Tesla take-private skepticism grows after Elon Musk's funding claim

Flags fly over the Tesla Inc. Gigafactory 2 which is also known as RiverBend a joint venture with Panasonic to produce solar panels and roof tiles in Buffalo New York

Tesla directors have said they knew about Elon Musk's surprise proposal to privatise the money-losing auto maker before he tweeted about it and have met several times in the past week to discuss the proposal.

On Wednesday morning, multiple members of Tesla's board of directors signed a statement that confirmed Musk was serious about taking Tesla private.

Rather, it was attributed to Brad Buss, Robyn Denholm, Ira Ehrenpreis, Antonio Gracias, Linda Johnson Rice, and James Murdoch.

The board had "met several times over the last week" to discuss going private, the statement said. The company already has a $2 billion investment from Saudi Arabia's sovereign fund as well as Tencent, which took a 5 percent stake in 2017.

Teresa Goody, a former SEC official, said Musk "did something inappropriate and caused chaos in the market" in a way that would likely draw scrutiny from investigators.

Musk, who has had a contentious relationship with Wall Street analysts, and short-sellers who bet against his stock, tweeted on Tuesday that he could take the company private at $420 per share-but Farley said a company doesn't necessarily run better if it's out of the public eye.

Tesla stock opened at $369.09 on Wednesday, sliding almost 3 percent from its Tuesday closing price of $379.57.

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"What does Musk mean by 'funding secured?"' asked Toni Sacconaghi, an analyst at Bernstein who has always been bearish on Tesla shares.

But the board offered no further details of the proposal or its funding, sparking new questions about the feasibility of the master gambit Musk revealed in a surprise series of midday tweets on Tuesday.

Musk mused Tesla could be bought back at $420 per share.

Two of the potential stumbling blocks to Musk's plan include the stock price premium not being enough to get the existing shareholders on board to support the sale and coming up short on the announced funding to complete the transition.

Harvey Pitt, a former chair of the Securities and Exchange Commission, said Musk's asserting a final sale price and that funding was "secured" opened him to potential charges of stock manipulation or securities fraud. "This is out there, even for Tesla", analysts with Barclays wrote Wednesday.

The statement was not from the company's full board of directors.

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