Elon Musk

Elon Musk wants to take the Wall Street short sellers out of Tesla’s picture. On Monday, the CEO revealed more details about his plan to take the electric car firm out of public stock exchanges and into private hands, while pushing back against skeptics that criticized his decision to tweet his plan first.

“The only way I could have meaningful discussions with our largest shareholders was to be completely forthcoming with them about my desire to take the company private,” Musk explained in a Monday post about his announcement. “However, it wouldn’t be right to share information about going private with just our largest investors without sharing the same information with all investors at the same time. As a result, it was clear to me that the right thing to do was announce my intentions publicly. To be clear, when I made the public announcement, just as with this blog post and all other discussions I have had on this topic, I am speaking for myself as a potential bidder for Tesla.”

Musk posted on his Twitter page on August 7 his plan, saying that he had secured funding:

A Bloomberg story on Sunday claiming that Saudi Arabia’s public investment fund — with a Tesla stake just under the five percent threshold required for public reporting — is exploring the idea that it could play a role in Musk’s plan. The fund purchased a stake through third parties after repeatedly approaching Tesla to discuss investment plans.

On Monday, Musk revealed that the fund has approached him regularly over the past two years with a proposal to take the firm private. Musk says he met with the fund on July 31, after it had purchased the stake, and that the fund’s managing director expressed strong support for a deal to help finance the transition. After he published his plan, Musk says the fund has supported continuing discussions while asking for more details on how this plan would work in practice.

The size of the money required for a buyout is unclear. Musk proposed buying shares at $420, 20 percent above the $350 share price of that day, which would value Tesla at over $70 billion. The plan would involve offering existing shareholders a choice between remaining invested in a future private firm, or receiving the buyout. Musk claimed on Monday that he expected around two-third of shares to stay in Tesla.

Musk’s sudden announcement angered some. Two lawsuits filed since the tweet claim that the posts were designed to decimate short sellers’ position, investors that stand to make money from a drop in Tesla’s share price. Musk has repeatedly singled out such sellers as among the groups that want Tesla to fail.