Shorting of a stock is used for both speculation and hedging a position. Tesla has been on a continuous downwards bear trend for the past YTD, so it is very likely that quite a bit of money has been made shorting Tesla up until now.
Just because a few players are able to buy Tesla entirely, it does not mean that shorting a position is necessarily bad.
Tesla has huge liabilities in terms of debt and (probably under-accouted-for) warranties. Even if the stock dropped to $1, wouldn’t this be the biggest Apple acquisition in company history? Tesla has 12+B in debt and other liabilities and is losing nearly a billion a quarter. That’s four Beats and another one per year.
What else are they going to do with their cash horde except make big acquisitions?
Strategically, I think this could make sense in the long term, even if it loses for a very long time, just for the battery research team and the foothold into the electric car business.
Why does having more cash make a business strategy better? Just because they have cash to spend, doesn’t instantly mean there are synergies.
In fact, most corporations tend to spend cash for acquiring irresponsibily. At the beginning of any MBA class discussing mergers and acquisitions, they’ll cite the fact that the majority of these fail to produce the intended value.
Apple could pay off all of Tesla's debt with like 5% of its cash reserves. Tesla is highly ratioed, but that's a function of its own financials -- to a company like Apple, the debt isn't very scary.
I think the fact that it comes with a mercurial CEO with discipline issues subtracts quite a bit from a potential acquirer's price.
Think about it - if you were considering buying the firm, what odds would you put on your first board meeting after being all about whatever the hell Musk got up to last week?
In the case of Apple, Tim Cook has spent quite a while working with Steve Jobs so he's no stranger to collaborating with a loose canon and could probably handle Musk pretty well.
I seem to recall that Steve was more involved with the Mac than the Lisa.
Also, in the context of the current discussion, the Steve that Tim Cook worked with was not young, reckless Steve, but an older and somewhat more mellow and responsible Steve.
The difference is Jobs' obsession was limited to consumer electronics, more or less, and he pushed the company to focus heavily on a very limited range of products.
Musk on the other hand will talk about cars one day, then solar energy the next, then the Hyerloop, then landing on Mars and making toy flamethrowers. The fit could not be more wrong.
Apple's acquired properties are quietly extinguished and replaced with Apple branding. Musk wouldn't have the temperament to play second fiddle to anybody else.
>Apple's acquired properties are quietly extinguished and replaced with Apple branding. Musk wouldn't have the temperament to play second fiddle to anybody else.
Beats as a brand is still around and producing new products.
A Steve Jobs that had spent some time in the wilderness away from Apple to mature and grow. Musk is probably more similar to Jobs before he left Apple the first time.
I don't think Tesla offer anything but common stock, and although Musk owns the largest portion it would be possible to buy out all the other institutional investors and obtain a majority. Probably would need a substantial premium on the price, but hey, everyone has a price.
I don't quite know what you mean by "offer". It doesn't matter what they offer/offered at IPO, we should be looking at their capital table, and their company bylaws, that determine what types of shares they have and who has how many and of what kind.
It's quite common that the founders have special shares and only common stock is put up on the market at IPO time. (And early stage investors usually got preferred stock, but they usually exit at IPO time.)
