He tweeted that he had funding and in the email mentions no funding. This is a really weird announcement that feels like an empty pump of the stock. He could have chosen any number...
Taking Tesla Private
31–40 of 290 posts
Re: Taking Tesla Private
#32I am a bit ignorant as to the mechanics of how this would work. Can anyone with the knowledge elaborate on what this means? Im thinking in terms of a few scenarios here: 1) I read this news and want to get on the Tesla train and throw all my liquidity into the current stock. 2) I already have x number of shares. What happens to them? 3) If I dissent, am I cut a check and told to hit the bricks? 4) is he going to need…
1. You can buy TSLA stock as soon as trading them resumes. Lots of people already have.
2. If this acquisition goes through, each one of your stocks will be worth $420. Congrats.
3. You can't really dissent to shareholder majority agreeing to this deal.
4. $70bn is a lot of mulla, so I would guess this will not be all Musk's personal funds.
5. Theoretically, through some sort of a private equity venue. Just like any other private company.
Re: Taking Tesla Private
#33As a thumb rule I do not like to work for private companies especially when around 40% of my renumeration comes from RSUs.
Re: Taking Tesla Private
#34First anounced a couple of hours by Elon on twitter: https://mobile.twitter.com/elonmusk/status/10268726522903797...
Which lead to comments if it being a scam..
It is impressive to see the power of twitter news!
Re: Taking Tesla Private
#35The main question I have is about financing. If Elon owns 20% of the company now, and he doesn't intend for that to change, and he is giving the option of public shareholders to sell at $420, then who is financing this? Usually a private takeover requires a partnership with a huge private equity firm. Wouldn't releasing this without having (or identifying) that partner be premature? And wouldn't the resulting stability be dependent on that partner's exit strategy?
Re: Taking Tesla Private
#36Earlier quoted context omitted.
If you're a heavy TSLA short-seller, you're already in deep trouble, unless this falls through very quickly. There will be margin calls. Welcome to the losing side of short-selling.
It only falls if Elon is bluffing. He’s guaranteed $420 / share.
Lots of things can go wrong with a deal this size, but yes, unless he's bluffing, this most likely will happen.
Re: Taking Tesla Private
#37I think it's a great move. Prevents short term greedy shareholder strategies.
By paying a large premium to the all time high? If he's worried about the stock going down, paying more for it doesn't make a ton of sense. You should wait until the stock is down and then take it private.
Re: Taking Tesla Private
#38Pretty enormous amount of money required. Say half of TSLA shareholders take the $420, that's approx ~$40bn required. Then there's another $10bnish of debt refinancing required, and probably many more billion for future product development and new assembly lines.
I don't think Softbank could finance this, it would be well over half their entire fund.
Saudi maybe - but still quite a chunk of change for them.
Re: Taking Tesla Private
#39Guess Elon isn't too confident about being able to deliver the earnings he promised on.
Can you expand on that, please?
It means he’d rather not be under the scrutiny of wall st investors. He thinks the volatility is off-putting to his employees. He thinks wall st isnt forecasting correctly or is short-term focused. These are his reasons.
Re: Taking Tesla Private
#40I am a bit ignorant as to the mechanics of how this would work. Can anyone with the knowledge elaborate on what this means? Im thinking in terms of a few scenarios here: 1) I read this news and want to get on the Tesla train and throw all my liquidity into the current stock. 2) I already have x number of shares. What happens to them? 3) If I dissent, am I cut a check and told to hit the bricks? 4) is he going to need…
If a majority votes to take the company private, you would have the option of selling or accepting private stock (some non-voting class I'd assume) that you can trade. Voting class stock would be only offered to investors with >X% current holdings, probably the 5% the Saudi's just purchased. Employees may have a third class stock. As an investor, you'd be given paperwork to sell or accept the new stock in exchange for your old stock. Rules for buying and selling private stock are pretty common and there are several organized indexes for private stock trades.
All of the short-sellers would lose every penny they gambled.