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It is a common move to take a company private in order to restructure it.
 

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Lately, whenever Musk has opened his mouth, it has hurt Tesla's share price. if it can be proven that he was intending to buy back the company when he made those various damaging pronouncements, then he's opening himself to charges of securities fraud. Alternatively, if this turns out to be hot air, and he uses the rally in the company's shares to sell any of his own holdings at a profit, he's likely to be looking at a courtroom wall for a while.

Musk might think the Saudis represent a money-well of near-infinite depth that he can draw from whenever he wants, but working for monarchs is a pain in the butt - they want the last say on everything, but they're never around to give it, and woe betide anyone who makes a decision without referring it up to His Excellency first. If you think Tesla's workers are overstretched now, give the Saudis a year in charge and you'll see real demoralization. They might be rich, but they're not fools: $72 billion needs to be paid back, and that'll be the end of Elon Musk's control - they'll put one of their men in charge, and he will ruthlessly cut costs, starting with staffing costs.
 

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Discussion Starter · #5 ·
Apparently, he gave further explanation.
He sent an email to employees and published the same email in Tesla's domain in the web.
In this text he explains why it would be better to take Tesla private. As far as I can understand he expects that the shareholders stay as investors of this private Tesla, but he will pay 20% for anyone who wants to sell his shares.
He cited the reasons to go private aswell:

1 - "As a public company, we are subject to wild swings in our stock price that can be a major distraction for everyone working at Tesla, all of whom are shareholders"

2 - "Being public also subjects us to the quarterly earnings cycle that puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term"

3 - "Finally, as the most shorted stock in the history of the stock market, being public means that there are large numbers of people who have the incentive to attack the company."

IMHO, he had plenty of time without any kind of pressure, missing goals that he himself set, now that the investors want results he wants to retreat. Again, I find it absurd, but I'm a layman in this subject.
 

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He’s also mulled moving production to China and closing his US operations. I’m ready to be done with this guy. Time for FCA to step in and demonstrate how real automotive manufacturing is done.
 

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Elon's a spoiled child. The stock market loved his company, and inflated its share price to a level unheard of for any car manufacturer of its volume, let alone one with such difficulties in delivering on promises. This allowed him to get free money by selling Tesla stock to raise funding.

But now, the stock market is evil because its quarterly demands to know when Tesla's going to start turning a profit are interrupting Tesla's mission? It's mission to do what?... lose money? Elon has forgotten the purpose of a joint-stock company: to make profit for the investors. If he didn't want to make a profit, that's fine, it's a free world, and he can do what he wishes with his money, but if that's the case, he should never have floated Tesla. When you IPO a company, you are promising investors a profit: there is no other reason for someone to buy stock.

A hostile takeover of Tesla would cost more than the proposed $72 billion buyback value. For some perspective, $72 billion would buy 50% of Toyota Motor Company or 90% of Volkswagen Group. It would buy 90% of FCA and Ford Motor Company. If I were to hand you $72 billion now, and told you that you had to use it to buy control of a listed company, would you really pick Tesla?
 

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Elon's a spoiled child. The stock market loved his company, and inflated its share price to a level unheard of for any car manufacturer of its volume, let alone one with such difficulties in delivering on promises. This allowed him to get free money by selling Tesla stock to raise funding.

But now, the stock market is evil because its quarterly demands to know when Tesla's going to start turning a profit are interrupting Tesla's mission? It's mission to do what?... lose money? Elon has forgotten the purpose of a joint-stock company: to make profit for the investors. If he didn't want to make a profit, that's fine, it's a free world, and he can do what he wishes with his money, but if that's the case, he should never have floated Tesla. When you IPO a company, you are promising investors a profit: there is no other reason for someone to buy stock.

A hostile takeover of Tesla would cost more than the proposed $72 billion buyback value. For some perspective, $72 billion would buy 50% of Toyota Motor Company or 90% of Volkswagen Group. It would buy 90% of FCA and Ford Motor Company. If I were to hand you $72 billion now, and told you that you had to use it to buy control of a listed company, would you really pick Tesla?
I personally wouldn't give 72 billion for Tesla, but some cash loaded Chinese entity or Arabian prince with more money than they know what to with might...of course Amazon's Jeff Bezos has a net worth of 143 billion...Amazon could buy Tesla, and Bezos would still have plenty of money left over.
With Tesla it's the promise of what could be, mass produced electric cars are the future.

I figure some entity will wait until the company is in a death spiral, and buy Tesla on the cheap...once the prime investors bail that is gonna be the beginning of the end for Tesla.
The investors want results for their investment, and Musk continues to give them smoke and mirrors.
 

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I personally wouldn't give 72 billion for Tesla, but some cash loaded Chinese entity or Arabian prince with more money than they know what to with might...of course Amazon's Jeff Bezos has a net worth of 143 billion...Amazon could buy Tesla, and Bezos would still have plenty of money left over.
With Tesla it's the promise of what could be, mass produced electric cars are the future.

I figure some entity will wait until the company is in a death spiral, and buy Tesla on the cheap...once the prime investors bail that is gonna be the beginning of the end for Tesla.
The investors want results for their investment, and Musk continues to give them smoke and mirrors.
Apple has a market capitalization of 1 trillion dollars—they could have it if they wanted. Not sure they want it.
 

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The investors want results for their investment, and Musk continues to give them smoke and mirrors.
^^^^ This. How much longer are the investors willing to wait? If they perceive there is little to no ROI then Musk will be in trouble.
 

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My conspiracy theory is he was betting on an eco-friendly administration that would publicly (or covertly) fund his efforts in some capacity and save Tesla's butt. Now that it went the other way he's in trouble.
 

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I think his basic strategy is an old saying, “If you owe the bank $100,000, they own you. If you owe the bank $1 billion, you own them.”

In short, he gets stock sold by promising things he obviously can't supply (and somehow doesn't get sued or fined), pulls tricks to pretend to make deadlines (releasing untested cars to production with serious brake issues which somehow becomes a “good thing” — “hey, look, we can fix problems on-line!”), and taking credit for everything ever invented; and gets more and more loans because, well, if the banks pull out now, it all sinks, and maybe, just maybe, if they keep lending him more money, someday the lenders will retire and it won't matter when Tesla dies.

The Obama administration didn't bail him out, I doubt the Clinton administration would. When Tesla implodes, it will be HUGE. Or... it won't implode, and eventually will make real profits and someday pay back the debt. Ya never know!

I don't think that tweet was ever serious, supposedly the stock price was the police code for marijuana possession or some such... but it shot the stock up to the point where some lenders could trade debt for stock and get something out, which is good for both Musk and the lenders; and it could have hurt short-sellers, which would make Musk happy.
 

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I think his basic strategy is an old saying, “If you owe the bank $100,000, they own you. If you owe the bank $1 billion, you own them.”

In short, he gets stock sold by promising things he obviously can't supply (and somehow doesn't get sued or fined), pulls tricks to pretend to make deadlines (releasing untested cars to production with serious brake issues which somehow becomes a “good thing” — “hey, look, we can fix problems on-line!”), and taking credit for everything ever invented; and gets more and more loans because, well, if the banks pull out now, it all sinks, and maybe, just maybe, if they keep lending him more money, someday the lenders will retire and it won't matter when Tesla dies.

The Obama administration didn't bail him out, I doubt the Clinton administration would. When Tesla implodes, it will be HUGE. Or... it won't implode, and eventually will make real profits and someday pay back the debt. Ya never know!

I don't think that tweet was ever serious, supposedly the stock price was the police code for marijuana possession or some such... but it shot the stock up to the point where some lenders could trade debt for stock and get something out, which is good for both Musk and the lenders; and it could have hurt short-sellers, which would make Musk happy.
Which is intentional stock manipulation and illegal to say the least. He shouldn’t get a pass because: twitter. Nor should he get a pass because: musk. We have an infatuation with celebrity that is way out of hand.
 

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Which is intentional stock manipulation and illegal to say the least. He shouldn’t get a pass because: twitter. Nor should he get a pass because: musk. We have an infatuation with celebrity that is way out of hand.
Stock manipulation?

Please tell me how that is different from falsifying sales figures to show continuous growth?

Rolling odometers back?

Investor presentations with no link to real production?

Constant talk of mergers, acquisitions, etc?

...and much more!
 

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And FCA/Chrysler got sued for each of those things. Tesla seems immune to any law.

They didn't get sued for the investor presentations with no link to real production, because they made it clear those were their plans and that plans change.

The biggest corporate “we lie without consequences” crime, though, was Juergen Schrempp and the “merger of equals,” with a judge saying, in essence, that CEOs can lie all they want, as long as the lie is, in retrospect, obviously a lie. It does make one wonder what the qualifications are for being appointed and confirmed as a federal judge. Twisting reality to meet ideology or political agendas must come above being able to make sense... (not unlike the judge in the Microsoft trial who let Microsoft lawyers commit perjury three times before telling them they should make their lies less obvious.)
 

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Marchionne's talk of mergers wasn't necessarily good for FCA's stock, nor was it a false statement: GM management confirmed that FCA had made overtures to it after Sergio's comment that FCA would be interested in merging with GM. I don't see how this fits the other examples, which were clearly fraudulent activities.

Musk is different because he wasn't talking about his company's performance to investors, but rather about its stock, and he put an explicit dollar figure on its future value. Musk said: "if you buy Tesla one share of stock today, I will give you $420 for it soon, because I'm taking the company private [and I have already secured the money to do so.]" The bit in brackets has to be implied, because if it's not true, he was committing a crime by making the statement.

If he has the money to do this, there's no problem. But now he has to prove that he had a completed, contractually-binding line of credit from his financiers at the time he made the announcement. Without that proof in place, he's in trouble. Again.
 
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