— This is the script of CNBC's news report for China's CCTV on August 8, 2018, Wednesday.
The news shows that the capital from Saud Arabia SWF accounts for 3% to 5% of the whole Tesla's stock.
However, because the shareholdings proportion is under the released threshold of 5%, so Saudi does not have to release the specific amount that they hold, while what we can confirm that SWF is the 8th largest stake holders to Tesla. And their investment to Tesla is the most brave behavior they have done till now. The 2nd news is from TESLA CEO Musk.
Musk issued a series of TWEET about possibly taking the company private at $420 a share causing TESLA stock price surged more than 8%.
But because the investors questioned about the privatization, TESLA's share prices floated and that result in the trading of Tesla's stock halted at 2:08 pm but resumed at 3:45.
After that, an internal email sent to Tesla employees from Musk was exposed verifying the authenticity of privatization considerations to some extent, but also showing that Musk has not made the final decision yet. That caused TESLA's stock price closed high for about 11%, reaching USD379.57 per share, and this price was close to TESLA's highest price in the history, Musk said that the purpose of privatization is to allow all employees in TESLA keep their shareholder's position, but the employees can still sell their option exercise of TESLA's stock would be a great opportunity for privatization.
In addition to that, some analysts think that for TESLA this kind of growth tech company, privatization is good for keeping some key information confidential. As a listed company, TESLA has to release the debt condition, personnel change, executives' salary and the amount of producing and delivering seasonally, but the negative news TESLA faced and the market shortness all limit the strategy development of TESLA. Meanwhile, privatization also aligns the company's long-term shareholder interests, allowing the company to maintain control over every operational decision without violating shareholders' quarterly expectations.
[Gene Munster, managing partner, Loup Ventures] "they have a broad big vision of accelrating global adoption of renewable eneryg.
The believers believe this could be a much bigger company.. how boig? this take our valuation, we tlaking 85 bln in enterprise value, investors i talk to think this company be 3, 4 5 times bigger."
Therefore, although privatization brings a lot benefits to TESLA, some people think this decision is wired, because its cost is high. Currently, Musk holds 20% shares, and privatization means Musk needs USD50 billion to buy the rest shares. It is really costly adding the debt that is around USD1O billion. So some analysis questioned that privatization is unreasonable. At the same time, Musk post TWEET regarding the future plan of TESLA also violating the rules to some extent, because privatization is a serious problem to the US security exchange. If Musk does not have enough capital to take TESLA private, then the TWEET would be a wrong announcement. An in the overnight, NASDAQ stopped the trading of TESLA is also because this TWEET made the US Securities and Exchange Commission confused. But privatization is not the final decision; we will keep an eye on this issue.