In this light I imagine Tesla/Elon will divulge as little information as their legal counsel will allow.
All the screaming and gnashing of teeth is really just helping Elon build his case.
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All the screaming and gnashing of teeth is really just helping Elon build his case.
Well, as long as one wants to torture words to their waterboarding utmost, imagine this scenario at the Interstate’s margin where the Commercial Vehicle Patrol is interviewing the overturned truck’s driver:
“Did you secure your load of 60,000 lbs of pipe?”
“Oh, yes. I secured the load.”
“And with what did you secure it?”
“With twine.”
“Did you secure your load of 60,000 lbs of pipe?”
“Oh, yes. I secured the load.”
“And with what did you secure it?”
“With twine.”
Causalien
Prime 8 ball Oracle
After almost a decade of this. I find myself constantly saying, I am weary. So it's a relief to finally see the stock getting taken privately. If I, as an investor on the sideline can feel weary like this, I imagine the effect being even bigger for those fighting in the pit. So I am going to say yes. Take the stock private and let's all enjoy some peace.
Esme Es Mejor
Member
Coming from a legal background, it’s ambiguous because it doesn’t say how much financing is secured, or in what way it is secured. This actually works in Musk’s favor, not in favor of the shorts.
He didn’t say whether he had the full enterprise value secured, or just the enterprise value minus his shares. Or, perhaps, just the amount they anticipate needing to cash people out (possibly less than $30 billion). Which is good— no need to show his hand until he’s ready to play it. All the tweet means is that he’s serious.
Likewise for how the financing was secured. He didn’t say whether it was signed letters of intent, verbal agreements, or something else entirely. Again, all it means is that he’s serious. And I have no doubt that he is.
Mike Smith
Active Member
Proof that Elon is telling the truth about having funding secured:
Elon tweeted:
"Funding secured".
"Investor support is confirmed. Only reason why this is not certain is that it’s contingent on a shareholder vote."
The board of directors then released a statement including: (regarding their meetings with Musk the week prior)
"This included discussion as to how being private could better serve Tesla's long-term interests, and also addressed the funding for this to occur."
If what Elon showed the board regarding funding was anything less than a certainty as claimed in his tweets, they would have revealed that in their statement. They would have had no choice. If they knew the CEO was committing ongoing fraud of this magnitude and didn't stop him they would be exposed to legal action along with Musk.
Elon tweeted:
"Funding secured".
"Investor support is confirmed. Only reason why this is not certain is that it’s contingent on a shareholder vote."
The board of directors then released a statement including: (regarding their meetings with Musk the week prior)
"This included discussion as to how being private could better serve Tesla's long-term interests, and also addressed the funding for this to occur."
If what Elon showed the board regarding funding was anything less than a certainty as claimed in his tweets, they would have revealed that in their statement. They would have had no choice. If they knew the CEO was committing ongoing fraud of this magnitude and didn't stop him they would be exposed to legal action along with Musk.
ZachShahan
Active Member
I have steel balls. Unfortunately, not a lot of cash.
Actually, the Journal is reporting that is not clear whether an enforcement investigation is or is not currently underway. Look at the paragraph immediately following the one you qouted:
"It couldn’t be learned on Wednesday whether the agency had opened a formal enforcement investigation. An SEC spokesman declined to comment. Tesla didn’t respond to a request for comment."
Ergo, your 'ergo' is not substantiated.
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ZachShahan
Active Member
I have a VERY hard time believing it's the Saudis. Maybe a small stake, but nothing dramatic. I'd assume it's more likely Page/Alphabet, Ron Baron, and the like. Maybe I'm naive.
Cross posting from another thread.
It is obvious Elon has been mulling over going private for a number of years. As recently as last year, a deal with Softbank could not be consummated. He definitely has backing now, and he had a short window to announce the deal. Consider this.
In any case, the ramification is, this is stealing the stock from folks who do not have the ability to hold the SPV in a retirement account / foreign account / is leveraged long / not a accredited investor or some combination thereof. Personally It is not possible for me to have the same exposure to the SPV as I now have to TSLA. Additionally, there is no way h3ll i can avoid paying significant taxes, if this deal goes thru. I am seriously hoping for the price to jump significantly past 420, which would likely break the deal.
It is obvious Elon has been mulling over going private for a number of years. As recently as last year, a deal with Softbank could not be consummated. He definitely has backing now, and he had a short window to announce the deal. Consider this.
- The 10Q dropped Monday AM and the quarterly results were a couple of days before that. Imagine the nonsense in the media, announcing the deal before the earnings, would have created.
- The Saudi news broke Monday and the stock was going up. He had to act quick as otherwise he'd be announcing an offer for a piddly premium
- In the current situation, the deal economics work very well because at the deal price (420) any longs who want to sell would be offset by shorts looking to cover. This cannot happen if 3Q becomes profitable and shorts are naturally squeezed out. The outlay needs to be more because of higher SP and fewer offsetting shorts
In any case, the ramification is, this is stealing the stock from folks who do not have the ability to hold the SPV in a retirement account / foreign account / is leveraged long / not a accredited investor or some combination thereof. Personally It is not possible for me to have the same exposure to the SPV as I now have to TSLA. Additionally, there is no way h3ll i can avoid paying significant taxes, if this deal goes thru. I am seriously hoping for the price to jump significantly past 420, which would likely break the deal.
I thought about "capping short losses" by setting issue price at a multiple of the current stock price. E.g. pay 1000.- to buy shares rated 420.-
That would counter the dilution by injecting "free cash" and cause a massive financial derisking.
And if there is a massive squeeze, there might be a point where no one wants to sell to stay in, but still some shorts needing to cover. Raising price to maybe 100x should in theory convince the needed shares to concert. But at some point even private bankruptcy might not create enough cash to pay those prices and a fast raise might even pull down the short backing broker.
Somehow this deadlock has to be resolved to close the deal.
ZachShahan
Active Member
That was exactly my take. Siding with you & Cosmacelf on that * 17. The only remaining question, imho, is if he can. I assume he can and will, but don't have a clue about the timeline and how long it takes for shorts to sprint for the doors.
Planning to sell some shares in another company in the morning that I'd rather hold onto, but hard to pass up an opportunity to make my last retail investments in TSLA just before a short squeeze. (Crossing fingers.)
mmd
Active Member
Let me help you out. Elon is a super genius. He thinks in N^N dimensions while we mortals struggle with 1 dimensional, inside the box thinking. While he was typing the first sentence, his mind wandered on to his backyard project of his, I dunno, 7th mansion may be. He meant his backyard landscaping project had its "funding secured". So the two sentences are actually unrelated.
Worst case scenario: Elon claims insanity of super human intelligence and gets out scot-free.
What happens to the many banks and traders selling cover calls? What happens to the shares held by market makers? The swing traders? All those shares will be dumped.
A big part of Tesla value is its use as a gambling token. Once that value is taken out, the token will be worth much less..
People may get peace,but with such high capital infusion needs and few buyers, Tesla will not survive for long.
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I think there is merit in this argument. Board members don't like going to prison.
But it is less than conclusive proof. The Board members said they are now taking the appropriate next steps. Perhaps one of these steps is reviewing the details of the funding secured by Elon. Surely this would be an appropriate next step prior to summarily throwing Musk under the bus!
Still, if the Board does not act within a couple of days, I think we can safely assume they have determined that Elon has been truthful.
RobStark
Well-Known Member
So James Murdoch isn't willing to go to prison to give Elon a few weeks of cover?
I agree. If there was any ambiguity, Elon eliminated it with his follow-up tweet:
"Investor support is confirmed. Only reason why this is not certain is that it’s contingent on a shareholder vote."
Not much wiggle room left, is there?
Mike Smith
Active Member
I'm not really seeing how this makes it less than conclusive. If they need to review the details of the funding that means the funding exists, and they'd see how secure it was. If Musk's tweets were materially false on something this important they legally have to reveal it immediately.
ZachShahan
Active Member
Yes, and it also makes me think more than anything else they are idiots and their fundamental problem is they don't trust Elon. But I'm drinking Kool-Aid, so what can I say?
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