Tesla's value underrated by Musk, top investor says

Tesla chief executive Elon Musk suggested this week he plans to take the electric carmaker private. Did he mean

Tesla chief executive Elon Musk suggested this week he plans to take the electric carmaker private. Did he mean

A Tesla spokesperson declined to comment. "Funding secured", Musk tweeted Tuesday afternoon, initially offering little context.

SoftBank has previously invested in Uber, Nvidia and GM's Cruise. These reportedly include why the company chose to make such a major announcement on Twitter and if it believes "investor-protection rules had been met". Elon Musk's net worth is tied directly to Tesla's stock price, and according to the Bloomberg Billionaire Index, he theoretically made $1.43 billion on the day. Tesla also would likely need to borrow billions more to help pay for its ambitious plans of its electric vehicle line and its battery manufacturing plants. The statement did not address how the $420-per-share price was established.

Musk also said he intends to give Tesla's existing shareholders the option of retaining a stake in the company through a special fund, if they want.

The deal would be the biggest leveraged buyout of all time, beating the $45 billion record set by Texas power utility Energy Future Holdings.

On Wednesday, Breitbart News' Economics and Finance editor John Carney expressed doubts about plans to take Tesla private, suggesting the move may face insurmountable legal headwinds.

SoftBank is now not interested in a deal for Tesla after earlier this year taking a stake in General Motors Co's self-driving unit, Cruise, Reuters reported earlier on Wednesday.

By taking Tesla private, Musk believes that the company will be able to sharpen its long-term focus of revolutionizing an automobile industry dominated by fuel-combustion vehicles without having to cater to investors' fixation on how the business is faring from one quarter to the next.

Tesla board mulls de-listing plan

If we turn to the Street in general, we can see that Wall Street has a neutral point of view on Tesla, with TipRanks analytics exhibiting TSLA as a Hold.

He said that would allow Tesla to "operate at its best, free from as much distraction and short-term thinking as possible".

The Times article went on to mention that, if Musk has not in fact fully secured the funding, the assertion of which sent shares up, it would amount to securities fraud.

There still are near-term execution risks around ramping up Model 3 production and the ability to generate cash, Jonas believes.

Despite the board's statement, it was clear early Wednesday that the euphoria had worn off over Musk's bold claim that he had the funding secured to take the electric-car maker private.

Names excluded from the board statement were Musk; his brother, Kimbal Musk; and Steve Jurvetson, a venture capitalist and early Tesla backer who's been on leave since past year. Tesla's other board members are Musk, his brother Kimbal Musk and venture capitalist Steve Jurvetson.

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