Is Tesla in trouble?
08-12-2018, 12:52 PM
#781
Team Owner
A Saudi sovereign wealth fund invested $2B in Tesla around a week ago. There's more where that $2B came from.
But more recently the word is Saudi has no interest in a Tesla buyout/taking the stock private.
If you also eliminate China -- which is not hard to do -- that doesn't leave many candidates with the required (estimated) $40B or so. This $40B is less than the est. $72B of Tesla stock. The thinking is with around 30% of Tesla stock owned by Musk, and others, that these stock owners would not sell their shares and not all other owners of the stock would sell either so the estimate is only $40B or thereabouts would be needed to buy out Tesla stock and take it private.
Still $40B cash just doesn't grow on trees.
But more recently the word is Saudi has no interest in a Tesla buyout/taking the stock private.
If you also eliminate China -- which is not hard to do -- that doesn't leave many candidates with the required (estimated) $40B or so. This $40B is less than the est. $72B of Tesla stock. The thinking is with around 30% of Tesla stock owned by Musk, and others, that these stock owners would not sell their shares and not all other owners of the stock would sell either so the estimate is only $40B or thereabouts would be needed to buy out Tesla stock and take it private.
Still $40B cash just doesn't grow on trees.
08-12-2018, 01:04 PM
#782
Race Director
The stated goal is to take TSLA private. I don't see how buying out Musk's shares gets anywhere. The $420 / share price is there to guarantee all shareholders will agree to the buyout. I'm guessing most will at that price. I posted the OP on this topic. When I read the flash at, IIRC, Bloomberg, my first thought was Musk was lying in the sense that he'd approached some entity and to him, that was a done deal since he never misses.
Thus whoever decides to buy out Tesla shares doesn't have to come up with the full buyout purchase price of I think the amount I read was $78B, but something less than that. $40B or thereabouts is what some believe the buyout will cost, if it comes to that.
08-12-2018, 01:46 PM
#783
Rennlist Member
As I stated a few days ago with an article link, it is all about getting the convertible bond holders to convert to stock at $365+.
So that Musk would not have to pay off something like $900 million due next January that Tesla does not have.
So that Musk would not have to pay off something like $900 million due next January that Tesla does not have.
Last edited by Terry Adams; 08-12-2018 at 03:06 PM.
08-12-2018, 01:50 PM
#784
Team Owner
Sorry, didn't make myself clear. The thinking is in taking Tesla private Musk and other large stake shareholders would not sell but instead retain their shares. Thus Musk with his around 30% of the shares and other owners of large blocks of shares would not put their shares up for sale. Also, it is expected a number of owners of smaller amounts of Tesla stock would not sell either.
Thus whoever decides to buy out Tesla shares doesn't have to come up with the full buyout purchase price of I think the amount I read was $78B, but something less than that. $40B or thereabouts is what some believe the buyout will cost, if it comes to that.
Thus whoever decides to buy out Tesla shares doesn't have to come up with the full buyout purchase price of I think the amount I read was $78B, but something less than that. $40B or thereabouts is what some believe the buyout will cost, if it comes to that.
Given Musk's record and recent instability, I think either scenario isn't likely.
08-12-2018, 01:52 PM
#785
Race Director
Missed your post but you are 100% correct. Well, except I think you meant to type: ".... $900 million due next January that Tesla does *NOT* have."
08-12-2018, 01:53 PM
#787
Race Director
While that may be the case, the bond holders will still weigh what another $900+M worth of share dilution will do to future stock price. If they convert at $365 PS, but this and similar future conversion dilutions take TSLA down to say $300 PS, that would be a stupid play for the bond holders. Unless Tesla unilaterally holds the conversion option, then that is a different story. Musk can sacrifice future stock price to avoid the immediate pain of paying the bonds upon maturity.
CP
CP
08-12-2018, 02:10 PM
#788
Team Owner
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Without knowing the details on the contracts for the debt obligations in Jan thru March, it's difficult to say if that is really any kind of drop dead date at all.
After all, the bondholders want to get paid, not drive Tesla into the ground.
After all, the bondholders want to get paid, not drive Tesla into the ground.
08-12-2018, 02:30 PM
#789
Rennlist Member
Converting equity to debt is called "Bankruptcy".
Musk is just trying to do it outside the courts and without using the word.
Musk is just trying to do it outside the courts and without using the word.
08-12-2018, 03:07 PM
#790
Rennlist Member
08-12-2018, 04:07 PM
#791
Rennlist Member
Originally Posted by PTurbo965
Without knowing the details on the contracts for the debt obligations in Jan thru March, it's difficult to say if that is really any kind of drop dead date at all.
After all, the bondholders want to get paid, not drive Tesla into the ground.
After all, the bondholders want to get paid, not drive Tesla into the ground.
At the current cash burn rate Tesla is already headed for the ground.
I would rather take cash than stock at $365.
If that's the bond holders' option that is what Musk is trying to avoid with his go private tweet.
His board is a bunch of yes men afraid to be fired.
08-12-2018, 08:21 PM
#792
His board is a bunch of yes men afraid to be fired.
But seriously this is fun to watch. "I love my new Model 3. It has the brakes of a Dodge Dart and an Apple II Plus on the dash. And it was so easy to buy!"
08-13-2018, 01:35 PM
#793
I hope you've driven one before knocking it?
08-13-2018, 03:58 PM
#794
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If the Saudis buy Tesla and it goes under, that will launch a whole new wave of liberal documentary movies on the conspiracy against the electric car.
08-13-2018, 04:58 PM
#795
Rennlist Member
Yep.
It's getting warm. Martha Stewart went away for less.
https://www.thetruthaboutcars.com/20...investigation/
It's getting warm. Martha Stewart went away for less.
https://www.thetruthaboutcars.com/20...investigation/