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Musk mulls taking Tesla private, Saudi sovereign fund builds $2B stake

313 points by fludlight 8y ago

paulpauper 8y ago
I don't mean to rub it in , those people who said to short Tesla a couple weeks ago were sure wrong. Last week Steve Eisman who rose to fame in 2008 by betting against the housing market, shorted Tesla. That position is probably at least 25% underwater now. Not only that, but Tesla losing money does not mean it is insolvent, because it can keep raising money and most of those losses are capital expenditures instead of operating losses.
- winslow 8y ago
  While I don't necessarily disagree with your statement it is important to note when Eisman and others shorted the housing market before the 2008 collapse their positions also took big negative hits having to pay hundreds of millions to hold their short positions. Obviously in the end of the housing market collapse they made massive profits. Still very early in their TSLA position to determine the winners & losers.
  - hn_throwaway_99 8y ago
    If Tesla goes private, that is the end for the shorts - there is no "after" after that. Everyone who shorted will have to pay back their shares at $420 a share (or whatever the final price ends up being).
    - xkjkls 8y ago
      That if is a big if. Tesla is currently trading $40 under their supposed acquisition price. That's not exactly high confidence from the market that this deal will go through.
      - paulpauper 8y ago
        that is because nothing has been finalized. it can easily get there just based on market momentum. Tesla gained $70 in a week. another 40 is not that hard
        xkjkls 8y ago
        Wall Street loves free money. The stock was trading at $360 before this proposal was announced, and only moved a third of the way to the purchase price on the news. That's not implying investor confidence that this will happen. Otherwise, plenty of people would be willing to load up on the stock on the assurance it would be bought at $420.
    - paulpauper 8y ago
      yes, not to mention it can still go to 420 without being bought out, by virtue of market momentum and a bidding war
    - querulous 8y ago
      sure, if tesla goes private
- xkjkls 8y ago
  I'm not sure Tesla's public market story is over. It's somewhat absurd for a company to announce a plan that would require $40 billion in capital to be raised to finance it, and offer no details on where that is coming from. Two, Tesla has large operating losses to go along to its CapEx and many shorts dislike how exactly their choosing to classify many of their expenses. Depending on how you look at their accounting, you can easily believe this company is completely structurally unprofitable. The people who are betting against Tesla are not stupid.
  - paulpauper 8y ago
    The people who are betting against Tesla are not stupid. Smart people lose money all the time: victims of mt gox hack enron long term capital management 2000 dotocm crash Bill ackman's herbalife short. and and and on
    - xkjkls 8y ago
      > victims of mt gox hack ok bro, I'm not sure we have the same definition of smart people if yours are people decided to buy a bunch of cryptocurrency and keep it all in a website built in php
      - paulpauper 8y ago
        one person I know, a physicist, said he lost 50 btc in the hack. in hindsight keeping the coins there was stupid but at the time it seemed safe
        dragontamer 8y ago
        I go to physicists to learn about physics. I wouldn't ask them a question about finance. I go to an economist, or maybe a trader, to learn about money and finances.
    - whymauri 8y ago
      "The market can remain irrational longer than you can stay solvent" - keynes
- nickik 8y ago
  Their are insane. They have absolutely no leg to stand on. Tesla has sustained enough Model 3 production that they produce positive cashflow and they will be profitable in Q3/Q4. As one large investor said, Tesla short term guidance has been pretty reliable. Unless some massive macro event happens there is no way Tesla stock is gone fall back to prices where many of the shorts hold once they have proven the are able to mass produce cars. Their reasons for the short positions are getting worse and worse. The main argument has been that Tesla is unable to produce Model 3 and will not have positive cash flow. Those arguments are all but dead in the water if you look at current sales numbers.
giarc 8y ago
https://twitter.com/elonmusk/status/1026872652290379776 https://twitter.com/elonmusk/status/1026872652290379776 "Am considering taking Tesla private at $420. Funding secured." Elon
- deleted 8y ago
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- shawn 8y ago
  $420.69, to be precise. The replies raise an interesting question: does this count as stock manipulation? I’m not sure it would, but the rules seem a bit arbitrary sometimes.
  - SpaceManNabs 8y ago
    Where did you get this number from?
    - shawn 8y ago
      https://m.youtube.com/watch?v=Y27ey39dRYQ https://m.youtube.com/watch?v=Y27ey39dRYQ It’s the size of the download.
  - quickben 8y ago
    He wrote "funding secured". Now he has to prove it upon demand, or he'll get sued. A lot.
- dudus 8y ago
  A pot joke borderline market manipulation. Just amazing. How do people get away with this?
chollida1 8y ago
Keep in mind that this position was built via the secondary market and not from Tesla itself. And that the position size would be about 3 Billion, a large but pretty ordinary size for a fund of their size. They also put in $400 million into magic leap, ar large bet on Uber and about $50 Billion into the Softbank vision fund that is throwing money around. I think this puts them about the 8th largest shareholder of Tesla. As an aside, with Musk's recent tweet I think he's going to get a pretty stern talking to by the SEC about discomfiture and Reg FD. Even if its true, 1) You've now used that bullet in your gun against the short sellers 2) Did it in a very dubious way, via twitter rather than RegFD disclosure. 3) will now have to answer questions about this "private takeover", ie where is the money coming from? how long is it committed for? For what? An SEC headache a momentary pop that was immediately erased? The tweet caused a momentary pop in the stock price which was erased about 2 minutes after it popped. The market can be exceedingly good and correcting itself. Elon seems to be doubling down https://twitter.com/elonmusk/status/1026879404905885697 https://twitter.com/elonmusk/status/1026879404905885697
- fossuser 8y ago
  Is it corrected? I'm still seeing it up $25.
  - chollida1 8y ago
    The initial pop was related to a report that the Saudi fund built a position in Tesla. The stock is now right about where it was when Musk tweeted.
  - frgtpsswrdlame 8y ago
    Today's peak TSLA price was $371.07 (through my provider) so it's yet to be seen whether it will reach that again or close lower.
    - fossuser 8y ago
      Looks like it's up to $380 after hours.
seren 8y ago
Who would have predicted 30 years ago that a Saudi sovereign fund would invest in an electric car company ? Symbolically that is a pretty potent signal.
- creaghpatr 8y ago
  Hedging their bets, not the worst idea.
  - zeusk 8y ago
    > Hedging ... not the worst idea Not at Tesla's valuation
  - pmart123 8y ago
    Yep. I believe the Saudi sovereign wealth fund has divested from or has mandates to divest from fossil fuel related investments. https://www.theguardian.com/business/2016/apr/01/saudi-arabia-plans-to-sell-state-oil-assets-to-create-2tn-wealth-fund https://www.theguardian.com/business/2016/apr/01/saudi-arabi...
- dagss 8y ago
  It would be much weirder (crazy?) for Saudis to invest in oil. They have lots of fresh income when oil goes well, so the fund should be designed to do well if oil does not go well.
- melling 8y ago
  How much longer will their oil last? They need to invest for life after oil.
  - dagss 8y ago
    Saudi Arabia might have enough oil to last until demands drops..... It is also some of the cheapest oil to extract, so sometime before they might start lowering prices to push everyone else out of the market. Keep in mind their production is restrained now to keep prices high.
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faizshafique 8y ago
Is it corrected? I'm still seeing it up $25.
Cshelton 8y ago
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.
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- 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.
mephitix 8y ago
Super coincidental that Elon announced he was thinking about taking the company private right after this happened. My guess is that they had run the numbers on taking the company private before. Since the Saudis had approached Elon before and he denied their offer (for whatever reason) he probably was upset that they acquired a stake through secondary markets and tweeted their half-baked plan... (not a good course of action IMO)
- mandeepj 8y ago
  > Super coincidental that Elon announced he was thinking about taking the company private right after this happened. Not super coincidental. It's incidental and on-purpose. What a day
- jVinc 8y ago
  > not a good course of action IMO How so? They've just got 5% of Tesla and he's talking about taking it private at +15%. It seems like instant profit to them just from the reaction to them buying it.
tristanj 8y ago
Trading of Tesla stock has now been halted following this news & Elon's tweets. https://www.cnbc.com/2018/08/07/tesla-stock-jumps-on-musks-tweet-that-he-is-considering-taking-compan.html https://www.cnbc.com/2018/08/07/tesla-stock-jumps-on-musks-t...
- anomatopoeia 8y ago
  Interested in seeing where the funding is coming from at that valuation. Potentially the biggest buyout of all time? Other buyouts of such scale involved companies with huge cash flows/profits - think RJR Nabisco, Hilton, TXU (big US utility). Tesla of course is a very different animal. Hard to imagine any kind of conventional financing working for this type of deal. Beyond the Saudis maybe some other SWF or deep pocketed individual investors?
  - gonesilent 8y ago
    Apple?
    - CyberDildonics 8y ago
      Or Softbank. The Bank of Japan is printing money like crazy to keep the Yen from deflating. Softbank seems to intent on getting out of Yen and into assets while the Yen still has the value it does right now.
  - trhway 8y ago
    Chinese? Given their interest in electric cars, Gigafactory (https://electrek.co/2018/08/07/tesla-hiring-gigafactory-3-china/ https://electrek.co/2018/08/07/tesla-hiring-gigafactory-3-ch...) and solar and of course the amount of USD they have.
  - qaq 8y ago
    Why does is have to be beyond Saudis? it also could Qatar, China,UAE etc.
    - deleted 8y ago
hn_throwaway_99 8y ago
I get it, it's Musk, but this is still such an irresponsible way to announce news of this magnitude. From a WaPo article: The sudden announcement gained immediate criticism from former regulators who suggested it may conflict with SEC rules for potentially market-moving statements. Harvey Pitt, a former SEC chairman, told CNBC on Tuesday that Musk’s tweets “might consittute fraud if any of the facts he disclosed are not true” or if there was any indication that he had floated the proposal purely to boost the stock price
- Voloskaya 8y ago
  It's irresponsible from our point of view because we don't know much about this yet. From his point of view, if he is serious about it, then it's not a false fact and it's not floated purely to boost the stock price, so why should he be afraid?
  - shawn 8y ago
    Because it’s the SEC. It’s the favorite tool to send rich people to jail. Of all the things rich Americans should be afraid of, the SEC probably ranks near the top, short of physical threats.
    - thieving_magpie 8y ago
      Man, that's some thick sarcasm (I hope).
    - rottyguy 8y ago
      The information was disseminated to all parties at the same time and they weren't in a "dark" period. I know several people are upset given their bet but I don't see this being any different than some headline in an AP release. If anything, twitter is more immediate to the masses and there's no middleman.
    - baybal2 8y ago
      >Because it’s the SEC. It’s the favorite tool to send rich people to jail. Of all the things rich Americans should be afraid of, the SEC probably ranks near the top, short of physical threats. Living in America :)... I'm very glad that a number of countries require nothing more of public companies than timely disclosed financials. Americans, are you happy with your country very likely having the world's most complex securities laws?
saudioger 8y ago
Musk would be much more tolerable if he followed the ancient rule of "put up or shut up"
- cam3ham 8y ago
  lol if anyone has delivered, it's the guy that launched rockets and build electric cars.
  - TomK32 8y ago
    There's probably still too many people won't think he's an underachiever until they see all three boosters of a FH landing while their landing spot is being circled by autonomously driven Teslas.
    - saudioger 8y ago
      This feels like a false argument to me. I don't think most people are saying he's an underachiever, just opposing the idea that everything he does is good.
- api 8y ago
  Come back when you led a team to build an orbital rocket with a reusable first stage while simultaneously leading a team to build a luxury electric vehicle with self-drive capability... and largely succeeded in both with a few hiccups. I think he's put up.
  - mhh__ 8y ago
    Not many people have a spare billion dollars, however.
    - api 8y ago
      Many more billions have been spent by others trying to do these things and they have failed.
    - 8y ago
deleted 8y ago
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rconti 8y ago
Trading is halted. https://seekingalpha.com/news/3379457-tesla-trading-halted-live-updates https://seekingalpha.com/news/3379457-tesla-trading-halted-l...
- froindt 8y ago
  "...Would create special purpose fund enabling anyone to stay with Tesla. Already do this with Fidelity’s SpaceX investment." Does anyone know more about how this is organized? My understanding (which could well be wrong) is that organizations with over 500 owners must do normal quarterly filings in the same way a publicly traded company would. Yet in previous years I've searched and come up empty handed on SpaceX.
  - dragonwriter 8y ago
    I think the model is the fund is one investor in Tesla, many people are investors in the fund. So Tesla doesn't have materially different reporting requirements.
    - marvin 8y ago
      How does this skirt the accredited investor requirement in Sarbanes-Oxley? Seems like a very obvious way to avoid it, and hence something that would not be allowed.
boznz 8y ago
Good on Tesla. Markets are fickle and not conjunctive to long term planning and investment
chollida1 8y ago
Honestly, I'm starting to think this is less about avoiding the public markets and more about getting out of the crushing debt (8.65 in liabilities comming due before the end of March 2019)that they have coming due in March of 2019. The billion of debt coming due is convertible above a price of $360 and if he can keep the price propped up will almost certainly force all bond holders to convert into equity holders. https://seekingalpha.com/article/4191711-tesla-stealth-capital-raise?ifp=0 https://seekingalpha.com/article/4191711-tesla-stealth-capit... I mean, think about this rationally, if it wasn't for the public markets Tesla would already be bankrupt. Going private means giving up this access to capital as well as having to come up with 9 Billion to fund debt commind due. With stock you have something to bargain with when selling debt. Without it you've lost a huge weapon. Same for paying your employee's. No more tesla stock that appreciates each quarter that you can sell as soon as it comes to you. Also just did some digging on Tesla bonds and CDS... At current levels, they imply a about a 30% chance of a Tesla default in the next five years. It costs around $1.3 million to insure $10 million of bonds against default. And if Tesla went private and he funded it with debt he's looking at a rate somewhere around the low teens from what Bloomberg is reporting which means borrowing $58 Billion to finance this would cost aroudn $7.1 Billion a year in interest payments at 12.5%. And keep in mind he's paying that to cut off public markets access for raising money, one of his best sources of cheap capital in the past 5 years.
- wbl 8y ago
  Convert optionality is on the buyer side usually.
  - chollida1 8y ago
    Yes....usually > Readers should also note that, unlike the 2018 and the 2021 convertibles, where the principal is always repayable in cash, the 2019 convertibles may be redeemed wholly in shares (at Tesla's option and if the requisite conversion ratio has been met). So yes the bond holder can choose to convert after Dec 1st 2018 and Tesla can force them to convert when the bonds come due in March 2019
- _ph_ 8y ago
jv22222 8y ago
I hope he pulls this off. It would be excellent if he could get out of the public company weeds, and get more brain bandwidth to focus on executing and solving problems.
- xkjkls 8y ago
  Why does that not affect other CEOs? I don't see Jeff Bezos complaining about being a public company.
danbrooks 8y ago
Musk is only, what, 50 billion short of buying the company? Looks like another PR stunt.
- Voloskaya 8y ago
  He never said he was buying Tesla himself though...
  - xkjkls 8y ago
    Still needs to find someone with %50 billion though
baxtr 8y ago
I really don’t get the obsessions with going private. It used to be everybody’s goal to go public, an IPO was one of the greatest achievements. Musks wants to go private to have better control of “his” companies and to prevent market pressures? I think being a public company is good for many reasons, amongst other: the public can participate in the success of companies and for the company it provides a great reality gauge. Maybe that’s what he’s afraid of...
- Barrin92 8y ago
  >I think being a public company is good for many reasons, amongst other: the public can participate in the success of companies and for the company it provides a great reality gauge. Maybe that’s what he’s afraid of... The return to some sort of 19th century capitalism dominated by private industry magnates has been going on for a while.
- Voloskaya 8y ago
  He stated multiple times that he doesn't like public market because investors don't care about long term goal. That's why he said he will never take SpaceX public (if he can), as his goal with SpaceX is to go to Mars, not to optimize for revenue. I believe he also said he only took Tesla public because he had no choice, not because it was his goal.
  - xkjkls 8y ago
    There's hundreds of public companies focused on long term goals. Amazon, Berkshire Hathaway, Starbucks, etc. Why is Elon Musk special compared to these others?
    - petra 8y ago
      Or of curiosity, besides Amazon and Google and Toyota, are there any technology companies focused on long term growth?
      - xkjkls 8y ago
writepub 8y ago
Saudi money is dripping with blood - the kingdom's wealth and control is a result of well documented massacre of dissidents, of Shias and of funding terror and patronizing the Wahabis, especially against philosophies opposed to the kingdom. It's deeply disappointing to see Musk legitimatize the Sauds, who threatened Canada with a 9/11 style attack just 24 hours ago
- Voloskaya 8y ago
  How is Musk legitimizing the Sauds exactly? If anything it looks like one of the reason to go private is specifically to prevent the Saudi fund from being able to increase their ownership by buying on the public market.
  - mankash666 8y ago
    You cannot stop the Sauds from buying stock on the public market, you can decline a private bailout from them, on moral grounds
    - Voloskaya 8y ago
      How exactly is the Saudi fund going to buy share on the public market if Tesla is not on the public market anymore?
      - writepub 8y ago
        Moot point. If public, Tesla can't stop the Sauds from buying stock. However, they can refuse a bailout from the Sauds to go private
        Voloskaya 8y ago
        > However, they can refuse a bailout from the Sauds to go private What do you mean? I may be missing something here, but I really don't understand this part. Are you suggesting the Saudis are the one that will provide the 50B$ needed to go private?
dang 8y ago
All: please stick to specifics and don't go into MuskMania (the fever that results when MuskLove meets MuskHate). That's always the same and therefore off topic here. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
foota 8y ago
What if the funding is the Saudi wealth fund and the stake they acquired was to form a majority ownership? Edit: this is probably not the case, sounds like speculation is of a hostile takeover.
thesimon 8y ago
https://www.tesla.com/en_GB/blog/taking-tesla-private?redirect=no https://www.tesla.com/en_GB/blog/taking-tesla-private?redire...
ryzvonusef 8y ago
Taking Tesla Private https://www.tesla.com/en_GB/blog/taking-tesla-private https://www.tesla.com/en_GB/blog/taking-tesla-private
- ryzvonusef 8y ago
  Tesla reopens 10% higher after weighing decision to go private https://www.cnbc.com/2018/08/07/tesla-says-no-final-decision-has-been-made-to-take-company-private.html https://www.cnbc.com/2018/08/07/tesla-says-no-final-decision...
zaroth 8y ago
Elon has just written an email to employees, also published on the site, explaining how he thinks going private would be good for Tesla and very generally how it could work. It doesn’t appear to include any more specifics about where funding for the opt-in buyout would come from. TSLA resumed trading just before closing bell and closed at $379.57 up 11% for the day. https://www.tesla.com/en_GB/blog/taking-tesla-private?redirect=no https://www.tesla.com/en_GB/blog/taking-tesla-private?redire...
dylanhassinger 8y ago
Very scary to see Tesla fall into the hands of a despotic nation that is cracking down on free speech https://www.newsweek.com/saudi-arabia-orders-16000-students-leave-canada-amid-diplomatic-row-1060547?piano_t=1 https://www.newsweek.com/saudi-arabia-orders-16000-students-...
- gpm 8y ago
  This is making the very large assumption that it is the Saudi's financing the deal...
- nickik 8y ago
  Stop spreading FUD
mrfusion 8y ago
What happens if I refuse to sell my share?
- startupfounder 8y ago
  "First, I would like to structure this so that all shareholders have a choice. Either they can stay investors in a private Tesla or they can be bought out at $420 per share, which is a 20% premium over the stock price following our Q2 earnings call (which had already increased by 16%). My hope is for all shareholders to remain, but if they prefer to be bought out, then this would enable that to happen at a nice premium." - https://www.tesla.com/en_GB/blog/taking-tesla-private?redirect=no https://www.tesla.com/en_GB/blog/taking-tesla-private?redire...
- kylec 8y ago
  If you hold shares in a company that gets bought, your share is converted into your portion of the proceeds. You can't refuse. In this case, Elon wants to let current investors stay investors, so you should be able to hold your share and it'll convert into whatever the private equity equivalent will be.
  - dragonwriter 8y ago
    The private equity equivalent of a share of stock is...a share of stock.
- nickik 8y ago
  Musk has already said that you can continue to hold them.
dangjc 8y ago
It's a sign public equity markets aren't structured well that companies aren't encouraged to think long term. The most successful companies in today's markets don't even allow common shareholders to control the company, ie Google and Facebook with their special classes of controlling shares. We might need to reconsider changing laws around choosing board seats or requiring shareholders to have minimum holding times in order to align incentives better for the long term. If public equity markets don't work, the alternative is more and more of wealth creation happening privately, in startups funded by VCs, private equity, or family owned businesses. The public won't get to participate.
- marvin 8y ago
  That's a very sad thought, and unfortunately the way things are trending right now.
modeless 8y ago
Can someone explain how Tesla can go private while still allowing all employees and any current investor who wants to remain shareholders as Musk is saying? AFAIK there is a threshold number of shareholders after which a company is required to be public. You can't just declare that you're a private company if you have thousands of members of the general public still holding equity.
- rrdharan 8y ago
  That threshold was raised from 500 to 2000 shareholders as part of the JOBS act: http://www.lathropgage.com/newsletter-44.html http://www.lathropgage.com/newsletter-44.html
- shoo 8y ago
  I think after you have 2000 or more shareholders there are requirements to publically report the financial performance. I am not sure if this makes the company a "public company". https://www.investopedia.com/terms/5/500-shareholder-threshold.asp https://www.investopedia.com/terms/5/500-shareholder-thresho...
- tonfa 8y ago
  I can't find the link to some Matt Levine's article explaining it, but iirc it's not that the company has to be public, but that it has similar requirements from the SEC as a public company. At this point since you have to abide to the same accounting requirements, you maybe has well be public to benefit from the extra capital.
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endlessvoid94 8y ago
This article mentions 4 times that it's unlikely Tesla will be able to pull this off. Not a single positive or optimistic note. Which is fine, but it's not as if Bloomberg has no ability to influence market prices.
brisance 8y ago
IMO it's just a PR ploy to prop up the price. 1. How is Tesla going to raise capital if not through the public markets? Would a PE firm lend them money at better rates (unlikely, with interest rates going up)? They could've gone to Warren Buffett for another convertible-bond deal but Musk just had to get into a pissing match with Buffett. 2. Only Musk can sell a story about how $TSLA going private is good for employees' stock options. It's the other way around; Tesla is losing employees and the only way to get them to stay is to lock them in with an inflated valuation. Ask anyone who has worked during the Dotcom bust. 3. Using an after market hours price of $380, $420/share would be a premium of 10.5%, or a market cap of about $72B. In the meantime the company is still not profitable. And that Saudi sovereign fund investment is just a hedge against oil prices, since Musk has said he will not give up his holdings nor resign if the firm were to go private. His ego wouldn't allow him to do so, either.
qop 8y ago
It's a good thing dang is here to tell us that talking about Musk is off topic in a thread about an article about Musk. What a tolerant, open-minded approach!
d2161 8y ago
Just saw this today. I couldn't believe it because I saw this first on reddit like a few weeks back, where a redditor thought all of Musk's weirdly negative publicity stunts were to make Tesla less desirable in wallstreet's eyes so he could make it private. I can't find the post now, but that's interesting it turned out like this. I do agree that institutional investors have an incentive to prioritize short term over long term gain. After all, you can just sell your stocks, buy into another company and push for short term gain over and over. Maybe it is better for Tesla to be private
lanevorockz 8y ago
Very simple, as the fight of big oil against tesla seems to have backfired as Musk still has resources to buy back the company. It's better for them to hedge their exposure to oil.
csours 8y ago
DISCLAIMER: I work for a Tesla competitor, any opinions are solely my own. I am not a financial analyst, I may be a lizard-person. If I were Elon, I would love it if I could take my company private and keep my fans as shareholders. I would love it if I could "go private" and not have to actually buy back all of the shares of people who want to go long anyway. I would love it if shorts had no mechanism to short my company. I would love it, but I don't know if I could find a real financial instrument that allows for it. (I posted this on another thread in case it shows up twice.)

313 points by fludlight 8y ago

I don't mean to rub it in , those people who said to short Tesla a couple weeks ago were sure wrong. Last week Steve Eisman who rose to fame in 2008 by betting against the housing market, shorted Tesla. That position is probably at least 25% underwater now. Not only that, but Tesla losing money does not mean it is insolvent, because it can keep raising money and most of those losses are capital expenditures instead of operating losses.

winslow 8y ago
While I don't necessarily disagree with your statement it is important to note when Eisman and others shorted the housing market before the 2008 collapse their positions also took big negative hits having to pay hundreds of millions to hold their short positions. Obviously in the end of the housing market collapse they made massive profits. Still very early in their TSLA position to determine the winners & losers.
- hn_throwaway_99 8y ago
  If Tesla goes private, that is the end for the shorts - there is no "after" after that. Everyone who shorted will have to pay back their shares at $420 a share (or whatever the final price ends up being).
  - xkjkls 8y ago
    That if is a big if. Tesla is currently trading $40 under their supposed acquisition price. That's not exactly high confidence from the market that this deal will go through.
    - paulpauper 8y ago
      that is because nothing has been finalized. it can easily get there just based on market momentum. Tesla gained $70 in a week. another 40 is not that hard
      - xkjkls 8y ago
        Wall Street loves free money. The stock was trading at $360 before this proposal was announced, and only moved a third of the way to the purchase price on the news. That's not implying investor confidence that this will happen. Otherwise, plenty of people would be willing to load up on the stock on the assurance it would be bought at $420.
  - paulpauper 8y ago
    yes, not to mention it can still go to 420 without being bought out, by virtue of market momentum and a bidding war
  - querulous 8y ago
    sure, if tesla goes private
xkjkls 8y ago
I'm not sure Tesla's public market story is over. It's somewhat absurd for a company to announce a plan that would require $40 billion in capital to be raised to finance it, and offer no details on where that is coming from. Two, Tesla has large operating losses to go along to its CapEx and many shorts dislike how exactly their choosing to classify many of their expenses. Depending on how you look at their accounting, you can easily believe this company is completely structurally unprofitable. The people who are betting against Tesla are not stupid.
- paulpauper 8y ago
  The people who are betting against Tesla are not stupid. Smart people lose money all the time: victims of mt gox hack enron long term capital management 2000 dotocm crash Bill ackman's herbalife short. and and and on
  - xkjkls 8y ago
    > victims of mt gox hack ok bro, I'm not sure we have the same definition of smart people if yours are people decided to buy a bunch of cryptocurrency and keep it all in a website built in php
    - paulpauper 8y ago
      one person I know, a physicist, said he lost 50 btc in the hack. in hindsight keeping the coins there was stupid but at the time it seemed safe
      - dragontamer 8y ago
        I go to physicists to learn about physics. I wouldn't ask them a question about finance. I go to an economist, or maybe a trader, to learn about money and finances.
  - whymauri 8y ago
    "The market can remain irrational longer than you can stay solvent" - keynes
nickik 8y ago
Their are insane. They have absolutely no leg to stand on. Tesla has sustained enough Model 3 production that they produce positive cashflow and they will be profitable in Q3/Q4. As one large investor said, Tesla short term guidance has been pretty reliable. Unless some massive macro event happens there is no way Tesla stock is gone fall back to prices where many of the shorts hold once they have proven the are able to mass produce cars. Their reasons for the short positions are getting worse and worse. The main argument has been that Tesla is unable to produce Model 3 and will not have positive cash flow. Those arguments are all but dead in the water if you look at current sales numbers.

giarc 8y ago

https://twitter.com/elonmusk/status/1026872652290379776 https://twitter.com/elonmusk/status/1026872652290379776 "Am considering taking Tesla private at $420. Funding secured." Elon

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shawn 8y ago
$420.69, to be precise. The replies raise an interesting question: does this count as stock manipulation? I’m not sure it would, but the rules seem a bit arbitrary sometimes.
- SpaceManNabs 8y ago
  Where did you get this number from?
  - shawn 8y ago
    https://m.youtube.com/watch?v=Y27ey39dRYQ https://m.youtube.com/watch?v=Y27ey39dRYQ It’s the size of the download.
- quickben 8y ago
  He wrote "funding secured". Now he has to prove it upon demand, or he'll get sued. A lot.
dudus 8y ago
A pot joke borderline market manipulation. Just amazing. How do people get away with this?

chollida1 8y ago

Keep in mind that this position was built via the secondary market and not from Tesla itself. And that the position size would be about 3 Billion, a large but pretty ordinary size for a fund of their size. They also put in $400 million into magic leap, ar large bet on Uber and about $50 Billion into the Softbank vision fund that is throwing money around. I think this puts them about the 8th largest shareholder of Tesla. As an aside, with Musk's recent tweet I think he's going to get a pretty stern talking to by the SEC about discomfiture and Reg FD. Even if its true, 1) You've now used that bullet in your gun against the short sellers 2) Did it in a very dubious way, via twitter rather than RegFD disclosure. 3) will now have to answer questions about this "private takeover", ie where is the money coming from? how long is it committed for? For what? An SEC headache a momentary pop that was immediately erased? The tweet caused a momentary pop in the stock price which was erased about 2 minutes after it popped. The market can be exceedingly good and correcting itself. Elon seems to be doubling down https://twitter.com/elonmusk/status/1026879404905885697 https://twitter.com/elonmusk/status/1026879404905885697

fossuser 8y ago
Is it corrected? I'm still seeing it up $25.
- chollida1 8y ago
  The initial pop was related to a report that the Saudi fund built a position in Tesla. The stock is now right about where it was when Musk tweeted.
- frgtpsswrdlame 8y ago
  Today's peak TSLA price was $371.07 (through my provider) so it's yet to be seen whether it will reach that again or close lower.
  - fossuser 8y ago
    Looks like it's up to $380 after hours.

seren 8y ago

Who would have predicted 30 years ago that a Saudi sovereign fund would invest in an electric car company ? Symbolically that is a pretty potent signal.

creaghpatr 8y ago
Hedging their bets, not the worst idea.
- zeusk 8y ago
  > Hedging ... not the worst idea Not at Tesla's valuation
- pmart123 8y ago
  Yep. I believe the Saudi sovereign wealth fund has divested from or has mandates to divest from fossil fuel related investments. https://www.theguardian.com/business/2016/apr/01/saudi-arabia-plans-to-sell-state-oil-assets-to-create-2tn-wealth-fund https://www.theguardian.com/business/2016/apr/01/saudi-arabi...
dagss 8y ago
It would be much weirder (crazy?) for Saudis to invest in oil. They have lots of fresh income when oil goes well, so the fund should be designed to do well if oil does not go well.
melling 8y ago
How much longer will their oil last? They need to invest for life after oil.
- dagss 8y ago
  Saudi Arabia might have enough oil to last until demands drops..... It is also some of the cheapest oil to extract, so sometime before they might start lowering prices to push everyone else out of the market. Keep in mind their production is restrained now to keep prices high.
8y ago

faizshafique 8y ago

Is it corrected? I'm still seeing it up $25.

Cshelton 8y ago

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
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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.

mephitix 8y ago

Super coincidental that Elon announced he was thinking about taking the company private right after this happened. My guess is that they had run the numbers on taking the company private before. Since the Saudis had approached Elon before and he denied their offer (for whatever reason) he probably was upset that they acquired a stake through secondary markets and tweeted their half-baked plan... (not a good course of action IMO)

mandeepj 8y ago
> Super coincidental that Elon announced he was thinking about taking the company private right after this happened. Not super coincidental. It's incidental and on-purpose. What a day
jVinc 8y ago
> not a good course of action IMO How so? They've just got 5% of Tesla and he's talking about taking it private at +15%. It seems like instant profit to them just from the reaction to them buying it.

tristanj 8y ago

Trading of Tesla stock has now been halted following this news & Elon's tweets. https://www.cnbc.com/2018/08/07/tesla-stock-jumps-on-musks-tweet-that-he-is-considering-taking-compan.html https://www.cnbc.com/2018/08/07/tesla-stock-jumps-on-musks-t...

anomatopoeia 8y ago
Interested in seeing where the funding is coming from at that valuation. Potentially the biggest buyout of all time? Other buyouts of such scale involved companies with huge cash flows/profits - think RJR Nabisco, Hilton, TXU (big US utility). Tesla of course is a very different animal. Hard to imagine any kind of conventional financing working for this type of deal. Beyond the Saudis maybe some other SWF or deep pocketed individual investors?
- gonesilent 8y ago
  Apple?
  - CyberDildonics 8y ago
    Or Softbank. The Bank of Japan is printing money like crazy to keep the Yen from deflating. Softbank seems to intent on getting out of Yen and into assets while the Yen still has the value it does right now.
- trhway 8y ago
  Chinese? Given their interest in electric cars, Gigafactory (https://electrek.co/2018/08/07/tesla-hiring-gigafactory-3-china/ https://electrek.co/2018/08/07/tesla-hiring-gigafactory-3-ch...) and solar and of course the amount of USD they have.
- qaq 8y ago
  Why does is have to be beyond Saudis? it also could Qatar, China,UAE etc.
  - deleted 8y ago

hn_throwaway_99 8y ago

I get it, it's Musk, but this is still such an irresponsible way to announce news of this magnitude. From a WaPo article: The sudden announcement gained immediate criticism from former regulators who suggested it may conflict with SEC rules for potentially market-moving statements. Harvey Pitt, a former SEC chairman, told CNBC on Tuesday that Musk’s tweets “might consittute fraud if any of the facts he disclosed are not true” or if there was any indication that he had floated the proposal purely to boost the stock price

Voloskaya 8y ago
It's irresponsible from our point of view because we don't know much about this yet. From his point of view, if he is serious about it, then it's not a false fact and it's not floated purely to boost the stock price, so why should he be afraid?
- shawn 8y ago
  Because it’s the SEC. It’s the favorite tool to send rich people to jail. Of all the things rich Americans should be afraid of, the SEC probably ranks near the top, short of physical threats.
  - thieving_magpie 8y ago
    Man, that's some thick sarcasm (I hope).
  - rottyguy 8y ago
    The information was disseminated to all parties at the same time and they weren't in a "dark" period. I know several people are upset given their bet but I don't see this being any different than some headline in an AP release. If anything, twitter is more immediate to the masses and there's no middleman.
  - baybal2 8y ago
    >Because it’s the SEC. It’s the favorite tool to send rich people to jail. Of all the things rich Americans should be afraid of, the SEC probably ranks near the top, short of physical threats. Living in America :)... I'm very glad that a number of countries require nothing more of public companies than timely disclosed financials. Americans, are you happy with your country very likely having the world's most complex securities laws?

saudioger 8y ago

Musk would be much more tolerable if he followed the ancient rule of "put up or shut up"

cam3ham 8y ago
lol if anyone has delivered, it's the guy that launched rockets and build electric cars.
- TomK32 8y ago
  There's probably still too many people won't think he's an underachiever until they see all three boosters of a FH landing while their landing spot is being circled by autonomously driven Teslas.
  - saudioger 8y ago
    This feels like a false argument to me. I don't think most people are saying he's an underachiever, just opposing the idea that everything he does is good.
api 8y ago
Come back when you led a team to build an orbital rocket with a reusable first stage while simultaneously leading a team to build a luxury electric vehicle with self-drive capability... and largely succeeded in both with a few hiccups. I think he's put up.
- mhh__ 8y ago
  Not many people have a spare billion dollars, however.
  - api 8y ago
    Many more billions have been spent by others trying to do these things and they have failed.
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rconti 8y ago

Trading is halted. https://seekingalpha.com/news/3379457-tesla-trading-halted-live-updates https://seekingalpha.com/news/3379457-tesla-trading-halted-l...

froindt 8y ago
"...Would create special purpose fund enabling anyone to stay with Tesla. Already do this with Fidelity’s SpaceX investment." Does anyone know more about how this is organized? My understanding (which could well be wrong) is that organizations with over 500 owners must do normal quarterly filings in the same way a publicly traded company would. Yet in previous years I've searched and come up empty handed on SpaceX.
- dragonwriter 8y ago
  I think the model is the fund is one investor in Tesla, many people are investors in the fund. So Tesla doesn't have materially different reporting requirements.
  - marvin 8y ago
    How does this skirt the accredited investor requirement in Sarbanes-Oxley? Seems like a very obvious way to avoid it, and hence something that would not be allowed.

boznz 8y ago

Good on Tesla. Markets are fickle and not conjunctive to long term planning and investment

chollida1 8y ago

Honestly, I'm starting to think this is less about avoiding the public markets and more about getting out of the crushing debt (8.65 in liabilities comming due before the end of March 2019)that they have coming due in March of 2019. The billion of debt coming due is convertible above a price of $360 and if he can keep the price propped up will almost certainly force all bond holders to convert into equity holders. https://seekingalpha.com/article/4191711-tesla-stealth-capital-raise?ifp=0 https://seekingalpha.com/article/4191711-tesla-stealth-capit... I mean, think about this rationally, if it wasn't for the public markets Tesla would already be bankrupt. Going private means giving up this access to capital as well as having to come up with 9 Billion to fund debt commind due. With stock you have something to bargain with when selling debt. Without it you've lost a huge weapon. Same for paying your employee's. No more tesla stock that appreciates each quarter that you can sell as soon as it comes to you. Also just did some digging on Tesla bonds and CDS... At current levels, they imply a about a 30% chance of a Tesla default in the next five years. It costs around $1.3 million to insure $10 million of bonds against default. And if Tesla went private and he funded it with debt he's looking at a rate somewhere around the low teens from what Bloomberg is reporting which means borrowing $58 Billion to finance this would cost aroudn $7.1 Billion a year in interest payments at 12.5%. And keep in mind he's paying that to cut off public markets access for raising money, one of his best sources of cheap capital in the past 5 years.

wbl 8y ago
Convert optionality is on the buyer side usually.
- chollida1 8y ago
  Yes....usually > Readers should also note that, unlike the 2018 and the 2021 convertibles, where the principal is always repayable in cash, the 2019 convertibles may be redeemed wholly in shares (at Tesla's option and if the requisite conversion ratio has been met). So yes the bond holder can choose to convert after Dec 1st 2018 and Tesla can force them to convert when the bonds come due in March 2019
_ph_ 8y ago

jv22222 8y ago

I hope he pulls this off. It would be excellent if he could get out of the public company weeds, and get more brain bandwidth to focus on executing and solving problems.

xkjkls 8y ago
Why does that not affect other CEOs? I don't see Jeff Bezos complaining about being a public company.

danbrooks 8y ago

Musk is only, what, 50 billion short of buying the company? Looks like another PR stunt.

Voloskaya 8y ago
He never said he was buying Tesla himself though...
- xkjkls 8y ago
  Still needs to find someone with %50 billion though

baxtr 8y ago

I really don’t get the obsessions with going private. It used to be everybody’s goal to go public, an IPO was one of the greatest achievements. Musks wants to go private to have better control of “his” companies and to prevent market pressures? I think being a public company is good for many reasons, amongst other: the public can participate in the success of companies and for the company it provides a great reality gauge. Maybe that’s what he’s afraid of...

Barrin92 8y ago
>I think being a public company is good for many reasons, amongst other: the public can participate in the success of companies and for the company it provides a great reality gauge. Maybe that’s what he’s afraid of... The return to some sort of 19th century capitalism dominated by private industry magnates has been going on for a while.
Voloskaya 8y ago
He stated multiple times that he doesn't like public market because investors don't care about long term goal. That's why he said he will never take SpaceX public (if he can), as his goal with SpaceX is to go to Mars, not to optimize for revenue. I believe he also said he only took Tesla public because he had no choice, not because it was his goal.
- xkjkls 8y ago
  There's hundreds of public companies focused on long term goals. Amazon, Berkshire Hathaway, Starbucks, etc. Why is Elon Musk special compared to these others?
  - petra 8y ago
    Or of curiosity, besides Amazon and Google and Toyota, are there any technology companies focused on long term growth?
    - xkjkls 8y ago

writepub 8y ago

Saudi money is dripping with blood - the kingdom's wealth and control is a result of well documented massacre of dissidents, of Shias and of funding terror and patronizing the Wahabis, especially against philosophies opposed to the kingdom. It's deeply disappointing to see Musk legitimatize the Sauds, who threatened Canada with a 9/11 style attack just 24 hours ago

Voloskaya 8y ago
How is Musk legitimizing the Sauds exactly? If anything it looks like one of the reason to go private is specifically to prevent the Saudi fund from being able to increase their ownership by buying on the public market.
- mankash666 8y ago
  You cannot stop the Sauds from buying stock on the public market, you can decline a private bailout from them, on moral grounds
  - Voloskaya 8y ago
    How exactly is the Saudi fund going to buy share on the public market if Tesla is not on the public market anymore?
    - writepub 8y ago
      Moot point. If public, Tesla can't stop the Sauds from buying stock. However, they can refuse a bailout from the Sauds to go private
      - Voloskaya 8y ago
        > However, they can refuse a bailout from the Sauds to go private What do you mean? I may be missing something here, but I really don't understand this part. Are you suggesting the Saudis are the one that will provide the 50B$ needed to go private?

dang 8y ago

All: please stick to specifics and don't go into MuskMania (the fever that results when MuskLove meets MuskHate). That's always the same and therefore off topic here. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html

foota 8y ago

What if the funding is the Saudi wealth fund and the stake they acquired was to form a majority ownership? Edit: this is probably not the case, sounds like speculation is of a hostile takeover.

thesimon 8y ago

https://www.tesla.com/en_GB/blog/taking-tesla-private?redirect=no https://www.tesla.com/en_GB/blog/taking-tesla-private?redire...

ryzvonusef 8y ago

Taking Tesla Private https://www.tesla.com/en_GB/blog/taking-tesla-private https://www.tesla.com/en_GB/blog/taking-tesla-private

ryzvonusef 8y ago
Tesla reopens 10% higher after weighing decision to go private https://www.cnbc.com/2018/08/07/tesla-says-no-final-decision-has-been-made-to-take-company-private.html https://www.cnbc.com/2018/08/07/tesla-says-no-final-decision...

zaroth 8y ago

Elon has just written an email to employees, also published on the site, explaining how he thinks going private would be good for Tesla and very generally how it could work. It doesn’t appear to include any more specifics about where funding for the opt-in buyout would come from. TSLA resumed trading just before closing bell and closed at $379.57 up 11% for the day. https://www.tesla.com/en_GB/blog/taking-tesla-private?redirect=no https://www.tesla.com/en_GB/blog/taking-tesla-private?redire...

dylanhassinger 8y ago

Very scary to see Tesla fall into the hands of a despotic nation that is cracking down on free speech https://www.newsweek.com/saudi-arabia-orders-16000-students-leave-canada-amid-diplomatic-row-1060547?piano_t=1 https://www.newsweek.com/saudi-arabia-orders-16000-students-...

gpm 8y ago
This is making the very large assumption that it is the Saudi's financing the deal...
nickik 8y ago
Stop spreading FUD

mrfusion 8y ago

What happens if I refuse to sell my share?

startupfounder 8y ago
"First, I would like to structure this so that all shareholders have a choice. Either they can stay investors in a private Tesla or they can be bought out at $420 per share, which is a 20% premium over the stock price following our Q2 earnings call (which had already increased by 16%). My hope is for all shareholders to remain, but if they prefer to be bought out, then this would enable that to happen at a nice premium." - https://www.tesla.com/en_GB/blog/taking-tesla-private?redirect=no https://www.tesla.com/en_GB/blog/taking-tesla-private?redire...
kylec 8y ago
If you hold shares in a company that gets bought, your share is converted into your portion of the proceeds. You can't refuse. In this case, Elon wants to let current investors stay investors, so you should be able to hold your share and it'll convert into whatever the private equity equivalent will be.
- dragonwriter 8y ago
  The private equity equivalent of a share of stock is...a share of stock.
nickik 8y ago
Musk has already said that you can continue to hold them.

dangjc 8y ago

It's a sign public equity markets aren't structured well that companies aren't encouraged to think long term. The most successful companies in today's markets don't even allow common shareholders to control the company, ie Google and Facebook with their special classes of controlling shares. We might need to reconsider changing laws around choosing board seats or requiring shareholders to have minimum holding times in order to align incentives better for the long term. If public equity markets don't work, the alternative is more and more of wealth creation happening privately, in startups funded by VCs, private equity, or family owned businesses. The public won't get to participate.

marvin 8y ago
That's a very sad thought, and unfortunately the way things are trending right now.

modeless 8y ago

Can someone explain how Tesla can go private while still allowing all employees and any current investor who wants to remain shareholders as Musk is saying? AFAIK there is a threshold number of shareholders after which a company is required to be public. You can't just declare that you're a private company if you have thousands of members of the general public still holding equity.

rrdharan 8y ago
That threshold was raised from 500 to 2000 shareholders as part of the JOBS act: http://www.lathropgage.com/newsletter-44.html http://www.lathropgage.com/newsletter-44.html
shoo 8y ago
I think after you have 2000 or more shareholders there are requirements to publically report the financial performance. I am not sure if this makes the company a "public company". https://www.investopedia.com/terms/5/500-shareholder-threshold.asp https://www.investopedia.com/terms/5/500-shareholder-thresho...
tonfa 8y ago
I can't find the link to some Matt Levine's article explaining it, but iirc it's not that the company has to be public, but that it has similar requirements from the SEC as a public company. At this point since you have to abide to the same accounting requirements, you maybe has well be public to benefit from the extra capital.

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endlessvoid94 8y ago

This article mentions 4 times that it's unlikely Tesla will be able to pull this off. Not a single positive or optimistic note. Which is fine, but it's not as if Bloomberg has no ability to influence market prices.

brisance 8y ago

IMO it's just a PR ploy to prop up the price. 1. How is Tesla going to raise capital if not through the public markets? Would a PE firm lend them money at better rates (unlikely, with interest rates going up)? They could've gone to Warren Buffett for another convertible-bond deal but Musk just had to get into a pissing match with Buffett. 2. Only Musk can sell a story about how $TSLA going private is good for employees' stock options. It's the other way around; Tesla is losing employees and the only way to get them to stay is to lock them in with an inflated valuation. Ask anyone who has worked during the Dotcom bust. 3. Using an after market hours price of $380, $420/share would be a premium of 10.5%, or a market cap of about $72B. In the meantime the company is still not profitable. And that Saudi sovereign fund investment is just a hedge against oil prices, since Musk has said he will not give up his holdings nor resign if the firm were to go private. His ego wouldn't allow him to do so, either.

qop 8y ago

It's a good thing dang is here to tell us that talking about Musk is off topic in a thread about an article about Musk. What a tolerant, open-minded approach!

d2161 8y ago

Just saw this today. I couldn't believe it because I saw this first on reddit like a few weeks back, where a redditor thought all of Musk's weirdly negative publicity stunts were to make Tesla less desirable in wallstreet's eyes so he could make it private. I can't find the post now, but that's interesting it turned out like this. I do agree that institutional investors have an incentive to prioritize short term over long term gain. After all, you can just sell your stocks, buy into another company and push for short term gain over and over. Maybe it is better for Tesla to be private

lanevorockz 8y ago

Very simple, as the fight of big oil against tesla seems to have backfired as Musk still has resources to buy back the company. It's better for them to hedge their exposure to oil.

csours 8y ago

DISCLAIMER: I work for a Tesla competitor, any opinions are solely my own. I am not a financial analyst, I may be a lizard-person. If I were Elon, I would love it if I could take my company private and keep my fans as shareholders. I would love it if I could "go private" and not have to actually buy back all of the shares of people who want to go long anyway. I would love it if shorts had no mechanism to short my company. I would love it, but I don't know if I could find a real financial instrument that allows for it. (I posted this on another thread in case it shows up twice.)