• 4 minutes England Running Out of Water?
  • 7 minutes Trump to Make Allies Pay More to Host US Bases
  • 10 minutes U.S. Shale Output may Start Dropping Next Year
  • 14 minutes Washington Eyes Crackdown On OPEC
  • 5 hours The Political Debacle: Brexit delayed
  • 7 hours Tidal Power Closer to Commercialisation
  • 4 hours New Rebate For EVs in Canada
  • 5 hours No Mercy: EU Fines Google $1.7 billion For Abusing Online Ads Market
  • 11 hours US-backed coup in Venezuela not so smooth
  • 15 hours Oil-sands recovery by solvents has started on a trial basis; first loads now shipped.
  • 8 hours Solar to Become World's Largest Power Source by 2050
  • 14 mins Trump sells out his base to please Wallstreet and Oil industry
  • 8 hours Will Trump Cave Again
  • 9 hours Read: OPEC THREATENED TO KILL US SHALE
  • 19 hours Biomass, Ethanol No Longer Green
  • 18 hours Malaysia Oil & Gas Updates
  • 14 hours Boeing Faces Safety Questions After Second 737 Crash In Five Months

Breaking News:

UK Oil, Gas Production Up 20% Since 2014

Oil Prices To Skyrocket If U.S. Shale Stalls

Oil Prices To Skyrocket If U.S. Shale Stalls

Despite mounting bullish geopolitical news,…

Musk Starts Speculation Storm With “Taking Tesla Private” Tweet

Elon Musk

Tesla’s chief executive is either unable or unwilling to stay away from headlines for any length of time, and this week makes no exception. Yesterday, Musk tweeted he planned to take Tesla private when its share prices hits US$420. The tweet followed an FT report that Saudi Arabia had acquired a stake of between 3 and almost 5 percent, worth US$2 billion, in Tesla.

In his tweet, Musk said he had already secured the funding for the move, adding that current shareholders could either sell at US$420 per share or stay with the company. In response to a commenter on the thread, Musk said he hoped Tesla’s existing shareholders stayed with the company. Further elaborating, he said that the company could set up a special purpose fund to enable all shareholders to remain with the company. The mechanism, Musk said, has already been employed for SpaceX.

At a price of US$420 per share, Tesla’s total value would be US$70 billion. Yesterday, the stock closed at US$379.57.

As the FT suggests, taking Tesla private may indeed be the best way forward from Musk’s perspective given the nature of his relationship with analysts at the moment. In fact, the CEO even sent an email to employees noting that taking it private would create “the environment for Tesla to operate best”, relieving the management of the quarterly earnings announcement headaches that pressure it to focus on short-term targets. It would also, said Musk, save it from short sellers that have turned Tesla into the most shorted company in the history of the stock market, in Musk’s words.

Related: The Oil Bulls Are Back

As the tweet came out soon after the FT’s report about the Saudi acquisition, one might be tempted to see it as a response to it. However, Musk’s reference to “all” shareholders that he’d like to see staying with the company suggests this would not be an accurate interpretation.

Still, when the Saudi royal family initially approached Musk directly to acquire a stake in it, the company refused, the FT reports. The family then passed things over to the Kingdom’s Public Investment Fund, which bought the stake with the help of JPMorgan. The stake makes Saudi Arabia one of Tesla’s eight largest investors.

Meanwhile, some have questioned the factual nature of Musk’s tweet, noting he could be held legally responsible for it if it was not a statement of fact; in other words, if he was simply messing around with his Twitter following. The Daily Caller quoted former SEC chairman Harvey Pitt as saying the tweet “might constitute fraud if any of the facts he disclosed are not true.” Combined with the FT report about an email to employees, however, the tweet can hardly be considered anything other than a statement of plans. Whether or not these plans will come to fruition remains to be seen. 

By Irina Slav via Safehaven.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News