Why did Tesla go private? What does the overbearing president Musk want to do? Or these 3 reasons!
<h1>Musk suddenly announced! Tesla or going private? </h1>
According to the Financial Times (FT) on Tuesday (August 7), saudi Arabia's sovereign wealth fund (PIF) opened a $2 billion position this year to hold Tesla stock, accounting for about 3% to 5% of the company's equity.
It is worth mentioning that the state fund, which is overseen by Saudi Crown Prince Mohammed bin Salman, is by far the fund's boldest bet.
Just as the market was digesting the big news, 30 minutes later, Tesla CEO Elon Musk tweeted that he was considering taking tesla stock at $420.
An internal letter from Musk to Tesla employees leaked out, confirming that the privatization considerations were true, but that no final decision had been made.
<h1>Well, why does Musk want Tesla to go private? </h1>
So the question is: good end, why did Mister want Tesla to go private?
In response, by Tuesday afternoon, Musk issued a more formal statement, announcing that Tesla may be privatized. In this regard, foreign media said that Musk's desire to privatize Tesla may be based on the following three aspects, specifically:
First, confidential competition information!
As a privately held company, Tesla is not required to disclose information that could give competitors an advantage.
Second, be consistent with the long-term interests of shareholders!
As Musk mentioned in his letter, owners of privately held companies can maintain control of every operational decision without violating shareholder quarterly expectations.
Third, push up the stock price!
Musk may have guessed that these news would push up the stock price just like the former lord of the SEC. As Harvey Pitt hinted at Tuesday: "Musk complained about market prices, complained about shorting, and the stock price rose rapidly by 5 to 8 percent." ”
<h1>What is the market impact? The bears lost $1.3 billion on the day, and Musk's value rose by $1.5 billion! </h1>
Just as the so-called "pull a hair and move the whole body", the market heard this news, it was a shock!
The above two big news boosted Tesla's stock price up and down, Tesla's stock price rose by about 8%, and intraday trading was suspended for an hour and a half, resuming trading 15 minutes before the close.
In the end, Tesla closed up 10.99% at $379.57, close to the highest closing record of $385 on September 18, 2017. It rose 7.39% before the suspension of trading, quickly pulled up more than 13% after resuming trading, touched as high as $387.46, and fell back in 10 minutes, falling nearly 1% after hours.
Therefore, some people suspect that this is Musk's approach to raise the stock price, after all, Musk also said in the open letter that he "considered privatization" and not "decided to privatize".
In addition, a bull financial editor noted that Musk's privatization news tweet is only 61 characters, but it has caused the bears to lose $1.3 billion in a single day, and this year's cumulative short loss is $3 billion, and Musk's net worth has risen by nearly $1.5 billion, breaking through the $25 billion mark.
In addition, it is worth mentioning that at present, Musk already owns 20% of Tesla's shares. He needs to raise more than $50 billion to buy shares held by other shareholders. Add up to about $10 billion in debt, and the deal would be the largest leveraged buyout in history, surpassing the $45 billion 2007 acquisition of Texas energy giant TXU (Energy Future Holdings), which eventually went bankrupt.
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