Total newbie question. I don't know anything about company mergers and acquisitions. Elon has started and sold a couple businesses already. If in 5 years, he sells Tesla, what will that mean for those of us investing for the long haul? Lets say the stock is at $300 at the time the sale is announced.
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Krugerrand
Meow
Don't think Tesla will be sold. I think Elon is thinking of keeping his shares in his family for generations (ie., Ford).
Elon Musk (@elonmusk) tweeted at 10:35 PM on Tue, Jun 04, 2013:
"Forgot to say one thing at Tesla annual shareholders meeting: just as my money was the first in, it will be the last out."
Elon Musk (@elonmusk) tweeted at 10:35 PM on Tue, Jun 04, 2013:
"Forgot to say one thing at Tesla annual shareholders meeting: just as my money was the first in, it will be the last out."
Elon will not be selling Tesla anytime soon. There are a number of reasons for this. He can't do it contractually is one of the most immediate. The biggest reason that it won't happen is because creating a viable and compelling electric car is one of his personal lifetime goals. It's possible that sometime after making sure that the Gen III is a major success that he will allow someone else to run Tesla while he focuses on SpaceX. Selling out is not going to happen since whoever he sells the company to can screw it all up and he would not want that to happen. Elon is not in it for the money. Money is just a catalyst to allow him to achieve his personal goals. If he was only about the money then he would have just retired with the $800 million he got from the Paypal sale.
I don't see sale until gen 3 on road. But i do believe he will ultimately sell.
1. Look at his record he has sold previous companies and 2. He has said his money will be the last out of the company. Making that statement means he is thinking about the end of his involvement. The only way to make his the last out is to sell the company. I don't believe his big goal is to become a manufacturing tycoon but rather to see electric cars in the vast majority. Once that is assured I believe he will look for new goals or total immersion in another big idea
I took his statement that his money will be the last money out as inferring that he's not going to sell his shares, ever.
In his interview at the Computer Museum (An Evening with Elon Musk and Alison van Diggelen - YouTube), he said that he was thinking how Ford Motor Co. had kept control of the company in the family and he saw merits to that. It shows that he's thinking of that possibility.
Norse
Active Member
To answer the original question, if a sale was announced it would be at a price premium to the market rate. So you would get some 5-10% premium, payed in some other stock shares, which you could then sell. And yes, that is very unlikely and would mean the end of EV's because some car company could easily buy Tesla just to "accidentally" mess it up.
Why can't he contractually do this? I'm not saying he will, but I thought with the Fed loan payback this restriction is no longer present.
Assumming the around $300 share price and the 10% premium we are talking a market cap of almost $40 billion. Thats more than the size of Audi. Who could afford to buy that with the intention of messing it up? I doubt anyone could or would buy and dump Audi, so I fail to see who would with Tesla. Might the investment firm or the competitor end up ruining Tesla sure, but having that as the plan seems too farfetched to me.
I've tried to find out how much it cost to buy up Ovonic to stop NiMH batteries for electric cars but I'm fairly certain the amount was miniscule compared to Teslas value. Big oil or GM/Ford or similar throwing 200 mill away to kill Tesla would be likely. GM worth 50Bill or Ford worth 80 bill doing the same with Tesla not so much IMHO.
Cobos
LOTS of organizations. Exxon, Saudi Arabia. The Illuminati, skull and bones.
Realistically it could be a "partnership". That is the cheap way to do it. Big oil and automakers all sign on to bring EV's to market. They use it as a fig leaf to show how green they are and make commercials with people in lab coats making the world a better place. Then due to internal conflict and disagreement the whole thing doesn't work very well. Really it writes itself, and I am not a big conspiracy nut. But, yes I agree with the other posters that it will not be sold at any price.
Note that Audi is part of the Volkswagen-Audi-Seat-Skoda-Bentley-Bugatti-Lamborghini-Porsche-Ducatti-Scania-Man Group (Source: http://www.volkswagenag.com/content/vwcorp/content/en/brands_and_products.html)
So I think I know "who could afford". It will just become the Volkswagen-Audi-Seat-Skoda-Bentley-Bugatti-Lamborghini-Porsche-Ducatti-Scania-Man-Tesla Group... And they can decide to shut down Tesla thereafter if they wish to do so...
Yes I know Audi is part of the VW group. VW is not doing well in the US and not terribly well in Europe either so that got to hurt. Bentley, Bugatti and Lamborghini can't be making much money, they are like Halo brands, good for the PR, but not necissarily for the bottom line directly. Porsche and Audi on the other hand IS doing well. Do you really think they would have the economy to buy up another Audi and throw all that money down the drain? I haven't looked into the VW group in particular but considering how much the whole Porsche thing cost them I'm not sure they would even find banks to fund this thing.
I am still talking about with the plan to run Tesla into the ground in a short time-frame. Could the VW group be considering buying Tesla with the plan to completely change over their product line to electric, very gutsy but at some point might make sense.
It's the comparison to Cobasys I think is wrong. GM could afford with the help of Chevron to buy Cobasys and write that off but Tesla is a completely different league. After all even Chevron "only" made about 24 bill in profits last year, so they would have to spend almost two years of complete profits to wipe out Tesla. That's a lot of money.
Cobos
I am still talking about with the plan to run Tesla into the ground in a short time-frame. Could the VW group be considering buying Tesla with the plan to completely change over their product line to electric, very gutsy but at some point might make sense.
It's the comparison to Cobasys I think is wrong. GM could afford with the help of Chevron to buy Cobasys and write that off but Tesla is a completely different league. After all even Chevron "only" made about 24 bill in profits last year, so they would have to spend almost two years of complete profits to wipe out Tesla. That's a lot of money.
Cobos
Audi is stil a part von the Volkswagen-Group, but they are independet. But Audi has no interest to build EVs (news last week). And Volkswagen has neither effords to build EVs, cause the dont want to build them (except some tiny cars to alibi).
There will be many companys watching the Tesla-stock but aktually I think noone would take the risk.
RationalOptimist
Member
I think there is zero chance an existing auto manufacturer would buy Tesla. Will always seem insanely expensive to any of them. They will instead (eventually) spend $billions trying to compete. The only possible buyers are Google (Elon is friends with Sergey and Larry and Google thinks auto-pilot cars have huge future) or Apple (the Apple board gives up on Tim Cook and needs Elon to take over as CEO... ie similar to the reintroduction of Jobs). Tesla is not primarily an auto company, it's a tech-driven re-invention of the future.
Problem with a big non-auto company like Google or Apple buying Tesla is anti-trust laws. Can be a deal breaker.
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