The next day, the three agreements were paid and delivered at the same time.
Goldman Sachs 80,000 copies, JPMorgan Chase 50,000 copies, Morgan Stanley 30,000 copies.
A total of 160,000 contracts, corresponding to 16 million shares of Tesla Put Option.
Strike Price 350 US Dollar, three months after the expiration date, Premium unified 10 US Dollar. The total Premium 160 million US Dollar.
The Strike Price and Premium correspond to the stock price level of Tesla before Elon Musk tweeted - around 340 US Dollar.
Investment banks have wiped out all the gains after the privatization news came out.
The traders at the investment bank felt that this business was a sure win.
In their view, Elon Musk's tweet has pushed the stock price to 378 US Dollar, and the privatization target price of 420 US Dollar is right in front of them.
Put Option is most likely a piece of waste paper. Lowering Strike Price from 370 to 350 will have a higher safety margin. Premium can also receive 10 US Dollar, which is just free money.
But they don't know that Zhao Chen is not betting on the failure of privatization.
He was hedging the risk of a failed privatization.
350 US Dollar is Strike Price, and 10 US Dollar is Premium, which means the break-even point is 340 US Dollar.
His loss limit is only 160 million US Dollar.
As long as the stock price of Tesla falls below 340 US Dollar, Put Option will start making money.
Investment banks believe that even if privatization fails, it will return to the starting point of 340 US Dollar.
But Zhao Chen is worried about the impact of failed privatization on market confidence and the impact on bullish sentiment.
The stampede caused by the liquidation of long positions will be even more terrifying.
United States Eastern time, noon on the 8th.
Elon Musk issued another statement in which he explained,
Privatization can create the best operating environment for Tesla, but the final privatization plan still needs to be voted by Shareholders' Meeting.
Zhao Chen was flipping through the overwhelming news feed on his phone in the early morning, knowing in his heart that this was just the beginning.
However, the market is starting to calm down.
CNBC commented that Elon Musk's unorthodox approach of using social media to disclose the company's plans has left investors unsure to what extent they should take his statements seriously.
On CNBC's financial program, several guests quarreled.
Bullish analysts said this was Elon Musk's ultimate counterattack against Short Sellers. Bearish analysts questioned where the funds would come from. Those on the fence said they would wait until the Board of Directors decision came out.
At the same time, Elon Musk explained in an internal email to Tesla employees,
Privatization will "create the best operating environment for Tesla" and protect it from "the impact of violent stock price fluctuations",
And free the company from the "quarterly report cycle", thereby avoiding giving Short Selling Short Selling Tesla opportunities.
He also said that after privatization, current shareholders can continue to invest in the privatized Tesla, or they can cash out at the price of 420 US Dollar per share.
At the end of the day, Tesla's share price fell 2.43%, closing at about 370 US Dollar.
On August 9, the SEC began to intervene.
According to reports, United States Securities and Exchange Commission is questioning whether Elon Musk is seriously considering privatizing Tesla,
Ask him why he announced this via Twitter rather than in a regulatory filing, and whether his statement can be trusted.
The regulator's question is whether Elon Musk's public remarks and Tesla's operations violated the federal Securities Law.
As soon as the news came out, the stock price of Tesla once fell below 346 US Dollar, erasing all the gains since the news of the privatization.
Short Sellerss are starting to get ready--
The head of research at fintech and analytics firm S3 Partners said there was an increase in Short Sellers positions,
"Short Sellers may smell blood now".
Analysts at Wall Street generally expressed doubts about whether Elon Musk could obtain enough funds to complete the privatization transaction.
A partner from a well-known investment institution said bluntly:
"People are definitely disappointed that there's not more news about the financing."
On August 10, Elon Musk spoke out again on Twitter, using the term "short-sighted" to mock those Short Sellers investors who bet on his company.
His previous privatization remarks on Twitter have triggered government investigations and shareholder lawsuits.
Two new lawsuits were filed that day, accusing Elon Musk of artificially inflating stock prices through tweets in an attempt to harm short sellers.
Tesla's stock price closed down 4.83% that day, at 352.45 US Dollar.
The break-even point of Zhao Chen is 340 US Dollar. When the stock price is 352 US Dollar, Put Option has not yet generated income, but it is not far from making money.
The Short Sellerss in Stock Bar started to party.
Those who were previously offended by Elon Musk's tweets are now jumping out to celebrate.
Someone dug up a clip of Elon Musk angrily attacking analysts during Financial Report's conference call a few years ago, with the text - "You also have today."
But more people are waiting and watching. Whether the privatization is true or not, whether the funds have been implemented, no one knows the answers to these questions.
On August 13, nearly a week had passed since the tweet was released.
Elon Musk finally published a long article on the Tesla official website, explaining in detail his privatization plan and funding sources.
He wrote that the Saudi sovereign wealth fund recently bought about 5% of Tesla's shares through the open market, after the fund had contacted him several times to discuss privatization.
On July 31, the two parties met again. The managing director of the Saudi Fund "expressed regret" that Elon Musk has not yet promoted the privatization, and strongly supported providing financial support for the privatization of Tesla at this time.
"After the meeting on July 31, I firmly believe that we are expected to reach an agreement with the Saudi sovereign wealth fund soon, and the only issue left is to advance the process.
It was for this reason that I said 'funding secured' in the August 7 announcement."
Elon Musk also clarified that most of the funds required for the privatization will come from Equity Financing rather than debt financing, which is different from the leveraged buyout structure commonly used when conventional companies are privatized.
He also said that media reports that more than 70 billion US Dollar are needed to complete privatization seriously exaggerate the actual capital needs--
He estimated that about two-thirds of existing shareholders will continue to hold shares after privatization, so the actual acquisition cost may only be about 20 billion US Dollar.
After this blog post was published, Tesla's stock price rose slightly by 0.26% that day, closing at 356.41 US Dollar.
But the views of legal professionals are not optimistic.
Keith Higgins, a partner at Ropes & Gray and former head of the SEC's corporate finance division, noted:
"A prudent lawyer would have told him that you should not say 'funds are secured' before getting the commitment letter."
John Coffey, director of the Columbia Law School Center for Corporate Governance, also said,
Monday's blog post suggested that Elon Musk's statements last week were exaggerated and could put him at a disadvantage in the SEC investigation.
"At the time of the tweet, it was clear that he was not funded - something he indirectly admitted."
An SEC spokesperson declined to comment on Tesla's latest statement.
But everyone knows that the storm will intensify.