Tesla board to formally review Elon Musk’s plan to go private, TSLA reacts after hours
After two days of confusion, it appears Elon Musk’s plan to take Tesla private may be beginning to take shape. CNBC is reporting that Tesla’s board is planning on meeting with financial advisors next week to finalize a formal review plan for Musk’s proposal.
Musk first announced plans to take the company private midday Tuesday on Twitter. He simply tweeted, “Am considering taking Tesla private at $420. Funding secured.” The stock immediately shot up before trading was halted. The company then posted an official blog post elaborating on Musk’s reasoning for the move.
Yesterday, Tesla’s board issued a short statement saying they first heard of Musk’s plans last week and was taking the “appropriate steps” to evaluate Musk’s plan. The new CNBC report claims that Tesla’s board plans to ask Musk to recuse himself from next week’s discussion. Musk’s brother, Kimbal Musk, presumably will also recuse himself from the discussion. Kimbal Musk was notably excluded from the board’s previous statement. Elon Musk recused himself from the board’s review of the SolarCity acquisition in 2016.
“Last week, Elon opened a discussion with the board about taking the company private. This included discussion as to how being private could better serve Tesla’s long-term interests, and also addressed the funding for this to occur. The board has met several times over the last week and is taking the appropriate next steps to evaluate this.” – Statement from the following members of Tesla’s Board of Directors: Brad Buss, Robyn Denholm, Ira Ehrenpreis, Antonio Gracias, Linda Johnson Rice, and James Murdoch
While Elon Musk has claimed that funding is “secured” for the company to go private, he has yet to reveal financial backers. There’s a flurry of speculation surrounding the backers’ identities, ranging from Google to The Saudi Arabian Wealth Fund. Musk’s bid at $420/share values the company at $70B, excluding the company’s debt. Short sellers and skeptics alike have been rebuffing the notion that a financial backer even exists. The board’s move to formally review the bid seems to poke holes in that theory.
Musk’s motivation to go private surrounds the company’s ability to think long-term, operate more efficiently and remove the distraction of a volatile stock price. While taking the company private would achieve those goals, the stock has been anything but stable since his announcement, trading at record-level volume on Tuesday and Wednesday.
Tesla’s stock was down nearly 5% during the day today and is up 2.5% after-hours on this news.
The post Tesla board to formally review Elon Musk’s plan to go private, TSLA reacts after hours appeared first on TESLARATI.com.
Source: https://www.teslarati.com/tesla-board-to-formally-review-elon-musks-plan-to-go-private-tsla-reacts-after-hours/
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