Investors share the pain of Musk's aborted Tesla bid

Investors share the pain of Musk's aborted Tesla bid

The Saudis were unhappy about Musk detailing his talks with the Kingdom's sovereign wealth fund in an August 13 blog post, where the CEO justified his earlier tweet about "funding secured" on their interest, the people said.

In a blog post late Friday, Musk said most of Tesla's shareholders expressed the belief that the company was better off staying public. A Tesla spokesman declined to comment.

Investors in Tesla's bonds and convertible debt had also already shown skepticism that the tens of billions of dollars needed for the buyout would materialize, unconvinced by Musk's tweet or subsequent blog post in which he could only make the case for going private and not list clear backing. And if Musk's tweets were to be believed, it was basically a done deal. Some analysts said the drama has damaged the credibility of both Musk and his board, and called for the company to bring in a top operations executive to help right the ship.

"Additionally, a number of institutional shareholders have explained that they have internal compliance issues that limit how much they can invest in a private company". Musk's plans for Tesla are reportedly being scrutinized by the SEC, especially in the "funding secured" part of his shock announcement on Twitter.

Well, turns out that deal was not exactly done, the funding far from secured.

In a long report about the Tesla board's deliberations over taking the company private, the Journal revealed that investment advisors from Goldman Sachs and Silver Lake had lined up $30 billion of financing for the privatization deal.

Tesla's board published a parallel letter saying they supported Musk in his decision to keep the company public.

One of the ideas that advisers discussed involved creating a private market for Tesla shares, similar to how the stock of SpaceX, Musk's rocket company, is traded among employees and other shareholders, the people said.

Lawsuits against Mr Musk, co-founder and chief executive of Tesla, "could linger for a year", Gene Munster, managing partner at Loup Ventures, a venture capital firm, said.

Such discussions are unlikely to be subject to legal privilege and the SEC could subpoena minutes of the meeting, he said.

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