Tesla board evaluating CEO's bid to take company private

Tesla board mulls de-listing plan

SoftBank has previously invested in Uber, Nvidia and GM's Cruise.

Tesla's CEO also laid out what he envisions as the ideal path for going private. These reportedly include why the company decided to make such a major announcement on Twitter and if it believes "investor-protection rules had been met".

Nonetheless, $1.4 billion to Elon Musk - all in a day's work, right?

One of the skeptics was analyst Frank Schwope who told Reuters "Who gives $30 to $50 (£23.2 - £3.8.8 / €25.8 - €43) billion to buy back the shares?" "And if you stay as a shareholder you get less information than before and you depend more and more on Elon Musk".

In a Wednesday research note, Morgan Stanley analyst Adam Jonas estimated Tesla will end up taking on about US$50b in additional debt if the company goes private. The value of his shares at that price would total $72 billion, short of the $100 billion performance bar it must cross for him to be able to exercise his $2.6 billion stock-option grant, Bloomberg noted.

"If Apple wanted to be in the auto business, this is how you do it-you step up, doesn't have to be $420 (per share), it could be another price".

Tesla CEO and founder of the Boring Company Elon Musk speaks at a news conference in Chicago. Board members at Tesla are evaluating Musk’s $72 billion proposal to take the electric car and solar panel maker
Tesla directors say they knew of Elon Musk's surprise plan to go private

If the company went private, employees and shareholders would be given an opportunity to sell or buy their stock approximately every six months.

The deal would be the biggest leveraged buyout of all time, beating the $45 billion record set by Texas power utility Energy Future Holdings. "At risk, of course, is that anything short of a formal take-private offer could trigger lawsuits from burned-short-sellers, or at worst, public pressure to remove Musk as CEO". That report had already partly lifted Tesla's stock.

Mr Musk and SoftBank held unsuccessful talks about a take-private deal in April 2017, according to a source familiar with the matter.

China's Tencent Holdings Ltd, which took a 5 percent stake in Tesla a year ago, could also be a possible partner. The surprise announcement was sandwiched between other provocative tweets and, among other things, promptly caused a temporary halt in the trading of Tesla shares on Wall Street while also causing some to doubt if Musk was being serious.

"Basically, I'm trying to accomplish an outcome where Tesla can operate at its best, free from as much distraction and short-term thinking as possible, and where there is as little change for all of our investors, including all of our employees, as possible".

Some on Wall Street shared that view. "Funding secured", the message from Musk, sent out nonchalantly on Tuesday afternoon, stated.

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