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That's beyond parody.
Elon is the CEO and Chairman of the Board of Tesla; and, rather than acting consistently with the fiduciary duty he owes all TSLA share holders, he represents the interests of some anonymous group of strangers? Res ipsa loquitor.
This is the biggest question, even bigger than whose funding is secured and will the shareholders vote yes.
Munster speculated that the non-accredited investors could have their shares held in an SPV (Special Purpose Vehicle) which could act as a single investor for the purposes of staying under the 2,000 limit for a private company. It still remains to be seen what the structure of this entity would be, who would administer it, if it would have voting rights, and how share purchases and sales would be handled.
This is all pure speculation of course, since the SEC has the final say on what is and what is not allowed. All of us who are not accredited investors are kind of waiting to find out what's going to happen to our stakes.
Because it is too much money. Even in normal times, large share buyers cause the price to move up. Someone with a $20B buy order would sent the price shooting up.
And also, Tesla as a private company can be more attractive than Tesla as a public company to a certain kind of buyer.
Finally, if done as a deal, the new buyers would demand and get board seats. Unmentioned in all this is that probably about 1/3 of the board will turnover when Tesla goes private. Not a big deal, unless you are one of those board members
Maybe it was just 3 shares trading over and over, sell, buy, sell, buy... We don't know.
My guess is that it was much more then 3 (just count the shared bought from bulls here) but much less than 71m. Any guess how many shares there are actually involved in millissecond trading when bears try to push the price down? Could it be that in combination with high FUD and high risk that only a few shares are needed for that?
That's relative to the factual basis of "funding secured"
IMO, the transction was inchoate at the time of the filing and did not qualify as an " event", so I would cut them some slack.
jhm
Well-Known Member
They may well have substantial positions in common shares already. Certainly better prices were to be had prior to Elon's tweet. The value for them is in seeing their common shares upgraded to private share, and for that they are willing to guarantee a cash out price to see that the transaction goes through. Also after the transaction is agreed to, they may buy more shares to avoid having to buy them at $420.
NO self-dealing, conflicts of interest, or action adverse to Tesla.
Shotwell is a great manager, but SpaceX would not be anywhere near where it is today without Elon. I would argue instead that they work together well as a team, and the company wouldn’t be as far along as it is today if one or the other hadn’t been there. However, Elon is by far the most important of the two. Great managers are rare, but not impossible to find. Visionary, technical leaders like Elon are extremely rare.
One of Elon’s strengths is that he makes bold decisions that work out. Building the Nevada gigafactory, the largest factory in the world, was a ridiculous idea for such a small company. Spending huge amounts of money on rocket reusability was so idiotic that no national government even considered doing it the way Elon did it (the space shuttle was the government’s solution, a committee design if I ever saw one).
Make no mistake, Tesla’s value would diminish significantly if Elon weren’t there.
Your prior post (quoted below) seemed to be gloating about new indications that Elon was not lying - perhaps I misread you? I was simply asking what indications you were seeing. I agree with your comment here that there appears to be no new evidence either way. My guess is that the SEC inquiry and the Tesla Board review will shed light on this question fairly soon, one way or the other.
"Huh. So, it sounds like Elon might actually not be lying about this? So if I'm short the stock, now is probably a great time to consider covering? Or would it be better to hang on in case the stock drops further? Asking for a friend...."
I agree with your sentiments about BS news, but not about Wall Street.
The utility of Wall Street is to efficiently allocate capital to worthwhile investments. This is not a minor thing. Without a properly functioning financial system, you get aberrations like China where people are building entire ghost cities because there is no viable other place to invest their money. It is not productive use of the country’s excess wealth.
You can also contrast our financial system with those with central planning where clueless and corrupt bureaucrats make all their boneheaded decisions as to where and how to allocate capital.
The US financial system as a whole is very sophisticated and works very well.
I don't think that matters. My response was only in regards to someone saying if Elon doesn't have a signed letter of intent in writing, then he is in big trouble. I think this person was just parroting what they heard on CNBC, because I heard the same thing there yesterday. I don't believe this is true.
At the same time, it's really just a waste of time spent splitting hairs anyway. Since as I think we will all find out soon enough. Funding secured.
mmd
Active Member
Look at the size of the deal to get an idea. The Tesla board is going to consider next week if they will even set up a special committee to consider this, and no one seems to have heard about where the money is coming from. And you expect this to close by Oct 15? Pass me some of the stuff you are drinking.
Now consider the implications of this:
If Tesla's Q3 delivery report and earnings are really going to be as great as what Elon promised, stock will go way up, and the shareholder vote to take it private at $420 will likely fail. Would Elon have proposed $420 if he thought that is what will happen?
Recall, this is a guy who thought 4 years ago, that Tesla market cap will hit a trillion dollar someday! $420 a share is peanuts, more so if you consider the explosive growth you are expecting to see from Q3 onward : half a mil cars sold at 25% gross margin. Ergo,?
If I think that you understood what I was saying, then I am in for a rude awakening
What comes after P?
As an aside:
When I see all the desperate bulls just hanging in there with the only hope of a short squeeze to bail them out, I know I am in the right camp
Do check out the naked shorting ability of market makers and the T+13 closing rule in regulation SHO.
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I am 100% sure that the potential investor bought shares via market and will do so until share price is above 420. Not every single share, because that would have caused kind of a squeeze. Typically "quiet" buying is possible up to 5% of the total volume traded.
Possibly the taking private buyout price could revised upwards, say 450 or so. Then buying Action beyond 420 is the deal...
420$ is IMO a first indication. 450$ and more seems very likely to me. Not to mention what happens of other parties entering the game since the could be the last chance for a take over...
GLTAlongs
Your suggestion was pretty amusing, though. Obviously only an imbecile would rely on a verbal contract in a deal worth tens of billions of dollars. Mr. Musk may be many things, but he is not stupid. It is pretty funny to imagine Elon explaining to the Tesla Board - or the SEC - how he secured funding to buy Tesla with a handshake: "It's totally binding in California! Yeah, so that's the thing."
ZachShahan
Active Member
Look at the size of the deal to get an idea. The Tesla board is going to consider next week if they will even set up a special committee to consider this, and no one seems to have heard about where the money is coming from. And you expect this to close by Oct 15? Pass me some of the stuff you are drinking.
Now consider the implications of this:
If Tesla's Q3 delivery report and earnings are really going to be as great as what Elon promised, stock will go way up, and the shareholder vote to take it private at $420 will likely fail. Would Elon have proposed $420 if he thought that is what will happen?
Recall, this is a guy who thought 4 years ago, that Tesla market cap will hit a trillion dollar someday! $420 a share is peanuts, more so if you consider the explosive growth you are expecting to see from Q3 onward : half a mil cars sold at 25% gross margin. Ergo,?
If I think that you understood what I was saying, then I am in for a rude awakening
What comes after P?
As an aside:
When I see all the desperate bulls just hanging in there with the only hope of a short squeeze to bail them out, I know I am in the right camp
Do check out the naked shorting ability of market makers and the T+13 closing rule in regulation SHO.
Sorry if I wasn't clear — that's not my comment. I was just sharing a comment from one of our readers that I found interesting and potentially useful.
MODERATOR:
A note to commend all of you, collectively (and most of you, individually.....), for being pretty good Boyz ‘n Grilz during this tumultuous time. Having to drive 415 miles for a root canal operation, as I did today, means little time or inclination to keep you in line.
But let that also be a veiled warning - cuz if someone does step on my toes, I’m already quite cranky yes indeedy.
A note to commend all of you, collectively (and most of you, individually.....), for being pretty good Boyz ‘n Grilz during this tumultuous time. Having to drive 415 miles for a root canal operation, as I did today, means little time or inclination to keep you in line.
But let that also be a veiled warning - cuz if someone does step on my toes, I’m already quite cranky yes indeedy.
You were plenty clear.
I think mid October for a shareholder vote might be optimistic but certainly not out of the question. Based on my reading, the law only requires a minimum 20 day notice to call a vote. I accidentally closed the tab that had the code so I can't quote it.
At the same time we might not see it for 7 months (March '19) similar to Dell. However, for this deal to go through as proposed, expedience seems almost mandatory to me.
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