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Fact Checking
Well-Known Member
The problem the shorts have: the shares will be recalled before the vote, and any resulting forced covering and short squeeze will be over by the time the deal is voted on.
Under this scenario the shorts have no control over the timing of the squeeze: on share recall they will have to either close their position by buying from the open market or find other borrowed shares, within standard settlement time which should be T+2 on the NASDAQ - which shares will be in short supply. I.e. the situation could deteriorate and the squeeze could be over in a very short amount of time.
The question is, once most shorts are bankrupt or licking their wounds with only 10% of their former buying power, what will happen to the share price? Does it return to $420 or does it stay at elevated levels because the shorts depleted the pool of shareholders willing to sell at all lower price levels? Or does the 34 million shares improved dilution calculation result in much higher intrinsic valuation for every long share?
Even if the deal is not approved because the price hovers around $600, the shorts will be out of their positions at this point.
At least that's how I see the dynamic of the short squeeze. Opinions?
For a couple days after Q2 call, there wasn`t so much FUD. For me it is the proof that much of FUD are orchestrated from one center. They stopped FUDs only to consider tactics and how to proceed .
I am so sorry because I have to sell my shares, but
Tesla must must go private!
I am so sorry because I have to sell my shares, but
Tesla must must go private!
I'm not completely sure about this. His has -eh- history with twitter..
Correct. A run on the stock doesn’t kill the transaction (and Musk is assuming the run will happen). Anyone who wants to sell (or cannot legally invest in the private company) will sell in the open market at the >420 strike price before the transaction is effective. So nobody ends up paying cash as part of the transaction. The “secured funding” is only relevant if there are not enough buyers willing to take the price at or above 420 in the open market before the transaction occurs.
Fact Checking
Well-Known Member
A buyout deal to take a public company private is not a "scheme to manipulate the price or availability of stock in order to cause a short squeeze". If it was the case then it would be illegal to take any public stock with a significant short interest private - which would be an absurd outcome.
In fact Elon even warned shorts that they have only so much time before their position blows up. They didn't take him seriously. In fact Elon warned them two days ago again by announcing the buyout deal - shorts can still close very close to where the price was before Elon made his announcement.
Also, Tesla has fiduciary duty to their shareholders, which by logical extension means that Tesla's obligations are the exact opposite of the financial interests of short sellers. So if Tesla does something that hurts short sellers, such as increasing profits, or taking the company private - too bad, the SEC won't shed a tear for them.
Fair enough. So I am genuinely curious as to how this could be the case.
The USA is a reasonably open country with a real risk that misdeeds come to light.
And I have to imagine that among journalists some still look up to Bob Woodward and Carl Bernstein and have some integrity left.
So are there financially weak or otherwise vulnerable journalists who are actually being bribed ?
Or are they (being) convinced that they would lose their job if Tesla, which doesn't pay for commercials, is allowed to succeed and create a new trend ?
Are are they just clueless and duped about a given 'editorial line' ?
Or is it just that bad news and a critical view is thought to attract more viewers?
How would this actually work - and wouldn't that in itself be a story for a real journalist?
Dan Detweiler
Active Member
To be honest, if it is trading below $420 and privatization is secure, I'll take the deal. I will take delivery in a month or two and can't wait 6 months for another chance to get my downpayment out. Not my ideal situation, but I figure I am doing the best possible thing I can to support the company...buying their product. Wish I could do it and still stay vested but I can't.
Dan
Dan Detweiler
Active Member
It's been two days for God's sake. Don't you think Tesla has an army of lawyers making sure this thing is on the up and up? Let's see what all comes to light in time, huh?
Dan
Dan Detweiler
Active Member
It's not a scheme to manipulate the price of the stock if they actually do it. Like I said before, rather than jumping to conclusions about what is or is not happening or what Elon is or is not thinking, let's see what plays out. It's been two days. Nobody knows what conversations or deals have been made. I'm sure the Tesla legal team is on this. We don't have to be the first to know every detail.
Dan
Mike Smith
Active Member
Musk is too big to jail
I vote for clueless.
Actually, it’s their audience that is clueless, or bloodthirsty or both. They are just playing to their audience.
Follow the incentives. Journalists’ incentives are ratings or clicks or eyeballs.
The SP is fading, the FUD of SEC is at highest.
Elon did not disappear, 12 hours ago tweeted:
Tesla deliveries & AP hardware chart by @lexfridman at MIT
Cool, isn`t it.
Tesla Board don`t have to announce who is investor, until formulating finale proposal for voting.
Dan Detweiler
Active Member
Yeah, he sure did manipulate the stock price to his advantage, didn't he? If that was his motivation he sure sucks at it!
Frankly, to hear a short seller have the audacity to cry manipulation is the height of irony and hypocrisy. They have done nothing but manipulate the market downward through the dissemination of all the FUD we have seen over the last several months. But it's ok to misrepresent. It's ok to sensationalize. It's ok distort. It's ok to flat out lie. Just so long as it suits and supports their short position, right?
Total BS.
Dan
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I have a couple of aquaintances that opened new short positions yesterday. They were previously bearish on Tesla, but were unwilling to short due to the possibility of large increases in the share price if market remained irrational (from their viewpoint). They now feel comfortable shorting, their thinking being $420 caps there losses.
I dont agree with their strategy at all (Im long via calls) - but just thought I woudl share what perhaps many are thinking.
I dont agree with their strategy at all (Im long via calls) - but just thought I woudl share what perhaps many are thinking.
Can someone rationaly explain this to me, you know... like i'm 3...
Are ppl realy THAT stupid?
when you tell lies others for very long time you start to believe them yourself.
The official notification will be right before shareholders voting round. Shareholders voting round will be postponed as far as possible (1-2 months from now) to let all weak stomach shareholders sell their shares to those who are ready to stay in the private company. One has to be delusional to think otherwise.
The official notification will be right before shareholders voting round. Shareholders voting round will be postponed as far as possible (1-2 months from now) to let all weak stomach shareholders sell their shares to those who are ready to stay in the private company. One has to be delusional to think otherwise.
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