"T$3 he reason for doing this is all about creating the environment for Tesla to operate best", the email reads.
Yesterday, Tesla CEO Elon Musk tweeted about potentially taking his company private again to expand long-term planning and, probably, to "own the shorts".
The oil-rich kingdom of Saudi Arabia's investment fund has gobbled up a multibillion-dollar stake in the company in recent months, the Financial Times reported Tuesday, but Tesla has not answered questions about the involvement of the kingdom, or anyone else, in how he would finance the company's exit from public markets.
Former SEC chair Harvey Pitt told CNBC that while the USA stock market regulator permits executives of publicly listed companies to use social media to make statements about their businesses, Musk's tweet was still "highly unprecedented". According to the WSJ report, as well as others slowly trickling out of Twitter's financial corner, the SEC is looking into whether or not Musk was telling the truth when he said he'd already secured financing to take the company public. The surprise announcement was sandwiched between other provocative tweets and, among other things, promptly caused a temporary halt in the trading of Tesla shares on Wall Street while also causing some to doubt if Musk was being serious.
An acquisition of Palo Alto, California-based Tesla by overseas investors would likely trigger a national-security review by the Committee on Foreign Investment in the U.S. The panel, which has stepped up its scrutiny and blocked some deals lately, could impose conditions, including limits on control of the company and information sharing.
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.
Tesla shares fell as much as 3.4 per cent to US$366.52 before the start of regular trading, though they pared declines after the board statement.
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Musk has promised a sustained net profit starting in the third quarter.
China's Tencent Holdings Ltd (0700.HK), which took a 5 percent stake in Tesla a year ago, could also be a possible partner.
The statement was not from the company's full board of directors. "If the process ends the way I expect it will, a private Tesla would ultimately be an enormous opportunity for all of us". He suggested he did in an initial tweet, but so far Tesla hasn't disclosed any sources of financing, and no one has stepped forward publicly to say they're backing the plan.
Tesla stock, which has been on the rise for days, skyrocketed after the tweet and ended Tuesday up 11%.
"What does Musk mean by 'funding secured?"' asked Toni Sacconaghi, an analyst at Bernstein who has always been bearish on Tesla shares. 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.
Two of the potential stumbling blocks to Musk's plan include the stock price premium not being enough to get the existing shareholders on board to support the sale and coming up short on the announced funding to complete the transition.