It's possible Musk could persuade some large institutional and strategic investors to either newly become or remain shareholders in the private company, which could reduce his funding needs, said Toni Sacconaghi, an analyst at Bernstein who has always been bearish on Tesla shares.
Musk, in tweeting Tuesday that he may take Tesla Inc. private, said he hoped "all" investors would remain shareholders after the buyout rather than follow the conventional approach of cashing out.
Tesla fell 0.8 per cent to $367.50 in trading before USA exchanges opened Thursday - well below the $420 at which Musk said shareholders would be bought out. Tesla and SpaceX did not respond to a request for comment.
Such is the unusual nature of Elon Musk's varied business ventures, there tends to be considerable attention on pretty much everything he does and says.
The agreement would be the largest purchase based on debt of all time, surpassing the record of U.S. $ 45 billion established by the firm of Texas Energy Future Holdings.
I hope not, because I think Tesla going private is a great idea (like my friend Yann Brandt, who thankfully has announced in the wake of Musk's Twitter pronouncement that he is keeping his seminal solar newsletter, SolarWakeup, private).
Some analysts have suggested that Mr Musk could convince Tesla's top shareholders, such as Fidelity Investments and China's Tencent, to roll their equity stakes into the deal, thereby significantly reducing the amount of money needed to be raised.
The murkiness of the financing could turn into a legal mine field for Musk and Tesla, according to both Coffee and former SEC lawyer Pete Henning, now a law professor at Wayne State University.
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CNBC's report came several days after Musk stunned financial markets by revealing on Twitter that he is considering taking the automaker private. The talks failed to progress due to disagreements over ownership and have not started up again.
Tesla's stock surged 11 percent on Tuesday, collectively costing short sellers more than $1 billion, by some estimates. Korus said he would need more details from Musk to judge whether a buyout offer would be practical and at what price it would be attractive.
Some on Wall Street shared that view.
In a Wednesday research note, Morgan Stanley analyst Adam Jonas estimated Tesla will end up taking on about $50 billion in additional debt if the company goes private.
The company is still working its way out of what Musk called "production hell" at its home factory in Fremont, California, where a series of manufacturing challenges delayed the ramp-up of production of its new Model 3 sedan, on which the company's profitability rests.
Board members will likely tell Musk to recuse himself from the talks, one source told CNBC, while they discuss taking the company private.
Tesla has been public since 2010, but Musk has said in the past that he would like to take Tesla private. He looked no further than his rocket company - Space Exploration Technologies Corp. - for a way to keep Tesla shareholders onboard. I mean, if you are an institutional investor with hundreds of millions invested in Tesla, who, other than Musk, could you trust to speak authoritatively on behalf of the company?