Elon Musk’s Go-Private Tesla Tweet Made Saudi Officials “Unhappy”; VW Among Potential Investors

Elon Musk’s move to announce on Twitter his plan of taking Tesla private at $420 per share, as funding was allegedly secured, stunned the industry but the whole thing was aborted just as hired advisers were brought in to assess the situation.

Musk believed that Saudi Arabia’s Public Investment Fund was eager to back his venture but then realized that most shareholders wanted Tesla to remain public.

Musk’s tweet even triggered an investigation by the U.S. Securities and Exchange Commission, sending Tesla’s stock price into a wild ride, trading as high as $387 and as low as $288 since August 7.

Bloomberg reports that Musk’s public announcement stirred unease among Saudi officials about the publicity surrounding their potential role. They were unhappy about Musk detailing his talks with the Fund in a blog post, where the CEO tried to justify his earlier tweet about “funding secured” on their interest. Add to that their concerns about potential fallout from shareholder lawsuits and the SEC investigation.

Citing people familiar with the matter who asked not to be identified, the report goes on saying that Saudi officials were open to making a significant investment as a mean to attract technology expertise to the region and hedge against oil but the fund was interested in a minority stake to limit its exposure to a single deal and save resources for other projects.

Musk and the Saudi officials hadn’t reached an agreement on the terms of the structure of their participation before the Tesla CEO pulled the plug. In addition to its interest in Tesla, the Saudi sovereign fund also considers an investment in Lucid Motors.

Another report from Wall Street Journal says that Volkswagen was one of the potential investors that were lined up by Musk’s advisers. They proposed to Musk a roster of investors that included Volkswagen AG and Silver Lake, which had agreed to contribute as much as $30 billion. But the deal team told him that the money would likely come with strings attached, as the new investors would want a lot of say in the company.