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Tesla board confirms it will consider Musk's privatization plan

Tesla board confirms it will consider Musk's privatization plan

The brief statement by six of the nine board directors said that the discussions about taking the company private had also "addressed the funding for this to occur".

On Wednesday morning, multiple members of Tesla's board of directors signed a statement that confirmed Musk was serious about taking Tesla private. The board has met several times over the last week and is taking the appropriate next steps to evaluate.

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's tweets caused a flurry of activity in financial markets.

Musk, who has had a contentious relationship with Wall Street analysts, and short-sellers who bet against his stock, tweeted on Tuesday that he could take the company private at $420 per share-but Farley said a company doesn't necessarily run better if it's out of the public eye.

Tesla shares fell as much as 3.4 per cent to US$366.52 before the start of regular trading, though they pared declines after the board statement.




"Who gives $30 to $50 billion to buy back the shares?", asked NordLB analyst Frank Schwope.

"It's very hard to put leverage on this company", due to its negative cash flow and "operational issues", Scott said Wednesday on Bloomberg Television. He said funding was "secured", without elaborating.

In that time, Tesla short-sellers - Musk's sworn enemies - may have lost more than $800m, according to estimates from financial-technology firm S3 Partners, while his 20% stake reportedly gained $851m. That last part is important, because Tesla's going to need a lot of it. The talks covered both the reasons for doing so - which Musk also laid out in an email to employees that was subsequently posted online - as well as the funding.

"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.

Former SEC chair Harvey Pitt told CNBC that while the U.S. stock market regulator permits executives of publicly listed companies to use social media to make statements about their businesses, Musk's tweet was still "highly unprecedented".