Yeah; the investors approved the sale/price/buyout.
🤔
private investors
So IF you are really wealthy, you get invited to "invest" your money in more risky adventures. Companies that are not publicly traded. Companies that do not exist yet, companies that may not yet have made their first dollar, or first product.
Used to be a cash net worth of $1M would see you qualify as an "accredited investor" and if you knew the right folks, you could get an invite to put some of your money into "an exciting new venture". 95% of these lose money, but some make money, and very very few go public, and that is the huge payoff. These are never open to the man in the street. Closest you might get as a peon would be an early entry into a crowdfunding that offers shares eventually - anything offered to the public though is under a lot more scrutiny than private placements with investors.
And Obama tightened laws around this, so now I believe an accredited investor needs to be worth around $5M free and clear. The companies seeking investment are required to do due diligence on their investors before accepting the money. Not all of them do (and how I ended up in some of these offerings, did not have the net cash worth, but managed to finagle some numbers and bingo they took my money). Typical minimum investments are in the $100K range, but can be $250 or $500K.
These are similar but not the same as the large investment houses that offer positions to clients before companies go public.
Then you get Elon level of Private Offerings or Private Placements. Dude is smart enough not to use his own considerable money - or that money is tied up in shares and not liquid.
Elon has a core of acolytes, not just his Muskers or fan boi's. These are folks whose net worth starts with B. The dude I know, we grew up within 5 miles of each other, and I consult for his racing business to make sure he is not getting ripped off by the teams he contracts. Dude loves racing, but is naive to how the business works, and the pirahnas in the paddock, and I am the guy that keeps his contracted teams from ripping him off
He has known Elon since South Africa days (in fact invested in Elon's Dad's mining operations) and was one of the first guys to give Elon money for business ventures. That lead to PayPal and a huge payoff, which lead to Tesla pre-public offering, and an even larger payoff. Same guy is heavy into SpaceX too. He called me early this year asking way too many questions about Twitter, he knows I use FinTwit and wanted to know more about what Twitter was, and how it worked, and how it made money. About two months later he told me why he was asking, and that he had promised Elon a tranche of money - knowing my mate, this probably means several Billion $$$. My buddy owns a worldwide electrical connector company, and his partner is Swiss with even more billions. They have investment companies between them not related to the main source of income, and are always looking for places where the returns will beat the market in general. So they give Musk money, and in 5-8 years he gives it back often 3 x or 5 x the original value, or way more if the company lists on the market in the mean time.
The Billionaire lady in our town was another early Tesla investor. Inherited most of her wealth, but has a variety of business ventures, and she parks several billion at a time with Musk.
Heck, the guy makes you a fortune on a relatively small investment, he comes knocking with a new idea, and asks for money? Most cannot transfer the funds quickly enough. The rich get richer.
That was what amused me with TWTR, and folks saying Elon was going to have to sell all his TSLA shares to make the deal happen. My mate tried to give him more money 6 weeks ago, and I guess the deal was almost fully funded then. Once they reach a threshold of funding, the investment banks (on behlaf of their super wealthy clients) are eager to put up the rest of the money.
We will never see all the documents related to the deal going private, but I would wager there are guys like Thiel and Ellison putting up money to make this happen.
In 5 years time when the business has been cleaned up and thriving, they will either take it public again, or sell it to a fund. And heck if they lose the whole thing, they get to write those investments off as against tax as losses, and likely still break even.
One example of private placement to qualified investors.
Worked for a guy who was a pilot for a major airline. Late 40's. Through friends met some of the Crocs founders. After much discussion and though, invested $250K with them. It made sense, they were doing OK with sales and production but were stuck with growth issues due to lack of capital. Within 5 years Crocs went public, and the day they IPO'd he was worth $15M. Wow!! Sold half his shares as soon as lockup expired. Took early retirement. He does admit to losing about $500K in various other investment offers before hitting it big with Crocs.
Me, I have lost on so many "cannot miss" investments, but still feel confident that one of them eventually will hit for the lotto win. Or Not.