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Elon Musk says Tesla's private buyout could be funded by Saudi Arabia

By Polycount · 14 replies
Aug 13, 2018
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  1. Tesla CEO and co-founder Elon Musk recently announced on Twitter that he planned to take the company private. This announcement came as a surprise to many and served as yet another example of the billionaire's unorthodox approach to business management.

    Indeed, the announcement was so sudden that even Tesla's own board of directors weren't fully aware of Musk's intentions.

    Musk's initial Twitter post, where the CEO said he wanted to take Tesla private at $420 a share, sent the company's stock skyrocketing for a short period of time. Musk's vague tweets led some -- particularly the company's "short sellers" -- to believe he was attempting to manipulate the company's stock prices.

    However, that notion is based on the belief that Musk didn't have funding "secured" as he promised on Twitter.

    Unfortunately for skeptics, Musk has confirmed that the funding has been available for quite some time.

    In a blog post published Monday, the CEO announced that Saudi Arabia's sovereign wealth fund expressed interest in funding a private Tesla as far back as 2017.

    That interest turned to firm intentions when the country's government purchased 5 percent of Tesla's stock last month, prompting a meeting between government officials and Musk himself.

    Musk says Saudi Arabia is ready to move forward with a deal, but the details will need to be hashed out and presented to Tesla's shareholders before a final decision can be made.

    Permalink to story.

  2. Uncle Al

    Uncle Al TS Evangelist Posts: 5,390   +3,779

    Not releasing information to stockholders in advance of the announcement; selling to a foreign national company without prior SEC review and approval ...... sounds like the old boy may be smoking a BIG ONE!
  3. wiyosaya

    wiyosaya TS Evangelist Posts: 3,986   +2,287

    Doesn't he always smoke a "Big One?" Or should that be, leaves a big steaming one where ever he goes and whatever he says?
    jarvis54 likes this.
  4. Vrmithrax

    Vrmithrax TechSpot Paladin Posts: 1,467   +500

    Heh, put a big electric vehicle manufacturing company in the hands of a group from a country synonymous with oil exports... What could possibly go wrong there? :p
    Humza, andrewdoyle88, Reehahs and 5 others like this.
  5. Sausagemeat

    Sausagemeat TS Maniac Posts: 409   +205

    Makes sense to me. The Saudis know oil won’t last forever and they want to use the wealth they have now to invest in the techs and companies that could dominate the world in the future.
    hk2000 and Reehahs like this.
  6. Reachable

    Reachable TS Evangelist Posts: 369   +183

    He was smart not to tell the Board. So what if caught them dumbfounded? He didn't close the deal, he just negotiated it. Had it leaked, the world would have argued about it, and the Wall St. gamblers would have f***ed it up.
    hk2000 and Reehahs like this.
  7. MonsterZero

    MonsterZero TS Evangelist Posts: 566   +323

    I can see Dubai being the city of the future in no time if that deal actually goes through, not that I'd ever actually be able to afford to go there.
  8. Vrmithrax

    Vrmithrax TechSpot Paladin Posts: 1,467   +500

    Well, with me being serious now, I'd tend to agree. If it wasn't for that pesky issue of promoting electric vehicles being a major conflict of interest with their primary revenue source, until the day finally comes that the oil dries up, I'd say it was a no-brainer.
  9. Theinsanegamer

    Theinsanegamer TS Evangelist Posts: 1,547   +1,767

    Well, except for the part about the Saudis proposing the funding AFTER musk tweeted it, running afoul of SEC rules. By keeping this a secret and surprising everyone, he may have caused himself and tesla way more trouble then the deal is worth.

    Had he told the board, they would have slapped him across the face and remind him he has to play by the rules if he doesnt want investors to destroy his company before he can take it private.
  10. p51d007

    p51d007 TS Evangelist Posts: 1,965   +1,230

    EV's that don't GENERATE their own source to recharge the batteries? I still DO NOT get the rush to that sort of EV.
    You still must generate electricity to charge it, and, the sun doesn't always shine, and the wind doesn't always blow, so unless you have a battery capacity the size of Texas, how are you going to charge all of these silly things.
  11. Reehahs

    Reehahs TS Guru Posts: 729   +472

    Tweet was this year and the Saudi proposal was last year. Saudi fund initiated first by purchasing 5% of Tesla stock prompting a meeting.
  12. The cost of generating electricity is significantly lower at night. Guess what time people charge their vehicles? There is a reason many EV manufacturers include a feature to charge your car on off-peak hours.
  13. wiyosaya

    wiyosaya TS Evangelist Posts: 3,986   +2,287

    EV's not generating their own source of energy is pretty much a given in that it would be contrary to the laws of thermodynamics.

    Besides that, to follow up on what @iamcts said, there was a study done by the Pacific Northwest National Laboratory about 10-years ago which stated that there is enough excess electric generation capacity in the US to power something like 75% of all personal vehicles on the road at the time.

    Give it a few years, and when the real players like Toyota and others come along with their production EVs, my bet is that they will have vehicles that are significantly better than what Musk has.

    IMO, Musk is looking for a way out before he loses his a$$.
  14. mbrowne5061

    mbrowne5061 TS Evangelist Posts: 1,209   +670

    A cellphone that doesn't generate its own source to recharge batteries. I still DO NOT get the rush to that sort of cellphone.

    You generate the electricity the same way you always do; with power plants. Even if using a carbon cycle, the power plants on the grid use much more efficient thermodynamic cycles, have more efficient running conditions, and are better at pollution sequestration than the power plants in cars and truck. There is a reason why most EV sedans only cost a 3-5 cents a mile to run, compared to the roughly 10 cents a mile of a gasoline sedan (at $3/gal, 30 miles to the gallon, assuming you're traveling at most efficient speed for both). The equivalent-size EV is just more efficient with its energy usage: no cost for idling; no extra cost for acceleration; much smaller losses for braking; cruising is cheaper; computer control can decrease energy loss through tire slip; and the energy comes from a mix of more efficient carbon cycles and non-carbon cycles.

    The US already exports a ton of electricity to Canada and Mexico, and we have excess capacity just sitting there. Every power plant built is built to exceed anticipated future demand for decades. Current plants will only have their retirement or overhaul date pulled in, and new plants will have their designs revised to generate more power (which plant owners love; cheaper per-MW to build, run, and maintain; higher profits; longer life to make more money).
  15. Anton Skryaga

    Anton Skryaga TS Enthusiast Posts: 38   +17

    >EV sedans only cost a 3-5 cents a mile to run
    >10 cents a mile of a gasoline sedan
    Does this calculation includes a price of both cars?

    >no extra cost for acceleration
    Acceleration always has an extra cost. This is law of physics :)

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