Elon Musk Says He's Considering Taking Tesla Private; Tesla Suspends Shares As It is Expected To Make an Announcement (cnn.com) 415
Elon Musk said he's thinking about taking Tesla private. More specifically, he said he may buy back the company for $71.3 billion (at a share price of $420), and already has the funding to do so. From a report: Musk, the CEO and largest shareholder of the electric car maker, said on Twitter on Tuesday that he has secured funding from a private buyer. He implied that the funding values the company at $420 a share. The stock had been worth about $342 a share before Musk's tweet, and shares quickly jumped as high as $371.
The stock had climbed slightly earlier in the day after the Financial Times reported that Saudi Arabia has quietly built a big stake in Tesla. Tesla didn't immediately respond to a request for comment. About an hour and 20 minutes after the Musk tweet, trading in Tesla stock was suspended because the company was expected to release news. TechCrunch: Musk's hope, he later tweeted, is that "all current investors remain with Tesla even if we're private. Would create special purpose fund enabling anyone to stay with Tesla. Already do this with Fidelity's SpaceX investment." Musk, who said he would stay on as CEO, also seems willing to have a provision for retail investors, who have held Tesla shares prior to Dec. 31, 2016, to convert their shares into private shares. Musk, in response to a tweet, said he's "super appreciative of Tesla shareholders" and "will ensure their prosperity in any scenario." Musk has publicly mused about taking Tesla private before, saying in a 2017 Rolling Stone profile: "I wish we could be private with Tesla," Musk murmurs as they exit. "It actually makes us less efficient to be a public company."
Analysts speaking to Reuters said they believe Musk is serious. George Galliers of Evercore ISI, said, "I can't believe this is something to bluff or make fun of. Given his historic frustration with short sellers, analysts and certain parts of the press, it is perhaps also not surprising that he has given consideration to taking the company private."
Update: Elon Musk sent an email to employees on Tuesday to explain his rationale behind the move. He wrote: Earlier today, I announced that I'm considering taking Tesla private at a price of $420/share. I wanted to let you know my rationale for this, and why I think this is the best path forward. First, a final decision has not yet been made, but the reason for doing this is all about creating the environment for Tesla to operate best. As a public company, we are subject to wild swings in our stock price that can be a major distraction for everyone working at Tesla, all of whom are shareholders. Being public also subjects us to the quarterly earnings cycle that puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term. Finally, as the most shorted stock in the history of the stock market, being public means that there are large numbers of people who have the incentive to attack the company. I fundamentally believe that we are at our best when everyone is focused on executing, when we can remain focused on our long-term mission, and when there are not perverse incentives for people to try to harm what we're all trying to achieve. This is especially true for a company like Tesla that has a long-term, forward-looking mission. SpaceX is a perfect example: it is far more operationally efficient, and that is largely due to the fact that it is privately held. This is not to say that it will make sense for Tesla to be private over the long-term. In the future, once Tesla enters a phase of slower, more predictable growth, it will likely make sense to return to the public markets. In a tweet moments ago, Musk said, "Investor support is confirmed. Only reason why this is not certain is that it's contingent on a shareholder vote."
Analysts speaking to Reuters said they believe Musk is serious. George Galliers of Evercore ISI, said, "I can't believe this is something to bluff or make fun of. Given his historic frustration with short sellers, analysts and certain parts of the press, it is perhaps also not surprising that he has given consideration to taking the company private."
Update: Elon Musk sent an email to employees on Tuesday to explain his rationale behind the move. He wrote: Earlier today, I announced that I'm considering taking Tesla private at a price of $420/share. I wanted to let you know my rationale for this, and why I think this is the best path forward. First, a final decision has not yet been made, but the reason for doing this is all about creating the environment for Tesla to operate best. As a public company, we are subject to wild swings in our stock price that can be a major distraction for everyone working at Tesla, all of whom are shareholders. Being public also subjects us to the quarterly earnings cycle that puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term. Finally, as the most shorted stock in the history of the stock market, being public means that there are large numbers of people who have the incentive to attack the company. I fundamentally believe that we are at our best when everyone is focused on executing, when we can remain focused on our long-term mission, and when there are not perverse incentives for people to try to harm what we're all trying to achieve. This is especially true for a company like Tesla that has a long-term, forward-looking mission. SpaceX is a perfect example: it is far more operationally efficient, and that is largely due to the fact that it is privately held. This is not to say that it will make sense for Tesla to be private over the long-term. In the future, once Tesla enters a phase of slower, more predictable growth, it will likely make sense to return to the public markets. In a tweet moments ago, Musk said, "Investor support is confirmed. Only reason why this is not certain is that it's contingent on a shareholder vote."
Hey! (Score:5, Funny)
Dude, he's doing a Dell.
Re:Hey! (Score:5, Informative)
Re: (Score:2)
Re: Hey! (Score:4, Informative)
"Do you realize this whole hatred of the "shorts" was all Elon's bullshit?"
That's bullshit alright but not entirely Elon's.
Short-sellers have been trash-talking Tesla's plans & performance for years. Yes they were losing money while building a car company from nothing but a discounted building but plenty of auto companies have had rough rides without people like Cramer, Chanos, Spiegel et al trashing them at every turn.
" Musk has proven to me what a loathsome person he is"
Your shorts are too tight. He made a very offensive remark to someone who openly denigrated his efforts to help WHEN *REPEATEDLY* ASKED to get involved.
Musk didn't pick that fight but he did overreact.
And he's since apologized. Where is the apology from Unsworth for telling Musk to stick his supposedly useless mini-sub up his ass?
OTOH I would like to see Musk keep his promise to demonstrate that the sub would have worked after all.
Re:Bullshit. (Score:5, Funny)
The current U.S.A. president?
(no idea, just asking)
Re: Hey! (Score:4, Informative)
Then complain to Rick Stanton, co-lead of the rescue team, who requested the sub and supplied his dimensions. I'm sure he'd be glad to hear from you and your cave rescue expertise.
Oh, and FYI, even after Musk apologized? Unsworth's mother, in an interview, called for Musk to be shot.
And I guarantee you that there's already some people out there contemplating doing exactly that. There's orders of magnitude more people that hate Musk than people who even know that Unsworth exists.
Re: Hey! (Score:5, Informative)
GM lies about their faulty ignition switches and killed people.
Honda continued to ship faulty airbags, and testified before Congress about it. People probably died from that too.
Toyota denied faulty throttles and cruise control on the Prius that could result in unintended acceleration. Nope, that's perfectly safe.
Name one car company that never had anyone crash and die, or had a safety recall of any kind. While you come up with nothing, nobody will hold their breath and wait.
Don't be a fucking idiot.
Re: (Score:2)
*whistles a tune* [youtu.be]
Do it (Score:5, Interesting)
Re:Do it (Score:5, Insightful)
Saudi Arabia called, they want their Oil in control
Re: Do it (Score:5, Insightful)
Re: Do it (Score:5, Informative)
The Saudis have their mitts in a number of things you wouldn't expect, and which will give them reach for decades to come, for example, they own 50.1% of the Canadian Wheat Board:
https://www.theglobeandmail.com/report-on-business/us-saudi-firms-to-buy-former-canadian-wheat-board/article23966156/
In light of the recent 9/11 style threat made against Canada by a Saudi State controlled twitter account:
https://www.cbc.ca/news/canada/toronto/saudi-arabian-group-apologizes-for-posting-image-appearing-to-threaten-canada-with-9-11-style-attack-1.4775509
The Canadian government should look strongly at foreign ownership of things like our Wheat Board as that's not in our nation's best interests from a food security standpoint.
Re: Do it (Score:2, Informative)
saudi arabia is a terrorist state. Just seize all their assets...
Comment removed (Score:5, Insightful)
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The problem is that functionally a state usually only "takes back" foreign owned assets when things are going to shit. Like Venezuela. And if they exercise that before things go to shit, well, then everyone else stops investing in that country because the risk is too high and that country's economy is at a severe disadvantage compared to the rest of the world. So you are correct, but exercising that option is a double edged sword.
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You may not have noticed, but there is no more "Canadian Wheat Board". The Saudis bought a bunch of assets when the Wheat Board was disbanded.
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Semantics. The functions of the Wheat Board went with those assets to G3, the approval of the sale of which was interestingly enough, one of the last major regulatory items approved by the Harper government before they lost power. Wonder how Harper spun that one to his backers.
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Not semantics to all the people buying and selling wheat - not through the Wheat Board.
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Investing in an EV manufacturer is a perfectly logical hedge for a company whose assets are mostly locked up in oil. And Tesla is the only sizeable purely-EV manufacturer in the world (and manufacturers over half of the world's EV battery capacity)
That said, it's not clear what the Saudi announcement has to do, if anything, with this. It was claimed that they had been trying to buy into Tesla directly, and were rebuffed, so they bought shares on the open market. If they're actually investing as one of the
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** ... for a country whose assets are mostly locked up in oil.
Re: Do it (Score:5, Informative)
It was also just announced that the Saudi's purchased a pretty big slice of Tesla:
https://www.bbc.com/news/busin... [bbc.com]
"The tweets came after a separate report in the Financial Times that Saudi Arabia's sovereign wealth fund had taken a 3%-5% stake in Tesla, a holding worth at least $1.9bn."
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Saudi Arabia called, they want their Oil in control
They might want to start by getting a better press / twitter [boingboing.net] manager: (parenthetical mine)
A Saudi Arabian organization is apologizing after posting an image on Twitter appearing to show an Air Canada plane heading toward the CN Tower in a way that is reminiscent of the 9/11 attacks in the U.S. (article includes copy of said photo)
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Not to worry my good friend WindBourne who I've never met, but who I love dearly based on his ownership of a single TSLA share and many positive slashdoot postings.
One day I will sweep you, myself, and probably a bunch of hot blondes up on my electric rocket and we will fly to Mars. There you and I only will repopulate the human race with super babies with all those hot blondes.
Also as is customary, I have deposited US $.012 in your checking account for your post. Keep believing, WindBourne. One day you and
Re:Do it (Score:5, Interesting)
I am sick of the trolls that are trying to destroy Tesla.
Unfortunately, here on Slashdot, a troll is defined as anyone who points out that they are burning through cash faster than they can earn it. Yes, they've hit their production goals with the Model 3, and that takes investment...but time will tell if that investment pays off. They may not have enough time with their current burn rate.
https://money.cnn.com/2018/08/... [cnn.com]
Look, many of us like electric cars and most everyone will probably end up driving them in the very near future, but odds are Tesla may not be around that long. I'm wondering if part of taking this private is so that their quarterly balances won't be so public.
Re: Do it (Score:5, Interesting)
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Another problem is Musk’s notoriously fragile ego.
Re:Do it (Score:5, Interesting)
They may not have enough time with their current burn rate.
The problem with burn rate is it's an extrapolation. [xkcd.com] It ignores the plan to reduce the burn rate.
I'm wondering if part of taking this private is so that their quarterly balances won't be so public.
No doubt this is part of it.
Wall Street wants information that Tesla simply can't disclose because it would lose it's competitive edge. What are the cost targets per vehicle? How will the company reach those targets? If Tesla gives up that information, it would be valuable information for competitors.
At the end of the day, an investment in Tesla is an investment in Musk. Do you trust his planning? Do you trust his ability to overcome obstacles along the way? Some people think he is a liar and a cheat. However, I look at the success of SpaceX and conclude that Musk is entirely capable of leading Tesla to the same success.
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$27,9 billion in assets. $22,6 billion in liabilities. Was there any reason why you handpicked only one part of the assets and liabilities lists? Also, any particular reason you didn't bother to mention the 60 day payment terms on accounts payable, that is to say, they build, deliver, and get payment for a vehicle before the bills for its production come due? No bothering to mention the nearly 20% margins they make on said vehicles? The fact that th
Re: Do it (Score:2)
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What are you talking about - "a religion"? Please. It's the one true religion. We can prove the existence of our savior, what about you? ;)
Re: Do it (Score:4, Funny)
What are you talking about - "a religion"? Please. It's the one true religion. We can prove the existence of our savior, what about you? ;)
And very early in the morning the first day of the week, they came unto Pad 39 at the rising of the sun.
And they said among themselves, Who shall launcheth us away the rocket from the base of the tower?
And when they looked, they saw that the stack was fired away: for it was very great.
And entering into orbit, they saw a young man sitting on the left side, clothed in an air-tight white garment; and they were affrighted.
And he saith unto them, Be not panicked!
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LMAO. Your case is rested based upon mod points on Slashdot? That's awesome! Well, at least it's as consistent as your argument. I can't think of a single company with massive demand (greater than any in the entire market), that went bankrupt. Not a single one. Maybe Telsa is the first in all of history . . . but not likely. I hope I get modded up, so I can rest my case too.
Re: Shareholders (Score:2)
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OTOH, a large number of red states continue to work to block Tesla from selling in their state.
BUT, I suspect that with this going private, that investment money will be forthcoming, and Tesla will probably open up a NEW bid for a third GF in America.
At that point, any GOP politician that is fighting Tesla will likely have some explaining to do.
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Elon has donated only slightly more to the GOP/Republican candidates than he has to Democrats/Democratic candidates. Generally his own reps and people on key congressional committees. Aka, for access (I hope that it doesn't shock your sensibilities to learn that members of your government pay more attention to you when you give them money, although I know you'll feign offense at the concept)
These donations in turn have been orders of magnitude smaller than he's given to organizations such as the Sierra Cl
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But I should back off. You've just lost a ton of money and I'm sure you want to vent. Come on. Shout. Shout. Let it all out.
Come on. I'm talking to you, come on.
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So you've been ranting and raving all this time about how Tesla was doomed, yet you never actually held those beliefs strongly enough to put even a penny on the line? Basically, you were concern trolling?
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What a pity I didn't listen to you ;)
Yes, it does. What sort of person who was convinced that Tesla was destined for imminent failure wouldn't take the "obvious" profits from that? What, was your checking account earning too high of an interest rate compared to doubling your money on Tesla's "obvious" collapse?
Let's say you weren't 100% convinced
Re:Shareholders (Score:5, Informative)
1) They're quarterly calls, not yearly
2) It was Q1 of this year, not last year
3) There were two people. They were not "investors", they were analysts, both of whom had been pushing short theses (although only one was generally negative on Tesla as a whole). The the questions were - BTW - boneheaded. One of them was literally answered right at the top of the quarterly newsletter that everyone on the call was supposed to have read before calling in.
4) There actually was one person on the call (Galileo) representing actual retail investors, and Musk devoted half the call to answering questions from him.
So Few Public Companies (Score:5, Insightful)
Re: So Few Public Companies (Score:3)
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there's less ability for common small investors to benefit from wealth generation.
Explain.
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Re:So Few Public Companies (Score:5, Insightful)
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there's less ability for common small investors to benefit from wealth generation.
Explain.
What's hard to understand? The stock market makes it possible for those small investors to invest in companies, without the company getting to decide whether they get to buy stock in it.
Unfortunately, it also enables HFT and other kinds of BS, but it does still do the first thing.
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Mutual funds can (and do) own privately held companies. Arguably it is one of the big reasons why companies are electing to stay private-- no shortage of capital available to do it, and few real disincentives to not do it.
It does make it much harder for risk-tolerant investors with less than $100k to invest in something they believe in, which is a shame. Maybe it will create more specialty mutual funds that focus on a small number of companies that give people a little bit of diversification in a common p
Let me guess, you have never had a 401k (Score:2)
When you work for a company, they tell you who administers your retirement. And they tell you what funds you can buy. Now, if your company uses Fidelity - a HUGE supporter of Musk (they invested in SpaceX) - you have pretty much no choice but to indirectly invest in Tesla
Since you appear to never have had a 401k let me explain how they ACTUALLY work.
Yes a company like Fidelity manages funds. But a 401k holder have a range of investment profiles or funds to select from within Fidelity - everything from dome
Sweet (Score:2)
I just bought more shares this morning, just in under the wire it appears. Debated waiting until it fell a little more but obviously good not to wait! Will be interesting to see what happens.
In a case like this I wonder what happens to short positions? Is it basically like the stock value is suddenly $420 (PS rolling eyes at obvious drug reference) and they have to settle up at that price? If so it's a last brutal "Fuck You" from Musk to the shorts.
Re: Sweet (Score:3)
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I just bought more shares this morning, just in under the wire it appears.
I'm on the opposite side of the fence. I was debating about buying Tesla shares and trying to balance Musk's personal behavior in recent weeks against what Tesla is doing and sort of decided I could stomach him. But it looks like I lost out.
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Sorry to hear that but it looks like he will be arranging for a way for investors to still invest in private Tesla as well, as mentioned they have a fidelity fund for SpaceX (which I didn't know about and am now going to look into).
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Well unless you are speculating, investing should be long term anyway
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The fidelity angle isn't much of an angle as it turns out. Fidelity among other companies, invested in SpaceX during earlier funding rounds, and so owns private stock. Those private stocks in SpaceX are then split up into a couple of Fidelities mutual funds. So you could "buy" some SpaceX private stock by purchasing shares in those mutual funds, however they'd be watered down as SpaceX represents a tiny portion of what is in those mutual funds. Additionally if the fund managers at Fidelity so choose they co
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Thanks for clarifying that, the Fidelity thing sounds much less appealing now that I know the details. Oh well!
Shh, adults are talking here (Score:2)
But you still flamed another AC above for stating the risk of investing with Fidelity after posting that.
Yes, because I wanted to invest specifically in just SpaceX, which I found I could not do. Meanwhile some idiot AC (no doubt your in-bread brother) thought all Fidelity 401K funds invested in Tesla or SpaceX which is so stupid I can't believe even you would believe it.
He was rightfully flamed and if he had an ounce of sense would remove himself from the internet until he is at least five years old.
I'll
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If so it's a last brutal "Fuck You" from Musk to the shorts.
So, in other words, the shorts take it in the shorts.
Time to rethink public corporations (Score:5, Insightful)
I'm not surprised Mr. Musk is doing this, he is clearly fed up with Wall Street and trying to meet their quarterly expectations rather develop the company and the products for the long term. I would think that dealing with analysts/quarterly statements and their (potential) fallout to be essentially overwhelming as well as causing the executive suite to try and maintain a positive outlook every twelve weeks.
Going private doesn't mean that the stress of creating the best product and making a profit goes away, just that more focus can be put on the company and its products which should result in better products and a better ROI for the company's owners at the end of the day.
I would expect other companies with long lead time products (Boeing, Ford, etc.) will consider finding private investors and taking themselves out of the exchanges so they can focus on their businesses and not making Wall Street investors happy.
Re:Time to rethink public corporations (Score:5, Interesting)
And back in more normal times, companies were required to have a track record of profit and profit growth before the markets would even consider buying into their public offering.
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This. At the time of Tesla's IPO I thought he should've gone to the bond market first. It's not as splashy but it keeps control of the company in what you'd hope are the right hands and allows for longer-term plans to work through. Yes, you have to service the bond debt but that should be part of the plan.
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The bond market wouldn't lend to him because of the combination of astronomical risk and no upside.
Think about it -- the bond lender gets, at most, the principal and interest they charge you. They don't share at all in the company success, no matter how much you make.
Re:Time to rethink public corporations (Score:5, Insightful)
> trying to meet their quarterly expectations rather develop the company
Absolutely right. We've been seeing what happens to long standing tech institutions when the investors' quest for better quarterly numbers is king - R&D is sacrificed, entire parts of the company are sold off, and after the investors sell to take their profits and move elsewhere, the company is a sad shell of itself.
And it's not just tech companies, it's most public companies. One of the public companies I worked for in years past owned the building they were in and rented out the bottom 3 floors to other businesses for a decent chunk of revenue, but decided one quarter that selling the building would be a great way to prop up the numbers for the shareholders and get some capital. Needless to say they went into receivership and were sold piecemeal a few years later as it turns out that a one time cash infusion doesn't help a company's long term bottom line nearly as much as renting out 3 floors of a commercial/retail building in one of Canada's most expensive neighborhoods (Vancouver's Kitsilano area), but hey quick cash made the shareholders happy that quarter.
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He stands to lose all of his 100 billion pay package everyone talked about and used to attack him as a money grabber. He gets minimum wage to comply with the law and he does even cash those checks.
That private funding deal better be real (Score:3, Insightful)
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I don't think he's that dumb to commit securities fraud.
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Dumb enough to insult analysts instead of presenting a plan to profitability
Re:That private funding deal better be real (Score:4, Insightful)
Dumb enough to insult analysts instead of presenting a plan to profitability
The analysts were being insulting, they deserved to be insulted. Stop crying about their crying.
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Analysts wanted sane plan, Musk has none.
Today's tweet may be violation of law, there will be shareholder lawsuits.
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And a model 3 isn't $35k, that is the point.
Did he mention Fidelity? (Score:2)
Hopefully that 71.3 billion doesn’t include any significant portion of my retirement funds...
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I hate the investors so much that i want them to stay when i take it public.... now that is truly speaking from both ends.
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...private...
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I hate the investors so much that i want them to stay
It's not the investors he hates. It's the shorters who are trying to destroy Tesla by spreading FUD.
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The limited liquidity in privately owned countries makes it significantly harder to short the stock on margin.
Qualified investors can still do it, but it is significantly harder for joe day trader.
He wants his cake and eat it too? (Score:2)
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Privately held stocks just aren't traded on the public stock exchanges, there isn't any magic involved. Private investors can still buy and sell their private stocks, they just lose the benefit of doing so via the public markets. Participating in the public markets does incur extra cost for the company in the form of abiding by more regulations, which depending on your views of said regulators may or may not be a positive. Often privately held companies, and their shareholders, aren't interested in buying a
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You also avoid, having a whole bunch of fund mangers and 401k's driving business decisions.
They only ask one question. Will the stock value go up.
Should we do this really innovative thing that will pay off well withing the next 10 years? Only if the stock value will go up.
Should we make sure we have the best quality of anyone? Only if the stock value will go up.
Should we invest in R&D and take a serious risk that might tank the company? Only if the stock value goes up.
Having those kinds of investors, f
Their is no chance this is legal (Score:2)
Musk, the CEO and largest shareholder of the electric car maker, said on Twitter on Tuesday that he has secured funding from a private buyer. He implied that the funding values the company at $420 a share. The stock had been worth about $342 a share before Musk's tweet, and shares quickly jumped as high as $371.
1. Go Public
2. Realise that the stock has been doing slightly left of nothing for a year now and you are losing money hand over fist as your stock underperforms.
3. Announce that sometime soon, some mystery money will appear and pay everyone a hundred dollars over market value for any TESLA stock.
4. Profit
Legit..posted (Score:4, Informative)
Looks like a great plan!
The problem with publicly held corporations... (Score:2)
Accountability ... You see , when 50% or more of your investors are fund managers for 401k's they don't care a even a little about things like 'long term profitability' , 'company reputation' , customer service or product quality. The only question they ask is , will the stock value go up , so the portfolio will grow. They have no real interest in the product or serving the customer and that attitude is a dis-service to the whole of society. It may be time to consider some other corporate structures.
I prefer private companies (Score:2)
I've worked for a private tech company for 15 years. While I've been here we've grown 3x in revenue and employees (almost 5000 now). We regularly plan for 5 years from now -- never, ever have I ever heard someone think about the next quarter. It's be best outcome for the company and as an employee.
Keeping Safe (Score:2)
Stock shorts serve a valuable social purpose which is to monetize accurate information that a corporation is overvalued, thereby incentivizing efficient pricing. But shorts can also play a roll in illegitimate scams, where an accurately-valued stock is shorted, then publicly badmouthed to drive down its price.
Not to name names here, but a lot of the outstanding Tesla shorts are held by the those with a documented record of engaging in the latter. These are not ethical people and one certain event that wo
Pump and... (Score:2)
It'll be quite interesting to see who sells large chunks of stock over the next few days. Particularly if this turns out to be yet another Elon will-o'-the-wisp.
He only pays for shareholders selling (Score:5, Insightful)
it seems as if it would be more prudent to use that kind of funding to accelerate production and research.
Free of noise and short manipulation he'll have a lot more time and funds free to go into R&D.
Once could also argue this move is a massive marketing expenditure as without short backing, negative Tesla news stories will dry up like dust in the wind, and sales should soar ever higher...
Remember, he only has to actually spend money on people wanting to sell shares - the large majority of Tesla investors (like myself) would not be selling at $420, we'd continue to be private shareholders, so that would be part of the funding not spent that could be used further on R&D. So while he has $84 billion in funding to take TSLA private, he probably will only have to spend about 20$ of that on share buybacks and can put the rest into other efforts.
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May want to read summary again. (Score:5, Insightful)
I don't think you grasp what has happened. Must has secured enough funding to buy back every single share at $420.00 (ha ha Elon). Trading is suspended pending this announcement. Tesla is THE buyer now, and so is paying for any stock sales that will happen as part of the transition.
People who do not want to sell will be converted to private shares. So the only cash Tesla has to spend is on the shareholders that do not want to go private and get out - basically the short holders, plus probably some small number of people that consider $420 a great exit point to avoid any further risk.
were you asleep in econ 101?
Yes because I already knew everything they were teaching there from my own studies in grade school, but unlike you I actually attended economics and business classes beyond Econ 101 so I can understand what is occurring.
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Pretty dense there fellow (Score:3)
Why are you guys so focused on the "shorts"? What are they doing to Tesla? Nothing
Only funding a vast array of negative news about Tesla , no big deal right?
Basically from my angle, I just love to see people motivated by hate fail.
Suckers like you will continue giving him money and going private means he doesn't have to tell you what is going on
"Suckers like me" have made quite a lot of money from Tesla just through stock, and will likely make more going forward.
Why would I care what is going on day to day
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"Suckers like me" have made quite a lot of money from Tesla just through stock [...] Why would I care what is going on day to day? I invest for what will be happening ten years from now
These two comments seem to be at odds with each other.
If you have made money from Tesla stock it means you have already sold some of the stock based on recent growth in the last 5 years or so. But that would mean you have been caring what has happened in the short term, since you have been selling stock to make money.
If you haven't sold any Tesla stock recently, you haven't made any money from Tesla. They don't declare dividends so no one has made money off of Tesla stock without selling it. You may see you
There is a line though (Score:5, Insightful)
I see what you are getting at and I don't exactly care either, I too mostly say let people do what they want.
However in the case of Tesla it's gone a lot further than that, and into the realm of there being so many shorts and some of vast size, they were trying desperately to manipulate and lower the stock price, trying to drive the company out of business.
When you cross the line from "Well I'll bet the company will fold", to actually trying to cause a company with tens of thousands of employees to fail, then I get pissed off. You are affecting those who bet the company would not fail, but worse you are affecting the lives of a lot of people with jobs there.
You are going to see a remarkable shift in Tesla coverage over the coming years with nothing more to gain from short sellers, probably a few vindictive "I sat at thee from the depths of hell" level articles from those poor shorts who believed the lie the industrial short sellers were peddling than Elon would fail...
So I do feel a little sorry for shorts that were too small to actually affect public stock and news. But not too sorry because the mindset it takes to invest via shorts is a feel a fundamentally bad moral choice, and I would never use that myself - if I don't like a company I just don't buy from them, I don't actively bet on failure. It's really unhealthy to build any aspect of your life around negative mindsets, it bleeds into other aspects of your life and makes you an unpleasant person.
Re:There is a line though (Score:4, Informative)
Yes, you can. People like Chanos have basically made a career out of it. By shorting, you lower the stock value, and its market cap. It puts the company in a position to borrow on less favourable terms and pay off convertible debt with cash. Short campaigns generally come hand-in-hand with FUD campaigns, designed to encourage longs to sell and worsen lending terms to the company / create less interest in its bond offerings / reduce its sales. In short, they attempt to create a self-reinforcing downward spiral.
The problem is that it only works effectively with companies that are currently dependent on borrowed cash - usually companies heavily invested in scaling up operations, wherein their investments have not yet transformed into revenue.
Re: (Score:2)
Good way of looking at it as a marketing investment!
I'm long a meaningful number of shares (at least to me), and from where I sit, I'm not sure if I would sell or hold at $420. It really isn't a high enough price to meet my growth expectations, but at the same time I am not sure if they could keep growing at 10% per year with that as a baseline.
The closing price today isn't yet at arbitrage pricing levels, so it will be interesting to see what happens over the next week.
Re: (Score:2)
Welcome to the "explosion" he warned the shorts of in June. ROFLMAO.
The only way he could do that is by offering more stock to the new buyers and watering down the current shares. People would be screaming. That is actually one of the main things the shorts he so nicely warned have been using to try to talk the stock down - that he would water the stock down with new stock offerings in order to raise money.
But, with it being private, they will be better able to throw their own money in now and then. I've es
Got that wrong (Score:2)
this is a classic Enron.
Wrong - it's a classic Elon.
That is to say, thinking outside the box people are trying to trap you in.
Re: (Score:2)
One of Saudi national wealth funds most likely. Bin Salman has been clear in his policy to massively invest in post-oil economy. This fits the bill.
And these are the most currency-rich funds in the world, bar none.
Re: (Score:3)