Musk's Tesla U-turn Prompted by Annoyed Saudis and Fearful Fans, Despite Interest From Volkswagen: Reports

Friday night’s not-so-surprising move by Tesla CEO Elon Musk, in which he wheeled around his plan to take the company private like an angry father cutting short a family vacation, has many angles.

First and foremost is the money factor, which matters more than anything else in this drama. According to two new reports, money eventually became available, just not from the sources we were led to expect. And not from sources Musk wanted.

According to the Wall Street Journal, green-seeking auto giant Volkswagen wanted a piece of Tesla’s action. After Musk’s team of assembled bankers rushed to put together a roster of investors last week, Volkswagen stood out among the final group. This group, it should be noted, was apparently willing to put up $30 billion in funding for the buyout.

Sources with knowledge of the dealings claim this motley crew of big players was not what Musk had hoped for. He was warned that they, and most certainly VW, would want a big say in how the automaker conducted itself. Meanwhile, many of Musk’s beloved mutual funds and small, superfan investors threatened to pull out, or at least pare their holdings.

As we all know, Musk likes having his own hand on the tiller.

While all of this was going on, Saudi Arabia was growing perturbed. The country’s sovereign wealth fund, tapped as a source of funding for Musk’s plan, is not an ATM from which anyone can just withdraw cash. According to Bloomberg, the Saudis weren’t too pleased that Musk mentioned their meetings in a public blog post.

Nor were the Saudis interested in holding a large stake in the company, sources claim, with concerns about the SEC’s investigation into Musk’s Aug. 7th tweets creating concern among the fund’s overseers. There was never a deal reached on just how much the sovereign wealth fund would contribute, the sources state.

Funding secured? Not by a long shot.

Tesla’s share price fell nearly four percent after trading opened Monday morning, but the stock has since recovered half of the loss.

[Image: Tesla]