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Update: SEC allegedly investigating "funding secured" part of Musk's Tesla privatization tweet


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Some rough math:

 

Tesla has about 170 million shares of common stock outstanding.  Of that amount, Musk owns about 20%.  That means the capital required to buy out the remaining shareholders would be at least:

 

170 million shares * 0.8 * $420/share = $57.1 billion

 

That's a HELLUVA leveraged (debt-financed) buy out that will have debt issued to private equity/venture capital/sovereign wealth funds/etc.

 

In fact, Bloomberg estimates that Musk would have to come up with $66 billion.

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2 minutes ago, SFLUFAN said:

Because he intends to take the company "private" which means that the shares won't be available to the public.  He needs to buy out anyone that has stock that's traded on public exchanges.

What is the difference? I don't know anything about this. 

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11 minutes ago, Jwheel86 said:

What is the difference? I don't know anything about this. 

The difference is that you or anyone else of the general public won't be able to buy Tesla stock when the company goes "private".  Everyone that currently holds Tesla stock will have to be bought out either with cash or an exchange of their currently-held stock for newly-issued stock in the new "private" Tesla.

 

The stock will be closely-held between Tesla employees, management, and private equity investors, etc.  The stock will be removed from public stock exchanges and no longer subject SEC requirements. For example, the financial statements of Tesla would no longer be publicly available.

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8 minutes ago, TwinIon said:

Here's a piece from The Verge discussing why taking the company private would be so difficult.

Yes, Elon's "plan" (OLOLOL!) would require the creation of a Special Purpose Vehicle/Special Purpose Entity (SPV/SPE) for those stockholders that don't cash out at $420/share.  I'm not sure that it's as seemingly impossible as the article's respondents think though.

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https://www.thecut.com/2018/08/azealia-bankss-feud-elon-musk-grimes-explained.html

 

Quote

Elon Musk announced via Twitter that he was considering making Tesla a private company with shares starting at $420, which was a pretty big business announcement. Azealia Banks claimed on Instagram that he had tweeted the decision while tripping on acid, and that after the fact, he was freaking out because he had not secured the necessary funding to take the company from public to private.

 

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hahahahahaha 

 

 

Quote

In a conversation with a Business Insider reporter, Banks claimed that while she was at Musk’s house, she overheard him on the phone, panicked and “scrounging for investors.” She also said “I could run Tesla better than he does,” and added that she thinks Grimes and Musk are “so pitiful.”

 

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