24 hours after Musk tweet, no clue where ‘secured’ financing from

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This is the simplest Occam’s Razor explanation. There simply is no funding.

Maybe Musk just tweeted out something. Some Tesla board members said Musk approached them last week about going private. But even Musk, himself, simply tweeted he was “considering” it. That’s not necessarily the language of someone with committed financing.

There are no legal repercussions for saying “funding secured,” said Frank Aquila, an M&A partner at Sullivan & Cromwell.

“It’s sort of the same difference between collusion and conspiracy,” Aquila said. “Collusion isn’t a crime. It means nothing in the legal sense. Conspiracy is a crime. If you say ‘I secured this,’ it could mean you had a conversation. Committed means something else. If you have committed financing, you have documentation and conditions. Secured just means lined up. It doesn’t mean that much.”

The motivations for why Musk may have this are impossible to know without confirmation from Musk himself. Is it to spite shortsellers? Or maybe it is a warning to outside investors, like the Saudi sovereign wealth fund, to stop buying shares of his company?

By the way, this wouldn’t be the first time Musk has tweeted something that sounded definitive but wasn’t. Last year, Musk tweeted that he had received “verbal govt approval” to build a high-speed hyperloop connecting New York, Philadelphia, Washington D.C. and Baltimore. It was later reported that the supposed approval was likely a miscommunication between Musk and a White House official.

2018-08-08 16:50:00

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