Tesla board confirms Elon Musk's buyout plans

Tesla board confirms Elon Musk's buyout plans

Tesla board confirms Elon Musk's buyout plans

Ford Executive Vice President Jim Farley on the benefits of being a public company after Tesla CEO Elon Musk tweeted he is considering taking his company private.

The statement says Musk "addressed the funding for this to occur" in the conversations. The talks touched on taking Tesla private, but failed to progress due to disagreements over ownership. "I wanted to let you know my rationale for this, and why I think this is the best path forward", Musk wrote in a blog post. If not, it could amount to idle chatter, perhaps aimed at boosting the company's stock price. Being public also subjects us to the quarterly earnings cycle that puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long term.

In a letter here after his tweet on Tuesday, Musk fleshed out his idea, suggesting shareholders would get the option to sell their shares for $420 each or remain investors in a private Tesla, out of the glare of Wall Street and its need for positive quarterly results. The company declined to comment beyond pointing to an all-employee email sent Tuesday by Musk.

Musk tweeted on Tuesday that he had secured funding for the plan, but he has not provided details or evidence, and several securities attorneys told Reuters that Musk could face investor lawsuits if it was proven he did not have secure financing at the time of his tweet.

"Finally, this has nothing to do with accumulating control for myself". Musk owns about 20 percent of the Palo Alto, California, company's stock, so that likely would reduce the cost of the buyout.

Musk has promised a sustained net profit starting in the third quarter.

Names excluded from the board statement were Musk; his brother, Kimbal Musk; and Steve Jurvetson, a venture capitalist and early Tesla backer who's been on leave since past year. The company already has a $2 billion investment from Saudi Arabia's sovereign fund as well as Tencent, which took a 5 percent stake in 2017.

"Last week, Elon opened a discussion with the board about taking the company private", six directors on Tesla's nine-member board said in a statement. It was pretty quick and seemed to handle well enough.

Any buy-out would require a shareholder vote. "Either way, the future is very bright, and we'll keep fighting to achieve our mission". Tesla spokesmen didn't immediately respond to requests for comment on Wednesday.

"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 move is estimated to require north of $50 billion to buy out the public shareholders. He said funding was "secured", without elaborating.

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