Fintech

Tokenize Tesla to Take it Private Says Investor, But Musk Says Saudi Fund is Providing the Capital

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An investor has suggested Musk could launch a Tesla Coin to take it private. Haydar Habra, of Andra Capital, says:

“I love Tesla, I love Elon Musk, and I think he should definitely consider the blockchain and tokenization of assets. We’d call it the Tesla Coin.”

But Elon Musk, Tesla’s CEO, has different plans. Providing further details on his “funding secured” tweet, Musk stated:

“Recently, after the Saudi fund bought almost 5% of Tesla stock through the public markets, they reached out to ask for another meeting. That meeting took place on July 31st. During the meeting, the Managing Director of the fund expressed regret that I had not moved forward previously on a going private transaction with them, and he strongly expressed his support for funding a going private transaction for Tesla at this time. I understood from him that no other decision makers were needed and that they were eager to proceed.

I left the July 31st meeting with no question that a deal with the Saudi sovereign fund could be closed, and that it was just a matter of getting the process moving. This is why I referred to ‘funding secured’ in the August 7th announcement.”

That suggests Tesla is indeed going private, with Musk stating the board was supportive of the plans, but no use of blockchain tech is expected. Haba, however, says tokenizing Tesla would have many benefits.

Haba says it would take him “90 days and $30,000” to transfer private company shares to someone else. “Now we can do it on the blockchain in a matter of seconds, between global investors,” he said. “This is by far better than anything out there.”

In the future, there will be no distinction between private and public, Haba argues. “We’re only going to have one high-quality tokenized offering,” he says.

That future might however be a bit too early for Musk to consider, who says the reported $70 billion to take Tesla private is an overestimate.

“The $420 buyout price would only be used for Tesla shareholders who do not remain with our company if it is private.

My best estimate right now is that approximately two-thirds of shares owned by all current investors would roll over into a private Tesla,” he said.

Musk further revealed that he had to publicly announce the plans as he needed to hold discussion with some of the biggest shareholders. That would give them an information advantage, he said, therefore had to make public his intentions.