TSLA Market Action: 2018 Investor Roundtable

[KarenRei]

Let's say cash flow goes positive. Model 3 production excels. Shorts decide to cover, stop bleating the bad news FUD, more shorts fold, and so on. And so TSLA would normally float up to, say, $420+. Your internal valuation team values it at $450.

Now... someone comes along offering $420. Would you sell? Would you vote for that? Or would you vote no, buy a ton at $420+, and hold out for $450?

If your internal team says $500 in 12 months. Would you vote for $420 now? Probably not...

Would you threaten to vote no, but suggest that $450 might buy your vote?

One poll we could do here is what price buys your "yes" vote?

I think a more interesting poll would be - at what price would you sell to covering shorts, know you can't buy back and that you're losing your shareholder place in a private Tesla? Is $420 a "not selling for that!" price? $500 and you'll take the money? $840 now would be nice, you don't want to wait 10 years to see if Tesla succeeds? $infinite as the entire energy industry needs replacing?

Done.

POLL: What price buys your "yes" vote to sell?

 

[Skryll]

If Tesla does go private, and some chunk of investors have to pass on investing in the private Tesla for various reasons, where do you guys think those dollars will end up?

Wouldn’t other tech stocks seem reasonable? Perhaps Amazon, Apple, Google? Private Tesla will shift billions of dollars - anybody else have a guess at any other companies that have a high likelihood of benefiting from this?

To explain in a different way, if, say, Fidelity had to close its position with Tesla because of some legal or strategic reason, they’d have a giant pile of cash - where do you think it will go?

A significant portion will probably end up being roadster, P3D, tesla roof and home battery orders.

 

[hobbes]

Here comes the money:
Terms of Service Violation

 

[LoveTSLA]

Saudi Fund in Talks to Invest in Tesla Buyout Deal

Saudi Fund in Talks to Invest in Tesla Buyout Deal

 

[Krugerrand]

Twitter bear skabooshka has tucked tail, and folded his tent. I'm guessing his pay cheque bounced.

Yes, the bandwidth to open a text from his source then tweet the number is off the charts.

 

[KarenRei]

Here comes the money:
Terms of Service Violation

The shorts were going crazy the other day sharing that Reuters report that the Saudis weren't interested in taking part in the privatization deal. This literally reverses that.

 

[CuriousSunbird]

Any clue what percentage of Panasonic's operations are Tesla-related?

if Panasonic doesn't get bought out by Tesla within a few years, I fully expect them to end up backstabbed by Tesla within a few years. Can't leave that much of its profit in someone else's hands...

Tesla accounts for about half of Panasonic's Automotive and Industrial division revenues, so about 1.25 trillion. So out of 7.3 trillion of total sales that's about 17%.

 

[Navin]

Tesla accounts for about half of Panasonic's Automotive and Industrial division revenues, so about 1.25 trillion. So out of 7.3 trillion of total sales that's about 17%.

Enjoy your posts. Thoughts on Elon and his thoughts on buyout? Curious if you think it’s possible or not. Thanks.

 

[KarenRei]

Tesla accounts for about half of Panasonic's Automotive and Industrial division revenues, so about 1.25 trillion. So out of 7.3 trillion of total sales that's about 17%.

So, pretty low. It'll of course grow over the next few years, but the investment would still be rather watered down.

 

[Krugerrand]

I don't know about "in general", but if I could no longer own TSLA, I'd try to "backdoor" my investment into them via suppliers, raw material providers, etc. The question is which publicly traded companies will be the most intimately tied to Tesla's fortunes going into the future. I'd need a mix, as Tesla has a habit of killing off its suppliers in favour of vertical integration :Þ

If I remember correctly there’s an Australian lithium mine that Tesla has/will have business with.

 

[replicant]

Anyone who knows anything about business and these sorts of transactions will NOT admit to being “interested” publicly, and here’s why: if the Saudis come forward and confirms they want to take this company private, then share price will automatically shoot up overnight closing near or over the $420 level, making it more difficult for them to buy us out straight, at the price level they want...

Consider buying a car for example. If you want to buy someone’s car, in order to get a great deal you can’t admit to loving their car. You have to downplay it by telling them the color isn’t what you’re looking for, or that you wish the interior was darker, etc. Then the haggling process can begin. If the Saudis admit to financial support today, they’ll find themselves buying Tesla shares at $450-500 when this is all said and done, instead of $420. This is business, you can’t trust anyone except Elon at this point. And you definitely can’t trsut Reuters.

Indeed!

cf. Terms of Service Violation

 

[CuriousSunbird]

Enjoy your posts. Thoughts on Elon and his thoughts on buyout? Curious if you think it’s possible or not. Thanks.

Many thanks. As you will have seen from previous posts, I have not formerly been a big believer in the Tesla story, BUT I don't subscribe to the Elon is evil/dishonest/etc. theory that floats around. So when he says tunding is secure and the only thing uncertain is the shareholder vote, I believe him. I therefore bought short-dated calls a few days ago.

 

[Cosmacelf]

Many thanks. As you will have seen from previous posts, I have not formerly been a big believer in the Tesla story, BUT I don't subscribe to the Elon is evil/dishonest/etc. theory that floats around. So when he says tunding is secure and the only thing uncertain is the shareholder vote, I believe him. I therefore bought short-dated calls a few days ago.

Yeah, be careful with the short dated part. This deal will take a while, like 6 months, to close I suspect.

 

[Sunlight]

Once upon a time we used to watch "Game of Thrones' and "Outlander" etc to get our fill of intrigue; deceptions; lies; back stabbing; black and white/good and bad; blood spilling; rumours; magic..……..

Now I just follow Tesla - especially the market threads!

What a 6 year ride so far (for me)......Whether Tesla becomes the biggest company or disappears down the gurgle, it'll make a cracking 10 series HBO TV epic in the future. By the way has anyone made a in-depth TV documentary about the Tesla journey so far?

 

[bdy0627]

Wow! Amazing analysis
I converted all my common stock as well as OTM calls into DITM calls last week expiration J19 . I am a bit nervous about losing time premium and liquidity as the privatization deal nears. Any thoughts on that would be highly appreciated
For what it’s worth my TA chart read suggests SP far exceeding $420 to $520 to 530s within the next 4 to 5 weeks followed my a sharp sell off in Tsla shares

At this point, I think it's important to look at the intrinsic value of any calls other than weeklies, since the stock price may trend close to the buyout price of $420 within several weeks (though possibly much later). The DITM J19s do not offer a great value when you look at the intrinsic value. For instance, if you look at an at the money J19 $350, the current premium is $46. When executed, it will cost $35,000 to purchase 100 shares at $350. With the stock trading at $420, that gives you an intrinsic value of $7,000. Using the current premium, the profit potential with this call is ($7,000 - $4,600)/$4,600 = 52%. This compares with an 18% return holding stock when it goes to $420. Now compare a DITM J19 $200. That premium is $160. Doing the same math, you end up with a profit potential of 37%. Not only is the intrinsic value lower, but the profit potential if the stock runs much higher than $420 is much lower. Basically, the idea of paying less time premium with DITM LEAPs has been negated since we know what the stock price will be if the buyout succeeds.

 

[Foghat]

Saudi Fund in Talks to Invest in Tesla Buyout Deal

Saudi Fund in Talks to Invest in Tesla Buyout Deal

Reuters says no Saudis, Bloomberg says yes Saudis.

I imagine the SEC will investigate this market manipulation right away...

 

[defc0n]

With two pieces of positive news, including Shanghai factory financing and apparent further Saudi interest after all, my complete wild guess is for TSLA to reach 370s again on Monday. That should be enough to scare off a small percentage of shorts, but with their high level of conviction, who knows.

 

[bdy0627]

Is any good news about Tesla Fundamentals now going to be meaningless to the stock price? I get the feeling that if model 3 weekly production jumped to 7,000 next week, that all stock price movement will still revolve around the $420 offer. Who cares about how profitable Tesla is becoming when all your shares are ever going to be worth as a public compamy for the next 3-6 months is $420.

Possibly the only way good news would increase the price past $420 is if it encouraged a rival bidder at a higher price.

Good news regarding the ramp and eventually profits should certainly set the floor, though the buyout situation is creating even higher volatility now.

 

[Navin]

The thing that most folks don’t realize is that there could be some big investment group that has been acquiring options to purchase shares of tesla. If this group or groups come out and say they have acquired enough shared to constitute a large percent of tesla shares - that will cause a big squeeze. Is there an electric version of the word

Fahrvergnügen

 

[bdy0627]

Nerds?

Given my investment volume in Tesla I better be very "nerdy" in that respect.

Yep. I'm approaching my investment in TSLA even more like a full-time job now. A huge amount of wealth is going to change hands over the next few months. IMO, you can't do enough DD right now to try to figure out how to approach TSLA investments.