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Saudi Fund in Talks to Invest in Tesla Buyout Deal, Report Says (bloomberg.com)
Saudi Arabia's sovereign wealth fund is in talks that could see it becoming a significant investor in Tesla as part of Elon Musk's plan to take the electric car maker private, Bloomberg reported Sunday, citing a person with direct knowledge of the fund's plans. From the report: The Public Investment Fund, which has built up a stake just shy of 5 percent in Tesla in recent months, is exploring how it can be involved in the potential deal, the person said on condition of anonymity. Discussions began before the controversial Aug. 7 tweet by Musk, who is Tesla's co-founder and chief executive officer, saying he was weighing a plan to take the company private. The PIF sees its investment in Tesla as a strategic way for the world's biggest crude producer to hedge against oil, the person said. The Saudi fund hasn't made any firm decisions on whether to increase its stake, or by how much, but talks are ongoing, the person said. It wasn't immediately clear how much the fund would invest in Tesla.
Only the most optimistic Tesla supporter would equate an investor "exploring how it can be involved in a potential deal" with "something concrete".
No, he didn't. They said talks were ongoing and there was no firm decision, which means funding was NOT secured and not at $420, per Musk's tweet, at least with the Saudi PIF.
Tesla makes cars that consume energy and batteries which store it, whereas Saudi Arabia produces energy. It still requires energy to charge Tesla's batteries, which on a mass scale means natural gas for power plants (unless we're going to blanket the country with solar cells and wind farms) - Saudi Arabia has the largest natural gas reserves in the world, thus is already hedged against oil.
Saudi Arabia has the largest natural gas reserves in the world, thus is already hedged against oil.
They've also got something of an excess of insolation, which they could harness using solar thermal and/or PV. They are well-located to export that energy to something like half of the world, too...
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Apparently some people have trouble understanding the difference between "having secured funding sources" and "having negotiated a deal that's ready to present to shareholders for a vote".
A year ago, Tesla had secured funding for a buyout deal from Softbank. But the deal negotiations fell apart over the level of control (Musk didn't want Softbank basically having veto authority over all company decisions).
Several years ago, Tesla had secured funding for a buyout deal from Google. But during the negotiations, Tesla's financial fortunes turned around and Musk broke off the negotiations.
There's no shortage of people out there who would consider a 20% premium not unreasonable for gaining significant control of the company (and of course its corresponding value surge when its shorts are forced to all cover at once). I estimate the total cost of the buyout to be on the order of $20-25B, maybe as much as $30B, depending on the details (a big question is who can remain on as investors). Musk obviously won't be selling his stake, and most (but not all) institutional investors seem to think that $420 is below their sell price. We're polling retail investors right now on TMC and it looks like most think $420 isn't even close to their selling point. But there's a number of regulations that may make it difficult for some parties to remain on if Tesla goes private.
With a buyout on the order of a few tens of billions of dollars, and a desire that no single party come close to a majority stake, individual investments can be expected to be on the order of a few billion dollars each. There's a great number of companies / individuals / funds out there for which this is a reasonable investment range. And the Saudi sovereign wealth fund is definitely among them. I am not privilege to the Saudis' investment structure, but the Norwegian sovereign wealth fund has a ton of investments over $1B (but only one over $8B).
Assuming ethanol comes from murdered children and the hydrogen from magic, hydrogen saves 132% more lives than ethanol.
That's true, but economically exporting photovoltaic charges from solar cells across the oceans and around the world (in carriers such as Hydrogen) will require a lot of R&D before it's viable.
It was actually a way to convey information to a potential investor that protects him from SEC action. He had lined up terms with one player, but he doesn't 100% like the terms. He wants to have another player provide better terms, but if he revealed to the other player he had a particular price already matched, that would be enough for them to buy in and profit. By tweeting the price and that enough funding was lined up, it is made in a public way, so he can continue negotiating with the 2nd player ASAP. He didn't bother filing with the SEC before tweeting, because he didn't want to slow things down. He could have actually been negotiating with the 2nd player right as he tweeted, and use it as a public way to reveal information without even stopping the meeting.
Do the Saudis have the money? Answer: Yes.
Does there exist a set of terms under which the Saudis would be willing to provide the money? Answer: Apparently yes.
Are terms agreed upon? Answer: No.
Are the Saudis the only player involved? Answer: No.
Summary: Is funding secured? Yes. Is a deal complete and ready to present to shareholders? No.
Apparently you were wishing that Elon had tweeted "Buyout deal for Tesla complete; all terms negotiated and ready to be voted on at next shareholder meeting".
Assuming ethanol comes from murdered children and the hydrogen from magic, hydrogen saves 132% more lives than ethanol.
Think about it... Saudi fund investing in Tesla. Oil wealth investing in disruptive technology that can potentially obviate the need for petroleum fuels. If this happens, they'll deep-six that company because it's a threat to their cash cow.
It's much simpler. Saudi Arabia needs a hedge. There's no better hedge against oil than an EV manufacturer.
Assuming ethanol comes from murdered children and the hydrogen from magic, hydrogen saves 132% more lives than ethanol.
This is the same news that have been circulating since the announcement over and over:
Elon is in talks with big Tesla investor[s].
Well, of course he's in talks with ALL big investors. Even if funding is secured to match all the valuation money - it's in Elon's best interest that all big investors keep their ownership instead of Elon having his 20% and the investor getting 80% of the company. This does not imply that funding is not secured!
Clearly a lot of people want Musk and Tesla to fail and thought that the privatization messages that came out late last week was Musk losing it. I'm not a fanboy, but I must say there's a certain amount of amusement to be gained from seeing the posts and reactions of people who want him (and his businesses) to fail.
Hate Musk and his products all you want, but don't try to bet against him.
Mimetics Inc. Twitter
Apparently some people have trouble understanding the difference between "having secured funding sources" and "having negotiated a deal that's ready to present to shareholders for a vote".
And yet Musk has achieved neither so I'm not sure the difference you're highlighting is relevant. "Secured" in the financial world means a firm commitment. An investor "exploring how it can be involved" is nowhere near that threshold.
You can't hedge the production of one type of energy against the consumption of an alternate type of energy, so there are in fact much better hedges against producing oil than an electric car manufacturer.
Tesla, now brought to you buy racist anti-gay bankers ;)
Interesting theory. I can totally imagine buying a home under your definition:
Seller: "Have you secured funding for buying the house?"
Buyer: "Yes, I have a loan offer from my bank"
Seller: "Unfortunately that won't do. You see, I don't consider it 'secured' until you've accepted the bank's loan offer and have the cash on hand. Goodbye!"
Assuming ethanol comes from murdered children and the hydrogen from magic, hydrogen saves 132% more lives than ethanol.
So it's at $420, the Saudis have already agreed to the price and terms? Really? Is that why they are still negotiating?
Secured funding is binary - it either is or isn't. If it is, then terms, players, and amounts are all done. If it isn't, then negotiations are still going on. You're trying to debate that you can be a little pregnant - not gonna work.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
You know, maybe if Musk had wanted to make clear that he hadn't accepted any terms yet, he shouldn't have made any definitive statements, but rather have started off his post with something like "Am considering taking Tesla private...", and continually used words like "if we go private" multiple times, "would be", "in any scenario", etc, and only talked about "investor support".
'... oh wait.
Assuming ethanol comes from murdered children and the hydrogen from magic, hydrogen saves 132% more lives than ethanol.
Saudi Arabia wants to be solidly entrenched in the world when their oil/gas runs out. So they are diversifying hard./p.
Your ad here. Ask me how!
Unless that hedge has you strategically placed against China, who has decided it is a "prime industry" from a Government standpoint and thus solar panel production is heavily subsidized. Oh, and that strategic opponent in the panel market is also your biggest buyer of oil...
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
A loan offer from a bank is in fact considered "secured funding" since it represents a firm commitment by the bank. I didn't say a firm commitment means an executed commitment, ie funds delivered, so you're 0 for 2 on the relevance scale for posts.
You shorts should be novelists. Seriously. I'd totally buy your books. You could be the next John Grisham.
Assuming ethanol comes from murdered children and the hydrogen from magic, hydrogen saves 132% more lives than ethanol.
Wow, having an offer from a reliable funding entity is "secured funding", even if you haven't yet agreed to their preferred terms, and even if you ultimately arrange for other terms with them or with other parties. Imagine that.
I'm glad we were able to have this discussion today.
Assuming ethanol comes from murdered children and the hydrogen from magic, hydrogen saves 132% more lives than ethanol.
The Saudis have a lot of money and the general thought is they are eager to not only hedge, but to diversify.
Diversifying into a company that has the ambition to enable more renewable energy seems a reasonable complementary strategy. Whether Tesla shall be the company to best realize that remains to be seen. They seem to be more willing to do risky short term things than most of their competitors. Of course particularly on EV they have increasingly competent competition from the traditional automakers that have a lot of advantages like more widespread dealer and service networks, but some of those have been viable partnerships. For solar roof, they seem to be having some struggles, and it's still far cheaper just to do normal solar panels. I've no idea on their powerwall stuff.
XML is like violence. If it doesn't solve the problem, use more.
Control, structure, parties to the deal, and a million other things.
Assuming ethanol comes from murdered children and the hydrogen from magic, hydrogen saves 132% more lives than ethanol.
From the article: "Discussions are at high level"
Assuming ethanol comes from murdered children and the hydrogen from magic, hydrogen saves 132% more lives than ethanol.
I think it's funny how people are assuming that the Saudis are the only party involved (and before this, were assuming "no parties").
There's thousands of individuals, many thousands of funds, and tens of thousands of companies worldwide which could plausibly be parties to such a buyout. To anyone who wants to exhaust the list: you've got a lot of phone calls to make; better get started.
It's funny how everyone instead went to calling banks, as if this would be a LBO. Why on Earth would anyone look at Tesla and assume "LBO"? That's nonsensical.
Assuming ethanol comes from murdered children and the hydrogen from magic, hydrogen saves 132% more lives than ethanol.
Yes, you've finally gotten it right - an offer for funding is in fact considered "secured funding" in the financial world. It's the same thing when someone offers shares for sale on a stock exchange - the potential buyer hasn't contractually agreed to the seller's terms until he executes the transaction.
So - deal not secured. If you're still talking those terms, there isn't secured funding. Saudis have NOT agreed to give $420 per share if they're still negotiating all those terms. Again - it's binary. It's either secured or its not.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
I think it's funnier how people think "The Saudis" are a single person.
"First they came for the slanderers and i said nothing."
The seller has nothing to do with the terms of your loan. When you have a secured loan from a bank for purchase of a house, the bank has already decided to give you the money it agreed - $500K, $250K, whatever. The ONLY terms the bank will typically place on the loan is that the house has to be worth the amount loaned, based on an independent inspection. But the money is the buyers money to use, and the seller doesn't matter at all. Terms are decided (rates, payment periods, etc) all done. Just the final validation (like an audit) to ensure the property is worth the funds.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
High level versus low level. In other words, they are talking about maybe doing a deal, but they haven't even started the low-level discussions needed to make an offer. So - not secured.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
Musk specifically stated "Investor support is confirmed. Only reason why this is not certain is that it’s contingent on a shareholder vote"
https://twitter.com/elonmusk/s...
Based on that, the initial market reaction and the numerous tweets and videos in support to taknig Tesla private, a vote could be held Monday and the wheels set in motion.
Because as he said "funding secured", right?
Pain is merely failure leaving the body
I think it's funnier when people think that running around and asking people if they'd like to invest is the equivalent of having secured funding at a fixed price...
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
https://www.reuters.com/articl... The Reuters article seems to be backed up better, but I don't put it past the Saudis to agree to talks to help them preserve the value of their recent open market stock purchase so they can to proceed to liquidate. Rei "forgot" to mention not only was SoftBank not interested last year in Tesla because they wanted Musk out, but they also said $300 a share was too expensive. From SoftBank, some of the dumbest money around. And this was when Tesla'a finances weren't nearly as precarious as they are today. Speaking of Tesla's finances, GreyBar just slapped a mechanics lien against Tesla, adding to the growing pile. They are a Fortune 500 electrical services company. First large vendor not getting paid. And lest you think high level talks always portend of something coming to fruition, remember Lehman? https://www.reuters.com/articl...
Yes, everyone who dares to question the emperor is a short. Classic tribal behavior on your part.
Oh my god. Did he accuse Elon Musk's opponents of being shorters in a discussion about Tesla shorting? What injustice. How terrible. The SEC should investigate now!!! Clearly Rei on Slashdot is RESPONSIBLE for all the shorter's LOSSES!!!!! We need COMPENSATION NOW!!!!
He's wrong about Novels though; The shorters write much better film scripts.
The buyer has a secured offer in that, with exceptions for the collatoral value of the house, they can totally sue the bank to enforce the loan offer. That's what "secured" means. The fact that the buyer hasn't yet accepted it doesn't change anything.
Musk is going to need to produce an appropriately signed and dated piece of paper.
Your ad here. Ask me how!
What's ironic about Musk's reckless tweet is that any buyout will now have to also include money to pay for potential lawsuit damages. Longs bought shares on Tuesday's announcement to see their gains disappear as doubts of Musk's truthfulness surfaced. Longs who were holding OTM calls at 420+ saw the value of their contracts drop as Musk effectively capped upside. Tesla is now liable for damages to both shorts and longs! Amazing, but as both sides can agree on, Tesla is a special case!
Saudi Arabia may not be a single person, but it's still very much a family business. As far as I know it's the only nation in the world with the family name in the country name.
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There's no reason for Saudi Arabia to export electricity across the ocean. They have direct land routes to the approximately 6.5 billion people who live in Asia, Europe and Africa. That said, it's still not realistically economical at the moment due to losses over such huge distances -- hardly more realistic than ideas of covering the sahara in solar panels. And it would never have anywhere near the margins of oil.
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You obviously are one of the people taking it in the "Shorts".
Just because you can't gamble on Elon's level, you hate him; I understand that. That's normal these days.
But he won't be losing a case brought by short sellers; they will be laughed out of court.
Just watch. :)
Truth isn't Truth - Guliani
'nuff said.
Truth isn't Truth - Guliani
The shorters drive him bonkers and he is frankly obsessed with it.
Not nearly as obsessed as the shorters are with destroying Tesla.
He announced the "$420" buyout price to drive the stock up and hurt the shorters.
Even after this story and the previous $2b in Saudi fund money buying into Tesla, you still can't believe a buyout is in the works... sad.
My prediction is a buyout will happen around $50, with some surges up to $1k beforehand once shorts realize the deal is serious and have to unwind positions.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Having read the back and forth between the two of you, I just had to let you know that (A) you are obviously a zealot without the ability to understand the real world and in particular complex finances and (B) I will not feel very sad when you are living under a bridge because you put all your money down shorting Tesla (yes it's that obvious you have a large stake).
Musk isn't going anywhere, except going to take Tesla private... I'll post back in a year or so to laugh at you, maybe you can read it on a library terminal.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Truer words has rarely been spoken. Welcome to the sane side
"inteligence"?
Anyways, since humanity hasn't quite pegged down what intelligence is nor how to accurately measure it, I'm not sure what the debate is for. I believe many leaders past and present are low-iq knuckle draggers, yet possess large amounts of power over other humans. I'm not sure what that says for the so-called intelligence of humanity, either.
His ignorance covered the whole earth like a blanket, and there was hardly a hole in it anywhere. - Mark Twain
"Clearly a lot of people want Musk and Tesla to fail"
"No, many of us are skeptical."
Not mutually exclusive. Negation is not warranted here.
"Hate Musk and his products all you want"
"All this "hate" doesn't exist."
Then you haven't been reading all the comments in all the tfa's that have been published here.
"Calling a skeptic a hater is one sign"
OP did not state that skeptics are haters. OP did not mention skeptics at all. OP mentioned "seeing the posts and reactions of people who want him (and his businesses) to fail". A good summation might be "all haters are skeptics; not all skeptics are haters".
His ignorance covered the whole earth like a blanket, and there was hardly a hole in it anywhere. - Mark Twain
You make it sound like Tesla isn't able to swap one cell type for another. I doubt that is the case, especially since they foresaw this.
Ezekiel 23:20
You obviously use a different meaning of "secured" to me. Well, to everyone, actually.
I secured the sale of my house, but later the buyer didn't sign the contract!
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
Perhaps it's a word that doesn't translate well to or from Icelandic? He's probably using the same definition these fine upstanding financial geniuses
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
God promised him the funding?
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
Is it? IANAREL but I'd have thought that if the bank lent you money to buy a specific house it'd be a little impolite to go to Vegas with it, buy TSLA, short TSLA, buy a different house or indeed do anything other than use it to buy that specific house.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
Wasn't this obvious from the start that the Sauidis would try to kill antil-oil motor companies from ever flourishing ?? World full of suckers.
As long as you spend it on a house that passes inspection and appraisal - you can buy any property you want.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
Musk did have something concrete ? Shocking!
Yeah, I stopped believing anything Musk says anymore, ever since he came up with this ludicrous fantasy about sending his car in space.
He wasn't asked. Some account on Twitter "asked" him. No one is buying it. No one really wanted him there.
No they are just cultists who really believe that Musk is a savior that is going to take them to Mars. That is not a joke: they really believe it.
Obviously negotiations are starting, no deal is finalized. $420 a share is the opening offer by the seller. It's capped. And Musk hurt his offer by potentially adding billions in liability costs to it. If you think shares are worth more than $420 you're saying PT Barnum doesn't value his own company enough. That's crazy. If I was a stock holder I'd dump it given how limited the upside is and how terrible the company's finances are.
Comment removed based on user account deletion
The Saudis flexed their $ in latest protest against Some Canadian criticism. Tesla will have various self interests varying depending on investors but the Saudis sent a signal recently on meddling in their domestic affairs.
There's thousands of individuals, many thousands of funds, and tens of thousands of companies worldwide which could plausibly be parties to such a buyout. To anyone who wants to exhaust the list: you've got a lot of phone calls to make; better get started.
Why bother when Musk has to disclose exactly who it was who had actually committed sufficient funding for the deal at the time he sent the tweet (and whoever he says it was then has to confirm it actually was them) for him to avoid fines, potential jail time, and a flood of civil lawsuits? Much less effort just to sit back and pop some popcorn.
Your information on Saudis is outdated. Bin Salman changed the state's policy to "prepare for post-oil economy" when he came to power.
Tesla fits the bill.
Ruling the country is the family business, not the country itself.
And said country has countless clans within House of Saud feuding with one another. Many of them run their own investment funds which are specifically split across the clan lines.
Summary: Is funding secured? Yes.
You entire post was fine except you put 'Yes' to this instead of 'No'. If there is still negotiation about terms, funding is not secured - either side can walk away at anytime.
seriously are you that dense? a Loan Offer is a firm commitment
. a discussion with your bank saying," hey next week I might be interesting in taking out a loan for a house can I talk to you about that if I decide too?" and them "saying sure come talk" that is not a firm commitment, which on the face of it is what people are suggesting Musk has, if it is the former he is fine, if it is the later he is FUCKED!
exactly there is no need to guess, we will all know soon enough, the announcement triggered lawsuits and the SEC. sit back and eat popcorn till then when we either get to see the shorters cry and jump out windows or watch Musk go insane when he realises how much money he will be personally liable for.
Saudi invest almost universally long term. They also don't enforce non-public format of their investment heavily, which is why you won't find any definitive statements on wealth of Saudis in "reputable" mainstream media.
Best analyst assessments I've seen have been insider data, and they suggest that Bezos, Gates and Slim are small fish in comparison to wealthiest Saudis.
Only the most optimistic Tesla supporter would equate an investor "exploring how it can be involved in a potential deal" with "something concrete".
More info has now been released by Tesla and it looks like this has been in the works for some time
https://electrek.co/2018/08/13...
Pain is merely failure leaving the body
And there we are. He clearly spent the last few days holed up with his lawyers trying to figure out the best way to perfume this pig, but thus far the market doesn't seem thrilled with the story. He basically admits that "funding secured" was just his own spin on a verbal, aspirational conversation with the managing director of the Saudi sovereign wealth fund, and that in fact the fund had not yet committed to the transaction when he tweeted:
Following the August 7th announcement , I have continued to communicate with the Managing Director of the Saudi fund. He has expressed support for proceeding subject to financial and other due diligence and their internal review process for obtaining approvals .
I'm generally a classic butter and salt kind of guy, but the fallout from this could go on long enough that I may throw in an occasional batch of caramel corn for variety. Stay tuned....
"Lol I waited around all weekend while grimes coddled her boyfriend for being too stupid to know not to go on twitter while on acid" https://www.rhymeswithsnitch.c...
Hey AC, care to share some links where Trump has imprisoned peaceful rights activists or given a free pass to a group of people throwing a gay guy off a roof? I get that you need to hide your stupidity behind anonymity in the Age of Information but something so easily disprovable is getting sad from Trump haters. Stop grasping at straws and update your tired beliefs.
Add "Are the Saudis abusive scumbag? Yes"
> I'll post back in a year or so to laugh at you
I don't think you need to wait that long. Musk already consulted with some banks(goldman, silver lake) and some lawyers. And I am guessing the Saudi's aren't the only interested party to want to take tesla private. the more information leaks out, the more is apparent that Musk did plan this through.
https://www.nasdaq.com/article/musk-says-silver-lake-goldman-advising-on-taking-tesla-private-20180814-00015
he was criticised by some fucking jerk, he got angry and responded inappropriately
This 'fucking jerk' being the (genuinely) heroic cave rescuer that Musk called pedo guy?
Classy.
To have a right to do a thing is not at all the same as to be right in doing it
Curiously absent from this thread is any outrage from the likes of Amimojo, PopeRatzo and Serviscope that Elon is selling out to a mysoginistic, anti-LGBTQ empire. Try to be consistent guys.
Yes, none of them have chipped in to say they don't like Hitler either, so they're literally Nazis.
To have a right to do a thing is not at all the same as to be right in doing it
While I mildly disagree with you on some things, I still think you are a mostly reasonable person. Watching you suffer these fools is painful for me. I am unsure if they have some sort of actual mental disorder or if it is willful ignorance. It is like they are fully invested in not understanding/seeing reality. It is happening everywhere. Did someone add something to the water?
Anyways, have a nice day. :)
"Someone needs to talk to the tree of liberty about its ghoulish drinking problem." by ohnocitizen