Displaying items by tag: tesla

(New York)

Tesla is a hard stock to figure at the moment. No one is quite sure how likely it is that the company will be taken private at $420. Many are trying to handicap the odds, with Barron’s guessing they are less than 50%. The stock has given up much of the initial gains it got from Musk’s fateful tweet, but the big question is where it will go next. The answer is that it likely won’t move much until there is more information to digest. The SEC is investigating the company, but there is little word on any potential deal.

FINSUM: We think Tesla is going to be quite banded until more information about a potential deal comes out.

(New York)

Well it finally happened. Investors had been waiting anxiously to see if the SEC would act over Elon Musk’s highly unusual way of announcing his buyout intentions last week. Musk tweeted out his plans to take the company private at $420 per share. The SEC has been looking into whether this is a violation of disclosure rules or even intentionally misleading information. The big question is whether Musk actually had the “funding secured” as he said, because if not, it could be the basis for a market manipulation charge. At least two lawsuits have been filed against Tesla since the tweet.

FINSUM: So the SEC says companies are allowed to announce material info over social media, so this case is really just about whether the statement was misleading.

(New York)

Any investor will already know that Tesla is locked in an interesting and precarious situation. Elon Musk is apparently fixed on taking the company private, which has pushed its share price up, but the effort looks highly vulnerable, which could send things crashing back down. Add into the mix that the SEC is investigating the fact that Musk announced his intentions via Twitter, and you have a dangerous mix. Many are wondering when the SEC might decide if Musk broke the rules with his tweet, but the reality is that it may take some time for a judgment.

FINSUM: In our view the lack of a ruling on Musk’s tweet could mean this whole deal sits in limbo for some time.

(New York)

Elon musk’s tweet last week about planning to take Tesla private was met with much excitement, but also much incredulity. Many seemed to think the idea was just a pie in the sky plan with little chance of actually coming to fruition. However, the plan seems to be moving forward as Musk announced yesterday that he has hired Goldman Sachs and Silver Lake to advise the deal. Musk is apparently also working with the Saudi Arabian sovereign wealth fund to get the capital necessary to buyout the company, but is also seeking outside investors as well.

FINSUM: As the plan looks more and more concrete, the stock keeps rising towards the announced $420 buyout price.

(New York)

There seems to be some serious incredulity over whether Elon Musk’s tweet about taking the company private will ever come to pass. And with good reason, as it would take around a $100 bn of private capital to do so—no small feat for a money-losing company. However, Barron’s says it may actually happen. The company’s board is moving to lay out a strategic plan for how to pursue the privatization. CNBC further comments that “Tesla's board will likely develop a special committee of a smaller number of independent directors to review the buyout details”. Tesla’s share price fell 5% yesterday, apparently on doubts the plan would go ahead.

FINSUM: This is the kind of coup that someone like Musk could likely pull off. We also think it is a smart strategic play. However, given how challenging the undertaking is, we are leaning towards it not happening.