Tesla board says Musk started going-private talks last week

Danny Moloshok  Reuters

In a statement on Tesla's website on Wednesday, six of Tesla's nine directors said the board had met several times over the last week to discuss the idea and was "taking the appropriate next steps to evaluate this".

Other board members mentioned in the statement included Robyn Denholm, Ira Ehrenpreis, Antonio Gracias and Linda Johnson Rice.

Most analysts were skeptical, but some said a deal could materialize if Musk succeeded in lining up the right funding.

The statement by the board, published by NASDAQ, confirms that the proposal is under serious consideration. In a note to clients, Bernstein analyst Toni Sacconaghi asked: "What does Musk mean by "funding secured"?"

Tesla CEO Elon Musk tweeted Tuesday that he's is mulling taking Tesla private at US$420 a share.

Tesla's shares were down 2.1 percent at $371.70 on Wednesday after closing up 11 percent on Tuesday.

In that time, Tesla short-sellers - Musk's sworn enemies - may have lost more than $800m, according to estimates from financial-technology firm S3 Partners, while his 20% stake reportedly gained $851m. And as the stock price has climbed this year, so too have the bets against it.

China's Tencent Holdings Ltd, which took a 5-percent stake in Tesla past year, could also be a possible partner.

The oil-rich kingdom of Saudi Arabia's investment fund has gobbled up a multibillion-dollar stake in the company in recent months, the Financial Times reported Tuesday, but Tesla has not answered questions about the involvement of the kingdom, or anyone else, in how he would finance the company's exit from public markets. This proposed route would also keep all Tesla employees as shareholders/investors in the company, while Tesla would adopt an ownership and governance structure similar to the current form of SpaceX.

It's also unclear how Musk came up with the $420 price.

Two of the potential stumbling blocks to Musk's plan include the stock price premium not being enough to get the existing shareholders on board to support the sale and coming up short on the announced funding to complete the transition.

If the content of Musk's tweet was not true, lawyers argue, it could expose Tesla's mercurial chief executive officer and the company to regulatory action and private lawsuits.

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