TSLA Market Action: 2018 Investor Roundtable

[TrendTrader007]

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18s

Replying to @elonmusk and @CathieDWood
Simply put $TSLA short sellers are making a fallacious assumption that Elon’s funding secured tweet was not serious and do not believe that he can pull it off If the deal goes through as I believe it will then shorts will be silenced once and for all If not, shorts will win

 

[AZRI11]

Yeah, so let me put it this way, I see stark contrast between what David Gelles is advocating for in his book (this is a quote from an Amazon reader review of his book):

The author defines "Mindfulness" as the ability to see what's going on our heads without getting into it. He defines mindfulness as means of being aware of our experiences, observing without judgment and responding from place of clarity, compassion rather than fear, and insecurity and corporate greed.​

... and the boasting tweet David Gelles sent gleefully when Tesla's stock price started dropping in pre-market trading, shortly after his highly negative interview with Elon Musk was published:

"Tesla $TSLA stock now down close to 4 percent in pre market trading. Wonder why?"​

So while meditation might be real, in David Gelles I sense various levels of deception and few signs of the compassion he is advocating for.

Didn't realize my transcendental meditation class had an optional "How To Become A Professional Short Seller" course.

 

[TrendTrader007]

I don't understand her arguments:

First, as a private company, Tesla will be unable to capitalize on its competitive advantages as rapidly and dramatically as it would as a public company, an important consideration given the network effects and natural geographic monopolies to which autonomous taxi and truck networks will submit.
​

Is she saying that Tesla won't be able to do equity financing? I think equity financing and leveraged debt got Tesla into trouble to begin with, it's what attracted the shorts who seem to have a ... willing ally at Moody's.

Second, in the private market, Tesla would lose the free publicity associated with your role as the CEO of the public company not only with the bestselling mid-sized premium sedan in the US, but also arguably in the best position to launch a completely autonomous taxi network nationwide in the next few years.
​

Don't think this is true: Elon has no trouble getting publicity as the CEO of SpaceX.

What he wants to avoid is the volatility and short-termism of public markets, which is in large part enabled by being traded on an exchange where the rules are in favor of speculators and financial parasites.

For example why isn't it public information who the biggest Tesla shorts are? Is it UBS? If yes, shouldn't they be barred from attacking Tesla through covert means, due to the obvious conflict of interest? The identity of the largest investors is public - why not the identity of the largest anti-investors?

I think the final straw for Elon were the 9% layoffs in June. They were entirely unnecessary and were disruptive, the layoffs were only done to reach profitability faster.

Excellent points
I suggest you bring these to Elon’s attention on $TWTR

 

[KarenRei]

The layoffs were indeed a bad move since many more employees have had to be hired in other areas.

Is your notion here that Tesla should have relocated solar salespeople across the country to teach them how to assemble cars?

All employees are not interchangeable - you know that, don't you?

 

[Boomer19]

Okay, I gave you a "funny" for that!

But seriously, with the stock at $320 and freely trading millions of shares a day, why would anyone put up $billions to take this private at $420 unless they were getting majority control as in a typical LBO? The battle between shorts and longs is what keeps Tesla in the news every day. How many articles do you read each day on Ford or GM? close to...none.

i’m not against most other car companies bc i dont think thats helpful to economy. tesla is in the news everyday bc of their methods and their leader. love/hate with society and the major players he’s up against, and their constituents.

SpaceX has a COO. Tesla should have had one as soon as Musk began forming other companies. They lost a good candidate when Jon McNeill left.

again, not against someone coming in to handle some day to day. i think this position is more helpful once they’ve achieved model3 (bet the company) equilibrium, and help is still needed in service and delivery (even though production is looking better).

 

[EV forever]

Boomer... "as he should be"? The SEC is all up in Tesla's you know what over his tweets. I agree the CEO should be the PR frontman, but not in Tesla's case. At least until they hire a COO, then put him on the front line of PR. I still believe the shareholders were wrong in not separating the CEO and Chairman roles. It would be interesting to do a recount and see how many would still vote the same way today.

@beachbum77 “The SEC is all up in Tesla's you know what over his tweets”.

What are you basing this statement on? I don’t believe SEC has officially confirmed that there is any ongoing investigation. All of this SEC stuff is reported as ‘sources within SEC’ ‘ sources within Tesla’ say that SEC has launched an investigation. If there was clear evidence that this is the case, I missed reading that. Maybe you can provide me with a link to this?

Musk is Musk. No one can change him fundamentally and we don’t want him to change. There are a few tweets which make us cringe, but by and large, his tweets are informative and honest. I know I can believe him when he tweets as it is entirely his communication. I would rather have this than some filtered watered down version from a seasoned PR firm, which we could never really put any faith in.

 

[beachbum77]

Is your notion here that Tesla should have relocated solar salespeople across the country to teach them how to assemble cars?

All employees are not interchangeable - you know that, don't you?

LOL... Not at all. I meant smaller layoff reductions while adding those other very needed positions. It would have seemed that nothing at all was changing. Using it as a "cost-cutting" measure was pointless. Have you seen any drop in SG&A?

Layoffs are never a positive for several reasons. 1) It means you either over-hired or are having to cut back production. 2) Severance is payments for an absent person which further damages/increases the SG&A account. 3) Big layoffs invariable make the remaining employees edgy and less productive. (MBA 101).

 

[beachbum77]

@beachbum77 “The SEC is all up in Tesla's you know what over his tweets”.

What are you basing this statement on? I don’t believe SEC has officially confirmed that there is any ongoing investigation. All of this SEC stuff is reported as ‘sources within SEC’ ‘ sources within Tesla’ say that SEC has launched an investigation. If there was clear evidence that this is the case, I missed reading that. Maybe you can provide me with a link to this?

Musk is Musk. No one can change him fundamentally and we don’t want him to change. There are a few tweets which make us cringe, but by and large, his tweets are informative and honest. I know I can believe him when he tweets as it is entirely his communication. I would rather have this than some filtered watered down version from a seasoned PR firm, which we could never really put any faith in.

Do you think the BoD lawyered up for no reason? FYI: The SEC never confirms or announces an investigation. You only know for sure one has occurred when the FBI walks in to arrest someone.

 

[Fact Checking]

Have you seen any drop in SG&A?

Most of the layoffs were initiated in mid June, with just two weeks left from Q2. Many of the layoffs were reported to be effective end of June.

I.e. Q3 will be the first quarter with significant cost saving effects of the layoffs - Q2 only carried the costs of the restructuring.

 

[beachbum77]

Most of the layoffs were initiated in mid June, with just two weeks left from Q2. Many of the layoffs were reported to be effective end of June.

I.e. Q3 will be the first quarter with significant cost saving effects of the layoffs - Q2 only carried the costs of restructuring.

That's the sad part. With the severance pay we will unlikely see any drop in SG&A expense. By the end of next month many of the new hires will be in place. So where is the net savings? Look at the pages of open positions in service and delivery on the Tesla website.

 

[wipster]

Awesome, but curious that they think that the rates are about to collapse. Has there been some announced downtime coming up?

It's been that way for a while, I've wondered that myself. Maybe they're betting on the come... if so they're gonna be waiting a long time for their lotto card to hit.

 

[wipster]

I wish these were true, but they're guesstimates.
There are pretty reliable rumours (as much as rumours can be) that last few days have been slow because of part availability issues.

Just don't bet the farm.
However, I did bet small part of my house (HELOC) in addition to all my liquid assets; but it's better to be prepared than blindsided.

Do you own a farm? Just sayin'...

 

[EV forever]

Do you think the BoD lawyered up for no reason? FYI: The SEC never confirms or announces an investigation. You only know for sure one has occurred when the FBI walks in to arrest someone.

I do not believe there is any SEC investigation. That is FUD propagated repeatedly till now folks are stating it as a fact. The lawyering up is simply to evaluate the going private option.

 

[Fact Checking]

That's the sad part. With the severance pay we will unlikely see any drop in SG&A expense. By the end of next month many of the new hires will be in place. So where is the net savings? Look at the pages of open positions in service and delivery on the Tesla website.

The rate of change is what matters, SG&A already went down as a percentage of revenue in Q2, it will be an even lower percentage of revenue in Q3.

Also, just to clarify, you wrote this:

Using it as a "cost-cutting" measure was pointless. Have you seen any drop in SG&A?

What you write is either showing confusion on your part, or you are trying to disinform: no SG&A drop was possible from the 9% layoffs in Q2 because it only became effective in Q3.

So why are you calling the cost-cutting measure "pointless" based on no drop in Q2 SG&A?

 

[Fact Checking]

I do not believe there is any SEC investigation. That is FUD propagated repeatedly till now folks are stating it as a fact. The lawyering up is simply to evaluate the going private option.

Also note that the Tweet was written by Elon the largest shareholder, who proposed a private buyout. He didn't tweet in his capacity as the CEO of Tesla.

Tesla didn't tweet.

The short false narrative is (intentionally) trying to blur these two separate roles of Elon, to spin it into a false "Tesla liability, bankwuptcy!" lie.

 

[beachbum77]

I do not believe there is any SEC investigation. That is FUD propagated repeatedly till now folks are stating it as a fact. The lawyering up is simply to evaluate the going private option.

From my experience, we hired investment bankers first. We needed their advice and assistance in raising the funds to buy out another smaller company. Our own legal staff handled most of the details.

So far the only confirmed hiring the BoD has done was to hire lawyers without any offer in sight at this point. So the BoD is not dealing with a proposal. The lawyers are there for other reasons. My best guess is they are addressing the subpoenas that are reported to have been sent to the directors, and how much exposure they could be facing from the class action lawsuits that may be headed Tesla's way. Getting ahead of that activity is a smart move.

 

[beachbum77]

Also note that the Tweet was written by Elon the largest shareholder, who proposed a private buyout. He didn't tweet in his capacity as the CEO of Tesla.

Tesla didn't tweet.

The short false narrative is (intentionally) trying to blur these two separate roles of Elon, to spin it into a false "Tesla liability, bankwuptcy!" lie.

I think you are confusing two separate issues. First, the SEC is reported to be looking at the production level tweets over the past 18 months that have proven to be false. Second is the tweet about "funding secured". The first will affect Tesla, the second you are correct is directed at Musk as an individual in his EBO effort. But the BoD needs legal guidance on both issues. If indeed they have been issued subpoenas as to what Musk told them and when, they could open themselves to further liability. They would definitely want expert counsel before addressing those subpoenas (if they indeed exist).

As far as the class actions, a lot of "longs" were injured along with shorts. I am one of them. However, my losses were small (call options) compared to some of the others I have read/know about. I made the mistake of believing "funding secured". While the press was focused on the shorts making $1.2 billion, no one seemed to care that longs have lost $7 billion at the same time.

 

[elasalle]

Dear Elon: An Open Letter Against Taking Tesla Private - ARK Investment Management

 

[mspohr]

LOL... I think we both know the odds of any "filtering" of Elon's early morning posts are less than zero. At this point could he even do more damage? I think people are becoming immune to his weirdness. It is taken for granted as part of his "baggage". The SEC could change that but otherwise, it will be Musk, as usual, going forward.

I enjoy his posts.
He's constantly posting interesting stuff.

 

[lunitiks]

I don't understand her arguments:

Easy.

She’s saying that going private will be amazingly stupid. Bureaucracy will kill progress, enthusiasm and hope for the company.

Can’t disagree with her, as we have hard evidence of this from another «private company»:

You’re welcome