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ANALYSIS: Why Saudi Arabia Could Take Tesla Off The Stock Market

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On Aug. 7, Elon Musk sent shockwaves through Wall Street when the billionaire tweeted his plans of taking Tesla [TSLA] private at $420 a share.

The tweet got Musk in some serious hot water with the SEC—subpoenas, investigations and all sorts of legal shit. Namely because a tweet like that moves the market.

The tweet caused an immediate takeoff on the company’s stock price, jumping 11% before trading was briefly halted. A Fox Business report says that the investigation is now “formal.”

All that aside, what is this “funding secured” Musk is talking about? Is he really taking it private? In his defense, Big E—an active, unfiltered Tweeter—is simply sharing his thoughts on his personal Twitter, right?

But looks like there could actually be some truth to it.

According to Forbes, Saudi Arabia’s sovereign fund (PIF) has approached Musk numerous times since early 2017 to acquire a stake in Tesla.

So why is Saudi Arabia interested in Tesla?

At first glance, the idea of an oil kingdom teaming up with a Silicon Valley entrepreneur who wants to build electric cars might seem strange, but a large part of this ties back to Saudi Arabia’s Vision 2030 program.

This plan aims to wean the oil-rich country from depending heavily on income from fossil fuels and instead diversify into infrastructure projects, tech, tourism and trade.

(Oh, the plot thickens!)

So naturally, an investment in Tesla looks like the perfect hedge for the Saudi endowment, considering it already owns 5% of Tesla. PIF might look at taking Tesla private once the company is cleared by the SEC of any wrongdoing.

Related: Why Going Private Is The ‘Best Path Forward’ For Tesla

Tesla’s struggling (with profitability)

Tesla’s losses have mounted over the last few years and some experts are predicting bankruptcy.

On the performance side, Tesla’s earnings per share (EPS) have declined from -$1.25 in 2015 to -$1.36 in 2016 and -$8.74 in 2017.

Although Tesla’s earnings are expected to “increase” to -$5.91 in 2018 and -$4.19 in 2019, the company is far from achieving profitability.

Tesla has faced multiple challenges to achieve production targets for the Model 3.

In June 2018, Elon Musk said Tesla was on track to produce 5,000 Model 3 units per week by the end of Q2. An ambitious goal they’d set and made. But only barely, due to hiccups in production.

“We were huge idiots and didn’t know what were doing,” Musk told Bloomberg in July 13 interview.

Investors are still hopeful

Musk has accepted that it’s difficult to be a manufacturer in the automobile segment. Despite the ongoing cash-flow problems, Tesla’s expected to hit 73% YOY revenue growth in fiscal 2018.

Estimated 2018 revenues could go as high as $20.36B.

Tesla’s latest earnings also cheered many investors. The automaker burned less cash than expected, with cash outflows coming in at $739M—significantly lower than the expected $889M.

‘Bullish on Tesla’

Analysts expect company revenue to surge to $28.2B (38% growth) in 2019 and $33.9B in 2020 (21%).

For investors, Tesla shares have performed over the years: They were up 45% in 2014, 9.6% in 2015, -10% in 2016, before rebounding 45% in 2017.

The stock is up just 3% in 2018, however. But the tale is far from over.

To be continued, WealthLABBERs…

Money

CHART: How Blockchain Powers Bitcoin

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Blockchain, Bitcoin. Bitcoin, blockchain.

The two terms go hand in hand—and have become almost ubiquitous with this year’s insane rise (and fall) of Bitcoin.

But what does it all really mean? How does it come together? In this week’s chart, our friends at CB Insights break down exactly how blockchain powers Bitcoin.

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This Mogul Became America’s 1st Black Billion-Dollar Businesswoman

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Sheila Johnson.

Where to start?

She’s the first black billion-dollar businesswoman. Before Oprah Winfrey.

She started as a TV executive, founding Black Entertainment Television (BET), the first TV network targeting African Americans. She then became a real estate mogul.

Oh, she also owns a stake in three major sports franchises, the NBA Wizards, NHL Capitals and the WNBA Mystics, the African American, period, to boast that claim.

In honor of Black History Month, let’s dive into her remarkable career.

FAST FACTS:

  • Born Sheila Crump in McKeesport, Pennsylvania, Johnson co-founded BET in 1979 with then-husband Robert Johnson. The couple sold it to Viacom in 2000 for $2.9B
  • Sheila Crump Johnson became the first African American woman on the Forbes’ Billionaire list in 2000—beating Oprah Winfrey to the distinction.
  • Per Forbes, Johnson has an $820M net worth as of 2019

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Foray into real estate…

After closing the sale to Viacom, Robert and Sheila pocketed around $1.5B each. Johnson used that windfall as seed money to build a hospitality real estate empire in 2005.

“There’s a disparity in paychecks between whites and blacks,” she told the Wall Street Journal. “I will never forget that.”

As CEO of Salamander Hotels and Resorts, Sheila controls a spectacular portfolio of six luxury hotels in Florida, Virginia and South Carolina. And she’s built it from the ground up—literally—in her own spirit.

“I’ve been to many hotels, not only in the US, but all over the world,” she told Forbes last year. “And I wanted to find something that was going to really make Salamander stand out beyond all of these hotels.”

So what does that mean?

“You have to understand, there are a lot of people, investment companies, with very deep pockets,” she says. “They can do it, but they don’t have the experiences that we’re able to bring. I am constantly trying to find a way to help Salamander Resort & Spa stand out head over heels above any other hotel — not only in the area, but in the nation.

“I want them to leave that resort wanting to come back and not just say, ‘I’ll be back in six months.’ I want them to come back all the time.”

And so far it’s worked. In fact, on Forbes Travel Guide’s 61st list of Star-Rated hotels, Johnson’s Salamander Resort & Spa outside of Washington, DC earned a Five-Star distinction.

Image Credit: Salamander Resort & Spa

Forbes: “Everything [she] touches turns to gold.”

That’s a real quote. From Forbes. Last year. It’s also true.

BET? Billion-dollar exit. Washington Capitals? Stanley Cup.

And Roma. Won 10 Oscars. Who showed it before a single soul started caring? Johnson’s Middleburg Film Festival. (Which, by the way, has 32 films and counting in Academy Award contention.)

Remember her golf resort at Innisbrook? Oh, yeah. Hosts the Valspar Championship, one of the PGA calendar’s most-anticipated tournaments.

Becoming a billionaire comes with a new level of clout as well. “When you don’t have money, you’re not invited to special events; you really don’t matter,” she told WSJ. “It’s a society thing.”

So instead, she’s turned to giving back. Her Sheila Johnson Fellowship’s paid for more then 40 scholarships at Harvard University for students who otherwise wouldn’t afford to attend.

Image result for sheila johnson"

Breaking glass ceilings. 

There’s an alarming statistic in business and diversity—especially as it pertains to women. According to research by investor Richard Kerby, 18% of all VCs are women—and only 3% are black. In addition, less than 50 black women ever have raised $1M in funding.

“When I got started,” Johnson says, “I couldn’t get a loan. I had to use my own money to get Salamander Resort and Spa.”

She explained to WSJ last year that men can go to any bank with a bank proposal. And no matter how “wacky” the idea is, she said, “they’re going to get the financing. Women do not have that ability.”

Johnson’s taken it upon herself to do something about that, becoming one of the founding partners of WE Capital, an investment firm that invests in female entrepreneurs.

“I started out in a very unique position where I had my own capital to be able to get started,” she says. “But there have got to be banks and investors that believe in helping women who want to be entrepreneurs in the hospitality business.

“And it’s just really, really important that they really take a look at this.”

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Money

VIDEO: How Far Does $150K A Year Get You In New York City?

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Source: HuffPost

No matter what metric or list you look at, it goes without saying: New York City is one of the most expensive places in the world to live in.

In this video, CNBC spoke to a Millennial who runs her own brand consulting agency and wants to #WealthHACK her way to retirement by 40.

She makes $150K a year. But how far does that actually get her? Check it out.

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