Tesla going private? We have questions...
We have many questions. for instance:
1. How does the debt of a buyout provide less pressure than the stock market?
There is quarterly reporting and an incentive for short sellers to trash talk the company on Twitter, but that surely pales in comparison to the pressure to maintain bank/ bond covenants and make interest payments.
3. How do you finance $50bn(?) of new debt on a company with negative cash flow, big expansion plans and where analysts forecast a need for further equity raises?
6. How can public shareholders remain investors in a “private” company?
Musk said in his letter that shareholders “can stay investors in a private Tesla or they can be bought out at $420 per share, which is a 20 per cent premium over the stock price following our Q2 earnings call (which had already increased by 16 per cent)”. He also seemed to suggest a fund structure similar to that at his rocket company, SpaceX.
However, the problem is an SEC rule that a private company cannot have more than 500 shareholders of record. The Securities and Exchange Commission would surely look straight through the pretence of a private company structure, wouldn't it?
We have many questions. for instance:
1. How does the debt of a buyout provide less pressure than the stock market?
There is quarterly reporting and an incentive for short sellers to trash talk the company on Twitter, but that surely pales in comparison to the pressure to maintain bank/ bond covenants and make interest payments.
3. How do you finance $50bn(?) of new debt on a company with negative cash flow, big expansion plans and where analysts forecast a need for further equity raises?
6. How can public shareholders remain investors in a “private” company?
Musk said in his letter that shareholders “can stay investors in a private Tesla or they can be bought out at $420 per share, which is a 20 per cent premium over the stock price following our Q2 earnings call (which had already increased by 16 per cent)”. He also seemed to suggest a fund structure similar to that at his rocket company, SpaceX.
However, the problem is an SEC rule that a private company cannot have more than 500 shareholders of record. The Securities and Exchange Commission would surely look straight through the pretence of a private company structure, wouldn't it?
Big Short Steve и сие
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