On August 13, Mr Musk posted a statement to Tesla's website in which he explained that the comment relative to funding being secured was based upon a July 31 meeting with the Saudi Arabian sovereign wealth fund in which its representative expressed support for funding a transaction to go private.

He has also asked for additional details on how the company would be taken private, including any required percentages and any regulatory requirements.” We had imagined following the surprise August 7 announcement that another party (e.g., the Saudi fund) had already firmly decided (including having completed any internal review process) to fund a going private transaction.

Tesla does appear to be exploring a going private transaction, but we now believe that such a process appears much less developed than we had earlier presumed (more along the lines of high level intention), suggesting formal incorporation into our valuation analysis seems premature at this time.

Tesla's Board of Directors has also announced a special committee comprised of three independent directors to evaluate any transaction (the Board stated it has not yet received a formal proposal).

We now await the SEC's verdict if it agrees with the largest US bank, and what that would mean for the embattled Tesla CEO.

Categories: ZH