Saudi Arabia Tried to Take Tesla Private, Elon Musk Reveals During Federal Trial

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Elon Musk has made the explosive revelation that the Saudi Arabian sovereign wealth fund was angling to take Tesla private. He revealed this during the ongoing deposition at a federal trial in San Francisco on Tuesday.

Musk stated that Saudi Arabia's state-owned wealth fund was "were unequivocal about moving forward," with the acquisition.

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"I thought it would be good for the shareholders to take Tesla private ... We were under an unprecedented attack from short sellers." he added, according to Market Watch.

Musk explained that he saw the Saudi offer favorably as he understood that tech giant Google had a 'standing interest' in buying Tesla. He said the Saudi Public Investment Fund (PIF) 'unequivocally' supported the plan to take Tesla private.

The whole case, in which the current trial is taking place, emanates from Musk's tweet in 2018 in which he said funding was secured for taking Tesla private at $420 a share. Investors have filed a class action lawsuit against the Tesla founder, accusing him of committing securities fraud with the tweet.

Elon Musk
Elon Musk Wikimedia Commons

According to Musk, the plan to take Tesla private was dropped due to what he says as a lack of support from some investors. Musk also said he wanted to avoid the lengthy process the privatizing process would have taken.

The Tesla share price had surged after Musk tweeted the plan to take it private by offering $420 per share. However, the share prices backed down when it became clear that the deal was not going to take place, resulting in investor losses amounting to millions of dollars.

Musk says his tweet was completely genuine and truthful and denies the shoareholders' charge that he was trying to manipulate Tesla share price with the tweet.

He then explains that the Saudi sovereign wealth fund Governor later 'backpedalled' on the commitment. Citing text messages with the wealth fund chief, Musk said Yasir Al-Rumayyan was later engaged in 'ass covering'.

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Tesla Logo (Representational Picture) Wallpaper Flare

Arguing further that his tweet was genuine, Musk told the court that he would have sold SpaceX stock to take Tesla private. He cited example of his recent acquisition of Twitter and the sale of his stock in Tesla to raise funds. He said he would have done the same for taking Tesla private.

Yahoo Finance reported that Musk had entered into a deal with Google co-founder Larry Page in 2013 to sell Tesla for $11 billion. The deal failed to materialize over differences on specific points of acquisition.

This article was first published on January 24, 2023
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