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Dear Elon: Please reconsider and take Tesla private

Discussion in 'TSLA Investor Discussions' started by EinSV, Oct 6, 2018.

  1. EinSV

    EinSV Active Member

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    #1 EinSV, Oct 6, 2018
    Last edited: Oct 6, 2018
    Tesla has a very important mission: to accelerate the world's transition to sustainable energy. It already has had a tremendous impact and is disrupting an automobile industry that up to now has been hell-bent on accelerating destructive climate change.

    Tesla is also in the process of accelerating the transition of the planet's electric power from dirty coal and natural gas to clean solar and wind by providing the key missing ingredient -- inexpensive batteries that allow these renewables to be used for cheap baseline power.

    It seems clear to me that Tesla is also on a path toward tremendous financial success. The Model 3 is a home run and Tesla's ambitious gross margin targets have been validated by two separate independent groups of engineers -- Sandy Munro and engineers hired by German big auto (Mercedes, BMW or Audi).

    Strangely enough, Munro was forced to clam up by the threat of legal action if he kept reporting his positive conclusions. The financial press has been remarkably uninterested in pursuing that tantalizing story. The U.S. press has also, strangely enough, refused to publish anything about the German engineers' report. That is especially odd since that report was widely reported in Germany and apparently freaked out the German auto industry, which was forced to realize the threat from Tesla was even more real than they imagined.

    Model 3 teardown in Germany finds that Tesla's cost of materials is $18k, cost of production $10k (and that's w/ a $50k+ early production Model 3) : teslamotors
    Tesla Model 3: Ingenieure finden unbequeme Wahrheit im Auto - manager magazin
    Tesla Model 3 analysis triggers legal woes for teardown expert Sandy Munro

    Tesla's battery business also appears positioned to go through the roof, with demand stratospheric and Tesla emerging as the clear industry leader. Tesla's known product pipeline -- Model Y, Semi, Pickup, Solar Roof, a lower priced sedan -- looks incredible and Tesla has teased that there are some other products in the works as well. No one knows for sure who will emerge as the industry leader in self-driving, but Tesla appears very well-positioned. Creating and developing what may turn out to be the industry-leading self driving chip out of whole cloth is another exciting development no one in the press seems interested in talking about.

    Bottom line: with Model 3 now emerging from production hell, Tesla is extremely well positioned to accelerate the world's transition to sustainable energy while delivering outsized returns to shareholders.

    But there is a problem. Shortsellers, the financial press, impatient and shortsighted investors. And now the SEC. The main risks to Tesla's mission are not operational, but a direct result of being a U.S. listed public company.

    Those of us who have been watching Tesla for a long time (I started following Tesla when it formed and visited the old San Carlos facility in ~2006 when it had 6 Roadster prototypes) realize how difficult and improbable it has been to achieve what Tesla has accomplished so far, and how important Elon has been to that success.

    With the current pipeline, Tesla may be at a stage where someone else could take over and it would be fine. But without Elon leading the charge there is no way it could keep growing at the pace it has, and more importantly accelerating the transition to sustainable energy at the pace it has.

    I posted in another thread the remarkable statistic that after this quarter's results are in Tesla's revenues will likely have grown 75% (or more) annualized over the past 1, 2 and 3 year periods. Tesla is an Undervalued Growth Juggernaut

    That is staggering, mind-bending, unprecedented growth for a company this size -- roughly triple the rate of amazing growth companies like Amazon and Netflix that have historically grown at closer to 25% annually. Yet we hear nothing of this in the press either.

    This sort of growth has only been possible by taking big risks. Like doubling the "impossible" 2020 target of 500,000 vehicles per year to 1 million per year. This was risky, and resulted in a messy, stressful production hell. But even if Tesla falls short of the 1 million car per year target, Tesla is on a path to greatly exceed its original "impossible" target. Another incredible result that a "normal" company and "normal" CEOs would never have accomplished. Almost anyone else would have settled for much lower growth rates because there would be less stress and drama. Less opportunity for the press and short sellers to attack the company. Fewer investors freaking out over bumps in the road.

    Tesla needs Elon Musk at the helm to continue that incredible growth, and to achieve Tesla's mission of accelerating the world's transition to clean energy. That is getting harder and harder as a public company. Short sellers know what a huge threat Elon is to them and attack him relentlessly, and the press plays along, while ignoring Tesla's many accomplishments.

    And let's be honest, Elon's personality is better suited for a private company than a public one. Yes it would be better if he stopped tweeting about pedos, the SEC, etc. but that's been obvious for a while and it hasn't happened. If Tesla were private, most of these issues would disappear, Elon's stress level would drop like a rock and the focus could return to Tesla's products, which are amazing.

    Elon had valid reasons for pulling the plug on going private. Many investors preferred staying public and many retail and institutional investors could not be shareholders in a private company. It also appears the new shareholder group was not the right mix (too much ICE). But there was tremendous pressure to get a deal done quickly. With more time to quietly lay the groundwork, I suspect a much stronger group of go-private investors could be put together. And with more time, perhaps some clever lawyers and investment banks could create a structure or an investment product that would allow more current institutional and retail investors to own TSLAP stock.

    But even if there is no solution that allows all current investors (including me) to stay with a private Tesla, I think the best course is still for Tesla to be taken private. The developments since Elon's decision to stay public -- including not only the predictable attacks by the press and short sellers, but the SEC being co-opted by short sellers and recklessly destroying shareholder value through overzealous enforcement -- are cause to reconsider.

    In my opinion, Tesla would be in a much better position to achieve its mission as a private company. Without a $10 billion market cap short seller PR syndicate with nothing better to do than trash the company 24/7. And without an SEC that seems to have forgotten its mission and either does not care about the interests of shareholders or is just incompetent.

    Tesla would also be in a much better position to generate returns for shareholders. That may be a different mix of shareholders for a few years, but Tesla can again IPO when it has matured and is less of a target for short sellers. Who knows, maybe Tesla departing the markets would even spark some reforms and either eliminate short selling or make it less toxic.

    I personally would be very disappointed if I could not be a shareholder for the next few years since I believe Tesla is poised to achieve great things. But to me Tesla's mission should be top priority. If Tesla were taken private near or above all-time highs, investors who could not participate in a private TSLA might be disappointed but would be hard-pressed to argue they were treated unfairly.

    Elon: please reconsider and take Tesla private.
     
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  2. r0xx0r

    r0xx0r Member

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    He is actually doing that. Bring the stock price down to the floor so the secured funding investor that he mentioned will be able to aquire TSLA :p
     
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  3. Ludalicious

    Ludalicious Member

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    Fantastic idea.... Crank the stock down with moronic tweets then screw all the investors who ever had faith in Tesla & Elon.
     
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  4. pend1971

    pend1971 Member

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    #4 pend1971, Oct 6, 2018
    Last edited: Oct 6, 2018
    Elon should take tesla private and buy each shares for $4,000. I think Tesla will reach $1 trillion in market-cap within 5-6 years which would make each share worth $5,800 so even at $4,000 that's a 30% discount from intrinsic value.
     
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  5. AZRI11

    AZRI11 Member

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    Only screwing options traders. Investors need to stay long.
     
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  6. EinSV

    EinSV Active Member

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    Tesla's share price is extremely volatile. As mentioned in the OP, the idea would be to go private at a price near or above ATH. It doesn't have to be this month or next month, although it is possible the SP will jump back up after Q3 results.
     
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  7. Electroman

    Electroman Well-Known Member

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    100% agree with OP.

    Tesla should go private.
     
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  8. TSLA_Hopeful

    TSLA_Hopeful Member

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    He has to do it at 420, at the least. He can't announce a price, get into a lawsuit, drop the price, and buy it at a cheaper price.
     
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  9. Electroman

    Electroman Well-Known Member

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    He dropped the price?
     
  10. SteveG3

    SteveG3 Active Member

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    #10 SteveG3, Oct 6, 2018
    Last edited: Oct 6, 2018
    yeah. maybe a partial step prepping towards this, if we linger at $260s and lower, would be for Elon to use his equity in SpaceX (IIRC $12 billion plus) to take his Tesla stake from 20-25% up to 35-45%.

    Friends like Larry P, Sergei, and Larry Ellison could literally buy an additional 50% of Tesla by committing 20% or so of each of their net worth, buying Tesla at about $350/share (right about $60 billion valuation). That is, $40-45 billion of each of their net worth remaining diversified, with about $10 billion each in Tesla. At current prices, they'd only need to commit about $7.5 billion each of their $50-60 billion net worth's. While, I'd hope us long-time holders would get at least something like $350, nothing wrong with such friends as Larry, Sergei, Larry, starting to accumulate from irrationally cheap trading available on the open market.

    What concern is $8-10 billion committed to this mission for individuals who would each continue to have $40 billion plus in other assets?

    like EinSV, if us individual investors cannot still be included, I'd still rather see the drama fall off, and the mission move forward via going private.
     
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  11. Ulmo

    Ulmo Active Member

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    I was thinking a combo: have the privateering parties buy many Tesla shares at a discount from short term weak uncommitted traders (such as now), then for the remaining long steadfast unwavering shareholders who don't want to or can't stay as private shareholders, offer a reasonable buyout of the estimated 5 to 8 year share value of $1,200 per share.
    If the buyout price is $1,200 per share, that should actually benefit long options traders.
     
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  12. Wesmosis

    Wesmosis Member

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  13. Lycanthrope

    Lycanthrope Ask Dr Stupid...

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    Given that Elon already stated that he stopped the privatisation due to the fact that it would force many investors out, I don't see why he would re-initiate it now and at a lower price too, which would screw-over those investors even more than the previous deal.

    Only case I can see is a load of friendly forces loading-up during this sale period, meaning less shares to be bought at the target price, meaning a higher price can be offered.

    But I don't think this is going to happen.
     
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  14. N5329K

    N5329K Active Member

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    Well, then there are those who bought shares believing (!) they could turn them around at $420 in a few weeks. They lost real money. Not Tweet money.
    Robin
     
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  15. AZRI11

    AZRI11 Member

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    True that. Shorts have used everything plus Elon's tweets to feed the fud. Elon wants to burn them so badly and the SEC comes to shorties rescue. Meanwhile this is what's important Washington Post: Breaking News, World, US, DC News & Analysis
     
  16. strangecosmos

    strangecosmos Non-Member

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    Why is anyone concerned about stock price volatility? Why is that cause for panic?

    Elon explicitly said: “I think that if people are concerned about volatility, they should definitely not buy our stock. I’m not here to convince you to buy our stock. Do not buy it if volatility is scary.”

    Moreover, more uncertain stocks are more volatile. Tesla is a high-risk, high-growth company as you said. So, volatility means that Tesla is being priced as one would expect. This isn’t a problem, it’s how the stock market normally works.

    Why is anyone concerned about short sellers? Can you name one instance where short sellers significantly decreased the long-term intrinsic value of Tesla, where Tesla itself or Elon himself were not at least partially to blame? I can’t think of a single example.
     
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  17. Paracelsus

    Paracelsus Member

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    And that 'everything' they are using includes shares available to Shorts through the share lending programs. Thus is an investor really 'Long' if their share are lent for short term gains to people trying to destroy the company and its vision of a more sustainable planet?
     
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  18. Brando

    Brando Active Member

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    Every investor should read
    Stock Information | Tesla, Inc.

    And stop being obsessed with daily stock prices - they vary by the minute and often $10-$20 per DAY.
    Go live a life or you'll be as boring as Buffett or stock brokers. Who wants that? Elon very seldom trades stocks.
    Figure out something more interesting to do than stock trading.
     
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  19. EinSV

    EinSV Active Member

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    #19 EinSV, Oct 8, 2018
    Last edited: Oct 8, 2018
    Elon tweeted a fantastic article that eloquently makes a few points relevant to this thread. A couple highlights:

    "Tesla and Elon Musk are having a terrible time getting basic, neutral, balanced press coverage. They’ve achieved enormous results in ramping up the Tesla Model 3 production faster than almost any new model car in history, they are outselling their competitors massively in North America and Europe, they still have hundreds of thousands of $1,000 pre-orders for the Tesla Model 3 (more than any car ever anywhere), Teslas continue to win raves from teardown analysts and test drivers, its autonomous features continue to be the best of any production vehicles, its market capitalization is 10 times what it was 5 years ago, and the Model 3 itself is on track to soon be the fifth or sixth best selling car in the USA of any make, model, or price point. In a normal world, this string of successes would lead to incredibly positive coverage."

    "As the chart shows, news sentiment is often negative despite the incredibly positive results. It doesn’t take much reading of Musk’s actual tweets or Tesla’s actual results to see the massive disparity between how Tesla and Musk are portrayed and what they are actually doing."

    "So, [shorts] have a ton of money invested and they keep losing it. But what does this have to do with why media outlets keep saying bad things about Tesla? Well, the report What to Do When Short-Sellers Attack from an organization devoted to the PR industry has some good insights.

    “‘Short sellers have historically been some of the savviest media folk around,’ says Elliot Sloane, president of New York’s Sloane & Company. ‘They are always willing to speak to the press and will be very clear about their convictions on a certain company. This is quite different from the traditional large-cap buy side players like Fidelity, which have rules about not promoting their portfolio holdings. The shorts understand the demands of the press and know how to work the system.’ […]“Adds Ferris, ‘Certain members of the media have made a heyday with professional shorts, and have been used by certain short selling firms to help them feather their nests. The pros are most adept at working their perspectives into stories, or generating stories. After all, they know that a negative story, or one with negative or questioning overtones, often has a deleterious effect on market price, and properly timed, can create a windfall for the short seller.’

    Recently, Elon Musk pointed out the links between one of the most aggressive of Tesla muck-raking journalists, Linette Lopez of the Business Insider, and Jim Chanos, one of the most aggressive of Tesla shorts. Business Insider and Seeking Alpha are both business- and investment-oriented sites which have a strong anti-Tesla bias in their reporting. And one of the most prominent Tesla-bashers at Business Insider h"as been clear about her relationship with one of the strongest of the Tesla-shorters. As another Twitter user recently highlighted, 100% of Business Insider’s many Tesla articles from reporter Linette Lopez since November 2017 have had negative headlines. They are often dramatic in language, sensationalistic, and insinuate poor morals and even criminal intent."​

    Musk and Tesla are doing much better than headlines suggest

    Short sellers have more than a passing impact. They seek to attack Tesla's brand, image and reputation to do lasting damage. A quick glance at active shorters' twitter feeds shows they try to promote the ideas that Teslas are dangerous (fire! autopilot crash!) and unreliable (never mind Model S has an above average reliability rating from Consumer Reports), that Elon is a crook, that Tesla is on the verge of bankruptcy, and basically pound a steady drumbeat highlighting every possible negative report about the company. They infest social media and blanket the press with constant negativity. This hurts the brand, interferes with demand and interferes with recruiting.

    It is also an enormous source of stress and distraction for a very talented CEO, whose creativity and skills could be better utilized developing a new feature for the Model Y or Semi, solving a challenging Gigafactory production problem, dreaming up the next product or basically doing anything other than neutralizing the latest FUD from shorts.

    Tesla clearly would be much better off without the army of short sellers constantly throwing dirt and trying to undermine everything the company does and has accomplished. Judging from press reports, you would never realize that Tesla is actually doing great -- Model 3 is a home run (grand slam, actually), its quarterly revenues are about to triple in only two years and it has an incredible product pipeline. Instead, due in significant part to media savvy short sellers, the press coverage gives exactly the opposite impression. Going private would wipe out short sellers and eliminate an enormous negative overhang on the business.
     
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  20. mos6507

    mos6507 Member

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    Hanlon's razor - Wikipedia
     
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