Elon Musk, a pioneer in commercial space exploration andelectric cars, is now tinkering with one of Wall Street's moststoried products: the management led buyout.

Musk, in tweeting Tuesday that he may take Tesla Inc. private,said he hoped “all” investors would remain shareholders after thebuyout rather than follow the conventional approach of cashing out.He looked no further than his rocket company—Space ExplorationTechnologies Corp.—for a way to keep Tesla shareholdersonboard.

For years SpaceX has run an internal stock market for employeesand other shareholders, allowing it to remain closely held. Theycan privately sell shares to sophisticated investors such asFidelity Investments through liquidity events, according to aletter from Musk to employees. Tesla could use a similar structureto go private without requiring stockholders to cash out, saidSohail Prasad, founder of San Francisco-based Equidate, which helpsclosely held tech firms hold similar share sales.

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.