Another big promise from Musk, but serious investors aren’t biting, treat $82bn Tesla buyout as a joke

LONDON — South African-born entrepreneur Elon Musk is back in the headlines after a move that was outrageous, even by his standards. It came via Twitter, where Tesla's founder has been super-active in recent months as the pressure on his business has escalated. It seems few had any inkling of what he was about to unleash. Musk owns 20% of Tesla's shares. Apparently he will now buy out the other 80% at a price of $420, with funding already secured. That's far above the highest level the share has traded at. And at a price where lenders would need to stump up $70bn in cash to buy a company that hasn't made a profit in any of its 15 years in business. For context, the biggest ever leveraged buyout was in 2007 when a private equity group that included KKR and Goldman Sachs did a $45bn deal to acquire Texan utility TXU Energy. After surging on the news, Tesla's share price eased back to around $370, a $50 discount to the supposed buyout offer. That tells us everything. Serious investors think it's a hoax. – Alec Hogg

This is The Rational Perspective, I'm Alec Hogg. In this episode Elon Musk wants to buy Tesla for $82bn.

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