Tesla board says it will assess plan to go private

Last Updated Aug 14, 2018 10:17 AM EDT

Tesla's board has created a committee of independent directors to assess CEO Elon Musk's plan to take the company private. 

The committee hasn't yet received a formal proposal from Musk, who earlier this month tweeted that he had secured funding to take his electric-car company private. He wrote in a blog post that the funding would come from the Saudi sovereign wealth fund, and added that going private "could be good for our shareholders" and "advance our mission of accelerating the transition to sustainable energy."

The board said the committee's members are Brad Buss, Robyn Denholm and Linda Johnson Rice, and that it has hired Latham & Watkins LLP as the committee's legal counsel. 

"The special committee has not yet received a formal proposal from Mr. Musk regarding any Going Private Transaction nor has it reached any conclusion as to the advisability or feasibility of such a transaction," the board said in a statement

Shares of Tesla slipped $3.15, or less than 1 percent, to $353.26 in early trading Tuesday.

A leveraged buyout of Tesla, which has a market capitalization of about $60 billion, would represent an abrupt change in financial strategy for a company that went public in 2010. Going private would remove Tesla from Wall Street scrutiny, eliminating the need to publicly disclose its earnings and -- for Musk -- having to explain himself to shareholders.

Musk tweeted on Aug. 7 that he had "funding secured" to buy Tesla shares at $420 per share.

That tweet may have created a sticky situation for Musk as it appears the funding may not be locked up yet. According to Musk, the tweet followed a meeting with Saudi Arabia's Public Investment Fund.

Shares of Tesla Inc. jumped 11 percent in a day, raising the value of the company by $6 billion.

That's led to at least two class-action lawsuits alleging securities violations.

--With reporting by The Associated Press.