Tesla CEO Elon Musk confirmed reports on Monday morning that the Saudi Arabian sovereign wealth fund purchased a stake in the company worth nearly 5 percent and held discussions with Musk about taking the company private.
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In a blog post, Musk said the wealth fund has approached him “multiple times” over the past two years to discuss funding for privatization, most recently on July 31.
“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,” Musk wrote. “I continue to have discussions with the Saudi fund, and I also am having discussions with a number of other investors, which is something that I always planned to do since I would like for Tesla to continue to have a broad investor base.”
The Financial Times reported last week that Saudi Arabia’s sovereign wealth fund – overseen by Saudi Crown Prince Mohammed bin Salman – built up a 3 percent to 5 percent stake in Tesla.
That same day, Musk said on Twitter that he was “considering” taking the company private at a $420 buyout price and that funding had already been secured.
The entrepreneur has received criticism for making the announcement on Twitter, with some questioning whether he violated securities laws. On Monday, Musk explained he made the decision to break the news in that manner so all shareholders would have access to the knowledge at the same time.
The stock popped during the early hours of Monday’s trading session before it pared those gains.
Saudi Arabia’s Public Investment Fund (PIF) is a centerpiece of its initiative to modernize the kingdom’s economy. The comprehensive plan, known as Vision 2030, was laid out in April by the country’s leaders and involves transferring 5 percent of state-owned Saudi Aramco to the investment fund through an initial public offering, expected to be the largest in history.
PIF invested $3.5 billion in ride-sharing company Uber last year.