Tech: Elon Musk’s Tesla buyout plan
Elon Musk wants to take Tesla private, said Arash Massoudi in The Financial Times. The CEO made the declaration via tweet this week, signaling a move that could “bring an end to his fractious relationship with Wall Street.” Musk has warred with short sellers who believe Tesla’s shares are overvalued. His statement followed news that Saudi Arabia’s sovereign wealth fund had taken a $2 billion stake in Tesla. The “unorthodox” Twitter announcement “left investors guessing about how seriously to take the claims.” Musk later told employees going private would free Tesla from “wild swings in our stock price that can be a major distraction.”
Bankers and private-equity investors have already “cast doubt on Elon Musk’s ability to pull off a buyout,” said Miriam Gottfried and Cara Lombardo in The Wall Street Journal. Musk said in the deal he envisions Tesla’s current investors could either sell their stakes or remain invested in Tesla through a special fund. But details about how he would fund the deal or when he would make the buyout offer are scant. And deals by “big, anchor investors” to take companies private and protect them from “the glare of public ownership” often have to surmount opposition from shareholders and scrutiny from regulators.