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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 bett
by 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.