Buyout?

[Smitty901]

We have no way to knowning for sure who if any creditors they have. As a privately held company they are not required to make public near as much information as a publicly held one. True any Government funding would be public information but the rest is pretty much private.
Elio at this time is not required to publish a financial report to the public or to give notice of their intentions. Another reason the cost of running a private company are so much lower.

 

[tonyspumoni]

We have no way to knowning for sure who if any creditors they have. As a privately held company they are not required to make public near as much information as a publicly held one. True any Government funding would be public information but the rest is pretty much private.
Elio at this time is not required to publish a financial report to the public or to give notice of their intentions. Another reason the cost of running a private company are so much lower.

Totally on target Smitty901.

What do we know for certain that addresses the "buyout before bankruptcy" question and the question I think many of us, including the OP, really want to know - will this happen?

(1) EM comprises a group of private investors attempting to design, produce, and market a revolutionary vehicle from evolutionary parts.
(2) This group of investors comprises a skilled, experienced, savvy, and closeknit set of well-heeled individuals with complementary and synergistic expertise
(3) The management team has enlisted the avowed support of a wide range of suppliers with first-rate reputations.
(4) The management team has successfully identified and secured a production site, complete with most/all of the required workflow pieces to kick off production.
(5) Product development, while not as fast as many would hope, has tangibly progressed to the point where final pre-production prototypes are likely already under formal consideration if not between drawing board and cutting room floor
(6) EM has applied for a DOE ATVM load for, I think, $185M to be used to "start production" because, as the CEO Paul has stated, he's the CEO and it would be irresponsible to not seek all sources of funding (and 4% interest and a 25 year amortization schedule would be killer terms unmatchable by any conventional capital provider)
(7) Everything Paul or other spokespersons have said so far has come to pass more or less exactly as stated except for timing, which we all agree has been tedious. Nevertheless, there has been a distinct difference between statements of fact and those of prevarication, e.g. vehicle specs (invariant) and timing ("we are confident X will happen by Y."

Everyone can draw their own conclusions from this. I say that: (1) they have all the capital they need for now; (2) this will happen, though the final form and eventual timing remain subject to final details dictated by the sources of their capital.

 

[Smitty901]

Any kind of buy out would be unlikely. There is just not the kind of asset venture capital goes after involved with ELIO.
When venture capital by any name go after a target they
1. ID a with a stock price below it's assets
2. A company that due to mismanagement is earning way below what it could
3. A company with assets that can be turned into cash quickly.
4. They have an exit before the come in.
In many cases they already know if once they get their hands on all the books if they can turn it around they can sell it off in parts and still make money
If you have ever been at a company this has happen to you know how it works. They do not buy in ,Invest betting on the future. No one buys a company like that they wait and pick it up at a fire sale.
ELIO has none of that to offer an investment group. YET. ELIO is treading water with nothing to sell off if it sinks. It is a start up on a shoe string.
I hope they make it. In for 1000 now and likely another.
I live in the real world. working for a company now two years in to an investment group take over. Stock price has over doubled . Signs the investment group may be on the way to the exit soon.

.

 

[tonyspumoni]

Smitty901,

I gotta disagree with on this one, at least with respect of the staging of potential VC involvement.

VC gets involved very early in many of the deals I know of. Many VC's and angels in fact focus their portfolios exclusively on startups and EM will get a lot of attention.

You do accurately highlight though why EM would want to avoid VC's if possible - they'll have to pay a premium for their working capital and for this capital they'd have to cede a measure of control - but whether angel or VC, outside capital providers will get some measure of control or they won't invest. Period. I don't care how good of an opportunity a deal looks like, if you pony up $185M you get board seats at worst. This is right and good and is how the system works.

I like how you think though.

 

[karl]

Lets understand some of the basic terms here...
http://www.investinganswers.com/financial-dictionary/businesses-corporations/buyout-949

 

[tonyspumoni]

Lets understand some of the basic terms here...
http://www.investinganswers.com/financial-dictionary/businesses-corporations/buyout-949

Perfect Karl. That about sums up the terms.

EM's current investors could try to sell out but there is zero chance of them doing so presently; they got into this thinking the EM would be an eventual moneymaker so they are hardly likely to want to cash out now. This company is a start-up. They have gone through Series A funding (founders), which is the people onboard now who have already thrown money in. They are looking now for Series B money (external capital providers). Series A got them everything I already mentioned above (items 1-7). They are using success in those items to now troll for Series B money. I am not at all familiar with the startup drill in the automotive sector, but I have seen this many, many times in mine (Pharma/Biotech) and value is value. EM looks to be a play with tremendous upside. The could indeed confront obstacles in getting Series B money but it would be highly improbable owing to the self-defeating nature of the gesture for any of the current founders to look for an exit before they have executed on the plan they all agreed to going in. When Carl Icahn, the Koch brothers, or another activist investor starts showing up, then you'll know that they are in trouble, or if a board member resigns to "pursue other interests" or "spend more time with their family".

 

[D Borland]

I think there has to be actual Production Elio's rolling off the assembly line before going public would ever be a viable option for raising future working capital.

i disagree. A huge number will invest in start-up of this nature. I am one of them.

 

[D Borland]

Are you kidding me. Have you seen some of the companies that went public in the last 20 years.Its all about demand. If they sell the dream and people think its viable, they will invest.Its called greed and fear. If greed overrides fear, they will get their money.

absolutely correct

 

[Kuda]

Snipped: EM's current investors could try to sell out but there is zero chance of them doing so presently; they got into this thinking the EM would be an eventual moneymaker so they are hardly likely to want to cash out now. This company is a start-up. They have gone through Series A funding (founders), which is the people onboard now who have already thrown money in. They are looking now for Series B money (external capital providers). Series A got them everything I already mentioned above (items 1-7)./QUOTE]

Given Statements in&regarding the plant video: "pending the ATVM Loan" Elio isn't seeking any
further investment at this time. A key word in all of this is "Control". Whether 'buy out' or IPO,
VC's, Angels, etc., Paul will have to walk those tight ropes very carefully if he wants to achieve
his 'end game'. Which I believe to be international distribution, under his terms: high mileage,
low cost, domestic content, quality & safety. Maintaining 'control' becomes more & more difficult
the more (OPM = Other Peoples Money) you need to succeed...........

 

[Texconsin]

Smitty901,

I gotta disagree with on this one, at least with respect of the staging of potential VC involvement.

VC gets involved very early in many of the deals I know of. Many VC's and angels in fact focus their portfolios exclusively on startups and EM will get a lot of attention.

You do accurately highlight though why EM would want to avoid VC's if possible - they'll have to pay a premium for their working capital and for this capital they'd have to cede a measure of control - but whether angel or VC, outside capital providers will get some measure of control or they won't invest. Period. I don't care how good of an opportunity a deal looks like, if you pony up $185M you get board seats at worst. This is right and good and is how the system works.

I like how you think though.

I say we keep the Viet Cong out of it! Charlie can make his own vehicle!