Elon Musk’s mystery Tesla buyout funder is Saudi Arabia – "because of the important need to diversify away from oil"
Saudi Arabia's sovereign wealth fund is the mystery funder that has offered to finance a deal to take Tesla private, Elon Musk wrote in a Monday morning blog post. The post lays to rest a mystery that has bedeviled Wall Street and the news media since Musk tweeted last Tuesday that he had "funding secured" for a buyout.
"Going back almost two years, the Saudi Arabian sovereign wealth fund has approached me multiple times about taking Tesla private," Musk wrote in his Monday post. "They first met with me at the beginning of 2017 to express this interest because of the important need to diversify away from oil."
Musk isn't ready to sign on the dotted line with the Saudis yet. "I 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," Musk wrote.
Musk also noted that this will not be a leveraged buyout, where the acquisition is largely funded by borrowing money that would have to be paid off by Tesla later. Instead, the Saudis (or whoever ultimately funds the deal) will buy shares from existing shareholders who want to cash out—these funders would then become some of Tesla's biggest shareholders.
A total buyout of Tesla would cost more than $70 billion. But Musk says he's hoping that many of Tesla's major shareholders will choose to remain as shareholders in the new, private company.
My comment though is that it is a sign that more and more fossil fuel-based investors and companies are investing more heavily in renewable energy technology. In many cases startups in renewable energy were not traditional energy companies nor even car companies, but the mainstream players are now moving in. There is still pioneering ground to cover though as all renewable energy technologies are still innovating and evolving (meaning it gets replaced / outperformed by newer technology within 5 years).
See https://arstechnica.com/cars/2018/08/elon-musk-considering-using-saudi-oil-money-to-buy-out-tesla/
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Elon Musk’s mystery Tesla buyout funder is Saudi Arabia The Saudis have been seeking to fund a Tesla buyout since early 2017, Musk says. |