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Interesting. Bloomberg's Sebastian Boyd said: Incidentally, Tesla has a free-float of 127.5 million shares. At $420 a share, that would cost you $53.6 billion.
by Keyframe 8y ago
Interesting. Bloomberg's Sebastian Boyd said:
Incidentally, Tesla has a free-float of 127.5 million shares. At $420 a share, that would cost you $53.6 billion. The company already has net debt of of $8.8 billion and an adjusted net leverage ratio of 13 times. Were it to be bought in a management-led LBO, a back-of-the envelope calculation would give it a leverage ratio of over 90 times, worse on a trailing 12-month basis. You can't run a company on math like that.
So, either it's happening based on persuasion and belief (with Saudis as rumoured) or it's an attack against shorts and a bluff in which case SEC's rule 10b-5 might come into play and then... In any case, interesting.
- swalsh 8y agoAn interesting perspective on why Elon might be pulling this move: https://www.barrons.com/articles/tesla-stocks-surge-puts-convertible-bonds-in-the-money-1533667505 https://www.barrons.com/articles/tesla-stocks-surge-puts-con...
- djanogo 8y ago"...which would effectively let the electric-auto maker pay off that obligation in stock instead of cash." How does paying off the obligation with stock work?, whose shares would Tesla assign the bond holder?, if it assigns shares after market closes and when market opens if it's below $360, won't the bond holders sue?
- brohee 8y agoThe shares are created. As the debt are not repaid it's as if the bond holder bought shares in a round of recapitalization instead.