Tesla's board seeking more information on Musk's financing plan

Tesla's board seeking more information on Musk's financing plan

The hedge funds betting on a slump in the Tesla share price are holding their nerve amid mounting scepticism that Elon Musk can muster the $82 billion he will need to take it private.

Following Elon Musk's recent tweets in which he claimed that he has the funding to take Tesla private and was seriously considering the move if Tesla's stock price reaches $420, analysts have been left confused and unsure of Musk's plans.

The second was that Tesla's stock price spiked almost 40 dollars a share, from $342 to $380, which led to trading being halted on the stock.

Tesla shares fell 2.4 per cent to US$370.34 on Wednesday after closing up 11 per cent on Tuesday. Tesla, which hasn't been accused of wrongdoing, didn't immediately respond to a request for comment.

"Who gives USA $30 to $50 billion to repurchase the shares?"

Over the past few weeks and months, Tesla and more specifically CEO of Tesla Elon Musk have been in the news quite a fair bit, and a good amount of that press hasn't been exactly positive.

The agreement would be the largest purchase based on debt of all time, surpassing the record of United States $ 45 billion established by the firm of Texas Energy Future Holdings. Tesla could use a similar structure to go private without requiring stockholders to cash out, said Sohail Prasad, founder of San Francisco-based Equidate, which helps closely held tech firms hold similar share sales. But in his Tuesday letter to employees, Musk signaled that he has a different vision for Tesla.

Tesla's board seeking more information on Musk's financing plan

CNBC's report came several days after Musk stunned financial markets by revealing on Twitter that he is considering taking the automaker private. Bloomberg News, which first reported on that meeting, said the talks failed to progress due to disagreements over ownership.

"I'm trying to accomplish an outcome where Tesla can operate at its best, free from as much distraction and short-term thinking as possible, and where there is as little change for all of our investors, including all of our employees, as possible", he said.

Mr Musk said in a tweet on Tuesday that he had secured financing for the deal, but he did not publicly provide further details.

Some on Wall Street shared that view. And if I learned one thing in my 13 years as a public company CEO, it is that a peer group comparable company analysis is the oxygen that mutual fund managers breathe. Tesla could seek SEC approval to make a tender offer exclusively to its small shareholders while retaining larger institutional owners, John Coffee, a professor of law at Columbia University, said in an interview.

Going private is one way to avoid scrutiny by the public market as Musk and the company tackle those challenges.

"He may be okay if the world knows his profit and loss, as long as he doesn't have to deal with the short-sellers and the wild fluctuations in his stock", said Jurasic. The three-sentence statement that six board members issued the next day failed to address major questions including how the deal would be funded and in what way it could be structured. I mean, if you are an institutional investor with hundreds of millions invested in Tesla, who, other than Musk, could you trust to speak authoritatively on behalf of the company?

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