Thread by @Pivotal_Capital

THREAD on a peculiar contingency in the $TSLA $MXWL acquisition, which may explain the current 55% premium, but raises many more significant questions about $TSLA's motive here. 1/n

2/ In the form 425 (Filing of certain prospectuses and communications in connection with business combination transactions) filed by $MXWL yesterday, you will find this little contingency:

3/ This means that if $TSLA is trading >$245.90 when the deal closes, each $MXWL share will be exchanged for $4.75 worth of Tesla stock, valuing the deal at approximately $218mm (a 55% premium to last Friday's closing price)

4/ HOWEVER, if $TSLA falls below $245.90, the exchange rate on the shares becomes locked at 0.0193 $TSLA shares for each $MXWL share. In other words, if $TSLA falls below $245.90, Maxwell's deal value begins to decline rapidly. See the spreadsheet below:

5/ At a $TSLA share price of about $160, the premium is effectively wiped out. Anything below that and $MXWL shareholders will be taking a haircut, which could end up being quite significant. Why would $MXWL management expose themselves to this risk?

6/ Conversely, if $TSLA's share price falls below $245.90, they could end up getting $MXWL at a significant discount. What is management not telling us? What is so significant about $245.90 for $TSLA?

7/ Does $TSLA management know that the share price will likely be below $245.90 by the time this deal closes sometime in Q2'19? That sure would explain the 55% premium on the offer for a company nearing bankruptcy. Seems plausible to me, but what do I know? I'm the village idiot

8/ $TSLA still has not filed an 8-K or S-4 for the deal - I will be patiently waiting for those, because a company with these financials should not be bought at a 55% premium.
<fin>

9/ Just another spreadsheet to show how $MXWL's premium would be knocked out by $TSLA falling below $245.90