Tesla Inc.’s board confirmed it knew last week about Elon Musk’s proposal to take the electric-car maker private, adding credence to the idea that this was more than a spur-of-the-moment whim from the notoriously impulsive billionaire.

“Last week, Elon opened a discussion with the board about taking the company private,” six directors on Tesla’s nine-member board said in a statement. “The board has met several times over the last week and is taking the appropriate next steps to evaluate this.”

Despite the board’s statement, it was clear early Wednesday that the euphoria had worn off over Musk’s bold claim that he had the funding secured to take the electric-car maker private. Investors were asking whether he really does have the equity or debt lined up to make it happen. He suggested he did in an initial tweet, but so far Tesla hasn’t disclosed any sources of financing, and no one has stepped forward publicly to say they’re backing the plan. The board said only that Musk had “addressed the funding for this to occur.”

Names excluded from the board statement were Musk; his brother, Kimbal Musk; and Steve Jurvetson, a venture capitalist and early Tesla backer who’s been on leave since last year.

Tesla shares fell as much as 3.4 per cent to US$366.52 before the start of regular trading, though they pared declines after the board statement. The stock is far below the $420 price at which Musk said shareholders would be bought out.

“What does Musk mean by ‘funding secured?”’ asked Toni Sacconaghi, an analyst at Bernstein who has long been bearish on Tesla shares. “How could Tesla possibly fund such a large transaction?”

Musk owns an almost 20 per cent stake in Tesla, meaning he’d still need roughly $70 billion in financing to take Tesla private. That kind of money may be accessible through sovereign wealth funds or other strategic investors, said Dwight Scott, president of Blackstone Group LP’s GSO Capital Partners. Musk’s money-losing and cash-burning company is an unlikely candidate for debt investors to be willing to help go private.

“It’s very hard to put leverage on this company,” due to its negative cash flow and “operational issues,” Scott said Wednesday on Bloomberg Television.

It’s possible Musk could persuade some large institutional investors to remain shareholders in the private company, which could reduce his funding needs, Sacconaghi said.

“We think it would be extremely difficult -- bordering on impossible -- to believe that TSLA could raise significant amounts of debt in public markets,” he said.