If the buyout comes I’m gonna sell half and lock in the profits. Cash me out Elon.
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If the buyout comes I’m gonna sell half and lock in the profits. Cash me out Elon.
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At this point, I am essentially waiting to see how much *influence* the Saudis will have. I guess I don't really care if they get non-voting shares, but if they get a lot of voting shares I would worry about malign influence.
I for one welcome his decision to tweet the go-private intent asap. For once, us retail investors were privy to info AT THE SAME TIME as the large investors. That was the ONLY way to not screw retail investors, while shopping the go-private idea with current investors AND with Saudi Arabia as a backstop.
Thanks to his tweet, I got a chance to back up the truck, while the media played "who dat", and the shorts continued to laugh at us. If he didn't tweet, my cash would've been on the sidelines, while the major investors bought up whatever the shorts were throwing away.
Although there's a significant number of funds who must divest, I sometimes wonder if there are even enough shares for everyone to hold private shares when the shorts have to return the 35 million borrowed? But that's just my speculation. The point is that at least I got the chance to act on fresh information.
Interesting insights into Saudi palace intrigue. Sounds to me like the PIF director is currently in favor with the Crown Prince, but we'll see if they fall out of favor.
Bullshit! Let me quote this again:
Tesla still hasn't said where its secured financing is coming from — here's what that probably means
This is a partner who specializes in mergers and acquisitions at a prestigious law firm. He would know the legal meaning of "funding secured".
Funding was secured, and anyone who disagrees with that can take it up with Mr. Aquila.
Funding was not *committed*. But that's different!
Munger, Tolles and Olsen is Charlie Munger's law firm.
Charlie Munger of Berkshire Hathaway.
For what it's worth.
The first thing I found out about Wachtell, Lipton, Rosen & Katz is that it's famous for helping companies avoid hostile takeovers.
Small is lucrative for Wachtell, corporate America's legal defense...
I don't think you get it. The board had instructed Musk to talk about the Saudi deal with major investors like Fidelity, T Rowe Price, etc. He was going to do so that day. It would be illegal (SEC violation) for him to do so without telling the rest of us, so he told the rest of us. And that's outright what Musk said today.
I hope this privatization deal will close at $420. Like many on this board, I plan to stay invested in private Tesla.
I see two potential risks for people who firmly believe it will smoothly go to $420 and close the deal.
1. For those who think it can't go above $420 and sold $420 covered Calls on all their shares, what if Apple or Google decide to join the bid, the price is raised, and your shares are called away? If you plan to sell your shares anyway, then this may not a big problem.
2. More importantly, for those who think it can only go up from here and leveraged to the full extend, what if there is a flash crash for whatever reason. Will your account withstand the quick crash? The probability for big drop is low, the consequence could be really bad. If you have high leverage using margin or selling Puts, you probably want to have a tight stop loss to prevent the worst case. Or buy some insurance using out of money options.
I am not a fan of margin and high leverage.
I see two potential risks for people who firmly believe it will smoothly go to $420 and close the deal.
1. For those who think it can't go above $420 and sold $420 covered Calls on all their shares, what if Apple or Google decide to join the bid, the price is raised, and your shares are called away? If you plan to sell your shares anyway, then this may not a big problem.
2. More importantly, for those who think it can only go up from here and leveraged to the full extend, what if there is a flash crash for whatever reason. Will your account withstand the quick crash? The probability for big drop is low, the consequence could be really bad. If you have high leverage using margin or selling Puts, you probably want to have a tight stop loss to prevent the worst case. Or buy some insurance using out of money options.
I am not a fan of margin and high leverage.
Elon refused to issue Saudis new shares. So they bought in the open market. This is good news at two levels.
1. He HAS negotiating leverage with the Saudis
2. Tesla definitely doesn’t need a capital raise at this point
simples
1. He HAS negotiating leverage with the Saudis
2. Tesla definitely doesn’t need a capital raise at this point
simples
Well not sure, my 3 will have the same costs as an S. Confirmed by Tesla BTW.
On the German Tesla Sales for 2018:
This year it won’t be much of a surprise, when the sales drop till 2019, Jan!
Because the German government wants to halve the taxes on company cars.
And while new Tesla cars aren’t cheap till the Model 3 arrives, a great portion of the sales comes from companys.
If you are in a good paid job it’s common, you get a car paid by your company.
But you have to add 1% of the car price to your taxable income every month. And this tax will lower to 0,5% starting 2019.
A Tesla Model S is mostly bought for around 90.000€ as of today. That’s 900€ per month adding to your taxable income. (On higher salaries you pay around 40% tax on that, so you’d pay 360€ for getting a car from your company)
With the new tax gift (0,5%) its only 450€ taxable income per month. (180€)
So while this is a big deal for many potential buyers, just remember this, when the 2018 sales numbers for Germany are published.
2019 will be through the roof!
This year it won’t be much of a surprise, when the sales drop till 2019, Jan!
Because the German government wants to halve the taxes on company cars.
And while new Tesla cars aren’t cheap till the Model 3 arrives, a great portion of the sales comes from companys.
If you are in a good paid job it’s common, you get a car paid by your company.
But you have to add 1% of the car price to your taxable income every month. And this tax will lower to 0,5% starting 2019.
A Tesla Model S is mostly bought for around 90.000€ as of today. That’s 900€ per month adding to your taxable income. (On higher salaries you pay around 40% tax on that, so you’d pay 360€ for getting a car from your company)
With the new tax gift (0,5%) its only 450€ taxable income per month. (180€)
So while this is a big deal for many potential buyers, just remember this, when the 2018 sales numbers for Germany are published.
2019 will be through the roof!
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Johan
Ex got M3 in the divorce, waiting for EU Model Y!
I don't speak lawyeresque perfectly, but I think that that was 10% substance and 90% caveats. Seems very prudent though.
Its a very carefully written piece so clearly that has been word by word checked and approved and written by a group of lawyers.
So we see them every day moving this forward with what I call high speed. Lawyers have been found and appointed and put into motion quickly.
I have 0% doubt that Elon will execute on it. Shorts will continue to doubt it ...."The special committee has not yet received a formal proposal from Mr. Musk".
Every day goes by they do not cover is a day less they have to leave their sinking ship.
Like on the Titanic, first nobody wanted to get into the rescue boats and than they tried all together...... just a few survived....
Right. As much as I enjoy Elon's candid tweets, I'm not gonna complain if Law and PR review his upcoming communications about going private...
Reciprocity
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I dont know if the Saudi's intended a hostile takeover, but you cannot deny the timing of the tweet in relationship to the "$420, funding secured" tweet. The stock was skyrocketing before the tweet and after coming out of the halt, it stabilized and started to drop. If the ideas to halt the hiking of the stock it worked, if the plan was to pump the stock, it was a bad idea. My guess is the former was the goal. The tweet basically put Elon back into the drivers seat, making the average holder not want to sell. I dont know who is selling today, besides short sellers. I believe the short sellers believe firmly that $420 sets a cap, the reason is if the price goes above 420, many must sell so they will start to sell then. The reason they would sell sooner is the time factor of the money, if you can sell for 420 next week, why would you wait until Nov. or later. If you must sell, then you might start to liquidate above 420. This sets a soft cap at 420 where shorts could cover. Until then they will continue to pile in hoping that Elon goes to jail (laughable) or that the SEC delivers some a bailout bellow 300. They can also do ok if the deal fails. What they might be miscalculating though is that all these experts and lawyers being hired by the board might come up with a different number. Institutional investors might also have a bigger number in mind. This 420 cap could jump to 520 overnight and you do not want to be short at 350 or even 380 or even 420. Given that many where short at 250 recently and the rate has been mostly stable or increasing lately, this causes some issues with covering above 500. So one should be selling until the share are above 520 which is a world of difference when compared to 420 which is relatively safe to short from say 380. They could even buy some out of the money calls to protect themselves.. but what if they where to conservative with that and bought 450s or 500s, those would wiped out by the $520 price as well.
This stuff is far to complicated to even ponder. Goog luck to all.
This stuff is far to complicated to even ponder. Goog luck to all.
I kept waiting for someone to point that out.
Some additional reference points FWIW:
-Berkshire Hathaway has a major position in BYD;
-Berkshire Hathaway makes minority and controlling investments then lets management manage;
-https://www.mto.com/about-us. Reading some of this gives a very good idea.
For the record Munger, Tolles is NOT Berkshire Hathaway ( 'BH' )but they have represented them in some major cases.
Given the close connection between several close associates of top BH managers, some close friends of Warren Buffet, and...
people who've signed the "Giving Pledge" (i.e. Elon Musk is one of them)...
we may safely assume that adult advice for going private is very well in hand.
I agree. Thinking about where the piles of tens of billions are, BH is at the top of the list and really a better candidate than Apple or Google.
I was happy to see Charlie Munger's firm involved and wondered/hoped something with BH might be a possibility.
Charlie Munger calls Elon Musk 'brilliant' and bitcoin 'stupid and immoral'
Musk “swings for the fences”
Regarding Tesla, Munger said, “It’s already created more significance than anybody had predicted. Its founder is bold and brilliant, and he swings for the fences. People like that get some remarkable results. Sometimes they get some quick failures. I haven’t the faintest idea how Elon Musk will turn out, but he has a considerable chance of success and considerable chance of failure. He seems to like it that way.”
Munger said he hadn’t heard that Musk had tweeted that he was going to start a candy company in response to Buffett’s comment, “I don’t think he’d [Musk] want to take us on in candy.”
“I didn’t hear that. Sounds like wise-assery,” Munger chuckled. “I can’t criticize anybody else for wise-assery.”
Based on all the comments from Buffett and Munger, I don't think they understand Elon/Tesla as much as us on this forum. From Elon's recent talk about moat, I think Buffett said no to the deal. If somehow Berkshire gets involved with Tesla, it has to be from Ted and Todd. Overall the chance is low.
People frequently point to the fact that Munger pushed Buffett to buy EV company BYD in 2008. If Munger didn't have a sizable investment in BYD years before 2008, he wouldn't push Buffett to buy BYD, that's my view. Buying BYD was a mistake, this will become clear within 10 years.
Those California companies are more likely to understand and be interested in Tesla. Google and Apple are the top candidates. Elon gives them a chance. It's up to them to make a smart decision.
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