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

Elon Musk vs. Short sellers

Discussion in 'TSLA Investor Discussions' started by jesselivenomore, Jun 18, 2018.

  1. WarpedOne

    WarpedOne Supreme Premier

    Joined:
    Aug 17, 2006
    Messages:
    3,567
    Location:
    Slovenia, Europe
    The problem for shorts is they cannot just wait it out.

    Once some of the shorts try to exit, it will cause to SP to rise. This in turns will cause ALL other remaining shorts to fill the required margin with pure cash. They do not have on option of saying yes or no - the ones that are not to come up with required cash, get liquidated automaticaly - it means that their existing cash is used to buy the shares at current prices.

    This causes the SP to rise more. And short margin accounts demand even more cash, and more shorts are unable to come up with it, and thus more forced buying at current price, and even higher SP .. rinse and repeat until there are only shorts that have enough cash to pour into their margin account at some skyhigh SP price.
    Higher the SP, fewer such shorts.

    Longs have no trouble just waiting, shorts on the other hand must pay hard big cash for the wait. Some will be able to do it, many many many will not.
    This is about tens or even hundreds of billions of dollars of cash. Such money is normally invested elsewhere and not ready to be transferred at short notice as demanded by brokers managing the shorts.
     
    • Like x 2
  2. winfield100

    winfield100 Active Member

    Joined:
    Feb 16, 2013
    Messages:
    1,456
    Location:
    bon vivant traveler
    Does not the vote to go private require the recall/close out of short positions?
    25% short >> 15% float = positive feedback loop of SP rise as 35,000,000 get covered at $420, then $430 then "a weeping and wailing and a gnashing of teeth and rending of garments"
     
  3. mongo

    mongo Well-Known Member

    Joined:
    May 3, 2017
    Messages:
    5,095
    Location:
    Michigan
    If the date of record in the future, the call back can happen. There was recently a case where the DoR was previous to the announcement.
     
    • Like x 1
  4. WarpedOne

    WarpedOne Supreme Premier

    Joined:
    Aug 17, 2006
    Messages:
    3,567
    Location:
    Slovenia, Europe
    Yes, the callback would be just some gasoline over the fire...
     
  5. bhzmark

    bhzmark Supporting Member

    Joined:
    Jul 21, 2013
    Messages:
    2,440
    • Like x 2
  6. AlMc

    AlMc 'Senior Moments' member

    Joined:
    Apr 23, 2013
    Messages:
    6,751
    Location:
    Delaware
    As to Different Investment Houses/Brokers allowing private equity shares being held: This is particularly thorny for IRA accounts so I asked my broker/agent at TDAmeritrade what their policy 'might be' about me keeping those types of shares in mu IRA accounts: (mine, wife's and daughter's). His response:


    Al,

    I left you a voicemail but wanted to follow up with a quick email. We do generally allow private placements, or shares of private companies in IRAs, however we review each security on a case by case basis. That being said, as we get more details on TSLA if it does go private, we would review the stock and make a determination then. We have many clients who also hold the stock so I am sure it is something we would review quickly, and while I can’t say for certain, I would imagine it would not be a problem for you to keep holding it in your accounts as you do now.


    Let me know if you have any other questions, and if I get more information on my end I will let you know.


    Have a great day!
     
    • Informative x 20
    • Love x 2
    • Helpful x 1
  7. winfield100

    winfield100 Active Member

    Joined:
    Feb 16, 2013
    Messages:
    1,456
    Location:
    bon vivant traveler
    "
    that is similar to what Schwab told me, though they were more vague
    """Whether Tesla will go private is still in the speculation phase and not confirmed. Taking the company private would require shareholder approval. Should this become a reality, Tesla would buy your shares at a pre-determined price.

    Should Tesla go private, CEO Elon Musk mentioned the possibility of creating a special fund to allow current shareholders to retain an investment in the company--although not in shares of stock.
    Again, Tesla's going private is currently just a consideration. Should it proceed, you'll hear many more details prior to completion."
     
    • Helpful x 1
  8. neroden

    neroden Happy Model S Owner

    Joined:
    Apr 25, 2011
    Messages:
    8,650
    Location:
    Ithaca, NY, USA
    I do not want to get bought out or dumped in a fund which is not a Tesla pure-play. Grrrr.
     
    • Like x 3
  9. oneday

    oneday Member

    Joined:
    Nov 29, 2014
    Messages:
    489
    Location:
    Bay Area
    I don't think anyone here does. What likelihood, obviously guessing, would you put on being dumped into a fund which is not a Tesla pure play.
    I would vote no, if this were the case, as I would expect most retails would not be ok with this.
    I would hope this is a 0% likelihood.
     
    • Like x 1
    • Love x 1
  10. neroden

    neroden Happy Model S Owner

    Joined:
    Apr 25, 2011
    Messages:
    8,650
    Location:
    Ithaca, NY, USA
    I think it depends heavily on securities regulations.
     
  11. jhm

    jhm Well-Known Member

    Joined:
    May 23, 2014
    Messages:
    6,477
    Location:
    Atlanta, GA
    Big Oil Backs Tesla Short Sellers, Says Wealth Manager | OilPrice.com

    It's always interesting to see how this plays at OilPrice.com. They always have an oil centric view in their news rehash peices. This author and a few others do tended to take a broader view. Nice to see the industry standard PR relegated to the bottom of the piece. Yep, Tesla is getting pushed around. And yes, Tesla is a threat to the oil industry.
     
    • Like x 2
  12. schonelucht

    schonelucht Active Member

    Joined:
    Mar 10, 2014
    Messages:
    3,958
    Location:
    Nederland
    • Funny x 1
  13. jhm

    jhm Well-Known Member

    Joined:
    May 23, 2014
    Messages:
    6,477
    Location:
    Atlanta, GA
    Indeed. Apparently the oil world is much more diverse than that.
     
  14. neroden

    neroden Happy Model S Owner

    Joined:
    Apr 25, 2011
    Messages:
    8,650
    Location:
    Ithaca, NY, USA
    I'm getting a picture of what happened now. Saudi Arabia has been trying to get Musk to go private with them for a while. The short-seller, FUD/disinformation gang has been sufficiently effective at their FUD-spreading that Musk finally decided he'd rather sell out to Saudi Arabia than deal with the short-sellers any more. Reasonable! I probably would have made the same decision!

    But he'd still rather not sell out entirely to Saudi Arabia. So the more additional investors he can get in on the go-private deal, the less he has to give to Saudi Arabia.

    Silver Lake is now in -- Musk called them financial advisors, but they don't do standalone advice, they do private equity investment. And possibly Goldman Sachs is in (though they might just be advising). We'll see who else is in.

    The Board told him to sound out the other major investors about a Saudi buyout, and quite correctly, he knew he had to tell all investors.

    So here we are. It's either going to be a straight-up Saudi buyout or a Saudi-plus-lots-of-others buyout, and both Musk and I would prefer the latter. Either way, Tesla gets delisted and short-sellers are gone (as are options traders, as are quants, short-term speculators, HFT traders, and noise traders).
     
    • Like x 8
    • Love x 8
    • Helpful x 2
  15. Electroman

    Electroman Active Member

    Joined:
    Aug 18, 2012
    Messages:
    4,407
    Location:
    Dallas, TX
    Exactly my reading too. And with the recent increase in position by the Saudis from the open market, Elon had to act now.
     
    • Like x 1
  16. TheTalkingMule

    TheTalkingMule Distributed Energy Enthusiast

    Joined:
    Oct 20, 2012
    Messages:
    2,057
    Location:
    Philadelphia, PA
    I'm loving this Goldman/Silverlake conversation. Shorts have 4-bet bluffed and Elon has shoved. Shorts must now fold.

    None of this should be surprising, Elon has always been willing to bet it all when the market forces his hand. I think this will be a very interesting week.
     
    • Like x 2
  17. Electroman

    Electroman Active Member

    Joined:
    Aug 18, 2012
    Messages:
    4,407
    Location:
    Dallas, TX
    As excited as I am, I am nervous too..

    These advisors are like the hosts of the Shark tank. I am not sure they always keep their client's interest above their personal interest of making money out of this deal.
     
    • Like x 2
  18. winfield100

    winfield100 Active Member

    Joined:
    Feb 16, 2013
    Messages:
    1,456
    Location:
    bon vivant traveler
    #638 winfield100, Aug 14, 2018 at 5:02 AM
    Last edited: Aug 14, 2018 at 5:25 AM
    I am doing my part to help the short sellers {fight/spiritedly discuss/become educated/naifs_not_get_hurt_by_fagans} among themselves, by repeating over and over what I see as simple truths to many different ones/shorts

    1) buy out price sets _floor_ of $420 (or higher as SP spikes, and you sold way below that
    2) 35,000,000 shares sold short will be forced redeemed at $14.7 Billion (now ~34.27M) at conversion to TSLAP(rivate)
    3) All shorts realized way less and _lost_ $2.8 Billion in 2018, and lose way more as conversion approaches
    4) if you look at a combo of Stock price, Vol, and Advance/Decline line it looks like big shorts are unwinding (see #2)
    5) smaller shorts will get trampled as the elephants stampede for exits and have a bag of IOU's. ($14.4B as of today) and it looks like larger shorts are hurting smaller shorts
    6) this WILL happen in 4-6 months

    7) I get hysterical responses and am told i'm lying, "hurting" people, delusional, paranoid, and "just shut up"
    8) no one disputes #s 1-6, (i've been in markets since around 1981 and studied Tech Analysis and Charts for a long time, still a mystery, but certain things seem to be there)

    if i'm wrong, i'd appreciate responses, except when is Truth, as I see it, Fear, Uncertainty and Doubt?
    (should this be another thread, it does seem to apply to market action, at least obliquely)

    EDIT: Could the mods move this to the Elon vs the shorts thread, apologies to all
     
    • Like x 4
    • Helpful x 1
    • Love x 1
  19. tomas

    tomas Only partially psycho

    Joined:
    Oct 22, 2012
    Messages:
    2,924
    Location:
    Chicago/Montecito
    Also interesting that this underscores the Saudi oil divestment strategy. Could it be they want Tesla energy as much as transportation? Seems like a smart long term play for remaining an energy leader long into the future... terraplants in the desert anyone?

    The US loses its leadership and potential jobs as the future of production will now have both China and Saudi at the table.

    Our biggest industry is “financial services” and we let the permutations of ways to squeeze a dollar get out of control and chase away real industry. Sad.
     
    • Like x 2
    • Love x 1
  20. winfield100

    winfield100 Active Member

    Joined:
    Feb 16, 2013
    Messages:
    1,456
    Location:
    bon vivant traveler
    I have a question about a hypothetical scenerio.
    I'm having a "spirited" discussion with a few short sellers, being accused of delusional, paranoid, "just shut up you will hurt small shortsellers" etc
    IF say I had 10-20 million shares and they were "pledged" (not sure what that means) but say the brokerages holding them loaned a lot of them out to shorts to sell, at prices _well_ below $420/share
    The shorts, of their own volition, then built a "Stock bomb" of 35,000,000 (now 34.27M).
    Elon hits the countdown timer on the bomb of 4-6 months
    All those 34.27M now need to be redeemed, bought back @$420/share, or higher
    Do shorts have any legitimate reason to complain about the temporary "loan" that is now being recalled at a substantial loss?
    Am I looking at this correctly? I actually hate it that the smaller guys that were sucked in will get hurt worse than the larger elephants "lifting their wallets to mitigate their losses"
    i'm extremely new to shorting/options etc as I only have been long, but in markets since around 1981 or so
     
    • Like x 1

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