What's Next for Tesla as a Public Company?

What's Next for Tesla as a Public Company?

What's Next for Tesla as a Public Company?

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 the blog post, published without the fanfare of his earlier tweets, Musk said it had become clear to him that, while "there was more than enough funding" to take Tesla private, doing so would estrange numerous company's existing shareholders (and most ardent supporters of the company). In a separate tweet, he wrote: "Investor support is confirmed".

A Tesla spokesman on Sunday also referred back to those previous comments. At the time Musk only said that the funding was secured.

Musk has stuck to his original statement that he believed a deal was possible, and one person familiar with the discussions told Reuters that Musk was serious about taking the carmaker private.

Surely, though, it wasn't just because people didn't like it that Musk reversed course. In a single tweet, Musk had people all over the world saying in dismay: Tesla is going private? How?


Analysts have suggested a capital raise may be required soon to boost investor confidence but investment bankers who are not working for the company said over the weekend it would also contradict Musk's promise that Tesla is adequately funded.

While the Saudis were open to making a significant investment in the effort as a way to help the kingdom hedge against oil and attract technology expertise to the region, the fund mainly was interested in a minority stake to limit its exposure to a single deal and save resources for other projects, the people said.

It remains unclear what Musk meant by "funding secured". As Musk admits: "Although the majority of shareholders I spoke to said they would remain with Tesla if we went private, the sentiment, in a nutshell, was 'please don't do this'". After consulting with Tesla's Board of Directors and "current shareholders, large and small", the post says, Musk decided it would be best to give privatization a rest.

"Eventually this will blow over, but it's going to take at least six months", analyst Gene Munster of Loup Ventures said by phone Saturday.

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