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Home / Business / It does not sound like Elon Musk really thought that "funding secured" Tweet

It does not sound like Elon Musk really thought that "funding secured" Tweet



Elon Musk
Photo: Kiichiro Sato (AP)

Earlier this month, Tesla and SpaceX CEO Elon Musk added to his seemingly endless drama with the announcement via Twitter that he had "secured funding" to Tesla private at $ 420 per share. The tweet quickly blew into his face, caught the attention of the Securities and Exchange Commission, and created chaos for the company. When Musk finally announced that he would rescind the plan late Friday night, it was less surprising than further confirmation of his diminishing credibility.

Well, after a New York Times report this weekend, more details on what exactly was going on. On Musk's head, when he hit the tweet button, surfacing. It has long been clear that Musk sees the company as private in order to calm its constant market volatility and focus on production, but it does not really seem that it is considering all possible consequences of this move. Sources familiar with the situation told the newspaper that the CEO had finally acknowledged that his initial assessment of the idea in the Times was "overly simplistic" and not at all the magic bullet he had believed in: [19659005] At this time, five people close to the events, Mr. Musk realized that his thinking was too simple. While the private retreat would have eliminated some issues, he would have created new ones.

His concerns included giving too much control to private investors – including conventional car companies and Saudi Arabia, a symbol of big oil – and excluding smaller investors who might not be able to keep a stake.

In particular, one of the main investors that Musk believed was "secured" was Saudi Arabia's Sovereign Wealth Fund, which the country uses to diversify its economy in anticipation of a lesser oil. dependent future. But according to The Times, other Musk had to declare that every investment would be conditional:

According to people who were familiar with Mr. Musk's thinking, closer relationships with new private investors posed their own challenges , By borrowing money from Saudi Arabia's sovereign wealth fund – which Mr. Musk saw as a safe bet – Tesla would have teamed with a country whose foundations are fossil fuels and which is often criticized for human rights reasons. [19659006] This cognitive dissonance – an electric car company backed by big oil – has been pointed out to Mr. Musk several times, these people said.

The Times added that discussions with Saudi investment fund managers and others from various countries would have made it clear that some wanted more out of a deal than just a cut in the company's stock. In particular, some sovereign wealth funds wanted to open Tesla production facilities in their home countries – which would link the company's image more directly to the new shareholders and would mean a repetition of its production nights.

That does not sound like reporting how these questions were worked out before Musk sent the tweet. The paper also said that discussions with "several major automakers" had led to funding, although some of them had "reputation baggage." Just as with the SWF, Musk also did not want to give up his control over the Tesla manufacturing process "The relocation of production from its US site in California," wrote The Times

Other issues that became apparent were that it was nearly impossible was to develop a plan in which all current Tesla investors could participate in a buyout. According to the Associated Press, the "Funding Secured" Tweet from Musk also did not contain any relevant information, such as that the Saudi fund was still conducting due diligence on the potential deal. All this seems to confirm that Musk's initial tweet was at least hasty and misleading, which is the basis of the SEC investigation. Speculation that he might be bluffing probably will not be silenced either.

Tesla shares never came close to the theoretical buy-out price of $ 420, which means that traders already felt that something was wrong. "The fact that he is now within weeks "The insincerity in which the first statement was made," said James Cox, Duke University's Corporate Governance and Securities Law Specialist, to Tesla's investors, recognizes that they are leading a frantic, unpredictable, possibly self-destructive CEO "Yale School of Management Professor Jeffrey Sonnenfeld told the Times." No CEO. Emagazine.credit-suisse.com/app/art … = 157 & lang = DE That 's always so confusing and confusing … a big business should not be driven by the hectic, public, volatile impetus of the CEO and his Control market valuation.

This is just the latest in a whole series of bizarre incidents. Collecting part or all of Musk, including fights with journalists, one of the men who participated in a Thai cave rescue as pedophiles, weird interviews and a sprawling one Smearing beef with rapper Azealia Banks and musician Grimes for no reason, and although he has worked to the point of exhaustion at Tesla's, his mood the moment he posted the tweet will scarcely deter the SEC, the Times recently reported , which offers several ways to incriminate Musk and his crew with violations of anti-fraud laws, and if so, the result could be fines or worse.

[New York Times]


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