World Economy
0

Tesla Board Questions Musk’s Go-Private Proposal

Tesla Board Questions Musk’s Go-Private ProposalTesla Board Questions Musk’s Go-Private Proposal

Tesla Inc’s board has not yet received a detailed financing plan from CEO Elon Musk, and is seeking more information about how he will take the US electric car maker private in a proposed deal worth $72 billion, people familiar with the matter said on Thursday.

While Tesla’s board has held multiple discussions about Musk’s proposal, which first became public on Tuesday, it has not yet received specific information on who will provide the funding, one of the sources said, Reuters reported.

Musk, a 47-year-old investor and engineer, stunned financial markets on Tuesday, when he revealed on Twitter he was considering a take-private deal for Tesla, an auto manufacturing pioneer that developed the world’s first ever premium all-electric sedan car.

The move came after months of Musk battling investors, journalists and analysts over whether Tesla could turn a profit and produce enough of the mass market model of its flagship electric car to meet demand.

Musk said in a tweet on Tuesday that he had secured financing for the deal, but he did not publicly provide further details.

Speculation has swirled among shareholders and investment bankers about who could fund a deal of that size, especially given that the company’s bonds are already rated junk by credit rating agencies.

The US Securities and Exchange Commission has contacted Tesla to ask about Musk’s assertion on Twitter that funding for his proposed deal was “secured”, the Wall Street Journal reported on Wednesday.

The revelation that the board is seeking more details from Musk could raise new questions about how he plans to finance the deal at his proposed price of $420 per share.

After jumping to close at $379.57 on Tuesday, Tesla shares have since fallen about 7% to end trading at $352.45 on Thursday.

Add new comment

Read our comment policy before posting your viewpoints

Financialtribune.com