A startling tweet from Tesla's founder, Elon Musk, was the first chapter of a knocking, unpredictable end that led the company to the Saudi labyrinth and witnessed in the course of open market research. "Elon, to tweet, please" was, according to the New York Times, the sensible request that the management team handed over to the president of the electric car manufacturer.
On Tuesday, August 7, before the opening of the market, Elon Musk shook the financial world with a simple intention. It announced in eight words and 57 characters that it had admitted to launch an offer to take over to Tesla, where the financing was already guaranteed. Tesla started the month at a high level and closed the day for the tuition at $ 341. The price was $ 420 (€ 371) per share. With a statement of this, the price climbed with the lift (11%). But suspicion settled on the market. The threat would be to take it seriously or just a manipulation maneuver, retaliation against vendor shorts, malicious investors who gamble on the fall in stocks and reveal a special passion for attacking Tesla shares? The US Securities and Exchange The Commission (SEC) did not value Musk's behavior to communicate such relevant information, temporarily suspend trading, and then opened a formal investigation.
This week, Tesla was notified to testify to the SEC and to explain the different serial. It is unlikely that the lawsuit will lead to an exorbitant fine or even criminal prosecution.
The actions regretted and accumulated considerable losses. The price lags far behind Musk's reference mark, a sign that investors do not believe in the seriousness of the deal, and it is well below the price it was before the fatal tweet – closed on Thursday at $ 336. 19659002] Musk's critics speak of a "show of entertainment" and say they want to evaluate the fundamentals of the company, such as the colossal debt of $ 11 billion (€ 9.5 billion).
The Saudi job
Prior to the summons of SEC, Musk had already drawn up a comprehensive story explaining the part of "secured financing" that the market did not realize. In an operation that would make Tesla the most expensive stock market ever ($ 71 billion, € 62 billion at the current price), the billionaire will have a strong ally: the sovereign wealth fund of Saudi Arabia.
fund has used two billion dollars to take a 5% position at Tesla and, according to Musk, has been under pressure since the beginning of 2017 to withdraw the equity business. On July 31, the Saudis "repeated the strong support for the operation", regretting that it was not yet advanced. Musk left the meeting confidently that he "could close the deal" and the next day shared the information with the management team he presided over. The entrepreneur deals badly with the pressure of investors and immediate results and sees the quote carousel as "a source of distraction" for those who want to work in the long term.
"It is clear that the fund has more than the capital it needs to execute a transaction like this", says Musk, as if things were so simple. It is true that the Saudi fund manages a portfolio of € 250 billion, but must have assets to go to Tesla. Saudi Arab community does not comment on the case and a source cited by the Wall Street Journal admitted that it might be interested in reinforcement. This does not coincide with financing a general offer that, according to a Saudi banker, is a scenario that will never be done. If Saudi financing is confirmed, another obstacle may arise. The new law on foreign investment imposes restrictions on the control by foreigners of high-tech companies or that endanger national security.
Musk owns 20% of the shares and through his calculations, one third of the current shareholders will resist the temptation to profit from sales. That is, the financial effort is halved. In the statement this week, Musk argues with the accusation of ignoring the rules of the market. He felt it was necessary to "inform all shareholders of the intention" to withdraw Tesla from the listing, he said.