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I am a bit ignorant as to the mechanics of how this would work. Can anyone with the knowledge elaborate on what this means? Im thinking in terms of a few scenar
by S_A_P 8y ago
I am a bit ignorant as to the mechanics of how this would work. Can anyone with the knowledge elaborate on what this means? Im thinking in terms of a few scenarios here:
1) I read this news and want to get on the Tesla train and throw all my liquidity into the current stock.
2) I already have x number of shares. What happens to them?
3) If I dissent, am I cut a check and told to hit the bricks?
4) is he going to need to raise capital to do this?
5) would the private company/person still be able to buy/sell "shares" on some off the stock market exchange?
- dunpeal 8y ago1. You can buy TSLA stock as soon as trading them resumes. Lots of people already have. 2. If this acquisition goes through, each one of your stocks will be worth $420. Congrats. 3. You can't really dissent to shareholder majority agreeing to this deal. 4. $70bn is a lot of mulla, so I would guess this will not be all Musk's personal funds. 5. Theoretically, through some sort of a private equity venue. Just like any other private company.
- toomuchtodo 8y ago> Theoretically, through some sort of a private equity venue. Just like any other private company. I'm curious how this will work if you hold TSLA in retirement accounts (all of my TSLA is in a Roth IRA).
- TrickyRick 8y agoOr an alternative to number 2, the acquisition does not go through and the stock plummets 20% from current price and you're now deeply in the red. I don't know enough about Tesla to predict which one is the mos likely but I have seen this happen in other companies.
- ChicagoDave 8y agoIf a majority votes to take the company private, you would have the option of selling or accepting private stock (some non-voting class I'd assume) that you can trade. Voting class stock would be only offered to investors with >X% current holdings, probably the 5% the Saudi's just purchased. Employees may have a third class stock. As an investor, you'd be given paperwork to sell or accept the new stock in exchange for your old stock. Rules for buying and selling private stock are pretty common and there are several organized indexes for private stock trades. All of the short-sellers would lose every penny they gambled.
- S_A_P 8y agoThanks. Your last sentence seems to sum up the motive here in my opinion, not so much to screw the short sellers, but to limit/stop the ability of them to influence the value of the company through whatever means.
- Tomte 8y agoShort sellers aren‘t evil. They are a mechanism how the public trade exchange improves its estimate how much a company is worth. After the very ugly financial news over the last months (but probably true — nobody has credibly refuted them), it‘s not hard to see why Musk and the less rational part of his supporters would love to see short sellers disappear, and „punished“.
- ChicagoDave 8y agoI wouldn't say "evil" either. I just think some of the short sellers have motivations beyond straight financial business modeling.
- fossuser 8y agoShorting is fine when you're predicting the stock will go down, it starts leaning towards evil when you try and damage the company to cause the price to go down. Billions on the line create a nasty incentive and a publicly traded company is more at risk of negative attacks when they're not yet profitable.
- nopriorarrests 8y agoThere is zero evidence of shorts trying to damage the company. Every time when TSLA stock was down last year it was some material news regarding missing Model 3 production estimates previously provided by Elon Musk himself or something like that.
- ChicagoDave 8y agoNot quite true... https://electrek.co/2018/07/24/tesla-troll-short-doxxed-oil-industry-musk-calls-boss/ https://electrek.co/2018/07/24/tesla-troll-short-doxxed-oil-...