
Taking Tesla Private - freerobby
https://www.tesla.com/blog/taking-tesla-private
======
nine_k
> _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. 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._

> _SpaceX is a perfect example: it is far more operationally efficient, and
> that is largely due to the fact that it is privately held._

Something that I can very well understand.

~~~
patrickaljord
Isn't SpaceX success due to the fact that most of its orders come from the US
government while Tesla has to compete in the free market and isn't that
successful there?

~~~
gameswithgo
The free market of automobile manufacturing in which the USA has propped up
both GM and Ford, and in the past Chrysler? The one in which the Japanese
government is carefully intertwined with their automotive industry?

The government is _a_ customer of space x but they still compete against other
companies for that business.

~~~
gamblor956
Tesla has also received a substantial amount of government support, including
state and federal EV rebates for buyers of its cars (roughly $300 million), an
extremely large handout from the state of Nevada ($1.3 billion), a large
handout from New York ($1 billion), handouts from US Government ($500
million), carbon credits ($520 billion as of 2015). Collectively, Tesla's
government support actually exceeds the government's bailout of Ford by
several orders of magnitude...

GM and Ford were propped up by the government during the Great Recession to
protect tens of thousands of jobs. Both companies have since repaid those
loans...though GM discharged much of its loan through bankruptcy.

~~~
ilove_banh_mi
My understanding is that in 2009 Ford rejected the bailout the US automakers
were offered (taking instead a loan which they are still repaying, through
2022).

GM was effectively nationalized (at a reported cost of $11b) and the creditors
lost their shirts.

~~~
gamblor956
Ford received a different bailout.

Also, I mixed up GM and Chrysler on which of them repaid the loan.

------
peeters
The main question I have is about financing. If Elon owns 20% of the company
now, and he doesn't intend for that to change, and he is giving the option of
public shareholders to sell at $420, then who is financing this? Usually a
private takeover requires a partnership with a huge private equity firm.
Wouldn't releasing this without having (or identifying) that partner be
premature? And wouldn't the resulting stability be dependent on that partner's
exit strategy?

~~~
take4
> _CNBC reports that none of the Wall Street banks it contacted were aware of
> any transaction or had committed to funding a leveraged buyout of Tesla._

~~~
peeters
So there's the real story. Who is this financer (or group) with ~40 billion in
capital that is willing to bet long on Tesla? That's really interesting to me,
if Musk is being truthful here.

~~~
Diederich
Totally, totally random thought, but I figured I'd record it, even though it
doesn't seem to make sense.

Bezos?

~~~
peeters
What, timed with an announcement of a merger between Blue Origin and SpaceX?
:)

~~~
RankingMember
That wouldn't be the worst idea in the world considering the cost of
spaceflight to begin with and the duplicate work they're undoubtedly doing.

------
synaesthesisx
As an investor since 2012 I think Tesla would be far more operationally
efficient private. Also a bit of schadenfreude but I've personally enjoyed
watching Wall Street shorts collectively lose hundreds of millions of dollars
over this.

~~~
joezydeco
Might be in the _tens of billions_ before this is all said and done.

(~34 million short shares outstanding * $420/share = ~14 billion dollars to
cover. Is my math wrong?)

~~~
coltonv
Wouldn't that assume that every short seller would lose $420 per share? They
probably purchased their shorts at like ~$350 per share, so they'd only stand
to lose 420-350=$70 per share, correct?

~~~
peeters
I'm a newbie when it comes to calls and puts, couldn't they just fill their
shorts now (no pun intended, I seriously don't know the terminology) if
they're worried about it? Tesla closed at $370.

~~~
mikec3010
What happens when $14bn in short interest tries to buy simultaneously?

~~~
whataboutism
It sounds like everyone will be buying TSLA tomorrow. Even the little guy who
wants to earn the difference between $379 and $420.

------
athenot
This would have a side-effect of making all the short-sellers lose, which
would be quite satisfactory to Musk.

Until Tesla's economics become obvious to all in the market, this is probably
the best decision; this allows them to be more focused on the long run.

~~~
mikestew
Part of me wonders if it isn't a side-effect, but the goal: put the squeezin'
on the shorts. But, man, if that tin-foil hat theory is true, Musk better have
someone in the wings at least _pretending_ to want to finance this lest the
SEC come a-knockin'. Normally, I'd just pass that off as "haha, wouldn't
_that_ be funny!", but given some of Musk's tweets lately, there's still a
little part of me that entertains the idea as plausible.

~~~
Cthulhu_
Yeah I'm really wondering whether this was legal - I would've been on his ass
if I were the SEC for illegal price manipulation. Even if he doesn't go
through with it, it's still bumped the stocks up by a lot. Could've been a
move to scare off the shorts?

~~~
mikestew
By the time you had made your post, Tesla had already issued a press release
saying the same, and news had come out that Musk had been talking to the board
about it for the past week. So, yeah, he was serious and not being
manipulative, and AFAICT completely legal.

------
derriz
Not directly related to the thread, but I'm surpised by the extreme anti-short
seller sentiment? Why is it important that they suffer?

Short-selling is what makes almost zero expense mutual/index funds available
to mom n' pop investors. Fidelity are about to offer ZERO TER funds on the
basis that short-sellers pay heavily to borrow stock from them.

It seems analogous to expressing hatred for umbrella sellers because you don't
like rain.

When I lived in Ireland before the GFC banking collapse, I remember bank
executives whipping up public support for a government ban on short-selling
bank stocks on the basis of "protecting decent companies from shady
speculators and evil gamblers". In terms of cost to society, it was the bank
executives who inflicted massive damage and bankrupted the country, not short-
sellers of bank stock.

Since then, I've been quite skeptical when people blame speculators and short-
sellers for the behavior of markets. There's usually some basis for shorting.

~~~
apexalpha
What real world value do short sellers add? Owning a stock used to mean that
you invested in (a part) of a company. You risk your money to get some of the
real world gains the company hopefully makes.

Now, the stock is the product, not the company. It's become a game in itself.
It adds nothing to the real world outside of finance.

~~~
flush
What real world value to long buyers add? Sure, if you invest and the company
takes that investment and does really well with it, the world may benefit from
an increase in productivity/wealth. But if you invest and the company does
poorly and tanks, then the world loses by something because you could have
taken that money somewhere productive. The kind of market that produces the
most real world value is one where companies are valued accurately. If you
think a stock is undervalued, you go long. If you think it's overvalued, you
go short. Both actions affect the market value of a stock.

Seems like two sides of the same coin. I can't see where an argument against
one doesn't work against the other.

------
nostromo
This feels like a rushed announcement.

First you throw out a tweet, later in the day you halt trading, then you make
an announcement that you're "considering" something major, but that you
haven't decided yet.

Not only that, but Musk seems a tad bit paranoid. He's regularly talking about
all those evil greedy short-term traders that attack the company -- which is a
little silly since traders have given Tesla a larger market cap than GM and
Ford.

~~~
gameswithgo
I think he is more concerned about actual espionage, sabotage, manufactured
bad press etc, than the stock price manipulation. That maybe indeed be
paranoia or maybe he has seen it happening enough.

~~~
fpoling
Huge shorts positions give strong insensitive to pay for sabotage or other
real harm to the company.

------
dangjc
It's a sign public equity markets aren't structured well that companies aren't
encouraged to think long term. The most successful companies in today's
markets don't even allow common shareholders to control the company, ie Google
and Facebook with their special classes of controlling shares. We might need
to reconsider changing laws around choosing board seats or requiring
shareholders to have minimum holding times in order to align incentives better
for the long term.

If public equity markets don't work, the alternative is more and more of
wealth creation happening privately, in startups funded by VCs, private
equity, or family owned businesses. The public won't get to participate.

~~~
gimmeThaBeet
>If public equity markets don't work, the alternative is more and more of
wealth creation happening privately

I say that's a fair point, for the reasons you describe, that there's less
oversight, and more mammoth capital sources that have an appetite for VC at
nearly any stage.

The "aren't encouraged to think long term" is an odd bit. You are right but at
the same time it seems to be at least imo that we (the market) _want_ these
ownership structures. We want Page and Bezos and Zuckerberg and Musk, but we
want to own it too. Snapchat and its S&P denial would be the battleground
there.

So I think to paraphrase you latter idea "we might to formalize a public
equity model that is more flexible around a founder/visionary, or we might
need to be more explicit about who controls a company, and what can be done to
change that control."

I suppose the balance to me is between making the burden of public markets
lighter on companies with longer term vision, and exposing retail markets to a
wild frontier that is imo only appropriate for more sophisticated parties.

------
Keyframe
Interesting. Bloomberg's Sebastian Boyd said:

 _Incidentally, Tesla has a free-float of 127.5 million shares. At $420 a
share, that would cost you $53.6 billion. The company already has net debt of
of $8.8 billion and an adjusted net leverage ratio of 13 times. Were it to be
bought in a management-led LBO, a back-of-the envelope calculation would give
it a leverage ratio of over 90 times, worse on a trailing 12-month basis. You
can 't run a company on math like that._

So, either it's happening based on persuasion and belief (with Saudis as
rumoured) or it's an attack against shorts and a bluff in which case SEC's
rule 10b-5 might come into play and then... In any case, interesting.

~~~
swalsh
An interesting perspective on why Elon might be pulling this move:
[https://www.barrons.com/articles/tesla-stocks-surge-puts-
con...](https://www.barrons.com/articles/tesla-stocks-surge-puts-convertible-
bonds-in-the-money-1533667505)

~~~
djanogo
"...which would effectively let the electric-auto maker pay off that
obligation in stock instead of cash."

How does paying off the obligation with stock work?, whose shares would Tesla
assign the bond holder?, if it assigns shares after market closes and when
market opens if it's below $360, won't the bond holders sue?

~~~
brohee
The shares are created. As the debt are not repaid it's as if the bond holder
bought shares in a round of recapitalization instead.

------
cs702
_No external financing might be necessary_ , because virtually all Tesla
shareholders today (i.e., people who are net-long the stock) are _true long-
term believers_ in Musk's vision unconcerned with the company's short-term
financial issues. (People who are concerned with financial issues are either
avoiding the stock or shorting it.) These true-believer shareholders will want
to hang on to their shares as the company goes private and shares start
trading "by appointment" on less liquid, secondary private equity markets.

If I'm right and Musk pulls this off, short sellers are in for a world of
pain. They will likely have to scramble to cover their short positions in the
face of a limited supply of shares before delisting.

~~~
nopriorarrests
I need to double check it, but some of the largest institutional shareholders,
like Vanguard Group, could only hold positions in public companies, so they
will have to sell.

Retail investors can decide to go private, but tesla free float is very small,
so they don't matter much in a grand scheme of things.

~~~
cs702
Yes, that's true for Vanguard. But others, like Fidelity, can and will allow
shareholders to hold private shares in their brokerage acccounts, sometimes
through special purpose vehicles created for the purpose.

------
glbrew
I would like to make a prediction: the Saudi Royal Family is the funding
source. There are very few banks that could back this financially, and they
have all said they are not behind it. The only source of this much money and
secrecy is the House of Saud. They apparently also snapped up to 5% of public
shares, and have expressed lots of interest in investing in the "new" economy.

~~~
Symmetry
Good way for them to hedge against a threat to their primary source of income.

------
martinald
Pretty enormous amount of money required. Say half of TSLA shareholders take
the $420, that's approx ~$40bn required. Then there's another $10bnish of debt
refinancing required, and probably many more billion for future product
development and new assembly lines.

I don't think Softbank could finance this, it would be well over half their
entire fund.

Saudi maybe - but still quite a chunk of change for them.

~~~
martin_bech
Or Apple, Google, maybe even Jeff from Amazon. Musk changes the rules of the
game on a regular basis.

~~~
Element_
Just because those companies have massive market caps and cash reserves
doesn't mean they can cut a check for 40B+ to buy a company that is burning
cash. Hard to imagine any board signing off on that deal.

~~~
dragonwriter
> Just because those companies have massive market caps and cash reserves
> doesn't mean they can cut a check for 40B+ to buy a company that is burning
> cash.

Cash reserves mean they _can_.

> Hard to imagine any board signing off on that deal.

Right, conservative (appropriately so!) corporate decision making means they
likely _won 't_, not _can 't_.

------
annamargot
How will Tesla get around the shareholder limit?

There is a limit to the number of shareholders a privately held company can
have. It's apparently 2,000.

[http://blog.gust.com/limiting-the-number-of-shareholders-
in-...](http://blog.gust.com/limiting-the-number-of-shareholders-in-private-
companies/)

[https://www.investopedia.com/terms/5/500-shareholder-
thresho...](https://www.investopedia.com/terms/5/500-shareholder-
threshold.asp)

~~~
toomuchtodo
You would own shares in a private fund that would own Tesla shares.

------
mikeryan
In the Tesla case I feel that the shareholder concerns are pretty valid and
provide an interesting counter pressure to Musk's "This is fine" attitude. Not
saying either is right, but the friction is likely valuable.

I'd not want to be an investor in a private Tesla. It would seem way to
volatile.

~~~
Fuckyourself
I am a shareholder. I will not be selling after going private. This is really
good for me because we can finally stick it to the shorts and the only people
who we lose are "traders" \- I don't care about what they think. Long term
investors only is a good motto :)

~~~
gamblor956
If Elon's tweet is motivated by a desire to stick it to the shorts, and he
does not in fact have funding lined up to take Tesla public, he could
(probably would) face a _massive_ stock manipulation lawsuit that would
bankrupt him, in addition to any SEC settlements which would likely result in
him being banned from holding an executive or board position in any publicly
traded company.

~~~
shafyy
How do you know he doesn't have funding lined up? Usually, if Musk says
something like this it's true. (And don't start with he has a history of
underestimating deadlines etc., this is totally different)

------
edhu2017
I think it's a great move. Prevents short term greedy shareholder strategies.

~~~
jonknee
By paying a large premium to the all time high? If he's worried about the
stock going down, paying more for it doesn't make a ton of sense. You should
wait until the stock is down and then take it private.

~~~
aembleton
By paying a 20% premium he's ensuring that the short sellers will need to buy
shares at the premium price guaranteeing that they've lost at least 20% of
what they've gambled.

~~~
jonknee
Ah yes, overpay so you can stick it to the big mean short sellers. Might as
well go for 50% premium with that logic!

------
shawn
_Second, my intention is for all Tesla employees to remain shareholders of the
company, just as is the case at SpaceX. If we were to go private, employees
would still be able to periodically sell their shares and exercise their
options. This would enable you to still share in the growing value of the
company that you have all worked so hard to build over time._

How does this work as a private company?

~~~
Voloskaya
Private companies are still allowed to give share to employees. Employees are
then allowed to sell their stock periodically (every 6 months in this case).

~~~
shawn
Right, but with who?

~~~
Voloskaya
Depends, the company could buy back, or during a founding round, some part of
that founding can be reserved to buy employee shares. External investors are
also allowed to buy from employees during this period.

------
S_A_P
I am a bit ignorant as to the mechanics of how this would work. Can anyone
with the knowledge elaborate on what this means? Im thinking in terms of a few
scenarios here: 1) I read this news and want to get on the Tesla train and
throw all my liquidity into the current stock. 2) I already have x number of
shares. What happens to them? 3) If I dissent, am I cut a check and told to
hit the bricks? 4) is he going to need to raise capital to do this? 5) would
the private company/person still be able to buy/sell "shares" on some off the
stock market exchange?

~~~
dunpeal
1\. You can buy TSLA stock as soon as trading them resumes. Lots of people
already have.

2\. If this acquisition goes through, each one of your stocks will be worth
$420. Congrats.

3\. You can't really dissent to shareholder majority agreeing to this deal.

4\. $70bn is a lot of mulla, so I would guess this will not be all Musk's
personal funds.

5\. Theoretically, through some sort of a private equity venue. Just like any
other private company.

~~~
TrickyRick
Or an alternative to number 2, the acquisition does not go through and the
stock plummets 20% from current price and you're now deeply in the red. I
don't know enough about Tesla to predict which one is the mos likely but I
have seen this happen in other companies.

------
explorigin
Elon fashions himself a super hero: Batteries to Australia and Puerto Rico, A
pledge to fix Flint's water quality and a submarine to rescue the boys in the
cave.

Super heroes rock when they really do super things, but Elon flew off the
handle with the last one when he called the master diver a pedophile all
because his idea wasn't the one they used.

Having someone at the helm that is volatile like this is bad for a public
company, but a private company would be able to shrug off embarrassing events
such as these much easier.

Elon might be doing it to save his job.

~~~
mehblahwhatevs
I was thinking the same thing.

Usually his tweets send stock down, this one sent it up but may be in
violation of SEC rules.

I imagine shareholders must be getting pissed whenever he goes off on a Trump
like tirade on Twitter.

------
jonknee
He tweeted that he had funding and in the email mentions no funding. This is a
really weird announcement that feels like an empty pump of the stock. He could
have chosen any number...

~~~
belltaco
I don't think it was an intentional pump, I think he needs someone to change
his Twitter password, not tell him the new one and post on his behalf, just
like Trump also needs.

------
maaaats
Not sure I agree with the dupe-flag. The other post was about the Saudi deal
and then got changed. So the discussion there is fragmented.

~~~
dang
You're right that it's not a precise dupe, but the topics are almost identical
and we shouldn't have two of these on the front page at the same time. So we
have to decide which one.

The other article is more substantive, since it's based on at least some
facts, and the thread is correspondingly better. This one, by contrast, is
really just an announcement of a possible future announcement. So it seems
clear the first URL should win. If and when they actually take steps to go
private, there will certainly be much discussion on HN.

~~~
maaaats
That's fair. Thanks for explaining.

------
gtdawg
There was a HN discussion a couple of days ago complaining about companies
going public much later. Could the short term quarterly horizon of public
investors, as pointed out here, be a big reason companies don't IPO sooner?

------
sounds
TSLA up 7% on announcement, high of $370.79

If you're a short seller, beware the "squeeze." If you're not a short seller,
this article can be an amusing read:

[https://www.reuters.com/article/us-volkswagen/short-
sellers-...](https://www.reuters.com/article/us-volkswagen/short-sellers-make-
vw-the-worlds-priciest-firm-idUSTRE49R3I920081028)

~~~
dunpeal
If you're a heavy TSLA short-seller, you're already in deep trouble, unless
this falls through very quickly. There will be margin calls. Welcome to the
losing side of short-selling.

~~~
eanzenberg
It only falls if Elon is bluffing. He’s guaranteed $420 / share.

~~~
filmgirlcw
He’s not guaranteeing anything. He hasn’t mentioned financing to do this, and
it’s not a small amount of money to raise. Shareholder approval isn’t a given
either. It’s probable that he’d get the votes if he showed the financing
necessary for a $420 stock price, but it’s not a guarantee.

~~~
nopriorarrests
If can demonstrate guaranteed financing for this deal from outside investors
at $420/share, then he just tweeted material news about his company, and he
had all the rights to do so.

If he can't prove guaranteed financing for this deal, that's securities fraud
and SEC investigation is the next step of this drama. Imagine... well, SNAP
CEO tweeting "Some rich folks are going to take us private at $50 per share
lmao ayee, cover your shorts". This is a market manipulation.

------
Camillo
If Tesla announces this (causing the stock to rise, since the suggested price
is much higher than the current price), and then doesn't go through with it,
is it considered stock manipulation? I don't mean to accuse them, I'm sure
they covered their bases, but I'd like to understand how it works.

~~~
Keyframe
SEC has a rule for that:
[https://en.wikipedia.org/wiki/SEC_Rule_10b-5](https://en.wikipedia.org/wiki/SEC_Rule_10b-5)
and
[https://www.investopedia.com/terms/r/rule10b5.asp#ixzz5NWNPZ...](https://www.investopedia.com/terms/r/rule10b5.asp#ixzz5NWNPZXqa)

 _Examples of offenses that would violate rule 10b-5 would be: executives
making false statements in order to drive up share prices_ ... interestingly,
it's as serious as ... _or a company hiding huge losses or low revenues with
creative accounting practices._

------
bitxbit
My take is he needs to do this in order to keep and attract the talent Tesla
needs. Stock was way too volatile while rest of the tech industry has been
going hockey stick.

------
FabioFleitas
If Elon is guaranteeing a $420/share buyout - are there any downsides to
buying as much stock as possible right now? Would the only risk be that this
whole plan falls through or that Elon ultimately decides against that price?

~~~
bklyn11201
As shares are not close to $420 right now, that indicates healthy skepticism
that Elon is capable of getting this done. Do you have reason to believe that
he is capable of raising $50-80 billion to complete the transaction? If yes,
then you have a great arbitrage opportunity.

------
avree
Guess Elon isn't too confident about being able to deliver the earnings he
promised on.

~~~
Diederich
Can you expand on that, please?

~~~
avree
Wall Street investors and analysts focus heavily on the bottom line. Elon
believes that the work Tesla is doing requires more time, sustained attention,
and focus than public investors have tolerance for. Furthermore, he thinks the
volatility demotivates employees.

These are all completely true, and very reasonable, but do show (at least to
me) that the near-term promises regarding profitability he made at the last
earnings call are probably in jeopardy.

Thank you for asking for a clarification rather than just knee-jerk down
voting, though. :)

~~~
jsight
I agree with your assessment. It seemed clear that Tesla was cutting back
investment in new supercharger locations and maybe even service centers to
reach profitability. I can't say that now felt like the best time for that
kind of slowdown to me.

------
ckastner
I don't like the guy (and it's obvious from my comments), but this move is
brilliant on so many levels.

The short sellers just got taken to the cleaners, _badly_.

By taking the company private, he's under less public and regulatory scrutiny.

It's probably easier for him to raise money privately, and there seems to be
sufficient interest.

Tesla's employees, who are probably pretty much worn out, got a nice pay day.

And, of course... he's _the_ hero again.

 _Edit_

Pure speculation, but could it be that this announcement might actually
backfire on the $420 price?

Tesla's is one of the most shorted stocks, ever. The short sellers stand to
lose _immensely_ , so they'll try to close their short position as quickly as
possible, thereby driving the price up higher -- possibly higher than the
$420.

~~~
mrtron
Why don't you like the guy? I am always surprised that people could have a net
negative opinion on someone who is trying hard to push technology forward in
multiple directions.

I agree this move is brilliant, and could be a huge competitive advantage when
self-driving bad press liability kicks in.

~~~
peeters
I'm overall a fan of Tesla and SpaceX, but there are a number of valid
criticisms you could make against Musk:

Occasionally childish relationship with his investors. Unfoundedly calling a
diver a pedophile after he attacked Musk's rescue submarine as a dumb idea. He
thinks he's an expert in any field he touches. Has an overall tendency on
social media to promote Trump-style tribalism--you're either on team Elon or
you're an idiot. There is no such thing as valid criticism of anything he
does.

Some of these things also make him great. He assumes that everyone who looked
at a problem before him was just too incompetent, corrupt, or complacent to
solve it right, which can be a useful trait because it's often true. But when
it's false it just makes him look like an asshole.

To be honest a lot of the hate just seems to come from how he responds to
haters, so it's a bit of a vicious circle. If he just took a break from
Twitter it'd probably benefit his image considerably.

~~~
bvc35
I'm not qualified to make a diagnosis of any kind, but this at first glance
suggests that he's a narcissist.

------
danpalmer
While there's some good reasons here, I can't help but think this is more an
emotional reaction on Elon's part, to the shorting and general negativity
around the company.

~~~
THE_PUN_STOPS
I think it's uncharitable to call it purely an emotional reaction. While that
is certainly a component, I think this is actually one of the best mission-
oriented strategic decisions Elon has made in a while.

The shorting and general negativity around the company are a morale drain on a
scale that few companies have ever experienced before, let alone any companies
that push their employees as hard as Tesla. I have friends who work very, VERY
VERY hard at Tesla to help achieve their overall goal, and all of the hate
really drags them down and makes them question why they work so hard, let
alone the anxiety over the value of their shares. The cloud of negativity is a
huge productivity sap and I suspect it is a contributor to the legendary rates
of turnover at Tesla as well.

~~~
danpalmer
> I think it's uncharitable to call it purely an emotional reaction.

I agree. I didn't call it one.

------
dogma1138
Would an Apple buyout be considered them going private if they are kept as a
separate entity? It’s the only one with enough money to buy them that I can
think off.

~~~
martin_bech
Apple could do it with cash, but a lot of others could do it with some form of
financing. A leveraged buyout.

~~~
dogma1138
Financing on this scale would require a massive and likely quite lengthy
undertaking if this is not a stop gap bluff it looks like they already have a
buyer and it looks like all the usual suspects as far as financing goes are
not involved.

------
maddyboo
I couldn't be more supportive of this idea. I am so tired of seeing Tesla
scramble to meet shareholder expectations which are almost always short-
sighted.

------
trhway
> as the most shorted stock in the history of the stock market

does this squeeze beats the VW one?

>First, I would like to structure this so that all shareholders have a choice.
Either they can stay investors in a private Tesla or ...

given the potential number of shareholders wouldn't there still be pretty
tough information disclosure requirements - isn't such required disclosure is
among the major factors pushing companies into public market?

------
madrox
On the one hand, the challenges of being a public company cited here are the
same ones facing all public companies, and they do quite well. On the other
hand, there's a ton of negative attention on the street that's probably a huge
distraction.

I do think Tesla will be better served as a private company as long as Musk is
CEO. He isn't public CEO material.

------
myth_buster
Cached:
[https://webcache.googleusercontent.com/search?q=cache:xcMrTh...](https://webcache.googleusercontent.com/search?q=cache:xcMrThoRYRgJ:https://www.tesla.com/blog/taking-
tesla-private+&cd=36&hl=en&ct=clnk&gl=us)

As the page is erroring out.

------
panchicore3
I can see the cannabis industry investors and other stoner dudes purchasing
for that specific amount.

------
yisymphony
Instead of taking it private, what's stopping Tesla as a company from buying
back shares from public market when the price is low? It not only stabilize
the price it is also have long term benefit if the company is confident for
the future.

~~~
kgwgk
Tesla doesn't have money to buy shares back. It's not clear what does he mean
by "taking Tesla private" and who would be providing the money.

------
whatok
Nothing on financing and an FT reporter said bankers close to Tesla knew
nothing about it.

------
agumonkey
who is gonna finance that 420USD buy-back ?

------
tomphoolery
The difficulty to predict TSLA, especially early on, was one of the main
reasons I sold it. It's now about double its value, but that's a recent
phenomenon and it was pretty volatile before that.

~~~
belltaco
I made the mistake of trying to trade the highs and lows on other stocks, got
burnt out by the unpredictability. After that I just put my money on stocks I
trust will grow over the long term(2+ years) and I don't even check their
prices daily or even weekly.

------
takeda
LOL at $420/share I think he wants investors to chill out.

Anyway, since I own some shares will miss their stock, since I truly believe
in them, but I guess this is better for the company.

------
pstadler
Why has the been banned from the homepage and marked as dupe?

~~~
goshx
I'm wondering about that as well. I don't see any other post about it and this
is the official post from Tesla.

------
isseu
Is this common? Would shareholders accept this?

~~~
raverbashing
With that premium? I'd say it's a no brainer

------
bearcobra
I'm surprised given their burn rates that they don't want continued access to
public capital markets.

------
arvind3199
He is bluffing trying to squeeze the shorts, no one rational can value it 82B
unless it was waymo level tech.

~~~
mythz
This is no bluff:

> Investor support is confirmed. Only reason why this is not certain is that
> it’s contingent on a shareholder vote.

[https://twitter.com/elonmusk/status/1026914941004001280](https://twitter.com/elonmusk/status/1026914941004001280)

~~~
arvind3199
Yes he is, Where do you get 66 billion $. Investor support dosen't mean he has
the financing. Don't quote a tweet, get some real sources.

"And yet it also left many questions unanswered, namely how Musk -- who owns
almost 20 percent of the company -- would be able to come up with the $66
billion necessary to complete the transaction. At $420 a share, Tesla would
have an enterprise value of about $82 billion including debt. To take it
private, the billionaire would have to pull off the largest leveraged buyout
in history, surpassing Texas electric utility TXU’s in 2007."

~~~
mythz
That's an announcement from the CEO of Tesla. The details are still
forthcoming but there is no greater source.

$66B is inaccurate, Tesla would only need to buy from the shareholders that
wish to sell at $420.

------
swalsh
I'd like to think that back in the day Elon, and Clarence Saunders would have
been great friends.

------
I_am_tiberius
Not sure when it was published exactly but the stock price impact was visible
already 2 hours ago.

------
eizo
First anounced a couple of hours by Elon on twitter:
[https://mobile.twitter.com/elonmusk/status/10268726522903797...](https://mobile.twitter.com/elonmusk/status/1026872652290379776)
Which lead to comments if it being a scam.. It is impressive to see the power
of twitter news!

------
phoenix1326
Seems like a good decision for Tesla. They have been pushing way to hard to
satisfy the public opinion. The product and the company will continue to do
well without being a public company.

------
11thEarlOfMar
True story: I was standing on my back porch, finishing my morning coffee. It
was one of those January Silicon Valley mornings where it can't quite decide
whether its raining or not. Between the clouds, a rainbow appeared. From my
vantage in the hills in South Fremont, the end of that rainbow sat squarely on
the Tesla factory.

Being the sophisticated investor that I am, I know a 'buy' signal when I see
one.

Here's to Elon and any Tesla employee who ever broke a sweat to deliver the
pot of gold at the end of that rainbow.

~~~
Invictus0
Is this supposed to be a joke?

~~~
baq
are you so short on tesla that you can't appreciate some nice quick'n'dirty
storytelling? :) whether the story is true is of no consequence.

------
jefe_
I know Twitter is powerful, but its wild to imagine you're Elon Musk or Kylie
Jenner or Donald Trump, you know that when you push send, the 280 characters
you typed will cause millions of people to either smile or frown, lead to
significant financial gains or losses, and set the course of news for the
morning, day or week. That level of influence is crazy to think about.

------
isseu
Why this post was flagged?

------
bitCromwell
would make a hell of a utility coin

------
eastendguy
Can someone please ELI5 this for me? Why is a private Tesla better? As long as
Elon and employees own more than 51% of the stock (do they?), can't they not
just ignore the stock price swings?

~~~
belltaco
You still have to publicly reveal all the quarterly numbers, estimates for
next few quarters, do all the GAAP accounting etc. which puts a lot of toll on
a company that's going through wild swings in capital spending and production.

If they don't keep their promises, the stock will crash, so everyone goes on a
production death march close to the end of the quarter under extreme stress,
instead of just growing organically at a steady pace. Good estimates are hard,
just like in IT. That's why many companies delay going public, for example
Uber.

~~~
eastendguy
Yeah, but why not just ignore a stock price crash if you don't need to sell
and believe in the long term plan?

~~~
Scarblac
Every employee holds stock. I don't think every employee is in the position of
never needing to sell. A price crash is bad for morale.

------
Karishma1234
As a thumb rule I do not like to work for private companies especially when
around 40% of my renumeration comes from RSUs.

------
h4b4n3r0
Ballsy. And nukes short sellers from the orbit as well even if it doesn't go
through. It's the only way to be sure.

------
arcanus
(If this happens) What does this mean for owners (non-employees) of TSLA
stock? Will you be able to maintain your holdings in the company after it is
delisted from an exchange?

~~~
cdkee
His post says you can have private shares or accept the buyout at $420

~~~
cure
I'm going to guess that that will require accredited investor status
([https://en.wikipedia.org/wiki/Accredited_investor](https://en.wikipedia.org/wiki/Accredited_investor)).

