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Tesla is reportedly in early discussions with investors about funding to go private (TSLA)

elon musk

  • Tesla is in early discussions with some potential investors about the possibility of taking the company private, Bloomberg reported.
  • According to the publication, the company is looking for several investors rather than seeking a few large stakeholders.
  • The report appears to contrast Tesla CEO Elon Musk's Tuesday tweets, in which he said funding to take the company private was "secured" and indicated a shareholder vote was the final step needed to finish a deal.
  • Bloomberg said sources close to 16 financial firms and technology companies were not aware of backing arranged before Musk sent his first tweet.
  • Tesla did not immediately respond to Business Insider's request for comment. 

Tesla is in early discussions with some potential investors about the possibility of taking the company private, Bloomberg reported on Friday.

According to the publication, the company is looking for several investors rather than seeking a few large stakeholders. Tesla has begun discussions with some potential investors and is talking with banks about the whether it will be able to make a deal and what that deal might look like, but it hasn't hired a bank to formally assist in the process, Bloomberg reported.

The report appears to contrast Tesla CEO Elon Musk's Tuesday tweets, in which he said funding to take the company private was "secured" and indicated a shareholder vote was the final step needed to finish a deal. Bloomberg said sources close to 16 financial firms and technology companies were not aware of backing arranged before Musk sent his first tweet.

Tesla did not immediately respond to Business Insider's request for comment.

Three days after Musk said he had locked down the funding necessary to take Tesla private pending a shareholder vote, neither he nor the company has disclosed where that money could come from.

"Am considering taking Tesla private at $420. Funding secured," Musk said on Tuesday via Twitter before issuing a formal statement on Tesla's website.

He later said: "Investor support is confirmed. Only reason why this is not certain is that it's contingent on a shareholder vote."

While Tesla's board released a statement on Wednesday saying Musk had discussed with it last week the prospect of going private, Musk had yet to tell the board where the backing for a buyout deal would come from, Reuters reported on Thursday, citing a source familiar with the matter.

Musk's failure to clarify his tweets indicating Tesla is a shareholder vote away from becoming a private company is a problem, James Rosener, a partner at the law firm Pepper Hamilton who specializes in private equity and corporate financing, told Business Insider.

"The fact that there has been no announcement clarifying, confirming, or denying the financing is surprising and puts Tesla and Musk at great risk," he said in an email.

That risk includes the possibility of fines from the Securities and Exchange Commission or even criminal prosecution, said Harvey Pitt, who was the agency's chairman from 2001 to 2003.

"This whole course of events is highly problematic," he said.

The Wall Street Journal reported on Wednesday that the SEC had made an inquiry into Tesla about whether one of Musk's tweets regarding the possibility of taking the company private was truthful. And on Thursday, Bloomberg reported that the agency was "intensifying" its inquiry.

An inquiry from the SEC does not necessarily mean an investigation will follow.

Read Bloomberg's full story here.

This is a developing story. Check back for updates.

Have a Tesla news tip? Contact this reporter at mmatousek@businessinsider.com.

Read more about Tesla possibly going private:

SEE ALSO: Ex-Tesla engineer Doug Field is back at Apple, working on its self-driving-car program, Project Titan

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