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Discussion Starter · #1 ·

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I am a lawyer, but not a securities lawyer, but I have to say that Twitter announcement posed several giant red flags to me. Maybe he is feeling the pressure given the short sellers, and given the significant possibility that as a public company it’s not going to survive.


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Yeah, the business channel is buzzing.

He can't do this without shareholder approval FYI. Trading resumed 15 minutes ahead of the close.
 

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Closed up 10% at $387.46. It's already dropped a bit after hours.

If my fund companies that hold this stock don't sell their interest in this company I'm going to dump them. Without the SEC/public trading a lot of irresponsible financial things can happen and I don't want to be any part of it. Mainly, I just don't want to hear about it.

In a series of follow-up tweets, Musk confirmed that one reason to go private would be to save "a lot of headaches." He also added that his "hope" was that all current investors could remain as investors even if Tesla were to go private, potentially by creating a "special purpose fund" similar to SpaceX's capital structure.
He'd better hope so because if his "secured" funds buy out everyone at $420, he's no longer going to be the majority share holder. He doesn't have the cash to do this. Word is the 'Saudis' may be his backer, whatever that means.

https://www.nasdaq.com/article/why-tesla-stock-skyrocketed-and-got-halted-cm1003704
 

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Eventually the rubber's going to hit the road. With no hint of making any money (700 million dollar loss last quarter) even with production squeazing out the projected number of cars at double the original price the only hope is to take it private before it all falls apart. If future projects do come to fruition and their resultant ramp up costs, it may take twenty years to earn back the money lost. The stock market won't stand for that for long. Hope they don't disappear like so many other car companies. Example: England alone has had over 1800 car companies that have produced from a preproduction car to over millions sold and aren't around now.
 

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Most likely an SEC violation by posting the per share purchase price when the actual prices was significantly lower than the announce price.
 

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Most likely an SEC violation by posting the per share purchase price when the actual prices was significantly lower than the announce price.
That’s my concern also. Desperate or reckless, or both.


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Most likely an SEC violation by posting the per share purchase price when the actual prices was significantly lower than the announce price.
The way I heard it the announcement was done on Twitter and that's some sort of no-no when traditional announcement avenues hadn't been notified. It smacks of Musk's usual thinking out loud before thinking it through and checking the rules.

As for making a profit, the alleged Saudis don't have that need. They can keep a losing company afloat indefinitely. A much better footing than using OPM from equity dilutions. I think that avenue is running dry. Most analysts say Tesla will need another cash infusion by Q1 2019 anyway.

If it's approved by stockholders and the funding really is there, the self-imposed capex limits might be lifted. Else don't expect a Model Y, semi, new roadster or anything else any time soon.
 

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Saudis or not, why would anyone put up their money for a company that is highly unlikely to ever earn its valuation of $82 billion? I don't get it. I guess P.T. Barnum may have been right. Or Musk will be facing the mother of all class actions. Especially with Porsche, Mercedes and many others coming to play in this space, seems he might have lost his "first mover" advantage. Or I'm out of touch with car markets.
 

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Could this be the Saudi’s attemp to assist Tesla in failing thereby slowing down the EV movement and keeping their oil flowing longer
 

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Discussion Starter · #13 ·

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It's a lot easier to run a company that's losing money if you are private. Your investors can't easily bail on you. It's not a bad move, but it could easily mean Tesla is in big trouble. It would have been a lot better if he hadn't floated a price. That was dumb. (But of course it's in an age to dumbness via twitter).
 

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Check out MarketWatch.​ He's really stepped in it this time!
Therese Poletti said:
Short sellers, one of the reasons Musk cited in the employee email as inspiring him to want to go private, could certainly claim that Musk was trying to manipulate the stock, especially if he cannot or will not prove his claim that the money for a buyout has already been pledged.

“If this is not a serious bid, the short sellers can sue on the grounds that this is an artificial and fraudulent manipulation of the stock, which violates Rule 10b-5,” John Coffee Jr., a law professor and director of the Center on Corporate Governance at Columbia Law School, said in an email. “Remember too that he made an objective statement and not just a statement of possible intent — namely, he said ‘financing secured.’ If that is not true, he is in deep trouble.”
There's the real meat of the issue. I'm hearing words and prases like "problematic" and "could be in violation". Whether he did violate rules is yet to be proven. Therese Poletti hit the nail on the head with this remark:

Therese Poletti said:
As seems to be typical for Musk and Tesla, the end result appears to be a justifiable move, but the means to get there are inexcusably dumb.
 

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“My tweets are literally what I’m thinking at the moment, not carefully crafted corporate bs, which is really just banal propaganda,” Musk said in June.
What's alarming is that this sounds just like another irresponsible individual with lots of twitter followers.

When you are a leader you have a responsibility to carefully craft your words, because they DO matter.
 

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First I hope Tesla succeeds and does well long term. This would be good for America and employment to have another major US owned manufacturer.

I was an executive in a company that over time, went from private, to public, then back to private. It's true that it's much easier to manage and make decisions in a privately held company. You also don't need to deal with the extreme level of regulation that comes with being a publicly traded company. The benefit of being public is the ease in raising additional capital.

Regarding Tesla I do see the advantage of them going private, however not at this point and time. Based on their current valuation, the buy-out price would have to be substantially less than the current stock price. If the stock declines I could see going private as a realistic option along with some deep pocketed investors like Panasonic, etc.
 

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Musk weasel clause, is it has to go to a vote
that tells me what ever he says don't mean much
shorts will try to use it to their benefit
wonder if he was trying to raise share prices
didn't seam to work much
or he see the potential down line and wants to capitalize on it with the chosen few and kill the shorts at the same time
and maybe take tesla to the next level doing it - up or down!
 

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So, in my mind and memory, going private means financing it with a ****load of unsecured debt. Who's in for some Tesla junk bonds?
 

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So, in my mind and memory, going private means financing it with a ****load of unsecured debt. Who's in for some Tesla junk bonds?
Not I, said The Cat.
 
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