Volkswagen was reportedly Tesla’s backer to go private

Elon Musk at Tesla Model 3 reveal

Volkswagen may have come to Elon Musk’s rescue, but the Tesla CEO turned the German automaker down for funding to take his company private, according to a report from The Wall Street Journal on Monday.

Elon Musk started a circus on August 7 when he tweeted about taking Tesla private at $420 per share. At the time Musk only said that the funding was secured. According to the The Wall Street Journal report, no investors were lined up and Tesla then went on a hunt to find them.

The German automaker Volkswagen AG and Silver Lake—a private-equity firm that was brought in with Goldman Sachs Group Inc. to facilitate the deal—would have been the largest investors, contributing $30 billion of financing for the privatization, sources familiar with the deal told The Journal.

These “weren’t the kind of investors Mr. Musk had in mind,” according to The Journal. Musk was “suspicious” of other automakers and believed they wanted a share of what he refers to as the “Tesla halo.”

Such a deal would likely have strings, such as investors wanting a say in the company. While advisers “were confident” a deal could be reached, Musk told some board members Thursday before a meeting “he had doubts about the proposal.”

Last Friday Musk announced via a blog post on the automaker’s website that Tesla will remain a publicly traded company.

Tesla and Musk are in hot water with the Securities and Exchange Commission after his August 7 tweet. The tweet was posted before any board statement or regulatory filings. 

Early reports, later confirmed by Musk, stated the sovereign wealth fund of Saudi Arabia was the funding for the privatization. The Wall Street Journal reported that the Saudis never made a formal proposal.

Volkswagen wouldn’t be the first large automaker to hold a stake in Tesla. In the Silicon Valley automaker’s early years both Toyota and Daimler invested in Tesla.

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