Hollis Johnson/Business Insider Tesla CEO Elon Musk has expressed his desire to take the company private.
- A special committee of Tesla's board of directors has hired the public relations firm Joele Frank as the company attempts to go private, Fox Business first reported.
- The Fox Business reporter Charles Gasparino said on Twitter that the firm has been retained for "image repair."
- A Joele Frank representative confirmed to Business Insider that it is working with the special committee.
- Tesla declined Business Insider's request for comment.
A special committee of Tesla's board of directors has hired the public relations firm Joele Frank as the company attempts to go private, Fox Business first reported.
The Fox Business reporter Charles Gasparino said on Twitter that the firm has been retained for "image repair."
Tesla said last week that its board of directors had formed a special committee to consider any forthcoming go-private proposals. A Joele Frank representative confirmed to Business Insider that it is working with the special committee. Tesla declined Business Insider's request for comment.
On August 7, Tesla CEO Elon Musk expressed his desire to take Tesla private in a now-controversial tweet.
"Am considering taking Tesla private at $420. Funding secured," Musk said via Twitter.
Some were confused in the hours and days following the tweet, since Musk did not initially disclose who might provide the funding he mentioned.
Musk said in a statement last week that he used the phrase "funding secured" because he believed there was "no question" Saudi Arabia's Public Investment Fund would provide funding for a deal to convert Tesla into a private company. He made the announcement via Twitter, he said, because he wanted all Tesla investors to know about the possibility of Tesla going private at the same time.
But Musk didn't mention any legally binding agreements that were in place at the time he sent the "funding secured" tweet, and he also said he was in discussions with other investors, which suggested some sources of funding may not have been settled before the tweet was sent.
Musk said all relevant parties would be able to review a proposal before a decision was made about going private. He said a proposal would not be presented, however, until discussions with potential investors were finished.
The Saudi sovereign wealth fund first met with Musk early last year about taking Tesla private, Musk said, adding that they'd met multiple times. After the fund purchased about 5% of Tesla's shares, it requested another meeting with Musk, which Musk said took place July 31. Musk said that during this meeting the fund's managing director "strongly expressed his support" to contribute funding to take Tesla private.
Musk notified Tesla's board of directors of his desire to take Tesla private on August 2, he said. But The New York Times reported last week that Musk's "funding secured" tweet surprised the board, which it said had not approved the tweet. According to The Times, Musk told an informal adviser he sent the tweet because he had difficulty keeping information to himself and was frustrated with the company's critics.
The Times later reported that some board members had hired lawyers to protect themselves from the potential legal fallout of Musk's statements and urged Musk to stop using Twitter.
Tesla has been public since 2010, but Musk has previously said he would like to take Tesla private.
"I wish we could be private with Tesla," Musk said in an interview with Rolling Stone published in November. "It actually makes us less efficient to be a public company."
Musk said on August 7 that taking the company private was "the best path forward." He said the pressures of being a public company created distractions and promoted short-term thinking that may not produce the best decisions in the long term.
Musk has also said on multiple occasions that Tesla would become profitable by the end of this year and would not need to raise additional funds, despite its increased cash-burn rate in recent quarters.
At the end of June, Tesla said it achieved its goal of making 5,000 Model 3 sedans in one week. Musk previously said that the company would hit that number by the end of 2017 and that sustaining such a production rate was critical for Tesla to become profitable.
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