Elon Musk going from two public companies in 2016 to none

Elon Musk Tesla and Solarcity were both publicly trading from 2012 to 2016. Tesla went public June 29, 2010. Solarcity went public Dec 12, 2012.

Solarcity was bought by Tesla in a $2.6 billion all-stock transaction Nov 21, 2016.

Elon Musk has tweeted that he has the funding to take Tesla private for $420. I am quite sure thata majority of shareholders will accept the deal. The buyers probably includes the Saudi Arabian sovereign wealth fund.

Elon Musk will have some extra valuation on his Tesla stock, but will probably retain all of it.

Elon will not need to worry about quarterly earnings and can focus on the ten year goal.

Elon will be able to focus on making Tesla worth more than $650 billion by March 2028 in order to trigger the maximum performance bonus of $55.8 billion. Elon’s shares would be worth about $145 billion if the $650 billion target was met. Elon would have $200 billion in Tesla valuation if Tesla reaches $650 billion.

Elon will be more free to run all of his private companies.
SpaceX
Tesla
Solarcity
Boring Company
Hyperloop
Neuralink
OpenAI

5 thoughts on “Elon Musk going from two public companies in 2016 to none”

  1. ” This setup becomes a full-blown circus when the arbitrageurs arrive to participate in squeezing the shorts over and above mere shareholder demand to remain long. ”

    And it will be a beautiful thing to watch the pathological skeptics squeal.

  2. I think shareholders will approve the buyout, but that’s not the same thing as “accepting the offer of $420.” Musk was clear that he is inviting current shareholders to remain long, and most of us think the long term value is much higher than $420, so we will. Those who exit will only be holders that are limited to holding public shares (index and certain mutual funds, investors that need the liquidity, other special circumstances). The actual percentage of shares tendered will be a minority. The interesting question is whether it will be enough to mitigate a gigantic short squeeze well above the buyout price, as nearly 1 in 5 currently owned shares is counterfeit — in the sense that it it is currently “owned” by both the party that lent it to the short sellers and the party the short sold it to. The short’s obligation to get one or the other party to sell amounts at this point to additional demand. This setup becomes a full-blown circus when the arbitrageurs arrive to participate in squeezing the shorts over and above mere shareholder demand to remain long.

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