Tesla CEO Elon Musk Details Funding Plan for Taking Tesla Private

cageymaru

cageymaru

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Elon Musk has revealed that a great deal of the funding to take Tesla private will come from the Saudi Arabia sovereign wealth fund. He backed up his August 7th claim that the funding was secured by revealing that the Managing Director of the fund had contacted him multiple times over the course of the past two years seeking to take Tesla private. As previously reported, Elon Musk is not happy with the pressure that short sellers place upon the company's stock.

It is also worth clarifying that most of the capital required for going private would be funded by equity rather than debt, meaning that this would not be like a standard leveraged buyout structure commonly used when companies are taken private. I do not think it would be wise to burden Tesla with significantly increased debt. Therefore, reports that more than $70B would be needed to take Tesla private dramatically overstate the actual capital raise needed. The $420 buyout price would only be used for Tesla shareholders who do not remain with our company if it is private. My best estimate right now is that approximately two-thirds of shares owned by all current investors would roll over into a private Tesla.
 
A fool and his money....

Say goodbye to the Saudi sovereign wealth fund if it invests in this sinkhole of a company.

Musk is the modern day PT Barnum and Ripley, combined into one.
 
The internet has conditioned my mind.
Whenever I see the Tesla logo I see an upside down buttplug.

But talk about fun company gifts

and both products reduce exhaust... OK ima go show my self the door now.
 
SvenBent said:
The internet has conditioned my mind.
Whenever I see the Tesla logo I see an upside down buttplug.
. . . .
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Gee Thanks, my mind hadn't made that connection, but now... Brings a whole new meaning to 'Autodrive'.

One big advantage of being private is you are freed from many of the SEC reporting requirements.
 
Chris_B said:
Is this guy ever out of the fucking headlines?
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Not while websites need clicks.

I think its pretty good news as Elon has been more and more unhinged of late. I think he's semi-aware that he's in a Twitter feedback loop, the more responses he gets the more he's conditioned to respond with more. He needs to break out of it, and I think ending the short-seller drama surrounding Tesla is his answer to how he's going to do that.
 
So would that make it a Saudi-owned American company or how would that work?
 
It appears Elon's definition of "funding secured" is different than the SECs, go figure.
 
I'm having a hard time understanding how association with the Saudi's could possibly outweigh the 'pressure from short sellers' enough to be 'in Tesla's long term interest'.

I thought that the reason we were all buying Teslas (aside from virtue signalling) was to give the finger to OPEC. Now Elon wants to:

article said:
most of the capital required for going private would be funded by equity rather than debt
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Make the Saudi's at least ~1/3 owners of Tesla (for the price of at least ~$24B).

article said:
My best estimate right now is that approximately two-thirds of shares owned by all current investors would roll over into a private Tesla.
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Was that before or after you told them that the House of Saud was coming?
 
Nicepants42 said:
I'm having a hard time understanding how association with the Saudi's could possibly outweigh the 'pressure from short sellers' enough to be 'in Tesla's long term interest'.
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Clearly, they are preparing for a future when they no longer can rely on their oil reserves for income...

nah, they are going to make sure tesla is going to fail spectacularly.
 
The Saudis know they have a couple of decades worth of oil until they run out, so for many years now have been investing to be able to have a wealthy economy in the aftermath. Mostly they invest in tourism, but betting on EV and the like is exactly like hedging their bets - these will increase in value as their reserves decline, so it makes perfect chance.
 
I would be upset too if people were profiteering on my stumbles. It seems all manufactures have had some terrible recalls and not received the fanfare Tesla has.

Well, maybe volkswagon.....

I hope this pays off for him and his future projects
 
There seems to be a big difference between Saudi investors asking about doing due diligence and possibly taking the company private, and "funding secured," especially with the odd plan proposed to somehow go private while allowing all current shareholders the chance to retain ownership interests.

Not commenting on Tesla failure/success or Saudi in any form, just an observation that informal offers (that were surely predicated on a standard buyout) don't correspond to guaranteed financing for Musk's plan.
 
ecuador said:
The Saudis know they have a couple of decades worth of oil until they run out, so for many years now have been investing to be able to have a wealthy economy in the aftermath. Mostly they invest in tourism, but betting on EV and the like is exactly like hedging their bets - these will increase in value as their reserves decline, so it makes perfect chance.
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There's oil for centuries at our current level. It's the demand that's the problem. If it keeps growing, it will put pressure on everything, not just oil.
 
Fidelity Investments is involved with both Elon's companies, and my guess who one of the major contributors could be.
 
Nicepants42 said:
Make the Saudi's at least ~1/3 owners of Tesla (for the price of at least ~$24B).
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More likely closer to 15B than 24B. And it appears Elon is trying to get other backers to invest (I'd be unsurprised to see Larry Page invest, he famously said he'd rather give his money to Elon than charity) to ensure that no one shareholder has a controlling interest. Plus there would be legal issues with Saudi wealth fund trying to acquire 20% or more.
 
ryamkajr said:
A fool and his money....

Say goodbye to the Saudi sovereign wealth fund if it invests in this sinkhole of a company.
Click to expand...

It's beyond unlikely, they have access to an absolutely mind bending amount of money. If liquid they could buy every major car manufacturer in the world, plus Google, and have change. The mooted IPO of Aramco, the saudi oil company was specifically to get some liquidity to their wealth fund (that only has a casual few hundred billion).

Saudi doesn't operate like typical sovereign wealth funds, in this case the assets are literally those of the royal family and are valued in the trillions. It's all just about how they diversify those assets and put them formally as "Assets under Management" of the wealth fund, as most of it is in Aramco holdings atm (worth trillions & revenue for which is twice that of Exxon, or equal to Apple and Exxon together), taking a little side punt on a company like Tesla makes sense.

Aramco revenues are $14,000... a second. Tesla is pocket change.
 
jpm100 said:
There's oil for centuries at our current level. It's the demand that's the problem. If it keeps growing, it will put pressure on everything, not just oil.
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Well, these days the oil industry is talking about Peak Oil Demand, and predicting that total demand will, well peak around 2040 or so, and decline from there. https://www.mckinsey.com/industries/oil-and-gas/our-insights/is-peak-oil-demand-in-sight Electric cars are a big part of that; if batteries continue to decline in price, by 2025-2030 electric cars with 250-300 mile ranges will be cheaper than similar sized gas cars; and cheap batteries will mean many of those will be plug-in hybrids. The other huge part is demographic trends; birth rates are declining all over the world, and are below replacement in many areas; for the most part only sub-saharan Africa will be seeing any major population increases. Saudi investing in Tesla is a good way for them to hedge their bets.

As for Tesla, I understand why Musk is taking it private; the amount of money the shorts have been losing has reached the point where some of them might start using less than ethical actions to try and drive the price down, and no I am not talking about saying mean things about Tesla on twitter, or paying journalist to cover every Tesla accident with far more scrutiny than other automakers. When a billion dollars is on the line, industrial sabotage starts looking appealing. I hope Mr. Musk has a good security team while he pulls Tesla off the public market.
 
Bull snot. He ILLEGALLY tried to manipulate the stock price to financially harm short sellers. He LIED and needs to face consequences for ILLEGAL stock manipulation. He cost longs AND shorts for tens of billions - which will be added to the company’s debt and bankrupt Tesla.
 
Rathor said:
Bull snot. He ILLEGALLY tried to manipulate the stock price to financially harm short sellers. He LIED and needs to face consequences for ILLEGAL stock manipulation. He cost longs AND shorts for tens of billions - which will be added to the company’s debt and bankrupt Tesla.
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Oh no, he tried to manipulate the manipulators! Therefore the company and all people working for it and all the innovation it brought must be put down and burn in hell! All because he tried to harm stock brokers, the wealthest freeloaders of the world, who never innovated anything, doesn't produce anything of value, just sail along the market winds and make money with no work. And I define work as something that has a valuable product. They might spend 14 hours a day in front of their screens watching markets, but that is not work as it is not producing anything useful to society.
 
dreadcthulhu said:
Well, these days the oil industry is talking about Peak Oil Demand, and predicting that total demand will, well peak around 2040 or so, and decline from there. https://www.mckinsey.com/industries/oil-and-gas/our-insights/is-peak-oil-demand-in-sight Electric cars are a big part of that; if batteries continue to decline in price, by 2025-2030 electric cars with 250-300 mile ranges will be cheaper than similar sized gas cars; and cheap batteries will mean many of those will be plug-in hybrids. The other huge part is demographic trends; birth rates are declining all over the world, and are below replacement in many areas; for the most part only sub-saharan Africa will be seeing any major population increases. Saudi investing in Tesla is a good way for them to hedge their bets.

As for Tesla, I understand why Musk is taking it private; the amount of money the shorts have been losing has reached the point where some of them might start using less than ethical actions to try and drive the price down, and no I am not talking about saying mean things about Tesla on twitter, or paying journalist to cover every Tesla accident with far more scrutiny than other automakers. When a billion dollars is on the line, industrial sabotage starts looking appealing. I hope Mr. Musk has a good security team while he pulls Tesla off the public market.
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The oil industry said we hit peak 10 years ago as cover to jacking up the price of gas. Doom Sayers are a market manipulator's best friend. They give each other credibility and we pay out the ass for nothing. Oil companies would love to pump less and charge more. Question for you. Would you rather sell 100 sandwitches that cost you $2 for a price of $2.25 or would you rather sell 50 sandwhiches for $3? The former is $25 profit, the latter is $50. Which one is ancillary better for you making 100 sandwiches or making 50? They absolutely want to pump less if a price increase is attached. The only concern about an induced shortage is if the public gets too outraged and its too obvious for the stooge politicians to pretend its not an artificial shortage. "We're running out" is perfect FUD cover.
 
I hope these class action suits don't harm the company.
Also hope the SEC investigation doesn't hurt it.

Elon himself....hes a danger to the companies future if he keeps running his mouth off...while tripping on acid

Fuck those short sellers also :)
 
M76 said:
Oh no, he tried to manipulate the manipulators! Therefore the company and all people working for it and all the innovation it brought must be put down and burn in hell! All because he tried to harm stock brokers, the wealthest freeloaders of the world, who never innovated anything, doesn't produce anything of value, just sail along the market winds and make money with no work. And I define work as something that has a valuable product. They might spend 14 hours a day in front of their screens watching markets, but that is not work as it is not producing anything useful to society.
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Musk spends all day sticking his foot in his mouth on twitter... how exactly does that count as a valuable product? It certainly isn't valuable to society. Neither is Tesla at this point - it's already spurred companies with better management to move into the EV space, and Tesla makes apple look downright DIY friendly when it comes to repairs. They're as bad as swatch group, and I for one hope they fail in a spectacular way because of it.
 
The bloom has certainly fallen from the Musk rose. His cult of personality still believe he wants to save the world, and will succeed if only people will leave him alone.
 
M76 said:
Oh no, he tried to manipulate the manipulators! Therefore the company and all people working for it and all the innovation it brought must be put down and burn in hell! All because he tried to harm stock brokers, the wealthest freeloaders of the world, who never innovated anything, doesn't produce anything of value, just sail along the market winds and make money with no work. And I define work as something that has a valuable product. They might spend 14 hours a day in front of their screens watching markets, but that is not work as it is not producing anything useful to society.
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I mean, whether is gold shit or bronze shit it still shit, even if he's a saint he should still pay for telling something which is not true and does mislead investors, love or hate Tesla, seems fair to at least pay a fine for it.
 
jpm100 said:
The oil industry said we hit peak 10 years ago as cover to jacking up the price of gas. Doom Sayers are a market manipulator's best friend. They give each other credibility and we pay out the ass for nothing. Oil companies would love to pump less and charge more. Question for you. Would you rather sell 100 sandwitches that cost you $2 for a price of $2.25 or would you rather sell 50 sandwhiches for $3? The former is $25 profit, the latter is $50. Which one is ancillary better for you making 100 sandwiches or making 50? They absolutely want to pump less if a price increase is attached. The only concern about an induced shortage is if the public gets too outraged and its too obvious for the stooge politicians to pretend its not an artificial shortage. "We're running out" is perfect FUD cover.
Click to expand...

You completely misunderstood what I said there; peak oil DEMAND is very different than the peak oil SUPPLY concerns that the odd combination of environmentalist & oil companies were pushing last decade. Peak oil supply means that the maximum amount that can be economically pumped out of the ground hits a limit, and declines from there. Peak demand means that the total world desire to purchase oil (at least at a price above extraction cost) will hit a peak, and then decline from there. Or to use your sandwich analogy, if enough people start buying wraps instead of sandwiches, even if the sandwich maker sells at just above break-even, $2.05, he will only find 50 buyers. Now imagine electric cars are the wraps.

A lot of the oil companies & major oil producing countries are worried about this, due to the above mentioned improvements in batteries & demographic transitions. Some countries have lots of oil in the ground that is potentially valuable now, but if peak demand hits they might not be able to profitably extract it in the future.
 
Interesting...

Elon Musk Gives Saudi Investors Presentation On New Autonomous Beheading Machine For Adulterers

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