bdy0627
Active Member
I don't understand the idea of the Saudis undertaking a hostile takeover of Tesla on the open market. Is that even possible? How could that happen?
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bdy0627
Active Member
Doesn't Tesla have a governance structure that would prevent the Saudis from taking over the company even if they owned over 20% of Tesla? Isn't that why the Board exists?
I mean I took the 15 minute compliance course at my company and I really don't think you can participate in a going private negotiation and buy stock on the open market. By doing so you would be acting on material nom-public information. Likewise they can't sell. But nothing to do now but wait and see I guess.
bdy0627
Active Member
What surprised me about Munster's note after the NYT article is that he did not point out any of the speculativeness of the article. He took it at face value regarding Elon. Most of us here absolutely do not. It seems so obvious to me. I'm puzzled that Munster doesn't share our skepticism about the article. Elon's interview with MKB the same day shows Elon as the Elon we are used to - tired and in need of a haircut, but he certainly doesn't look like he is on the verge of losing it.
Andrea James actually indicated she thinks the NYT article will be a positive in the longer term. She also made some comments that there really wasn't anything new from the article. She did embrace the idea from the article that the Board is actively searching for a COO, which appears to be completely speculative. CNBC and others really ran with that idea, blowing it up into the idea that Elon should either be let go, or at the very least, take a leave of absence.
Anyone who actually knows surely can't speak, but @neroden gave a plausible explanation that he can surely point to quickly, as to how both a) and b) can be true. The main idea is that for an institutional investor to be let in on the go-private deal (i.e. getting the option to buying out others at 420$/share), they would have to agree to refrain from buying on the open market until the deal is finalized. Others can choose to stay out of the deal, and instead accumulate shares now and either keep them or having them bought at 420 when the deal materializes. If this seems unclear then it is just because I could not explain it as well at neroden, whose posts one should never skip.
That would probably be the case, if they are currently negotiating privately with said investors, but only explain why the entities involved in that negotiation do not add. But there have to be players that won't be allowed to own big stakes in a private corp, so they will stay away from those negotiations. If there was a reasonable chance for a buyout at $420 to happen, i'd assume they would increase there holdings to profit from the upside, should that deal go through.
Fact Checking
Well-Known Member
Bigger funds and institutions might be able to segregate their day-to-day trading staff from the going-private negotiators (by making sure the two groups do not talk to each other), but any bigger decisions like significantly increasing their stake due to attractive prices possibly needs the buy-in of the top guys who negotiate ...
But yes, the lack of big, organized buyers on the way from $280 to $305 was very visible in the price action.
bdy0627
Active Member
I think your first sentence is really the key about what is going on in the market with TSLA right now: there is a lot of speculation. What is actually known?
- Elon is seriously considering making a formal offer to the Tesla Board to take Tesla private at the buyout price of $420. He believes he has the funding for it. He is in the process of figuring out which investors would be part of private Tesla. He has indicated he wants to allow current investors to be able to stay invested in private Tesla, and he is going to try to make that happen.
- The Saudis are a significant part of the investor group but the breakdown of the investors is not known at this time.
- The Tesla Board is preparing for a formal buyout proposal from Elon.
- The SEC appears to be formally investigating Elon over his tweet about having funding secured to take Tesla private. Neither the SEC or Tesla have confirmed this. This information has all come from anonymous sources "familiar with the matter."
- The stock climbed to a close of $379 following Elon's announcement. Subsequently, it has fallen to $305.
There has been very recent speculation from the media that the Tesla Board was blindsided by Elon's tweet, and that several members are angry with Elon. The media is strongly suggesting that Elon needs a leave of absence or maybe should even be fired. The media is also speculating that the Board is now in crisis mode trying to figure out what to do about Elon. The media have speculated that the Board is urgently trying to find a COO to take over day to day operations from Elon.
All of this mixed together has resulted in the stock price dropping to where it is now. Is the stock acting REALLY volatile? Yep. Should it have risen as high as it did based on Elon's announcement? Should it have fallen as far as it has subsequently? There is no concrete evidence to seriously suggest that the Tesla Board won't be getting a proposal from Elon to take Tesla private. If that is in fact the next step we see happen, what will the market do with the stock price? Stay tuned...
Her letter was well written and came from an honest concern.
I hope when his 48th Birthday rolls around he feels he can slow down a little and appreciate all he has done.
Workaholics work hard for long hours. When things get tough they work harder. I wouldn't worry about the 120 hour weeks, because it won't last long: either Tesla becomes profitable and he goes back to regular workaholic weeks, or the company collapses.
PS People have talked about Ambien, but haven't said whether it's the slow-release version. There's a big difference between having difficulty getting to sleep, and true insomnia.
PS People have talked about Ambien, but haven't said whether it's the slow-release version. There's a big difference between having difficulty getting to sleep, and true insomnia.
bdy0627
Active Member
I think they both are right, at this particular moment. Elon had to bet the company on model 3. He had to take over production in the spring to do everything possible to bring production up to 5,000+ per week as soon as possible. They appear to be now on the cusp of sustaining that level. I think he feels he still needs to be there right now to keep this ramp progressing. Hopefully, he will be able to step back from that role soon, but not quite yet.
No, i think it's clear and i understood what you wanted to say. I think that's what i was wondering about in my last post. Imho, this would assume that almost all current investors would want to join the private deal, which seems not very plausible. Afaik, many aren't even allowed to own private equity or are at least not known for doing so in the past. If that's the case (which i can't know for sure), it leaves the question open, why those entities do not buy given the current upside. This is again assuming there is a high probability that deal is going to happen. If chances for such a deal are low, i mostly agree with other bears, that Tesla may be in a bit of trouble because of the Tweets and accompanying market reaction.
Nice summary, thanks. Of course i'll stay tuned! Apart from hoping to make a bit of money, the whole story is way to interesting and entertaining to miss.
bdy0627
Active Member
All TSLA traders should be prepared for the market to react on the unmotivated answer of Elon linked above. Why bring up the ugly word again ?
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