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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.
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?
The difficulty to predict TSLA, especially early on, was one of the main reasons I sold it. It's now about double its value, but that's a recent phenomenon and it was pretty volatile before that.
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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.
Any experienced non-retail short seller would've bought some long term out-of-the-money call options as insurance for a scenario like this. Most retail shorts know it's best practice... but they're retail after all, so many are going to get burnt if this hype goes through.
> 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?
isn't that successful there?
While there's some good reasons here, I can't help but think this is more an emotional reaction on Elon's part, to the shorting and general negativity around the company.
The shorting and general negativity around the company are a morale drain on a scale that few companies have ever experienced before, let alone any companies that push their employees as hard as Tesla. I have friends who work very, VERY VERY hard at Tesla to help achieve their overall goal, and all of the hate really drags them down and makes them question why they work so hard, let alone the anxiety over the value of their shares. The cloud of negativity is a huge productivity sap and I suspect it is a contributor to the legendary rates of turnover at Tesla as well.
True story: I was standing on my back porch, finishing my morning coffee. It was one of those January Silicon Valley mornings where it can't quite decide whether its raining or not. Between the clouds, a rainbow appeared. From my vantage in the hills in South Fremont, the end of that rainbow sat squarely on the Tesla factory. Being the sophisticated investor that I am, I know a 'buy' signal when I see one. Here's to…
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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?
> 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?
If I'm right and Musk pulls this off, short sellers are in for a world of pain. They will likely have to scramble to cover their short positions in the face of a limited supply of shares before delisting.