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Musk endeavours

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onthemove
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Re: Musk endeavours

#157938

Postby onthemove » August 8th, 2018, 2:41 pm

odysseus2000 wrote:There are a substantial number of posters on social media who claim that Musk has acted illegally, but SEC aren't saying so.
Others say Musk hasn't got the money which is a dangerous belief, especially if a good % of the holders take the private stock.


It doesn't matter how many people may or may not take up the offer.

If the claim of 'funding secured' isn't strictly true, that is when it gets potentially dangerous.
Funding isn't 'secure' if there aren't firm commitments to cover the entire shares in case that were necessary - it isn't 'secure' if it couldn't cover all potential scenarios.

I suspect the reason of few of us are cautious is Musk's recent background.... it wasn't long ago he got a bit too trigger happy, publicly calling someone he was getting annoyed with a 'pedo' without any grounds at all.

We all know how much Musk is being irritated by shorters... and he knows full well how much a spike in share price would hurt the shorters.

A few of us therefore aren't completely discounting the possibility he could have perhaps got a little over reactive again, and perhaps could similarly be being rather 'loose' in his claims.

From various articles I've read, it's fairly normal when funding is secured apparently for it to be lodged somehow with one or more institutions, etc.

Now, of course, that isn't the only way so this isn't conclusive and he may genuinely have secured funding elsewhere by other means, but so far, from what I've read there doesn't seem to be any hint - beyond Musk's tweet - of such secured funding in the normal places / channels.

Securing funding for such large amounts, would, one might expect, involved substantial work by lawyers and accountants to ensure it's all legally water tight.

You'd think as part of that process, a proper, official stock market notification would be par for the course, carefully worded, after being reviewed by the lawyers.

It may be that he genuinely does have secured funding.

But the SEC aren't going to say it's not true without some form of proper formal investigation. So it isn't any surprise that they aren't currently saying he's done anything illegal. They follow proper process and would need to properly see all the accounts, contracts, etc, to establish whether the funding really is secured or not before they would make any judgement. And that will take a long time.

If he does have secured funding, then he's nothing to worry about... the regulators have already said a tweeting in itself isn't a problem - as long as the information is properly true and accurate.

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Re: Musk endeavours

#157952

Postby BobbyD » August 8th, 2018, 3:43 pm

Last week, Elon opened a discussion with the board about taking the company private. This included discussion as to how being private could better serve Tesla’s long-term interests, and also addressed the funding for this to occur. The board has met several times over the last week and is taking the appropriate next steps to evaluate this.


- https://ftalphaville.ft.com/2018/08/08/ ... /#comments

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Re: Musk endeavours

#157964

Postby odysseus2000 » August 8th, 2018, 4:15 pm

Who might have $70+ billion available:

Soverign wealth funds
https://en.wikipedia.org/wiki/Sovereign_wealth_fund

Buffett
https://www.businessinsider.com/warren- ... 018-8?IR=T

Apple
https://www.cnbc.com/2018/02/01/apple-e ... -have.html

Many other combinations could reach $70+ billion

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Re: Musk endeavours

#158053

Postby BobbyD » August 8th, 2018, 7:39 pm

FT article 'Musk’s dream of taking Tesla private bumps up against reality ' appears to have enhanced security atm so I won't quote and link but it points out that many shares are held by index funds which will have to sell if Tesla goes private.

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Re: Musk endeavours

#158106

Postby BobbyD » August 8th, 2018, 11:53 pm

Runners and riders

Who could fund Musk’s Tesla buyout?
Wide range of heavyweights populate picture of plan to take carmaker private


https://www.ft.com/content/e0dfec74-9b2 ... 46bae86e6d

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Re: Musk endeavours

#158118

Postby odysseus2000 » August 9th, 2018, 2:47 am

The FT runners and riders article gave me a good smile. Once I used to subscribed to the FT but I gave it up and for good reasons like the poor quality of articles such as this one.

The writers don't know if its a bluff and have written about possibilities that might be able to fund it. I did that a few posts ago and they have nothing more material to say. They throw up a potential regulators hurdle which has not been used on stuff like a car company before. Then they go on about all the index funds having big stakes in Tesla, but they are index funds... How can it be that Tesla is at one moment a massively over priced equity and then the bread and butter of index funds?

The comments are even more amusing, a subset of the population who mostly have no clue save for having seen nothing similar and therefore doubt it with a few sensible comments, but mostly clueless ones thrown around.

Meanwhile how much will it cost to take Tesla private? Sure they will have to have the full figure available, but the actual cost will likely be a lot less than $70 billion as there will be a lot of swapping of public shares for private.

There is no discussion of the potential positives for Tesla being private which I have already mentioned in terms of a comparison with Branson's Virgin group who could also be a potential investor in a private Tesla.

This is a slightly better article:

https://www.thestreet.com/technology/ho ... t-14678229

Will be interesting to see if an 8k is filed, if so then price of Tesla equity likely goes to $420 very quickly.

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Re: Musk endeavours

#158128

Postby odysseus2000 » August 9th, 2018, 7:13 am

Guardian comment:

https://www.theguardian.com/technology/ ... -for-tesla

...And what if, to fill the financing gaps, Tesla has to borrow heavily to get the buy-out across the line? The bark of short-sellers can be irritating, but banks and bondholders have bite in the form of legally enforceable rights of repayment. Musk should perhaps reflect that the rough and tumble of public markets hasn’t been pure hell. Capital has still flowed and his core group of shareholders has been prepared to ignore the scepticism. Life could be worse.


Not sure I follow this. The proposal is to convert every public share into a private one with Musk saying he has the funding to do this. There is, so far at least, no indication that he wants to reduce the number of shares, such that the likely transition is just public to private with no additional debt as the new owners will be owners of stock that was previously held by others. Meanwhile company debt will remain what it is, not changing at all.

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Re: Musk endeavours

#158155

Postby PeterGray » August 9th, 2018, 9:01 am

Others say Musk hasn't got the money which is a dangerous belief

I'll agree for those who might consider shorting. But, of course the converse is true for anyone thinking of going or staying long - assuming he can put it together would be dangerous for them.

Large doses of salt required either way I'd think, and I certainly have no intention of getting near Tesla either long or short.

Peter

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Re: Musk endeavours

#158159

Postby PeterGray » August 9th, 2018, 9:12 am

The proposal is to convert every public share into a private one with Musk saying he has the funding to do this. There is, so far at least, no indication that he wants to reduce the number of shares, such that the likely transition is just public to private with no additional debt as the new owners will be owners of stock that was previously held by others. Meanwhile company debt will remain what it is, not changing at all.


Presumably many (most?) shareholders will not want to hold shares in a private Tesla, and there are regulations that prevent a simple transfer to private ownership (with shareholders losing voting rights). So a very large number of shares (even if not all) will have to be bought out. That will have to be funded by debt (a lot of debt which will have massive costs and strings attached), or he passes over a lot of the equity to private institutions that he doesn't control - which would seem not to gain the main advantage he is presumably after, of not needing to justify himself to others.

You don't do all this to protect yourself from shorters. Shorters are an annoyance, and if Musk is right and Tesla is a great and profitable success they will be swept away and become irrelevant. They only matter and make money if they are right.

Peter

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Re: Musk endeavours

#158186

Postby BobbyD » August 9th, 2018, 10:44 am

odysseus2000 wrote:The writers don't know if its a bluf


Harvey Pitt, former SEC chairman, discusses the circumstances under which Elon Musk's tweet about potentially taking Tesla private would qualify as market manipulation and securities fraud.


- https://www.cnbc.com/video/2018/08/07/m ... ation.html

Then they go on about all the index funds having big stakes in Tesla, but they are index funds... How can it be that Tesla is at one moment a massively over priced equity and then the bread and butter of index funds?


You do know how index funds work?

PeterGray wrote:Presumably many (most?) shareholders will not want to hold shares in a private Tesla


...and many such as the aforementioned index funds can't continue to hold Tesla.

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Re: Musk endeavours

#158343

Postby odysseus2000 » August 9th, 2018, 8:02 pm

BobbyD
You do know how index funds work?


Top 25 mutual funds with Tesla in its top 10 holdings:

http://www.fundmojo.com/mutualfund/fund ... stock/TSLA\

See any index funds there?

Index funds hold a small bit of everything making each one hold a tiny bit of Tesla.

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Re: Musk endeavours

#158345

Postby odysseus2000 » August 9th, 2018, 8:10 pm

PeterGray
Presumably many (most?) shareholders will not want to hold shares in a private Tesla, and there are regulations that prevent a simple transfer to private ownership (with shareholders losing voting rights). So a very large number of shares (even if not all) will have to be bought out. That will have to be funded by debt (a lot of debt which will have massive costs and strings attached), or he passes over a lot of the equity to private institutions that he doesn't control - which would seem not to gain the main advantage he is presumably after, of not needing to justify himself to others.

You don't do all this to protect yourself from shorters. Shorters are an annoyance, and if Musk is right and Tesla is a great and profitable success they will be swept away and become irrelevant. They only matter and make money if they are right.


I suspect with Tesla a cult most private share holders will continue to hold Tesla shares and no matter what there has to be a shareholder vote.

If Musk is planning to buy out folk and take the shares himself then yes, he will have to borrow.

But I have seen nothing to suggest this.

The difference between public and private is about the quality of the owners and their understanding of the business and time horizons.

As is Tesla equity attracts relentless attacks most of which are clearly made up by shorters to give them a quick profit. Take away these shorters by
going private and Tesla can operate with out all the short term volatility. Taking Tesla private is exactly what Branson did with his Virgin group for essentially the same reasons.

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Re: Musk endeavours

#158346

Postby BobbyD » August 9th, 2018, 8:16 pm

odysseus2000 wrote:Top 25 mutual funds with Tesla in its top 10 holdings:

http://www.fundmojo.com/mutualfund/fund ... stock/TSLA\

See any index funds there?


Not really pertinent to the question you asked though is it?

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Re: Musk endeavours

#158356

Postby odysseus2000 » August 9th, 2018, 8:54 pm

Bobbyd
Not really pertinent to the question you asked though is it?


My point was that index funds would only hold a bit of Tesla and that was confirmed by the top mutual fund holders, save maybe one, not being index funds that I posted.

The general quality of the analysis being posted all over social media is clear evidence that most posters do not understand anything about investment and there posts are not worth reading.

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Re: Musk endeavours

#158656

Postby BobbyD » August 10th, 2018, 10:15 pm

odysseus2000 wrote:
Bobbyd
Not really pertinent to the question you asked though is it?


My point was that index funds would only hold a bit of Tesla and that was confirmed by the top mutual fund holders, save maybe one, not being index funds that I posted.


Your point was:

odysseus2000 wrote:How can it be that Tesla is at one moment a massively over priced equity and then the bread and butter of index funds?


Elsewhere...

The SEC Is Intensifying Its Probe of Tesla


- https://www.bloomberg.com/news/articles ... statements

Elon Musk's Tweet was Irresponsible, Reckless, Says Ex-SEC Attorney


- https://www.bloomberg.com/news/videos/2 ... rney-video

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Re: Musk endeavours

#158676

Postby odysseus2000 » August 11th, 2018, 12:30 am

BobbyD
The SEC Is Intensifying Its Probe of Tesla


- https://www.bloomberg.com/news/articles ... statements

Elon Musk's Tweet was Irresponsible, Reckless, Says Ex-SEC Attorney


- https://www.bloomberg.com/news/videos/2 ... rney-video


Is this the best that can be done, an Ex SEC attorney, wanting a bit of income to help his retirement. What he says and thinks is irrelevant.

As to SEC increasing its investigation of Tesla at an informal level again means nothing.

If the SEC goes to formal it might mean something but anything informal is not relevant.

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Re: Musk endeavours

#158684

Postby BobbyD » August 11th, 2018, 2:15 am

odysseus2000 wrote:
BobbyD
The SEC Is Intensifying Its Probe of Tesla


- https://www.bloomberg.com/news/articles ... statements

Elon Musk's Tweet was Irresponsible, Reckless, Says Ex-SEC Attorney


- https://www.bloomberg.com/news/videos/2 ... rney-video


Is this the best that can be done, an Ex SEC attorney, wanting a bit of income to help his retirement. What he says and thinks is irrelevant.

As to SEC increasing its investigation of Tesla at an informal level again means nothing.

If the SEC goes to formal it might mean something but anything informal is not relevant.

Regards,


Everything you don't agree with is irrelevant...

Lawsuit accuses Tesla's Musk of fraud over tweets, going-private proposal

...

The complaint filed by Kalman Isaacs said Musk’s alleged false and misleading tweets on Aug. 7 about a possible going-private transaction, and Tesla’s failure to correct them, were a “nuclear attack” on short-sellers that inflated Tesla’s stock price and violated federal securities laws.

Tesla did not respond to a request for comment on the proposed class-action complaint filed in the federal court in San Francisco. The company is based in nearby Palo Alto, California.


- https://www.reuters.com/article/us-tesl ... SKBN1KV2IQ

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Re: Musk endeavours

#158701

Postby BobbyD » August 11th, 2018, 8:08 am

Double trouble.

Lawsuits accuse Tesla's Musk of fraud over tweets, going-private proposal

Reuters) - Tesla Inc and Chief Executive Elon Musk were sued twice on Friday by investors who said they fraudulently engineered a scheme to squeeze short-sellers, including through Musk’s proposal to take the electric car company private.

The lawsuits were filed three days after Musk stunned investors by announcing on Twitter that he might take Tesla private in a record $72 billion transaction that valued the company at $420 per share, and that “funding” had been “secured.”

In one of the lawsuits, the plaintiff Kalman Isaacs said Musk’s tweets were false and misleading, and together with Tesla’s failure to correct them amounted to a “nuclear attack” designed to “completely decimate” short-sellers.


- https://www.reuters.com/article/us-tesl ... SKBN1KV2IQ

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Re: Musk endeavours

#158705

Postby ap8889 » August 11th, 2018, 8:51 am

Apropos of nothing, I had a drive in a new Tesla the other day. I believe the asking price was around £65k.

I then went to my local Ford dealer and had a drive in a new petrol Ford valued at 22k. I am not sure there was that much to choose between them.

£40k buys a lot of petrol. Or a lot of Vanguard.

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Re: Musk endeavours

#158712

Postby PeterGray » August 11th, 2018, 9:51 am

Purely anecdotal, and not to be used for investment decisions, but kind of interesting! Locally our upmarket so called "farm shop" are Tesla devotees and now have a row of 8 or so (mostly empty) Tesla charging points, mostly used by the owners I think. But a few miles down the road a hotel has recently opened and they are providing Porsche charging points for their customers.

Tesla don't have a clean run, though they are clearly ahead in the performance market for now. But you have to ask how long propriety charging systems can last. If electric really is the future that is a massive hindrance to it.

Peter


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