It's a bit of a coincidence that I wrote about the dearth of public companies this morning and Tesla goes and announces it's considering going private.
Dell as a test case for going private
The company I used in the earlier post was Dell. Here's what Fast Company said about Dell's going private five years ago that is relevant to Tesla:
If Dell was trading at an all-time high, Dell wouldn’t be going private. It’s this low stock price that has created this opportunity. As expected, some investors aren’t happy. There are a lot of homeowners who aren’t happy with the decline in their home values as well. Today’s price is today’s price. Why should Dell pay a premium to buy itself? The “market” has set a price–Dell is taking advantage of that now.
Are there risks to going private? Perhaps. But...
As this site is now reader-supported via Patreon, the remainder of this article is only available to subscribers at a specific patronage level. Articles at patronage levels BRONZE, SILVER, and GOLD are denoted by the categories in blue capital letters above the post. Posts categorized DAILY are available to both SILVER and GOLD patrons.
Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.