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Taking Tesla Private

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Re: Taking Tesla Private

#71

Post by bklyn11201 »

FabioFleitas wrote: post #51

If Elon is guaranteeing a $420/share buyout - are there any downsides to buying as much stock as possible right now? Would the only risk be that this whole plan falls through or that Elon ultimately decides against that price?

As shares are not close to $420 right now, that indicates healthy skepticism that Elon is capable of getting this done. Do you have reason to believe that he is capable of raising $50-80 billion to complete the transaction? If yes, then you have a great arbitrage opportunity.

Re: Taking Tesla Private

#72

Post by belltaco »

eastendguy wrote: post #24

Can someone please ELI5 this for me? Why is a private Tesla better? As long as Elon and employees own more than 51% of the stock (do they?), can't they not just ignore the stock price swings?

You still have to publicly reveal all the quarterly numbers, estimates for next few quarters, do all the GAAP accounting etc. which puts a lot of toll on a company that's going through wild swings in capital spending and production.

If they don't keep their promises, the stock will crash, so everyone goes on a production death march close to the end of the quarter under extreme stress, instead of just growing organically at a steady pace. Good estimates are hard, just like in IT. That's why many companies delay going public, for example Uber.

Re: Taking Tesla Private

#73

Post by vasco »

FabioFleitas wrote: post #51

If Elon is guaranteeing a $420/share buyout - are there any downsides to buying as much stock as possible right now? Would the only risk be that this whole plan falls through or that Elon ultimately decides against that price?

That's not a negligible risk. It's analogous to thinking bonds have no risk because the issuing company guarantees it (forgetting it might well go bankrupt).

Re: Taking Tesla Private

#75

Post by take4 »

peeters wrote: post #35

The 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 stabili…

> CNBC reports that none of the Wall Street banks it contacted were aware of any transaction or had committed to funding a leveraged buyout of Tesla.

Re: Taking Tesla Private

#76

Post by maaaats »

FabioFleitas wrote: post #51

If Elon is guaranteeing a $420/share buyout - are there any downsides to buying as much stock as possible right now? Would the only risk be that this whole plan falls through or that Elon ultimately decides against that price?

Yeah, I think the price now will end up reflecting what people think is the odds of this happening. If you are 100% sure this will happen, you would be willing to buy shares for $419. If you are 90% sure you may stop at $400 etc.

Re: Taking Tesla Private

#77

Post by Fuckyourself »

mikeryan wrote: post #27

In the Tesla case I feel that the shareholder concerns are pretty valid and provide an interesting counter pressure to Musk's "This is fine" attitude. Not saying either is right, but the friction is likely valuable. I'd not want to be an investor in a private Tesla. It would seem way to volatile.

I am a shareholder. I will not be selling after going private. This is really good for me because we can finally stick it to the shorts and the only people who we lose are "traders" - I don't care about what they think. Long term investors only is a good motto :)

Re: Taking Tesla Private

#78

Post by patrickaljord »

nine_k wrote: post #16

> As a public company, we are subject to wild swings in our stock price that can be a major distraction for everyone working at Tesla, all of whom are shareholders. Being public also subjects us to the quarterly earnings cycle that puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term. > SpaceX is a perfect example: it is far more operatio…

Isn't SpaceX success due to the fact that most of its orders come from the US government while Tesla has to compete in the free market and isn't that successful there?

Re: Taking Tesla Private

#79

Post by joezydeco »

synaesthesisx wrote: post #14

As an investor since 2012 I think Tesla would be far more operationally efficient private. Also a bit of schadenfreude but I've personally enjoyed watching Wall Street shorts collectively lose hundreds of millions of dollars over this.

Might be in the tens of billions before this is all said and done.

(~34 million short shares outstanding * $420/share = ~14 billion dollars to cover. Is my math wrong?)

Re: Taking Tesla Private

#80

Post by lccarrasco »

shawn wrote: post #48
sailingparrot wrote: post #44

Earlier quoted context omitted.

Private companies are still allowed to give share to employees. Employees are then allowed to sell their stock periodically (every 6 months in this case).

Right, but with who?

Companies have buyback programs or you could sell them directly to other shareholders.
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