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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."
Those apologies during last week's earnings call must have left him with a really bad taste in his mouth.
One of our competitors trademarked the term "hypothesis". From now on, we will call them "boneheaded ideas".
The Saudis have their mitts in a number of things you wouldn't expect, and which will give them reach for decades to come, for example, they own 50.1% of the Canadian Wheat Board:
https://www.theglobeandmail.com/report-on-business/us-saudi-firms-to-buy-former-canadian-wheat-board/article23966156/
In light of the recent 9/11 style threat made against Canada by a Saudi State controlled twitter account:
https://www.cbc.ca/news/canada/toronto/saudi-arabian-group-apologizes-for-posting-image-appearing-to-threaten-canada-with-9-11-style-attack-1.4775509
The Canadian government should look strongly at foreign ownership of things like our Wheat Board as that's not in our nation's best interests from a food security standpoint.
It was also just announced that the Saudi's purchased a pretty big slice of Tesla:
https://www.bbc.com/news/busin...
"The tweets came after a separate report in the Financial Times that Saudi Arabia's sovereign wealth fund had taken a 3%-5% stake in Tesla, a holding worth at least $1.9bn."
If you post as Anonymous Coward, don't expect a reply.
saudi arabia is a terrorist state. Just seize all their assets...
Elon posted a blog about it: https://www.tesla.com/blog/tak...
Looks like a great plan!
1) They're quarterly calls, not yearly
2) It was Q1 of this year, not last year
3) There were two people. They were not "investors", they were analysts, both of whom had been pushing short theses (although only one was generally negative on Tesla as a whole). The the questions were - BTW - boneheaded. One of them was literally answered right at the top of the quarterly newsletter that everyone on the call was supposed to have read before calling in.
4) There actually was one person on the call (Galileo) representing actual retail investors, and Musk devoted half the call to answering questions from him.
Assuming ethanol comes from murdered children and the hydrogen from magic, hydrogen saves 132% more lives than ethanol.
"Do you realize this whole hatred of the "shorts" was all Elon's bullshit?"
That's bullshit alright but not entirely Elon's.
Short-sellers have been trash-talking Tesla's plans & performance for years. Yes they were losing money while building a car company from nothing but a discounted building but plenty of auto companies have had rough rides without people like Cramer, Chanos, Spiegel et al trashing them at every turn.
" Musk has proven to me what a loathsome person he is"
Your shorts are too tight. He made a very offensive remark to someone who openly denigrated his efforts to help WHEN *REPEATEDLY* ASKED to get involved.
Musk didn't pick that fight but he did overreact.
And he's since apologized. Where is the apology from Unsworth for telling Musk to stick his supposedly useless mini-sub up his ass?
OTOH I would like to see Musk keep his promise to demonstrate that the sub would have worked after all.
Pain is merely failure leaving the body
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.
Assuming ethanol comes from murdered children and the hydrogen from magic, hydrogen saves 132% more lives than ethanol.
Yes, you can. People like Chanos have basically made a career out of it. By shorting, you lower the stock value, and its market cap. It puts the company in a position to borrow on less favourable terms and pay off convertible debt with cash. Short campaigns generally come hand-in-hand with FUD campaigns, designed to encourage longs to sell and worsen lending terms to the company / create less interest in its bond offerings / reduce its sales. In short, they attempt to create a self-reinforcing downward spiral.
The problem is that it only works effectively with companies that are currently dependent on borrowed cash - usually companies heavily invested in scaling up operations, wherein their investments have not yet transformed into revenue.
Assuming ethanol comes from murdered children and the hydrogen from magic, hydrogen saves 132% more lives than ethanol.
GM lies about their faulty ignition switches and killed people.
Honda continued to ship faulty airbags, and testified before Congress about it. People probably died from that too.
Toyota denied faulty throttles and cruise control on the Prius that could result in unintended acceleration. Nope, that's perfectly safe.
Name one car company that never had anyone crash and die, or had a safety recall of any kind. While you come up with nothing, nobody will hold their breath and wait.
Don't be a fucking idiot.
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