Tesla: How Much Cash Should It Realistically Secure?

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About: Tesla, Inc. (TSLA), Includes: BABA, TCEHY
by: Ramy Taraboulsi, CFA
This article is exclusive for subscribers.
Ramy Taraboulsi, CFA
Long/Short Equity, Special Situations, Growth, Contrarian
Summary

On August 7th, 2018, Elon Musk indicated through a tweet that he is planning to take the company private at $420, and that the funding is “secured” for this transaction.

The $420 per share would result in a capitalization of around $70B.

The paper shows that the amount of cash that needs to be raised for a buyout is substantially less than $70B.

This report provides an analysis of how securing the funds required for a buyout may pan out.

Paper thesis:

My research showed me that Tesla (TSLA) going private at $420 is a very viable alternative and that, regardless of the fundamentals of the company, it will most likely happen very