3 ms·

Help me understand your theory... So in your mind, Elon's genius master plan is to give money to current share-holders that will leave and don't stay as investo

Help me understand your theory... So in your mind, Elon's genius master plan is to give money to current share-holders that will leave and don't stay as investors when Tesla goes private, in an attempt to raise capital for the company? I'm not a math surgeon but that does not add up...

vannevar 8y ago
Here's a scenario: Musk doesn't have to buy every share at $420 (interesting choice of price points, that); in theory, he could sell a lot of shares privately at say, $250/share, then use some of the proceeds to buy out a respectable number of public shareholders to maintain appearances, and swap the rest of them into a fund. The remainder of the money from the private sale, he can use to fund growth. Tesla's public share price soars, giving Musk symbolic public vindication, and once the deal is done, there's no public visibility on the private share value. Basically, a way of doing an effective down-round. Obviously, this all depends on convincing enough existing holders to swap into the fund, and that in turn depends on maintaining the Musk reality-distortion field. Any slip, or acknowledgment of what's really going on, and those shareholders may spook.
- pooya13 8y ago
  With 250$ per share he can buy 0.2 * 250/420 = 12% of the shares. And in that case he would not have any shares left. Again buddy, this does not make ANY sense.
  - vannevar 8y ago
    And yet today that's exactly what he said he's going to do (though he hasn't disclosed the price of the private interest he's selling, only a rough estimate of the total proceeds). Musk disagrees with your math though; he expects to buy 1/3 of the shares, not 12%. But I'm sure he hopes it will be less. And of course he's not doing it all himself. He'll have shares left, he's just going to have to take a haircut.

3 ms·

Help me understand your theory... So in your mind, Elon's genius master plan is to give money to current share-holders that will leave and don't stay as investo

by pooya13 8y ago

vannevar 8y ago
Here's a scenario: Musk doesn't have to buy every share at $420 (interesting choice of price points, that); in theory, he could sell a lot of shares privately at say, $250/share, then use some of the proceeds to buy out a respectable number of public shareholders to maintain appearances, and swap the rest of them into a fund. The remainder of the money from the private sale, he can use to fund growth. Tesla's public share price soars, giving Musk symbolic public vindication, and once the deal is done, there's no public visibility on the private share value. Basically, a way of doing an effective down-round. Obviously, this all depends on convincing enough existing holders to swap into the fund, and that in turn depends on maintaining the Musk reality-distortion field. Any slip, or acknowledgment of what's really going on, and those shareholders may spook.
- pooya13 8y ago
  With 250$ per share he can buy 0.2 * 250/420 = 12% of the shares. And in that case he would not have any shares left. Again buddy, this does not make ANY sense.
  - vannevar 8y ago
    And yet today that's exactly what he said he's going to do (though he hasn't disclosed the price of the private interest he's selling, only a rough estimate of the total proceeds). Musk disagrees with your math though; he expects to buy 1/3 of the shares, not 12%. But I'm sure he hopes it will be less. And of course he's not doing it all himself. He'll have shares left, he's just going to have to take a haircut.