Daimler Stays Invested In Tesla, But Hedges Its Position Against Loss

10 months ago by Jay Cole 17

We Recently Caught The Mercedes B-Class ED Hiding At The LA Auto Show

We Recently Caught The Mercedes B-Class ED Hiding At The LA Auto Show

Daimler is a big believer in Tesla Motors, and they want to continue to be a major shareholder in the California automaker… but they also want just a little more insurance against the share’s more violent tendencies.  Enter the hedge position.

On Friday, Daimler announced the move to better protect itself,  as well as this statement explaining the decision:

“The objective of the transaction concluded is to protect the value of Daimler’s shareholding in Tesla, whilst allowing Daimler to retain significant participation in any further appreciation of Tesla share price during the three year collar agreement.”

2015 Mercedes B-Class ED Interior

2015 Mercedes B-Class ED Interior

Currently the German automaker holds 4.3% of the company, good for about $760 million dollars.

The two companies are currently working together on Mercedes’ next plug-in offering, the B-Class Electric Drive which will be out next summer in the United States.  Tesla supplies much of the electrical powertrain (as well as the battery packs) for Mercedes.

Daimler has also made its intentions known that it wants to work with Tesla in the future on new projects; a sentiment that was reflected again by the company’s financial chief Bodo Uebber last week during this transaction:

“We are also demonstrating the long-term nature of our partnership and our intention to continue and to broaden the partnership in the coming years.”

Daimler’s position in Tesla was worth more than $1 billion dollars as recently as October of this year.

Reuters

Tags: ,

17 responses to "Daimler Stays Invested In Tesla, But Hedges Its Position Against Loss"

  1. Volt says:

    dorky electric mini van why couldn’t it have been a sedan

    1. Anon says:

      I could say that about the i3… ;)

    2. Taser54 says:

      How would Tesla support a luxury sedan? Oh right.

    3. ItsNotAboutTheMoney says:

      Because the world isn’t the USA. In most countries hatchbacks and wagons are preferred for their large cargo area by car size.

    4. E.V. Fitter says:

      It’s looks like a practical car. For some people function is way more important than looks. Functionaly sedans don’t work for me. If the volt was shaped like this I’d have one now. What bums me out is that even if it is eventually available nation wide (I’m not holding my breath) the cost will probably be out of my league.

    5. Aaron says:

      Minivan? No, this is a hatchback. There is no sliding door, and the passenger capacity is 5. This vehicle has more in common with a Mazda 3 than a Mazda 5.

  2. Nix says:

    Daimler AG is a publicly traded company, and it has a fiduciary duty to its stockholders to properly hedge any risky investments. So news of them hedging an investment in TSLA is not too surprising. It is business as usual and doesn’t reflect anything upon TSLA or Daimler AG.

    Shareholders in Daimler AG stocks aren’t investing in a venture capital group where naked risk would be the norm.

  3. Rick says:

    C,E and S class electric :)

  4. Bill Howland says:

    I don’t know what Dieter is worried about. It didn’t faze him to lose $Billions on Chrysler.

    1. Aaron says:

      Daimler got WAY more out of Chrysler than Chrysler got from Daimler. Basically, they drained Chrysler, making them cheapen out their cars to the point where they were trash. It’s taken years for Chrysler vehicles to return to nice interiors and good engines.

  5. pjwood says:

    Title might say “Hedges its position”, or “Hedges its position against severe gain, or loss”, not just “loss”. A collar effectively mutes what they’ll expect to gain from the investment, for a while.

  6. drpawansharma says:

    How many billions has BMW invested in its electric car business. For the same money tesla should go for a creeping acquisition in the market and become largest shareholder. Then they could call it THE TESLA BENZ

  7. Alaa says:

    I don’t understand this from Mercedes! They should be scared from Tesla. They are trying to do like this UAE guy that left Tesla earlier this year. He was there to sink Tesla, and when he saw that he will fail he sold his shares. Mercedes are trying to fool Tesla. My hope is that Tesla is the one that will fool Mercedes.

    1. veselin says:

      Very interesting! I checked in Google. UAE is the biggest shareholder in Daimler.

      http://uk.reuters.com/article/2012/04/08/tesla-taqa-update-idUKL6E8F801520120408

      Why do you thing this company tried to sink Tesla?

    2. Anon says:

      Not understanding something does not automatically mean there is a conspiracy against Tesla… It just means you don’t understand something. *shrugs*

      1. Alaa says:

        It doesn’t exclude it either!