Genuine question: he presumably has $20m of Tesla stock he can sell tomorrow if he wants. Since it's a public stock. Or $2m/day for the next two weeks. So what do you mean?
Sure he's not gonna sell all his stock... but in this particular case, it feels like a distinction without a difference.
Musk is (was?) not selling Tesla stock. It would be very hard to sell $8.5B of stock without completely crashing its value. He was taking out a loan secured against that stock.
> Musk then sold more than 3 million shares on Tuesday and about half a million shares on Wednesday in 215 separate transactions that collectively netted $3.88 billion. Unlike the Monday sale, these sales were not part of a pre-planned stock sale, known as a 10b5-1, according to the SEC filings.
Is this allowed? I thought major shareholders/executives were required to announce upfront when selling stock? How do we know he's not acting on inside information regarding some bad news?
So its $25.5 billion of debt backed by his Tesla shares and $21 billion from himself, presumably from selling Tesla shares?
I wonder how many will accept the offer - about 30% of ownership have said they're not interested at that price, if he let a few large holders stay on it could be successful - but this would be a kick in the teeth for smaller investors and his retail fans.
I didn’t load up on Tesla shares when Elon tweeted about Ambien, self driving advancements, or software updates coming any day now, so why would I take him seriously about going private?
The route for going private was to stop trading the shares, meaning I would never make good on that profit. Because ceasing trading is what going private means: I no longer hold stock at $420/share, I hold stock in Tesla which I might be able to sell to someone some day for some as yet unspecified amount.
Assuming he is buying newly-issued shares from Tesla, then the money goes directly into their treasury. So, the company will have $20MM more in cash than it did the day before.
Big fanboy of musk here. His tesla Stock is highly overvalued now....probably a great time to sell but he cannot so easily sell it without company permission.
Bingo. This stunt especially after he tweeted long time ago that he will be the last one to cash out on Tesla. Then himself said anything above $1000 for the stock its overpriced.
It will be very easy to see if that's what it was. If they deal won't go thru (I anticipated both parties will be stuck in court to fight over $1B for close to 5 years, then Musk will settle for some $200MM), Musk can simply buy Tesla stock back! Why he needs to all this cash sitting in a bank right???
he wasn't (or isn't) aiming to sell the stock, he was/is aiming to finance the purchase using his Tesla stock as security. So this line of argument... Doesn't really make sense?
This is all publicly available. Due to leverage, he faced ruin if Tesla fell below X (whatever X is) if he funded it all himself. So he opened his side of the deal up to other people, and allowed other large shareholders to come inside his tent - which reduced his exposure.
Then the market dropped 15%.
Matt Levine has an excellent series of newsletters covering it.
Execs in any public company routinely sell shares at a pre-determined rate every quarter. Execs besides Elon have been selling as part of the plan, and company employees are free to sell as well.
According to SEC filings, Elon himself hasn't sold any recently, but he owns 20% of Tesla, worth about $10B today. Even if Tesla drops 10x, he would have $100M worth of shares. Not to mention all his other assets, shares in SpaceX etc. He has more money than he will ever need.
I wonder how Tesla shareholders feel about this situation. It seems like by leveraging with his Tesla shares, he's passing on the risk to everyone who owns Tesla stock. If they have a couple bad quarters or some kind of macro change happens and the price starts going down, Musk gets margin called and has to dump his stock on the market, which could start a spiral of panic-selling or even open Tesla itself to being corporate-raided.
Sure he's not gonna sell all his stock... but in this particular case, it feels like a distinction without a difference.
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