Elon Musk and the electric auto company after he tweeted he wanted to take the firm private, causing the share price to inflate and short-selling investors to lose millions.

"I left the July 31st meeting with no question that a deal with the Saudi sovereign fund could be closed", Musk said.

Despite tweeting on Tuesday that funding had been secured, Musk's newest blog post appears to contradict that claim. "I understood from him that no other decision makers were needed and that they were eager to proceed", Musk wrote in the blog. The fund has recently built a stake just shy of 5 percent in Tesla. The timeline begins on August 2, when Musk told the board that he wanted to take Tesla private. 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 transaction would be structured with equity so as not to burden Tesla with crushing debt, Musk added.

The lawsuits filed by Isaacs and William Chamberlain said Musk's and Tesla's conduct artificially inflated Tesla's stock price and violated federal securities laws. The 47-year-old, who also serves as chairman of Tesla, would prefer to amass a group of investors who could each contribute part of the funds because he wants to avoid having one or two large new stakeholders in the company, separate people familiar with the details said Friday.

The SEC has asked Tesla if Musk had facts to back up his claim on Twitter that funding is "secured", people familiar with the regulator's inquiry told the Wall Street Journal last week. Once those discussions are complete, Musk will bring a proposal to Tesla's board.

As a result, Tesla shares jumped 11 per cent, causing so-called short-sellers who have been betting on the stock crashing for years to lose millions.

Musk says that means reports suggesting Tesla would need more than $70 billion to go private "dramatically overstate the actual capital raise needed". I will now continue to talk with investors, and I have engaged advisors to investigate a range of potential structures and options.

The tweets are aimed at "shorts", or investors who borrowed shares of Tesla and immediately sold them with the hope that Tesla's share price would fall. If the board approves the deal, then it would go to a vote of shareholders.

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