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Makes sense. But note also that if Musk pulls this off, he might be able to do it without external financing, because virtually all Tesla creditors and shareho
by cs702 8y ago
Makes sense.
But note also that if Musk pulls this off, he might be able to do it without external financing, because virtually all Tesla creditors and shareholders today (i.e., people who are in one way or another net-long the company) are true long-term believers in Musk's vision who are unconcerned with the company's short-term financial issues. (People concerned with Tesla's financial issues are either avoiding exposure to the company or betting against it.) True-believer shareholders (including converted creditors) will want to hang on to their shares as the company goes private and shares start trading "by appointment" on less liquid, secondary private equity markets, potentially at more unicorny prices due to the absence of short selling.
If I'm right, short sellers are in for a world of pain. They will likely have to scramble to cover their short positions in the face of a limited supply of shares before delisting.
- kgwgk 8y agoMost of the equity investors are institutionals that cannot keep the investment in a non-traded stock even if they wanted to. And bond-holders care about the coupon, not about Musk's vision.
- nlowell 8y agoSource on virtually all shareholders being long-term true believers? How is that quantified?
- xkjkls 8y agoLong term believers also expect to be paid one day too.
- xkjkls 8y agoDefine "short term financial issues". I don't know about you, but if I'm someone owed a loan or payment for supplies at a specific date, I expect to be paid in full, regardless of whether I believe in their long term vision. Many of the investors who you call "converted creditors" are not people interested in investing in a highly illiquid stock.