Thought's on the Woodford equity income fund

AnotherJoe

greenglide wrote: »

Musk has talked about paying shareholders $420 against a peak of $380 or so.
How does that cause the end of the world to the investors?

It doesn't. Its the end of the world to the hedge funds who have shorted this to the moon, and are now looking down the barrel at several billion dollars loss minimum with a time limit if the offer goes ahead . Before this offer a short could always hang on indefinitely if they were convinced they were right, they would even just have gained from a fortuitous general stock market decline, nothing to do with Tesla fundamentals as such.


Musk has ripped away the floor they were standing on, almost literally.

Malthusian

greenglide wrote: »

How does that cause the end of the world to the investors?

AnotherJoe was referring to the short sellers who would stand to lose tens of billions. I don't know how much Einhorn and co have shorted, but they would need to buy Tesla shares at $420 after borrowing them and immediately selling them for much less than that. And as Tesla would then go private, their short position would be closed and the loss would be locked in.

It is quite possible that Elon Musk is just causing mischief in between accusing random cave divers of being child molesters.

The fact that Tesla shares are currently trading for $380 even though Musk is supposedly going to imminently buy them for $420 shows that the market is taking Musk's announcement with a gigantic pinch of salt rather than sign up for an instant 10% profit.

The funds to buy the shares off the public shareholders will probably come from the big investment banks, not hedge funds.