latest automotive news, best new and used cars, find a new car dfd65_Tesla_Model_S_Interior-610x406 Where’s Musk’s Financing Coming From? Reports Say SEC, Tesla Board Want to Know Tesla

Like a Netflix original movie with lots of action but a threadbare plot, Elon Musk’s plan to take Tesla private has some glaring holes. The largest of which is how he’ll finance the buyback of stock (at $420 a share) to make his dream possible.

The list of people who’d like to know where exactly the money’s coming from is a long one, but at the top of the list is the U.S. Securities and Exchange Commission — followed, apparently, by Tesla’s own board of directors.

According to two sources who spoke with Bloomberg, Musk’s Tuesday tweets and blog post caused the SEC to ramp up its investigation of the automaker. The commission was already collecting info on Tesla’s production plans, but now it’s more interested in the source of the money for Musk’s anticipated buyout. In his earlier statements, Musk claimed he had secured funding.

While it’s an informal inquiry that might not lead to anything more serious, the sources claim, the SEC does want to know if Musk’s statement was factual. Should it come to pass, Musk’s goal to take the publicly traded company private would mean the largest leveraged buyout in history. The deal is said to be worth roughly $72 billion.

The SEC isn’t along in wanting to know more. While six members of the automaker’s board of directors issued a brief statement regarding Musk’s plan on Wednesday, claiming the CEO had “addressed” the funding, Reuters reports that curiosity is rife. The board has not heard details on who will provide the funding, a source said.

A decision on whether to launch a formal review of Musk’s plan should come in the coming days, the source said, with board members already seeking advice from investment bankers on the potential hiring of financial advisers. Should the board greenlight a review, Musk would have to recuse himself. The alternative is the formation of a special board committee to carry out the task.

Musk claims he plans to keep hold of his 20 percent stake in the automaker should the company go private, encouraging existing shareholders to hold onto their stakes if they feel like it.

After spiking nearly 11 percent before trading closed Tuesday, Tesla’s stock has lost almost all of the ground it gained after Musk’s announcement.

[Image: Wikimedia (CC BY-SA 4.0)]

Article source:


Please enter your comment!
Please enter your name here