Weak Sauce: Elon Musks 2018 Feud With Saudi Fund Revealed – Yahoo Finance

(Bloomberg) -- Elon Musks short-lived effort to take Tesla Inc. private after his infamous funding secured tweet in August 2018 has loomed over the billionaires reputation -- and his quest to buy Twitter Inc.

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Now, a series of text messages that Musk exchanged with Silicon Valley friends, investors and the managing director of Saudi Arabias Public Investment Fund during that saga have come to light as part of an ongoing shareholder lawsuit. The texts provide a window into how Musk operates as he once again attempts -- almost four years later -- to take a publicly traded company private.

In a text-message exchange with Yasir Al-Rumayyan, the head of the Saudi PIF, an angry Musk discusses a Bloomberg News article that reported the fund was in talks to take Tesla private. The Tesla CEO was upset because he believed hed reached a handshake agreement with Al-Rumayyan weeks earlier, in July 2018, for the fund to finance the transaction.

This is an extremely weak statement and does not reflect the conversation we had at Tesla. You said you were definitely interested in taking Tesla private and had wanted to do so since 2016, Musk wrote in an August 2018 text message, according to a 300-page motion filed late Friday as part of the suit. Im sorry, but we cannot work together.

Its up to you Elon, Al-Rumayyan responded.

You are throwing me under the bus, Musk wrote back.

It takes two to tango, Al-Rumayyan replied. We havent received anything yet.

The back-and-forth continues. Al-Rumayyan tells Musk that we cannot approve something that we dont have sufficient information on, and writes that hes been waiting for more details. Later in the exchange, Al-Rumayyan asks Musk to read the article please.

Story continues

I read the article, Musk says. It is weak sauce and still makes me sound like a liar. It is filled with equivocation and in no way indicates the strong interest you conveyed in person.

Musk told Al-Rumayyan that Tesla would move forward with private equity firm Silver Lake, Goldman Sachs Group Inc. and other investors. The next day, however, he published a blog post citing the Saudi PIFs interest in taking Tesla private as the reason he tweeted that he had funding secured.

Al-Rumayyan texted that he was surprised Musk had divulged loose information, despite having signed a non-disclosure agreement and after keeping the PIF waiting for specifics needed to move forward with a deal. Musk scolded Al-Rumayyan again for not pushing back against media reports about whether the Saudi fund would support the go-private transaction.

Reuters reported that two sources from PIF confirmed no interest in Tesla, which is absolutely false, and yet you did nothing until I forced the issue, Musk wrote.

Musk shelved the effort later that month after it became clear many large investors wouldnt go along with it, stunning the financial world with a late Friday night blog post titled Staying Public.

Still Fighting

Since then, Tesla has become profitable and built factories in Shanghai, near Berlin and in Austin, Texas. The company has indisputably ignited the shift to electric vehicles, and its $1 trillion valuation has made Musk the worlds wealthiest person.

But the investors suing Musk in federal court argue that Musks August 2018 tweets were indisputably false and cost them billions of dollars by spurring wild swings in Teslas stock price. The judge in the case ruled earlier this month that no reasonable jury could find Musks tweets on August 7, 2018, accurate or not misleading. Musk and his attorneys have insisted he was entirely truthful and are trying to appeal.

Musk also has stood by his argument that Saudi Arabias wealth fund had agreed to support his attempt to take Tesla private. The text messages were part of a motion filed by Alex Spiro, Musks lead outside attorney.

The filing includes excerpts from Musks deposition with the U.S. Securities and Exchange Commission, which sued Musk for securities fraud. The agency settled with Musk and Tesla, with each paying $20 million and Musk agreeing to step down as chair of Teslas board for three years.

Musk has repeatedly said since then that he doesnt respect the SEC, and lashed out at the agency again Monday on Twitter.

Twitter Talks

Starting early this year, Musk quietly began acquiring a more than 9% stake in Twitter and became its largest individual shareholder. After turning down a board seat, he launched an unsolicited $43 billion offer for the company earlier this month.

Twitter has traded below Musks $54.20 offer price, indicating skepticism over the prospects of his acquisition bid. But after securing financing from institutions including Morgan Stanley, Musk spent Sunday meeting with Twitter executives who grew more receptive toward the offer, a person with knowledge of the matter said. The company is working to hammer out terms of a transaction and could reach an agreement as soon as Monday if negotiations go smoothly, according to people who asked not to be identified because the information is private.

While Musk has said hes lined up $46.5 billion to fund his bid for the social media platform, the text messages from 2018 serve as a reminder that the 50-year-old billionaire also can change his mind. They also highlight that, when angered, hell play hardball.

The case is In re Tesla Inc. Securities Litigation, 18-CV-04865, U.S. District Court, Northern District of California (San Francisco).

(Updates with more of Musks exchange with the head of the Saudi PIF starting in the 10th paragraph.)

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Weak Sauce: Elon Musks 2018 Feud With Saudi Fund Revealed - Yahoo Finance