Musk's SpaceX could help fund take-private deal for Tesla

Oscar PerryAug 21, 2018

Several Tesla Inc shareholders have told Reuters they are concerned that the electric vehicle maker will have to pay more to fund its growth if it becomes a private company and loses the ability to sell new shares to stock market investors.

Musk repeatedly teared up during the Times interview, telling the newspaper that he nearly missed his brother's wedding as he worked 120-hour weeks and referring to an "excruciating" period of trying to meet the company's vehicle production goals.

It's not clear why they're bothering Musk now more than before, but it might be because Tesla's hard year (Model 3 production delays and Model X crash that has dropped stock prices since March) made more short-sellers turn to Tesla, or because Musk's own activities (say, a positive quarterly earnings call) have cost the short-sellers huge sums.

"This past year has been the most hard and painful year of my career", he said in the interview.

Investors must have gotten unnerved.

Evercore had earlier forecast production of 123,000 Model 3s during the second half of the year, but the analysts said they may need to boost that by as much as 7 percent after the tour. The latest snapshot of Bloomberg's Model 3 Tracker shows Tesla consistently cranking out more than 5,000 cars a week, a threshold that Musk has long said will make the mass-market sedan profitable. His tweet reportedly has also ruffled feathers among Tesla board members, who were unaware of his plans to explore taking the electric carmaker private and are searching to find a chief operating officer or other No. 2 executive to help ease the burden. But he told the newspaper he wrote the tweet inside a Tesla Model S while he was driving to the airport, and that no-one else reviewed it. Tesla stock is in bear-market territory, down more than 21 percent from its 52-week high.

Lawyers have warned that his tweet may have broken 14e-8 of the Securities Exchange Act of 1934, which prohibits publicly traded companies from announcing plans to buy or sell securities if executives don't intend to complete, don't have the means to complete, or are trying to manipulate the stock price.

Musk also denied having smoked weed before sending the tweet, but did mention he sometimes takes Ambien to help him sleep.

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Musk said that he hasn't taken a week-long vacation in close to 20 years.

The company said the board formed a special committee to evaluate proposals to take the company private. They can have the job.

Musk told the Times that board members had not complained to him about his tweet.

But the South African-born Musk has appeared to fray under the pressure in recent months.

Musk says in a blog posted Monday that most of the funding would be in stock rather than debt. "Is there someone who can do the job better?"

In the interview with The New York Times, Musk blamed short-sellers, from whom he said he anticipated "a few months of extreme torture".

Musk has also been alleged for taking drugs to deal with the stress.

And, earlier this year, Musk tweeted that "most people don't know this, but comets [are] mostly made of cocaine".

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