A Saffa Buying Tesla for $70 Billion?!
OK, Tell Me More?
Elon Musk has proposed buying out Tesla in order to remove it from the stock exchange and rather own it privately. He’s also revealed that he might be receiving the backing of one of his major nemeses.
Hmm, Go On?
Elon Musk has always had beef with the fossil-fuel industry and Tesla was one of his ways to stick it to Big Oil and the dirty, fuel-guzzling auto industry. On a number of occasions, he’s also alleged that the powers that be in the oil and auto industries were sabotaging his efforts. What’s curious now is that he has unveiled Saudi Arabia, the world’s largest oil producer, as the party who will fund Tesla’s delisting*.
What’re The Saudis Thinking?
Many people are sceptical about the involvement of Saudi Arabia in the future of electric transportation, but we shouldn’t forget that oil is not a renewable resource and the Saudis are well aware that their main source of wealth is literally burning up. They are implementing a programme to diversify their income streams by 2030 and are being proactive by ensuring they have a finger in the electric motoring space relatively early on.
Why Go Private?
A company listed on a stock exchange is generally held by public shareholders who can freely trade their shares in the company on a regulated stock exchange. As the company is publicly traded, there are certain requirements set out by the various exchanges, but generally, all require a relatively high level of transparency and disclosure to the public.
With that level of public information available, a company and its leadership come under scrutiny and companies like Tesla who have less of a track record and are more experimental/innovative end up feeling the pressure. This move would allow Tesla to get out of the public spotlight and focus on what it set out to do – “accelerate the world’s transition to sustainable energy.”