‘Weak sauce’: Elon Musk's 2018 feud with Saudi fund revealed

Elon Musk's short-lived effort to take Tesla Inc. private after his infamous "funding secured" tweet in August 2018 has loomed over the billionaire's reputation — and his quest to buy Twitter Inc.

Now, a series of text messages that Mr. Musk exchanged with Silicon Valley friends, investors and the managing director of Saudi Arabia's Public Investment Fund during that saga have come to light as part of an ongoing shareholder lawsuit. The texts provide a window into how Mr. Musk operates as he once again attempts — almost four years later — to take a publicly traded company private.

In a text-message exchange with Yasir Al-Rumayyan, the head of the Saudi PIF, an angry Mr. Musk discusses a Bloomberg News article that reported the fund was in talks to take Tesla private. The Tesla CEO was upset because he believed he'd reached a handshake agreement with Mr. Al-Rumayyan weeks earlier, in July 2018, for the fund to finance the transaction.

"This is an extremely weak statement and does not reflect the conversation we had at Tesla. You said you were definitely interested in taking Tesla private and had wanted to do so since 2016," Mr. Musk wrote in an August 2018 text message, according to a 300-page motion filed Aug. 22 as part of the suit. "I'm sorry, but we cannot work together."

"It's up to you Elon," Mr. Al-Rumayyan responded.

"You are throwing me under the bus," Mr. Musk wrote back.

"It takes two to tango," Mr. Al-Rumayyan replied. "We haven't received anything yet."

The back-and-forth continues. Mr. Al-Rumayyan tells Mr. Musk that "we cannot approve something that we don't have sufficient information on," and writes that he's been waiting for more details. Later in the exchange, Mr. Al-Rumayyan asks Mr. Musk to "read the article please."

"I read the article," Mr. Musk says. "It is weak sauce and still makes me sound like a liar. It is filled with equivocation and in no way indicates the strong interest you conveyed in person."

Mr. Musk told Mr. Al-Rumayyan that Tesla would move forward with private equity firm Silver Lake, Goldman Sachs Group Inc. and other investors. The next day, however, he published a blog post citing the Saudi PIF's interest in taking Tesla private as the reason he tweeted that he had "funding secured."

Mr. Al-Rumayyan texted that he was surprised Mr. Musk had divulged "loose information," despite having signed a non-disclosure agreement and after keeping the PIF waiting for specifics needed to move forward with a deal. Mr. Musk scolded Mr. Al-Rumayyan again for not pushing back against media reports about whether the Saudi fund would support the go-private transaction.

"Reuters reported that two sources from PIF confirmed no interest in Tesla, which is absolutely false, and yet you did nothing until I forced the issue," Mr. Musk wrote.

Mr. Musk shelved the effort later that month after it became clear many large investors wouldn't go along with it, stunning the financial world with a late Friday night blog post titled "Staying Public."

Since then, Tesla has become profitable and built factories in Shanghai, near Berlin and in Austin, Texas. The company has indisputably ignited the shift to electric vehicles, and its $1 trillion valuation has made Mr. Musk the world's wealthiest person.

But the investors suing Mr. Musk in federal court argue that Mr. Musk's August 2018 tweets were "indisputably false" and cost them billions of dollars by spurring wild swings in Tesla's stock price. The judge in the case ruled earlier this month that "no reasonable jury could find Mr. Musk's tweets on August 7, 2018, accurate or not misleading." Mr. Musk and his attorneys have insisted he was "entirely truthful" and are trying to appeal.

Mr. Musk also has stood by his argument that Saudi Arabia's wealth fund had agreed to support his attempt to take Tesla private. The text messages were part of a motion filed by Alex Spiro, Mr. Musk's lead outside attorney.

The filing includes excerpts from Mr. Musk's deposition with the U.S. Securities and Exchange Commission, which sued Mr. Musk for securities fraud. The agency settled with Mr. Musk and Tesla, with each paying $20 million and Mr. Musk agreeing to step down as chair of Tesla's board for three years.

Mr. Musk has repeatedly said since then that he doesn't respect the SEC, and lashed out at the agency again Monday on Twitter.

"The San Francisco office of the SEC were shameless puppets of Wall St shortseller sharks, while doing nothing to protect actual shareholders. That is why I lost all respect for them," he tweeted.