Money Elon Musk Makes $82 Billion Gambit to Silence Tesla Critics

15:27  08 august  2018
15:27  08 august  2018 Source:   msn.com

Elon Musk sued over tweets, proposal to take Tesla private

  Elon Musk sued over tweets, proposal to take Tesla private Tesla Inc. and its chief executive Elon Musk were sued twice on Friday by investors who said they fraudulently engineered a scheme to squeeze short-sellers, including through Musk's proposal to take the electric car company private. The lawsuits were filed three days after Musk stunned investors by announcing on Twitter that he might take Tesla private in a record $72 billion US transaction that valued the company at $420 per share, and that "funding" had been "secured.

Seemingly out of the blue, Elon Musk proclaimed that he might pull his money-losing Tesla Inc. off the market. Taking the electric-car company private at the price he touted would amount to an $ 82 billion valuation, a monumental sum that left many investors wondering: Is this a joke?

To take Tesla private, Musk would have to pull off the largest leveraged buyout in history, surpassing Texas electric utility TXU’s in 2007. And Tesla doesn’t fit the typical profile of a company that can raise tens of billions of dollars of debt to fund such a deal.

(Bloomberg) -- The wild tweet hit Wall Street at precisely 12:48 p.m. Tuesday -- and things just keep getting wilder.

Seemingly out of the blue, Elon Musk proclaimed that he might pull his money-losing Tesla Inc. off the market. Taking the electric-car company private at the price he touted would amount to an $82 billion valuation, a monumental sum that left many investors wondering: Is this a joke?

It wasn’t.

August 7, 2018

Musk, the enfant terrible of Tesla and SpaceX, has defied the odds before. But Tuesday’s gambit -- unleashed in tweet after tweet over the next 2 hours and 40 minutes -- opened a new chapter in one of the most tempestuous business stories of our time.

Lawsuits accuse Tesla's Musk of fraud over tweets, going-private proposal

  Lawsuits accuse Tesla's Musk of fraud over tweets, going-private proposal Lawsuits accuse Tesla's Musk of fraud over tweets, going-private proposalThe lawsuits were filed three days after Musk stunned investors by announcing on Twitter that he might take Tesla private in a record $72 billion transaction that valued the company at $420 per share, and that "funding" had been "secured.

In this reply, he made clear that he has no plans to give up Tesla ’s CEO spot. — Elon Musk (@ elonmusk ) August 7, 2018. Read | For Elon Musk , an $ 82 Billion Gambit to Silence Tesla ’s Critics .

Elon Musk Makes $ 82 Billion Gambit to Silence Tesla Critics August 8, 2018, 2:03 AM EDT.

Tesla’s crazy day, in one chartHow Musk’s tweets boosted his net worthComparing the deal with the biggest buyouts in historyA QuickTake on SEC rules for social mediaMusk says Tesla could copy SpaceX’s structureThis company shouldn’t be publicly traded: Liam Denning

Even fans seemed unsure whether Musk could pull this off -- or, if he does, where that will leave Tesla. Only a week ago, the company with a seemingly unshakable base of firm believers and equally fierce legion of detractors recorded another huge loss after burning through hundreds of millions of dollars.

‘Better Environment’

Indeed, Musk’s initial tweet, sent roughly half an hour after news emerged that Saudi Arabia’s sovereign wealth fund had built a stake in Tesla worth about $2 billion, was the latest in a series of unusual maneuvers that have thrust the executive into the public spotlight.

Tesla forms committee to assess proposal to go private

  Tesla forms committee to assess proposal to go private Tesla is forming a special committee to evaluate proposals to take the company private one week after CEO Elon Musk said he was considering it. The committee, made up of three independent directors, said Tuesday that it has not received any formal proposal from Musk, who on Aug. 7 tweeted that he had "funding secured" to buy Tesla shares at $420 per share.

Musk Mulls Taking Tesla Private, Valuing Company at $ 82 Billion August 7, 2018, 3:53 PM EDT. Elon Musk Makes $ 82 Billion Gambit to Silence Tesla Critics August 8, 2018, 6:09 AM EDT.

— Elon Musk (@ elonmusk ) June 29, 2018. No, this time Musk has reason to gloat. Tesla said it reached its goal of producing 5,000 Model 3 sedans decision to borrow more than billion in 2017. But beyond all that, Damodaran referred to this, our chart of the day: The bottom line is the bottom line.

He’s made no secret that he has little patience for his naysayers. In a May conference call, the CEO blithely said that if investors were concerned about the volatility of Tesla’s stock, they shouldn’t own the shares.

“The reason for doing this is all about creating the environment for Tesla to operate best,” Musk, 47, wrote Tuesday in an email to employees. He said wild swings in the carmaker’s stock price are a “major distraction” to Tesla workers, who are all shareholders. And he said that being public “puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term.”

Read more: Musk Wants Chinese Banks to Finance His New Tesla Factory

To take Tesla private, Musk would have to pull off the largest leveraged buyout in history, surpassing Texas electric utility TXU’s in 2007. And Tesla doesn’t fit the typical profile of a company that can raise tens of billions of dollars of debt to fund such a deal.

Tesla shares fall 5% on Wall St. skepticism, SEC probe reports

  Tesla shares fall 5% on Wall St. skepticism, SEC probe reports Tesla Inc.'s shares slipped almost five per cent to a two-day low on Thursday, wiping out all the gains fueled by chief executive Elon Musk's recent tweet announcing a plan to take the company private. Shares fell early in the day following Wall Street's skeptical response to Musk's idea of going private and a Wall Street Journal report on Wednesday that the U.S. Securities and Exchange Commission was asking Tesla why Musk announced his plans on Twitter and whether his statement was truthful.

Tesla CEO Elon Musk is thinking about taking the company private, he said in a Tweet this morning. More specifically, he said he may buy back the company for $ 82 billion (at a share price of 0 plus debt), and already has the funding to do so. Am considering taking Tesla private at 0.

Elon Musk Makes $ 82 Billion Gambit to Silence Tesla Critics August 8, 2018, 2:03 AM EDT.

The carmaker has lost money on an operating basis every year since going public and has been burning through billions of dollars amid the struggle to iron out production issues with its Model 3 sedan. Neither Musk’s tweets nor his blog post make mention of how the company would pay for it.

Tesla surged 11 percent Monday on the plan, closing at $379.57, or about 10 percent below the $420 a share Musk said he’d pay to take the company private, highlighting the doubts traders have about his ability to pull the deal off. The stock declined 0.6 percent at 10:58 a.m. on Frankfurt’s Tradegate before the U.S. market open.

August 7, 2018a close up of text on a black background: Tesla stock has had wild swings this year on Musk comments, tweets© Bloomberg Tesla stock has had wild swings this year on Musk comments, tweets

“The market doesn’t believe him,” said David Kudla, the CEO of Mainstay Capital Management, which is betting against Tesla. “His credibility has come into question over a number of things. If this were real, you’d expect the stock to go closer to $420 a share than it has.”

Most major buyouts also require a trip to the junk bond markets, where Tesla has fallen out of favor. Its inaugural offering of the notes last year fell below par almost immediately and never recovered. The bonds rallied Tuesday, but at just 92.4 cents on the dollar, they too reflect investor skepticism. If the deal were to actually go through, creditors would reap -- thanks to a clause in the bond contract -- a price of 101 cents on the dollar.

Tesla board plans to tell Elon Musk to recuse himself, prepares to review take-private plan

  Tesla board plans to tell Elon Musk to recuse himself, prepares to review take-private plan The board plans to meet with advisors next week about taking Tesla private, and has told Musk that he needs his own separate set of advisers.Load Error

It wouldn't be the first time Musk has undertaken such a gambit . SEE ALSO: Elon Musk 's new Tesla pay package could make him .8 billion — and it's a case study in what's wrong with executive compensation.

Tesla workers say they pay the price for Elon Musk 's big promises. Musk : “Threatening me only makes it worse for you”. Tripp: “I never made a threat. And of course a company with billions of dollars in product is going to have millions of dollars in scrap.

“It is important to note that, as of today, no details have been provided with regards to what ‘Funding secured’ means,” Evercore ISI analyst George Galliers said in a note, referring to a statement from Musk. “Depending on where the private funding may come from, going private may provide Tesla with” deeper pockets from strategic investor and freedom from the volatility of public markets.

‘Lot of Noise’

Musk has a long history of bristling at the amount of scrutiny Tesla endures from investors and the media.

In an interview with Bloomberg News in January 2015, he spoke of the benefits of running his closely held rocket company, Space Exploration Technologies Corp., and his frustrations with having taken Tesla public in June 2010.

“There’s a lot of noise that surrounds a public company and people are constantly commenting on the share price and value,” he said in 2015. “Being public definitely increases the management overhead for any given enterprise.”

SpaceX Model

Musk pointed to SpaceX as a model for how Tesla could be privately held. He said in a tweet his hope is that all current investors in the electric-car company would stick with it by buying into a “special purpose fund,” and said that this has been done through a Fidelity investment in the rocket manufacturer.

Tesla CEO Musk taunts short sellers amid legal scrutiny

  Tesla CEO Musk taunts short sellers amid legal scrutiny Tesla CEO Musk taunts short sellers amid legal scrutinyThe tweets are aimed at "shorts," or investors who borrowed shares of Tesla and immediately sold them with the hope that Tesla's share price would fall. That would allow the shorts to buy back the stock at a lower price, return the shares to the lender, and pocket the difference.

Elon Musk just made another big bet on himself. Over the last two days, Musk has bought 72,500 shares of Tesla , when shares were Despite Musk 's apparent confidence, Tesla is the most shorted U.S. equity, with a . 82 billion short exposure, according to financial analytics firm S3 Partners.

Elon Musk , CEO of Tesla and SpaceX, has a net worth around .1 billion . Luckily, he has the mind and the money to make it happen. Despite a massive net worth hovering around .1 billion , Musk has never taken a paycheck from Tesla , refusing his ,000 minimum salary every year.

Taking Tesla private “makes a ton of sense” from Musk’s perspective, said Gene Munster, a managing partner at venture capital firm Loup Ventures. Though even he -- one of Tesla’s biggest bulls -- assigns long odds to the CEO pulling off this deal.

“Musk does not want to run a public company,” Munster said. “Our guess is there is a 1 in 3 chance he can actually pull this off.”

https://t.co/kw4eHOJfBh

— Tesla (@Tesla) August 7, 2018

(Updates with shares in 11th paragraph. Earlier versions of the story were corrected to say how Tesla could be privately held and to amend the spelling of the company name.)

--With assistance from Sarah Gardner, Matthew Martin, Brad Olesen, Sebastian Boyd, Vildana Hajric, Dinesh Nair, Sally Bakewell, Emily Chang, Ed Ludlow and David Welch.

To contact the reporters on this story: Dana Hull in San Francisco at dhull12@bloomberg.net;Claire Boston in New York at cboston6@bloomberg.net

To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, ;David Papadopoulos at papadopoulos@bloomberg.net, Kevin Miller

©2018 Bloomberg L.P.

Tesla forms three-member panel to decide on any Musk proposal .
Tesla Inc.'s board named a special committee of three directors on Tuesday to evaluate possibly taking the electric carmaker private, although it said it had yet to see a firm offer from the company's chief executive, Elon Musk.Load Error

—   Share news in the SOC. Networks
This is interesting!