Elon Musk Talked With SoftBank About Tesla Investment in 2017

Elon Musk Talked With SoftBank About Tesla Investment in 2017

Elon Musk Talked With SoftBank About Tesla Investment in 2017

Tesla shares fell 2.4 percent to $370.34 on Wednesday after closing up 11 percent on Tuesday.

In a letter to shareholders after his tweet on Tuesday, Musk fleshed out his idea, suggesting they would get the option to sell their shares for $420 USA each or remain investors in a private Tesla, out of the glare of Wall Street and its need for quarterly results. Later in the day it became clear that Musk was in fact serious about the bid to take Tesla private when Tesla published a blog post in Musk's name addressed to all employees and when Musk tweeted that he had already lined up the funding for such a move.

Musk's plan to take Tesla private would give all shareholders the option to stay as investors in the now-private company or to sell their shares at $420 per share, which represents a premium of about 20 percent based on the stock price during the second quarter earnings call at the end of June.

Tesla Inc Chief Executive Officer Elon Musk'splan to take the electric auto maker private raised doubts among Wall Street analysts about the billionaire' s ability to gather enough financial backing to complete the deal.

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

Tesla's shares were down less than one per cent at $376.31 United States in morning trading on Wednesday after closing up 11 per cent at $379.57 U.S. on Tuesday. He now owns 20 percent of the company, so more than $60 billion is needed to buy the business from public shareholders.

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'Finally, as the most shorted stock in the history of the stock market, being public means that there are large numbers of people who have the incentive to attack the company.

If Musk didn't actually have financing secured when he said he did. oh boy.

FILE PHOTO: Elon Musk, founder, CEO and lead designer at SpaceX and co-founder of Tesla, speaks at the International Space Station Research and Development Conference in Washington, U.S., July 19, 2017.

"I suspect the corporate lawyers are scrambling right now and hoping the SEC doesn't go after him and the company, because it could be viewed as a statement from Tesla", Peter Henning, a professor at Wayne State University Law School specializing in securities law, explained to the Detroit Free Press regarding Musk's tweet on Tuesday.

But the board offered no further details of the proposal or its funding, sparking new questions about the feasibility of the master gambit Musk revealed in a surprise series of midday tweets on Tuesday.

China's Tencent Holdings Ltd, which took a 5-percent stake in Tesla past year, could also be a possible partner. Many initially thought it was Elon Musk's attempt at a bad joke about marijuana, because "420" has always been associated with pot. Tesla spokesmen didn't immediately respond to requests for comment on Wednesday. The move is estimated to require north of $50 billion to buy out the public shareholders.

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