Private Lies: Musk Tweets He Will Take Tesla Private

In a pair of Tweets Musk proclaimed he would take Tesla private around $420 a share. He doesn't have controlling interes

Share Price $420

Shares Rise 6.5%

In response to those Tweets, Tesla Rose 6.5% in Afternoon Trading.

Shares are up but Musk does not have controlling interest. Where's the funding?

Tesla’s stock was up 6.5% at $364.11 in early afternoon trading, meaning it would need to climb a further roughly 16% to reach $420. The Financial Times reported on Tuesday that Saudi Arabia’s sovereign-wealth fund has accumulated a roughly $2 billion stake in the company.

Tesla couldn’t immediately be reached for comment.

Publicity Stunt

My best guess is this is another publicity stunt hoping to squeeze the shorts. But if that is a success, who will be left to buy?

Mike "Mish" Shedlock

Comments (20)
No. 1-10
KidHorn
KidHorn

How is this legal? There are all sorts of disclosure laws that I would guess are violated with his tweets/

everything1
everything1

This is so wrong how he goes about this. He's driving share prices so insiders or market gurus (whoever they are, wherever they are), can sell shares, then buy back again. I just can't believe the SEC allows this kind of behavior.

Wagner_4
Wagner_4
Updated on

I think the real question here is - what premium over the $420 price short sellers will have to offer to convince at least ~27.6% of current Tesla share holders to sell their shares instead of particpiating in "Private Tesla". Otherwise, it would be mathematically impossible for short sellers to cover. They MUST cover all the shares before Tesla goes private.

If Elon Musk offers current Tesla shareholders to stay in "private Tesla" then Elon does not have to "cough up" ~40B in cash to buy at $420. The amount of cash required could turn out to be significantly less.

Overall, this is smart move by Musk, because Tesla short sellers are working actively to damage Tesla brand. As an example, go to Twitter and look at Mark B. Spiegel's, latrilife, skabooshka's and other short seller tweets where they found a wreck of Model 3 that burnt due to house fire and then presented that as a fire that possibly started from Tesla Model 3 instead. They won't have incentive to post stuff like that anymore.

The only concern is if some government regulatory body prevents takeover. But since Michael Dell was able to take Dell private, then why Musk could not do the same thing? Of course, he still has to convince current investors that see the vision and expected Tesla stock to go to $1000/share.

ML1
ML1

Was there some debt-to-stock conversion deadline that Tesla stock had to meet at a high enough price otherwise Tesla would have had to pay back debt in cash that Tesla does NOT have much left?

This is desperation move because even Saudis do not have that much stupid money to spend so this is a most likely a knowing lie by Musk to goose the stock price so owners of debt convert to stock instead of taking debt payment in cash.

Musk is a genius in marketing and PR and Tesla stock manipulation...

JonSellers
JonSellers

"I a pair of Teets Musk proclaimed ..."

Much more Shakespearean than "a pair of boobs named Musk said 'I'".