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Musk’s Buyout Tweet Is Not Good News for Tesla Shareholders

Was the original Tweet a violation of SEC regulations? How would such a buyout work — particularly with Musk insisting that current shareholders could keep their TSLA stock? There are a number of problems for Tesla shareholders — particularly individual investors — in a buyout scenario. The market will discount the time required to close. Something closer to $415 would seem likely, which means Tesla stock only has about 18% more upside before hitting the buyout price. That’s not the upside Tesla shareholders seem to want. And it’s not a level of upside which compensates for owning a still-risky and still-leveraged company that only now is targeting positive free cash flow.

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