WASHINGTON—Tesla CEO Elon Musk clarified his comments about securing funds to take the electric-car maker private, saying that his “funding secured” tweet last week was based on repeated and ongoing discussions with Saudi Arabia’s sovereign wealth fund, which owns 5 percent of the company.
“Going back almost two years, the Saudi Arabian sovereign wealth fund has approached me multiple times about taking Tesla private,” Musk stated Aug. 13 in a blog post.
The Saudis first expressed their interest in 2017 because of “the important need to diversify away from oil,” he said, adding that they continued to reiterate their interest to take Tesla private in several follow-up meetings.
“Obviously, the Saudi sovereign fund has more than enough capital needed to execute on such a transaction.
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
“Recently, after the Saudi fund bought almost 5 percent of Tesla stock through the public markets, they reached out to ask for another meeting.”
Musk said that meeting took place on July 31.
“The [managing director of the] Saudi fund expressed his support for funding a going-private transaction for Tesla at this time,” he said.
“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.”
Musk posted his long explanation on the blog amid reports that the U.S. Securities and Exchange Commission (SEC) is investigating whether Musk’s earlier tweet was accurate.
Musk shocked markets with a tweet on Aug. 7 announcing that he had secured financing to take Tesla private at $420 a share, sending the stock up 10 percent on the same day.
Experts claimed that Musk’s disclosure of his plans via Twitter to take the company private were not in line with a Securities and Exchange Commission (SEC) rule that prohibits publicly traded companies from announcing plans to buy or sell securities if executives don’t intend to follow through, don’t have the means to complete the deal, or are flat out trying to manipulate the stock price.
“The probability that Musk is going to get sued by the SEC is quite high,” Joseph Grundfest, former SEC commissioner, told financial news cable network CNBC.