Tuesday, Tesla’s embattled CEO, Elon Musk, tweeted out the latest in a long line of ill-advised, narcissistic missives, this time seemingly, at the drop of a hat, announcing that he was taking his company private. The most analyzed tweet since, well, let’s be honest, pretty much anything from @realDonaldTrump, the reason posited by pundits for Musk’s hubris has ranged from straightforward (he really does mean to take Tesla private) to the delusional (he was trying to take the public’s mind off his “pedo” tweet) to the downright egotistical (he was just trying to screw the company’s short sellers that he loathes so much).
As I implied in the lede, if those were Musk’s intentions, he has failed spectacularly. In the few days since the tweet-induced surge in TSLA stock on August, 7th, for instance, Tesla’s share price has pretty much returned to where they were before, all those fanboy analysts’ predictions of the shorts finally caving in proving, once more, to be nothing more than wishful thinking.
Worse yet, according to the Financial Times, the short sellers, once they got over their initial shock, have actually become emboldened, seeing the same sort of panic in Mr. Musk’s actions as George Soros saw in the British government before he pounced in the most famous short position — the British pound — in history. According to Mark Spiegel, managing member of Stanphyl Capital Partners, “There’s not enough stupid money to buy this company at an $80 billion valuation.” In other words, Mr. Musk had better take Tesla private now because the sharks are no longer just circling, they can actually taste the blood in the water.
As for any attempt to justify this as a light-hearted attempt to take people’s mind off his infamous “pedo” tweet — calling out a worldwide hero as a pedophile will cause even a ‘national treasure’ like Mr. Musk some concern — that pretty much evaporated with two words: “Funding secured.”
Now the American Securities and Exchange Commission (SEC) is involved. John C. Coffee Jr., a professor at Columbia Law School, tells the New York Times that if Mr. Musk isn’t as secure as his tweet indicates, “that’s potentially a very material misrepresentation, and a very straightforward violation of Rule 10b-5” of the securities law — in short, securities fraud.” Now securities law can be more confounding than most, but the substance of the issue would seem to be this; Mr. Musk might have got away with trying to jazz up his stock and/or lifting company spirits if he hadn’t claimed to already have a “secure” backer. One can always, ‘think’ about modifying one’s corporate structure. However, claiming one has the funding necessary already in place is claiming to a material fact and, lying about this kind of thing brings about the kind of SEC scrutiny that makes a prolonged rectal examination seem welcome by comparison.
If, however, Mr. Musk does have a moneybags backer, then the question then becomes “who can it be?” If one is to believe virtually every financial news outlet in the world, none of the notoriously leaky major hedge finds or investments banks has bought into Mr. Musk’s dream. If not the traditional sources of capital, who then? Though, this be admittedly complete conjecture, Motor Mouth will look at the few Tesla suitors that have been talked about since this latest downturn in the company’s financial fortunes started late last year.
Much has been made in the last week of the coincidental investment by Saudi Arabia’s sovereign wealth fund in TSLA stock. The country’s Public Investment Fund (PIF) certainly has the funds. Though the number $80 billion, based on Mr. Musk’s wish of a US$420 per share buyout, has been bandied about, the number would more likely be less than that amount. Mr. Musk owns about a fifth of the outstanding stocks and has reiterated that he wants private investors to be able to continue with Tesla. As big as the number left would be, the PIF, with more than $250 billion in assets, could afford it.
The problem would be the optics of taking their monies. Saudi Arabia is literally the face of “Big Oil.” Now, factor in Saudi Arabia’s reputation as one of the most repressive regimes in the world and Mr. Musk and his investors/fanboys will have to do some serious ethical gymnastics to justify this one.
The idea of Apple buying Tesla is an old one. Nonetheless, with the company having just passed the US$1 trillion market cap mark, reportedly sitting on a quarter trillion in cash and, most importantly, is in the midst of developing automobile autonomy — most easily instituted, as most experts posit, with electric cars — the world’s most valuable company would seem to be an obvious suitor.
One big roadblock is that Doug Field has reportedly just returned to Apple. You might remember Mr. Field; He was Tesla’s former senior vice-president of engineering who was ousted last May when production of the Model 3 was being especially problematic. Mr. Musk famously took on his duties while continuing his CEO and head of marketing duties. According to the Financial Times, “His move to Apple will reignite speculation that the world’s most valuable company still harbours ambitions to design and build its own complete vehicles.” It might be safe to assume, then, that while Apple might have an interest in buying Tesla, Mr. Musk’s meglomania might not be as welcome. But, then, that might be his master plan. After all, 20 per cent of a US$420 billion buyout is one hell of a sayonara.
Norway’s Sovereign Fund
This one is my positing alone. But it makes a lot of sense. Norwegians absolutely love their Teslas. OK, they love their Tesla subsidies. But, whatever the case, Models Ss and Xs are very popular in the land of the midnight sun.
The sovereign fund also wants to diversify away from the oil money that is making the country so rich and also — yes, it’s a little hypocritical — use that fossil fuel to promote green initiatives. The fund is huge, soon to hit the US$1 trillion dollar mark, so it could buy Tesla from petty cash.
Admittedly, it’s a long shot, but, Musk has if nothing else, proven himself unafraid to take long shots. And methinks he might need one to get out of this latest mess.
WINDSOR — Ontario’s lottery regulator is urging a judge to let it walk away from an ugly legal war between a $6-million Chatham lottery winner and his ex-girlfriend, saying it doesn’t care who gets the cash.
Denise Robertson is suing her former live-in boyfriend, Maurice Thibeault, for half the $6.1 million he won with a Sept. 20, 2017 Lotto 6/49 draw.
“This is a classic she said, he said dispute,’” Ontario Lottery and Gaming Corp. lawyer James Doris said Monday in a Windsor court.
“It’s clear the real fight here is between Ms Robertson and Mr. Thibeault.”
Robertson claims she has a right to half the winnings because she and Thibeault bought lottery tickets as a couple and had a longstanding agreement to share any winnings. Thibeault denies there was such an agreement.
Robertson claims Thibeault told her their ticket was not a winner. She alleges she returned home from work five days later to learn he had moved all his things out. Robertson is suing him for $3 million.
OLG paid Thibeault $3.07 million in January and withheld the disputed half. The agency wants the court to take control of it until the legal battle is over. If that happens, the money would be held by the Ministry of Finance.
“OLG takes no position on who should get the money as long as it is released from liability,” said Doris.
Thibeault’s lawyer, Richard Pollock, said OLG should give the money to his client, then Robertson can sue him for damages based on the alleged agreement to split lottery winnings.
Pollock said Robertson has no right to claim the money from OLG, or have a say in what it does with the winnings, because she didn’t co-operate with the corporation’s investigation into the dispute.
This was a mandatory investigation requiring the co-operation of the claimants, he said.
“Mr. Thibeault has satisfied his obligation to submit to an investigation,” said Pollock. “Ms Robertson has not.”
He said Robertson would only submit to an interview with OLG investigators if her lawyer was present.
“You’ve got a party that says, ‘I’m here to co-operate, but here are the terms,’” said Pollock.
“Is that real co-operation?”
Robertson’s lawyer, Steven Pickard, said his client did not refuse to participate. She just wanted a lawyer there, he said, and OLG would not accept that.
Pickard said it would be “improper” to make Robertson submit to an interview without her lawyer present, because it could be used as evidence in a pending civil trial. He said the dispute should just go to trial “as quickly as possible.”
“And in the meantime, those funds should not be distributed to Mr. Thibeault,” said Pickard.
He said it would be inappropriate to give either person the money until the dispute is settled. Until then, said Pickard, his client isn’t concerned about who holds the money.
“We don’t care,” said Pickard. “This is not the issue here. The issue is preservation of $3 million.”
Superior Court Justice Gregory Verbeem didn’t say Monday when he will make a decision on the OLG’s request.
Despite high crop yields in Western Canada, Canadian National Railway Co. shipped 24 million metric tonnes of grain in the 2017-18 crop year, four per cent less than the previous year, due in part to a frigid Prairie winter.
Rival Canadian Pacific Railway Ltd., meanwhile, nudged up its numbers one per cent year over year, shipping nearly 26 million metric tonnes of grain, grain products and soybeans out of the Prairies for the crop year that came to a close at the end of July.
For the coming year, Calgary-based CP Rail forecasts the total crop to move at more than 83 million metric tonnes, five per cent above the five-year average.
CP Rail and the Montreal-based CN are outfitting their fleets with thousands of larger freight cars and track upgrades over the next four years.
The improvements come amid legislation that imposes financial penalties on railways that fail to deliver promised rail cars for grain shipments on time.
The extremely low temperatures in Western Canada last winter meant trains could take on fewer cars and carry less grain, a necessity related to locomotive air-brake systems.