I think it is notable that $Ford Motor (F.US)$ announced the...
I think it is notable that $Ford Motor (F.US)$ announced the plan to pay off high interest debt in and around the time $Rivian Automotive (RIVN.US)$ was about to go public. I would also point that the cost of paying off that debt should be immediately tax deductible to Ford. So I'm wondering if there is an added factor of tax planning going on where Ford gets a one time $billion interest expense deduction on the payoff of the debt. At the same time they sell some of their Rivian stake for what is obviously a big taxable gain.
Maybe I'm overthinking it or rationalizing. But I do think it likely Ford is wanting to have a tax plan on how to exit their Rivian stake. Ford has tax assets but I'm not sure those can all be used immediately or if Ford wants to use them all immediately.
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Selected one : I think that's a pretty solid observation. I'm not a GAAP accounting expert, but I think Ford's Rivian stake is below the "significant influence" threshold, so I suspect Ford's tax burden would occur at the point of sale.
In my opinion Ford is making the right choice paying of this debt, with or without tax implications, it's just unfortunate that it comes at a somewhat large cost to shareholders.
Lashell Liffick : About 3 or 4 months ago I had speculated to you a hypothetical merger of Ford and Tesla. You felt it was highly unlikely even while acknowledging there were synergies for such an alliance. You stated that a Rivian merger, though unlikely, was more realistic. That now appears to be very unlikely. Do you feel that a Ford/ Tesla merger or alliance is any more likely today? This is not a “gotcha” question. Your wisdom on these matters is greatly appreciated. I also welcome any other heavy hitters to weigh in on this subject. I respect the opinion of many contributors to this thread and there is now a great deal of money involved in this….Thank God!!!!!
Hotbuns Lashell Liffick : Not a chance!
Muriel Melber Lashell Liffick : I second "not a chance". When Elon goes out of his way to target the F-150 with his BS tug-o-war, rest assured top brass at $F take this very personally.
Wall Street newbie Lashell Liffick : Well, all I was doing is guessing what the Ford family wants to do. That is really what it comes down to. Because Tesla could be a $10 trillion dollar company and still would not be able to buy controlling interest in Ford unless the Ford family puts their controlling interest up for sale. Barring Ford bankruptcy of course.
Barney Tamminen : I would say a Tesla/Ford merger is as unlikely as ever. As you say a Ford/Rivian merger is even more unlikely then it was 3-4 months ago. Certainly any scenario of Ford owning Rivian while maintaining their controlling stake in Ford is all but impossible.