OK, I was slightly confused about the rule. The rule is actually that you can't buy *with unsettled funds* and then sell *before the funds are settled*. Since I never buy with unsettled funds it doesn't come up for me much...
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Runarbt
Active Member
What about 35million shares short. Who will sell to them at 420 or less?
I think we are in unchartered water here. Apparently shorts are not yet covering. It appears that most longs underestimated how delusional the shorts are. Most of them still firmly believe Elon is lying. We will probably see true short squeeze of the century
Add to that that you probably won't get ANYWHERE near the amount of information out of the company that you once did, to put a value on your shares/risk.
It't not really the company, its the manufacturer. I doubt they would get a new manufacturer #.
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Ugh. Keeping this post up in order to provide absolutely necessary rebuttals.
“All...have liquidity requirements”. TRUE
“They will {unstated: ‘therefore’} be obligated to sell...” ABSOLUTELY NOT TRUE. It is possible that some funds have zero provision for having a portion of their assets in private investments, but that is the case with very, very few - and almost NO “sizable” funds.
Shareholder vote is required, but the majority of share are help by large groups that are theoretically supportive of the move.The current investors would keep holding their shares (zero net cost), private investors would choose to stay in private Tesla or cash out at $420.
when the original tweet of 420 came out, people assumed cash out at 420, which crippled calls 420+
now that more details about the proposed buyout emerge, and then when the halt came off, they restablished their original value as of the saudi news.
the market obviously now realizes that 420 isn’t a cap.
this has the chance of being voliatkle obviously as shops all over the street are jockeying for position.
it’s def a risk to be holding calls 420 and above (and any where your premium paid plus strike is above 420) but we’ll see how it unfolds.
even if some people think the deal is a farce, keeping the price where it is now, there could still be a squeeze bc those who do believe will want their loaned shares recalled for the proxy vote.
then there’s the camp that doesn’t want the deal, and instead want multiples of this price (most likely the deal will be structured such that they will still recall their shares in order to vote NO)
so the 420 may be breached ...but we’ll see. there may be some mechanics to cycle through as the market repositions that will keep suppressing the price, or at least keeping it in check for time being.
i expect borrowing to go Neg rates tomorrow, meaning cost to borrow will increase
Especially for us non-US investors, can we even convert our shares to non public?? Or do we have to go through some US institution? Maybe transfer our shares to something like Interactive Traders if that´s possible and then have a better chance?
MikeQ
Member
So as a public company, the worth of my investment is based upon what someone else is willing to pay for the stock. This is (in theory) driven by future expectations of growth.
If I choose to stay with Tesla when they go private, how is the value of my investment determined?
If I choose to stay with Tesla when they go private, how is the value of my investment determined?
I was initially going to say no, but...
Options are actually a legal contract. So yes, you retain the ability to pay $700/share to receive 100 shares of TSLA (or whatever that becomes), and the options exchange is supposed to make you whole. I'm not certain exactly how the deep details of the exchange-traded options regulations work, though. I think they may be able to *accelerate your deadline*, and say "pay your $700 before it goes private or never".
(For incentive options and non-qualified options I'm sure they will continue to work as before, so I'm talking exchange-traded options here.)
Because of leverage. Someone please tell me if I'm doing this math wrong.
265 J20 call option, buy for 135.75x100=13,575
On the last day, hopefully the SP will be around 420. 420x100 =42,000
Cost of conversion = 265x100=26,500
42000-13575-26500 = 1,925 gain per call option
If I buy 10 such call options for 135,750, I'll walk away with 19,250 gain, or 155,000 total
If I buy the equivalent in shares (assuming385), that's 352 shares, x420 = 147,840 total
Is my math correct?
You're thinking actively-managed funds, though.
I would say that nearly every index fund will be forced to sell TSLA because I can't think of a single index which contains private equity. Powershares QQQ for instance will have to cash out if the deal goes through.
Ahem .. I believe I predicted this a month ago (well, pretty damn close anyway, esp for a newbie I think). The only way I could think of a super short burn of the century was to eliminate available shares.
Yeah, I'm already recalling in order to vote. Whether yes or no, I have a strong incentive to vote this!
Depends how the deal is structured. It's legal to own shares in private equity in foreign countries.
Perhaps one move is to get your stock actually issued into your name on the books of the company -- demand a certificate. (Can't do that if it's a retirement account or anything similar, of course.) This may involve some serious paperwork.
Oh man, what a day to play golf! 12 minutes after Elon tweeted, I saw the tweet on the second hole, and put in a smallish buy order. Thought about it some more for a few holes, then put in a large buy order, but by then trading had been halted. Got it executed when the market reopened at essentially the close for the day. Gulp.
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