The Wall Street Journal: Elon Musk believed he had verbal deal with Saudis to take Tesla private

The Wall Street Journal: Elon Musk believed he had verbal deal with Saudis to take Tesla private

Tesla Inc. CEO Elon Musk believes he had a verbal agreement in place with Saudi Arabia’s sovereign-wealth fund to help finance a plan to take the auto maker private, according to a person familiar with the matter, a contention that could preview how he will fight regulators’ accusation that he misled shareholders.

Musk was sued Thursday by the Securities and Exchange Commission, which alleged that he misled investors when he tweeted last month that he had funding secured to lead a Tesla buyout. The agency, which is seeking to oust Musk from Tesla TSLA, -13.90%  , said in its complaint that he “knew that he had never discussed a going-private transaction at $420 per share with any potential funding source.”

See also: Elon Musk ‘rolling the dice’ and buying time by turning down SEC settlement

Musk believes the SEC’s effort is flawed in assuming that a written agreement and fixed price were necessary for a deal, the person said. Musk also thinks regulators aren’t taking into account that Middle Eastern businesses routinely operate using verbal agreements in principle, the person said.

In addition, Musk has told people that he could have led a go-private transaction using his own stake in SpaceX, if major Tesla investors were on board. SpaceX is the privately held aerospace firm that Mr. Musk controls and is valued at tens of billions of dollars.

An expanded version of this report appears at WSJ.com.

Related posts