FIRST AIRED: August 10, 2018

Nice work! Enjoy the show!


You’re busy. We get it.

Stay on top of the news with our Editor’s Picks newsletter.

US Edition
Intl. Edition
Unsubscribe at any time. One click, it’s gone.

Thanks for signing up!



>> Tesla shares regained some ground on Friday, rising over a percent by midday, but the shares remained shaky following CEO Elon Musk's Twitter storm about taking the company private. Skeptics are asking how he would structure the deal and where he would get the money to buy back publicly traded shares at $420 a piece.
That values the company at $72 billion. There's also concern about a Wall Street Journal report on Wednesday that the US Securities and Exchange Commission is looking into the tweet and whether they were truthful. And Reuters late Thursday exclusively reported that even Tesla's board hadn't yet received a detailed financing plan from Musk and was seeking more information about his proposal.
The stock shot up on Tuesday over 10% when the tweets first hit, but has lost most of those gains since. Reuters' Heather Somerville.>> One major question is, could the existing Tesla investors really remain investors in Tesla, as Musk suggested he would do? In a tweet Musk said he would use a special purpose fund to allow retail investors and other public investors to stay in Tesla, even if it went private.
Now, he also referenced SpaceX, his rocket company as an example.>> Already do this with Fidelity's SpaceX investment, Musk tweeted.>> Now, that's not true. Fidelity is a mutual fund that made direct investments into SpaceX, it did not use a special purpose fund. So what Musk suggested was that he would stuff all the retail investors into a single special purpose vehicle.
A lot of experts have questions as to whether that's legal, whether that's possible, and how that would really even work. For one, retail investors really aren't supposed to be invested in private companies.>> A Musk trust owns 54% of SpaceX, which is worth $25 billion. Even if Musk can bring the small retail investors with him for the Tesla ride, the question remains where he would get the funds to buy out shareholders who want out.
SoftBank is one obvious big tech investor that bankers point to, but according to a Reuters source, Musk and SoftBank already held unsuccessful talks about a take private deal last year.