Blog Report: Tesla’s Board to Meet With Advisors About Take-Private Deal

Tesla’s board of directors plans to meet next week with financial advisors to discuss a plan to take the company private, according to a report from CNBC citing people familiar with the matter.

Musk tweeted this week that he would like to take the company private and has secured funding to do so. It’s not immediately clear where that funding will come from. The Securities and Exchange Commission has reportedly reached out to the company for further explanation.

The CNBC report says Musk will recuse himself from proposal reviews and will form his own separate set of advisors. Tesla’s board plans to develop a special committee to consider options, the report said.

Among those named as potentially providing the cash for the deal is Saudi Arabia’s sovereign wealth fund, which reportedly bought a 3 percent to 5 percent stake in the electric car maker.

Tesla has declined to comment on funding for the transaction.

 

[Kingdragon8]

What a total cluster....ah....screw! SEC is gonna have a field day with this along with a list of law suits that will be stiffing! Totally unethical and most likely unlawful....but the lead balloons can only stay afloat on a LOT of hot air!

 

[SO16]

What a total cluster....ah....screw! SEC is gonna have a field day with this along with a list of law suits that will be stiffing! Totally unethical and most likely unlawful....but the lead balloons can only stay afloat on a LOT of hot air!

I do see a lot of hot air.....in your comment.

 

[electracity]

What a total cluster....ah....screw! SEC is gonna have a field day with this along with a list of law suits that will be stiffing! Totally unethical and most likely unlawful....but the lead balloons can only stay afloat on a LOT of hot air!

Who is damaged? Anyone who wants out gets out at $420. Anyone who thinks Tesla will be worth much more in the future can stay in.

 

[msvoyager]

Great to read about these next steps. It is another steps forwards, and shows this plan is taken seriously. I know there are many skeptics, and a lot more who want Tesla's downfall. Shame on those to feel like that for an USA company creating USA made products that are meant to make earth into a better place. A lot of people should look way beyond profits, and encourage a company with a vision like this to WIN. This earns our respect and encouragement. Or would we rather see a foreign company taking over the EV world and/or remain cars dependent on gas??

 

[Mader Levap]

What a total cluster....ah....screw! SEC is gonna have a field day with this along with a list of law suits that will be stiffing! Totally unethical and most likely unlawful....but the lead balloons can only stay afloat on a LOT of hot air!

Sounds like you realized you are about to lose a lot of money. I am afraid that you won't find here much compassion for shorts.

 

[Barklikeadog]

I do see a lot of hot air.....in your comment.

It is blustery, but he's not wrong. There are a long list of issues with his claim.
Does he have funding as he suggests? Can't lie about something like this. We've had laws against that since 1934.
Musk blocks people on his twitter who are investors. You can't give advantageous information to one group of investors and not to another.
Misleading investors to pump or dump a stock involves civil and criminal penalties.
Claiming that investor support is confirmed... well investors are pretty surprised to hear about that.
Is this a good summary?

 

[Unpilot]

It is blustery, but he's not wrong. There are a long list of issues with his claim.
Does he have funding as he suggests? Can't lie about something like this. We've had laws against that since 1934.
Musk blocks people on his twitter who are investors. You can't give advantageous information to one group of investors and not to another.
Misleading investors to pump or dump a stock involves civil and criminal penalties.
Claiming that investor support is confirmed... well investors are pretty surprised to hear about that.
Is this a good summary?

Nope pretty bad summary actually.
You don't know about the funding anymore than I do...so it is not a lie unless he does not have the funding...open question at this point.
Blocking people on twitter is a non starter as I am sure you know. His titter feed is free to view for anyone.
Misleading investors....how?
Do you know investor support is NOT confirmed?

 

[SO16]

It is blustery, but he's not wrong. There are a long list of issues with his claim.
Does he have funding as he suggests? Can't lie about something like this. We've had laws against that since 1934.
Musk blocks people on his twitter who are investors. You can't give advantageous information to one group of investors and not to another.
Misleading investors to pump or dump a stock involves civil and criminal penalties.
Claiming that investor support is confirmed... well investors are pretty surprised to hear about that.
Is this a good summary?

Until you have proof to the contrary, your comment is just more hot air. Sorry to say.

 

[Mader Levap]

Musk blocks people on his twitter who are investors. You can't give advantageous information to one group of investors and not to another.

Musk does not have any requirements about giving information to shorts (why they would care about parasites that want to ruin company?). Only to his shareholders. Using word "investors" is cute, but no one will fall for that.

 

[Electroman]

Musk blocks people on his twitter who are investors

Shorts are investors? Should be a new kind of investor who gains by killing the company.

 

[Barklikeadog]

Until you have proof to the contrary, your comment is just more hot air. Sorry to say.

240.14e-8 Prohibited conduct in connection with pre-commencement communications.
It is a fraudulent, deceptive or manipulative act or practice within the meaning of section 14(e) of the Act ( 15 U.S.C. 78n) for any person to publicly announce that the person (or a party on whose behalf the person is acting) plans to make a tender offer that has not yet been commenced, if the person:

(a) Is making the announcement of a potential tender offer without the intention to commence the offer within a reasonable time and complete the offer;

(b) Intends, directly or indirectly, for the announcement to manipulate the market price of the stock of the bidder or subject company; or

(c) Does not have the reasonable belief that the person will have the means to purchase securities to complete the offer.

basically all he has to do is prove to regulators that funding is in fact secured. Is it?

the California State Teachers’ Retirement System, which owns about 213,000 shares as one of the largest institutional investors in Tesla, said it had not been contacted by Musk or the firm before the announcement.

basically all he has to do is prove that shareholders have given him the thumbs up. Did they?

You're right, I don't see the problem here.

 

[Vitold]

Everything will be reveilled in due time. What is the rush?

 

[SR-75]

A month or so ago, did E Musk warn those who were shorts to get out of those positions? I guess that warning fell on deaf ears and/or thought E Musk was making empty threats. I only remember that those that bet against Musk end up losing their shirts. But this time, they are losing their shirt and pants. I do not feel sorry for those shorts holders. They can go to hell for what they were trying to do to a fine American Company. WTG Musk and I love my Model S too.

 

[Barklikeadog]

A month or so ago, did E Musk warn those who were shorts to get out of those positions? I guess that warning fell on deaf ears and/or thought E Musk was making empty threats. I only remember that those that bet against Musk end up losing their shirts. But this time, they are losing their shirt and pants. I do not feel sorry for those shorts holders. They can go to hell for what they were trying to do to a fine American Company. WTG Musk and I love my Model S too.

Doesn't matter to me if the shorts get killed. It's all part of the game. They make their bets, they win they lose... I'm all for protecting positions though.

I'm just talking about the context of Musk's declarations. 100 years ago scammers would lie to get rich. -Even the president owns my stock! These other companies are investing in us! I have secured funding and if you get in now, you'll be wealthy!- The laws and oversight they passed to deal with this are very specific. You cannot lie about something like this, and you have to prove it to regulators. Stock price manipulation to help some or harm others... well goes without saying. Does he have a deal on paper for this 80billion buyout? Was he just going after shorts using market manipulation? anyway, the SEC will do what they have to do

 

[Cloxxki]

The teachers are not helping by even offering comment. To invest into a startup with no intent to privide dividend is risky as it is.

Elon offered his intent on a personal note, he's not known to be a liar, only a slow provider and short term husband, right?

 

[ggr]

the California State Teachers’ Retirement System, which owns about 213,000 shares as one of the largest institutional investors in Tesla, said it had not been contacted by Musk or the firm before the announcement.

What a ridiculous comment. Firstly, there are about 200,000,000 shares of TSLA out there, so this investor represents just a tad over 1% of Tesla. This is hardly "one of the largest institutional investors". For another, they almost certainly have internal investment guidelines that would prevent them investing a large blob of their money in any one company. In fact you can find their investment documents here: Investment Policies - CalSTRS.com .

Interestingly, they do allow themselves to invest up to 13% of their $223B assets in private equity. But I'd still be surprised if they would invest all of this (which comes to about $15B) in one holding.

1. The Private Equity Portfolio can include limited partnerships, (and other limited liability vehicles), direct investments in general partnerships, co-investments, and secondary interests in the following market segments: Buyouts, Venture Capital, Debt Related, Core Private Equity, and Private Equity Special Mandates. The primary objective for the Private Equity Portfolio is to provide enhanced investment returns over those available in the public market. 2. Private Equity has substantial fees and costs; consequently, emphasis will be placed on negotiating, monitoring, and controlling the direct and indirect costs of each limited partnership investment.

From their specific "Private Equity Policy":

1. The Maximum amount of the commitment shall not exceed:

Asset Type Diversified Non-diversified

Limited Partnership interests and
Separately Managed Accounts $1.5 billion $750 million

Co-investments, General Partner interests,
and
Portfolio Companies $500 million $250 million

(please forgive the formatting of the cut-and-paste. Page H-5 of the Private Equity Policy.)
So in fact they can't invest more than $250M, by their own policy, into TSLAP.

Why, then, would Elon even think about approaching them? There are plenty of investors who would have similar limitations, they all do, so not being approached means absolutely nothing.

 

[Az_Rael]

Who is damaged? Anyone who wants out gets out at $420. Anyone who thinks Tesla will be worth much more in the future can stay in.

I don’t think as many folks will be allowed to go along with Tesla as it goes private as we may think. There are the accredited investor rules, folks with their shares in IRAs or other retirement accounts that may not allow private equities, etc. It is being discussed here : "Going Private = Forced Liquidation" for many Investors

I am fully expecting to end up having my shares liquidated as most of mine are in an IRA and no option to keep them and I suspect many others will end up in the same boat. So the folks who will be damaged are the faithful longs who wanted to stay in but will be forced out.

 

[Brando]

240.14e-8 Prohibited conduct in connection with pre-commencement communications.
It is a fraudulent, deceptive or manipulative act or practice within the meaning of section 14(e) of the Act ( 15 U.S.C. 78n) for any person to publicly announce that the person (or a party on whose behalf the person is acting) plans to make a tender offer that has not yet been commenced, if the person:

(a) Is making the announcement of a potential tender offer without the intention to commence the offer within a reasonable time and complete the offer;

(b) Intends, directly or indirectly, for the announcement to manipulate the market price of the stock of the bidder or subject company; or

(c) Does not have the reasonable belief that the person will have the means to purchase securities to complete the offer.

basically all he has to do is prove to regulators that funding is in fact secured. Is it?

the California State Teachers’ Retirement System, which owns about 213,000 shares as one of the largest institutional investors in Tesla, said it had not been contacted by Musk or the firm before the announcement.

basically all he has to do is prove that shareholders have given him the thumbs up. Did they?

You're right, I don't see the problem here.

~170,000,000 shares outstanding, right?
213,000 shares California State Teachers’ Retirement System - = 0.13% one of the largest? seriously??
There has NOT been a shareholder vote yet. Needs 2/3 to pass, I think. keep barking

 

[Barklikeadog]

~170,000,000 shares outstanding, right?
213,000 shares California State Teachers’ Retirement System - = 0.13% one of the largest? seriously??
There has NOT been a shareholder vote yet. Needs 2/3 to pass, I think. keep barking

no vote? but Elon said he has shareholder support. are you saying that claim is a lie?
Shareholders have rights, doesn't matter if they own 1 share or 100,000.
It is stunning how I argue that i wish Musk would stop with the overpromising and general Trumpish craziness... because I DON'T want to see him get hit with lawsuits... and I get railed for it The meeting with the SEC isn't going to be pleasant. I hope they go private and make all of this fighting go away.