Tesla valued at $160m after Elon Musk hires JPMorgan, he tells Senate

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Acting CEO tells Senate committee he will remain in the position until a permanent CEO is found

It has been more than two months since Tesla announced the sudden and shocking departure of its chief executive, Elon Musk, and $160m appears to have flown out the door on advice from his pals at JPMorgan.

In a letter to Senate banking committee members on Wednesday, the bank’s acting CEO, Michael Cavanagh, said it had received a $160m “note” from Musk since his September 14 exit from the electric car company – a material vote of confidence in the veteran industrialist’s onetime bullying and seemingly unstable leadership style.

Musk, an outspoken and attention-seeking figure known for tweeting his outrage over his perceived failures, abruptly stepped down as Tesla’s chief executive in August.

Tesla insisted after the announcement that it remained on a track toward making his “synergy” company production goals for the Model 3, the new small sedan that has become the US carmaker’s central focus, as well as meeting its quarterly guidance.

Tesla’s stock quickly reacted, rising by nearly 20% in the following days and paring losses from a catastrophic, nearly 40% drop that followed Musk’s Tweet claiming he had “funding secured” to take the company private for $420 per share.

According to a newly released copy of the letter, sent to senators on the Senate banking, housing and urban affairs committee, Cavanagh said in a footnote, “Based on Musk’s statements to our staff, JPMorgan has received the note that discloses a position of approximately $160m since August 14th and concluded that there would be ‘significant’ value in Tesla as a stand-alone entity.”

Cavanagh said the $160m in notes – standard for large-company CEOs who relinquish control to focus on new ventures – came from people outside of Tesla and “just on its face are notable”.

“We’ve also since developed a long-term perspective on the company’s potential, and there was significant value assigned to Tesla’s brand and its potential,” he added.

Musk took to Twitter in August to claim that he had taken a five-year leave of absence to “focus on building out a world-class production organization”.

But Musk and Tesla management soon fell out again, with Musk attacking Tesla’s board of directors and suggesting that a “whole bunch of people” was conspiring against him.

Musk stepped down as chairman of Tesla two weeks ago, five months after Trump installed him as chair, and was replaced as CEO by Jerome Guillen, a former head of China’s electric vehicle production.

On Wednesday, Guillen, during testimony before a separate senate committee, said that he would remain in the chief executive role until the automaker’s board of directors finds a permanent replacement.

According to Cavanagh’s letter, a former employee of Musk’s, “JPMorgan has sourced and allocated funds” for Tesla, and he would remain as the automaker’s leader until a permanent boss was found.

Senator Mike Crapo, a Republican from Idaho and the committee’s chair, said he welcomed Guillen’s testimony.

“Notwithstanding our concern over CEO Musk’s recent behavior and circumstances, what we have here is a remarkable example of an entrepreneur who wasn’t afraid to ignore the normal processes and norms of the board of directors and asked for help from friends,” Crapo said.

JPMorgan did not immediately respond to requests for comment.

• This article was amended on 14 December. An earlier version said that Cavanagh said in his letter that JPMorgan had “sourced and allocated funds” for Tesla. This has been corrected to say that he had told the committee that JPMorgan had “sourced and allocated funds”.

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