While legal opinions continue to differ as to whether or not Twitter was an appropriate place to announce taking Tesla private, the biggest concern aired so far about Elon Musk’s bombshell announcement last week that he could take the company out of the public markets were the two words at the end of the tweet: “Funding secured.”
The reason for this is that if funding were not actually secured, he could potentially be tried for securities fraud.
However, yesterday the Tesla CEO issued a blog post which suggests that this was no bluff. Musk says that on July 31 he met with the managing director of Saudi Arabia’s sovereign wealth fund (this appears to be Yasir bin Othman Al-Rumayyan, the CEO of the Public Investment Fund, although Musk did not name him), who indicated that he was ready and eager to take Tesla private.
This is after the fund acquired a 5% stake of Tesla’s stock. Musk further revealed that this fund has approached him multiple times over the past few years offering to take Tesla private.
“I left the July 31st meeting with no question that a deal with the Saudi sovereign fund could be closed, and that it was just a matter of getting the process moving,” notes Musk in the blog post. “Obviously, the Saudi sovereign fund has more than enough capital needed to execute on such a transaction.”
Tesla appears to be moving forward on the plan, identifying Silver Lake and Goldman Sachs as financial advisors, as well as two law firms as legal advisors. Tesla has additionally formed a special committee of three independent directors to evaluate any transactions to take the company private.
Musk has stated via Twitter that the only remaining step is to secure shareholder approval, and has expressed the hope that all existing shareholders will stay with the company.
Investor support is confirmed. Only reason why this is not certain is that it’s contingent on a shareholder vote. https://t.co/bIH4Td5fED
— Elon Musk (@elonmusk) August 7, 2018