This morning, Tesla CEO Elon Musk finally let us in on who the secret funders are who will take Tesla private. In a blog post, he said:
“Recently, after the Saudi fund bought almost 5% of Tesla stock through the public markets, they reached out to ask for another meeting. That meeting took place on July 31st. During the meeting, the Managing Director of the fund expressed regret that I had not moved forward previously on a going private transaction with them, and he strongly expressed his support for funding a going private transaction for Tesla at this time. I understood from him that no other decision makers were needed and that they were eager to proceed.
I left the July 31st meeting with no question that a deal with the Saudi sovereign fund could be closed, and that it was just a matter of getting the process moving. This is why I referred to “funding secured” in the August 7th announcement.”
This is not the first time that Musk has equated conversations about potential deals as full-on approvals, but in the past, such comments haven’t concerned the Securities and Exchange Commission. Regulators are reportedly investigating whether Musk’s comments about taking Tesla private were a legitimate announcement or potential market manipulation. The SEC may take issue with Musk’s definition of “funding secured,” as Axios editor Dan Primack notes:
“there’s a very strong chance that regulators will disagree. Particularly if those regulators have ever expressed interest in buying something — a car, a house, a second piece of pie — but ultimately opted against it.”
It’s also still unclear whether the Saudi Public Investment Fund is even interested in taking Tesla private. Although, the PIF has already taken a minority stake in the company, a recent report from Reuters says the fund isn’t currently involved in any kind of funding process to take Tesla private. The report also says board members haven’t received the financial details of such a process.
Fast Company reached out to the PIF for comment and has not received a response.
Musk says in his blog post that the board is now setting up a special board committee and legal counsel to evaluate a possible proposal for going private.