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Musk Says 'Funding Secured' Claim Sparked by Saudi Meeting
Elon Musk said interest from Saudi Arabia's sovereign wealth fund gave him the confidence to drop the bombshell last week that he was considering taking Tesla Inc. private. The Saudi Kingdom's Public Investment Fund had approached Musk going back almost two years about taking Tesla off the market, he wrote in a blog post Monday, confirming that the fund recently bought an almost 5 percent stake. Musk described a July 31 meeting in which the Saudi fund's managing director expressed regret that Tesla hadn't moved forward with a go-private transaction.
[...] Several investors have since sued Musk and Tesla, claiming the company's share price had been manipulated. The Securities and Exchange Commission is said to be intensifying its scrutiny of the company and its chief executive officer after having started gathering general information about Tesla and Musk's earlier public pronouncements about manufacturing goals and sales targets.
One of Tesla's biggest critics, Vertical Group analyst Gordon Johnson, read Musk's blog post as a walk-back maneuver from his "funding secured" tweet last week. He cited Musk's statement Monday that the Saudi fund's support for taking Tesla private was "subject to financial and other due diligence and their internal review process for obtaining approvals." "He is specifically stating that funding is not secured, and I think that's a big deal," Johnson, whose $93 price target on Tesla shares is the lowest among Wall Street analysts, said on Bloomberg Television. "The question then becomes, what does the SEC do here, and do the shareholders stick with him?"
Also at CNBC.
Previously: Elon Musk Considers Taking Tesla Private
(Score: 0) by Anonymous Coward on Monday August 13 2018, @09:30PM (5 children)
Didn't this all start based on a hostile takeover rumor coming from Saudis?
(Score: 3, Insightful) by takyon on Monday August 13 2018, @09:33PM (4 children)
Rather than a hostile takeover, it could be seen as a willing embrace.
[SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
(Score: 2) by Fluffeh on Monday August 13 2018, @10:07PM (3 children)
It's a smart move for the Saudis - ween off oil economy, get a head start on the oil-killer. I do wonder how it will go with US regulators. Many countries have some very specific rules about external interests and owning massive/important companies.
(Score: 2) by bob_super on Monday August 13 2018, @10:32PM
The US is very picky about external takeovers, but the Saudi are our Best Buddies, so that would be fine.
... Except that traditional car makers will freak out at the amount of money suddenly becoming available to Tesla, and invite every lawyer they can find to read the anti-muslim anti-SA terror laws passed after 9/11, to try to get their many congresscritters to kill the deal and potentially Tesla in the process.
(Score: 0) by Anonymous Coward on Tuesday August 14 2018, @12:59AM
It's a smart move if Tesla's value increases. $420 per share for a company that is on the ropes is not cheap.
(Score: 2) by Bot on Tuesday August 14 2018, @08:07AM
>It's a smart move for the saudis indeed
Embrace extend (price, not mileage or efficiency) and extinguish.
Account abandoned.
(Score: 0) by Anonymous Coward on Monday August 13 2018, @09:36PM (13 children)
Who exactly is suing? If it is investors, why? the value went up? really?
If it is shorts, who gives a &*@#?
Seriously, Shorts!=Investors with respect to the stock they shorted . . .
(Score: 3, Funny) by Anonymous Coward on Monday August 13 2018, @09:51PM
"Eat my shorts!"
(Score: 2) by aiwarrior on Monday August 13 2018, @09:57PM (11 children)
This!
Shorters are on derivatives markets, meaning they are for good and bad out of SEC rules. SEC rules also impose a lot of rules on investors, that derivatives investors do not need to abide to. To be honest the derivative options people need to take it as part of life.
(Score: 0) by Anonymous Coward on Monday August 13 2018, @10:10PM (9 children)
What does this mean? You mean if I go to fidelity and short sell a stock I am "on derivatives markets"?
(Score: 5, Informative) by Anonymous Coward on Tuesday August 14 2018, @12:26AM (8 children)
"derivatives" are standardized contracts. When you short, you buy the right to sell somebody elses stock, you're not actually selling stock you own. Because they aren't your shares, you don't have a contractual relationship with the issuer. In this case Tesla. Because Tesla didn't sell you anything, or promise you anything, there is no "consideration". Which is to say, that Tesla has sod all to do with whatever you bought.
Manufacturing companies are extremely cash intensive. Corporate raiders often attempt to crash these companies. They take them over, loot the cash in the form of CEO bonus's, and then dump secured debt in place of the cash. The problem with that, is that long term manufacturing cycles are effected by highly variable market factors, like inflation, consumer demand, interest rates etc. The reason they keep cash on hand is to weather these cycles. So what happens is the company is weakened by the takeover and limps along until it ultimately goes bankrupt years later. The corporate raiders get new jets, and the children whose fathers work at companies like Tesla, starve.
There are many kinds of derivatives. Derivatives are highly speculative, and can create market wide dynamics that are extremely dangerous, or otherwise can be outright fraudulent. The 2008 market crash was caused by insurance based derivatives, that were actually illegal under Glass Steigall. But Glass Steigal was repealed during the Monica Lewinski scandal. (probably as part of a deal with a Republican congress to avoid impeachment) Incidentally this dynamic will happen again, because Glass Steigall was never reinstated.
There aren't a lot of folks who understand SEC law. And 99% of journalists writing about this, don't have the faintest clue what they are talking about. Even worse a lot of them are just echoing professional astroturfing, which IS actually illegal when it comes to manipulating market shares. So most of the related articles, are written by unwitting dupes in a criminal conspiracy.
What is actually more interesting, is that if this goes to court, it will open up discovery for Musk. Which is to say he will have an opportunity, and legal basis for sussing out who the players are, and naming them and shaming them in front of a judge and jury. So if they want to sue him, go ahead. I'm sure he would just hate to be thrown in that briar patch. Who knows what charges will be levied after such a circumstance?
(Score: 0) by Anonymous Coward on Tuesday August 14 2018, @01:50AM (5 children)
What's with this new pattern of people posting multi paragraph responses that fail to answer the question or otherwise go on a tangent?
(Score: 0) by Anonymous Coward on Tuesday August 14 2018, @02:17AM (3 children)
'"derivatives" are standardized contracts. When you short, you buy the right to sell somebody elses stock, you're not actually selling stock you own.'
(Score: 0) by Anonymous Coward on Tuesday August 14 2018, @04:01AM (2 children)
You mean if I go to fidelity and short sell a stock I am "on derivatives markets"?
(Score: 0) by Anonymous Coward on Tuesday August 14 2018, @05:30PM (1 child)
Sometimes the nomenclature "short" is used to refer to just selling a stock you own. Which is different than selling a stock you don't own. If you short a stock you don't own, you are buying a contract, which is a derivative. Derivatives are sold on various markets just like stocks, and your broker will provide them mostly transparently. Typically the first time you do this, your broker will be pretty explicit about showing you the risks.
It is important to distinguish between them. When the big banks defrauded the world economy, the way they did it was buying derivatives into consumer mutual funds they managed. Essentially they pushed fraudulent unpayable insurance claims into unwitting consumers retirement portfolios without their knowledge or consent, and then crashed the insurer so the claims could never be paid. The money John Q. Public paid into their mutual funds went into bankers bonus's, and George W. Bush may as well have underwrote the whole thing, because the SEC never prosecuted most of them.
(Score: 0) by Anonymous Coward on Tuesday August 14 2018, @09:41PM
Wow still not talking about actually just selling short a stock. Not selling a stock, not options, not futures, just short selling. It seems you have no idea what you are talking about and just keep trying to push some political point.
(Score: 0) by Anonymous Coward on Tuesday August 14 2018, @03:37AM
Hey!...SN is now all AC---all the time. Any AC can say anything no matter if it is a real fact or an alternate fact. Me thinks we need a "nuke" mod. Blast the infringing IP back into the "Dark Web".
(Score: 1) by khallow on Tuesday August 14 2018, @09:50AM
The answer is in the word "derivative".
A derivative is a security with a value explicitly derived from other assets. Shorting is not a derivative as a result. It's simply selling stuff you don't have.
(Score: 0) by Anonymous Coward on Tuesday August 14 2018, @11:34AM
I can't believe this got upvoted to +5, its the level of fake news we expect from the MSM. The deep state bots were out in force yesterday.
(Score: 2, Interesting) by Anonymous Coward on Monday August 13 2018, @10:14PM
According to this, the SEC does regulate "shorters":
https://www.investopedia.com/terms/r/regsho.asp [investopedia.com]
(Score: 3, Interesting) by Anonymous Coward on Monday August 13 2018, @10:45PM (12 children)
Investors have to be Saudis because Americans don't have any money. The Boomers are busy spending their pensions on luxuries as fast as they can before they die. GenXers are slaving from paycheck to paycheck. Millennials are starving while they drive Ubers for negative net income. Homelanders are stuck in the basement with social media and video games since they can't afford to go anywhere.
When the Boomers die they will bury their vast fortunes in their tombs, bankrupting America for good.
(Score: 1, Insightful) by Anonymous Coward on Monday August 13 2018, @11:00PM (6 children)
Thanks conservatives for sucking the big dong of oil execs! Is the runoff trickling down and making you feel better?
Fuckers tanked the country out of hate, fear, and greed. THANKS A LOT!
(Score: 0, Troll) by Anonymous Coward on Monday August 13 2018, @11:22PM (4 children)
In America, conservatives are people who want the Founders' ideal: A small, explicitly limited government whose sole purpose is to protect each individual's rights.
Whoever is responsible for the downfall, it's not the conservatives.
(Score: 1, Insightful) by Anonymous Coward on Tuesday August 14 2018, @03:26AM (2 children)
Sorry bud, that might have been the ideal but it sure isnt the practice. Like liberals who are ok with mass surveillance or who think weed is evil. They arent 100% liberals.
So ya, i reiterate, conservstives tanked this country and the dems followed suit to try and win with a more centrist position. We are now in corporatocracy and we need to flip this wagon around before the next generation thinks this shit is normal.
(Score: 0) by Anonymous Coward on Tuesday August 14 2018, @08:56AM (1 child)
You mean it isn't yet? The US has been run by corporations since at least the '80s. Between big oil, the military industry, the MAFIAA or the banks, I don't see any occasion in my lifetime that the US was ruled "by the people, for the people".
(Score: 4, Insightful) by c0lo on Tuesday August 14 2018, @01:09PM
But it is... for certain values of people.
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 2) by cmdrklarg on Tuesday August 14 2018, @04:05PM
The problem has very little to do which part of the political spectrum you reside in. It has everything to do with the rich and powerful using their money to influence politicians to have them do their bidding.
And I'll give you one guess on which side of the political spectrum is doing everything they can to cater to the rich and powerful. Who was it that just passed massive, permanent tax cuts for the rich? That was Obama, right?
The world is full of kings and queens who blind your eyes and steal your dreams.
(Score: 2) by LoRdTAW on Tuesday August 14 2018, @01:28PM
Fuckers tanked the country out of greed using hate and fear. THANKS A LOT!
FTFY.
(Score: 0) by Anonymous Coward on Tuesday August 14 2018, @12:13AM (3 children)
What's wrong with Mr. Putin? After all, he never bombed the US like Saudis; not yet anyway.
(Score: 0) by Anonymous Coward on Tuesday August 14 2018, @03:46AM (2 children)
Maybe not, but he did hack our interwebby to fuck with our minds.
(Score: 0) by Anonymous Coward on Tuesday August 14 2018, @04:50AM (1 child)
(Score: 4, Informative) by c0lo on Tuesday August 14 2018, @05:16AM
Don't need to go that far back. 1996 and the re-election of Yeltsin [latimes.com] would suffice.
One of the results? The raise of the Russian oligarchs [npr.org] which some of them are now subject of US travel ban.
(not in my intention to pass a value judgement here, just pointing out that interventionism is not necessary a thing of the distant past)
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 0) by Anonymous Coward on Tuesday August 14 2018, @03:42AM
Well you don't see Mr. Gates or the Mr. Koch's nor Mr. Buffet Buying into Tesla. They are all sitting on the sidelines waiting to see how things shake out.