On August 7, Tesla CEO Elon Musk sent the stock market into a tizzy when he tweeted out his plans to take his company private if the stocks hit $420. There was a suspension and also a resumption of the company’s shares, including reports of a major investment from Saudi Arabia. A significant investment from the same could loosen Musk’s grip on his company.
A tweet from Financial stated that Saudi Arabia’s sovereign wealth fund has bought a 3% to 5% stake in Tesla. This translates to an amount between $1.9 billion to $3.2 billion.
Saudi Arabia’s Public Investment Fund reportedly reached out to Musk, requesting to buy newly issued shares but Tesla declined the offer, resulting in the PIF buying shares in secondary markets. This would mean that the PIF is gaining control over the US company, a feat that Musk certainly wouldn’t like. Following FT’s report, Musk tweeted that he’ll make Tesla private if shares reach $420.
Going by Musk’s tweet, if Tesla reaches a share price of $420, it would have an enterprise value of $82 billion including the debts, according to the Guardian. The report adds that in order to make his company turn private, Musk will have to make the biggest leveraged buyout in history. In a follow-up tweet, Musk confirmed that he doesn’t have a controlling vote currently and he doesn’t expect any shareholder to have one if Tesla becomes private. In either case, he ‘won’t be selling.’