INSUBCONTINENT EXCLUSIVE:
Investors definitely aren''t stoked by the deafening silence coming from Teslaafter its chief executive announced in a tweet that he plans
to drop a fat sack of cash on public shareholders in a bid to take the company private.
Tesla shares have tumbled from their post-tweet
highs as investors are now left with the embers of what is increasingly looking like a Musk-induced pipe dream to lift the economic burdens
the company faces by delisting it.
At the close of the market Tesla shares were down $17.89, to $352.45, basically erasing the gains it had
earned based on speculation of an acquirer at a $420 price tag.
Days after Tesla chief executive Elon Musk tweeted a $420 per share
buyout offer for the company, no new details have emerged and several potential contenders for Tesla white knight have basically said &It
wasn''t me.
Elon Musk tweets he thinking about taking Tesla private
Reports fromThe New York Times, Axios and Bloomberg indicate that none
of the likely buyers — the private equity firms, multinational banks, sovereign wealth funds or SoftBank — had approached or been
approached by Tesla about the take-private transaction.
Dan Primack reported in Axios that &it none of the usual suspects on the debt side
Nor many on the equity side, such as big strategics (not Apple or Uber), private equity (not KKR, Mithril, Silver Lake, TPG, etc.) nor
deeper financial pockets (not SoftBank or Mubadala).
That kind of everyone that would be involved in what would be the biggest take-private
deal in history (Primack valued Tesla at around $85 billion including debt).
Indeed, the New York Times noted that Wall Street banks are
only now looking at ways to get in on the action.
Fromthe Times&report:
Executives at banks including Goldman Sachs and Citigroup are
discussing ways a deal could be structured, angling to land the potentially prestigious assignment of taking the maker of electric cars off
public markets, according to people familiar with the discussions
Bankers and lawyers on Wall Street said any deal is likely to be valued at $10 billion to $20 billion.
The $20 billion figure, far lower
than what would be required for full privatization, assumes that Tesla is only looking to reduce the number of shareholders on its cap table
so that it is no longer required to list on a major exchange
The argument is that with fewer shareholders, the company would not be subject to the whims of short sellers as easily as it is on the open
markets.
That the publicly stated rationale that Musk has given for his desire to take the company private.
Elon Musk explains why taking
Tesla private is ‘the best path forward
While some speculate about what Elon may have been smoking when he made his (potential) bid
public on Twitter, SEC regulators are more concerned with whether he&d told investors he had a quality deal instead of just shake.
Clouding
the picture is the large stake that Saudi Arabia investment fund had taken in the company right before Musk baked short sellers& positions
with the buyout tweet and the promise of financing.
Some conspiracy-minded speculators on HackerNews even theorized that the tweet was an
attempt to forestall a hostile takeover from the Saudis.
Allegedly @elonmusk is in a race to avoid a hostile takeover of @tesla from the
Saudi https://t.co/qTyIZz9AxH pic.twitter.com/MYxJwrfiOm
mdash; Pieter Levels
(@levelsio) August 7, 2018
No matter the rationale, Musk
may have more to worry about than just Tesla stock price should more detailed plans of the financing not materialize
The Securities and Exchange Commission is knocking, and they don''t take too kindly to the practice of defrauding investors.
The SEC wants
Tesla to explain Elon 420 tweet
