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

[neroden]

Exactly. Tesla is not being sold, they are delisting the common stock.

You mentioning it this way raises a curious possibility in my mind.

I *really* don't see how Tesla could go private while letting everyone keep their shares.

Tesla *could*, however, voluntarily delist while remaining a public company. That would let everyone keep their shares.

Unlisted public company - Wikipedia

I don't think any of the exchanges will list your stock if you ask them not to list you and refuse to pay their listing fees. (They *could* but I don't think they *will*.) If Tesla was public, but traded strictly in the OTC market -- infrequent and illiquid -- I think the options market makers would probably stop trading exchange-traded options, and I think the brokerages would at least be less *likely* to offer short-selling (though they still *could* offer short-selling).

I would be MUCH MUCH more comfortable with Tesla becoming an unlisted public company than "going private" and this would be MUCH easier.

 

[bhtooefr]

And as I've suggested in another thread, I think Musk's "going private" is actually impossible in SEC terms, with keeping anywhere near the current number of shareholders.

The SEC's clear on this - a go-private requires both delisting from exchanges and getting under 300 shareholders of record (or 500 if the company has no significant assets, but that doesn't apply here, I think).

Note that Musk isn't trying to get out from under SEC reporting requirements, he's trying to get out from under shorts. So, an unlisted public company may well do what he's trying to do fine.

 

[neroden]

It's 2000 shareholders of record now, which can be done by making most people hold their shares through intermediaries like brokers, but still.

I am considering getting my shares certificated.

 

[electracity]

I *really* don't see how Tesla could go private while letting everyone keep their shares.

Owners probably swap for a new common stock instrument. The same type private equity investors hold in firms like Uber. Tesla's balance sheet probably remain the same. The instrument that contains the equity position changes.

The only question I have is whether this creates a gain for tax liability.

 

[neroden]

Owners probably swap for a new common stock instrument. The same type private equity investors hold in firms like Uber.

My point is that people who hold their shares in various types of tax-preferred accounts are probably *not allowed to receive the new instrument* and will therefore be cashed out (if the buyout goes through).

 

[electracity]

My point is that people who hold their shares in various types of tax-preferred accounts are probably *not allowed to receive the new instrument* and will therefore be cashed out (if the buyout goes through).

Yes, Tesla must have a buyer for all those shares for the change to not have an impact on cash flow.

But certainly it seems that individuals who own high growth funds that were chosen specifically because they hold a lot of TSLA will get involuntarily cashed out. If I was Musk I would be looking for a practical way to let those people back in.

 

[PremiumPackage]

Guys come on. The top 5 shareholders after Elon are all huge fund managers. You think T Rowe Price is going to say "ah yes, please let my $5B equity position become completely illiquid tomorrow?" If he wants to do this, he'll need new money investors. The NYT is reporting they haven't been able to find anyone who has been approached about financing what, I'll say again, would be one of the largest buyouts of all time. Elon mentions in his blog he wants out of the quarterly earnings cycle - that means no more SEC reporting. This sounds very much like something Elon wants to do and something he will not be able to do.

 

[Yuri_G]

Guys come on. The top 5 shareholders after Elon are all huge fund managers. You think T Rowe Price is going to say "ah yes, please let my $5B equity position become completely illiquid tomorrow?" If he wants to do this, he'll need new money investors. The NYT is reporting they haven't been able to find anyone who has been approached about financing what, I'll say again, would be one of the largest buyouts of all time. Elon mentions in his blog he wants out of the quarterly earnings cycle - that means no more SEC reporting. This sounds very much like something Elon wants to do and something he will not be able to do.

The man sold 10 million dollars worth of garden torches. He may be better at raising money than anything else.

 

[Reality]

And if my mother was the Queen of England I'd be a prince. What's your point? Do you have any evidence that what he said is not true?

The burden of proof isnt on me luckily, but yes I think there is a pretty decent chance that it's not true. Possibly even just a weed joke that Elon didnt realize violated a truckload of SEC laws and now its backpedal time.

 

[EVMeister]

The burden of proof isnt on me luckily, but yes I think there is a pretty decent chance that it's not true. Possibly even just a weed joke that Elon didnt realize violated a truckload of SEC laws and now its backpedal time.

Snap back to reality.

 

[electracity]

If he wants to do this, he'll need new money investors.

He said he has it covered. He might be weird sometimes, but he's not stupid. You can be sure this effort involves many people, including many lawyers. Even the timing of the $420 tweet was surely carefully considered. "Why now" will be clearer in hindsight.

The primary "why" IMO is the potential for a negative feedback cycle between share price and car sales.

 

[replicant]

The burden of proof isnt on me luckily, but yes I think there is a pretty decent chance that it's not true. Possibly even just a weed joke that Elon didnt realize violated a truckload of SEC laws and now its backpedal time.

Are you seriously considering that he made a botched joke and instead of admitting it wasn't funny, he just decided to roll with it, convince the board to keep a straight face and take the jest seriously. So they're now preparing the biggest buyout of history... to save a joke.

 

[EVMeister]

Are you seriously considering that he made a botched joke and instead of admitting it wasn't funny, he just decided to roll with it, convince the board to keep a straight face and take the jest seriously. So they're now preparing the biggest buyout of history... to save a joke.

Oh there goes gravity.

 

[bkp_duke]

Are you seriously considering that he made a botched joke and instead of admitting it wasn't funny, he just decided to roll with it, convince the board to keep a straight face and take the jest seriously. So they're now preparing the biggest buyout of history... to save a joke.

This is a load of @#$%.

Board meetings for public companies MUST be documented. There WILL BE A RECORD of these meetings having occurred prior to his tweet.

Do us all a favor, if you don't know what you are talking about, shut up.

 

[oneday]

This is a load of @#$%.

Board meetings for public companies MUST be documented. There WILL BE A RECORD of these meetings having occurred prior to his tweet.

Do us all a favor, if you don't know what you are talking about, shut up.

He was responding to the troll. Not actually saying that’s what was happening.

 

[TintDepot.com]

Agreed. Moving away from oil is a start. Diversification.

Or they want to try to influence the EV market...slow it down? I doubt Elon would allow that.

Let's just hope their only interest is to diversity their holdings and play both sides of the energy market: oil & Tesla (EV, battery, solar roof).

 

[TintDepot.com]

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.

LOL, I just got it. I didn't notice anything yesterday about $420 stock price.

 

[bhzmark]

You mentioning it this way raises a curious possibility in my mind.

I *really* don't see how Tesla could go private while letting everyone keep their shares.

Tesla *could*, however, voluntarily delist while remaining a public company. That would let everyone keep their shares.

Unlisted public company - Wikipedia

I don't think any of the exchanges will list your stock if you ask them not to list you and refuse to pay their listing fees. (They *could* but I don't think they *will*.) If Tesla was public, but traded strictly in the OTC market -- infrequent and illiquid -- I think the options market makers would probably stop trading exchange-traded options, and I think the brokerages would at least be less *likely* to offer short-selling (though they still *could* offer short-selling).

I would be MUCH MUCH more comfortable with Tesla becoming an unlisted public company than "going private" and this would be MUCH easier.

I think it’s a novel hybrid of going dark and going private. Elements of both (not all shareholders bought out). The bright line is whether it triggers Rule 13e for certain going private transaction. And whether shareholders of record (not the same as beneficial owners) can be under 300. Most holders are beneficial owners with the shareholder of record being Cede & Co or similar. They could technically arrange to be under the 300 limit while still having thousands of beneficial owners. Fascinating financial and securities engineering.

 

[oneday]

Can anyone familiar with these things enlighten us on what type of things the board will be doing now.

Will they vote to hire an independent auditor to appraise TSLA value?

Will they vote to entertain a buy out offer?

Will they vote to initiate a shareholder vote?

When will these types of votes be made public?

 

[TexasTeslaRacing]

Can anyone familiar with these things enlighten us on what type of things the board will be doing now.

Will they vote to hire an independent auditor to appraise TSLA value?

Will they vote to entertain a buy out offer?

Will they vote to initiate a shareholder vote?

When will these types of votes be made public?

Good questions. I don't see a post public share cost being above $300 until Tesla starts showing a profit. It might be better to sell at $420 and then buy private shares at a lower cost, if they are available.