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Tesla Privatisation as a UK shareholder.


Guest JoceHockings

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Guest JoceHockings

As a UK-based investor, I have a number of Tesla shares in my ISA portfolio. If Tesla were to succeed in their bid to go private, I would like to keep the majority, if not all, of that stake as Elon Musk has suggested Tesla would not only make that possible, but actually encourage.

My question is whether I would need to do anything at my end?

Thanks in advance.

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17 answers to this question

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Hey @JoceHockings @blobface (great name) and @PandaFace 

I have just had a word with our Corp Actions team on this and they have confirmed it is a relatively complex and difficult question to answer. Each private company has a number of different rules and regulations which are relatively unique to each one - it's very tough to speculate on these things prior to the official 'documentation' coming out. 

They are just looking into the specifics of this and when I have a firmer understanding I'll of course post back here. One thing which is worth noting is that generally for a stock to be ISA  eligible requires that it is traded on a centrally located exchange. Privatisation would have an impact on this, and therefore it may not be possible to contain within the ISA wrapper. 

On a personal note, and this is purely my opinion, this could just be Musk shooting from the hip. Granted he has done this before (anyone remember the Boring Company tweets?) but still... 

Again, i'll update accordingly.
Apologies for no real clarity in this answer at present. 

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Guest abcvaluetrade

A Tesla board meeting is scheduled for the week starting Monday 13th August.

Premarket price 10-8-2018 13.18GMT 349 USD

Are there any IG examples of transitioning from public to private and what happened to those share holders.  Seagate  Dell ?

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So it turns out Musk was just gaming short sellers after all, who would have guessed it. Fury in the US when they found out on Saturday morning after the announcement Tesla was not going private from Musk and the board was made at 11 PM Friday (US time). Be interesting to see how that pans out on market open. Many predicting Musk will go (see below).

msk1.PNG.4ac34dbbea9ce90a46ad5707ee04f641.PNG

 

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Interesting Investopedia article from Monday on the long history of the games Musk plays with short sellers using twitter - is actually quite funny.

Musk is known for fighting with short sellers, often using Twitter to attack the group of investors and even accusing them of wanting “the company to die.” In a tweet after Tesla’s second-quarter earnings report, the CEO posted a doctored scene from the 2004 German-language movie “Downfall" about Adolf Hitler's final days. In Musk’ version, Hitler is a worried fund manager who has landed on the wrong side of a Tesla bet. “If Tesla doesn’t go bankrupt soon, I’ll lose everything,” rants an angry Hitler



Read more: Tesla Shorts Made $1B Since Go-Private Tweet | Investopedia https://www.investopedia.com/news/tesla-shorts-made-1b-goprivate-tweet/#ixzz5P5af8ZjS 
 

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Guest JoceHockings

Good shout @cryptotrader. Nice to see a direct counter to the negative spin that the NYT put on their interview with him - apparently they happened on the same day and, as you can see, it's a very different Elon to the one portrayed in the NYTimes.

Still a way to go on this issue, but if you can see past the FUD I think there's still a strong possibility this will go ahead. Just hoping I can keep my stake!

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News out today could be the death of this story. Saudis in talks with Tesla rival Lucid Motors. Meanwhile JP Morgan has drastically cut Tesla outlook citing there was never any serious offer, many other banks are expected to follow suit. Tesla is now the most heavily shorted company on the US market. 

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This went through yesterday which was thought provoking.

Carl Quintanilla

Tesla "is an operationally stressed co", and @elonmusk wants to raise its fixed costs? "If he thinks short-sellers are bad, try dealing with LBO debt-holders. That's gonna be worse for him because they're going to seize the assets. I don't get it at all." - @RBAdvisors on @CNBC

 

 

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Looking at this quote from @rimmy2000 's link I doubt you'd be able to hold a leverage position in this ...

"However, the structure envisioned for Tesla is similar in many ways to the SpaceX structure: external shareholders and employee shareholders have an opportunity to sell or buy approximately every six months."

Doubt IG would let you hold a lev position with something they can't deal out of ...

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Guest PandaFace
51 minutes ago, rimmy2000 said:

I think the answer is in this TSLA article >> https://www.tesla.com/blog/taking-tesla-private?redirect=no

"Here’s what I envision being private would mean for all shareholders, including all of our employees.

First, I would like to structure this so that all shareholders have a choice. Either they can stay investors in a private Tesla or they can be bought out at $420 per share, which is a 20% premium over the stock price following our Q2 earnings call (which had already increased by 16%). My hope is for all shareholders to remain, but if they prefer to be bought out, then this would enable that to happen at a nice premium."

Thanks @rimmy2000 but for me it was more regarding the actual “IG” way of things. How’d you spread bet on a private company? Can you even? 

But thanks for the link. Nice read. 

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Guest JoceHockings

Thanks @rimmy2000

Unfortunately it does not go into how that affects non-US shareholders (why would it, as it was originally addressed to Tesla employees :)).

As @JamesIG says above, this could get complicated and is hard to speculate on before all the details come out should the deal go ahead. At the very least it appears that I would need to move my shares out of their protective ISA wrapper. 

I wait with baited breath.

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I think the answer is in this TSLA article >> https://www.tesla.com/blog/taking-tesla-private?redirect=no

"

Here’s what I envision being private would mean for all shareholders, including all of our employees.

First, I would like to structure this so that all shareholders have a choice. Either they can stay investors in a private Tesla or they can be bought out at $420 per share, which is a 20% premium over the stock price following our Q2 earnings call (which had already increased by 16%). My hope is for all shareholders to remain, but if they prefer to be bought out, then this would enable that to happen at a nice premium.

"

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Ditto, joined the forum to ask the exact same question. 

What's the mechanism for the transition? And how would we be contacted about our decisions when / if the time comes? Are there any legal difference between the US and UK and would make us remaining as private shareholders more complicated? 

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