General Discussion: 2018 Investor Roundtable

[ZachShahan]

So someone disagrees. Don't just click the button because you don't like the post, reply and explain why you disagree!

AFAIK, this is not the thread for such a discussion.

But I assume the obvious point many of us would make in short or insanely long posts is that we think Elon is doing a superb job running the company, absolutely could not be replaced in a satisfactory way, and continues to show us his rather awe-inspiring ability to make very difficult decisions that are excellent moves for the company.

(I didn't initially give a "disagree" but just skipped past your post, but I did after you brought my attention to the matter since I think it's a completely backwards POV.)

 

[Mike Smith]

 

[RubberToe]

South Korea bans driving BMWs that haven't had an engine problem fixed that resulted in 40 vehicle fires:

BMW recall: South Korea bans vehicles because of fire risk

 

[Bet TSLA]

Hate to say it, but we're at the point where EM is detracting from the great vehicles that Tesla builds.

Never thought I would say that.

Oh, you've been saying stuff like this all along. Pretty predictable.

 

[EarlyAdopter]

Didn't want a disagree to be misconstrued, but a slight quibble here.

Wachtell (and Munger and Silver Lake and Goldman) is representing Elon, not the other innocent-bystander shareholders. Their job is to get him, and his co-investors, the best possible deal.

The Board, its special committee and their various advisers (including pretty decent law firms in Latham and WSGR) are supposed to look out for us shareholders. It remains to be seen how good a job they'll do.

Good catch! Thanks for the correction. I got my copy and pastes crossed. Yes, Latham & Watkins is the one representing shareholders. They are a top law firm. One of the largest in the world. Best of the best here representing both parties.

 

[Buddyroe]

Oh, you've been saying stuff like this all along. Pretty predictable.

Really? I must have been sleep walking. Please show me one of these posts where I doubted Musk. Should be easy to do since I've been "saying stuff like this all along".

 

[Mario Kadastik]

Found on the internet, thought it's hilarious so sharing here Don't really know the source.

 

[UnknownSoldier]

It's WSB obviously lmao, you can see the logo in the original

Clip from yesterday's Tesla presentation • r/wallstreetbets

 

[neroden]

I am not implying anything untoward will be uncovered,

Sure, they'll read this stuff. It's not going to change their assessment of the company. All of these redactions are inconsequential in financial terms.

 

[Akspai]

Hi guys,
I am trying to understand at what price I can buy this stock and what are the various scenarios that can playout.
So lets assume a few things:
1) EM has agreed already with majority of shareholders, meaning those with substantial holdings, that they will stick on and go private, so these guys dont cash out and the price of $420 means nothing to them.
2) Those people who dont want to go private can choose to sell their shares for $420.So the funding party(assuming the Saudi's for the moment) buy out these guys.

Can someone tell me what is the likely ratio of shares that will go private as is v/s those that will need to be bought out via funding? If the ratio is like 80:20, then in my opinion this deal is definitely possible. The only question is why would the funding party want to participate riat $420 when everyone else got in at much lower prices? I dont know the answer to this. Maybe there is a good reason. Just thinking aloud, as I think there is a brilliant opportunity here.

Thanks!

 

[bhzmark]

Good catch! Thanks for the correction. I got my copy and pastes crossed. Yes, Latham & Watkins is the one representing shareholders. They are a top law firm. One of the largest in the world. Best of the best here representing both parties.

Latham and Watkins is representing the special committee of directors (and thus they are the key legal advisors). Wilson Sonsini is representing Tesla the company ( relatively less to do ).

It isn’t crystal clear who Wachtell and Munger Tolles are representing but probably either Elon Musk or Saudi Arabia PIF or multiple buyer group parties collectively. Musk only said he is “working with” them. I suppose one firm could be advising him as a shareholder/buyer to represent him in the transaction while the other could advising him in his role as chair, director and officer and related fiduciary duties. The key is both are excellent law firms and in this case almost certainly are not billing by the hour with an incentive to drag things out, but rather based on a success fee for a transaction happening in Elon time (I.e., one-third the time it takes normal people, but double the time Elon optimistically targets).

Separately both Tesla and Musk will have securities litigation defense firms for the now three lawsuits filed. Almost certainly still different firms because they will have to defend the lawyering of the transaction firms above to the extent they advised on the lead up to this.

Musk now has lots of lawyers to “work with”.

EDIT: NYT reporting Paul Weiss representing Tesla in SEC inquiries. Another excellent firm.

 

[Cattledog]

...Elon time (I.e., one-third the time it takes normal people, but double the time Elon optimistically targets).

This is by far the most accurate equation ever posted in these investor forums...

 

[neroden]

For those who are curious, I currently have roughly half of my personal investable assets (a quarter of my family's investable assets) in Tesla. And I live off my investments, so I have to draw down regularly. I'm basically debating whether to cut down to 20% of my personal assets or 10% in Tesla when Tesla goes private; given that I have to make regular withdrawals, I don't think having more than 20% in something totally illiquid makes any sense whatsoever, regardless of how profitable it will be long term, especially since (if Tesla does as well as we all hope) the percentage in illiquid assets will slowly grow over time. But even 20% may be too much to keep illiquid (I'm currently running scenarios).

I don't know how many other retail TSLA investors are in essentially the same position, but it could amount to a significant number of people who have to cut their positions down if TSLA goes private.

 

[bhtooefr]

If there's liquidity events every 6 months, and you require liquidity... what may make sense is planning ahead based on those liquidity events, and pulling out of TSLA at each liquidity event to rebalance for, say, the 12 months after that liquidity event (in case you miss an event somehow or have unexpected expenses)?

(The only other reason to value liquidity higher than that would be to hedge against the risk of Tesla losing a significant amount of value. Unlikely, but something that is prudent to keep in mind.)

 

[neroden]

If there's liquidity events every 6 months, and you require liquidity... what may make sense is planning ahead based on those liquidity events, and pulling out of TSLA at each liquidity event to rebalance for, say, the 12 months after that liquidity event (in case you miss an event somehow or have unexpected expenses)?

(The only other reason to value liquidity higher than that would be to hedge against the risk of Tesla losing a significant amount of value. Unlikely, but something that is prudent to keep in mind.)

There is no guarantee that Tesla will have liquidity events every 6 months -- particularly if they have some particularly big capital expense during that six months. Neither is their any guarantee that I'll be able to get out as much as I need -- liquidity events can have size limits. Neither is there any guarantee as to the price I'd be able to get out it (apparently 5% fees for getting in or out are the norm). I would change my plans if there were, in fact, such guarantees. We shall see.

(There is no price guarantee in the public markets either, but I can also borrow against TSLA at very low rates if it's public and wait for the price to correct; I can't do that if it's private. Borrowing against private stock is possible but much more complicated.)

 

[avoigt]

Something happening in downunder...

Tesla big battery to be installed at Lake Bonney wind farm

Tesla Powerpacks arrive for next big battery at Victoria solar farm

“Coal is thing of the past”: Neoen starts on Victoria’s first wind and battery park

The Tesla big battery next to the 309MW Hornsdale wind farm near Jamestown in South Australia will be the biggest lithium ion battery storage facility in the world when it opens by December 1.

Explainer: The big 3 projects making South Australia capital of battery storage

 

[Unpilot]

One option I am considering is just a big bet (for me...big is relative of course) in the 420 price point. If I go all in at say 340-350 then sell at 420 I then take that profit and reinvest elsewhere.

Not an advice of course.

 

[ZachShahan]

I guess the stock drop is based on the NYT report?

I'm still surprised/confused that the price is so low when the deal seems to get more "real" and likely by the day. But that's why I decided years ago to not "trade" Tesla, only invest in it.

 

[mspohr]

I guess the stock drop is based on the NYT report?

I'm still surprised/confused that the price is so low when the deal seems to get more "real" and likely by the day. But that's why I decided years ago to not "trade" Tesla, only invest in it.

I guess I appreciate the FUD keeping the price down to give me time to add to my position.

 

[Moderatefan]

Tesla’s two biggest institutional investors significantly divested last quarter