Tesla board confirms Elon Musk's buyout plans

Tesla board confirms Elon Musk's buyout plans

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 directors Brad Buss, Robyn Denholm, Ira Ehrenpreis, Antonio Gracias, Linda Johnson Rice and James Murdoch said: "Last week, Elon opened a discussion with the board about taking the company private".

The statement says Musk "addressed the funding for this to occur" in the conversations. The board, they said, had met "several times" over the last week and was actively working to "evaluate" the proposal.

The issue of share accumulation by outsiders emerged only recently as reports that Saudi Arabia's public investment fund had built up a stake from 3 to 5 percent after its offers of purchase of new shares in Tesla were spurned by the company.

Tesla CEO Elon Musk tweeted Tuesday that he's is mulling taking Tesla private at US$420 a share.

Tesla stock opened at $369.09 on Wednesday, sliding almost 3 percent from its Tuesday closing price of $379.57. And as the stock price has climbed this year, so too have the bets against it.

In subsequent tweets, Mr. Musk said that going private would end "negative propaganda" from short sellers. The company declined to comment beyond pointing to an all-employee email sent Tuesday by Musk.

Subtropical storm Debby forms in the deep Atlantic
A tropical storm watch means damaging winds , damaging surf and flooding rains are possible anytime within the next 48 hours. Meanwhile, Hurricane Hector is also swirling in the Pacific as an impressively organized Category 4 hurricane.

"Just because" Musk wants it at $420 "doesn't mean that there aren't other people who might be willing to come in with another transaction that would be more beneficial to shareholders", Pitt said.

The statement by the board, published by NASDAQ, confirms that the proposal is under serious consideration.

China's Tencent Holdings Ltd, which took a 5-percent stake in Tesla previous year, could also be a possible partner.

The move to take the company public would remove Musk, who himself has a 20 percent stake, from the public arena - and contentious criticism.

While Tesla's board of directors might approve Musk's idea of taking the automaker private, current shareholders have the final say.

Of course, now that Musk has stated that he has secured the funds to do so, he may need to carry it out lest he face accusations of stock manipulation, according to FT, as the mere announcement of having the funds to take the company private caused Tesla stock to rise by 11 percent. They did not include Mr Musk, his brother Kimbal Musk, and Steve Jurvetson, a venture capitalist.

Related Articles