TMC is an independent, primarily volunteer organization that relies on ad revenue to cover its operating costs. Please consider whitelisting TMC on your ad blocker and becoming a Supporting Member. For more info: Support TMC

Dear Elon: Please reconsider and take Tesla private

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

  1. mos6507

    mos6507 Member

    Joined:
    Jan 12, 2008
    Messages:
    90
    Ask Elon.
     
  2. Brando

    Brando Active Member

    Joined:
    Sep 27, 2016
    Messages:
    2,126
    Location:
    Bainbridge Island, WA
    #22 Brando, Oct 9, 2018
    Last edited: Oct 9, 2018
    Do Teslas sell because of stock brokers and Madison Ave.? Does anybody "trust" the media/Wall St./Madison Ave.?
    Most everybody knows Advertising is BS. Ads work on the emotions - drink beer and you'll attract women. right.
    Proof? Look how much negative press. over 400,000 people still put down $1000.
    IF you don't know anything, you might only believe the only thing you heard - an Ad?
    IF you buy a car that way ... what? you'll only listen to the truthful ad??? you know that is crazy.

    Forget about the stock volatility. Forget about the negative press.
    SHOW people your Tesla. Talk about your Tesla.

    PS- IF someone still trusts VW after dieselgate - you're not going to get them to change by something they'll read. Tesla Ad going to be better than VW Ad? Tesla stock better than VW stock? that won't sell Teslas.
    SHOW them a Tesla is the only way, right?
     
    • Like x 2
  3. Brando

    Brando Active Member

    Joined:
    Sep 27, 2016
    Messages:
    2,126
    Location:
    Bainbridge Island, WA
    YouTube Channel SpaceX almost 2 million subscribers
    YouTube First Private Passenger on Lunar BFR Mission almost 1 million views (48:1 positive)
    Joe Rogan/Elon Musk 15 million views (46:1 positive)

    Can you find anything close by any other auto company or business exec.?

    side note: good news - Jeff going to raise wages?? <1 min.
     
  4. strangecosmos

    strangecosmos Non-Member

    Joined:
    May 10, 2017
    Messages:
    1,041
    Location:
    The Prime Material Plane
    This is one of the best posts I have read on TMC. God bless.

    We are at an interesting moment. In about three weeks, Tesla is probably go to announce a net profit and positive free cash flow for Q3. And then it will probably do so again for Q4, and for Q1, and so on.

    At the same time, Model 3 production and deliveries will continue to ramp. With each quarter, we’ll have increasing information about its gross margin. Hopefully in early 2019, the $35,000 Model 3 will begin production and hopefully it will have a positive gross margin.

    Cars like the Jaguar I-Pace and the Audi e-tron will probably prove to have no effect on Tesla’s sales.

    I don’t think the prevailing short narrative can survive this. The prevailing short narrative has always been about Tesla’s profitability, the profitability of the base Model 3, and oncoming electric car competition eating margin or demand. In the next 2-3 quarters, I think all of these talking points will be discredited.

    The question of valuation is the other part of the long/short debate. I think this is the strongest and most reasonable point made by Tesla shorts and other Tesla skeptics. Why should Tesla be valued more most other automakers today?

    For me, investing in Tesla has always been primarily about autonomy, from the very beginning. I first invested shortly after the HW2 announcement. So, on this front, I’ll be watching Navigate on Autopilot and what else is happening with autonomy. If Navigate on Autopilot is released anytime soon, and if it’s actually good, that may help focus the narrative on autonomy.

    I feel sanguine about short sellers because I don’t think they can prevent Tesla from executing on any of these goals, and I think by executing, Tesla will prove them wrong.
     
  5. mos6507

    mos6507 Member

    Joined:
    Jan 12, 2008
    Messages:
    90
    Company performance is not based on CEO popularity/celebrity contests.

    (For the record, I think Elon belongs at SpaceX and to have only a minor supporting role at Tesla.)
     
    • Like x 1
    • Disagree x 1
  6. EinSV

    EinSV Active Member

    Joined:
    Feb 6, 2016
    Messages:
    3,594
    Location:
    NorCal
    But you’re short Tesla so it is in your interest to encourage steps that would hurt Tesla, such as removing a brilliant CEO who has created tremendous shareholder value wherever he has been.
     
    • Like x 3
  7. mos6507

    mos6507 Member

    Joined:
    Jan 12, 2008
    Messages:
    90
    All shorts may be skeptics but not all skeptics are shorts, as much as fanbois may think otherwise.
     
    • Like x 1
  8. Brando

    Brando Active Member

    Joined:
    Sep 27, 2016
    Messages:
    2,126
    Location:
    Bainbridge Island, WA
  9. EinSV

    EinSV Active Member

    Joined:
    Feb 6, 2016
    Messages:
    3,594
    Location:
    NorCal
    The past few months -- including developments in the past week -- make the case for going private more clear than ever.

    With Tesla now strongly cash flow positive, the main potential benefit to Tesla of being public -- access to capital -- is not of critical importance since Tesla can self-fund. And if more cash is needed, it can use debt or do a cap raise as a private company as SpaceX regularly does.

    I don't know if there is a mechanism for Tesla to include all investors -- probably not -- but Tesla's mission is too important and being a public company is putting that mission at risk.

    Regardless of what happens in the latest round with the SEC, it is time to go private so Elon and Tesla can be 100% focused on accelerating the world's transition to sustainable transport and energy, without unnecessary distractions from Wall Street, including the SEC, short sellers and the financial press.
     
    • Like x 1
    • Love x 1
  10. neroden

    neroden Model S Owner and Frustrated Tesla Fan

    Joined:
    Apr 25, 2011
    Messages:
    14,059
    Location:
    Ithaca, NY, USA
    I will suggest a slightly different option: voluntarily delist from the stock markets; buy out anyone who is not permitted to remain in the company after that (such as Canadian retirement accounts and funds which are only allowed to invest in listed companies); and institute a first-right-of-refusal for Tesla to buy back any stock being sold (as with SpaceX)

    By officially remaining a "public company" and filing quarterly reports, you can have as many investors as you like. Also, I believe all existing individual investors can stay (though only accredited investors would be allowed to buy new shares).

    But taking it off the stock markets will eliminate short-sellers, eliminate short-term traders, and, by eliminating the stock price, will eliminate the motivation to manipulate the stock price.

    There is no legal requirement to list on the stock market, even if you're a "public company" (defined as having a lot of investors). The SEC could still harass Elon Musk, but they couldn't very well accuse him of market manipulation if there was no public market for the stock.
     
    • Informative x 3
  11. EinSV

    EinSV Active Member

    Joined:
    Feb 6, 2016
    Messages:
    3,594
    Location:
    NorCal
    That sounds like a very interesting option. As you describe it it seems as though it could potentially address most of the downsides of being a public company except the SEC risk and also partially address the main downside of going private (pushing out individual unaccredited investors). Taking the short sellers and short-term traders out of the equation would reduce the clickbait journalism somewhat, and could also reduce the risk of SEC shenanigans to some extent.

    How confident are you this would work as you describe, especially the part about existing unaccredited investors being allowed to stay in?
     
  12. neroden

    neroden Model S Owner and Frustrated Tesla Fan

    Joined:
    Apr 25, 2011
    Messages:
    14,059
    Location:
    Ithaca, NY, USA
    It's done super rarely these days, so I'm not confident. I did look up the rules though.

    The thing is, the ENTIRE edifice of SEC regulation is based around OFFERING TO SELL stock. So you can't offer to sell stock in an unlisted company to any random person. If they *already own it*, however, you can't force them to sell it -- that's just not how the law works. They own it, they have the right to keep it.
     
  13. NigelM

    NigelM Recovering Member

    Joined:
    Apr 3, 2011
    Messages:
    13,406
    Location:
    Northern Virginia
    Biggest issue is how to create a market when/if those investors want/need to sell.
     
  14. neroden

    neroden Model S Owner and Frustrated Tesla Fan

    Joined:
    Apr 25, 2011
    Messages:
    14,059
    Location:
    Ithaca, NY, USA
    Yeah, the company could offer SpaceX style buyback events.
     
  15. strangecosmos

    strangecosmos Non-Member

    Joined:
    May 10, 2017
    Messages:
    1,041
    Location:
    The Prime Material Plane
    #35 strangecosmos, Mar 1, 2019
    Last edited: Mar 1, 2019
    I want to invest in Tesla, and that’s impossible if Tesla is private. So, I want Tesla to stay public.

    Elon explored options to keep retail investors on board with Goldman Sachs and Silver Lake. The conclusion was that there was no way to make it work.

    Any solution would amount to finding a loophole in securities law, and regulators and legislators would have good reason to try to close that loophole.

    I’m not certain, but I think it would be illegal for Tesla to remain public and to delist from the NASDAQ:

    SEC restrictions on dealings in securities of unlisted public companies - Lexology
     
  16. EinSV

    EinSV Active Member

    Joined:
    Feb 6, 2016
    Messages:
    3,594
    Location:
    NorCal
    #36 EinSV, May 20, 2019
    Last edited: May 20, 2019
    In the nine months since the OP in this thread, the case for taking Tesla private has gotten stronger than ever.

    From a long-term perspective, Tesla continues to execute extremely well. In just a few months, Tesla has:
    • Introduced (on time) its new FSD computer developed in-house with best-in-industry specs
    • Made stunningly fast progress on GF3 in China
    • Significantly improved on industry leading range and efficiency for S/X
    • Introduced v.3 superchargers and improved v.2 charging rates that will dramatically reduce charging times
    • Completed the Maxwell merger that should create a path for improved battery performance at reduced cost
    • Easily raised $2.4B in convertible notes and stock
    • Closed a deal with FCA that will net $2B for emissions credits
    • Began shifting to a more efficient online sales model that will structurally reduce costs and improve profitability
    At the same time, new competitors' offerings have come to market that highlight Tesla's massive lead over the competition

    In exchange for this progress, the markets have given Tesla mostly grief.

    The market has shrugged off all of the positive news, and even spun much of it as negative -- desperate attempts by Elon to shift attention away from shrinking demand, etc.

    Never mind that Tesla has been the fastest growing large company in the U.S. by a long shot (perhaps anywhere) over the past 1, 3, 5 and 8 year periods, that the "competition" is years behind and that Tesla has a compelling product pipeline that provides a clear path to continuing 50%+ growth for years to come.

    Short sellers are more active than ever, pouring into the stock over the past few months (~15 million new shares shorted since Jan. 31). They continue to spread misinformation and actively try to undermine the company at every turn. Just this past week they have, among other things, pushed hard for a recall of autopilot due to the Florida crash, and pressed for still more SEC enforcement action. Despite Tesla just raising $2.4B and arranging for another $2B in payments from FCA, shorts have also revived the idea that Tesla would go into bankruptcy, and are aggressively using fears of bankruptcy to try to scare away potential buyers.

    The SEC continues to play its role in harming shareholder interests by rushing into court to file a ridiculous contempt motion over a tweet that had no impact on the market. And even though the judge berated the SEC attorneys for their overly aggressive actions, SEC Commissioner Robert Jackson loudly complained that SEC staff did not act aggressively enough, signaling the possibility of more SEC mischief to come (his term is scheduled to end in June, although that time can be extended).

    Shareholders continue to be fickle and overly focused on short-term results. Two of Tesla's largest institutional shareholders in the past -- T. Rowe Price and Fidelity -- have drastically reduced their shares, combining with massive short selling to put huge downward pressure on the stock. The broader market freaked out over subpar Q1 performance, ignoring the very positive long-term trends.

    There is too much at stake. Being a public company continues to be the number one risk factor facing Tesla IMO. It is also impairing Tesla's performance as Elon and management spend too much time and energy focusing on short-term issues and quarterly results that distract from building the company for the long-term.

    While the share price is low now, it is a good time for Elon to engage a team to develop a plan to go private when the SP recovers so that it can be done in an orderly fashion. I believe there is likely a significant amount of private capital that would be thrilled to invest in the greatest growth story of our generation, but is staying away because of the toxic environment that in large part is a result of Tesla being public.

    Chamath Palihapitiya, an exceptionally successful investor, explained that he steered away from Tesla stock (into convertible bonds) specifically because of the toxic market and media environment created by short selling hedge funds:

    “What it’s controlled by are a bunch of vulture-like venture and hedge funds, mostly hedge funds who like to prey on that company. If you look at for example the Twitter traffic or if you look at the forum traffic around Tesla the amount of hyping or under-hyping the amount of sniping is enormous. All of that signals to me that it is a market that is out of the control of the founders and the executives and firmly in the hands of financial manipulators."
    Venture capitalist defends Tesla and Elon Musk, issues bold takedown on TSLA skeptics

    Although he did invest in convertible bonds, this is a good example of the thought process of a long-term, growth oriented investor who could be attracted to a private investment in Tesla but is staying away from the toxic public market environment for Tesla.

    Tesla's products are so compelling that I believe it can overcome the toxic environment and succeed as a public company. But it can move faster, more aggressively and more efficiently -- and at much less risk -- as a private company.

    It's time to go private, Elon. At the next opportunity to make a fair offer to shareholders.
     
    • Like x 3
    • Informative x 1
  17. EinSV

    EinSV Active Member

    Joined:
    Feb 6, 2016
    Messages:
    3,594
    Location:
    NorCal
    Too late to edit but ~7 months since the OP, not 9. Note to self: don't post before coffee.:)
     
  18. Ludalicious

    Ludalicious Member

    Joined:
    Feb 22, 2018
    Messages:
    618
    Location:
    Vancouver
    What a trainwreck. Feel for you guys....
     
  19. Tam

    Tam Well-Known Member

    Joined:
    Nov 25, 2012
    Messages:
    5,676
    Location:
    Visalia, CA
    Tesla should not add ammunition to short sellers by a scary e-mail that Tesla's running out of cash in 10 months! I know Elon Musk meant well but it just sounds really bad.

    I agree that Tesla should go private if it can't handle short sellers.
     
  20. EinSV

    EinSV Active Member

    Joined:
    Feb 6, 2016
    Messages:
    3,594
    Location:
    NorCal
    If Tesla was private, Elon could communicate with his employees however he thought was most effective without worrying about his words being misinterpreted or misused by short sellers to try to harm the share price or the company.

    The past few days of drama over his email rallying the troops to focus on reducing expenses (a good thing) would have not existed at all or at most been barely a blip on the radar.
     
    • Love x 2

Share This Page

  • About Us

    Formed in 2006, Tesla Motors Club (TMC) was the first independent online Tesla community. Today it remains the largest and most dynamic community of Tesla enthusiasts. Learn more.
  • Do you value your experience at TMC? Consider becoming a Supporting Member of Tesla Motors Club. As a thank you for your contribution, you'll get nearly no ads in the Community and Groups sections. Additional perks are available depending on the level of contribution. Please visit the Account Upgrades page for more details.


    SUPPORT TMC