Tesla board evaluating Elon Musk's proposal to take company private

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Six of Tesla's board members issued a statement Wednesday morning confirming that they have been in discussions with CEO Elon Musk about taking the company private.

Other board members mentioned in the statement included Robyn Denholm, Ira Ehrenpreis, Antonio Gracias and Linda Johnson Rice. Later in the day it became clear that Musk was in fact serious about the bid to take Tesla private when Tesla published a blog post in Musk's name addressed to all employees and when Musk tweeted that he had already lined up the funding for such a move. "The board has met several times over the last week and is taking the appropriate next steps to evaluate this".

The most obvious equity partners for Musk would be a sovereign wealth fund such as Saudi Arabia's Public Investment Fund (PIF), which sources said on Tuesday had taken a stake of just below 5 percent in Tesla, or a major technology investment fund such as SoftBank Group Corp's Vision Fund, bankers said.

Musk's tweets caused a flurry of activity in financial markets.

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Shares rocketed up 11 percent after Musk's grand reveal Tuesday, with some expecting they would hit $420 - the price Musk had promised shareholders would receive once the company had finalized its go-private transformation.

Midway through the trading session in NY on Wednesday, Tesla shares were down 5% at $374 after surging 11% on Tuesday.

Trading in Tesla was halted for an hour and a half on Tuesday afternoon, by which time the stock had soared to $370.

It's possible Musk could persuade some large institutional investors to remain shareholders in the private company, which could reduce his funding needs, Sacconaghi said.

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Neither Elon nor Tesla has said yet where it's getting the money to go private.

China's Tencent Holdings Ltd, which took a 5-percent stake in Tesla previous year, could also be a possible partner.

Going private is one way to avoid close scrutiny by the public market as Musk and the company face those challenges. And as the stock price has climbed this year, so too have the bets against it.

"It's very hard to put leverage on this company", due to its negative cash flow and "operational issues", Scott said Wednesday on Bloomberg Television. Tesla's other board members are Musk, his brother Kimbal Musk and venture capitalist Steve Jurvetson.

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