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Those two words, tweeted by Tesla CEO Elon Musk, sent investors into a frenzy Tuesday. Who has promised Musk tens of billions of dollars to take his cash-burning company private?
Twenty-four hours after Musk's first tweet, Tesla has twice declined comment to CNBC on where the funding is coming from. The company and its board have issued statements on taking the company private, and both times, there was nothing said on financing. Wall Street bankers don't know, suggesting the money isn't being rounded up by a consortium of banks.
What it could mean? Here are some ideas.
This is the simplest Occam's Razor explanation. There simply is no funding.
Maybe Musk just tweeted out something. Some Tesla board members said Musk approached them last week about going private. But even Musk, himself, simply tweeted he was "considering" it. That's not necessarily the language of someone with committed financing.
There are no legal repercussions for saying "funding secured," said Frank Aquila, an M&A partner at Sullivan & Cromwell.
"It's sort of the same difference between collusion and conspiracy," Aquila said. "Collusion isn't a crime. It means nothing in the legal sense. Conspiracy is a crime. If you say 'I secured this,' it could mean you had a conversation. Committed means something else. If you have committed financing, you have documentation and conditions. Secured just means lined up. It doesn't mean that much."
The motivations for why Musk may have this are impossible to know without confirmation from Musk himself. Is it to spite shortsellers? Or maybe it is a warning to outside investors, like the Saudi sovereign wealth fund, to stop buying shares of his company?
By the way, this wouldn't be the first time Musk has tweeted something that sounded definitive but wasn't. Last year, Musk tweeted that he had received "verbal govt approval" to build a high-speed hyperloop connecting New York, Philadelphia, Washington D.C. and Baltimore. It was later reported that the supposed approval was likely a miscommunication between Musk and a White House official.
It's possible Musk has had conversations with third parties about financing a transaction and feels comfortable he could round up cash. A full buyout would cost about $72 billion at $420 a share, though Musk, himself, owns 22 percent of the company and suggested he would allow existing shareholders to maintain ownership, which would lower the cost.
Investors in a privatization could include sovereign wealth funds, wealthy individuals and private equity funds, though the latter may be unlikely given Tesla's business model isn't a good fit for standard leveraged buyout investment.
Neither SoftBank nor the Vision Fund is involved in the financing, according to people familiar with the matter. SoftBank recently put $2.25 billion in GM's self-driving car unit Cruise.
Chinese funds have billions to spend, but CFIUS and other regulatory concerns could doom a large buyout of a U.S.-based company with strong ties to technology.
"Can he get the financing? I suspect he can," Aquila said. "There's an awful lot of cash trying to find a home right now."
Still, it's unlikely Tesla could raise the money through debt markets, according to people familiar with the matter. Tesla raised high-yield debt a year ago, and it's already trading at 92 cents on the dollar. Banks may be unlikely to take the risk on raising $30 billion to $60 billion on a car company that doesn't pump out cash and could be at risk if there's an macroeconomic downturn.
This seems the least likely at this point, but perhaps there's a reason Tesla hasn't disclosed where the money is coming from. The company isn't under an obligation to disclose the funding information. Maybe Tesla just wants to keep everyone guessing. Or maybe Tesla is frantically trying to turn the investors referenced in Reason No. 2 into fully committed investors in preparation for a public statement.
- Additional reporting by CNBC's Hugh Son, Robert Ferris and Lora Kolodny.