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Maybe I'm being naive (and I'll admit that I haven't seen the interview), but if your goal was to buy back shares to take the company private, wouldn't a lower

Maybe I'm being naive (and I'll admit that I haven't seen the interview), but if your goal was to buy back shares to take the company private, wouldn't a lower stock price be better for you?

hn_throwaway_99 8y ago
No. For one, Tesla has a lot of convertible bonds coming due at $360 a share. If the price is above that, it just converts to stock, but below that Tesla needs to pay out cash.
- TAForObvReasons 8y ago
  If Musk actually had the "Funding Secured", a lower price would strictly be better. All the convertible bonds do is set a floor for the cost of extinguishing the convertible debt. The only circumstance in which a lower price would be detrimental would be one in which Tesla actually doesn't intend to go private. If they aren't going private, then they would have to deal with the cash crunch.
  - zeusk 8y ago
    A shareholder approval won't go through if the price is "low".
  - fjsolwmv 8y ago
    Musk didn't want to buy the whole company, just move it to private investors. Converting debt to stock is part of the funding for completing the goal.
jaimex2 8y ago
Thats the thing, there is no video interview... its just NYT's description. There was another video interview done hours before: https://www.youtube.com/watch?v=MevKTPN4ozw https://www.youtube.com/watch?v=MevKTPN4ozw
- optimiz3 8y ago
  Musk looks haggard in the interview - Cramer commented if he were on the board he'd insist on medical time off, can't say I disagree.
  - acct1771 8y ago
    Who better to trust for insight in this issue than market manipulator, lack of sleeping himself, Cramer? Disclaimer: I don't disagree.
- jaysonelliot 8y ago
  Yes, you've made that comment twice now. He's exhausted and kind of scattered in that interview. Not surprising that he was at a breaking point by the time he got to the NY Times.
hbosch 8y ago
You can’t just buy the shares back. Sometimes shares aren’t for sale. If I have 100,000 shares, you can’t just buy them from me — I have to sell them to you. You have to target high in order to entice shareholders to sell.
raincom 8y ago
It is like housing market: the moment there are more buyers than sellers, the prices rise. That's why when funds want to buy(sell) lots of shares, they spread it out over weeks by working with market makers. No one is going to naked sell (or short) shares in a rising market. When an entity acquires more than 5% of a publicly traded company, it needs to file 13(d). And it is hard to acquire even 30% of shares in the span of 3 months: people/algos watch volume every day. This is why it is easier to offer premium and buy the company outright, than to go through the rigmarole of 13(d), working with market makers, etc.

Maybe I'm being naive (and I'll admit that I haven't seen the interview), but if your goal was to buy back shares to take the company private, wouldn't a lower stock price be better for you?

hn_throwaway_99 8y ago

No. For one, Tesla has a lot of convertible bonds coming due at $360 a share. If the price is above that, it just converts to stock, but below that Tesla needs to pay out cash.

TAForObvReasons 8y ago
If Musk actually had the "Funding Secured", a lower price would strictly be better. All the convertible bonds do is set a floor for the cost of extinguishing the convertible debt. The only circumstance in which a lower price would be detrimental would be one in which Tesla actually doesn't intend to go private. If they aren't going private, then they would have to deal with the cash crunch.
- zeusk 8y ago
  A shareholder approval won't go through if the price is "low".
- fjsolwmv 8y ago
  Musk didn't want to buy the whole company, just move it to private investors. Converting debt to stock is part of the funding for completing the goal.

jaimex2 8y ago

Thats the thing, there is no video interview... its just NYT's description. There was another video interview done hours before: https://www.youtube.com/watch?v=MevKTPN4ozw https://www.youtube.com/watch?v=MevKTPN4ozw

optimiz3 8y ago
Musk looks haggard in the interview - Cramer commented if he were on the board he'd insist on medical time off, can't say I disagree.
- acct1771 8y ago
  Who better to trust for insight in this issue than market manipulator, lack of sleeping himself, Cramer? Disclaimer: I don't disagree.
jaysonelliot 8y ago
Yes, you've made that comment twice now. He's exhausted and kind of scattered in that interview. Not surprising that he was at a breaking point by the time he got to the NY Times.

hbosch 8y ago

You can’t just buy the shares back. Sometimes shares aren’t for sale. If I have 100,000 shares, you can’t just buy them from me — I have to sell them to you. You have to target high in order to entice shareholders to sell.

raincom 8y ago

It is like housing market: the moment there are more buyers than sellers, the prices rise. That's why when funds want to buy(sell) lots of shares, they spread it out over weeks by working with market makers. No one is going to naked sell (or short) shares in a rising market. When an entity acquires more than 5% of a publicly traded company, it needs to file 13(d). And it is hard to acquire even 30% of shares in the span of 3 months: people/algos watch volume every day. This is why it is easier to offer premium and buy the company outright, than to go through the rigmarole of 13(d), working with market makers, etc.