Every bizarre thing that has happened since Elon Musk sent his ‘funding secured’ tweet about taking Tesla private

Tesla CEO Elon Musk once expressed a desire to take Tesla private.

Tesla CEO Elon Musk once expressed a desire to take Tesla private.
Reuters/Bobby Yip

  • Tesla CEO Elon Musk has attracted controversy for his statements about taking Tesla private, made public on August 7.
  • The announcement – which took a lot of people by surprise – started off a wild few weeks of speculation and accusation, with Musk at the center.
  • On August 24, Musk formally abandoned the go-private plan and said Tesla would remain a public company.

Tesla CEO Elon Musk shocked observers when he said on August 7 that he was thinking about taking the company private.

That plan came to an abrupt conclusion on August 24, when Musk and Tesla formally abandoned the idea, having whipped up a whirlwind that got the attention of everyone, including Wall Street regulators.

Here’s what you need to know to make sense of the saga:

November 15, 2017: Elon Musk says in a Rolling Stone 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 6, 2018: The British diver Musk called a ‘pedo’ prepares to sue him for libel.

In July, Musk called British diver Vernon Unsworth a pedophile in a tweet and said he would bet money to back his accusation after Unsworth said the miniature submarine Musk designed and sent to Thailand to help with the rescue of a boys’ soccer team and their coach would have been ineffective and was merely a publicity stunt. Musk later apologized to Unsworth and deleted the tweet.

In a letter sent to Musk on August 6, L. Lin Wood, a lawyer retained by Unsworth, writes that he is “preparing a civil complaint for libel” against Musk and that Musk made “false and defamatory statements” suggesting Unsworth is a pedophile. In the letter, Wood invited Musk and his legal representatives to contact him to avoid a lawsuit.

August 7, 2018: Elon Musk sends “funding secured” tweet.

OnInnovation / Flickr

“Am considering taking Tesla private at $420. Funding secured,” Musk first said via Twitter before issuing a formal statement on the company’s website.

Musk said in the statement that a shareholder vote must be held before a final decision is made. But he said in a tweet that investor support was confirmed.

Taking the company private is “the best path forward,” Musk said in the statement. He said the pressures of being a public company create distractions and promote short-term thinking that may not produce the best decisions in the long term.

Musk’s statements raised questions about the certainty of funding he referenced and where exactly that funding would come from.

August 7, 2018: Stock jumps as high as 12%, closing at $379.57.

Reuters/Noah Berger

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 8, 2018: SEC reportedly makes inquiries into Tesla regarding Elon Musk’s “funding secured” tweet.

Lucy Nicholson / Reuters

The Wall Street Journal reported that the SEC had made an inquiry into Tesla about whether one of Musk’s tweets regarding the possibility of taking the company private was truthful.

According to the publication, the SEC was also looking into why Musk’s first statement about the potential of taking Tesla private was made on Twitter instead of in a regulatory filing. The agency also asked the company whether it believed Musk’s tweet followed SEC rules about protecting investors, The Journal reported.

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.

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.

Getty Images/Joshua Lott

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: On Monday morning, Musk reveals new details about why he sent “funding secured” tweet.

Joe Skipper / Reuters

In a blog post on Monday, Musk said he used the phrase “funding secured” because he believed after a July 31 meeting with Saudi Arabia’s Public Investment Fund’s managing director that there was “no question” the fund would provide backing for a deal to convert Tesla into a private company.

He made the announcement via Twitter, he said, because he wanted all Tesla investors to know about the possibility of Tesla going private at the same time.

August 13, 2018: Azealia Banks says she was at Musk’s house during the prior weekend and that he was “scrounging for investors.”

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: The New York Times reports that some members of the board were blindsided by his ‘funding secured’ tweet.

REUTERS/Joseph White

The New York Timesreported on Monday that Musk’s “funding secured” tweet surprised the board, which it said had not approved the tweet. According to The Times, Musk told an informal adviser he sent the tweet because he had difficulty keeping information to himself and was frustrated with the company’s critics.

August 13, 2018: Tesla hit with another securities fraud lawsuit.

Reuters/Kevin Lamarque

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 14, 2018: Tesla board forms a special committee to review a plan to take Tesla private.

Hollis Johnson/Business Insider

Three independent board members – Brad Buss, Robyn Denholm, and Linda Johnson Rice – will sit on the special committee. Musk will need the committee’s approval before a deal to take Tesla private can be approved.

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: 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 15, 2018: Goldman Sachs officially signs on to advise Musk on his plans to take Tesla private.

YouTube / Tesla Motors

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.

August 16, 2018: The Wall Street Journal reports that the SEC is investigating whether Musk was trying to hurt short sellers with his “funding secured” tweet.

Reuters/Bobby Yip; Business Insider/Dave Smith

The Wall Street Journal reported the Securities and Exchange Commission was investigating whether Tesla CEO Elon Musk was attempting to hurt the company’s short-sellers when he tweeted about taking the company private.

According to the report, the agency was asking Tesla’s board of directors what Musk told them before he tweeted that he had secured the funding to convert Tesla into a private company, were the proposal to pass a shareholder vote.

August 16, 2018: The New York Times publishes a revealing Elon Musk interview. He told the Times he does not regret his “funding secured” tweet and said that he planned to stay on as CEO of the company.

Larry Busacca/Getty Images

Musk said in the New York Times interview that this has been “the most difficult and painful year” of his career.

He also said he had no plans as stepping down as chairman and CEO, but that if someone thinks they can do the job better, they “can have the reins right now.”

And despite the fact that Musk’s “funding secured” tweet could end up costing both him and the company, he said he did not regret it.

August 17, 2018: Tesla short-sellers reportedly make around $1 billion.

Following Musk’s New York Times interview, Tesla’s share price dropped almost 9% when trading closed on August 17, and it fell nearly 1% more during after-hours trading. Tesla short-sellers made around $1 billion that day, The Times reported, citing data from the analytics firm S3 partners.

August 19, 2018: Musk defends his work habits.

Mark Brake / Getty Images

In response to Musk’s comments to The New York Times about working up to 120 hours per week, Arianna Huffington wrote that Musk’s work habits were unhealthy and unproductive in a post on Thrive Global that was published on August 17.

“You’ve come up against incredible challenges, and you’ve met them by being ever more rigorous and determined about applying the latest science. But at the same time, you’re demonstrating a wildly outdated, anti-scientific and horribly inefficient way of using human energy. It’s like trying to launch us into our clean energy future (or into space) with a coal-fired steam engine. It just won’t work,” she wrote.

Musk responded to her via Twitter early in the morning on August 19, suggesting that he had no choice but to work long hours.

“Ford & Tesla are the only 2 American car companies to avoid bankruptcy. I just got home from the factory. You think this is an option. It is not,” he said.

August 21, 2018: Morgan Stanley halts coverage of Tesla.

Adam Jonas
CNBC via Yahoo Finance

Morgan Stanley halted its research coverage of Tesla on August 21, a move that indicates it may be working with Tesla in some capacity as the company explores the possibility of going private. Last week, Goldman Sachs stopped covering Tesla, saying it was “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.”

August 24, 2018: Elon Musk announces Tesla will remain a public company.

REUTERS/Beck Diefenbach

Tesla CEO Elon Musk announced August 24 that Tesla will remain a public company.

This concludes what had been weeks of speculation and hand-wringing around the go-private proposal Musk first revealed in a tweet on August 7.

In a blog post published on Tesla’s website, Musk said discussions with existing shareholders and financial advisors revealed there was little appetite for such a move.

“After considering all of these factors, I met with Tesla’s Board of Directors yesterday and let them know that I believe the better path is for Tesla to remain public. The Board indicated that they agree,” Musk wrote.

August 27, 2018: The Wall Street Journal reports that Volkswagen wanted to invest in a private Tesla.

Volkswagen was one of the companies lined up to fund a potential deal to take Tesla private, The Wall Street Journal reported.

Tesla declined Business Insider’s request for comment and Volkswagen did not respond to a request for comment.

According to The Journal, Musk had reservations about letting rival automakers invest in Tesla, thinking they would be attempting to benefit from what he reportedly called the “Tesla halo.”

The Journal also reported that the potential new investors in a deal to take Tesla private would want a significant amount of influence over the company, though the publication did not specify whether Volkswagen specifically requested those or similar terms.

August 28, 2018: Musk and The New York Times disagree over whether Musk cried during his interview.

Bill Pugliano / Stringer / Getty Images

The New York Times said in its August 16 story about Musk that he “alternated between laughter and tears” in his interview with the publication.

On August 28, Musk said on Twitter that while his voice cracked during the interview, he didn’t cry.

“For the record, my voice cracked once during the NY Times article. That’s it. There were no tears,” he said.

In the first story, Musk is described as having “choked up multiple times” during the interview. That interview took place over the phone, according to a follow-up story.

A New York Times spokesperson said the publication stands by its description of Musk in the first story.

“Mr. Musk’s emotion was audible. It is not true that his voice only cracked once,” the spokesperson said.

August 31, 2018: Musk says he was thinking like a casino owner when he sent his “funding secured” tweet.

Larry Busacca / Getty Images for The New York Times

In an interview with The Wall Street Journal, Musk suggested that he sent his “funding secured” tweet because he thought the odds were in his favor.

“If the odds are probably in your favor, you should make as many decisions as possible within the bounds of what is executable,” Musk said.

He then compared his situation at the time to that of a Las Vegas casino.

“This is like being the house in Vegas. Probability is the most powerful force in the universe, which is why the house always wins. Be the house,” he said.

September 5, 2018: Musk reportedly hires a lawyer who used to work for the SEC.

Max Whittaker / Getty Images

Musk hired two lawyers in the wake of the reported SEC investigation into him and Tesla, according to Fox Business Network.

One of the lawyers Musk reportedly retained, Roel Campos, was an SEC commissioner from 2002 until 2007. Campos is a partner at the firm Hughes Hubbard & Reed and lists securities enforcement, securities litigation, and regulatory cases among his areas of focus on the firm’s website. Musk also reportedly retained Steven Farina, a partner at Williams & Connolly who focuses on securities enforcement and securities litigation, among other practice areas, according to the firm’s website.

Tesla, Campos, Farina, and Kramer did not respond to Business Insider’s requests for comment.