Elon Musk had been talking with Saudi Arabia for two years about going private with Tesla

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Nextbigfuture had speculated that the Saudi sovereign fund would be the source of funding when Elon Musk tweeted about going private with Tesla.

Nextbigfuture has been talking about the Sovereign Wealth funds mobilizing for technology and in particular technological singularity type companies and investments.

The Full Elon Musk Statement on Saudi Arabia and going private with Tesla

Update on Taking Tesla Private
Elon Musk August 13, 2018
As I announced last Tuesday, I’m considering taking Tesla private because I believe it could be good for our shareholders, enable Tesla to operate at its best, and advance our mission of accelerating the transition to sustainable energy. As I continue to consider this, I want to answer some of the questions that have been asked since last Tuesday.

What has happened so far?
On August 2nd, I notified the Tesla board that, in my personal capacity, I wanted to take Tesla private at $420 per share. This was a 20% premium over the ~$350 then current share price (which already reflected a ~16% increase in the price since just prior to announcing Q2 earnings on August 1st). My proposal was based on using a structure where any existing shareholder who wished to remain as a shareholder in a private Tesla could do so, with the $420 per share buyout used only for shareholders that preferred that option.

After an initial meeting of the board’s outside directors to discuss my proposal (I did not participate, nor did Kimbal), a full board meeting was held. During that meeting, I told the board about the funding discussions that had taken place (more on that below) and I explained why this could be in Tesla’s long-term interest.

At the end of that meeting, it was agreed that as a next step, I would reach out to some of Tesla’s largest shareholders. Our largest investors have been extremely supportive of Tesla over the years, and understanding whether they had the ability and desire to remain as shareholders in a private Tesla is of critical importance to me. They are the ones who believed in Tesla when no one else did and they are the ones who most believe in our future. I told the board that I would report back after I had these discussions.

Why did I make a public announcement?
The only way I could have meaningful discussions with our largest shareholders was to be completely forthcoming with them about my desire to take the company private. However, it wouldn’t be right to share information about going private with just our largest investors without sharing the same information with all investors at the same time. As a result, it was clear to me that the right thing to do was announce my intentions publicly. To be clear, when I made the public announcement, just as with this blog post and all other discussions I have had on this topic, I am speaking for myself as a potential bidder for Tesla.

Why did I say “funding secured”?
Going back almost two years, the Saudi Arabian sovereign wealth fund has approached me multiple times about taking Tesla private. They first met with me at the beginning of 2017 to express this interest because of the important need to diversify away from oil. They then held several additional meetings with me over the next year to reiterate this interest and to try to move forward with a going private transaction. Obviously, the Saudi sovereign fund has more than enough capital needed to execute on such a transaction.

Recently, after the Saudi fund bought almost 5% of Tesla stock through the public markets, they reached out to ask for another meeting. That meeting took place on July 31st. During the meeting, the Managing Director of the fund expressed regret that I had not moved forward previously on a going private transaction with them, and he strongly expressed his support for funding a going private transaction for Tesla at this time. I understood from him that no other decision makers were needed and that they were eager to proceed.

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. This is why I referred to “funding secured” in the August 7th announcement.

Following the August 7th announcement, I have continued to communicate with the Managing Director of the Saudi fund. He has expressed support for proceeding subject to financial and other due diligence and their internal review process for obtaining approvals. He has also asked for additional details on how the company would be taken private, including any required percentages and any regulatory requirements.

Another critical point to emphasize is that before anyone is asked to decide on going private, full details of the plan will be provided, including the proposed nature and source of the funding to be used. However, it would be premature to do so now. I continue to have discussions with the Saudi fund, and I also am having discussions with a number of other investors, which is something that I always planned to do since I would like for Tesla to continue to have a broad investor base. It is appropriate to complete those discussions before presenting a detailed proposal to an independent board committee.

It is also worth clarifying that most of the capital required for going private would be funded by equity rather than debt, meaning that this would not be like a standard leveraged buyout structure commonly used when companies are taken private. I do not think it would be wise to burden Tesla with significantly increased debt.

Therefore, reports that more than $70B would be needed to take Tesla private dramatically overstate the actual capital raise needed. The $420 buyout price would only be used for Tesla shareholders who do not remain with our company if it is private. My best estimate right now is that approximately two-thirds of shares owned by all current investors would roll over into a private Tesla.

What are the next steps?
As mentioned earlier, I made the announcement last Tuesday because I felt it was the right and fair thing to do so that all investors had the same information at the same time. I will now continue to talk with investors, and I have engaged advisors to investigate a range of potential structures and options. Among other things, this will allow me to obtain a more precise understanding of how many of Tesla’s existing public shareholders would remain shareholders if we became private.

If and when a final proposal is presented, an appropriate evaluation process will be undertaken by a special committee of Tesla’s board, which I understand is already in the process of being set up, together with the legal counsel it has selected. If the board process results in an approved plan, any required regulatory approvals will need to be obtained and the plan will be presented to Tesla shareholders for a vote.

92 thoughts on “Elon Musk had been talking with Saudi Arabia for two years about going private with Tesla”

  3. But Mr Musk has NOT secured funding. So he is definitely on the hook for a few billion in short losses. Talking for two years is not the same as secured funding. I’m not very happy about this outcome, I think it will wind up hurting SpaceX but his secured funding tweet is going to get him sued and I don’t see how he wins apart from some masterful lawyering.

  5. But Mr Musk has NOT secured funding. So he is definitely on the hook for a few billion in short losses. Talking for two years is not the same as secured funding.I’m not very happy about this outcome I think it will wind up hurting SpaceX but his secured funding tweet is going to get him sued and I don’t see how he wins apart from some masterful lawyering.

  7. Are there any specific definitions for “secured funding” in the market world? I would think that willful intent to pursue a deal over two years, coupled with increased investment by the entity desiring the deal, and then wanting to move forward with it yourself after confirming that the entity does indeed still want to proceed with the deal, would be reasonable grounds for thinking you have secured funding.

  8. Why? Because you can’t admit you screwed up? This boiler plate BS is what his lawyers told him to put out. They wrote it – not him – obviously. And lawyers only do that in ONE situation. Too bad Tommy the Luca Matteo chump can’t…or just won’t.. admit to what that situation is. www dot facebook dot com/teo.martini

  9. But Mr Musk has NOT secured funding. So he is definitely on the hook for a few billion in short losses. Talking for two years is not the same as secured funding. ” Contrast this injection of reality to Tommy the Luca/Matteo BS below:

  10. I just started 6 weeks ago and I’ve gotten 2 check for a total of $2200…this is the best decision I made in a long time! Thank you for giving me this extraordinary opportunity to make extra money from home. This extra cash has changed my life in so many ways”” thank you! This is What I Do….. w­ww.Tag30.c­om”””

  11. Are there any specific definitions for secured funding”” in the market world? I would think that willful intent to pursue a deal over two years”” coupled with increased investment by the entity desiring the deal and then wanting to move forward with it yourself after confirming that the entity does indeed still want to proceed with the deal”” would be reasonable grounds for thinking you have secured funding.”””

  12. Why? Because you can’t admit you screwed up?This boiler plate BS is what his lawyers told him to put out. They wrote it – not him – obviously.And lawyers only do that in ONE situation. Too bad Tommy the Luca Matteo chump can’t…or just won’t.. admit to what that situation is.www dot facebook dot com/teo.martini

  13. But Mr Musk has NOT secured funding. So he is definitely on the hook for a few billion in short losses. Talking for two years is not the same as secured funding. “”Contrast this injection of reality to Tommy the Luca/Matteo BS below:”””

  14. I just started 6 weeks ago and I’ve gotten 2 check for a total of $2,200…this is the best decision I made in a long time! “Thank you for giving me this extraordinary opportunity to make extra money from home. This extra cash has changed my life in so many ways, thank you! This is What I Do….. w­ww.Tag30.c­om

  15. Amazing how those corrupt shorting hedge funds lie cheat steal and can remain hidden by the SEC. Note how they spin the media with constant negative articles on TESLA. Now they cry foul play how ironic.

  16. WOW I got that one right! Mentioned it on previous Tesla article here. Must admit that it was based upon information I gleamed from the NBF article on the 2 trillion Saudi investment fund. Seemed like an excellent fit for transition to the future away from oil.

  17. Oh, I am willing to bet none of that was written by Musk at all. It’s got PR/Lawyer all over it. Which means the SEC thing is serious. Sucks to be a Kool-Aid drinking Musk Fluffer like Tommy here.

  18. Yes, investor relationships by tweet really aren’t working that well. Very likely the lawyers in any measure to scold him (namely, those with investments and not on his payroll), told him to shut up and deliver professional communications for a change.

  19. Amazing how those corrupt shorting hedge funds lie cheat steal and can remain hidden by the SEC. Note how they spin the media with constant negative articles on TESLA. Now they cry foul play how ironic.

  20. WOW I got that one right! Mentioned it on previous Tesla article here. Must admit that it was based upon information I gleamed from the NBF article on the 2 trillion Saudi investment fund. Seemed like an excellent fit for transition to the future away from oil.

  21. Oh I am willing to bet none of that was written by Musk at all. It’s got PR/Lawyer all over it. Which means the SEC thing is serious. Sucks to be a Kool-Aid drinking Musk Fluffer like Tommy here.

  22. Yes investor relationships by tweet really aren’t working that well. Very likely the lawyers in any measure to scold him (namely those with investments and not on his payroll) told him to shut up and deliver professional communications for a change.

  26. I haven’t screwed up. You were claiming he made it up, and he didn’t, you lying, sockpuppeting troll. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.

  27. How are you pretending he has not secured funding. KSA Sovereign Wealth Fund says they will do it, how is that not funding for it?

  29. This is also political, i would say the agreement of an Arabian oil Sheikh or a Prince is fairly solid even if not inked on paper.

  31. I haven’t screwed up. You were claiming he made it up and he didn’t you lying sockpuppeting troll.Lorem ipsum dolor sit amet consectetur adipiscing elit sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.

  32. How are you pretending he has not secured funding. KSA Sovereign Wealth Fund says they will do it how is that not funding for it?

  34. This is also political i would say the agreement of an Arabian oil Sheikh or a Prince is fairly solid even if not inked on paper.

  35. Elon Musk has been talking with Saudi Arabia for two years? What the heck?!!! This is another huge screaming and blatantly obvious reason why the U.S. government should not be doling out taxpayers money in subsidies to any and all private business enterprises.

  36. Elon Musk has been talking with Saudi Arabia for two years? What the heck?!!!This is another huge screaming and blatantly obvious reason why the U.S. government should not be doling out taxpayers money in subsidies to any and all private business enterprises.

  37. Amazing how the Kool-Aid Drinking Musk Fluffers on here can’t deal with reality that their God screwed up, badly. So much that they have not problems with him defrauding people with stock price manipulation simply because other scumbags don’t ‘get caught’? Wow!

  39. Nope. Because now they can SUE and SUE BIG TIME Tesla itself since Musk did that damage as CEO of said company. They will get compensatory AND punitive damages. And for civil cases like this the bar for evidence is a lot lower than it is for the possible criminal case should the SEC decide to prosecute.AND they can use whatever comes out of the SEC investigation in the lawsuits.

  40. Amazing how the Kool-Aid Drinking Musk Fluffers on here can’t deal with reality that their God screwed up badly.So much that they have not problems with him defrauding people with stock price manipulation simply because other scumbags don’t ‘get caught’? Wow!

  42. I’ve been following Musk since before he built Falcon 1. The man has beat all of my expectations by a long shot. I honestly didn’t believe that an electric car company could succeed, but now I can see that as long as Elon Musk is orchestrating things the companies will always succeed. If he says he’s going to put a man on Mars then he will. Can you just state for the record here that you don’t believe he is capable of it? “Fraud” as you describe it? We could talk about Tesla but the cars are already rolling off the assembly line, people are driving them all around the town I live in, the price is set by the markets, what is there to debate? There is DEBT, but the lenders are hanging on, no default. SpaceX is private and valued at $30B, no public to manipulate there! I think you’re delusional.

  43. Doesn’t bother me any, I think the Saudi’s are proving to be very good allies. They love our US-made cars over there too. Saudi money pouring in, great news, more/better jobs here at home. I think the only thing the Saudi’s get is a long-term hedge against oil price decline, if oil goes down Tesla goes up.

  44. More likes from Tommy the Matteo Fake Account. I don’t short stocks..let alone have any short position on Tesla.

  45. Nope. Because now they can SUE and SUE BIG TIME Tesla itself, since Musk did that damage as CEO of said company. They will get compensatory AND punitive damages. And for civil cases like this, the bar for evidence is a lot lower than it is for the possible criminal case should the SEC decide to prosecute. AND they can use whatever comes out of the SEC investigation in the lawsuits.

  46. I’ve been following Musk since before he built Falcon 1. The man has beat all of my expectations by a long shot. I honestly didn’t believe that an electric car company could succeed but now I can see that as long as Elon Musk is orchestrating things the companies will always succeed. If he says he’s going to put a man on Mars then he will. Can you just state for the record here that you don’t believe he is capable of it? Fraud”” as you describe it? We could talk about Tesla but the cars are already rolling off the assembly line”” people are driving them all around the town I live in the price is set by the markets what is there to debate? There is DEBT but the lenders are hanging on no default. SpaceX is private and valued at $30B”” no public to manipulate there! I think you’re delusional.”””

  47. Doesn’t bother me any I think the Saudi’s are proving to be very good allies. They love our US-made cars over there too. Saudi money pouring in great news more/better jobs here at home. I think the only thing the Saudi’s get is a long-term hedge against oil price decline if oil goes down Tesla goes up.

  48. More likes from Tommy the Matteo Fake Account.I don’t short stocks..let alone have any short position on Tesla.

  49. He did say he had the funding for it. You have yet to show where he retracted that. Because he had the funding for, there will be no fraud investigation, the SEC inquiry will get to the point they see the KSA was agreed to it and drop the matter.

  50. He did say he had the funding for it. You have yet to show where he retracted that. Because he had the funding for there will be no fraud investigation the SEC inquiry will get to the point they see the KSA was agreed to it and drop the matter.

  51. SEC is subpeoneing Musk! Three lawsuits have been filed by those who lost money based on his Tweets. And those are just the beginning. The Board is in chaos. It’s all going to hell. Oh, and Tommy Perkins aka Luca aka Matteo Martini and his other Musk Fluffing Buddies are looking like complete idiots right now. Especially the ones who claimed my EXACT predictions of these events unfolding were bupkiss. Who’s full of BS now, eh?

  52. SEC is subpeoneing Musk! Three lawsuits have been filed by those who lost money based on his Tweets. And those are just the beginning.The Board is in chaos. It’s all going to hell. Oh and Tommy Perkins aka Luca aka Matteo Martini and his other Musk Fluffing Buddies are looking like complete idiots right now. Especially the ones who claimed my EXACT predictions of these events unfolding were bupkiss. Who’s full of BS now eh?

  53. See that’s exactly the kind of stupidity which shows you are a moron, as well as very uncareful of the truth and a troll. I saw that link over on the Tesla Semi thread and reposted it here — and you are stupid enough to think that means I’m the person who posted it the first time. I can see why you don’t want any of your trollery documented. ” He said he had SECURED FUNDING. The only way you could be right is that was the case AT THE TIME OF THE TWEET. ” And it was so at the time of the tweet. You have nothing but an irrational bias against Musk. Et harum quidem rerum facilis est et expedita distinctio. Nam libero tempore, cum soluta nobis est eligendi optio cumque nihil impedit quo minus id quod maxime placeat facere possimus, omnis voluptas assumenda est, omnis dolor repellendus. Temporibus autem quibusdam et aut officiis debitis aut rerum necessitatibus saepe eveniet ut et voluptates repudiandae sint et molestiae non recusandae.

  56. No moron. He tweeted the truth before, he’ll tell the truth to the SEC, and you’re gloating will come to nothing. And no

  57. See that’s exactly the kind of stupidity which shows you are a moron as well as very uncareful of the truth and a troll. I saw that link over on the Tesla Semi thread and reposted it here — and you are stupid enough to think that means I’m the person who posted it the first time. I can see why you don’t want any of your trollery documented. He said he had SECURED FUNDING. The only way you could be right is that was the case AT THE TIME OF THE TWEET. “”And it was so at the time of the tweet. You have nothing but an irrational bias against Musk.Et harum quidem rerum facilis est et expedita distinctio. Nam libero tempore”” cum soluta nobis est eligendi optio cumque nihil impedit quo minus id quod maxime placeat facere possimus omnis voluptas assumenda est”” omnis dolor repellendus. Temporibus autem quibusdam et aut officiis debitis aut rerum necessitatibus saepe eveniet ut et voluptates repudiandae sint et molestiae non recusandae.”””

  60. No moron. He tweeted the truth before he’ll tell the truth to the SEC and you’re gloating will come to nothing.And no

  64. See that’s exactly the kind of stupidity which shows you are a moron, as well as very uncareful of the truth and a troll. I saw that link over on the Tesla Semi thread and reposted it here — and you are stupid enough to think that means I’m the person who posted it the first time. I can see why you don’t want any of your trollery documented.

    ” He said he had SECURED FUNDING. The only way you could be right is that was the case AT THE TIME OF THE TWEET. ”

    And it was so at the time of the tweet. You have nothing but an irrational bias against Musk.
    Et harum quidem rerum facilis est et expedita distinctio. Nam libero tempore, cum soluta nobis est eligendi optio cumque nihil impedit quo minus id quod maxime placeat facere possimus, omnis voluptas assumenda est, omnis dolor repellendus. Temporibus autem quibusdam et aut officiis debitis aut rerum necessitatibus saepe eveniet ut et voluptates repudiandae sint et molestiae non recusandae.

  65. “And no< I am not Luka, I am not Matteo, and just like is document here bit.ly/2MeWYZT " You just admitted to being Luca, because that is his Creepy Stalking Wall that he posted a month ago. "He tweeted the truth before" Really? So the SEC and three lawsuits are just for nothing? He said he had SECURED FUNDING. The only way you could be right is that was the case AT THE TIME OF THE TWEET. So far, the Saudis are saying it IS NOT done deal. Neither is any major investment bank is claiming they are part of any deal. That means he didn't have it secured at the time of his tweet.

  67. No moron. He tweeted the truth before, he’ll tell the truth to the SEC, and you’re gloating will come to nothing.

    And no< I am not Luka, I am not Matteo, and just like is document here bit.ly/2MeWYZT You are just a lying, sockpuppeting troll here at NBF. Pri quas audiam virtute ut, case utamur fuisset eam ut, iisque accommodare an eam. Reque blandit qui eu, cu vix nonumy volumus. Legendos intellegam id usu, vide oporteat vix eu, id illud principes has. Nam tempor utamur gubergren no.

  68. SEC is subpeoneing Musk! Three lawsuits have been filed by those who lost money based on his Tweets. And those are just the beginning.

    The Board is in chaos. It’s all going to hell.

    Oh, and Tommy Perkins aka Luca aka Matteo Martini and his other Musk Fluffing Buddies are looking like complete idiots right now. Especially the ones who claimed my EXACT predictions of these events unfolding were bupkiss. Who’s full of BS now, eh?

  69. He did say he had the funding for it. You have yet to show where he retracted that. Because he had the funding for, there will be no fraud investigation, the SEC inquiry will get to the point they see the KSA was agreed to it and drop the matter.

  70. I’ve been following Musk since before he built Falcon 1. The man has beat all of my expectations by a long shot. I honestly didn’t believe that an electric car company could succeed, but now I can see that as long as Elon Musk is orchestrating things the companies will always succeed. If he says he’s going to put a man on Mars then he will. Can you just state for the record here that you don’t believe he is capable of it? “Fraud” as you describe it? We could talk about Tesla but the cars are already rolling off the assembly line, people are driving them all around the town I live in, the price is set by the markets, what is there to debate? There is DEBT, but the lenders are hanging on, no default. SpaceX is private and valued at $30B, no public to manipulate there! I think you’re delusional.

  71. Doesn’t bother me any, I think the Saudi’s are proving to be very good allies. They love our US-made cars over there too. Saudi money pouring in, great news, more/better jobs here at home. I think the only thing the Saudi’s get is a long-term hedge against oil price decline, if oil goes down Tesla goes up.

  73. Nope. Because now they can SUE and SUE BIG TIME Tesla itself, since Musk did that damage as CEO of said company.

    They will get compensatory AND punitive damages. And for civil cases like this, the bar for evidence is a lot lower than it is for the possible criminal case should the SEC decide to prosecute.

    AND they can use whatever comes out of the SEC investigation in the lawsuits.

  74. Amazing how the Kool-Aid Drinking Musk Fluffers on here can’t deal with reality that their God screwed up, badly.

    So much that they have not problems with him defrauding people with stock price manipulation simply because other scumbags don’t ‘get caught’? Wow!

  76. Elon Musk has been talking with Saudi Arabia for two years? What the heck?!!!
    This is another huge screaming and blatantly obvious reason why the U.S. government should not be doling out taxpayers money in subsidies to any and all private business enterprises.

  78. I haven’t screwed up. You were claiming he made it up, and he didn’t, you lying, sockpuppeting troll.

    Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.

  81. This is also political, i would say the agreement of an Arabian oil Sheikh or a Prince is fairly solid even if not inked on paper.

  83. Amazing how those corrupt shorting hedge funds lie cheat steal and can remain hidden by the SEC. Note how they spin the media with constant negative articles on TESLA. Now they cry foul play how ironic.

  84. WOW I got that one right! Mentioned it on previous Tesla article here. Must admit that it was based upon information I gleamed from the NBF article on the 2 trillion Saudi investment fund. Seemed like an excellent fit for transition to the future away from oil.

  85. Oh, I am willing to bet none of that was written by Musk at all. It’s got PR/Lawyer all over it.

    Which means the SEC thing is serious.

    Sucks to be a Kool-Aid drinking Musk Fluffer like Tommy here.

  86. Yes, investor relationships by tweet really aren’t working that well. Very likely the lawyers in any measure to scold him (namely, those with investments and not on his payroll), told him to shut up and deliver professional communications for a change.

  87. I just started 6 weeks ago and I’ve gotten 2 check for a total of $2,200…this is the best decision I made in a long time! “Thank you for giving me this extraordinary opportunity to make extra money from home. This extra cash has changed my life in so many ways, thank you!

    This is What I Do….. w­ww.Tag30.c­om

  88. Are there any specific definitions for “secured funding” in the market world? I would think that willful intent to pursue a deal over two years, coupled with increased investment by the entity desiring the deal, and then wanting to move forward with it yourself after confirming that the entity does indeed still want to proceed with the deal, would be reasonable grounds for thinking you have secured funding.

  89. Why? Because you can’t admit you screwed up?

    This boiler plate BS is what his lawyers told him to put out. They wrote it – not him – obviously.

    And lawyers only do that in ONE situation. Too bad Tommy the Luca Matteo chump can’t…or just won’t.. admit to what that situation is.

    www dot facebook dot com/teo.martini

  90. “But Mr Musk has NOT secured funding. So he is definitely on the hook for a few billion in short losses. Talking for two years is not the same as secured funding. ”

    Contrast this injection of reality to Tommy the Luca/Matteo BS below:

  91. But Mr Musk has NOT secured funding. So he is definitely on the hook for a few billion in short losses. Talking for two years is not the same as secured funding.

    I’m not very happy about this outcome, I think it will wind up hurting SpaceX but his secured funding tweet is going to get him sued and I don’t see how he wins apart from some masterful lawyering.

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