Saudi Arabia's PIF has shown no interest in bankrolling Tesla buyout

Saudi Arabia's PIF has shown no interest in bankrolling Tesla buyout

Troy Powers
August 15, 2018

The complaints were filed three days after Elon Musk said it plans to remove Tesla from listing, proposing to take back each title for Dollars 420, valuing the deal around USD 72 billion (63 billion euros). Instead, it's the tweet's final two words, "funding secured", that could create problems.

Tesla CEO Elon Musk used Twitter late Friday to taunt investors who have bet against his company, even though his previous Twitter comments have spurred a government investigation and shareholder lawsuits.

Tesla, under its CEO Elon Musk, is reportedly looking for finding from a wide range of investors so as to prevent a concentration of ownership.

Tesla and the Securities and Exchange Commision declined comment on Thursday. In particular, and importantly, at 12:48pm eastern standard time on August 7, 2018, Musk issued a statement via Twitter that "funding" for the deal had been "secured" ("Funding secured").

Whether or not that will result in civil and criminal penalties for Musk remains to be seen as some reports suggest that the tweet sent out by Musk have left him vulnerable to such charges.

Market volatility created by short-sellers Musk, who owns one-fifth of the company, is really not a "Wall Street hanger-oner", but owing to Tesla's capital investment requirements, he has been forced to live with the need to have a Wall Street presence.

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Musk has not offered evidence that he has lined up the necessary funding to take Tesla private, and the complaints did not offer proof to the contrary.

While Saudi is certainly the first direction anyone would look to, and we've already discussed the Chinese interest via Tencent in a recent article called Why the Shanghai Government is Helping Tesla Secure the Gigafactory 3 Funding.

On August 1, when Tesla stock was climbing after the company's quarterly earnings release, Musk said on Twitter that he would send one of Tesla's biggest short sellers, David Einhorn, president of hedge fund Greenlight Capital, a box of short shorts "to comfort him through this hard time", referring to Greenlight Capital's big quarterly loss... mainly due to Tesla's stock boom.

But Musk has been open about his disdain for Tesla short-sellers.

"Musk has every right to say that he has a potential $420-per-share takeover bid lined up, provided that he doesn't sell stock into the hype", Cramer said this week.

Perhaps that's what was missing when Elon Musk and Masayoshi Son met past year. For less severe penalties, the SEC would have to determine it was more likely than not that Musk committed some form of misconduct, Pitt said.