• 3 minutes Is Pete Buttigieg emerging as the most likely challenger to Trump?
  • 5 minutes CoV-19: China, WHO, myth vs fact
  • 8 minutes Question: Why are oil futures so low through 2020?
  • 11 minutes Don't sneeze. Coronavirus is a threat to oil markets and global economies
  • 3 hours Energy from thin air?
  • 15 hours Fast-charging, long-running, bendy energy storage breakthrough
  • 41 mins “The era of cheap & abundant energy is long gone. Money supply & debt have grown faster than real economy. Debt saturation is now a real risk, requiring a global scale reset.”"We are now in new era of expensive unconventional energy
  • 6 hours Hey NYC - Mayor De Blasio declares you must say goodbye to fossil fuels. Get ready to freeze your Virtue Signaling butts off.
  • 19 hours Can LNG Kill Oil?
  • 7 hours Foxconn cancelled the reopening of their mfg plants scheduled for tomorrow. Rescheduled to March 3rd. . . . if they're lucky.
  • 19 hours Cheap natural gas is making it very hard to go green
  • 20 hours "For the Public's Interest"
  • 2 days Solar Cells at 25 Cents Apiece (5 cents per watt)
  • 21 hours The New Class War Exposes the Oligarchs and Enablers
  • 2 days Has Trump put the USA at the service of Israel?
  • 2 days Trump reinvented tariffs and it worked
The New ‘Must-Have’ For Energy Hedge Funds

The New ‘Must-Have’ For Energy Hedge Funds

Green investing is getting more…

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