This Sounds Like CYA to Me

Elon Musk has been on a Jihad against short-sellers of Tesla forever.

The other day, he tweeted that Tesla would be going public at $420, about a 30% premium.

Now, with regulators wondering if this might be an illegal stock manipulation scheme, Musk is claiming that he has what is pretty much a done deal with the Saudi Arabian sovereign wealth fund.

The house of Saud may not be the sharpest tack in the drawer, but taking Tesla private at a 30% premium when their best case PE ratio in the next decade is something north of 100:1 is foolish even by the standards of inbred oil-wealth.

My guess is that there were some very preliminary talks, and Musk wants to use this as a cover for his attempt to hurt the short-sellers.

I hope that there is a full investigation:

Elon Musk, Tesla’s chief executive, said on Monday that he had held meetings with representatives of a Saudi sovereign wealth fund who expressed an eagerness to help him take the electric-car maker private.

Writing in a post on Tesla’s corporate blog, Mr. Musk offered his fullest explanation yet for what he said were the circumstances behind his Aug. 7 message on Twitter that he was “considering taking Tesla private at $420” and had “funding secured.” The post sent Wall Street scrambling for more information.

In the blog post, Mr. Musk said the Saudi fund had approached him several times about taking the company private as part of the country’s efforts to diversify its economy beyond oil.

Mr. Musk said that after several meetings that began in early 2017, he had left talks with the fund’s managing director on July 31 “with no question” that a deal could be closed and “that it was just a matter of getting the process moving.”

Yeah, sure, and if you believe that, I have a bridge in Riyadh you might be interested in buying. 

Leave a Reply