I have not really had much to say on this one for a while but the share price graph suggests that the price is heavily linked to whether or not the takeover does go through. We tend to see a knee-jerk reaction if there are problems with potential takeovers and talks are terminated. So, when you bear in mind how low the Tesla share price has been over the last six months there could potentially be more downside than upside if the $420 takeover price is correct.
Tesla once again on headline after Musk's tweet. The share price skyrocketed on Tuesday after the tweet and on Friday it was closed where it was started on Tuesday. According to Bloomberg Saudi Arabia's Public Investment Fund is open to taking part in a go-private deal while Reuters denied that news. Meanwhile, Softbank's Vision Fund, which recently invested in #GeneralMotors' GM Cruise autonomous driving unit is not interested in funding a Tesla buyout.
At this moment in time it seems as though the market is unsure whether any bid will emerge even though the press are suggesting that funds have been secured. It seems as though some sovereign funds based in the Middle East are looking to hedge their bets on electric cars as demand for oil continues to show a long-term decline. While there is no doubt that oil is in long-term decline would a $70 billion plus investment in Tesla Motors be a gamble too far?
The consensus seems to be that soverign funds in Saudi Arabia are the mystery backers but why is the share price falling if this is really going to happen? True, as EM said, he would only need to raise a fraction of the $80b being mentioned because he holds a chunk and there are some other big shareholders who may not necessarily want to sell - instead waiting for their big pay day if/when the company hits that pot of gold at the end of the rainbow and maybe makes a return to the market in the future.
The shares were higher when there was concern there was no funding secured - now we have "assurances" that funding is available, the shares are falling. Is anything about Tesla straight forward?
Is Tesla really in the last throes of life? https://www.theglobeandmail.com/inv...ys-tesla-feels-like-its-entering-final-stage/ I dont think things are that bad but there does need to be changes at the top. Elon Musk is fast losing the respect of Wall Street and Tesla investors.
Elon Musk has pushed himself too hard of late and it is hard to watch his health deteriorate - it also looks as if he is suffering from some kind of burn out. The directors at Tesla have been happy to let him take all of the flak, lead the company from the front and when he needs their support, I dont see many in his corner? He does need a number 2 to take some of the strain and the sooner the better for EM and the share price.
Tesla is a traders dream at the moment - on the upside and the downside. The more EM opens his mouth the more volatile the shares are but if he keeps quiet, critics think something is going on which prompts even greater speculation lol Lets start a campaign to get EM off the front pages and let him concentrate on business!
It is impossible to say with any great conviction where the Tesla share price will be in the short to medium term let alone the long term. Just when things start to level out we see yet another drama emerging. First we had the problems with autopilot, funding issues are never far away, bad publicity for the chief executive, confirmation of a possible bid and all the time analysts are still turning against the company. What next?
