Oh Aye?

Tesla shares climbed as much as 13pc on Tuesday night after its mercurial co-founder Elon Musk announced he was considering taking the electric car maker private.

In a series of tweets Mr Musk, who has repeatedly complained about Tesla’s treatment on the public market and clashed with analysts, said he had already secured funding for the plan.

The company later released a statement, in which it said a final decision had not yet been made on whether to take Tesla private.

Well, that’s one way to boost the share price ahead of a capital raising. You know, say you’re going private, but haven’t quite decided, stock price jumps, have a rights issue instead claiming circumstances have changed.

What would be interesting to know is what the bond covenants say. Do holders have a change of control put on them? That would mean they’ve got to refinance all the debt at the same time. No, I don’t know. But it would, to me at least, indicate that the going private is less likely than the public capital raise.

And onto entire speculation. I don’t think – not that I’ve particularly studied it – that Tesla can get to mass market without more capital. But I also think that it’s only one more decent slug and they could. Thus it’s actually worth, for the long term perspective, destroying the current share price with a screw the fanbois massive rights issue. One that’s fully underwritten of course so they’re guaranteed the money.

But then there is a reason why I didn’t become a banker…..

35 comments on “Oh Aye?

  1. Tesla is a expensive taxpayer subsidised scam. He can take it to Mars if he likes. It still isn’t going to fly once the corporate handout ceases.

  2. Musk posts a lot of stuff that affects his companies, and share holders, on twitter rather than getting them released through official channels. Can someone explain to me why he hasn’t got into a whole heap of trouble for that?

  3. I’ve seen a few of these Tesla thingies around, and I still don’t know why anyone would want one.

    You’re paying Mercedes S-class money for a car that looks like a Hyundai, and is also worse in every possible way than a Hyundai, unless you’re a pervert who likes hanging around service stations for hours.

    What are you supposed to do if there’s an accident on the motorway and you end up taking a diversion that leaves you stranded and out of juice in the Welsh hills, or something?

  4. “Can someone explain to me why he hasn’t got into a whole heap of trouble for that?”

    Because he’s the darling of the eco-warriors and the SJW infested State apparatus, for now at least. The thing to remember is that the rule of law is dead in the West, it applies to those the ones with the guns decide it applies to.

  5. And which bank (or banks) are stupid enough to lend him the several billions needed to fund this?

  6. Probably the banks (or individuals) who have just made a killing from being long on Tesla shares……………

  7. Charging your Tesla takes about 12 hours at home, or something like an hour and a half on one of Tesla’s supercharger stations. So your Mum has a fall and needs you to drop everything and drive up to see her? Too bad, Mum! It’s the environment that matters.

    Using the supercharger is free – for now. It’s hard to see how they can successfully roll out a mass-market car and pay/get taxpayers to pay to refuel them indefinitely.

    It’s also hard to see how we could cope with even 10% of traffic switching to electric. Is there enough spare baseload leccy in the National Grid? Can we afford to add all the extra infrastructure at service stations to accommodate them? It’s not as simple as plonking down a few big capacitors. We also need to somehow find extra space, power lines, maybe even substations…

    NB also that fast charging damages batteries. Every time a Tesla owner plugs in at Charnock Richard, he’s degrading the lifespan of his car.

    Seems an incredible amount of time, trouble, and expense to replicate our existing, reliable, fossil-fuels-based energy network with an inferior alternative. Why are we doing this again? To guard against the existential threat of nice summers?

  8. You’re paying Mercedes S-class money for a car that looks like a Hyundai, and is also worse in every possible way than a Hyundai, unless you’re a pervert who likes hanging around service stations for hours.

    What are you supposed to do if there’s an accident on the motorway and you end up taking a diversion that leaves you stranded and out of juice in the Welsh hills, or something?

    Carry out your perversions on the sheep rather than through a convenient hole in a toilet partition?

  9. Used to be a half decent bit of tax planning that there was 0% BIK for the employee and 100% WDA for the company.

    Anything to annoy Spud, who as he had told us drives a 10 year old car which he never washes.

  10. Bonds have change of control covenants. As a holder, you get paid at 101 in the event of a change. (the 5.3% 2025’s are presently trading at 92.50).

  11. That apparent financing better be in place for him to announce a deal quickly, because those holders of $13 billion of short positions he’s just burned will have already contacted their very expensive lawyers. Along with of course the prospect of some jail time for stock manipulation.

  12. @Mr Womby: “And which bank (or banks) are stupid enough to lend him the several billions needed to fund this?”

    The Saudi Arabian sovereign wealth fund apparently.

  13. “But then there is a reason why I didn’t become a banker…..”

    Tim, as you’re clearly not thick, it must be because you have impeccable morals.

    Tesla at 2 syllables is potentially a much better brand name that Mercedes and also has the provenance of an electrical genius

  14. I’ve been in one of these Mercedes thingies lately, and I still don’t know why anyone other than a squirt would want one.

    No effing headroom. Not a lot of legroom either. Are they making them for the Chinese market nowadays?

  15. “The Saudi Arabian sovereign wealth fund apparently.”

    I wonder if they would lend me some cash. Anybody know the address to write to?

  16. Didn’t he say recently that Tesla has all the funds it needs? If so, a rights issue is likely to tank and the SEC might take an interest in what looks rather like share price manipulation. If he is actually going private then the short-sellers are probably already getting lawyered up. One way or another, legal eagles stand to make a packet out of this. I hope that Musk is prepared. You imagine that he would be but, on the other hand, look how his publicity stunt re the Thai cave business backfired. His luck might be running out

  17. I have problems understanding the cachet of the Merc mark, dearieme. Maybe a couple or three decades ago, when their superior build quality compared so well against other cars on the market. But having driven a few. My late father had some sort of fetish for buying the things. Can’t say they were any better than anything in an equivalent range out of the far-east for a start.
    Although did notice one thing. In common with BMW’s. Driving one rapidly turns you into the sort of obnoxious cunt usually own ’em. Can only presume it’s some chemical they put in with the “new leather” smell. Even a couple days after returning to a less germanic car, you find yourself cutting people up in traffic & parking in a manner makes you a bloody nuisance to everyone else.

  18. Steve
    “What are you supposed to do if there’s an accident on the motorway and you end up taking a diversion that leaves you stranded and out of juice in the Welsh hills, or something?”

    I suspect that most people who can afford to fork out for a Tesla also have a sensible car that they use for any remotely challenging (anywhere near the Morlocks) trip – and for emergencies when their piety-wagon is immobilized while sucking up the Narnia electricity..

  19. Steve – drive a Tesla before passing judgement. The smoothness and acceleration are intoxicating.

    A friend of mine pointed out that Tesla have the technology but can’t perfect the mass production / supply chain. Mass production / supply chain is the established car company’s bread and butter but they are having to play catch up with the tech. Solution is for Tesla to license the tech and to get out of production.

  20. “A friend of mine pointed out that Tesla have the technology”

    If you like being burnt alive after a minor crash.

  21. Ivan Chestikoff–Smooth and Cool would better be saved for ciggie ads. A car that has the Tesla’s range is just a toy.

  22. The Guardian ran an article recently that used an unnamed car (but most likely a Tesla) to go from Brighton to Edinburgh. Made interesting reading. It seems they spent a lot of time looking for a charging station. It reminded me of the early days of cars.

    I also wonder, given that electric vehicles were developed at the same time as ICE ones, why they didn’t take off. I think the physics/chemistry problem back then hasn’t changed much.

    Electric is fine around time. Anyone remember those old electric milk carts? Not so good where there’s distance and lack of infrastructure to deal with. Carry a spare battery anyone? Just like a jerrycan? Nope.

  23. “I guess *now* is the time to short the shares? (assuming Musk is bullshitting about getting the dosh to take Tesla private)”

    Musk hates short sellers and there’s more than a few people think he’s doing this just to spite them.

  24. @bis

    Not owned a Merc, but I briefly owned a BMW 535i Sport – effectively an M5 without the tuned engine.

    I was very disappointed as I loved the 5 Series looks, but it was like driving a bus – sporty & nimble it was not.

    Thankfully, hadn’t yet sold the 820 Vitesse. Sold the BMW on for a £1,200 profit.

  25. A relative in the car production business was offered a job at Tesla in order to put them in a position to produce in volume. The package on offer wasn’t enough to move to California. He’d have needed to have a couple of million to get a house half the size of his one in the mid-west. He did not go.

  26. @Steve
    Using the supercharger is free – for now. It’s hard to see how they can successfully roll out a mass-market car and pay/get taxpayers to pay to refuel them indefinitely.

    The cost is factored into the ludicrous pricing of the current Teslas. I assume that won’t happen for their attempt on the mid-range. If you have to pay to use a public charger, it works out considerably more expensive per mile than petrol. Which doesn’t worry me, as my electric car is a plug-in hybrid.

  27. What Steve said. If you’re spending Maserati money, why not buy the fanny magnet? There’s no other reason for buying anything more expensive than a BMW than minge. You can’t race down roads since speed cameras came along, or you’ll be in a jam.

    No golddigging slut knows you’re in an expensive car when you drive a car that looks like a Hyundai. The Maserati announces you’ve got a ton of spare cash.

    But even for people who want to be eco, everyone’s making electrics soon. There’s a Jaguar coming out soon. Tesla are fucked.

  28. @Bloke on M4 et al

    The 97% reason Jaguar and others make EVs is to comply with EU Global Warming rules on avg mpg.

    Trump has sensibly rolled back some of Obama’s similar rules.

    EVs are a displacement pantomime costing taxpayers billions and damaging economy.

Leave a Reply

Name and email are required. Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.