Tesla tethers to Elon Musk’s plans to take the group private

Thursday, Aug 09 2018 by

As Tesla investors were catching up on the report of Saudi Arabia’s significant stakes in Tesla, Elon Musk tweet stating his plans to take Tesla private came as a bombshell. His twitter post simply stated that he is considering taking the company private and slated the same at a price of $420, while the funding has been already secured by the company.

CEO of electric car maker declared his surprise buyout plans for Tesla, with funds assured, on 7 August 2018. The announcement came via personal Twitter account of Elon Musk at around 12:48 pm Eastern Time. His audacious offer over social media moved investors to check with the authenticity of the post. However, gaining clarity on Musk’s intentions, Tesla shares soar 11% to close at $379.57, building to the positive market sentiments on Saudi deal in a single day.

Tesla went public in 2010 with its initial public offering of $17 a share. That means alongside innovative automaker’s progress Musk’s offer of share price $420 proposes to give circa 24 times return to the money invested initially in Tesla.

Post Musk’s tweet, Tesla broke silence by publishing an official statement from Mr. Musk to employees that said, “As a public company, we are subject to wild swings in our stock price that can be a major distraction for everyone working at Tesla, all of whom are shareholders”.

Although confirming that the deal has yet not been finalized, Mr. Musk indicated the readiness of the funds to buyout $63.47 billion worth Tesla at $420 a share which is 20% greater than the stock price recorded after the company’s second-quarter earnings last week.

He also elucidated, his buyout plan has nothing to do with accumulating control for himself above 20% of his current shareholdings. He cited Tesla is at its best but being a public company it is getting harmed by the wild swings in the share price along with short sellers’ betting attacks.

Mr. Musk’s freewheeling behavior in running a public company has been greatly criticized by investment bankers and corporate governance. By giving no details on what basis the offer of $420 a share has been calculated, and how much fund had been secured and from whom, Musk cryptic statement is advocated to come under analysis.

As per the Securities and Exchange Commission ruling…

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ASX Limited is engaged in providing securities exchange and ancillary services, derivative exchange and ancillary services; central counterparty clearing services, and registry, depository, settlement and delivery versus-payment clearing of financial products. The Company's segments include prices and research, market products, trading services, listing and issuer services and education services. Its prices and research services included prices of shares, company information, announcements, dividends, ASX 24 reports, find a broker. Its market products included shares, indices, bonds, hybrid securities, managed funds, warrants, options and index derivatives. Listing and issuer services included clearing and settlement, issuing investment products, trading services, technical services, OTC clearing, ASX collaterals and debt securities. The Company was also focusing on providing online courses, finance seminars, research and surveys, share market game and education centres. more »

ASX Price
A$85.47
Change
-0.6%
Mkt Cap (£m)
9,281
P/E (fwd)
32.7
Yield (fwd)
2.8

Tesla, Inc., formerly Tesla Motors, Inc., designs, develops, manufactures and sells fully electric vehicles, and energy storage systems, as well as installs, operates and maintains solar and energy storage products. The Company operates through two segments: Automotive, and Energy generation and storage. The Automotive segment includes the design, development, manufacturing, and sales of electric vehicles. The Energy generation and storage segment includes the design, manufacture, installation, and sale or lease of stationary energy storage products and solar energy systems to residential and commercial customers, or sale of electricity generated by its solar energy systems to customers. The Company produces and distributes two fully electric vehicles, the Model S sedan and the Model X sport utility vehicle (SUV). It also offers Model 3, a sedan designed for the mass market. It develops energy storage products for use in homes, commercial facilities and utility sites. more »

NSQ Price
$222.1
Change
-1.7%
Mkt Cap (£m)
33,249
P/E (fwd)
154.3
Yield (fwd)
n/a



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