DealBook Briefing: How on Earth Will Tesla Go Private?

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The huge questions about taking Tesla private

Shares in the embattled electric carmaker jumped yesterday after the FT reported that Saudi Arabia had bought a stake. Then Elon Musk dropped a bombshell on Twitter: He was considering taking the business private at $420 a share, and funding was “secured.” That would be the biggest ever leveraged buyout, and at a 20 percent premium on where Tesla’s trading.

The audacity of the plan dumbfounded traders and reporters — as did the casual way Mr. Musk announced it.

It makes sense for him. Investors have battered Tesla for missing production targets and failing to turn a profit in the eight years since it went public. One precedent Mr. Musk endorsed was Michael Dell, who revived his computer company after taking it private.

Huge questions remain, though. Does Mr. Musk really have that financing? (CNBC couldn’t find any banks aware of it.) How could Tesla afford the debt payments without free cash flow? Was Mr. Musk just trying to squeeze short sellers? And did his tweet violate securities rules?

More from Dan Alexander of Forbes:

All told, these allegations — which sparked lawsuits, reimbursements and an S.E.C. fine — come to more than $120 million. If even half of the accusations are legitimate, the current United States secretary of commerce could rank among the biggest grifters in American history.

“The S.E.C. has never initiated any enforcement action against me,” Mr. Ross told Forbes. It did, however, fine him $2.3 million in 2016.

Be like us and don’t I.P.O., Spotify’s C.F.O. says

Spotify made waves when it listed shares directly on the N.Y.S.E. rather than through an initial public offering. Its finance chief, Barry McCarthy, has written an FT op-ed urging other companies to do the same.

The main reason? Not giving away money:

First, we saved on the underwriting fees, which range from 3.5 to 7 percent of the money raised. But the bigger cost saving was avoiding the I.P.O. discount. Think of it this way: the bigger the first-day gain in the closing price of your newly-issued stock, the higher the “cost” of your I.P.O. The investors who bought shares before the market opened pocket the gain in the stock price, instead of the company.

The F.C.C.’s phantom cyberattack

When the Federal Communications Commission’s comment system crashed during its net neutrality consultation, officials blamed a cyberattack.

But Gizmodo has obtained an investigation by the commission’s inspector general that says the problem was just viral traffic after John Oliver highlighted the consultation on “Last Week Tonight.” From the report:

While we identified a small amount of anomalous activity and could not entirely rule out the possibility of individual DoS attempts during the period from May 7 through May 9, 2017, we do not believe this activity resulted in any measurable degradation of system availability given the minuscule scale of the anomalous activity relative to the contemporaneous voluminous viral traffic.

Revolving door

Salesforce.com named Keith Block, its president, as co-C.E.O. alongside Marc Benioff.

Lior Ron, who sold the autonomous trucking start-up Otto to Uber two years ago, will now run Uber’s freight business.

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