Elon Musk Considers Taking Tesla Private - Trading Halted in Tesla Stock

Tesla's stock jumped over 8% upon news that Elon Musk is considering taking the company private:

Tesla Jumps After Musk Tweets He Could Take Company Private at $420 [per share]

Elon Musk says in a tweet, “Am considering taking Tesla private at $420. Funding secured,” Bloomberg News reports. Tesla climbs to session high, up 8.2%, on Musk’s tweet.

In a reply to someone on Twitter, Musk elaborates some:

Def no forced sales. Hope all shareholders remain. Will be way smoother & less disruptive as a private company. Ends negative propaganda from shorts

Can find more on that comment here: link

About an hour later I hear that trading has been halted on Tesla stock at $367 per share...

The Securities and Exchange Commission also declined to comment on the matter.

A video/article on the halted trading can be found here: Link

I was surprised to hear this, especially with recent scandals, news, and financial experts stating that the company was close to going bankrupt! I just recently made a thread about some of the lawsuits and scandals Tesla is facing if you are still curious: thread

To be perfectly honest, I knew companies could go public, and could go bankrupt, but I didn't know a publicly-traded company could also go public (if the circumstances permitted). Now I realize how naive I was to never realize this.

Anyway, does this announcement of Elon's potential next move give you any more faith in the company's fundamentals, or were you unquestioning in the first place? Or do you still doubt that his company will survive? What does ATS have to say?

I live near Silicon Valley and I see 100’s of Tesla’s, all I think is what’s going to happen to all of them when Tesla goes tits up. They probably will all be deactivated and “brick” and become worthless.

a reply to: bananashooter

Ever heard of the delorean?

originally posted by: bananashooter
I live near Silicon Valley and I see 100’s of Tesla’s, all I think is what’s going to happen to all of them when Tesla goes tits up. They probably will all be deactivated and “brick” and become worthless.

Oh Tesla isn't going anywhere. Too successful. Save this post for a year or two from now and you'll see what I mean.

originally posted by: FamCore
Tesla's stock jumped over 8% upon news that Elon Musk is considering taking the company private:

Tesla Jumps After Musk Tweets He Could Take Company Private at $420 [per share]

Elon Musk says in a tweet, “Am considering taking Tesla private at $420. Funding secured,” Bloomberg News reports. Tesla climbs to session high, up 8.2%, on Musk’s tweet.

I was surprised to hear this, especially with recent scandals, news, and financial experts stating that the company was close to going bankrupt! I just recently made a thread about some of the lawsuits and scandals Tesla is facing if you are still curious: thread

To be perfectly honest, I knew companies could go public, and could go bankrupt, but I didn't know a publicly-traded company could also go public (if the circumstances permitted). Now I realize how naive I was to never realize this.

Anyway, does this announcement of Elon's potential next move give you any more faith in the company's fundamentals, or were you unquestioning in the first place? Or do you still doubt that his company will survive? What does ATS have to say?

Yes, public companies can go private. Happens all the time, but it is generally with companies under duress of some sort.

I think part of Tesla's problem is that when you are a public company, you have too many shareholders you need to answer to and it makes it harder to make long term decisions because investors are only focused on next quarter's earnings.

The reason company's go public is that it is an easy way to raise needed capital for expansion, but it brings other headaches. Going public is also how early investors "cash out".

If Tesla were private, I don't think they'd be under so much pressure to make 5000 Model 3s and cut corners.

Tesla stock jumping makes no sense.

If it does go private sharelholders are sol.

originally posted by: neo96
Tesla stock jumping makes no sense.

If it does go private sharelholders are sol.

They will get a premium over the current share price. They wouldn't be SOL. This is why shares tend to go up when a merger is announced. The company being acquired is typically getting a premium over current share price.

a reply to: Edumakated

And just where would that premium come from for a company asking their suppliers to give $$ back?

I don't know about Tesla, their finances, only read about cars catching fire, some sort of spontaneous combustion option, but all I want to ask is if I'm the only one that sees that Elon Musk name and thinks about a cologne brand, gets sort of creeped-out? It's like some diabolical Bond villain, or something you squirt yourself with, to piss off people on elevators. First order of business is that man needs to change his name, if they can't work out the flammable cars thing.

originally posted by: neo96
a reply to: Edumakated

And just where would that premium come from for a company asking their suppliers to give $$ back?

The new shareholders taking the company private. They have to buyout all the existing shares. To do so, they offer a premium over existing shares. Being private does not mean you don't have shareholders. It just means the public can't buy shares of the company.

For example, if Tesla is currently trading at say $250/share, the new shareholders will offer $300/share to buy out everyone. The money comes from new debt or cash from the new shareholders taking the company private.

a reply to: Edumakated

A fool and their money are soon parted.

That company is going to end up like Delorean.

en.wikipedia.org...

originally posted by: neo96
a reply to: Edumakated

A fool and their money are soon parted.

That company is going to end up like Delorean.

en.wikipedia.org...

Maybe, maybe not. I remember when Apple was trading at less than $10/share. People swore IBM (MS-DOS) based computers would always dominate. Most millennials probably have never even heard of IBM now.

I think Tesla will be ok.

a reply to: Edumakated

But Tesla isn't Apple.

TSLA is trading at near $400 a share(over priced) for a company that has a -$1.9 billion dollar net revenue.

If I was a private equity firm?

I'd stay FAR away from Tesla.

My initial thought is: going private will allow Tesla (and Elon Musk) to avoid all sorts of reporting requirements. Without shareholders, they won't need to file regular financial reports.

Edumakated: Sorry, but I disagree. Tesla's fundamentals are terrible. They consistently burn cash. A lot of it. And it's been getting steadily worse, not better.

My theory is: Tesla has been cooking the books; the numbers they've been reporting are garbage, and an honest review would send pretty much the entire executive staff to prison. Taking the company private is how Musk hopes to avoid this.

a reply to: neo96

I wonder if Musk might be financing the takeover himself, using some kind of intermediary or shell company to hide it.

a reply to: neo96

a reply to: Edumakated


Update: "Tesla shares halted shortly after 2 PM", and SEC declined to comment

Elon replies to someone on twitter stating the following:

" Def no forced sales. Hope all shareholders remain. Will be way smoother & less disruptive as a private company. Ends negative propaganda from shorts "

No one is picking the winners and losers....Facebook, Google, Apple and Musk ...These eccentric billionaires have put the sweat of their brow into their craft and have their reputations rolled up into it... and if it's a failure they'll probably leave the country and never come back ...

using eccentric billionaire Howard Hughes for cover, the CIA spent $350 million

originally posted by: bananashooter
I live near Silicon Valley and I see 100’s of Tesla’s, all I think is what’s going to happen to all of them when Tesla goes tits up. They probably will all be deactivated and “brick” and become worthless.

That's why I wouldn't buy any of these new cars that have everything tied into that "infotainment" garbage. People are used to buying cars and keeping them 15-20 years. If your climate control is tied into a touchscreen, good luck replacing that in ten years when it craps out and they don't make them anymore. Especially since they're all just different enough to where you'd have to buy exactly the right one for your vehicle.

originally posted by: AndyFromMichigan
a reply to: neo96

I wonder if Musk might be financing the takeover himself, using some kind of intermediary or shell company to hide it.

Wouldn't be surprised.

Tesla was always a dog of an investment. Great products aren’t always great investments. I wouldn’t be surprised if the rumor is a way to cash in for Musk.