Elon Musk, wants to take Tesla into private hands, his hands
Elon Musk Could Be Playing The Markets With Tweet To Take Tesla Private
Industry News

When Elon Musk speaks the entire world, not just the automotive world, listens. Musk has the status of ‘leader of the world’ and the entire planet listened when he declared an audacious move to take Tesla private, without giving any details on how he would raise the $72 billion dollars needed to undertake such a bold move.

But this is how Elon Musk works, he is a ‘big ideas guy’ who shoots off fantasy ideas because he knows there is an audience that will listen. And the global markets did listen, from investors to short sellers indeed the entire global financing industry listened. Musk’s announcement to make Tesla a private company caused shares in the company to fall by 7 percent from $420 per share to $352 per share by last Thursday. For shareholders, this is a huge financial loss in an instant. But is Elon Musk deliberately short-selling Tesla in a bid to devalue the company so that he can buy it back at a much cheaper rate? It may well seem that way. Short sellers were furious at Musk. The global investment industry uses the golden currency of confidence to create value if, for example, Tesla has a slowdown in sales investors suddenly have a lack of confidence and Tesla’s share price takes a hit. Such a fall, of whatever percent, is bad for the individual investor, but good for those who seek to buy shares on the cheap with the expectation that things will improve, therefore netting a profit when share price increases. This is what Elon Musk is doing, but its difficult to believe it because he is doing it to his own company and it’s a genius poker play our theory is correct. But there is one problem, it’s almost impossible for a private company to raise $72bn, the investment community has poured doubt on Musk’s plans because Tesla is not turning a profit and therefore to raise such equity and debt financing is problematic. Musk has a net worth of $22bn and holds a 20 percent stake in Tesla, the richest man on the planet is Jeff Bezos who is worth $108bn, theoretically, Musk could ask Bezos to step in and buy 80 percent of Tesla. But would Bezos freeze at the thought of having to live with a net worth of only $36bn? Private investment is never going to happen so Musk’s next step is to avoid the capital markets and private investors and knock on the doors of Sovereign Wealth Funds. Such a fund is state-owned and the wealthiest is Norway which has a reputed net worth of $1 trillion dollars. Three of the top five wealth funds are from oil-rich countries of the middle east, Kuwait, Saudi Arabia, Abu Dhabi. And then there is China, so despite what the capital markets say Elon Musk could well raise the $72bn needed to make Tesla into a private company. However doing so is, in effect, reducing the shareholder burden at the expense of taking on debt. Musk has a lot of hurdles to jump if his plans are to prevail. He also has the burden of regulation to face down and the U.S. Securities Exchange Commission is already asking questions. As a result of one tweet, Elon Musk really does have the entire world listening.  Elon Musk, wants to take Tesla into private hands, his hands
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