Tesla’s board of directors says Elon Musk brought up going private last week

Tesla CEO Elon Musk.

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Tesla CEO Elon Musk.
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Fred Prouser / Reuters

  • The Board of Directors for Tesla said in a statement issued on Wednesday that company CEO Elon Musk had brought up the notion of taking the company private last week.
  • Musk announced on Twitter on Tuesday that he is considering taking Tesla private at $420 per share.
  • Some industry commentators have wondered if Musk opened himself up to legal ramifications because of the nature of his public announcement.

Tesla’s Board of Directors said in a statement issued on Wednesday that company CEO Elon Musk had brought up the notion of taking the company private last week, prior to his public Tweets on Tuesday afternoon.

In a statement issued on the Tesla company website, Board of Directors members Brad Buss, Robyn Denholm, Ira Ehrenpreis, Antonio Gracias, Linda Johnson Rice, and James Murdoch wrote:

“Last week, Elon opened a discussion with the board about taking the company private. This included discussion as to how being private could better serve Tesla’s long-term interests, and also addressed the funding for this to occur. The board has met several times over the last week and is taking the appropriate next steps to evaluate this.”

Venture capitalist Steve Jurvetson and Kimbal Musk, Elon’s brother, are also board members but are not listed among those who are included in making the statement.

Musk shocked the business world on Tuesday when he publicly announced in a series of tweets he may take the electric car company private at $420 a share.

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

In the formal statement, Musk wrote “a final decision has not yet been made, but the reason for doing this is all about creating the environment for Tesla to operate best.” Musk cited a desire to leave behind the distractions brought on by stock market trading and operate without the pressures of quarterly earnings cycles.

“I fundamentally believe that we are at our best when everyone is focused on executing, when we can remain focused on our long-term mission, and when there are not perverse incentives for people to try to harm what we’re all trying to achieve,” he said.

But Musk’s tweets about going private created an immediate firestorm, with some industry experts wondering if he opened himself up to legal liabilities by announcing his intentions to leave the market prior to a unified corporate statement with his board of directors.

Tesla’s stock soared following Musk’s tweets, reaching as high as $371.15 per share after trading around $361 in early afternoon trading on Tuesday.

Other industry experts cast doubt on the feasibility of Musk’s plan to pull off a buyout of Tesla.

Musk said in his statement that a shareholder vote must be held before a final decision is made. But he also tweeted thatinvestor support was confirmed, only that it was contingent on a shareholder vote.