Monday, 10 December, 2018

Tesla shares dip after Elon Musk proposes going private

Flags fly over the Tesla Inc. Gigafactory 2 which is also known as RiverBend a joint venture with Panasonic to produce solar panels and roof tiles in Buffalo New York Tesla board mulls de-listing plan
Orlando Vargas | 08 August, 2018, 21:53

Tesla Inc said on Wednesday its board is evaluating chief executive Elon Musk's idea of taking the company private after he brought the matter up for discussion last week. Company share prices, particularly in deals as giant as this one, are nearly always decided by corporate executives, board members or consultants who review market data and optimize for maximum value.

Tesla CEO Elon Musk tweeted Tuesday that he's is mulling taking Tesla private at US$420 a share.

Any final decision about privatizing the company would fall to existing shareholders.

But as the dust settles on Musk's latest Twitter escapade, questions remain over whether the Tesla chief executive broke SEC guidelines by tweeting the news.

Musk holds "about 20 percent of the company now", the statement said, and made clear that he doesn't see that changing whether Tesla is private or public.

The statement by the board, published by NASDAQ, confirms that the proposal is under serious consideration.

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But she said: "At the same time, we hope that Saudi Arabia and Canada will find a civilized solution to their differences". Saudi Arabia immediately suspended new trade agreements with Canada and expelled its ambassador.


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Collins' lawyers noted in a statement that the government has not said the congressman traded any shares of the stock. This led to three trades, it is alleged, that helped the defendants avoid $768,000 United States in losses.


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Musk has been under intense pressure this year to turn his money-losing, debt-laden company into a profitable higher-volume manufacturer, a prospect that has sent Tesla's valuation higher than that of General Motors Co.

There has been no word on when any vote might take place. And Musk is correct that Tesla has attracted a large number of short sellers - investors who profit by betting on a stock's decline.

Taking Tesla private would also free Musk from his tumultuous relationship with Wall Street as a whole, which had been consuming a significant portion of his time as well as a significant amount of all news surrounding the automaker. But after the markets opened Wednesday morning, Tesla's stock edged downward about 1 percent, to $375. The move would also foreclose the option of selling more stock to raise cash every year, a move which Musk has disfavored in recent years.

Tesla said on Wednesday the discussions had addressed the issue of how to fund such a deal, but gave no details.

I drove the regular, 271-hp, rear-wheel-drive Tesla Model 3 a few months ago and liked it. Shareholders would also have to be willing to potentially get less information about the company's performance and have less opportunity to sell their shares if it is no longer publicly traded. He followed up the tweet with an email to Tesla employees saying that he thought "the best path forward" would be to take Tesla private.

The most obvious equity partners for Musk would be a sovereign wealth fund such as Saudi Arabia's Public Investment Fund (PIF), which sources said on Tuesday had taken a stake of just below 5 percent in Tesla, or a major technology investment fund such as SoftBank Group Corp's Vision Fund, bankers said. But they did not reveal who or what institution Musk may have been referring to when he posted "funding secured". He might not get all of those to buy into his plan.

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