Tesla CEO Elon Musk met with SoftBank CEO Masayoshi Son about taking the electric-car maker private a year ago, Bloomberg reports.
An acquisition of Palo Alto, California-based Tesla by overseas investors would likely trigger a national-security review by the Committee on Foreign Investment in the U.S. The panel, which has stepped up its scrutiny and blocked some deals lately, could impose conditions, including limits on control of the company and information sharing.
Bloomberg's Selina Wang and Giles Turner reported that Musk and Son failed to reach an agreement over the structure of the company, citing sources.
In a statement on Tesla's website on Wednesday, six of Tesla's nine directors said the board had met several times over the last week to discuss such an idea and was "taking the appropriate next steps to evaluate this".
The company has only posted a quarterly profit twice in its history and has never made money during an entire calendar year, something that Musk has been trying to change by cutting costs, including recent mass layoffs that trimmed Tesla's workforce by 9 per cent. Tesla lost another $717.5 million in its most recent quarter.
Mr Musk had "opened a discussion with the board" last week, the six directors said.
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On Tuesday, Musk revealed on Twitter that he was considering privatizing the company after taking it public in 2010.
Former SEC chair Harvey Pitt told CNBC that while the U.S. stock market regulator permits executives of publicly listed companies to use social media to make statements about their businesses, Musk's tweet was still "highly unprecedented". As a public company, we are subject to wild swings in our stock price that can be a major distraction for everyone working at Tesla, all of whom are shareholders.
Some on Wall Street shared that view.
Taking Tesla private would also free Musk from his tumultuous relationship with Wall Street as a whole, which had been consuming a significant portion of his time as well as a significant amount of all news surrounding the automaker. It was pretty quick and seemed to handle well enough. "Either way, the future is very bright, and we'll keep fighting to achieve our mission".
At $420 apiece, buying all of Tesla's shares would cost about $72 billion, but Morgan Stanley analyst Adam Jonas wrote in a note to investors Wednesday that he expects about $50 billion in additional net debt. Many initially thought it was Elon Musk's attempt at a bad joke about marijuana, because "420" has always been associated with pot.
Of course, now that Musk has stated that he has secured the funds to do so, he may need to carry it out lest he face accusations of stock manipulation, according to FT, as the mere announcement of having the funds to take the company private caused Tesla stock to rise by 11 percent.