The boss of Tesla wishes to leave the Stock market to regain its freedom to run in and out of the clutches of the speculators.
Panic on Wall Street. No it is not a new blockbuster, but the u.s. stock market could soon write one of the pages most crazy of his story. Tuesday night, the whole place american financial’s eyes were riveted on Twitter. Not on the account of Donald Trump, which regularly causes a cold sweat in the analysts, but on the wire of the entrepreneur billionaire, Elon Musk.
Yet another coup bluff?
“I’m planning to remove Tesla from the stock Exchange at 420 dollars. Assured funding”, has suddenly posted the boss of the company’s electric cars.
Yet another shot to bluff the whimsical entrepreneur ? That is clearly not. The case appears to be serious as evidenced by the immediate reaction of the stock market authorities in the us that have temporarily suspended the title as he flew, some investors are sniffing the good shot. The action has actually ended the day Tuesday on an 11% jump ! If Elon Musk had the bad idea to turn back, he would then have to be accountable to the regulators that could accuse him of having attempted to manipulate the share price of the Tesla. To emphasize the seriousness of his approach, our man has insured have the money to conduct this operation at $ 70 billion.
Since the Michigan where is installed its investment funds specialized in automotive (General Motors, Chrysler…), weighing nearly two billion dollars, David Kudla, observing this new situation. Has The Express, he explained that “the u.s. market does not believe that Musk will achieve his purposes, even if we understand why he would prefer a structure that is private rather than public. In particular, it could focus on its long-term vision without worrying about quarterly public reports and criticism from analysts who accompany them”.
The target of speculators
In fact, on the merits of the case, the boss of Tesla has good reasons to consider an exit from the Nasdaq. The many fluctuations in the market price of the company, which pitches as a function of financial results and news -many of the manufacturer california, destabilizes the group. Barely half an hour after his first tweet, Musk sent an e-mail to his employees. “The reason why I want to do this [privatization] is to create an environment so that Tesla works better,” he wrote. As explained by Musk in his internal letter to the employees, the dimension “exerts an enormous pressure on Tesla”, pushing for example the direction to “make decisions for a given quarter, but not necessarily good for the long term.” It therefore seeks to give a little air to his business. “Musk was tired of the constant monitoring of the markets, not surprising that he wants a break,” said Matt Swanson, an analyst at Silicon Valley Software Group, in a note published Tuesday.
If the businessman is ready to make a strategic shift as tight, it is also that Tesla became the target of investors who bet against him. “Elon Musk has stated that his action was the more “shortée” of the market, remember to Express Alexandre Baradez, chief analyst at IG Market. The short-selling, or short selling involves borrowing securities it does not own and then sell it, with the aim to buy them back at a lower price and thus realize a profit on the difference.” According to the analyst, this situation is problematic, because a significant drop in price may hinder any increase in capital, necessary for the development of the company.
Accounts still in the red
As the specialist racing cars electric, still in full development phase, always running after his balance point. For the past several months, the group is experiencing significant difficulties of production on his latest-born, the Model 3, expected to pass Tesla’s trademark status for happy few at the new giant of the automotive world. The Model 3, whose base price is about 30 000 euros, was to be produced in 500 000 copies as soon as 2018, but it is very far from the account : on the second quarter only 28 578 Model 3 are pulled out of the production lines.
The Model 3 should enable the u.s. Tesla to penetrate the middle segment of the range and reach of mass production
During this time, the group continued to burn cash, posting a deficit of 739 million dollars only for the months of April, may and June !
READ ALSO >> For Tesla, it passes or it breaks
The biggest LBO in history!
Financially, the output of the stock exchange is therefore risky. To redeem the securities, Musk is going to have to be very incentive. That is why he has proposed 420 dollars per share, or roughly 80 dollars more than the course of Tesla just before the storm of tweets triggered by the billionaire.
For this campaign, it would launch the biggest BUY-out (redemption by borrowing with leverage) in the history. In a note published by Thomson Reuters on Wednesday, the financial agency reminds that it is currently the group american energy Texas TXU occupies the first place of this list of risky leveraged BUYOUT with a similar operation in 2007 to $ 44 billion. Musk pulvériserait, therefore, on this record, and would create a precedent, since it would be the first operation of this type on a company that has never completed a financial year in the green.
The ranking of the largest LBO in August 8, 2018
If he wants to complete the deal, he will have to rely on lenders of high rank. But Musk, who owns nearly 20% of the share capital of the company, custody, support weight. A few venture capitalists americans still believe in the guru of south africa. And fans like actor Leonardo Di Caprio or the rapper Kanye West also have deep pockets. Just as the bottom ruler of saudi Arabia, who a few minutes before the famous tweet from Musk on Tuesday, announced that the timely acquisition of an equity interest in Tesla to the tune of $ 2 billion, or almost 5% of the share capital of the company. To complete this operation is non-standard, it will need allies… Rich, but above all faithful !