In August 2018, Elon Musk announced that Saudi Arabia’s Public Investment Fund (PIF) had agreed to take Tesla private at $420 (a 20% premium to the then stock price of $350). The “funding secured” tweet that put Elon Musk in feud with SEC implied that Saudi’s PIF was ready to pay as much as $60B for the largest BUYOUT transaction in history that put Tesla’s valuation close to $80B. Elon Musk wrote a letter to investors and explained his motivations and the benefits of going private, the reasons were sheltering from short sellers and attacks that the company was receiving as well as shifting his focus and energy to production instead of dealing with analysts and short term quarterly earning pressure. He wrote,
“First, a final decision has not yet been made, but the reason for doing this is all about creating the environment for Tesla to operate best. As a public company, we are subject to wild swings in our stock price that can be a major distraction for everyone working at Tesla, all of whom are shareholders. Being public also subjects us to the quarterly earnings cycle that puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term. Finally, as the most shorted stock in the history of the stock market, being public means that there are large numbers of people who have the incentive to attack the company.”
Saudi Arabia’s Public Investment Fund (PIF) wanted to spend close to $60B and take Tesla private to shield it from massive short selling attacks and to move forward their “Strategic Vision 2030” which would lead the country to diversify away from fossil fuels and oil and to fortify their footsteps on clean / sustainable energy track.
The deal ultimately fell apart and Saudi PIF sold their billions of dollars of Tesla stake and instead invested $3B in Lucid Motors in several rounds between 2018 – 2021. The latest round that they invested in Lucid was in February 2021, when they invested $200M in parallel with PIPE investors. I will get back to the PIPE deal and Sep 1 sell off at the end of this article.
In Feb 2021, Saudi Arabia’s PIF took Lucid Motors public via SPAC but ironically, since early March and as soon as the hype deflated, the company and its largest backer have both fallen prey to what Saudis wanted to shield Tesla from. The stock has been a sweet target for short sellers and option writers since the DA. Short interest since April (until Aug 31) has been i
... keep reading on reddit ➡See the attached article exposing what this fraud Adam Jonas has done and let everyone else know. We don't appriciate bullshit like this with our hard-earned investments being put at risk because of pencil neck prick institutional analysts lile this and Morgan Stanley with no financial responsibility with respect to everday citizens investimg in the market!
https://cleantechnica.com/2021/04/11/adam-jonas-of-morgan-stanley-tesla-tsla-is-a-must-own-but-what-about-legacy-auto/
"The agreed plant value is roughly one-fifth the value we had assumed in our prior price target," he said.
So the guy is in Ohio real-estate as well? His (their) valuation of the plant was some 1.5 billion apparently. Thats the same plant built in 1966 by GM and given away to Steve Burns for some 20 million. Sure I could say I value the plant $1 cause what the heck do you do with a building the size of a village?
"Lordstown is negotiating a contract manufacturing agreement with Foxconn to make the Endurance and potentially other models on a new platform," Jonas said.
Did I miss some news? When was it said that there will be a new platform? If anything it could also be that the Fisker SUV and Foxtron could be sharing Lordstown platform
Im not bothering with the other couple of concerns he voiced cause they even more speculative.
One thing I will say though about this analyst. See this video where he says investors MUST own tesla at some $700 per share
https://www.youtube.com/watch?v=yazRMqUdQak
He downplays all logical reasons such as for example that Tesla share is ridiculously high at some 3.5 times VW.
His reasoning ... wait for it. That tesla vehicles will be something like what happened with the android phone or Windows operating system. We will all need to buy the tesla "platform".
So Adam Jonas is not only a guru on EVs and expert Ohio real estate surveyor. Hes also a software wizard.
Mr Jonas should note that platforms like Android and Windows actually came first THEN came the mobile and PC to run them. They were developed on their own and could run on any platform first so that customers helped in its improvements by showing producers what they really wanted. Lets put this in another way, if Jonas was right then we all should be running to buy blackberry because they had a platform on the market especially for vehicles long ago now.
My personal opinion is that this guy is just pumping Tesla for some reason
Even if you have been watching this Lordstown Motors Saga for a long time, you still might be confused. Like, why do they keep bashing this when it seems too good to be true? We have all wondered...now it is time to connect the dots...one at a time to come up with the underlying picture.
This is just part of the puzzle... this is about Morgan Stanley, their history with EV's and Adam Jonas.
Mr. Jonas has been the Auto analyst for Morgan Stanley for years and what is happening today, is similar to what happened years ago with his TSLA price targets. I'm going off of memory, but he threw out like a spread price target for TSLA of $5-$500. He was ridiculed for it, as he thought TSLA would fail but wasn't sure. And this when Cathie Wood came prominent...she mocked Adam Jonas and his love of Ford/GM and ICE vehicles while buying up TSLA shares. Many made fun of her (and CNBC/Insiders still hate her if you haven't noticed), but ended up being very right. (see below)
Jonas on the Lordstown conference call asked if they had room for a spare hub motor. Did he not even spend a few hours doing research on a company he was covering, or was it his hate of EVs? You can decide, but no one is that dumb....is was pre-meditated.
Now to what just happened. Jonas and Morgan Stanley took their $18 price target to $12 an then $8 in the matter of 2 months after the short interest went way up. That's not alarming, but all the media coverage sure has been. Barron's confused that it's not going down to 'analysts' targets. They are freaking out that they can't control the price action. Cramer, ever day...but that's another chapter.
Morgan Stanley bailed, because they see the potential of what happened with Jonas and TSLA. They know it could happen with RIDE, and they want no part of it. They know this cap is super low... 1/24th or Lucid, 1/50th of Rivian (potentially). Funds went overboard shorting and they have seen what that could mean...and I think it will happen.
Morgan Stanley decided to hit the eject button and said this “we believe the market may be underestimating the economic, strategic, political and social risks” . Well breakdown each word, Economic, Strategic, Political and Social. Try to put pros and cons on each of those. Lordstown Motors will succeed because of the Economic, Strategic, Political and Social reasons. Failure is not an option because of those reasons IMO.
https://preview.redd.it/s3ay9af2bv471.png?width=1298&format=
... keep reading on reddit ➡Dear Lucid Family,
2 days ago Adam Jonas of Morgan Stanley published an equity research report on Lucid and gave the lowball price target of $12. I have been following his thought trend on Tesla for a long time and I was surprised he assigned such a low $20B valuation to Lucid (Remember that Morgan Stanley is preparing to help Rivian IPO at $80B).
In less than 48 hours I put together over 10 research papers on Tesla published by Adam Jonas since May 2020, reviewed them all and put his Tesla valuation reasonings side by side to his Lucid valuation and price target. I tried to respond to most of his viewpoints in the article I published on WSB. If you haven't seen his report (if you are not a Morgan Stanley client), you have the chance to read his viewpoints too in my article. I know it is a long one but I put lots of time and effort to write this 7-page (4500 words) article in less than 48 hours after his research report came out. I believe it is worth reading.
Thanks
