Tesla’s board is establishing a formal committee to explore the possibility of turning the publicly traded electric vehicle maker into a private company.
The move comes after CEO Elon Musk triggered feverish speculation on Wall Street last week when he suddenly tweeted that he was considering taking the company private with “funding secured.”
Musk then followed that up with a blog post on the company’s website Monday saying the Saudi Arabia sovereign wealth fund had offered to finance the deal and that he had already discussed the possibility of going private with the board.
Musk has argued that Tesla would be better off as a private company because it would not be subject to quarterly profit pressures and short-sellers who bet against the company. He wants Tesla to focus on the long run and has said he plans to maintain his 20 percent stake in the go-private deal.
The company said Tuesday that its board had formed a special committee with three independent directors to assess any move to go private. The members are Brad Buss, Robyn Denholm and Linda Johnson Rice.
Tesla would not be allowed to go private without the special committee’s authorization.
The company noted that Musk had not yet presented an official proposal.
“Nor has it reached any conclusion as to the advisability or feasibility of such a transaction,” Tesla said in a statement.
Taken together, the developments reflect an unusually out-in-the-open process for a publicly traded company.
Most publicly traded companies that decide to consider such a transaction disclose their ruminations and their formation of a special committee at the same time in a strategically timed press release.
Musk said he wanted to do the deal at $420 per share. Tesla’s stock closed Monday at $356.41.
Analysts say that while some companies benefit from being privately held so that they can focus on long-term growth, Tesla may need the scrutiny of being a publicly traded company to become more efficient. The company has lost billions while it grows its electric vehicle operations.
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.
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