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Elon Musk Says He's Considering Taking Tesla Private; Tesla Suspends Shares As It is Expected To Make an Announcement (cnn.com)
Elon Musk said he's thinking about taking Tesla private. More specifically, he said he may buy back the company for $71.3 billion (at a share price of $420), and already has the funding to do so. From a report: Musk, the CEO and largest shareholder of the electric car maker, said on Twitter on Tuesday that he has secured funding from a private buyer. He implied that the funding values the company at $420 a share. The stock had been worth about $342 a share before Musk's tweet, and shares quickly jumped as high as $371.
The stock had climbed slightly earlier in the day after the Financial Times reported that Saudi Arabia has quietly built a big stake in Tesla. Tesla didn't immediately respond to a request for comment. About an hour and 20 minutes after the Musk tweet, trading in Tesla stock was suspended because the company was expected to release news. TechCrunch: Musk's hope, he later tweeted, is that "all current investors remain with Tesla even if we're private. Would create special purpose fund enabling anyone to stay with Tesla. Already do this with Fidelity's SpaceX investment." Musk, who said he would stay on as CEO, also seems willing to have a provision for retail investors, who have held Tesla shares prior to Dec. 31, 2016, to convert their shares into private shares. Musk, in response to a tweet, said he's "super appreciative of Tesla shareholders" and "will ensure their prosperity in any scenario." Musk has publicly mused about taking Tesla private before, saying in a 2017 Rolling Stone profile: "I wish we could be private with Tesla," Musk murmurs as they exit. "It actually makes us less efficient to be a public company."
Analysts speaking to Reuters said they believe Musk is serious. George Galliers of Evercore ISI, said, "I can't believe this is something to bluff or make fun of. Given his historic frustration with short sellers, analysts and certain parts of the press, it is perhaps also not surprising that he has given consideration to taking the company private."
Update: Elon Musk sent an email to employees on Tuesday to explain his rationale behind the move. He wrote: Earlier today, I announced that I'm considering taking Tesla private at a price of $420/share. I wanted to let you know my rationale for this, and why I think this is the best path forward. First, a final decision has not yet been made, but the reason for doing this is all about creating the environment for Tesla to operate best. 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. Finally, as the most shorted stock in the history of the stock market, being public means that there are large numbers of people who have the incentive to attack the company. I fundamentally believe that we are at our best when everyone is focused on executing, when we can remain focused on our long-term mission, and when there are not perverse incentives for people to try to harm what we're all trying to achieve. This is especially true for a company like Tesla that has a long-term, forward-looking mission. SpaceX is a perfect example: it is far more operationally efficient, and that is largely due to the fact that it is privately held. This is not to say that it will make sense for Tesla to be private over the long-term. In the future, once Tesla enters a phase of slower, more predictable growth, it will likely make sense to return to the public markets. In a tweet moments ago, Musk said, "Investor support is confirmed. Only reason why this is not certain is that it's contingent on a shareholder vote."
Analysts speaking to Reuters said they believe Musk is serious. George Galliers of Evercore ISI, said, "I can't believe this is something to bluff or make fun of. Given his historic frustration with short sellers, analysts and certain parts of the press, it is perhaps also not surprising that he has given consideration to taking the company private."
Update: Elon Musk sent an email to employees on Tuesday to explain his rationale behind the move. He wrote: Earlier today, I announced that I'm considering taking Tesla private at a price of $420/share. I wanted to let you know my rationale for this, and why I think this is the best path forward. First, a final decision has not yet been made, but the reason for doing this is all about creating the environment for Tesla to operate best. 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. Finally, as the most shorted stock in the history of the stock market, being public means that there are large numbers of people who have the incentive to attack the company. I fundamentally believe that we are at our best when everyone is focused on executing, when we can remain focused on our long-term mission, and when there are not perverse incentives for people to try to harm what we're all trying to achieve. This is especially true for a company like Tesla that has a long-term, forward-looking mission. SpaceX is a perfect example: it is far more operationally efficient, and that is largely due to the fact that it is privately held. This is not to say that it will make sense for Tesla to be private over the long-term. In the future, once Tesla enters a phase of slower, more predictable growth, it will likely make sense to return to the public markets. In a tweet moments ago, Musk said, "Investor support is confirmed. Only reason why this is not certain is that it's contingent on a shareholder vote."
Dude, he's doing a Dell.
I should use this sig to advertise my book ISBN-13 : 978-1501515132.
I am sick of the trolls that are trying to destroy Tesla.
I prefer the "u" in honour as it seems to be missing these days.
I don't if it's the regulatory environment or what driving the trend towards privately owned companies, but every time one goes private there's less ability for common small investors to benefit from wealth generation. I'm just a worker with a 401K, and I'd like to get the returns needed to retire on my investment income. Events like this make it slightly harder to do.
You don't dunk on Elon. Elon dunks on you.
I just bought more shares this morning, just in under the wire it appears. Debated waiting until it fell a little more but obviously good not to wait! Will be interesting to see what happens.
In a case like this I wonder what happens to short positions? Is it basically like the stock value is suddenly $420 (PS rolling eyes at obvious drug reference) and they have to settle up at that price? If so it's a last brutal "Fuck You" from Musk to the shorts.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
I'm not surprised Mr. Musk is doing this, he is clearly fed up with Wall Street and trying to meet their quarterly expectations rather develop the company and the products for the long term. I would think that dealing with analysts/quarterly statements and their (potential) fallout to be essentially overwhelming as well as causing the executive suite to try and maintain a positive outlook every twelve weeks.
Going private doesn't mean that the stress of creating the best product and making a profit goes away, just that more focus can be put on the company and its products which should result in better products and a better ROI for the company's owners at the end of the day.
I would expect other companies with long lead time products (Boeing, Ford, etc.) will consider finding private investors and taking themselves out of the exchanges so they can focus on their businesses and not making Wall Street investors happy.
Mimetics Inc. Twitter
While it is certainly his money (or investor's money) to do with what he will, but it seems as if it would be more prudent to use that kind of funding to accelerate production and research.
Otherwise Musk just committed a securities violation by lying about a potential private buyout.
Shareholders can sure seem like trolls. However, if you take their money, you are accountable to them.
Kudos to Elon for going through with this. It was supremely crappy of him to be badmouthing investors on the last yearly call. If you don't like investors asking questions then don't take their money. Looks like he's going to fix that problem.
it seems as if it would be more prudent to use that kind of funding to accelerate production and research.
Free of noise and short manipulation he'll have a lot more time and funds free to go into R&D.
Once could also argue this move is a massive marketing expenditure as without short backing, negative Tesla news stories will dry up like dust in the wind, and sales should soar ever higher...
Remember, he only has to actually spend money on people wanting to sell shares - the large majority of Tesla investors (like myself) would not be selling at $420, we'd continue to be private shareholders, so that would be part of the funding not spent that could be used further on R&D. So while he has $84 billion in funding to take TSLA private, he probably will only have to spend about 20$ of that on share buybacks and can put the rest into other efforts.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
That's all this is. If he has nothing to hide, there's no reason to take it private. The only reason public companies go private is to avoid public disclosure requirements that are designed to prevent bad actors acting badly and screwing shareholders.
i wonder what kind of fool would let the ceo to flap about the transaction on twitter and let everyone know his budget before any deals are made
or, who is meant to eat this bullshit this time? beloved shareholders?
this is a classic Enron.
Wrong - it's a classic Elon.
That is to say, thinking outside the box people are trying to trap you in.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
When you work for a company, they tell you who administers your retirement. And they tell you what funds you can buy. Now, if your company uses Fidelity - a HUGE supporter of Musk (they invested in SpaceX) - you have pretty much no choice but to indirectly invest in Tesla - or buy money market or bond funds. (Ick! as of now)
Now if one thinks that Tesla is very very overpriced and subsequently has a ton of risk and it's not for you - something that Elon himself has said in his Q1/2018 investor call - you are SOL.
We're talking about RETIREMENT savings.
Speaking as someone who has just recovered from 2000 - yes, the year 2000 - 18 years ago; too much risk is a bad thing when it's money you will need.
If the Saudis want to dump money into our markets (and I think way overpay), good for US because it inflates our savings.
If the Chinese want to finance the Tesla factory in Shanghai, China, good for us! (Although, it's not going to be good for Tesla - very very long story.)
The Saudis money is pumped from the ground. If they want to create an asset bubble, good! I just want the ability to stay out of the way of "irrational exuberance" - been there, got the T-shirt, and I don't need that again.
How is the not an attempt to manipulate the stock? This seems rather ludicrous to announce such a thing on Twitter!
Hopefully that 71.3 billion doesn’t include any significant portion of my retirement funds...
#DeleteChrome
Musk wouldn't be anywhere near as wealthy as he is now without Wall Street.
Do you understand that Fidelity (Wall Street) is a HUGE backer of him? And there are other firms and pensions - which I find ironic since Musk said in his Q1 conference call that people who couldn't afford to lose shouldn't be in Tesla stock.
Tesla shares wouldn't be trading anywhere near where they are if the company wasn't publicly traded - and Musk's wealth wouldn't be anywhere near what it is now.
But as for me, if Musk wants to go private - at $420?! buyout - then it means Tesla is about to become either very very profitable (I don't see how), or some sovereign wealth fund wants it that way and will reward Him accordingly (most likely).
Either way, if you're long - you win BIG TIME. Take the money and run. There are plenty of other opportunists out there with much less risk.
So he wants to go private, but still have funds available to the public from which Tesla can raise money from? As what, debt?
You can complain about short sellers all you want, but they provide one very necessary function for the market: they guarantee someone will buy when everyone else is selling. You run off the short sellers, and all of the sudden you have a bear market, and there are no buyers, and the market grinds to a halt.
Every private owner who ever wants to sell their stock ever had better take the cash today, if this is a buyout offer. If he has written an "investment fund" plan that keeps people from being able to sue him for failing to perform a fiduciary responsibility, then you've pretty much signed away any right to get your money back if he feels like keeping it.
Unless this also includes a significant cash infusion via an ownership dilution, it won't help Tesla's cash burn rate either.
Elon Musk is one of the biggest con men in modern times.
Howard Hughes was a crazy innovative aviator of the 20th century. He pushed huge boundaries, and had massive failures (Spruce Goose). Hughes eventually became so unhinged that he spent the last days of his life cooped up in his own Hotel in Las Vegas, eating only candy bars.
Musk is the same character.
Or perhaps he could be compared to Edison, who nearly went bankrupt on several business ventures. Or even ironically Nicola Tesla, who also was quite mad and thought the same pigeon visited him every day. Just because you have some early success doesn't mean you'll continue down that path. Musk is starting to become unhinged, and it's showing. Anyone that's not a fanboi of Musk can see it quite clearly. (Hint, if you think anyone that criticizes anything he does, you're almost certainly a fanboi)
He is a moron sold by saudi authorities.
There are billions of oil-based cars worldwide, and it did happy to the saudi authorities making them richer.
This moron did unhappy them when he did market electrical vehicles.
I don't think you grasp what has happened. Must has secured enough funding to buy back every single share at $420.00 (ha ha Elon). Trading is suspended pending this announcement. Tesla is THE buyer now, and so is paying for any stock sales that will happen as part of the transition.
People who do not want to sell will be converted to private shares. So the only cash Tesla has to spend is on the shareholders that do not want to go private and get out - basically the short holders, plus probably some small number of people that consider $420 a great exit point to avoid any further risk.
were you asleep in econ 101?
Yes because I already knew everything they were teaching there from my own studies in grade school, but unlike you I actually attended economics and business classes beyond Econ 101 so I can understand what is occurring.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Musk, the CEO and largest shareholder of the electric car maker, said on Twitter on Tuesday that he has secured funding from a private buyer. He implied that the funding values the company at $420 a share. The stock had been worth about $342 a share before Musk's tweet, and shares quickly jumped as high as $371.
1. Go Public
2. Realise that the stock has been doing slightly left of nothing for a year now and you are losing money hand over fist as your stock underperforms.
3. Announce that sometime soon, some mystery money will appear and pay everyone a hundred dollars over market value for any TESLA stock.
4. Profit
Troll is not a replacement for I disagree.
It goes with his S3XY cars, you know...
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
Why are you guys so focused on the "shorts"? What are they doing to Tesla? Nothing
Only funding a vast array of negative news about Tesla , no big deal right?
Basically from my angle, I just love to see people motivated by hate fail.
Suckers like you will continue giving him money and going private means he doesn't have to tell you what is going on
"Suckers like me" have made quite a lot of money from Tesla just through stock, and will likely make more going forward.
Why would I care what is going on day to day? I invest for what will be happening ten years from now, not to know what kind of bagels the CEo is eating or small yearly fluctuations. If you don't have a good guess as to how well Tesla will be doing ten years hence, you aren't much of a technologist and I would advise you to stick entirely to low-risk mutual funds. With your mindset, it seems like you would have shorted Tesla if you could have... zounds.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Elon posted a blog about it: https://www.tesla.com/blog/tak...
Looks like a great plan!
Elon just opened a can of whoop ass on himself with this move. If he doesn't have the financing in place the SEC will bbq his ass. If he is only floating a trial balloon the SEC will own his ass as well as current stock holders, and option traders. And finally, if he decides not to do this move his ass is cooked as well. Making statements like this have serious repercussions. I know from my own experiences working with a CEO that made a similar mistake. It cost him his company. He died 2 years later a very broken man.
Accountability ... You see , when 50% or more of your investors are fund managers for 401k's they don't care a even a little about things like 'long term profitability' , 'company reputation' , customer service or product quality. The only question they ask is , will the stock value go up , so the portfolio will grow. They have no real interest in the product or serving the customer and that attitude is a dis-service to the whole of society. It may be time to consider some other corporate structures.
âoeTolerance applies only to persons, but never to truth. Intolerance applies only to truth, but never to persons.
When you work for a company, they tell you who administers your retirement. And they tell you what funds you can buy. Now, if your company uses Fidelity - a HUGE supporter of Musk (they invested in SpaceX) - you have pretty much no choice but to indirectly invest in Tesla
Since you appear to never have had a 401k let me explain how they ACTUALLY work.
Yes a company like Fidelity manages funds. But a 401k holder have a range of investment profiles or funds to select from within Fidelity - everything from domestic stock, to foreign stock, to super conservative funds, all the way to money market funds which have zero risk and very low returns.
So no, you don't have to assume risk from Tesla or SpaceX if you do not want to, just take the straight Fortune 500 funds, or the aforementioned low return money market funds (which many do nearer to retirement to avoid market swings affecting the possibility of retirement).
"There is more worth loving than we have strength to love." - Brian Jay Stanley
I see what you are getting at and I don't exactly care either, I too mostly say let people do what they want.
However in the case of Tesla it's gone a lot further than that, and into the realm of there being so many shorts and some of vast size, they were trying desperately to manipulate and lower the stock price, trying to drive the company out of business.
When you cross the line from "Well I'll bet the company will fold", to actually trying to cause a company with tens of thousands of employees to fail, then I get pissed off. You are affecting those who bet the company would not fail, but worse you are affecting the lives of a lot of people with jobs there.
You are going to see a remarkable shift in Tesla coverage over the coming years with nothing more to gain from short sellers, probably a few vindictive "I sat at thee from the depths of hell" level articles from those poor shorts who believed the lie the industrial short sellers were peddling than Elon would fail...
So I do feel a little sorry for shorts that were too small to actually affect public stock and news. But not too sorry because the mindset it takes to invest via shorts is a feel a fundamentally bad moral choice, and I would never use that myself - if I don't like a company I just don't buy from them, I don't actively bet on failure. It's really unhealthy to build any aspect of your life around negative mindsets, it bleeds into other aspects of your life and makes you an unpleasant person.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Exactly. I am not sure why I was modded "offtopic". Are people dense? Why do people think he keeps tweeting out "420" in response to media questions on Twitter?
Slap on wall street. Bankers have turned companies into a horse at the race track. Betting and trying to make a buck off everything.
I've worked for a private tech company for 15 years. While I've been here we've grown 3x in revenue and employees (almost 5000 now). We regularly plan for 5 years from now -- never, ever have I ever heard someone think about the next quarter. It's be best outcome for the company and as an employee.
Stock shorts serve a valuable social purpose which is to monetize accurate information that a corporation is overvalued, thereby incentivizing efficient pricing. But shorts can also play a roll in illegitimate scams, where an accurately-valued stock is shorted, then publicly badmouthed to drive down its price.
Not to name names here, but a lot of the outstanding Tesla shorts are held by the those with a documented record of engaging in the latter. These are not ethical people and one certain event that would mitigate against future massive financial losses from their outstanding short positions would be a drop in Tesla share prices if Elon Musk had an accident. To put it bluntly: The insane amount of money involved and the demonstrated lack of ethics of those who stand to lose it should make Musk worry about there being contract on his life.
Ceci n'est pas une signature.
Game Over, man!
Gamer over.
It'll be quite interesting to see who sells large chunks of stock over the next few days. Particularly if this turns out to be yet another Elon will-o'-the-wisp.
But you still flamed another AC above for stating the risk of investing with Fidelity after posting that.
Yes, because I wanted to invest specifically in just SpaceX, which I found I could not do. Meanwhile some idiot AC (no doubt your in-bread brother) thought all Fidelity 401K funds invested in Tesla or SpaceX which is so stupid I can't believe even you would believe it.
He was rightfully flamed and if he had an ounce of sense would remove himself from the internet until he is at least five years old.
I'll let you have that last response, apparently ignorant troll.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Typically if a majority of shareholders vote for going private, the transaction happens and minority shareholders are forced to sell at the specified price. They don't become shareholders in the private company.
Can you pig-fuckers really not read or what??????
JFC.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
denigrated his efforts to help WHEN *REPEATEDLY* ASKED
By a TWITTER account! I'm calling bullshit. It was staged by Musk.
Anyway, who the hell commits to a twitter request? Seriously?
Bullshit.
Q2 results show an immediate cash shortfall. There is no extrapolation because it's already a done deal.
2.2 billion cash and over 3 billion in accounts payable.
To explain to you Tesla fans, that like having to pay a $2,000 rent payment with only $1,200 in the bank.
What to do?!
Wall Street wants information that Tesla simply can't disclose because it would lose it's competitive edge.
Complete nonsense. Wall Street has dealt with that since Coca Cola who wouldn't disclose it's secret.
And Musk NEVER said such a thing - ever. You fanboys are putting words into Musk's mouth; which makes ALL of you Trolls.
Troll.
And YOU need to know that ALL of Musk's and Tesla's problems are because of you fanboy-trolls.
Yes YOU!
Most of what you people say was NEVER said by Musk - EVER! And sorting it out has become a problem.
And I think even Musk cannot differentiate anymore.
He responds to things that for the life of me, I have never heard from a "short" or any Wall Street person. But - it was said among fanboys saying stupid hyperbolic nonsense.
I won't mention names, but Jesus people - get a fucking grip!! This is just a business enterprise! It's not your mother, it's not your religion and aside from Musk, it's not you!
Get a fucking grip fanboys!
Of course they had a high cash burn rate when they were building new production lines. Building the machine to build the car is expensive. Then it took time to get it up to speed, while paying for the labor to run it, before it started producing cars at the rate it should.
This is all expected, while a company is building up to full production. Then they get into production, the spend rate drops and the income rises, and they start making a profit.
This was the plan from the start, and it seems to be working perfectly. Tesla looks in great shape.
offered the advice that Tesla should "water down" current shares by selling more stock now rather than when Tesla is in a financial crisis. The "FUD" they are "spreading" is to ask why Tesla isn't doing this sensible thing. No, people would not be screaming -- the share price and demand for the stock would support this, so why isn't Tesla doing it?.
But only if he let's me deep throat his musky cock and shoot a load of jizm down my eager gullet.
in the absence of that regulatory environment your 401k wouldn't be worth the paper your statements are printed on. Those regulations exist for a reason. Small investors were getting robbed blind until they were made. Sad thing is Trump & co removed some Obama era rules that required investment houses to always act in the interests of the client. They've also (with the help of both parties) removed the last of the regulations passed post 2008 to prevent another crash. Time will tell if our 401ks survive the next bubble.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
Imagine getting a stock option worth something, working your ass off to keep it, and then... Elon decides what it's worth long-term.
From regulators to bondholders to investors to employees, Elon has performed a bait-and-switch every time. Ever notice how many senior technical people leave?
Bond markets are running out of patience, government incentives are disappearing, and both Elon and potential buyers realize a $35K Model 3 cannot be built at any profit, and the market will dry up after the initial bolus of buyers.
The Saudis are just the middlemen, to avoid political complications: all the technology will go to China, once Panasonic is backed into a corner. The real question is whether Elon can screw the US with Tesla and still maintain his SpaceX franchises with the US government.
Actually, this makes perfect sense, as a threat toward the short-sellers of Tesla stock. There are LOTS of short-sellers for Tesla; they borrow Tesla shares from the broker, sell them, bad-mouth the stock in hopes that the stock price will fall dramatically. Then they can re-purchase the Tesla stock at a lower price to cover their short-sale, and still make a profit.
Musk's gimmicky tricks like the "NOT A Flamethrower!" and the Tesla surfboards were designed to create a pop UP in the stock price, perhaps in the hopes of scaring the short-sellers into liquidating their positions NOW, rather than take bigger losses as Tesla shares went UP. If he actually took Tesla public at $420/share, the short-sellers would take it in the shorts, so to speak, and Musk could laugh all the way to the bank.
And ten, Dell-like, go public again and get even MORE money.
Elon Musk is crazy, all right; crazy like a fox!
Guess he thought the SEC would interfere more if he was still publicly traded. He may get enough bucks to stay in business, but would not be surprised if schedules continue to slip out...
If TSLA really is the most shorted stock in history, all he needs to do is execute his business plan. Then there would be the biggest short squeeze in history, as all the shorts are wrong and panic, buying to cover their shorts and driving the stock price even higher. That would easily result in TSLA going over $1000 per share.
It does nothing to drive the engine of economy and is pure 100% harmful GREED.
Outlaw it. There is no reason for it to exist.
Then complain to Rick Stanton, co-lead of the rescue team, who requested the sub and supplied his dimensions. I'm sure he'd be glad to hear from you and your cave rescue expertise.
Oh, and FYI, even after Musk apologized? Unsworth's mother, in an interview, called for Musk to be shot.
And I guarantee you that there's already some people out there contemplating doing exactly that. There's orders of magnitude more people that hate Musk than people who even know that Unsworth exists.
Well now, I guess that makes it A-OK then.
Excuses. what-about-ism.
You longs are totally fucked up and delusional cultists.
Regroups to con people with less PMITA prison enforced oversight.
I cannot express how happy I am to see short sellers lose everything after all the Russian-level trolling they've done over the years, especially here on Slashdot.
Only a fool at this stage would have all their money in oil.
The only reason to list in the first place is for the easy access to new capital by issuing new shares.
If they don't need money anymore, the negatives outweigh any positive benefits.