Elon Musk Claims He Had a 'Verbal Agreement' with Saudi Investors

Tesla CEO Elon Musk has defended his decision to tweet that he had “funding secured” to take Tesla private by stating that he had a “verbal agreement” with Saudi investors.

The Wall Street Journal reports that Tesla CEO Elon Musk has said that the reason he believed he had “funding secured” to take the electric-car manufacturer private was that he had a “verbal agreement” with Saudi investors which he believed was binding.

The SEC’s charges against Musk allege the he “knew that he had never discussed a going-private transaction at $420 per share with any potential funding source,” a claim which Musk denies and reportedly plans to fight after turning down a no-guilt settlement deal.

According to the Wall Street Journal:

Mr. Musk believes the SEC’s effort is flawed in assuming that a written agreement and fixed price were necessary for a deal, the person said. Mr. Musk also thinks regulators aren’t taking into account that Middle Eastern businesses routinely operate using verbal agreements in principle, the person said.

Musk has reportedly told others that if he wanted to take Tesla private, he could have done so using his stake in the space exploration company SpaceX if other major Tesla investors were on board with the plan.

Musk said in a statement on Thursday that he was “deeply saddened and disappointed” by the SEC action. He continued to state: “Integrity is the most important value in my life and the facts will show I never compromised this in any way.”

Tesla shares dropped nearly 14 percent to $264.77 on Friday.