Informed Comment Homepage

Thoughts on the Middle East, History and Religion

Header Right

  • Featured
  • US politics
  • Middle East
  • Environment
  • US Foreign Policy
  • Energy
  • Economy
  • Politics
  • About
  • Archives
  • Submissions

© 2025 Informed Comment

  • Skip to content
  • Skip to primary sidebar
Green Transportation

Elon Musk says in Talks with Saudis on Taking Tesla Private

AFP 08/14/2018

Tweet
Share
Reddit
Email

By Rob Lever | –

Washington (AFP) – Tesla chief executive Elon Musk disclosed Monday that he was in talks with Saudi Arabia’s sovereign wealth fund and other investors to take the electric automaker private.

The revelation came after Musk claimed in an August 7 Twitter post that financing for a deal to take Tesla private had been “secured.”

Musk said in a blog post on Monday he had “no question” that the Saudis would finance such a transaction following a July 31 meeting.

“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 wrote.

“It is appropriate to complete those discussions before presenting a detailed proposal to an independent board committee.”

The transaction would be structured with equity so as not to burden Tesla with crushing debt, Musk added.

Musk’s surprise comments last week sparked speculation he would need to borrow massive amounts to take Tesla private, a move that could allow the company to operate without requirements for financial reports and other pressures of a publicly traded firm.

But the comments also raised questions about whether Musk ran afoul of securities laws by claiming backing without a firm financial commitment.

The disclosures about Saudi interest “helps reduce the legal risk fallout for Tesla,” said Efraim Levy, an equity analyst at CFRA Research.

“It also helps clarify the going private situation even if the transaction is ultimately not consummated.”

But Levy said taking the company private would be a mixed blessing for Tesla and Musk — the company could avoid short-term pressures from Wall Street but also reduce its access to capital markets.

“They’ve had significant benefits from having access to capital markets, and the media attention has provided priceless free advertising,” Levy said.

“Despite Musk protestations, we think remaining public has and will benefit Tesla,” he added.

Tesla shares failed to sustain an early surge and ended with a small gain of 0.26 percent at $356.41.

– Less than $70 billion –


AFP/File / SAUL LOEB. If Tesla goes private, it would avoid many of the requirements and scrutiny of a publicly traded firm but could also limit its access to capital.

In his blog post Monday, Musk said that reports that more than $70 billion would be needed to take Tesla private “dramatically overstate the actual capital raise needed” because he expected some shareholders to remain invested in the firm.

His comment that he wanted to launch a buyout at $420 a share “would only be used for Tesla shareholders who do not remain with our company if it is private,” Musk said in the post.

“My best estimate right now is that approximately two-thirds of shares owned by all current investors would roll over into a private Tesla.”

Musk added that the Saudi Arabian sovereign wealth fund “has approached me multiple times” starting in early 2017 about taking Tesla private and had already taken a stake of nearly five percent though share purchases.

He said the Saudis were interested “because of the important need to diversify away from oil” and added that the sovereign fund “has more than enough capital needed to execute on such a transaction.”

Loup Ventures analysts Gene Munster and Will Thompson said in a research note that Musk has answered the question “where would the money come from?” but still faces a number of challenges.

“If Musk can help it, we believe he will limit additional investors to 20 percent equity (he owns 22 percent), which implies the Saudi fund could only invest $16 billion,” the analysts wrote.

“We still believe there is a greater than 50 percent chance Tesla is private in a year, and the blog post slightly increased those odds.”

California-based Tesla has become one of the most valuable automakers on expectations it will disrupt the industry, although it produced only slightly more than 100,000 vehicles last year.

The company has been struggling to boost production of its Model 3, which is less expensive than its first models and could held expand Tesla’s base.

Featured Photo: AFP/File / DAVID MCNEW. Tesla Motors CEO Elon Musk said he was in talks with the Saudi government’s sovereign wealth fund as part of his efforts to take Tesla private.

Filed Under: Green Transportation, Saudi Arabia

About the Author

AFP is a global news agency delivering fast, accurate, in-depth coverage of the events shaping our world from conflicts to politics, economics, sports, entertainment and the latest breakthroughs in health, science and technology. Headquartered in Paris, France, and founded in 1835, Agence France Presse is the third largest news agency in the world, after the Associated Press (AP) and Reuters. It has bureaus in 150 countries.

Primary Sidebar

Support Independent Journalism

Click here to donate via PayPal.

Personal checks should be made out to Juan Cole and sent to me at:

Juan Cole
P. O. Box 4218,
Ann Arbor, MI 48104-2548
USA
(Remember, make the checks out to “Juan Cole” or they can’t be cashed)

STAY INFORMED

Join our newsletter to have sharp analysis delivered to your inbox every day.
Warning! Social media will not reliably deliver Informed Comment to you. They are shadowbanning news sites, especially if "controversial."
To see new IC posts, please sign up for our email Newsletter.

Social Media

Bluesky | Instagram

Popular

  • Israel's Netanyahu banks on TACO Trump as he Launches War on Iran to disrupt Negotiations
  • Iran's Hypersonic Missiles Hit Israeli Refinery, Military Sites, as Israel does the same to Tehran
  • Iraqi Shiites Demand Expulsion of US Troops after Israel Attacks Iran
  • Why did Israel defy Trump – and risk a major War – by striking Iran now? And what happens next?
  • A Pariah State? Western Nations Sanction Israeli Cabinet Members

Gaza Yet Stands


Juan Cole's New Ebook at Amazon. Click Here to Buy
__________________________

Muhammad: Prophet of Peace amid the Clash of Empires



Click here to Buy Muhammad: Prophet of Peace amid the Clash of Empires.

The Rubaiyat of Omar Khayyam


Click here to Buy The Rubaiyat.
Sign up for our newsletter

Informed Comment © 2025 All Rights Reserved