Elon Musk, Tesla and the Saudi connection

28 August, 2018, 18:11 | Author: Corey Lynch
  • What will Tesla's board of directors do about Elon Musk

Musk and Tesla are facing investor lawsuits and a US Securities and Exchange Commission investigation into the truthfulness of the CEO'S August 7 tweets, according to an August 8 report by the Wall Street Journal.

In his original tweet, Musk said he had "funding secured", and later revealed that statement was based on talks he held with the Saudi Arabian sovereign wealth fund about investing in Tesla.

In a blog post Friday, the billionaire entrepreneur declared "most of Tesla's existing shareholders believe we are better of as a public company". There is also no proven path for most retail investors to own shares if we were private.

Several analysts suggested that Mr Musk could be replaced as chief executive or that a chief operating officer may be hired to support him. Some analysts said the drama has damaged the credibility of both Musk and his board, and called for the company to bring in a top operations executive to help right the ship. Leaving ownership as is puts the scrutiny back on Musk's all-consuming work style, the company's tricky cash position, its ability to meet mass-market production goals, and the independence and oversight of Tesla's board.




VW is also the only other company set to rival Tesla in building a network of fast chargers, after it was ordered to spend $2 billion to build a fast-charge network across America as part of its court settlement related to diesel emissions cheating. A Tesla spokesman declined to comment. Several investors have also sued Tesla, alleging that Musk's announcement was meant to manipulate the price of the company's stock.

David Johnson, a managing partner at corporate restructuring firm Abraxas Group, told FOX Business that Musk had made a misstep firing the tweet off. Coffee noted that the SEC may feel as though these disclosures were deficient.

But the judge said shareholders failed to show that Tesla needed to be clearer that Model 3 production could fall short.

Last year, Tesla announced it was producing an electric semi truck capable of carrying cargo across the country without burning any fossil fuels. Musk said earlier this month the company's "default plan" would be to fund that expansion by borrowing money from Chinese banks.

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