Tesla shares rise 11 percent after Musk's shocking tweet
08 August, 2018, 09:23 | Author: Kathy Ellis
"Gene Munster, a partner at the venture capital firm Loup Ventures, said that taking Tesla private "makes a ton of sense", for the following reason: "[Musk's] missions are big and make it hard to accommodate investors' quarterly expectations".
Asked on Twitter whether Musk would continue to be CEO under such a scenario, he replied there would be "no change". At market close, Tesla's market cap stood at $63.87 billion.
The Silicon Valley company faces a make-or-break moment in its eight-year history as a public company as competition from European automakers is poised to intensify with new electric vehicles from Audi and Jaguar, with more rivals to follow suit next year. Even as the world's 31st-richest person and Tesla's largest shareholder, Musk would be reliant on outside funding for any buyout since his fortune is highly illiquid. As he explained "Being public ... subjects us to the quarterly earnings cycle that puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term".
In contrast, private companies have a smaller number of shareholders-generally fewer than 2,000-and are not available for purchase on public markets.
Musk views short sellers as people who don't understand his company [.] It's similar to the relationship between Trump and the media. This is not to say that it will make sense for Tesla to be private over the long-term.
"This is great news for any bondholder any way you spin it", said Ross Gerber, chief executive of Gerber Kawasaki Wealth and Investment Management who owns both the convertibles and the stock. He said in his letter to employees that he did not seek to expand his ownership. It would be one of the biggest go-private deals on record with a price tag of about US$72 billion, based on US$420 per share. "Our guess is there is a 1 in 3 chance he can actually pull this off", wrote Gene Munster of Loup Ventures, adding that Mr. Musk's proposed premium over Tesla's existing share price might not be enough to persuade shareholders to sell.
Call options, which convey the right to buy shares at a fixed price in the future, were particularly busy and logged significant price gains on the day.
Tesla Motors CEO Elon Musk is considering taking the company private, saying it would be less distracting that the "enormous pressure" of meeting quarterly financial targets. He made no mention in his tweets or his letter of where the funding for a deal would come from.
Tesla stock was trading at about $355 a share before Musk's tweet.
Musk argued that his other major company, SpaceX, offered a good model for Tesla to emulate.
China's Tencent Holdings, which took a 5 percent stake in Tesla previous year, is another possible partner.
The US Securities and Exchange Commission (SEC) allows companies to use social media outlets like Facebook and Twitter to announce key information in compliance with its fair disclosure rules so long as investors have been alerted about which social media outlets will be used to disseminate such information.
However, some analysts were skeptical that Mr. Musk could engineer a buyout.
In fact, Tesla has turned a narrow profit in only two quarters since it became a public company in 2010. "Plus, this is short squeeze rocket fuel after a nice quarter".
Tesla shares rose 11 percent Tuesday, meaning short sellers lost about $1.3 billion in mark-to-market losses, according to estimates from Ihor Dusaniwsky, S3's head of predictive analytics.
That means the annual deficit would likely surpass last year's $552 billion total trade gap and hit the highest level since 2008. The deficit climbed $3 billion to $46.3 billion in June from $43.2 billion in May, the Commerce Department reported Friday .
That system will be developed over the next 100 days and implementation will occur sometime after that, she said . That increase is down from the former government's scheduled increase of 3 per cent which was set for October.
Despite many company executives complaining that they can not find workers to fill open positions, wage growth remains sluggish . Faucher writes that as that happens, job growth will slow down because businesses will find it more hard to recruit new hires.
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Moss paid homage to Green, who likely who have presented the Vikings Ring of Honor member at his induction ceremony. In applying what I learned in football for the rest of my life I've discovered we all win.
The two fires, which have threatened more than 9,000 structures, have not merged, but officials are counting them as one. The fire is entering its third week, with 163,000 acres burned and more than 1,000 homes lost.
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Add Donald Trump as an interest to stay up to date on the latest Donald Trump news, video, and analysis from ABC News. The Post reported a few weeks later that Trump Jr.'s initial misleading statement had been "dictated" by Trump.
The U.S. move has dismayed America's European allies trying to preserve the nuclear deal. Another added, "The Iranian people are seeking the same thing".
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Community Shield 2018, Chelsea vs Man City
I saw three games - he gets it, the team in a short time plays like he wants. "Always Chelsea is a big rival". We have very good midfielders, but maybe a midfielder with different characteristics".