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Elon Musk is taking Tesla private in offer that seems almost too good to be true

8 August 2018 7:46 PM
Tags:
Elon Musk
tesla
Vestact Asset Management
Byron Lotter

The Money Show’s Bruce Whitfield interviews Vestact Asset Management Portfolio Manager Byron Lotter.
A Tesla charging station. (pixabay, 2018)

South African born-and-raised Tesla boss Elon Musk took to Twitter to announce that he is taking the electric-car firm private.

It means that Tesla, currently worth $63.8 billion, will no longer be under the beady eyes of Wall Street.

At 5:37 pm (South Africa time) Tesla was trading at $374 per share, near its all-time high.

Shareholders will get $420 per share, according to Musk, valuing the business at more than $80 billion.

The Money Show’s Bruce Whitfield interviewed Vestact Asset Management Portfolio Manager Byron Lotter.

Lotter discussed five reasons why Musk is taking Tesla private:

  • So he does not have to deal with irritating short-sellers. He hates that people out there bet against his company that he believes is trying to save the world.

  • He doesn't have to deal with analysts and their short-term focused questions.

  • The business requires patience and a long-term view. The public market can be impatient. If he goes private, he can focus on the long term.

  • He won't be so heavily scrutinised on short-term production targets.

  • If he has found big private investors; they will be more strategically aligned with his vision than the public market.

The biggest drawback of going private is more limited access to capital, says Lotter, as Musk often went to the market and issued shares to get quick access to large sums of money.

For more detail; listen to the interview in the audio below (and/or scroll down for quotes from it.)

He seems to take real offence to all these shorts in the market. Tesla is the most shorted company in history. 25% of its market cap is shorted.

Byron Lotter, Vestact Asset Management

It was trading at $28 per share in 2011…

Byron Lotter, Vestact Asset Management

Tencent has 5% of the business… We know that the Chinese are putting their hands up to become the Electric Vehicle leaders of the world…

Byron Lotter, Vestact Asset Management

Any shareholder that gets out at $420 has done very well.

Byron Lotter, Vestact Asset Management

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8 August 2018 7:46 PM
Tags:
Elon Musk
tesla
Vestact Asset Management
Byron Lotter

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