Analysis: on whose money Ilon Mask will be able to withdraw Tesla from the stock exchange
On August 7, Pexels Ilon Mask announced on his Twitter account his intention to withdraw Tesla shares from the public market, buying them at a price of $ 420 each. The billionaire said that he wants to gain independence from price fluctuations on the stock exchange and is already preparing for a deal. The last two weeks, the media are discussing whether the deal will take place and who will help finance it: according to various estimates, fulfilling the promise to Ilon Mask will require from $ 66 to $ 72 billion.
Bloomberg: a Tesla and SoftBank transaction failed
The first “suspect” to cooperate with Ilon Mask in the privatization of Tesla was the Japanese holding SoftBank Group Corp. The company participated in the negotiations and wanted to invest in the production of electric vehicles in 2017. Now, according to sources from the Bloomberg publication, SoftBank’s interest in Tesla has declined.
The likely reason for such changes is already made by SoftBank investment in General Motors Co. Cruise and DiDi Chuxing Inc., Uber Technologies Inc. and Singapore's Grab. Thus, the company has already relied on the future of the car market, but not in favor of Tesla, which was slowly entering mass production despite the growing competition in the electric car market.
In an interview with Bloomberg TV on Thursday, Marcelo Claire, SoftBank's chief operating officer, confirmed openness to major transactions and partnerships with innovative businesses seeking expansion, but did not comment on the situation with Tesla.
Shares Tesla buy for the money of Saudi Arabia?
Another potential source of capital that Ilona Musk himself mentioned in the Tesla blog is the Sovereign Fund of Saudi Arabia. Tesla reported that the investor has sufficient funds, and his representatives have repeatedly participated in negotiations with the company, however, the decision on cooperation cannot be considered accepted.
The previous actions of the Saudi Fund also speak in favor of the alleged cooperation: in early June, it became known that they bought 5% of Tesla shares sold, having spent $ 2 billion on this. Experts believe that by investing in the production of electric cars, creates a safety cushion for the future when natural resources shrink.
Alternative: Mask manipulation
There are many other theories about how Ilon Musk will privatize the company, for example, Reuters suggested that Tesla could be acquired by another company Mask - Space X. In any case, the second party or parties to the transaction are not enough for the entrepreneur to decide: privatization the company is impossible without the consent of the shareholders and the permission of the US Securities and Exchange Commission (SEC).
Tesla's impulsive remarks have already raised questions from regulators: given the sharp fluctuations in shares caused by Mask’s social networks, the SEC launched an investigation into the situation. Ilona Mask can face a punishment for a violation in the rules of publication of material facts about a market issuer.
“If these comments were issued to move stock prices, this could be regarded as manipulation. And also as an attempted fraud in securities, ” commented the former SEC head Harvey Pitt, who was invited as an expert, to CNBC. Alertness of the regulator is caused both by the fact of indicating the future price of shares to be repurchased, and by its size: it is about 20% higher than the market one.
Other materials on finance and stock market from ITI Capital :
- Analytics and market reviews
- Purchase of shares of American companies from Russia
- Huawei overtook Apple in terms of sales. The capitalization of the American company still reached $ 1 trillion
- Analysts: Microsoft's capitalization could reach $ 1 trillion
- Mass media: large-scale cyber attacks accelerated the growth of capitalization of companies from the information security industry
- Bloomberg: хедж-фонды узнали результат Brexit раньше других и заработали миллиарды