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Elon hints he'll buy back shares and "taking Tesla private"

Discussion in 'TSLA Investor Discussions' started by jkirkwood001, Aug 7, 2018.

  1. Lasairfion

    Lasairfion Member

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    He does have a wry sense of humour.

    Also regards the Saudis, oil minister Sheik Ahmed Zaki Yamani said regarding the future of his native kingdom, back in 2000:

    “Thirty years from now, there is no problem with oil. Oil will be left in the ground. The Stone Age came to an end not because we had lack of stones, and the oil age will come to an end not because we have lack of oil.” He pauses, and shakes his head. “I am a Saudi and I know we will have serious economic difficulties ahead of us.”

    Oil to solar: Saudis push to be renewable energy powerhouse

    Looks like perhaps they're making good on that.
     
    • Informative x 2
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  2. HankLloydRight

    HankLloydRight No Roads

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    Yeah, he's going to value $62b company for a weed joke??

    Ummm.. no.
     
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  3. Brovane

    Brovane Member

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    You are talking about a man you launched his personal Tesla roadster into Heliocentric orbit.

    Naming car models so they spell out SEXY.

    Do I need to go on?

    I wouldn't put is past him that during the negotiations as the number was coming close to $420 he picked it for that exact reference.
     
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  4. PremiumPackage

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    Do you think the seller gets to pick the price at which the deal is done? It probably went like this:

    Buyer: I'll pay $414/share
    Elon: How about we do $420 for the LuLz
    Buyer: Sure!
     
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  5. bkp_duke

    bkp_duke Active Member

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    This goes back to his "short squeeze of the century" comment.

    I would not be surprised if he is doing this just to "fulfill his own prophecy" and squeeze the shorts into massive pain. That, and no longer having to deal with the shorts at all, of course.
     
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  6. Brovane

    Brovane Member

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    This is exactly what I was thinking.
     
  7. PremiumPackage

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    Then you've probably had a bit too much 420 yourself.
     
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  8. HankLloydRight

    HankLloydRight No Roads

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    That's much more realistic.
     
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  9. bkp_duke

    bkp_duke Active Member

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    Anyone know how it might work if you want to keep your shares, but they are sold through a brokerage and in your retirement account?
     
  10. Brovane

    Brovane Member

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    The deal has probably been in the works for sometime. Little did anyone realize it was a buyer to take the company private he was referencing.

    The buyer probably decided to strike now realizing the stock is only going to go up and the company gets more expensive to purchase.
     
  11. HankLloydRight

    HankLloydRight No Roads

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    If he were a well known stoner and made 420 jokes before, perhaps. But nowhere in the Ashley Vance biography does he mention Musk doing weed.
    see: https://www.quora.com/What-does-Elon-Musk-think-of-marijuana
     
  12. Brovane

    Brovane Member

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    I have to say I am little disappointed. If Tesla goes private the finances will become much more opaque. I was looking forward to the melt-downs by various talking heads as Tesla started reporting regular profits.
     
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  13. emupilot

    emupilot Active Member

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    Are there plausible scenarios that could make the sale price go higher than $420? It seems unlikely that there would be competing offers (Alphabet/Google? Apple?) as if they wanted to do it I suppose they would have done so before now.

    Will trading restart tomorrow? The "considering" statement in his tweet means investors don't know if it is worth $420 or what it was worth yesterday which seems like an untenable position. Elon should either make the offer or not.
     
  14. bkp_duke

    bkp_duke Active Member

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    True, but a completely privately-owned Tesla should scare the @#$% out of GM, Ford, BMW, Mercedes . . .
     
  15. emupilot

    emupilot Active Member

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    Tesla has notified employees and made a blog post, so it appears to be a real offer which just depends on shareholder approval.
     
  16. Reality

    Reality Member

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    no mention of source of funding, if this is made up it is straight fraud and im pretty sure a hastily written blog post isnt going to cover him.


    If you are long, are you hanging on for the last $40?
     
  17. emupilot

    emupilot Active Member

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    It seems like there are three possibilities for long investors:
    - Have stock bought for $420, take profit and go home
    - Become an investor in the private Tesla
    - Buyout falls through and continue to be long Tesla for the same reasons as always

    For now, it seems like there is little downside to hanging on until the buyout at least. If the buyout falls through the stock will likely at some point be worth more than $420 anyway.
     
    • Like x 3
  18. Russell

    Russell Supporting Member

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    Taking Tesla Private
    August 7, 2018
    The following email was sent to Tesla employees today:

    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.

    Here’s what I envision being private would mean for all shareholders, including all of our employees.

    First, I would like to structure this so that all shareholders have a choice. Either they can stay investors in a private Tesla or they can be bought out at $420 per share, which is a 20% premium over the stock price following our Q2 earnings call (which had already increased by 16%). My hope is for all shareholders to remain, but if they prefer to be bought out, then this would enable that to happen at a nice premium.

    Second, my intention is for all Tesla employees to remain shareholders of the company, just as is the case at SpaceX. If we were to go private, employees would still be able to periodically sell their shares and exercise their options. This would enable you to still share in the growing value of the company that you have all worked so hard to build over time.

    Third, the intention is not to merge SpaceX and Tesla. They would continue to have separate ownership and governance structures. However, the structure envisioned for Tesla is similar in many ways to the SpaceX structure: external shareholders and employee shareholders have an opportunity to sell or buy approximately every six months.

    Finally, this has nothing to do with accumulating control for myself. I own about 20% of the company now, and I don’t envision that being substantially different after any deal is completed.

    Basically, I’m trying to accomplish an outcome where Tesla can operate at its best, free from as much distraction and short-term thinking as possible, and where there is as little change for all of our investors, including all of our employees, as possible.

    This proposal to go private would ultimately be finalized through a vote of our shareholders. If the process ends the way I expect it will, a private Tesla would ultimately be an enormous opportunity for all of us. Either way, the future is very bright and we’ll keep fighting to achieve our mission.

    Thanks,
    Elon
     
    • Helpful x 1
  19. neroden

    neroden Model S Owner and Frustrated Tesla Fan

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    Several.
    Still might be.

    Also, there's the possibility of the price driving over $420 and forcing the bid to be redone.

    A tender offer is *complicated* and it's not going to be quick to execute -- it requires a vote by shareholders, and probably by convertible bondholders too, and it takes months just to mail the 200-page prospectuses and proxies out.

    Q3 results are likely to be published before the vote happens, unless Musk rushes the deal SUPER fast, and he might get in trouble if he super-rushed it before Q3, given that Q3 numbers will be great -- the lawsuit would say that he was trying to buy the company out before people saw the Q3 results.

    So if the stock booms before then... well.... he may have to raise the bid.
     
    • Informative x 2
  20. tga

    tga Supporting Member

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    No way will this be structured as a takeover. Elon will stay as the head of a newly-privatized Tesla. Look at the Dell deal for a howto.

    If Tesla was outright taken over, the buyer could do whatever it wants with the company, including shutting it down. Imagine Exxon-Mobil coming in with a higher buyout offer. Management would have a fiduciary responsibility to take it, even if Exxon-Mobil publicly stated they were going to close it down.

    I wonder how individual, non-employee investors would be allowed to play in a private Tesla. Wouldn't they have to be accredited? Elon tweeted:

    How do I buy SpaceX through Fidelity? Do I just have to buy one of their funds (ie, Contrafund) to get SpaceX (with a bunch of other stocks I may or may not want)?
     

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