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What if the $ 420 dream of Elon Musk did not go up in smoke?



Last August, Elon Musk tweeted that he had received "funding" to take Tesla privately. That turned out to be incorrect, and he eventually had to settle charges fraud with the Securities and Exchange Commission.

Musk is still struggling with the SEC for the same settlement, and it is possible that he will be tried for alleged violation of the court. In view of the upcoming decision, it pays to ask: what if he had initiated a financing? What could Musk do to transform Tesla, which has been listed on the New York Stock Exchange since 201

0, into a private company?

How could he have done it?

There are several ways in which Musk Tesla could keep to itself. One of the most common ways would be to finance a small group of institutional investors to buy the company's shareholders. Shareholders usually want a premium on the price of each stock (such as $ 420!) And must also agree to the deal. Investors would then receive ownership of the company, but the total number of owners would be below the thresholds of the Securities and Exchange Commission for public reporting.

This seemed to be the way Musk wanted to go first, but his subsequent tweets complicated things, said Stephen Diamond, a professor of law at Santa Clara University and an expert in securities law and corporate governance – especially Musk's Hope expressed that "[all of] current investors remain with Tesla, even if we are private ."


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