The SEC Is Intensifying Its Probe of Tesla

Postado Agosto 12, 2018

In two days, the stock has erased the 8.6% gain that followed Musk's surprise announcement on Twitter that he had secured funding to take the electric auto maker off the public market.

In an email to employees that was later published on Tesla's website, Musk gave a few more details on the plan, leading with the fact that a final decision had not been made. The shares have dropped on back-to-back days after jumping 11 percent on Tuesday, when Musk vowed that he had "funding secured" at a spectacular $82 billion valuation. Tesla did not respond to requests for comment. The company has completed more than 50 successful Falcon launches and snagged billions of dollars in contracts, including from NASA and the U.S. Department of Defense.

Such is the unusual nature of Elon Musk's varied business ventures, there tends to be considerable attention on pretty much everything he does and says.

The deal would be the biggest leveraged buyout of all time, beating the $45 billion record set by Texas power utility Energy Future Holdings.

As to the question of whether Musk has indeed secured the funding, there is plenty of skepticism among the Tesla short-sellers to go around. Tesla could use a similar structure to go private without requiring stockholders to cash out, said Sohail Prasad, founder of San Francisco-based Equidate, which helps closely held tech firms hold similar share sales.

The murkiness of the financing could turn into a legal mine field for Musk and Tesla, according to both Coffee and former SEC lawyer Pete Henning, now a law professor at Wayne State University. Bloomberg News, which first reported on that meeting, said the talks failed to progress due to disagreements over ownership.

Following Musk's unexpected tweet, a letter was sent to employees, who are also shareholders, explaining his rationale in more detail.

The company faces a make-or-break moment in its eight-year history as a public company as competition from European automakers is poised to intensify with new electric vehicles from Audi and Jaguar, with more rivals entering the market next year. While Tesla undoubtedly has excellent executives and a cadre of top professional talent, it seems to me that these funders are making an extraordinarily large bet on one man and his ability to achieve his vision.

The company is still working its way out of what Musk called "production hell" at its home factory in Fremont, California, where a series of manufacturing challenges delayed the ramp-up of production of its new Model 3 sedan, on which the company's profitability rests. Musk's bold claim that Tesla already has the funding in place to delist itself from the public glare of the stock exchange has yet to be verified. Five Fidelity Investments funds had a collective stake worth roughly about $436 million, according to disclosures from March and June, the most recent available.

Other board members mentioned in the statement included Robyn Denholm, Ira Ehrenpreis, Antonio Gracias and Linda Johnson Rice.

The board has hired advisers and will start talking to bankers next week, but plans on asking Musk to recuse himself from the discussions, CNBC reported Thursday after the market had closed.