Musk’s brazen gambit collapsed as investor support withered

Bloomberg

Elon Musk’s stunning tweet that he wanted to take Tesla Inc. private and had funding secured was a classic Musk moonshot — given credibility only by the sense that if anyone could possibly pull such a brazen feat, he was the guy.
The initial scoffing after that August 7 post gave way to hiring of bankers to a board meeting where, just maybe, it was ready to take shape. Then Musk aborted his own mission, when hastily assembled bankers and advisers had barely started work, according to people familiar with the matter. Musk was perhaps spooked by blowback from investors he was sure would support him, including key backers from Saudi Arabia, according to other people.
Most shareholders wanted Tesla to remain public, the billionaire chief executive officer conceded in a blog. Large institutional shareholders had limits on how much they could invest in a private company, and there was no proven path for most retail investors, who are among his most ardent and adoring fans. “The sentiment, in a nutshell, was ‘please don’t do this,’” wrote Musk.
Investors now must brace for another potential wild ride when US trading opens on Monday morning, while regulators and lawyers autopsy what happened to a deal potentially valued at $82 billion and Tesla’s board is left with a brilliant but exhausted and erratic CEO. The shares, always volatile, have traded as high as $387 and as low as $288 since August 7, far short of the $420 a share cash-out price Musk pitched. They closed at $322.82 on August 24.
“We have no idea how the shares will react on Monday, as the market seemed to conclude last week that the deal would not get done, for whatever reason,” Cathie Wood, chief investment officer of ARK Investment Management, wrote in an email.

Plan’s Downfall
The unfolding story suggests Musk was sorely mistaken when he tweeted “funding secured” and later told the world “investor support is confirmed,” based on his belief that Saudi Arabia’s Public Investment Fund was eager to back his venture.
The US Securities and Exchange Commission is now investigating his tweets and blog posts, which triggered the stock gyrations throughout August.
One of the investors Musk’s advisers had lined up was Volkswagen AG, the Wall Street Journal reported, citing people familiar with the matter.
A representative for the German automaker didn’t immediately have a comment when reached by Bloomberg News on Monday.
Other investors made their concerns widely known. Wood, of ARK Investment, published an open letter to Musk and Tesla’s board Wednesday in which she stated that Tesla should remain a public company.
“Thank you for the thoughtful letter,” Musk responded on Twitter.

Fire at Tesla’s California facility leaves car plant undamaged
Bloomberg

A fire broke out on Tesla Inc.’s premises in Fremont, California, causing no injuries or damage to the carmaker’s factory before it was extinguished.
A pile of cardboard that was being prepared for recycling along the facility’s southern fence caught fire, CEO Elon Musk said in a twitter post. Musk thanked the local fire department for its fast response. The fire department said it had called an investigator on the scene.
Tesla’s sole carmaking facility in Fremont is crucial for the company as it seeks to ramp up production rates. Tesla manufactured more than 5,000 of its Model 3s in the last week of June, working around the clock to hit the mass-manufacturing milestone.