Musk’s Challenges Mount Over Plan to Take Tesla Private
Tesla Inc. CEO Elon Musk faces several legal and regulatory challenges as he continues to justify a tweet a week ago indicating he wanted to take the company private.
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Tesla Inc. CEO Elon Musk faces several legal and regulatory challenges as he continues to justify a tweet a week ago indicating he wanted to take the company private at $420 per share and had the funds arranged to do so.
Media reports say Tesla’s board was blindsided by the tweet and has not yet received details from Musk about his plan. On Monday the board set up a special committee to evaluate Musk’s formal proposal, which it has not yet received, and decide whether the plan will be executed.
Separately, the U.S. Securities and Exchange Commission is investigating whether Musk’s initial tweet was accurate. Musk cast doubt on that question in a blog post on Monday. He said Saudi Arabia’s sovereign wealth fund had expressed strong interest at the end of July in privatizing Tesla but didn’t commit to backing the deal. The fund acquired nearly 5% of Tesla a week ago.
At least two investor lawsuits filed last week claims Musk’s tweet contained false and misleading statements intended to hurt short-sellers of Tesla’s shares.
Earlier today Bloomberg News pointed out that Tesla will probably need U.S. national security clearance to take the company private funds from Saudi Arabia or any other foreign source. The news service points to federal legislation signed this week by President Donald Trump that will expand the authority of the Committee on Foreign Investment in the U.S. to scrutinize foreign acquisitions American high-tech companies.
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