Elon Musk Reverses Course, Will Not Take Tesla Private

Tesla CEO Elon Musk

AUG 25 2018 BY WADE MALONE 132

Elon Musk insists there is enough funding to take Tesla private. Feedback from shareholders and advisers led to the decision.

After weeks of speculation and drama following a series of tweets about the possibility of going private, a decision has been made.

Late Friday evening, Tesla’s blog was updated with a statement from Elon Musk. Following pressure from shareholders, financial advisers and Tesla owners, Musk and Board of Directors have come to the conclusion that “the better path is for Tesla to remain public”.

The full contents of the blog post is included below:

Staying Public

Earlier this month, I announced that I was considering taking Tesla private. As part of the process, it was important to understand whether our current investors believed this would be a good strategic move and whether they would want to participate in a private Tesla.

Our investors are extremely important to me. Almost all have stuck with us from the time we went public in 2010 when we had no cars in production and only a vision of what we wanted to be. They believe strongly in our mission to advance sustainable energy and care deeply about our success.

I worked with Silver Lake, Goldman Sachs and Morgan Stanley, who have world-class expertise in these matters, to consider the many factors that would come into play in taking Tesla private, and to process all the incoming interest that we received from investors to fund a go-private transaction. I also spent considerable time listening to current shareholders, large and small, to understand what they think would be in the best long-term interests of Tesla.

Based on all the discussions that have taken place over the last couple of weeks and a thorough consideration of what is best for the company, a few things are clear to me:

  • Given the feedback I’ve received, it’s apparent that most of Tesla’s existing shareholders believe we are better off as a public company. Additionally, a number of institutional shareholders have explained that they have internal compliance issues that limit how much they can invest in a private company. There is also no proven path for most retail investors to own shares if we were private. Although the majority of shareholders I spoke to said they would remain with Tesla if we went private, the sentiment, in a nutshell, was “please don’t do this.”
  • I knew the process of going private would be challenging, but it’s clear that it would be even more time-consuming and distracting than initially anticipated. This is a problem because we absolutely must stay focused on ramping Model 3 and becoming profitable. We will not achieve our mission of advancing sustainable energy unless we are also financially sustainable.
  • That said, my belief that there is more than enough funding to take Tesla private was reinforced during this process.

After considering all of these factors, I met with Tesla’s Board of Directors yesterday and let them know that I believe the better path is for Tesla to remain public. The Board indicated that they agree.

Moving forward, we will continue to focus on what matters most: building products that people love and that make a difference to the shared future of life on Earth. We’ve shown that we can make great sustainable energy products, and we now need to show that we can be sustainably profitable. With all the progress we’ve made on Model 3, we’re positioned to do this, and that’s what the team and I are going to be putting all of our efforts toward.

Thank you to all of our investors, customers and employees for the support you’ve given our company. I’m incredibly excited to continue leading Tesla as a public company. It is a privilege.

A lot of discussion had occurred in recent weeks about who exactly would be able to provide the needed funds to take the company private. Many long time Tesla investors and owners responded negatively to learning that Saudi Arabia had been courting the company. The Saudi Arabia sovereign wealth fund initially declined to comment on whether or not they were interested. However, Musk has stated that there was a prior verbal agreement.

Some had questioned whether the Tesla CEO had legitimate intentions to take the company private and if the company had truly secured funding to do so. Reports soon came out that the SEC had served Tesla a Subpoena regarding his “Funding Secured” tweet.

However, many experts have said that even if his original tweet was false or misleading in some way, it would result in a slap of the wrist at worst.

More details will be added as they become available.

Source: Tesla Blog

Categories: Tesla

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132 Comments on "Elon Musk Reverses Course, Will Not Take Tesla Private"

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David Green

“Funding Secured” Well, maybe not.. I have to say, this was fully expected… Cue the lawyers…

JyChevyVolt

Elon mistyped, “funding secured.” It should have been a private message to Grimes, “420 secured.”

Mister G

420 is the last thing Elon needs because it will make him lazy, hungry, and unfocused BELIEVE ME

Chris O

Lawsuits take years and it’s doubtful anything serious will ever come of it.

David Green

Time will tell, I am not a lawyer, so not my file of expertise.

Chris O

I’m sure it’s enough for you if there is fear uncertainty and doubt about this.

David Green

No fear for me… I shorted, made my money, and got out.

Clive

Or so you say…. 🙄

Chris O

Exactly, the ongoing FUD campaign tells a different story, though it’s not necessarily on their own behalf these types carpet bomb these comment sections.

Dan F.

It may take time but anyone who bought on Musk’s Tweet, whether short covering or someone who who believed the hype will have a strong case. Funding was never secured in any legitimate way and people were mislead and lost money because of it.

Rightofthepeople

“Funding was never secured in any legitimate way…” Oh really? Please tell us all how you have this knowledge, how you know this to be a 100% accurate fact? I personally don’t know if funding was secured or not, I’m just curious how you do know this.

wavelet
Pretty simple: Musk explicitly said so. All he had was a meeting he believed went well (with the Saudi Sovereign Wealth fund). No MoU, let alone a detailed written offer (typical ones for this type of deal exceed 100 pages). The Tesla board also said, officially, that no offer was presented to them previous to the tweet. He also said in a further tweet that the only needed next step was shareholder approval. That was absolutely false, as there was no deal for them to approve. In the SOP of public companies (and taking public companies private is very uncommon when the intent is for them to continue their current business, esp. companies of this size), nothing would have been made public until there was a detailed deal the lawyers had already approved. It’s unclear what Musk’s intent was publishing the tweet (I’m charitably inclined to think he’s completely burned out, as he’s unquestionably been working very hard on several companies for years — I’m sure he had no nefarious intent), but he’s clearly incompetent to be CEO of a public company. It’s very odd that the board hasn’t kicked him out yet, and there most likely will be lots… Read more »
Pushmi-Pullyu

You apparently believe you have some sort of infallible ability to figure out what people are “really” thinking. Perhaps you are the Amazing Carnak, able to read Elon’s mind?

What Elon originally tweeted was “Am considering taking Tesla private at $420.” If you think that legally constitutes a promise, then I have some riverfront property in central Florida to sell you. It’s a bargain!

William

If it’s thick with Gators, I’ll help with the down payment, and bring the moving truck, EV of Course!

Dan F.

That part of the statement is not the problem, the problem is “funding secured”.

Alonso Perez

A CEO has no fiduciary responsibilities towards shorts, whether they covered or not. Shorts are not shareholders, or investors. If anything, a CEO gets paid to create value for shareholders and inflict pain on shorts. There is nothing to sue over.
Longs, however, >may< have standing, especially if they bought right after the announcement, at a high price.

CDAVIS

Elon Musk certainly did not win his effort to go private but as a result the anti-Tesla Jim Chanos wolfpack now have to deal with the very public Cathie Wood’s pro-Tesla narrative:

https://ark-invest.com/research/tesla-private

Cathie Wood’s has much more Wall Street credibility and respect than does Jim Chanos because Cathie Wood’s has a strong performance track record vs. Chanos’s has a hit-n-miss track record with more miss than hits last few years.

So here is the thing which is A VERY BIG DEAL:

The public TSLA battle between the TSLA longs and TSLA shorts has moved to a different battle ground:

It’s no longer Jim Chanos vs.Elon Musk.

Now it’s Jim Chanos vs. Cathie Woods.

That hugely benefits Elon Musk, Tesla, and Tesla shareholders.

*** Catherine Woods vs. James Chanos ***

Place your bets…

Pushmi-Pullyu

No one person is “in charge” of spreading anti-Tesla smear campaigns and FÜD. If Jim Chanos was abducted by space aliens tomorrow, it would probably not make any measurable decrease in the number of daily Tesla bashing posts. You can see scores or sometimes even hundreds of those on Seeking Alpha every single day. Do you really think all or even most of those are posted by Jim Chanos’ “wolf pack”?

No, the number of different entities involved in spreading anti-Tesla smear campaigns is pretty large. And they aren’t even all motivated by short-selling Tesla stock, altho I believe most of them are.

CDAVIS

@Pushmi-Pullyu said: “…Do you really think all or even most of those are posted by Jim Chanos’ “wolf pack?…”
—————

Yes…

The anti-Tesla Jim Chanos Wolfpack is not all but is #1.

Chanos Wolfpack is behind a well organized coordinated PR effort to promote their contrived thesis that Tesla is “worthless”. That’s not tinfoil hat… it’s Chanos’s well known MO.

But game has now changed…

*** Catherine Woods vs. James Chanos ***

Doggydogworld

Cathi Woods may be new to you, but she’s been saying this nonsense for some time. Before her, Adam Jonas of Morgan Stanley carried the “Tesla Mobility” torch. Nobody pays attention to either one.

And Pushmi is correct, virtually no one on Seeking Alpha or the more seriously anti-Tesla sites has ever even corresponded with Jim Chanos.

CDAVIS

@Doggydogworld said: “Cathi Woods may be new to you, but she’s been saying this nonsense for some time…”
———-

You same as Chanos say Cathie Woods is nonsense… I’m thinking Cathie Woods has it right.

*** Catherine Woods vs. James Chanos ***

https://ark-invest.com/research/tesla-private

Alonso Perez

Seeking Alpha is a joke. The original cogort of Tesla bashers is so discredited that they are all gone, replaced by a new set (the first generation wanted to short Tesla at $28, not a typo). The Mobility thing, however, is wildly speculative. Maybe it’s real, but probably not. Especially not the 80% gross margins.

Will

4000k for Tesla stock😭😭😭😭😭

CDAVIS

@Will said: “4000k for Tesla stock😭😭😭😭😭”
—————-

The $4,000 is a top range point and future (5 years) dollar based…

In Cathie Woods’s interview video “I’LL TELL THE BOARD HOW TESLA’S STOCK COULD GO TO $4,000” she explains that on a NPV (net present value) basis discounted @15%/yr she puts a today top range value of TSLA at $2000. Meaning that if today someone purchased TSLA at $2,000 as an investment they would get an average of 15% ROI over five years. source:
https://www.youtube.com/watch?v=_ZhrZJ-rdBo&feature=youtu.be

Further… The value range in Cathie’s Woods’s report for TSLA is “somewhere between $700 and $4,000 per share  in five years: source:
https://ark-invest.com/research/tesla-private

The news media has sensationalized the $4,000.

Distilled on a non-sensationalized basis:

Cathie Woods is saying she places a today value of TSLA somewhere between $350-$2,000… the midpoint value would therefore be TSLA $1,174. And that according to Wood’s report excludes placing value on several existing Tesla value lines including Tesla Energy.

On the other hand:

The anti-Tesla Jim Chanos Wolfpack thesis is that that Tesla “is not a leader” in EV tech and as a company is “worthless” and has “zero” value (Chanos’s words).

So:

Cathie Woods’s TSLA $1,174 (midpoint) vs. Jim Chanos TSLA $0

*** Catherine Woods vs. James Chanos ***

FrankfurterBub

Yeah well.. Don’t wanna say ‘told you so’, but…

And I’m sure, there will be a way to spin even this mess into a ‘just trust him, Elon knows best’ positive narrative.

Totally unnecessary, just focus on the cars, Tesla!

Get Real

Look, another brand new username suddenly just shows up for the first time right after DJ posts, what a coincidence.

David Green

Oh look, another post completely off topic, and unrelated to the thread…. just attacking other people… MODERATORS???

Get Real

You want your mommy too?
That is humor BTW. Might want to lighten up someday.

Chris O

Hmm, you are 24/7 standby to post your anti Tesla FUD, a self professed TSLA short and the moderators are nowhere in sight somehow.

Pushmi-Pullyu

“…just attacking other people…”

Gosh, only anti-Tesla trolls are allowed to do that. How dare he intrude on your territory!

FrankfurterBub

Dear ‘get real’,
I’m more than fed up with this ridiculous way of discussing, which seems to be like a modern way of sticking up your fingers into your ears and going ‘lalalala, I don’t want to hear you’. Conspiracies much?

I do not know David Green (the only guy I know with that last name is called John Green) and I don’t care about him. I am kind of a Tesla fan (even though I signed myself out of the German discussion board due to unfounded attacks over there, too), but I will never blindly hype a brand / company – or man, for that matter. Okay, maybe Eintracht Frankfurt, but that’s another story 🙂

Anyways: I wish Tesla stays on track l, we need Tesla – with idiots like Trump, who doesn’t care about the environment at all, now more than ever. But we need a stable Tesla, not one that is steered by a hot headed, childish CEO (who, to be fair, achieved more in one week than I probably will in a lifetime).

So, please Tesla: Focus on the damn cars!

Rightofthepeople

Fair comment FB, however I would like to point something out to you. You rightly criticize those who “discuss” issues by “sticking up your fingers into your ears and going ‘lalalala, I don’t want o hear you’”. However, further down in your comment you say “with idiots like Trump, who doesn’t care about the environment at all.” Look, you may not like Trump, you may not agree with him often if ever (especially if you are German), but I don’t think it’s a fair statement to say he doesn’t “care about the environment at all.” These are the types of statements (used on both sides of the political debate I might add) that are really meant to divide us and keep us from finding any common ground. This is exactly what Russia was (and still is) trying to promote through social media and other operations, anything that will divide this country (and yours) and cause strife and confusion. If they can get us fighting each other, we won’t notice all the things they are doing that we should actually be fighting.

FrankfurterBub

Alright, I admit that I am not a fan of Mr Trump – with or without Russian interference, though 🙂
But you are right, using that kind of language doesn’t prove a point, I am sorry. Let’s differentiate that statement: With people trying to put corporate interest first, environmental issues seem to be on the rise..

While I am not an activist, I know that we need to find ways to fight e.g. air pollution – and Tesla seems to have started something that might be a tiny piece of a overwhelmingly large puzzle.. So, please Tesla, do not get caught up in completely unnecessary battlefields.

David Green

I wrote a reply, and then realized it was a political comment which is a no-no…

Mark.ca

Right, I’m confused…
Can you explain how T cares about the environment…judging by his actions so far?

Dan F.

Trump cares about his golf courses, that’s about it as far as the “environment” is concerned.

David Green
THANK YOU… F B I am happy to discuss any part of the industry, but the blind faith of some is crazy… If we see a message we disagree with, we should discuss it, instead of attacking the person making the post. BTW, why do people feel that a Tesla short seller is so bad? After all they are just people too, trying to feed their family. The stock market has always been an over or under bet, some take the over, and some take the under. I would have to say, if a person really wants to know what is going on inside Tesla, the shorts are the place to go for information, they have researched every part of the operations, from counting trucks leaving the factory, to doing drone videos of all the operations, tracking Tesla’s corporate credit, tracking lawsuits, and Liens. I find the information to be interesting. Boeing had the same thing going on when the 787 crisis was happening, people stood outside the fence at the Everett factory, and tracked every airplane. Boeing also had internal whistleblowers, talking to the media, and most of what they told turned out to be exactly the case.
pjwood1

David, Capitalism can be divided two ways: Innovation, making things better, serving customers and things like that -or- conquering markets through plutocracy, so you don’t have to and can force, or collude, your way to what consumers are left to buy. Many shorts, specifically with Tesla, would absolutely love it if the company had no access to capital and could no longer compete. They hate competition, and if you really get into VW’s culture, hate the idea that a consumer’s interest in being environmental is a real thing. Not competing, or more specifically being anti-competitive, is what many of them, and Trump, is often about. It’s this ilk, that bothers people.

CDAVIS

@David Green said: “….BTW, why do people feel that a Tesla short seller is so bad?…”
—————-

Because they promote a Tesla narrative they know to be false…

The anti-Tesla Jim Chanos Wolfpack certainly are smart enough to know their Tesla thesis that Tesla is “worthless” (Chanos’s words) is false but nevertheless that is what they promote in hopes to profit from their short position.

In my book that is unethical…

FrankfurterBub

David, you are welcome. But on the other points, I disagree: shorts might be – per se – not bad people, but if you start pushing false information to hurt a company to earn money, that’s greed in its worst manifestation. Works the other way, too.

We nowadays live in a world, where false information and blatant lies seem to have no consequences whatsoever..

Saabluster
“I would have to say, if a person really wants to know what is going on inside Tesla, the shorts are the place to go for information” They have info yes. But it is not without bias. There is deep cynicism that runs through these shorts. I have for a long time seen you posting what many consider to be comments intended to negatively affect the company. I think you are just misguided. There are some who do this knowing full well they spread lies. There are also others who spread negativity because they believe the cynics. They don’t balance the negative with the positive to come to a more reasonable conclusion. “BTW, why do people feel that a Tesla short seller is so bad?” It feels morally wrong. I mean that taking into consideration Tesla’s stated intent to make a demonstrable positive impact on the very air you and I breathe. And while we can argue about whether or not that is just Elon marketing it is undeniable that the company’s trajectory would have a benefit for mankind’s and the earth’s health. And so it feels wrong to do anything to undermine this or put it in jeopardy. Especially… Read more »
antrik

Criticising Tesla or its CEO, if done in a reasonable tone, is not an issue. (Except maybe for total fanatics — but these seem to be rare here…) But doing so in a derisive, inflammatory way, is not OK. Making jabs at Tesla in every post, no matter whether the discussion was about Tesla in the first place, is not OK. And complaining when people get angry about it is, quite frankly, not very mature.

antrik

You are free to disagree with Musk’s behaviour; and you are free to disagree with Musk apologists — but if you word your disagreement in a derisive way, you can’t really be surprised when people get worked up over it.

JyChevyVolt

Elon lied… Let’s move on to quarter 3 and 10k/week.

David Green

First he has to pay damages caused to the investors… I want to see Elon’s face when he has to settle the lawsuits with the shorts to avoid prison.. HaHaHa…

JyChevyVolt

SEC can’t even fine Auburn. What are they going to do with a multi billionaire. 🙂

/S

David Green

I think the worst will come from class actions, not the SEC… But I do think Elon, Tesla, and the BOD are going to get thoroughly scolded…

Get Real

“prison”, LMFAO!
It’s going to fun watching you explain that away when it doesn’t happen.
Bankwupt!

David Green
Well, Thanks for the nice compliment. FYI the stock market is about over and under betting, just like Las Vegas. On Elon’s Funding Secured tweet, I took the under, and won… Does that mean I am a bad guy? Not really, but I am also not super smart… I am more smart-ish according to Elon. I do not in any way support frivolous lawsuits, however if an investor does his research and places a bet, the SEC laws protect him from false reporting by the company or its officials. Elon’s tweet seems to have been false reporting, which caused a surge in the stock price, possible wiping out some shorts, at the same time longs also rushed into the party grabbing all the shares they could on the allegedly fake news tweet, and these longs over the next 10 days got hammered. If either the shorts who took losses on this news or the longs that also took losses as a result of the truth coming out, both should be entitled to compensation. Tesla’s board also has some responsibility, as they were way too slow to correct the misstatement by their CEO, which could have increased the damages to investors.
Shaun

Prison… from lawsuits?…… Thats not how this works, thats not how any of this works.

Pushmi-Pullyu

Of all the Tesla-and-Elon smear campaigns by the various serial Tesla bashers posting to InsideEVs, the suggestion that Elon is going to jail for the “crime” of… well, of what? Of being overly optimistic? Of tweeting out something he was “considering” hopefully?

Of all the smear campaigns, this is easily the most over-the-top. The smear campaigners have a bigger chance of doing jail time, for all their libel and slander of Elon Musk, than Elon does!

It also really puts a glaring spotlight on how extremely, almost insanely, jealous of Elon some of the serial Tesla bashers are.

Oh, beware, my lord, of jealousy!
It is the green-eyed monster which doth mock
The meat it feeds on.

–Shakespeare, Othello

Shaun

If the SEC does anything at all, which I doubt, it will be a fine to just Elon for a likely max of 160k dollars. Especially with the fairly lenient administration at the head of the SEC these days.

Doggydogworld

So former SEC chars, commissioners and enforcement attorneys are participating in an “over-the-top smear campaign”?

Jail is only possible if Musk treats the SEC with contempt and their ensuing investigation turns up evidence of intent to “burn the shorts” or otherwise manipulate the stock. I’m confident his lawyers, who carefully crafted both update letters, will steer him clear of that outcome.

antrik

The former SEC chairs etc. are not the ones claiming Elon will go to jail.

Will

He’s not going to jail. He’s going to be fine 420

Doggydogworld

The shorts will put him in prison if he doesn’t settle??? Interesting theory, ha.

Musk’s lawyers need to settle ASAP with the SEC on a “admits no wrongdoing and promises not to do it again” basis. That may require emergency surgery to remove most of his ego, but it’ll grow back.

With a “no wrongdoing” settlement in hand, he can outspend and outlast the plaintiff’s lawyers in the civil suits. The ambulance chaser game is to quickly extort payments from corporations, give the “class” a few pennies and pocket the rest. They aren’t set up or funded for a long war.

Gazz

I can see lawyers lining up over SEC rules.

Pete

In my eyes, he is the one manipulating the most with his company’s share price! Eventually getting in to the serious troubles because of last.

HH

I find with the lawsuits coming up, next to him not taking it private, what is interesting are these bits:

“Additionally, a number of institutional shareholders have explained that they have internal compliance issues that limit how much they can invest in a private company. There is also no proven path for most retail investors to own shares if we were private.”

Especially the part about the compliance issues with some large institutional investors. It speaks to how totally unprepared he was when he sent the tweet. And using this angle, they will certainly question how serious he was with going private

HH

Why am I getting downvotes for this? Is there anyone who thinks he was properly prepared?

JyChevyVolt

You must be new here.

Rule 1:
You trash Tesla. Automatic down vote by Elon bots.

Rule 2:
Never forget rule #1

Vexar

All those robots in the factories in Fremont and Sparks have internet access, and they all have profiles on InsideEVs. When they are off the line for maintenance, they come here in droves. You had better watch yourself: a robot never forgets!

Chris O

This forum is buried in anti Tesla postings these days (just look through this thread) from people who seem to specialize in spreading negative messages about Tesla so I’m guessing the people who actually care about EVs get so fed up with this that they are now inclined to see any critical posting regarding Tesla as part of a wider campaign and vote accordingly.

I agree with you though, looks like Elon Musk was winging it with his going private strategy, probably meaning to pull one on the shorts engaged in a full scale smear campaign against his business. Looks like he figured the Saudi interest was enough to back up his “funding secured” claim, the courts will decide whether that was the case.

Pushmi-Pullyu

“Is there anyone who thinks he was properly prepared?”

What I think is that you don’t have the slightest idea of how prepared Elon was, or wasn’t. What I think is that you’re just repeating some Tesla bashing you’ve read elsewhere, and that you don’t realize what’s motivating the smear campaign you’re helping to spread. Please don’t take this personally — I’m not the one who invented the term — but the term “useful idiot” applies here.

You might want to reconsider allowing yourself to be used like this.

Asak

I think the issue is Tesla’s current market cap means it’s not that easy to come up with the money to take it private. Usually a company going private doesn’t need to rely on large institutional shareholders, but Tesla is not really in the sort of position where a company is taken private.

The whole thing really doesn’t make any sense at all. If Tesla were to get into trouble and start struggling that would be the time to consider going private, not currently when it’s flying high. So I don’t even know why Musk thought of it.

Honestly it probably would be better if he stopped tweeting. Lately it seems like it’s just getting him into trouble.

Pushmi-Pullyu

“I think the issue is Tesla’s current market cap means it’s not that easy to come up with the money to take it private.”

Yes, that is why I was not merely amazed, but absolutely astounded when Elon said he was considering taking Tesla private, and doubly so when Elon doubled down on that. Just because the Saudis and a few others have vast amounts of funds that they are seeking to invest doesn’t alter the basic risk/reward ratio. For a company whose “market cap” (total value of all public stock) is so much higher than what analysts say the company is actually worth, it simply makes no sense for anyone to buy enough of the publicly owned stock to be able to take the company private.

While I am disappointed that this isn’t going to happen, I’m very far from surprised. In fact, to some extent, I feel like I’ve stepped back into the real world after a visit to planet Bizarro.

“…I don’t even know why Musk thought of it.”

This I don’t understand. Elon explained in some detail why he wanted to take Tesla private. Do you think there was some hidden agenda there?

antrik

Analysts’ opinions vary widely regarding how much Tesla is really worth. Clearly, there are enough investors who think it’s worth >50 billions. For a buyout, I think it just means there must be enough investors thinking it would be worth even more as a private company?…

Note that even while announcing that the deal is off, Elon only reinforced his claim that funding was *not* an issue.

William

Good news Tesla, Musk: Stay the Course!

EVen to the “Point of No Return”!

Go Captain Elon, batten down the hatches, and we’re off to EVer more uncharted waters!

https://goo.gl/images/nLBf9u

JyChevyVolt

I think we should give Elon a round of applause for coming out with this explanation. Must be very difficult to admit wrong in front of billions of people.

Come on Elon, take TSLA to $4000.

HH

I must have overlooked the part where he admitted to doing anything wrong.

Pushmi-Pullyu

,

antrik

He didn’t admit to *doing* anything wrong; he did however admit to underestimating the downsides of this idea.

Dav8or

It should make it to $4200 because now things are 10x better.

Pushmi-Pullyu

Perhaps you need to turn down the gain on your Tesla Basher Reality Distortion goggles. Elon most certainly did not say he was wrong. Expressing disappointment is very far from admitting you’re wrong.

Steve Dave

He can easily fix this stock fraud thing with 2-3 years in prison.

Hauer

As long as a certain persion is still in office in the US it does not make sense to put ANYbody in jail except murderers.

Rightofthepeople

Yeah you’re right, Trump’s a horrible President. I mean, look at all the people who can’t find a decent job. Unemployment is up, the stock market’s down. Millions more on welfare than we had a few years ago, people literally starving in the streets. Minorities can’t find work, college grads can’t find work. Taxes are up, bonuses and salaries are down. GDP growth is flat at best, or even negative.

Oh wait, none of that is true.

Will

That’s not trump that’s the economics before trump

Vexar

He appointed Scott Pruitt to the EPA, who put Andrew Wheeler in as deputy. Not allies of the EV movement for sure!

Pushmi-Pullyu

Then you should thank the Obama administration for turning around the economic situation of the Great Recession. The Trumpster administration inherited the growth established under President Obama. In fact, growth was faster in two of the last 4 quarters of the Obama administration than it has been in any quarter of the Trumpster administration.

Not that any president actually deserves the credit or blame for the state of the economy, but if you’re going to do that anyway, then at least identify the correct administration to credit.

#FightFakeNews

Will

Yelp push pull

antrik

The point was that he is a horrible person, not whether or not economic policies are horrible…

William

The only restraints that Elon will EVer wear, are the Fur-lined Cuff-Puffs, that his BFF and warden Grimes will be handling.

Musk being EVer vigilant, will use his all time favorite “Safety Word”, during his residential lock down, which, as EVeybody knows by now, is “Funding SECured”!

Grimes you are the M.C. KeyMaster!
Use Full four point restraints if necessary,
in keeping Elon away from the Twitters!

Dav8or

Honestly, sleeping in a factory? He’s in prison now. One he made himself.

antrik

How is that restricting his freedom?

Asak

To be honest, Tesla going private never made a whole lot of sense. In general if you look at companies that are taken private, it’s because they are cheap. Usually their stock is way down and had been in the doldrums for some time. That makes it easier to come up with the money to take them private since the cost is much lower.

Now personally I think Tesla is incredibly overvalued. But even those who disagree with that hopefully will agree that Tesla doesn’t match the description above, of a struggling and inexpensive stock. If Tesla lost half or more of it’s value that might put it more in a position to be taken private or acquired by another company, but not right now.

Jopp

I still wonder if 420 was a reference to drug use from Musk. In the last months he seemed to be unable to lead his companies. Workers should be able to take a leaf out of their CEOs book.

Pushmi-Pullyu

“Four-twenty” is a euphemism for smoking marijuana. Does the overachieving, workaholic Elon Musk really strike you as a pot-smoking, stoned out slacker?

It amazes me that this conspiracy theory has gotten so much traction, and to me is just a symptom of how so many people jealous of Elon Musk’s many virtues and accomplishments are ready to believe anything bad about him, no matter how disconnected from reality it is.

Counterpoint

We can’t know intentions, so whether Mr. Musk wanted to take Tesla private to streamline the process as he said, to avoid public scrutiny, to embarrass short sellers, or to inflate stock prices, that can’t be known. But I’m glad they are staying public, because that way they will continue to have the required openness of a public company about their production status, etc.

antrik

The mandatory openness is good for stalkers like us 😉 — but is it good for Tesla’s mission? That’s the question that really matters.

Epsilon

Elon quite literally executed the privatization process backwards starting with the misleading concluding announcement and ending with the feasibility study. Embarrassing but if some learning about CEO responsibilities to shareholders and customers occurred it will make Tesla stronger.

Lou Grinzo

Bingo. Him coming out and saying that going private would have been an even bigger distraction is an admission he didn’t think this through nearly well enough. That is not a good trait in a CEO of a company the size of Tesla.

As for the “funding secured” thing, honestly, I have no idea what to make of it. I have no way of knowing whether Musk was told it was locked up, or he merely assumed it was based on good-faith comments from one or more other parties, or if it was a blatant lie. I suspect we’ll get a few revelations along the way, but will never know the full behind-the-scenes story on that part of this little drama.

Again: We desperately need Tesla to continue to succeed and put a lot of EVs on the road and push other car companies hard to do the same. But I don’t care if Musk is the CEO or an advisor to an Apple or Google owned Tesla or an outsider who often reads this site at night and drinks red wine, like me.

Seven Electrics

I suspect that this reversal moved so quickly because the Saudis are about to invest in Lucid. Had they done so while Tesla was still looking for funding, it would have ruined the funding secured cover story.

antrik

It’s not like investing in Lucid makes them less likely to continue investing in Tesla.

Seven Electrics

While Elon has already pledged roughly 40% of his stock has collateral for loans, look for him to buy on margin again in the premarket to attempt to manipulate the stock. He lost this battle with the shorts, but in his mind the war still rages on.

If they continue to burn cash, they will later consider a chapter 11 restructuring to eliminate their SolarCity and bond debt.

CDAVIS

@Seven Electrics said: “.. He [Elon Musk] lost this battle with the shorts…”
———————-

Musk certainly did not win his desire to go private but the anti-Tesla Jim Chanos wolfpack now have to deal with the Cathie Wood’s Tesla narrative. Cathie Wood’s has much more Wall Street credibility and respect than Chanos does due to Wood’s strong track record vs. Chanos’s hit-n-miss record.

So the public TSLA battle has moved from Jim Chanos vs.Elon Must to instead Jim Chanos vs. Cathie Woods. That is a big deal that hugely benefits Elon Musk, Tesla, and Tesla shareholders.

Doggydogworld

Third party, non-recourse SCTY debt is 925 million. Almost all is due in the next 2.5 years, which sucks for Tesla as the lease portfolio is not throwing off meaningful cash yet. But it will in the out years, so putting SCTY into Chapter 11 to avoid paying that debt would be a truly desperate and short-sighted move.

Tesla has 5 billion of their own bonds out. The first 920 million chunk will convert into stock. The nominal conversion price is $359.87/share, but the board can and probably will adjust this downward. Other maturities:

2021 – 1.38 billion converts on same terms as 2019s
2022 – 977 million converts at $333/share, also adjustable (I think)
2025 – 1.8 billion straight bond, will need to be refinanced

Nothing here will lead to BK, at least not for many years. Their business can either make money or it can’t. Wiping out the bonds doesn’t help.

CDAVIS

Look’s like a big win for Cathie Woods (ARK Invest CEO).

Cathie Woods said:

“… I’LL TELL THE BOARD HOW TESLA’S STOCK COULD GO TO $4,000 [if Tesla remains public]…” source:
https://www.youtube.com/watch?v=_ZhrZJ-rdBo&feature=youtu.be

Followed up by published Open Letter:

“Dear Elon: An Open Letter Against Taking Tesla Private”:
https://ark-invest.com/research/tesla-private

“Fund Manager Sends Letter To Tesla’s Board”
https://insideevs.com/fund-manager-predicting-tesla-4k-per-share/

Cathie Woods’ very public effort to keep Tesla public likely spilled over to forcing the group of fund managers that previously supported Musk’s taking Tesla private to re-think their support of Musk’s plan.

Upshot for Tesla:
This Musk “considering going private” episode has brought into front center Cathie Woods’ thesis of Tesla is undervalued which likely will result in greatly weakining the anti-Tesla Jim Chanos thesis that Tesla “is worthless” (Chanos’s words).

Bottom Line:

Musk’s “considering going private” saga will end up serving as a net positive for Tesla… be that intended or not.

Al D

Musk needs to keep a lid on it and let the stock go where it will. The shorts serve a worthy purpose. They keep an overpriced stock from becoming WAY overpriced and lessen the chance of a crash.

Pushmi-Pullyu

Shorting Tesla stock serves a useful purpose, yes. But stock shorters constantly spreading anti-Tesla smear campaigns in ongoing attempts to manipulate the stock price, serves a despicable and nefarious purpose! I don’t know if such attempts to manipulate the stock market are actually illegal, but they certainly are immoral and unethical.

Rather hypocritical that the ones insinuating that Elon will be sent to jail are themselves the ones committing activity which, if it’s not considered criminal, certainly ought to be!

Ron M

It seems like for the last 3 years analyst have been saying Tesla is in trouble because competitors are gonna have EV’s that will compete with Tesla. The only ones producing EV’s in quantity like Tesla are in China and I don’t know if the quality of the EV and battery is as good.
Still waiting and maybe in 3 years other manufacturers will have cars as good as what Tesla has now. However Tesla’s will be better than they are now.

TeslaPlease

The neighbor next door takes out a 50K credit line again their home mortgage

Year 1-4 — The family look prosperous and you see plenty of activity / smiles

Year 5 — With 3K of credit line remaining, the smiles have diminished and the hunt for more credit ensues

Year 6 — Carrying lots of debt, tons of purchases, and a huge debt service

It’s easy to look successful when you have borrowed tons of money – payback time.

Pushmi-Pullyu

Tesla’s assets have increased faster than its debt.

Your Tesla bashing here is no more truthful than it has ever been.

TeslaPlease
Bottom Line – No one believes Tesla has any value @ the $420 price We have went from funding secured to not going private. A reasonable person would ask what has changed? Did the Saudis get cold feet or were they scared off by Elon’s behavior? Having served as an analyst for an institutional investor, we know EXACTLY why this move to privatization is not going to happen (no one is going to speak about off-record conversations) on-record. No one is going to spend 20-40 billion on a company that will not fully open their financials for scrutiny – not gonna happen. No one is going to spend 20-40 billion on a company that does not produce business cases vetted by others and does not have a record of producing profits No one is going to spend 20-40 billion on a company (15 y.o.) that is carrying 10-15 billion in debt/liabilities and a very very slow ramp to profitability Suppliers talk to other companies (off the record) and industry folks know the financial condition of Tesla TODAY Paint it however you like, but when Tesla needs that next capital raise, it is not going to be pretty. NO FUNDING SECURED… Read more »
CDAVIS

@TeslaPlease said: “Bottom Line – No one believes Tesla has any value @ the $420…”
—————-

Wrong….

Cathie Woods said: “… I’LL TELL THE BOARD HOW TESLA’S STOCK COULD GO TO $4,000 [if Tesla remains public]:

https://ark-invest.com/research/tesla-private

*** Cathie Woods vs. Jim Chanos ***

scottydoesntknow

Whether Tesla fan or short, to call this a “process” is an exercise in retcon. The tweet was a serious misstep. But it will soon blow over.

tftf

A giant bluff from Musk that blew up now. Told you so since the inital tweet on August 7, 2018.

This will result in many lawsuits and SEC investigatiOns ( like the SCTY bailout and the Model3 2017 production projection lawsuit )

Pushmi-Pullyu

Here’s hoping that real Tesla investors — that is, those hoping the company succeeds — institute a class-action lawsuit against serial Tesla bashing shorters for committing fraud in the bashers’ campaigns of spreading smear campaigns and manipulating Tesla’s stock price.

I’m concerned that you might be targeted by such a lawsuit, Tftf.

tftf

I doubt you ever studied security law, PP.

The lawsuits I mentioned above are real, and more will be coming.

There were enough former SEC people explaining it on Bloomberg and CNBC over the past weeks.

Watch this video, PP:

https://www.cnbc.com/video/2018/08/15/former-sec-chair-on-regulatory-repercussions-for-elon-musk-tesla-tsla-stock-board-tweet-private-investors-shareholders.html

tftf

And more here:

“…statements are likely to raise further questions among SEC officials as to whether Musk had performed sufficient due diligence to have had a reasonable basis for his Aug. 7 tweets, she said.”

https://reut.rs/2P99WFh

There are severe legal implications for these tweets.

Mark.ca

I expect a head fake nosedive on Monday and the the stock to go back to mid 300 again.
Elon need a vacation …and get off social media!

Pushmi-Pullyu

Damn. I was hoping to see most of the anti-Tesla FÜDster activity disappear, when taking Tesala private brought an end to shorting activity.

Guess that was too good to be true, hmmm? 🙁

Spider-Dan

This entire episode was a “short burn,” plain and simple. It doesn’t matter if the stock goes back down, because there’s some non-zero number of shorts who were forced out when Elon announced the possibility of going private.

It’s stock market manipulation. Anyone reckless enough to “invest” – long or short – in a company with an unstable CEO deserves what they get. Even if you believe Tesla is ultimately going to fail, Elon can bankrupt your short position with a few choice comments before that happens.

antrik

The price didn’t go all that much above its previous value (or above its all-times high IIRC) — I don’t think many shorts were forced out by that?

(*Some* might have got cold feet and quit — but apparently not many.)