Big Saudi investment just announced

GDN

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#1
Tesla up about $15 just now on a big investment announcement by Saudi’s of a couple of billion. Just getting details.
 

Bokonon

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#2
Tesla up about $15 just now on a big investment announcement by Saudi’s of a couple of billion. Just getting details.
Wonder if it's related to this...

 

GDN

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#3
Wow. Hadn't seen that. It’s up about $20 now. A lot of news all of a sudden. He could have the backing. They are trying to verify the tweet. It came from his verified account but they are trying to confirm he wasn’t hacked and it is a real tweet from him.
 
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MelindaV

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#4
having previously worked at a publicly traded company, who's founder secured funding to take it back privately, I witnessed a hostile takeover, followed by the company closing the doors a couple years later.
it may sound like a great idea to convert a business back to private, but it is super risky and far from a guarantee all will go as expected.

ETA... I went back and dug up some old articles to see what was offered on that deal. When the CEO/Founder announced a buyback, there was a per share premium of 27.6% being offered ($14/share) for $850M. Sounded fantastic! shareholders would get a nice bump, the company would not be held to what the market wanted to see, and new projects could be tried out. a few months later the private backer removed the offer. The companies biggest competitor then stepped in with a $1B offer. shortly after, the per-share price dipped and they wanted to renegotiate $1B offer to a lower amount. With that, a third competitor (much smaller company) stepped in and countered with a larger offer (but still less than $1B). That ended up being the deal that went thru. So the little fish swallowed up the medium fish in hopes of competing with the big fish. little fish really wasn't equipped to become a medium-large fish and drown.

The whole reason the company I worked for was looking to go private, was because of analysts and shareholders resistance to investments in technology to compete with a brand new formatted business model competitor. they didn't want to be spending on any new development, but to sit back and record safe earnings that come without risk or capitol investment.
(that new competitor at the time was being traded for $1.50/share, and today closed at $351/share...)
 
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#5
Not sure if it's related but the stock trading has been halted on the news and Elon is indeed confirming the switch to going to private makes it easier for them to execute on their plans and stops the negative short activity dead in its tracks
 

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#6
Not sure if it's related but the stock trading has been halted on the news and Elon is indeed confirming the switch to going to private makes it easier for them to execute on their plans and stops the negative short activity dead in its tracks
Talk about panic there for a minute, my entire downpayment is tied up in $TSLA!!
Looks like it's about to go live again...

upload_2018-8-7_15-45-3.png
 

GDN

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#8
Don’t have access to it from here but Musk released an internal memo on his plan. TD Ameritrade has a copy of it. He set his sights on $420 to reward current investors.
 
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#9
I'd love to be a fly on the wall at Chanos' office right about now
 

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#10

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#12
This internal memo sounds very well considered and is a rational way to stop the disruptive nature of all the shorters. As a stock holder I would stay long and only sell a few shares to help in the purchase of my model 3 when that gets closer to being confirmed. It really sounds like a win-win for stockholders and for Tesla! This could also cause the short burn to really catch fire. Good times ahead.
 

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#13
Plus Elon said they might consider possibility of taking it public again after going private.
 

GDN

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#14
Does anyone know just how this works if you stay in:

First, I would like to structure this so that all shareholders have a choice. Either they can stay investors in a private Tesla or they can be bought out at $420 per share,"

Do you basically become a silent shareholder of sorts? As a private company there are many things they don't have to disclose. How do you know the valuation? What your share is worth? I'm OK with no voting rights or any control, that is exactly why Elon wants to take it private and I'm a believer in Elon, so he needs to be able to run it, but just not sure how it works with small little guy investors like ourselves - "shareholders" in a private company.
 

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#15
Does anyone know just how this works if you stay in:

First, I would like to structure this so that all shareholders have a choice. Either they can stay investors in a private Tesla or they can be bought out at $420 per share,"

Do you basically become a silent shareholder of sorts? As a private company there are many things they don't have to disclose. How do you know the valuation? What your share is worth? I'm OK with no voting rights or any control, that is exactly why Elon wants to take it private and I'm a believer in Elon, so he needs to be able to run it, but just not sure how it works with small little guy investors like ourselves - "shareholders" in a private company.
I really would like to know the answers to these questions as well. Thanks @GDN
 
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#16
What would be the implications of going private?

If it means taking the pressure off the quarterly financial goals, would Tesla then be at liberty to do things such as manufacture the base Model 3 much earlier than planned?
 

GDN

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#17
What would be the implications of going private?

If it means taking the pressure off the quarterly financial goals, would Tesla then be at liberty to do things such as manufacture the base Model 3 much earlier than planned?
I don't know about that as they still need cash coming in, that amounts to bigger profits on the more expensive cars, some of those things wouldn't change, at least not in the short term I don't think.
 

garsh

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#18
If it means taking the pressure off the quarterly financial goals, would Tesla then be at liberty to do things such as manufacture the base Model 3 much earlier than planned?
Not quite.

It means they no longer have to report progress and a detailed financial document every single quarter. Therefore, they can stop having end-of-quarter blitzes to deliver as many cars as possible.

What's stopping them from manufacturing the base Model 3 is that it would currently cause them to lose money. They need to first lower the cost of producing Model 3s. The way to do that is to increase their production rate. Think of the costs involved with producing a car as three different main groupings:
  1. Fixed costs. These are one-time purchases, like your factory and your robots. They've mostly already bought and installed these.
  2. Per-unit costs. This is your materials (aluminum, battery raw materials) and parts. They cost the same per car, but you can get a per-unit discount from your suppliers if you order more. A higher production rate allows you to order more.
  3. Hourly/Daily costs. You need to pay all of your employees whether you build 1000 cars/week or 9000 cars/week. This is where most of your cost savings come in with increased production.
I think when Tesla reaches 7000 cars per week consistently, the costs will be low enough for them to start selling base cars without losing money.
 

GDN

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#19
Will be interesting to see if any news trickles out today, I figure it will be pretty quiet now. Don't know how long it will take him to take it private, he reaffirmed he had the financing and if he doesn't, well it will be a huge nightmare and lawsuits anyway as he'll be charged with false statements to control the market. Maybe by November - go through a few more months of just watching the shorts hold out and burn. I'm sure Tesla doesn't want to have to go through another public quarter end if they truly make the decision to take it private.