The 47-year-old investor and engineer stunned financial markets on Tuesday when he said on Twitter that he was considering a take-private deal for Tesla, an auto manufacturing pioneer that developed the world's first luxury all-electric sedan vehicle.
In his blog Monday, Musk said that reports that more than US$70 billion would be needed to take Tesla private "dramatically overstate the actual capital raise needed" because he expected some shareholders to remain invested in the firm.
The Financial Times reported last week that Saudi Arabia's sovereign wealth fund - overseen by Saudi Crown Prince Mohammed bin Salman - built up a 3 percent to 5 percent stake in Tesla. They are the ones who believed in Tesla when no one else did and they are the ones who most believe in our future.
Tesla CEO Elon Musk at a press conference at the Kennedy Space Center in Cape Canaveral, Florida, U.S., February 6, 2018.
"My best estimate right now is that approximately two-thirds of shares owned by all current investors would roll over into a private Tesla".
SoftBank isn't planning to participate as a potential source of capital in a deal taking Tesla private, according to people with knowledge of that matter who asked not to be identified as the details aren't public.
The revelation comes days after Musk's claim in an August 7 Twitter post that financing for a deal to take Tesla private had been "secured".
Musk has also said he would be looking to keep his ownership of Tesla at around 20 percent in a buyout deal, and that a special objective vehicle, like the one that exists at his aerospace company SpaceX, would allow Tesla shareholders to remain invested if they so choose.
Musk also wrote that the Saudis are interested in the company because they want to diversify away from oil. "At this stage, it is hard for Tesla to convince the general investors that delivery will ramp up quickly".
A Saudi sovereign wealth fund is in talks that could make it a significant investor in Tesla if it is taken private.
The potential transaction will cost a jaw-dropping $82 billion, with Musk hoping to avoid having one or two large stakeholders in a company.
Musk said that after discussions on the deal last week with both outside directors and the full board it had been agreed that the next step was for him to consult with major shareholders. As a result, PIF itself made a decision to buy around $2 billion in Tesla shares, reportedly with the help of an investment bank.