Tesla shares dip after Elon Musk proposes going private

Source Getty

Source Getty

Six of Tesla's board members issued a statement Wednesday morning confirming that they have been in discussions with CEO Elon Musk about taking the company private.

"Having complex stakeholders is great", Farley said in response to a question about being public vs. private from FoxNews.com Automotive Editor Gary Gastelu at Ford's headquarters in Dearborn, Michigan. Musk's money-losing and cash-burning company is an unlikely candidate for debt investors to be willing to help go private.

"We've been in existence for over 100 years-we've always had complicated stakeholders - and that's what makes our company great and vibrant", he said.

"Distraction or not, the move feels right even if Musk is downplaying how supportive public markets have been". Musk has feuded publicly with regulators, critics, short sellers and reporters, and some analysts suggested that less transparency would be welcomed by Musk.

The most obvious equity partners for Musk would be a sovereign wealth fund such as Saudi Arabia's Public Investment Fund (PIF), which sources said on Tuesday had taken a stake of just below 5 percent in Tesla, or a major technology investment fund such as SoftBank Group Corp's Vision Fund, bankers said. The fund then reportedly proceeded to buy large amounts of Tesla stock on secondary markets, according to the Financial Times, and is now one of Tesla's eight biggest shareholders.

"I do not believe this is the appropriate way to suggest going private", Charles Elson, director of the John L Weinberg Center for Corporate Governance at the University of DE, told CNBC. Korus said he would need more details from Musk to judge whether a buyout offer would be practical and at what price it would be attractive. But I didn't walk away from it thinking, . "Either way, the future is very bright, and we'll keep fighting to achieve our mission".

The board had "met several times over the last week" to discuss going private, the statement said.

"Last week, Elon opened a discussion with the board about taking the company private", the board members wrote.

Two of the potential stumbling blocks to Musk's plan include the stock price premium not being enough to get the existing shareholders on board to support the sale and coming up short on the announced funding to complete the transition.

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