Investors really aren't buying Musk's plan for Tesla

Investors really aren't buying Musk's plan for Tesla

Now, several days later, CNBC reports thatthe board of directors at Tesla has scheduled a meeting with financial advisers next week to discuss the possible costs and benefits to actually following through on Musk's brash tweets.

So, this begs the question: Did Saudi see an opportunity for investment in Tesla, or was it Musk who found a prime opportunity for fundraising and share-value inflation upon the reveal of Saudi interest? Trading in Tesla's stock was eventually halted until everyone could figure out what was going on.

Musk said funding was secured, but offered no details as to which investor may be willing to cough up the billions needed to take Tesla off public stock exchanges. A special goal vehicle is a structure that pools investors into a single entity.

No major banks or investors have come forward to say that they have been contacted to help fund the take-private move - which, at about $70 billion, would be the largest LBO ever.

Founded in 2003, Hawthorne, California-based SpaceX has upended the space industry with its relatively low-priced reusable Falcon 9 rockets.

"Who gives USA $30 to $50 billion to repurchase the shares?" In February it test-launched the Falcon Heavy, the most powerful operational rocket in the world.

Another route Musk could take would be to "go dark" by delisting Tesla and reducing the number of shareholders below the threshold that requires Securities and Exchange Commission registration and reporting. "I, like a great many others, am confused by what is motivating" the go-private plan and "why it was communicated in the way it was". Alphabet's Google Inc invested $900 million in January 2015, Google said.

More news: Mourinho Expects "No" Players To Sign For Manchester United Today

Musk's personal stake in Tesla is nearly 20 percent, meaning he would need roughly $70 billion to take it out of the market.

Other ventures also got the "funding secured" treatment.

The SEC and Tesla declined Business Insider's requests for comment. But all that is now in the past and Musk brings some fresh bit of news to the table, and whether that is good news or bad news depends on what perspective you view the situation from. Short sellers bet that a stock price will fall, specifically by borrowing shares and selling them immediately.

Musk and key members appear to believe they'd have more flexibility operating as a privately held company. "Either they can stay investors in a private Tesla or they can be bought out at $420 per share". "But it's hard to completely ignore it when it's always in the news and there's so much volatility".

After jumping to close at US$379.57 on Tuesday, Tesla shares have since fallen about 7 per cent to end trading at US$352.45 on Thursday, amid investor skepticism over the deal's prospects. On Twitter, he alluded to the creation of a "special objective fund enabling anyone to stay with Tesla". Both were on the solar panel installer's board, and Musk, whose cousins ran the company, also was SolarCity's largest shareholder. In those cases, many investors put money into a single fund, and that fund takes a stake in the company, according to a SpaceX investor.

"They can set the price and where the shares are going", said Justin Byers, chief data officer for the Prime Unicorn Index, which tracks the performance of 102 private USA companies valued at $500 million or more.

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