>$325 million, paid in Tesla stock.
>Musk wrote in a June 21, 2014 letter to Simbol CEO John Burba
Jesus. I probably wouldn't have taken this deal either because it's all in stock but damn they must be kicking themselves right now.
>Musk wrote in a June 21, 2014 letter to Simbol CEO John Burba
Jesus. I probably wouldn't have taken this deal either because it's all in stock but damn they must be kicking themselves right now.
I don't mean to disparage Tesla, but rather to emphasize that there's a difference between receiving $325 million in cash, $325 million in blue-chip stock, and these $325 million.
tl;dr: you're both extremely confident, ignorant, and wrong.
- But options for multi-year expiries (because that is how long the disposal will take, after the obligatory lockup)...
- ... in a stock that is 1000x less liquid that your usual AAPL or GOOG...
- ...on a short notice on $325 million worth of stock, i.e. a huge percentage of the free float of the stock, making it impossible to hedge for any bank that offers the collar.
tldr: You are a bit too cocky given your lack of knowledge.
The full $325m would be about 1.5M shares which would be 15,000 options contracts. Quite a bit, but not too far from the current action in some December strikes (the 50 put has 11,883 open contracts).
tl;dr You could quite easily either divest of the stake outright or protect a large portion of it through options.
More sensibly, tossing out one batch at a time of less than 5% of the market will allow the stock to clear without sinking the market.
So parcel up the 2M into 50 groups of a few tens of thousands and we are cooking with gas.
The average trade volume is as you say 4.45M shares. Selling an additional 1.4M raises the daily trade volume by 31.4%.
Economics is supply and demand. If you increase supply by a massive amount when not changing demand. The price tanks. Effectively you are killing your own price point and this sales strategy isn't in your favor.