Elon Musk Totally Wasn’t Lying About Going-Private Funding

For real, just call up Crown Prince Mohammad. He’ll vouch for him.
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As he has spent the past several years teaching David Einhorn, Jim Chanos and the other haters and doubters, the rules do not apply to Elon Musk or any of his companies, most especially Tesla. Still, many thought he might have found one that does last week, when he tweeted that he’d already “secured” funding for what would be a $70-plus billion going-private transaction so that he’d never have to explain to some boneheads why Tesla wasn’t making as many Model 3s as he’d repeatedly promised, or why the concept of profitability doesn’t apply to a religion, or how reversing the traditional cash-flow relationship between buyer and supplier is really nothing to worry about. This included the SEC, which is apparently not a fan of offhand tweets announcing such things and which would like to know if Musk had any basis for typing it.

LudaMusk

People of Earth: Don’t worry! Even if Elon were bound by any securities laws or SEC rules, he totally didn’t violate them because he definitely got the Saudis to agree to finance the going-private deal long before he picked up his phone on Tuesday, whether or not his board knew anything about it.

Mr. Musk said his “funding secured” announcement came after meeting with the Saudi Arabian sovereign-wealth fund. He said the Saudi fund approached him multiple times about going private starting almost two years ago, and that he left a July 31 meeting with the fund’s managing director believing the fund was eager to proceed….

“I left the July 31st meeting with no question that a deal with the Saudi sovereign fund could be closed, and that it was just a matter of getting the process moving,” Mr. Musk wrote. “This is why I referred to ‘funding secured’ in the August 7th announcement.”

That the Saudis aren’t quite as confident, or that the proposed structure of the new private ownership group may not be possible, are mere details best nitpicked by hedge fund managers in new shorts and certainly do not trouble those operating on higher planes of existence.

A person familiar with the Saudi fund, called the Public Investment Fund, cautioned that while discussions have taken place, the fund hasn’t made a detailed proposal, in part because of questions centering on its potential rights as a foreign investor….

Last week, he suggested creating a “special purpose fund” to enable current investors to stay with Tesla.

But under current SEC rules, companies must register their securities with the agency if they have more than 500 “nonaccredited” investors—individual investors below certain income and wealth thresholds—as shareholders of record. In addition, a public company can’t go private and end its registration or filing obligations with the SEC if it has more than 300 shareholders.

Tesla had 1,156 shareholders of record as of Jan. 31, according to its annual report, along with many more shareholders whose shares are held in “street name” by banks or brokerages.

These sound like more rules. Elon Musk is not interested.

Elon Musk Met With Saudi Fund About Taking Tesla Private [WSJ]

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