• 4 minutes THE GREAT OIL PRICE PREDICTION CHALLENGE OF 2018
  • 9 minutes Time For Reaction: Trump Presses OPEC to Reduce Prices as Crude Trades Near $80
  • 15 minutes Nothing new in Middle East? Iran Puts On 'Show Of Strength' Military Exercise In Gulf
  • 42 mins Global Hunger Continues to Grow Driven By Climate Change
  • 12 mins Why Are the Maldives Still above Sea Level?
  • 1 day Toyota Agreed To Add Android Auto To Its Vehicles
  • 22 mins So oil touched $80! (WTI break $71 twice). What does the future hold?
  • 1 day China Tariff Threatens U.S. LNG Boom
  • 1 day A Buffett-type Solution and Canada's Problem
  • 12 hours Robots Roam the Seafloor Looking for Mineral Resources
  • 11 hours Transition Time: Volkswagen Announces "Electric for All" Campaign
  • 2 hours Freedom Of Internet: Google Plans Censored Version Of Search Engine In China!
  • 1 day Google And Facebook Lead Digital's March To Half Of The U.S. Ad Market
  • 1 day So about that psychological oil price ceiling of $80 ... Trump's Twitter sledgehammer is right on cue, again
  • 1 day As EU Divisions Deepen, Macron Stakes Out Electoral Turf
  • 9 hours Impeachment and stock market
Strong Rise In Spending Keeps Offshore Ahead Of Shale

Strong Rise In Spending Keeps Offshore Ahead Of Shale

An increase in final investment…

Canada Boosts Oil Exports To The U.S.

Canada Boosts Oil Exports To The U.S.

Though Canada’s oil industry is…

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