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The Saudi fund just made public that they own just under 5%, which is when you have to publicly declare to the SEC your holdings. This usually happens when ther

The Saudi fund just made public that they own just under 5%, which is when you have to publicly declare to the SEC your holdings. This usually happens when there is an attempt at a hostile takeover. What Elon did was brilliant and he just countered it by tweeting this out. He is willing to take it private at the $420 price, probably way higher than the Saudi's were planning on. So now it'll be a race to see who can obtain >50% of the shares. Elon has a massive head start with how much he owns already, but the Saudi's fund is ridiculously huge right now ($250B) and I'm sure they have the ability to pull in another few hundred billion on demand. Kind of scary. Elon will need to find a stupid amount of capital and fast to do this. It's very smart on Saudi Fund's part... They would own the worlds largest solar, battery, and EV producer. They could cover a desert in panels and sell the cars and batteries across Europe/Asia, while providing the power as well. They would once again have the largest control of the world's energy.

httpz 8y ago
Unlike EV, currently there are plenty of other options for solar panels. Also, there are plenty of other deserts outside of Saudi Arabia. I think it is a smart move by the Saudi fund but I don't think owning Tesla alone is enough to maintain them as the leader in the energy market in the decades to come.
- deleted 8y ago
  [deleted]
oh_sigh 8y ago
What do you mean 'way higher than the Saudi's were planning on'? I'm confused about the logistics of taking a company private, or how the Saudis would be negatively affected by Musk tweeting out that he effectively wants the stock to go up in price.
- toyg 8y ago
  The stock was work $360 before his tweet and almost $390 afterwards (before the market decided it was a boutade); if Musk can prove he has the cash, the price will naturally gravitate towards $420. That basically means he's daring the Saudis to pay 15% more (about $10bn more), in order to take over from him, than they had presumably planned to do.
  - deleted 8y ago
    [deleted]
  - panarky 8y ago
    > the price will naturally gravitate towards $420 There's a decent chance of a bidding war driving the share price far higher than that. This is strategic for the Saudis. And there are other strategic investors and sovereign wealth funds who will not want to see Tesla taken private for 10% above today's closing price. Tesla's market cap is only 6% of Apple's, and Apple isn't geopolitically strategic. Norway, China and Abu Dhabi all have SWFs larger than Saudi Arabia [1], and the energy implications of letting Tesla go would be strategic for each of them. [1] https://en.wikipedia.org/wiki/Sovereign_wealth_fund#Largest_sovereign_wealth_funds https://en.wikipedia.org/wiki/Sovereign_wealth_fund#Largest_...
- mandeepj 8y ago
  Answer for your Q is already there in OP's post >He is willing to take it private at the $420 price, probably way higher than the Saudi's were planning on > how the Saudis would be negatively affected by Musk tweeting out that he effectively wants the stock to go up in price. Saudis would have to shell out more money if valuation keep going higher
  - deleted 8y ago
    [deleted]
Rotdhizon 8y ago
I don't know much about how this works. Am I right in saying this is like the episode in Yu-Gi-Oh where Seto takes 51% of his fathers company so that he then owns the company? That's the only example I can think of to illustrate what I interpret this as.
X6S1x6Okd1st 8y ago
> They could cover a desert in panels and sell the cars and batteries across Europe/Asia, while providing the power as well. They would once again have the largest control of the world's energy. Doesn't seem like you can reasonably charge a car in europe/asia from solar panels in the middle east. You'll be dealing with some pretty nasty transmission losses.
- mschuster91 8y ago
  > Doesn't seem like you can reasonably charge a car in europe/asia from solar panels in the middle east. You'll be dealing with some pretty nasty transmission losses. First of all, the oil reserves in Saudi-Arabia aren't going to last forever - but they will need massive amounts of energy to maintain their cities, especially for drinking water. Desalination is ridiculously expensive, and water access will be the war driver in the entire Middle East once climate change really hits. Cover the desert with solar plants, the coasts with desalination plants (and don't care about the brine) => control who gets the electricity and/or the water, control the region. Saudi-Arabia is actually already going pretty far in their fight for regional supremacy, that would fit perfectly. As for transmitting the energy to Europe/Asia, well... there's technology in the works to synthesize gas (both gasoline and, well, gas) using electricity, which can be fed into the existing gas pipeline infrastructure and thus sold to the wide world.
  - Misdicorl 8y ago
    Wars about control of water will be centered around areas with fresh water availability. The middle east doesnt have any. If you have cheap desalinization capability, why would there be wars over water?
    - dragonwriter 8y ago
      > Wars about control of water will be centered around areas with fresh water availability. The middle east doesnt have any. More likely, they'll be centered around points of availability in areas of relative scarcity. There is, in fact freshwater in the Middle East, just not a lot. Which makes what is there a potential source of contention.
baybal2 8y ago
>It's very smart on Saudi Fund's part... They would own the worlds largest solar, battery, and EV producer. They could cover a desert in panels and sell the cars and batteries across Europe/Asia, while providing the power as well. They would once again have the largest control of the world's energy. I'm afraid I have to shatter this dream. There is a thing called Ohm's law, and it is not taught in business schools as I know... :)
- jankeymeulen 8y ago
  Supposedly you went to business school then? :-) HVDC has losses at about 3% per 1000km, from Saudi Arabia to the center of Europe is less than 5000 km as the crow flies. Doesn't seem too bad to me.
  - Baeocystin 8y ago
    Out of curiosity, I googled current HVDC lines, and was surprised at how rapidly it has started to replace HVAC for long-distance transmission. It now strikes me that getting a line from the peninsula to europe will be more of a political effort than a technical one, which is not the conclusion I was initially expecting.
  - mrguyorama 8y ago
    I thought the losses were nonlinear and complex? IE 10,000km is not 30% loss
    - fizx 8y ago
      Actually, you should do better than 30% loss due to the non-linearity: 1 - 0.97**10 => 0.2625758731050719
bitxbit 8y ago
That's an interesting take but I don't think it's Musk vs the Sauds. Musk realized he can't attract and retain tech talent with the shares in such a volatile state. I believe that's the underlying motivation here.
vasco 8y ago
Solar panel efficiency is inversely proportional to temperature, plus all that sand + wind is going to be adding to maintenance costs. There's better places to put solar panels than in the desert.
- sounds 8y ago
  Your concerns are interesting. Here are some solar power plants that appear to have the secret to overcoming temperature, sand, and wind. Any ideas what they're doing? • 1547 MW capacity: Tengger Desert Solar Park • 1000 MW capacity: Kurnool Ultra Mega Solar Park • 1000 MW capacity: Datong Solar Power Top Runner Base • 850 MW capacity: Longyangxia Dam Solar Park • 746 MW capacity: Bhadla Solar Park • 600 MW capacity: Pavagada Solar Park • 579 MW capacity: Solar Star, Rosamond, CA, United States • 552 MW capacity: Copper Mountain Solar Facility, Boulder City, NV, United States • 550 MW capacity: Topaz Solar Farm, San Luis Obispo County, CA, United States • 550 MW capacity: Desert Sunlight, Desert Center, CA, United States • 500 MW capacity: Huanghe Hydropower Golmud Solar Park • 452 MW capacity: Mount Signal Solar, Calexico, CA, United States • 400 MW capacity: Mesquite Solar Project, Arlington, AZ, United States • 140 W capacity: Mars Spirit Rover (ok, the experiment failed in 2011) • 140 W capacity: Mars Opportunity Rover
  - pitaj 8y ago
    I'm not sure about any of these plants in particular, but a lot don't use PV cells, instead using mirrors to heat and evaporate a liquid, driving a turbine.
    - perl4ever 8y ago
      I don't know whether it's accurate, but I've noticed people saying that these sorts of plants are kind of obsolete these days, because of the development of PV cells.
      - notabee 8y ago
        It's actually liquid sodium in newer designs, which retains heat well, is stored in an insulated tank, and can generate power using that heat even after the sun goes down. So no, I don't think they're obsolete. https://www.scientificamerican.com/article/new-concentrating-solar-tower-is-worth-its-salt-with-24-7-power/ https://www.scientificamerican.com/article/new-concentrating...
stale2002 8y ago
Why is Saudi Arabia Elon's enemy here? Perhaps it is the opposite, and the Saudis are the one's funding the whole going private operation in the first place?
kchoudhu 8y ago
Sure, or we can think of it in the same way we thought about their investment in Citigroup in 2007, their investment in Uber in 2016 or their investment in Snapchat this year. They are masters of market timing... just not the good kind.
- sf_rob 8y ago
  If you have data to suggest that their risk adjusted returns are abysmal then that would be very interesting. I don't see the point of picking 3 investments from a fund worth hundreds of billions and presenting it as data that they are underperforming.
dragonwriter 8y ago
Or, they could just own the operation that generates the power much closer to the point of use.
Baddog9415 8y ago
This is the dumbest fucking Scenario ever. US would never let Saudis own any energy company . And the Company is technically insolvent.
_fizz_buzz_ 8y ago
"ha no this is absurd, this is not how any of this works" - Matt Levine https://twitter.com/matt_levine/status/1027245773237436416 https://twitter.com/matt_levine/status/1027245773237436416

httpz 8y ago

Unlike EV, currently there are plenty of other options for solar panels. Also, there are plenty of other deserts outside of Saudi Arabia. I think it is a smart move by the Saudi fund but I don't think owning Tesla alone is enough to maintain them as the leader in the energy market in the decades to come.

deleted 8y ago
[deleted]

oh_sigh 8y ago

What do you mean 'way higher than the Saudi's were planning on'? I'm confused about the logistics of taking a company private, or how the Saudis would be negatively affected by Musk tweeting out that he effectively wants the stock to go up in price.

toyg 8y ago
The stock was work $360 before his tweet and almost $390 afterwards (before the market decided it was a boutade); if Musk can prove he has the cash, the price will naturally gravitate towards $420. That basically means he's daring the Saudis to pay 15% more (about $10bn more), in order to take over from him, than they had presumably planned to do.
- deleted 8y ago
  [deleted]
- panarky 8y ago
  > the price will naturally gravitate towards $420 There's a decent chance of a bidding war driving the share price far higher than that. This is strategic for the Saudis. And there are other strategic investors and sovereign wealth funds who will not want to see Tesla taken private for 10% above today's closing price. Tesla's market cap is only 6% of Apple's, and Apple isn't geopolitically strategic. Norway, China and Abu Dhabi all have SWFs larger than Saudi Arabia [1], and the energy implications of letting Tesla go would be strategic for each of them. [1] https://en.wikipedia.org/wiki/Sovereign_wealth_fund#Largest_sovereign_wealth_funds https://en.wikipedia.org/wiki/Sovereign_wealth_fund#Largest_...
mandeepj 8y ago
Answer for your Q is already there in OP's post >He is willing to take it private at the $420 price, probably way higher than the Saudi's were planning on > how the Saudis would be negatively affected by Musk tweeting out that he effectively wants the stock to go up in price. Saudis would have to shell out more money if valuation keep going higher
- deleted 8y ago
  [deleted]

Rotdhizon 8y ago

I don't know much about how this works. Am I right in saying this is like the episode in Yu-Gi-Oh where Seto takes 51% of his fathers company so that he then owns the company? That's the only example I can think of to illustrate what I interpret this as.

X6S1x6Okd1st 8y ago

> They could cover a desert in panels and sell the cars and batteries across Europe/Asia, while providing the power as well. They would once again have the largest control of the world's energy. Doesn't seem like you can reasonably charge a car in europe/asia from solar panels in the middle east. You'll be dealing with some pretty nasty transmission losses.

mschuster91 8y ago
> Doesn't seem like you can reasonably charge a car in europe/asia from solar panels in the middle east. You'll be dealing with some pretty nasty transmission losses. First of all, the oil reserves in Saudi-Arabia aren't going to last forever - but they will need massive amounts of energy to maintain their cities, especially for drinking water. Desalination is ridiculously expensive, and water access will be the war driver in the entire Middle East once climate change really hits. Cover the desert with solar plants, the coasts with desalination plants (and don't care about the brine) => control who gets the electricity and/or the water, control the region. Saudi-Arabia is actually already going pretty far in their fight for regional supremacy, that would fit perfectly. As for transmitting the energy to Europe/Asia, well... there's technology in the works to synthesize gas (both gasoline and, well, gas) using electricity, which can be fed into the existing gas pipeline infrastructure and thus sold to the wide world.
- Misdicorl 8y ago
  Wars about control of water will be centered around areas with fresh water availability. The middle east doesnt have any. If you have cheap desalinization capability, why would there be wars over water?
  - dragonwriter 8y ago
    > Wars about control of water will be centered around areas with fresh water availability. The middle east doesnt have any. More likely, they'll be centered around points of availability in areas of relative scarcity. There is, in fact freshwater in the Middle East, just not a lot. Which makes what is there a potential source of contention.

baybal2 8y ago

>It's very smart on Saudi Fund's part... They would own the worlds largest solar, battery, and EV producer. They could cover a desert in panels and sell the cars and batteries across Europe/Asia, while providing the power as well. They would once again have the largest control of the world's energy. I'm afraid I have to shatter this dream. There is a thing called Ohm's law, and it is not taught in business schools as I know... :)

jankeymeulen 8y ago
Supposedly you went to business school then? :-) HVDC has losses at about 3% per 1000km, from Saudi Arabia to the center of Europe is less than 5000 km as the crow flies. Doesn't seem too bad to me.
- Baeocystin 8y ago
  Out of curiosity, I googled current HVDC lines, and was surprised at how rapidly it has started to replace HVAC for long-distance transmission. It now strikes me that getting a line from the peninsula to europe will be more of a political effort than a technical one, which is not the conclusion I was initially expecting.
- mrguyorama 8y ago
  I thought the losses were nonlinear and complex? IE 10,000km is not 30% loss
  - fizx 8y ago
    Actually, you should do better than 30% loss due to the non-linearity: 1 - 0.97**10 => 0.2625758731050719

bitxbit 8y ago

That's an interesting take but I don't think it's Musk vs the Sauds. Musk realized he can't attract and retain tech talent with the shares in such a volatile state. I believe that's the underlying motivation here.

vasco 8y ago

Solar panel efficiency is inversely proportional to temperature, plus all that sand + wind is going to be adding to maintenance costs. There's better places to put solar panels than in the desert.

sounds 8y ago
Your concerns are interesting. Here are some solar power plants that appear to have the secret to overcoming temperature, sand, and wind. Any ideas what they're doing? • 1547 MW capacity: Tengger Desert Solar Park • 1000 MW capacity: Kurnool Ultra Mega Solar Park • 1000 MW capacity: Datong Solar Power Top Runner Base • 850 MW capacity: Longyangxia Dam Solar Park • 746 MW capacity: Bhadla Solar Park • 600 MW capacity: Pavagada Solar Park • 579 MW capacity: Solar Star, Rosamond, CA, United States • 552 MW capacity: Copper Mountain Solar Facility, Boulder City, NV, United States • 550 MW capacity: Topaz Solar Farm, San Luis Obispo County, CA, United States • 550 MW capacity: Desert Sunlight, Desert Center, CA, United States • 500 MW capacity: Huanghe Hydropower Golmud Solar Park • 452 MW capacity: Mount Signal Solar, Calexico, CA, United States • 400 MW capacity: Mesquite Solar Project, Arlington, AZ, United States • 140 W capacity: Mars Spirit Rover (ok, the experiment failed in 2011) • 140 W capacity: Mars Opportunity Rover
- pitaj 8y ago
  I'm not sure about any of these plants in particular, but a lot don't use PV cells, instead using mirrors to heat and evaporate a liquid, driving a turbine.
  - perl4ever 8y ago
    I don't know whether it's accurate, but I've noticed people saying that these sorts of plants are kind of obsolete these days, because of the development of PV cells.
    - notabee 8y ago
      It's actually liquid sodium in newer designs, which retains heat well, is stored in an insulated tank, and can generate power using that heat even after the sun goes down. So no, I don't think they're obsolete. https://www.scientificamerican.com/article/new-concentrating-solar-tower-is-worth-its-salt-with-24-7-power/ https://www.scientificamerican.com/article/new-concentrating...

stale2002 8y ago

Why is Saudi Arabia Elon's enemy here? Perhaps it is the opposite, and the Saudis are the one's funding the whole going private operation in the first place?

kchoudhu 8y ago

Sure, or we can think of it in the same way we thought about their investment in Citigroup in 2007, their investment in Uber in 2016 or their investment in Snapchat this year. They are masters of market timing... just not the good kind.

sf_rob 8y ago
If you have data to suggest that their risk adjusted returns are abysmal then that would be very interesting. I don't see the point of picking 3 investments from a fund worth hundreds of billions and presenting it as data that they are underperforming.

dragonwriter 8y ago

Or, they could just own the operation that generates the power much closer to the point of use.

Baddog9415 8y ago

This is the dumbest fucking Scenario ever. US would never let Saudis own any energy company . And the Company is technically insolvent.

_fizz_buzz_ 8y ago

"ha no this is absurd, this is not how any of this works" - Matt Levine https://twitter.com/matt_levine/status/1027245773237436416 https://twitter.com/matt_levine/status/1027245773237436416