Tesla CEO Elon Musk has revived his $44 billion bid to take the electric car maker private, saying he has lined up the funding to do it. The latest attempt by Musk to take Tesla off the stock market comes less than two months after he abandoned an earlier plan, which sparked lawsuits, an SEC investigation and intense scrutiny of the billionaire executive’s behavior. In a blog post on Tesla’s website late Monday, Musk said he met last week with Saudi Arabia’s sovereign wealth fund and “left that meeting convinced that it would be possible” to finance a deal at $420 per share. The offer represents a premium of more than 20 percent to Tesla’s current stock price.
What is Tesla?
1. Tesla is an electric vehicle and energy company founded by CEO Elon Musk.
2. Tesla’s mission is to accelerate the world’s transition to sustainable energy through the production of affordable, reliable, and clean electric vehicles and energy products.
3. Tesla designs and manufactures electric vehicles, as well as batteries, solar panels, and other energy products.
4. As of July 2020, Tesla operates over 3,000 Supercharger stations worldwide, with a goal of 20,000 by the end of 2020.
Who is Elon Musk?
Elon Musk is a business magnate, industrial designer, and engineer. He is the founder, CEO, CTO, and chief designer of SpaceX; early investor, CEO, and product architect of Tesla, Inc.; founder of The Boring Company; co-founder of Neuralink; and co-founder and initial co-chairman of OpenAI. A centibillionaire, Musk is one of the richest people in the world.
Musk was born to a Canadian mother and South African father and raised in Pretoria, South Africa. He briefly attended the University of Pretoria before moving to Canada aged 17 to attend Queen’s University. He transferred to the University of Pennsylvania two years later, where he received dual bachelor’s degrees in economics and physics. He moved to California in 1995 to attend Stanford University but decided instead to pursue a business career, co-founding web software company Zip2 with his brother Kimbal. The start-up was acquired by Compaq for $307 million in 1999. Musk co-founded online bank X.com that same year, which merged with Confinity in 2000 to form the company PayPal and was subsequently bought by eBay in 2002 for $1.5 billion.
In 2002, Musk founded SpaceX, an aerospace manufacturer and space transport services company, of which he is CEO, CTO, and lead designer. In 2004, he joined electric vehicle manufacturer Tesla Motors as chairman and product architect, becoming its CEO in 2008. In
What is the SEC?
The Securities and Exchange Commission (SEC) is a government agency that regulates the securities industry in the United States. The SEC’s mission is to protect investors, maintain fair and orderly markets, and facilitate capital formation.
The SEC has authority over all aspects of the securities industry, including exchanges, brokers, dealers, and investment advisers. The SEC also oversees public companies’ financial reporting and disclosure requirements.
The SEC is headquartered in Washington, D.C., and has regional offices across the country.
What did Musk tweet?
In a tweet on Tuesday, Musk said he was “considering taking Tesla private at $420. Funding secured.”
The tweet sent Tesla’s stock soaring, and the company is now worth more than $70 billion.
Musk’s tweet came just hours after the Financial Times reported that Saudi Arabia’s sovereign wealth fund had built a $2 billion stake in Tesla.
The fund is overseen by Crown Prince Mohammed bin Salman, who has been seeking to diversify the kingdom’s economy away from oil.
Tesla declined to comment on the tweet. It’s not clear if Musk has lined up the financing he would need to take the company private.
Musk’s initial tweet did not say how he would fund such a deal, and he has not responded to follow-up questions from reporters.
Why is this bid important?
1. Why is this bid important?
This bid is important because it would allow Tesla to avoid a lengthy and costly trial that could have distracted the company from its mission of accelerating the world’s transition to sustainable energy.
How could this affect Tesla’s stock price?
Tesla CEO Elon Musk has taken to Twitter to revive his $72 billion offer to take the company private, just weeks before he is set to go to trial for fraud. The SEC is seeking to bar Musk from serving as an officer or director of a public company, which would likely force him out of Tesla.
Musk’s latest Twitter offer comes as Tesla faces increasing pressure from shareholders. The electric car maker has been struggling to meet production targets for its Model 3 sedan, and its stock price has been volatile in recent months.
If the SEC succeeds in barring Musk from running Tesla, it could have a significant impact on the company’s stock price. Tesla without Musk would be a very different company, and investors would likely react negatively to the news. The stock could plunge if Musk is forced out, or it could rise if investors believe that Tesla can continue to thrive without him.
Either way, the outcome of the SEC’s case against Musk will be closely watched by investors and could have a big impact on Tesla’s stock price.
What’s next for Musk and Tesla?
1.1 Musk’s next move
Now that the SEC has formally charged Musk with fraud, he faces a potentially lengthy legal battle. The trial is set to begin on October 22nd. If convicted, Musk could be fined and/or face up to 20 years in prison.
In the meantime, Tesla is facing several other challenges. The company is struggling to meet production targets for its new Model 3 sedan, and it recently announced plans to lay off 9% of its workforce. Additionally, Tesla’s bond rating was downgraded to “junk” status by Moody’s Investors Service last week.
1.2 What’s next for Tesla?
Tesla will continue to try to ramp up production of the Model 3, which is seen as crucial to the company’s long-term viability. It also needs to find a way to reduce costs so that it can turn a profit on the car. And it will need to deal with the fallout from the SEC charges against Musk. All of this will be difficult enough without having to worry about a potential prison sentence hanging over Musk’s head.