Tesla CEO Elon Musk has expressed his desire to take Tesla private.Reuters/Bobby Yip
- Tesla CEO Elon Musk has attracted controversy for his statements about taking Tesla private.
- Questions have persisted about the amount of funding Musk had secured when he first suggested he had the backing necessary to convert Tesla into a private company, barring a shareholder vote.
- The SEC has reportedly asked Tesla about statements made by Musk and the company.
Tesla CEO Elon Musk shocked observers when he said on August 7 that he was thinking about taking the company private. Since then, Musk’s comments have captivated Wall Street, drawn the attention of regulators, and raised questions about how close the company is to locking down the financing necessary to leave the public markets.
Here’s what you need to know to get caught up:
November 15, 2017: Elon Musk says in a Rolling Stones interview that he wishes Tesla was a private company.
“I wish we could be private with Tesla,” Musk said in the interview. “It actually makes us less efficient to be a public company.”
July 31, 2018: Musk claims he met with the managing director of Saudi Arabia’s sovereign wealth fund.
Aaron P. Bernstein/Reuters
Musk claimed in a statement published on Tesla’s website on Monday that he had a meeting with the managing director of Saudi Arabia’s sovereign wealth fund on July 31.
During this meeting, Musk claimed the director “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,” Musk said.
The Saudi sovereign fund did not respond to a request for comment.
August 1, 2018: Tesla reports second-quarter earnings amid fear the company is running out of cash.
Hollis Johnson/Business Insider
Tesla reported an adjusted loss per share of $3.06 for the second quarter, which was larger than what analysts had predicted, and revenue of $4 billion, which beat analyst projections. Its cash burn, $739.5 million, was lower than analysts expected. The company said it expected to be profitable during the second half of 2018.
“Going forward, we believe Tesla can achieve sustained quarterly profits, absent a severe force majeure or economic downturn, while continuing to grow at a rapid pace,” the company said.
During the company’s earnings call, Musk apologized to Sanford C. Bernstein & Co. analyst Antonio Sacconaghi. During Tesla’s first-quarter earnings call in May, Musk had referred to Sacconaghi’s questions as “boring” and “boneheaded.”
“I’d like to apologize for being impolite on the prior call. Honestly, I really think there’s no excuse for bad manners, and I was kind of violating my own rule in that regard. There are reasons for it in that I had gotten no sleep, had been working 110-hour, 120-hour weeks, but nonetheless, there’s still no excuse,” Musk said during the second-quarter earnings call.
August 2, 2018: Musk claims he told Tesla’s board he wanted to take the company private at $420 per share.
John Moore / Getty Images
In his August 13 statement, Musk said that after first telling the board about his desire to take Tesla private, the board’s outside directors met without him. Musk said he later met with them again to talk about the discussions he’d had about financing a go-private deal.
August 7, 2018: Stock jumps as high as 12%, closing at $379.57.
Tesla’s share price surged after Musk’s “funding secured” tweet, rising by as much as 12%, to over $381, before settling at $379.57 when trading closed on August 7.
August 8, 2018: Tesla’s board posts a brief statement about Musk’s desire to take Tesla private.
Hollis Johnson/Business Insider
Tesla board members Brad Buss, Robyn Denholm, Ira Ehrenpreis, Antonio Gracias, Linda Johnson Rice, and James Murdoch said in a statement on August 8 that Musk had begun a discussion with them about going private the week prior. They said they had met multiple times since.
August 9, 2018: News breaks of the board reportedly asking Musk to recuse himself as it explores the possibility of going private.
Rashid Umar Abbasi / Reuters
CNBC reported that the board planned to meet with financial advisors to determine how it would explore the idea of converting Tesla into a private company and had told Musk that he must consult a separate, personal set of advisors.
August 10, 2018: Reports emerge that Tesla is in early discussions about funding to go private.
Kiichiro Sato / Associated Press
On August 10, Bloomberg reported that Tesla had begun discussions with some potential investors and was talking with banks about whether it would be able to make a deal and what that deal would look like, but it hadn’t yet hired a bank to formally assist in the process.
August 10, 2018: Two lawsuits filed against Musk and Tesla allege securities fraud.
Two Tesla investors filed separate lawsuits accusing Musk of misleading investors and manipulating the company’s stock price with his statements about taking the company private.
August 13, 2018: Azealia Banks says she was at Musk’s house during the prior weekend and that he was “scrounging for investors.”
AP/Getty/Business Insider
Banks told Business Insider that Musk seemed concerned about getting financing for a potential go-private deal while she was at one of his homes in Los Angeles.
A representative for Musk said he had never met or communicated with Banks, but did not deny that Banks had stayed at one of his homes during the time period Banks specified.
Tesla declined a request for comment on Banks’ claims regarding Musk’s efforts to find investors.
August 13, 2018: Musk tweets in the evening that he is working with Goldman Sachs and Silver Lake as financial advisors on a proposal to take Take private.
Pascal Le Segretain/Getty Images
“I’m excited to work with Silver Lake and Goldman Sachs as financial advisors, plus Wachtell, Lipton, Rosen & Katz and Munger, Tolles & Olson as legal advisors, on the proposal to take Tesla private,” he said.
August 13, 2018: Tesla hit with another securities fraud lawsuit.
A complaint filed on Monday in US District Court in California alleges that some investors purchased Tesla stock “at artificially inflated prices and suffered significant losses and damages once the truth emerged” that Musk had not secured the funding necessary to convert Tesla into a private company for $420 per share when he sent his “funding secured” tweet.
August 15, 2018: SEC reportedly subpoenas Tesla.
Max Whittaker / Getty Images
Fox Business reported on Wednesday that the SEC had sent subpoenas to Tesla concerning the company’s plans to explore going private and Musk’s statements about the process.
Fox Business reporter Charles Gasparino said on Twitter that sources suggested the agency was moving into a formal investigation of Tesla. Gasparino also said that SEC officials had concerns about how the agency’s investigation could affect Tesla’s ability to go private.
August 14, 2018: A fourth lawsuit is filed against Tesla.
Jalopnik reported on Wednesday that a fourth lawsuit had been filed against Tesla, alleging securities fraud.
According to the US District Court in California’s website, the lawsuit was filed on Tuesday.
August 15, 2018: Goldman Sachs officially signs on to advise Musk on his plans to take Tesla private.
Goldman Sachs said it would be “acting as a financial advisor in connection with a matter that is fundamental to the reasonable analysis of the rating and price target for the stock.”
The firm also said it was suspending research coverage of Tesla.
