Tesla Inc. could soon find its new major investor from Saudi Arabia as the company's chief executive, Elon Musk, let slip of his plans to take the electric car maker private in a USD$60 billion deal at USD$420 a share.
Last week, the business and tech world woke up to a piece of shocking news indicating Musk's decision to take the EV manufacturer out from the clutches and control of Wall Street.
In a Twitter post, the investor said that he's looking to make Tesla "private." A follow-up letter he addressed to Tesla Inc.'s constituents further implies the apparent influence of the firm's market standing on its operations, calling the constant stock price shifting a "major distraction."
Tesla's shares plummeted since Musk's announcement, barely making it to USD$380 last week.
However, new speculations were on the rise over the weekend, implying that the South African mogul may have already found a significant investor in Saudi Arabia.
A report from Time said that Saudi Arabia's sovereign wealth fund, the Public Investment Fund (PIF), is looking to expand its hold in the company. Citing sources with first-hand knowledge on the issue, PIF has in fact, already spoken with Tesla about the investment proposal several months prior.
Such revelations don't actually come as surprising given that the PIF already has put up a 5 percent stake in Tesla in the recent months valued at USD$2 billion.
Saudi Arabia is coincidentally the world's biggest producer of crude oil and other petroleum products. It may seem counterintuitive for such a firm to consider raising its stakes in the most popular producer of electric vehicles - a company whose sole aim is to eradicate the world's dependence on fossil fuel.
However, this move from the Saudi government is exactly in line with its plans to expand the country's investment portfolio past beyond the oil market.
The business world is no stranger to the fact that the global oil industry has recently been shaken in recent months, as stipulated in this report. For Saudi Arabia, whose economy depends mainly on black gold, any changes in the market should prompt its leaders to establish contingency plans, such as capitalizing on the renewables.
Simply put, Riyadh's investment in Tesla is considered a "hedge" against its own oil business. Should this market collapses or that countries will start to back away from fossil fuels, the Persian Gulf state would be able to stay afloat with its secondary source of revenue.
With the PIF already in the bag, Musk's projected USD$60 billion-worth of funding may soon be met in no time.