Tesla board confirms Elon Musk's buyout plans

Danny Moloshok  Reuters

Danny Moloshok Reuters

In the last week, Tesla's board has met "several times" to discuss Musk's proposal and "is taking the appropriate next steps to evaluate this".

"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. Shares rocketed up 11 percent after Musk's grand reveal Tuesday, with some expecting they would hit $420 - the price Musk had promised shareholders would receive once the company had finalized its go-private transformation.

"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.

"Basically, 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".

Some on Wall Street shared that view.

Musk is already CEO of another private company: SpaceX.

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The issue of share accumulation by outsiders emerged only recently as reports that Saudi Arabia's public investment fund had built up a stake from 3 to 5 percent after its offers of purchase of new shares in Tesla were spurned by the company.

Musk owns an nearly 20 per cent stake in Tesla, meaning he'd still need roughly $70 billion in financing to take Tesla private. "How could Tesla possibly fund such a large transaction?" He now owns 20 percent of the company, so more than $60 billion is needed to buy the business from public shareholders. But going private could also complicate Tesla's effort to build a mainstream electric auto by removing the easy access to capital the Wall Street darling has enjoyed. The move would also foreclose the option of selling more stock to raise cash every year, a move which Musk has disfavored in recent years.

Despite the board's statement, it was clear early Wednesday that the euphoria had worn off over Musk's bold claim that he had the funding secured to take the electric-car maker private.

Any buy-out would require a shareholder vote.

Tesla's shares were down less than one per cent at $376.31 U.S. in morning trading on Wednesday after closing up 11 per cent at $379.57 USA on Tuesday.

Harvey Pitt, a former chair of the Securities and Exchange Commission, said Musk's asserting a final sale price and that funding was "secured" opened him to potential charges of stock manipulation or securities fraud.

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