TSLA Market Action: 2018 Investor Roundtable

[oneday]

Well, as long as one wants to torture words to their waterboarding utmost, imagine this scenario at the Interstate’s margin where the Commercial Vehicle Patrol is interviewing the overturned truck’s driver:

“Did you secure your load of 60,000 lbs of pipe?”

“Oh, yes. I secured the load.”

“And with what did you secure it?”

“With twine.”

I'm not sure what this means...
But, tell me more stories!!!

 

[phil0909]

I'm not really seeing how this makes it less than conclusive. If they need to review the details of the funding that means the funding exists, and they'd see how secure it was. If Musk's tweets were materially false on something this important they legally have to reveal it immediately.

If I were a Board member and Elon told me he needed a day or two to pull together the relevant documentation, contractual material and legal opinions, I would give him a day or two - I think he's earned the benefit of any doubt. But I wouldn't let it go beyond that timeframe, and would insist on public clarification if needed. (And not because of the personal legal risk, but because it's a Director's job to protect the Company.)

 

[avoigt]

Cross posting from another thread.

It is obvious Elon has been mulling over going private for a number of years. As recently as last year, a deal with Softbank could not be consummated. He definitely has backing now, and he had a short window to announce the deal. Consider this.

1. The 10Q dropped Monday AM and the quarterly results were a couple of days before that. Imagine the nonsense in the media, announcing the deal before the earnings, would have created.
2. The Saudi news broke Monday and the stock was going up. He had to act quick as otherwise he'd be announcing an offer for a piddly premium
3. In the current situation, the deal economics work very well because at the deal price (420) any longs who want to sell would be offset by shorts looking to cover. This cannot happen if 3Q becomes profitable and shorts are naturally squeezed out. The outlay needs to be more because of higher SP and fewer offsetting shorts

In any case, the ramification is, this is stealing the stock from folks who do not have the ability to hold the SPV in a retirement account / foreign account / is leveraged long / not a accredited investor or some combination thereof. Personally It is not possible for me to have the same exposure to the SPV as I now have to TSLA. Additionally, there is no way h3ll i can avoid paying significant taxes, if this deal goes thru. I am seriously hoping for the price to jump significantly past 420, which would likely break the deal.

Why is there no way for you to avoid taxes? Its just a swap of securities with the same company. You simply get a different type of shares. So there is no sale and taxable incremental speculative win therefore nothing to tax.

Why do you say international investors cannot hold the stock?

 

[avoigt]

I think there is merit in this argument. Board members don't like going to prison.

But it is less than conclusive proof. The Board members said they are now taking the appropriate next steps. Perhaps one of these steps is reviewing the details of the funding secured by Elon. Surely this would be an appropriate next step prior to summarily throwing Musk under the bus!

Still, if the Board does not act within a couple of days, I think we can safely assume they have determined that Elon has been truthful.

This is just not even really smoke but certainly no fire.

If Elon did not buy stock while saying that sentence that funding is secured he is fine regardless how much and what has been secured and what he understands to be secured.

First of all there is no confirmation that there is any SEC investigation secondly if there is one they cannot debunk that he has some funding secured and is considering to take Tesla private. So what is the deal?

Its a short argument and will disappear quickly.

 

[Open Interest]

What are the thoughts out there on this event being taxable when converting to private shares? I would hate to pay 15%+ on my gains. The offering price should cover this.

Wife in the tax field say no way to avoid tax.

I’m not sure why that would be, but I am not a tax professional. When Bank of America was sold, my shares converted and did not become a taxable event until I sold them many years later. Same with my Safeway stock. And more recently, my employer was purchased by another bank, and my vested holdings remain in my brokerage account, not taxable until I liquidate. Unless you are suggesting this is different because it is a public company going private. Theoretically I don’t see why that would be different.

 

[ZachShahan]

BTW., regarding the Tesla board members statement released today:

"Statement from the following members of Tesla’s Board of Directors: Brad Buss, Robyn Denholm, Ira Ehrenpreis, Antonio Gracias, Linda Johnson Rice, and James Murdoch
PALO ALTO, Calif. , Aug. 08, 2018 (GLOBE NEWSWIRE) -- Last week, Elon opened a discussion with the board about taking the company private. This included discussion as to how being private could better serve Tesla’s long-term interests, and also addressed the funding for this to occur."
​

Of the 9 board members, 3 are missing from the statement: Elon Musk, Steve Jurvetson and Kimbal Musk.

• Elon is probably conflicted out of this board decision due to being a major shareholder and the initiator of the buyout.
• Kimbal Musk owns about 150k shares and might be conflicted out as well.
  
• Jurvetson might still own over 100,000 shares of TSLA, and is I believe also a major shareholder in SpaceX, so maybe he conflicted out too?

I believe the other board members are owning only minimal amount of shares at the moment.

What do you guys think, have I interpreted this correctly?

Ownership split here: TSLA Major Holders | Tesla, Inc. Stock - Yahoo Finance

 

[Matias]

Very interesting price action just now: decent +0.2% parabolic spike up in

Someone's still selling.

It's unclear to me why, isn't $420 paid by Elon's buyout consortium a much better price?

Privatization deal is not 100% sure to go trough. My portfolio is atm 40% cash (because of one private equity exit). 4% is in Tesla. If I were sure that the deal would be going trough, I would of course buy Tesla with all my cash an take 10% profit with the 420 buy out. But I don't know what to do. Part of me wants to put at least large part of that cash to tesla and take the profit with the buy out. But on the other hand I'm affraid what happens, if the deal does not go trough.

 

[ZachShahan]

Sorry to interrupt the important conversation going on, but I gotta say, that is a nice curve.

But, but ... Elon doesn't know how to run a company and would tank Tesla if he took it private and eliminated wise Wall Street oversight.

 

[lunitiks]

So, let me get this straight...

You can buy a share for ~$370 today?

Mmmkay?

And the company's multibillionaire CEO with a sports car in space says funding is secured to buy the share - from you - for $420?

....

 

[Mike Smith]

Proof that Elon is telling the truth about having funding secured:

Elon tweeted:
"Funding secured".
"Investor support is confirmed. Only reason why this is not certain is that it’s contingent on a shareholder vote."

The board of directors then released a statement including: (regarding their meetings with Musk the week prior)
"This included discussion as to how being private could better serve Tesla's long-term interests, and also addressed the funding for this to occur."

If what Elon showed the board regarding funding was anything less than a certainty as claimed in his tweets, they would have revealed that in their statement. They would have had no choice. If they knew the CEO was committing ongoing fraud of this magnitude and didn't stop him they would be exposed to legal action along with Musk.

Further proof Elon is telling the truth:

The SEC reportedly contacted Elon today. The first thing they would ask him is if his statements are true or not. If not, they would tell him to clarify or redact his statements before market open tomorrow. So now Elon is either lying directly to the SEC, or he's telling the truth.

 

[TradingInvest]

Privatization deal is not 100% sure to go trough. My portfolio is atm 40% cash (because of one private equity exit). 4% is in Tesla. If I were sure that the deal would be going trough, I would of course buy Tesla with all my cash an take 10% profit with the 420 buy out. But I don't know what to do. Part of me wants to put at least large part of that cash to tesla and take the profit with the buy out. But on the other hand I'm affraid what happens, if the deal does not go trough.

Not advice, but I'm pretty sure the deal will go through @ $420. There is a small chance the final price may go up a little bit.

 

[ZachShahan]

The 10-Q was released Monday morning. (I get notified of Tesla reportings to the SEC). So any discussions last week should have been reported in the 10-Q. If meetings occurred prior to the Conference Call they should have been reported there as well. Have can you have a clear and full picture of forward guidance and not discuss plans to take the company private? There is no way this all happened in one week since the call. You cannot arrange a history-making $71.3 billion buyout in that time.

Musk tells Board "hey, i'm thinking about taking Tesla private. i've got funding lined up."
Board: okay, let's see what you have. send everything over ASAP.
Board: will file 8-K once they have more info.

 

[KSilver2000]

But I don't know what to do. Part of me wants to put at least large part of that cash to tesla and take the profit with the buy out. But on the other hand I'm affraid what happens, if the deal does not go trough.

On the same fence.
Part of me thinks this is why the stock is/will hover at the $370 level until we get further clarification of the situation. If the deal is more likely to happen, the SP will jump to ~$420. If the deal seems less likely, my guess is it will drop back down to ~$320.

 

[ZachShahan]

I wouldn't usually post anything from Cramer, but this piece actually makes some interesting claims, especially the part about the legality of disclosing the possible move to take $TSLA private. Longs will enjoy this piece.

Jim Cramer: 4 Reasons Why You Should Not Short Tesla

That is epic.

"Terminal short" and the last segment the best parts.

 

[ZachShahan]

His first tweet ended with "funding secured". That takes it from a daydream he was having to a real possibility since he would have had to be in serious discussions with backers and signed letters of intent. That was what moved the stock. THAT is what also seems to have gotten the SEC's attention.

You are officially the first person I'm ignoring here. Please, for other people's benefit, please stop repeating nonsense you've typed 10 times.

 

[ZachShahan]

I don't know, Adam Jonas seems to be concerned that Tesla vehicles will become weaponized Terminators. Surely then ITAR would apply! /s

That will be one downside or a private Tesla — no more Adam Jonas questions.

Oh, also, no more questions from me on the conf call.

Maybe he'll set up calls for CleanTechnica, Galileo, Teslarati, Electrek, & The Onion.

 

[Mario Kadastik]

I have a hard time understanding why the finance media and shorts can't fathom that it doesn't need to be big banks and big corporations that buy out TSLA. If it's 30-40B that's needed, that's about 2-4 private investors with enough capital (Larry, Sergei etc). Elon would give 3-4 board seats and if the new investors each take 10-20% of the company there is no loss of control or anything else that would make this a bad deal. He's been promised this funding many times over in the past years I don't see him not taking a 10B stake in TSLA with expected long term return being in multiples.

So why is it so unfathomable that Elon has the funding secured? And considering his distaste for wall str I'd say it's pretty logical that it's noone from there...

 

[Mike Smith]

I have a hard time understanding why the finance media and shorts can't fathom that it doesn't need to be big banks and big corporations that buy out TSLA. If it's 30-40B that's needed, that's about 2-4 private investors with enough capital (Larry, Sergei etc). Elon would give 3-4 board seats and if the new investors each take 10-20% of the company there is no loss of control or anything else that would make this a bad deal. He's been promised this funding many times over in the past years I don't see him not taking a 10B stake in TSLA with expected long term return being in multiples.

So why is it so unfathomable that Elon has the funding secured? And considering his distaste for wall str I'd say it's pretty logical that it's noone from there...

Gene Munster figures only $25-30B is needed.

 

[loky]

Let me to debunk some shorts thesis.
Elon made a perfect storm.
When he tweeted " Am considering ..." he did it after the SP ramped heavily because a "mysterious" investor buy a bunch of shares. It was not a decision, the man was still thinking ...
Tesla stopped TSLA trading, to give time to shorts and others to comprehend, just in accordance with SEC rules.
Good morning, basic clarification, buyout SP will be at 420$, investors can stay , special (I believe will be two funds) funds for investors and employees, investor (singular) support is confirmed...
Elon`s tweet :“ Only reason why this is not certain is that it’s contingent on a shareholder vote”, meaning I already have confirmation of 46% votes (Elon has 20%) , but, acc to rules, to state that is unacceptable.
The letter to employees , one of the best I think..
Start trading....
The now shorter shorts are very happy believing the proposal limited their looses to 5,25B??!! Shorts must cover well in advance of voting for transformation, squeezing possible !
The Majority of The Board, without board members with possible conflict of interest, give notice. So, CEO proposes, The Boars started to evaluate (after Q2 call, very important) , adopts eventually and start formulating the finale proposal and organization for voting.
So far, everything is in line with regulation and SEC.
Not an advice, not pretending to be an expert, I think TSLA trading will continue as usual from this level, targeting 410 $ before voting, with big ups and downs caused by manipulation of big players , shorts squeeze and FUDs.
Just my 2 cents.

 

[jeewee3000]

I have a hard time understanding why the finance media and shorts can't fathom that it doesn't need to be big banks and big corporations that buy out TSLA. If it's 30-40B that's needed, that's about 2-4 private investors with enough capital (Larry, Sergei etc). Elon would give 3-4 board seats and if the new investors each take 10-20% of the company there is no loss of control or anything else that would make this a bad deal. He's been promised this funding many times over in the past years I don't see him not taking a 10B stake in TSLA with expected long term return being in multiples.

So why is it so unfathomable that Elon has the funding secured? And considering his distaste for wall str I'd say it's pretty logical that it's noone from there...

Same here, I can't understand how little credibility Elon (and the Tesla board) is getting about this privatisation at $420.

But then again, I couldn't understand before when the media/shorts kept ignoring the writing on the wall regarding all the previous Tesla milestones.

I assume the intelligent shorts KNOW they're in trouble big time, and are steering the media to try and dip the stock, just to get out of their short position ASAP. So it might still get volatile and dip deep, but sooner or later $420 will be here. Without talking of a VW-like-squeeze (which I am sceptical about), the good news here is that - with any sizeable dip - the shorts become each others enemy. Who will want to wait to cover in the hope of pushing a dip deeper, if their collegue-shorts might cover at current levels? Yesterday's price action might be interpreted in this way imho.

Either way, it will be interesting to see how the coming days/weeks play out.