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Elon Musk says he believed he had funding to take Tesla private

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Elon Musk has said he believes sufficient financial backing will come from both Saudi Arabia’s sovereign wealth fund and his own stake in SpaceX to take Tesla private. dollar.

On the second day of his testimony in federal court in San Francisco, Musk said he would support a possible attempt by the Saudi Public Investment Fund to take Tesla private for $420, a premium of about $20 per share. said it believed it was an “agreed deal.” However, he admitted that there was no contract and many details had not been worked out.

Musk said the PIF had “multiples” of the funds needed to take Tesla private, especially since it was not supposed to buy the company as a whole, and his rocket company, SpaceX. , he added, could be fully supplemented with shares of any shortage. “It’s important for jurors to know that,” he said.

The class action lawsuit came after Musk wrote on Twitter in August 2018 that he was considering taking the electric car maker private for $420 a share and had “secured the funding” to do so. It was brought up by investors who allege that Musk artificially boosted Tesla’s stock price. do so. The deal never materialized. Shareholders claim the posting ultimately caused significant financial losses as the stock plummeted in response.

Musk sent Tesla’s stock soaring sharply, up 11% at the end of the day. His post was based on a conversation with a PIF backer in which he said he would “shake hands” to take the company off the public market. “It was consensual,” he said.

When pressed about the possible reaction to the tweet, Musk, a solemn expression in a dark suit and dark tie, said in a packed courtroom that Tesla stock would either rise or fall so the market could act in a “fight back.” “It’s hard to decide,” he said. ‘intuitive’ method.

However, he acknowledged that the stock is likely to jump. “I would have expected the stock price to probably rise somewhat, but that seems likely. If you’re looking to take a company private or buy a company…there’s going to be some premium. In this case, it is clear what the premium will be.”

Musk has already testified that his tweet was based on a “snapshot decision” after the Financial Times received a heads-up that it was writing an article about PIF acquiring a $2 billion stake in Tesla. was doing. He described it on Monday as the “driving force” behind the tweet.

A lawyer for the shareholder tried to portray the tweet as a frivolous proposal, suggesting that the $420 price was based on a joke his girlfriend at the time found funny. Musk disagreed, saying it would apply a 20% premium to the stock, then round it up slightly.

“At this point, it is questionable whether the karma is good or bad, but there is some karma around 420,” he added.

The billionaire tweeted that he was “considering” taking Tesla private, emphasizing that it should not have been taken as a final agreement.

Shareholder attorney Nicholas Porritt noted that Musk had not discussed any proposals with Tesla’s board beforehand. So, if we discuss this in detail at a board meeting, it will turn into a bid-rigging.”

Musk and Tesla have already paid US regulators a total of $40 million for this tweet.

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