Tesla take-private skepticism grows after Elon Musk's funding claim

Tesla and SpaceX CEO Elon Musk at a SpaceX press conference in Cape Canaveral Fla. on Feb. 6 2018. More

Musk later clarified in a blog post that "a final decision has not yet been made", while touting the benefits of running a private company away from the "enormous pressure" of Wall Street's quarterly earnings cycle.

The report came the day after Musk said he was considering taking Tesla private and that funding had been secured, but did not offer any specifics about the unprecedented move.

Musk shocked the market, yet again with a tweet on Tuesday that he was considering taking the loss-making company private at $420 a share.

Tesla directors have said they knew about Elon Musk's surprise proposal to privatise the money-losing auto maker before he tweeted about it and have met several times in the past week to discuss the proposal.

Tesla Inc.'s board confirmed it knew last week about Elon Musk's proposal to take the electric-car maker private, adding credence to the idea that this was more than a spur-of-the-moment whim from the notoriously impulsive billionaire.

Musk also said he intends to give Tesla's existing shareholders the option of retaining a stake in the company through a special fund, if they want. The board, they said, had met "several times" over the last week and was actively working to "evaluate" the proposal.

Musk owns an nearly 20 per cent stake in Tesla, meaning he'd still need roughly $70 billion in financing to take Tesla private.

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Going private is one way to avoid scrutiny by the public market as Musk and the company tackle those challenges.

Several securities attorneys told Reuters that Musk could face investor lawsuits if it was proven he did not have secure financing at the time of his tweet. Musk owns about 20 percent of the Palo Alto, California, company's stock, so that likely would reduce the cost of the buyout.

Taking Tesla private would also free Musk from his tumultuous relationship with Wall Street as a whole, which had been consuming a significant portion of his time as well as a significant amount of all news surrounding the automaker.

SoftBank is now not interested in a deal for Tesla after earlier this year taking a stake in General Motors Co's (GM.N) self-driving unit, Cruise, Reuters reported earlier on Wednesday.

China's Tencent Holdings Ltd, which took a 5-percent stake in Tesla previous year, could also be a possible partner. "And if you stay as a shareholder you get less information than before and you depend more and more on Elon Musk".

A statement was issued by six members of the electric carmaker's board after Mr Musk tweeted to say he had the funding to de-list the company. Tesla is a legendary cash-burner, with roughly $10 billion in debts and $2 billion in reserves, and Musk would probably need in the tens of billions of dollars to buy out shareholders at the right price.

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