As an event trader, I am very inundated by the headline. Maybe I am too old-fashioned, I can't see how can it happen for a deal of this size on a high-valuation stock whose valuation is based on some uncertain/unproven visions. I don't see how debts can be financed... btw, I just find out that TSLA has become unavailable for short in IB, what the hell is going on
The point is that it isn't a deal. There is no white night here. It's Musk fapping in public and I guarantee that if he cannot show existing financing that there will be criminal charges or a civil action.
Which is why I was looking to short at 380 which looks like a comfortable risk level even if true, but IB said can't locate shares, you know why?
People are warehousing their shares. No way we get 380 but I will be with you on that. I am shorting any open above 360. Bear synthetic; bear spreads, etc.
I'm wanting TSLA to stay below 390 (I have a 390/400 bear call spread -- opened before today). That said, if there's serious interest in taking this private, I suspect it can be done with substantially less capital than many are speculating. What I mean is, Elon is making it sound like he's the good guy by wanting to create a special fund that the public investors could own. I see this as his technique to reduce the capital requirements. I suspect that with the competition among mutual funds, they're going to want a piece of the private fund as well. It's a selling point. Tesla's brand, then helps to attract and keep customers of their funds (ie fidelity, t rowe, etc). If the mutual funds that own TSLA also see this as a selling point to market their funds, then they're going to want to be involved if for no other reason than to prevent their competitors from having that box checked on their fund comparison brochures and such. Another possibility is that TSLA really does need to raise capital, but Elon doesn't want to or can't make that public (because he could get in trouble for making the statement that TSLA does not when he knows it does need funding). By taking it private, he runs the share price up, gets the extra capital as part of the buyout, still claims he didn't actually take out more loans / sell more bonds, and he can finally do what he wants without nearly as much public scrutiny. And finally, I wouldn't be at all surprised if there are some wealthy individuals with government connections pushing for this to go private. SpaceX and TSLA work symbiotically on government contracts that are awarded through the typical DC techniques. This is how I see private investors actually justifying a ~$70B price. I don't know if I'm going to take the loss on my bear call spread tomorrow or just let it ride. I'm very conflicted on this.
my goodness. TSLA chart is so jerky & spiky & twisty . its movement looks directionless. it needs to have compass.