Fair 'nuff, but a lot of people may be forced out due to retirement plan rules or government regulations. I assume Musk will do his *best* to design a deal which allows the *maximum* number of us to stay, but forced out is forced out regardless of who does the forcing.
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Holding shares in a private Tesla outside the US
- Thread starter hobbes
- Start date
Fair 'nuff, but a lot of people may be forced out due to retirement plan rules or government regulations. I assume Musk will do his *best* to design a deal which allows the *maximum* number of us to stay, but forced out is forced out regardless of who does the forcing.
ggr posted a good source with definitions what an Accredited Investor (AI) is in different countries. This AIs are the once that are able to participate in private equity like TESLAP.
My view is that Elon may have found a workaround of that rules as they force the normal Jo out and Elon made statement about his view that all shareholders will have two options (stay or paid out) to choose from and he hopes all will stay.
Regardless of my view this is a good source to read. For Europe it means:
"Retail clients requesting treatment as 'elective' professional clients (as defined by Markets in Financial Instruments Directive (MiFID)) must satisfy at least two of the following quantitative criteria in assessing the client's expertise, experience and knowledge:[8]
My view is that Elon may have found a workaround of that rules as they force the normal Jo out and Elon made statement about his view that all shareholders will have two options (stay or paid out) to choose from and he hopes all will stay.
Regardless of my view this is a good source to read. For Europe it means:
"Retail clients requesting treatment as 'elective' professional clients (as defined by Markets in Financial Instruments Directive (MiFID)) must satisfy at least two of the following quantitative criteria in assessing the client's expertise, experience and knowledge:[8]
- the client has carried out trade transactions, in significant size (at least EUR 50,000), on the relevant market at an average frequency of 10 per quarter over the previous four quarters;
- the size of the client's financial instrument portfolio, defined as including cash deposits and financial instruments, exceeds EUR 500,000;
- the client works or has worked in the financial sector for at least one year in a professional position which requires knowledge of the transactions or services envisaged."
If they were to be forced out because a retirement plan does not allow them to hold private TSLA, they would still have the chance to sell (some or all) the shares in their account and buy shares in a regular trading account if they know ahead of time, right? I realize that that might come with tax issues and possibly other ramifications, but technically they could still be owning private Tesla eventually.
I think that would definitely be unfavourable for some, but still a big difference from all small (non accredited/>2000 in number) being forced out.
So after a few days, here is what I learnt and what my strategy is now:
My bank DKB (where I have my checking account and which also offers a basic brokerage service) told me the same as most others of you reported: They don´t know anything about the deal yet and will inform me what to expect in time once they know more. Can´t really blame them, at least they replied within a day.
From what Elon said I expect him to set up something like they have for the SpaceX employees where Fidelity has a fund that includes only SpaceX which the employees can own IIRC. That would allow anybody to own TSLA private indirectly. For me I would have to make sure that my shares can get exchanged into that fund.
So the first point would be that my broker would support me owning this fund, which I am unsure of because they offer only a small selection of securities. So I am contemplating to moving to Interactive Brokers (IB) for example who seem to offer pretty much anything there is.
That brings me to the next possible problem: Where my shares are located. IB is located in the UK, so I guess by default my share would be held there? I still haven´t heard anything if this might really makes a difference. But to do everything I can it would probably be best to have them in the US. What does actually happen if I transfer my shares which I bought on German tradegate exchange to IB? Do they remain where they are (which depends on where I bought them as far as I understand) or move to the UK? Or could IB keep them in the US on my request?
Regarding timing, it sounds like opening a new brokerage account online and transferring my shares there should be a matter of two weeks or so. So for now, I assume I can still wait a bit until I make a decision.
With regard to the choice of my new broker, the main advantage of IB seems to be low trading fees which is important for people who trade very frequently which I don´t. On the other hand, they take a monthly fee if your portfolio is below 100,000 USD. They do definitely allow people from many countries to open account (unlike for example Schwab from what I read upthread). How do the other big international brokers compare? Might it be a good idea/is it possible to have your brokerage account directly through Fidelity, if they should turn out to be the issuer of the fund we might invest in?
EDIT: This is where I got the info about the structure for SpaceX employees: Crosspost: Asked at /r/SpaceX for former SpaceX employee to answer questions relating to private equity and liquidity events. : teslamotors
Nothing official, but sounds legit to me, redditor seems to have a good reputation.
My bank DKB (where I have my checking account and which also offers a basic brokerage service) told me the same as most others of you reported: They don´t know anything about the deal yet and will inform me what to expect in time once they know more. Can´t really blame them, at least they replied within a day.
From what Elon said I expect him to set up something like they have for the SpaceX employees where Fidelity has a fund that includes only SpaceX which the employees can own IIRC. That would allow anybody to own TSLA private indirectly. For me I would have to make sure that my shares can get exchanged into that fund.
So the first point would be that my broker would support me owning this fund, which I am unsure of because they offer only a small selection of securities. So I am contemplating to moving to Interactive Brokers (IB) for example who seem to offer pretty much anything there is.
That brings me to the next possible problem: Where my shares are located. IB is located in the UK, so I guess by default my share would be held there? I still haven´t heard anything if this might really makes a difference. But to do everything I can it would probably be best to have them in the US. What does actually happen if I transfer my shares which I bought on German tradegate exchange to IB? Do they remain where they are (which depends on where I bought them as far as I understand) or move to the UK? Or could IB keep them in the US on my request?
Regarding timing, it sounds like opening a new brokerage account online and transferring my shares there should be a matter of two weeks or so. So for now, I assume I can still wait a bit until I make a decision.
With regard to the choice of my new broker, the main advantage of IB seems to be low trading fees which is important for people who trade very frequently which I don´t. On the other hand, they take a monthly fee if your portfolio is below 100,000 USD. They do definitely allow people from many countries to open account (unlike for example Schwab from what I read upthread). How do the other big international brokers compare? Might it be a good idea/is it possible to have your brokerage account directly through Fidelity, if they should turn out to be the issuer of the fund we might invest in?
EDIT: This is where I got the info about the structure for SpaceX employees: Crosspost: Asked at /r/SpaceX for former SpaceX employee to answer questions relating to private equity and liquidity events. : teslamotors
Nothing official, but sounds legit to me, redditor seems to have a good reputation.
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From what I read you want to open another account because you are uncertain if your broker would allow you to have the new shares after privatization in that account.
The new shares you refer to are not defined yet and they have a huge variety to choose from. Each of those different in structure, rights, obligations ect. Thats true for TeslaP as well as the Fidelity fund that you refer to and that may come into play. Some of those may be even able to be managed from your existing Bank or not. Who knows?!
If IKB or IB will be able to hold this shares will be known once we know how the privatization is defined in detail.
Also, the location of your shares is usually not with your Bank or Broker. Sounds strange but this is a service that the Bank where you buy usually does not provide but outsource. If you buy with IKB your shares may be located in another country. With me it was Luxembourg.
If the location of the shares has an impact if and how you can transfer to the new shares is I believe not clear to anybody yet. We can assume that its the same in Europe and speculate if its different with the US. I feel better having mine in the US but I have no clue if its the same having them in Europe. I did the relova´cation mainly because of the voting option.
Also given IB is located in the UK have you taken into account that they are UK based and there is a certain probability that the UK will crash out of the EU which will have a large impact on what UK banks can service in Europe or not? Finally all regulations between the US and UK in terms of banking after a Brexit w/o agreement are in question as far as I know as they have been based on the EU US agreements.
If you ask them they will certainly tell you all remains the same but my information are different. Frankly said to be on the safe side I would not touch a UK bank until after mid 2019 maybe even later.
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Yeah, you´re right. But IB would give me everything I can hold in my current bank and then some. So chances I can hold TSLAprivate in whatever form it may come are bigger there.
You´re probably right about IB and brexit. So my best bet would probably be to move to a US brokerage if possible. Then again, thinking about it some more, many US citizens here on TMC are with IB and they´re not part of the EU, either
.You mentioned relocating your shares - that means you kept the same brokerage but your shares were transferred to the US, right? May I ask what brokerage you use and how much trouble it was relocating (I think you posted something about that already but can´t find it at the moment)?
No.
TheAMF (Frneh financial market authority) told me earlier this week that the only conditions to own OTC shares in the US are set by the SEC. The aforementionned European regulations don't apply to private shares of non European companies. They said we should ask the SEC or Tesla directly.
Please verify what your stating as I've already refuted it in another thread.
Thanks for clarifying, obviously then even Wikipedia is wrong.
From what I read in the other thread is that the SEC regulation around AI is a "paper tiger" anyhow designed to keep the company out of liability in case a shareholder tries to sue a private company. Having heard that the entire discussion is in question again as it seems like almost everybody can participate unless its within the 2k.
Yeah, you´re right. But IB would give me everything I can hold in my current bank and then some. So chances I can hold TSLAprivate in whatever form it may come are bigger there.
You´re probably right about IB and brexit. So my best bet would probably be to move to a US brokerage if possible. Then again, thinking about it some more, many US citizens here on TMC are with IB and they´re not part of the EU, either
You mentioned relocating your shares - that means you kept the same brokerage but your shares were transferred to the US, right? May I ask what brokerage you use and how much trouble it was relocating (I think you posted something about that already but can´t find it at the moment)?
Well, the key point here is you citizenship and where you live. It does not matter much if US shareholders are at IB too because for you as a European the rules are different. Moving to a US broker does not change that situation unless you move with a green card into the US and open an account with an US address.
I moved my shared from Luxembourg to NY. It does costs me €30 and takes 2-3 days. Done with a phone call. I am with CC/ BNP Paribas.
Hi avoigt and hobbes,
Im Holding my Shares also with the DKB. The current Location is Frankfurt, but i think it might be a good idea to move them to NY.
The DKB informed me that the Price to move the shares is 30€ plus third-party charges. So im not sure about those third-party-charges. Did you have to pay them ?
Since im only a Student i want to avoid a bad suprise...
T3SLA3
Member
I moved my shares from my local share broker to Halifax for free. They were happy to have them.
The shares reside in an Interactive Brokers Trader Workstation Account and I have been happy with the ease of trading ($25 NZD per transaction).
Looking at the IB website, they have 12 companies setup to handle various parts of the world. I deal with Halifax nz who use IB Aus Pty Ltd. There is a Timber Hill (Europe) AG which sounds like the one for Germany.
The shares reside in an Interactive Brokers Trader Workstation Account and I have been happy with the ease of trading ($25 NZD per transaction).
Looking at the IB website, they have 12 companies setup to handle various parts of the world. I deal with Halifax nz who use IB Aus Pty Ltd. There is a Timber Hill (Europe) AG which sounds like the one for Germany.
Yeah, you´re right. But IB would give me everything I can hold in my current bank and then some. So chances I can hold TSLAprivate in whatever form it may come are bigger there.
You´re probably right about IB and brexit. So my best bet would probably be to move to a US brokerage if possible. Then again, thinking about it some more, many US citizens here on TMC are with IB and they´re not part of the EU, either
You mentioned relocating your shares - that means you kept the same brokerage but your shares were transferred to the US, right? May I ask what brokerage you use and how much trouble it was relocating (I think you posted something about that already but can´t find it at the moment)?
Ok, thanks. Sounds pretty painless. This share location thing is still a bit new an confusing to me. You did it for voting rights, correct? What else does the location affect? Things I have heard/can think of:
- Voting right - is share location in the US a necessary or a sufficient requirement (in the mathematical sense) to be able to vote? Or once moved, do I still have to align other stuff?
- Trading - does it affect where I can trade the shares? I read somewhere that shares purchased on NYSE would be located in New York afterwards. But I guess I could still trade them in a German exchange if they are located in NY?
- Tax? Probably no difference?
- Exchanging them for shares of TSLAprivate - of course the central point here but I guess noone has any idea about that yet.
RedSquirrel
Member
The location seems to have a positive influence for avoigt on voting rights. But I wasn't that lucky previously as my shares have always been in the US. But I didn't go after it that much either.
They indeed can only be traded in the US once they are located there. Yet, you can always move them to other locations afterwards.
Taxwise it's no difference at all. I always trade at the most liquid stock exchanges for the indiviual stocks I'm buying and never had an issue regarding tax.
Well to be precise, I had voting rights before but for unknown reasons the bank does not execute on my legal rights. Thats illegal but to sue them would cost money and time.
Yes, I did it because wanted to participate in decisions. Still I believe it when I can vote the first time. Talk is cheap.
All other you listed, it is not affected like taxes or we do not know yet. Trading is more expensive if they are in the US though.
Nobody knows if the share exchange will be affected positively by having them in the US.
I believe, that i’m one of those 22%. I’ve bought my shares via Nordnet (scandinavian stock broker). My shares are apparently in some New Jersey bank. That New Jersey bank doesn’t know, that I own them. It only knows, that those are stocks owned by Nordnet customers.
It is like this New Jersey bank is a big warehouse. In that warehouse is one room, which is rented by Nordnet. In that room is one small locker, were my shares are.
Only Nordnet knows who owns shares on that locker.
Correct, if your bank has listed in their terms and conditions which they are free to do that you won't be able to vote than its a fair arrangement.You know what you buy in for.
My bank gives me in writing that I am able to vote but does not really help nor execute and even does not explain profoundly what the issue is.
Question:
Ones we are TESLAP I learned that an external consultant will calculate the SP twice a year.
How do they usually do that, who does control it, who is usually in charge picked by (whom) the board or shareholders and to what extend would that be called a fair and transparent process.
A couple of reasons why I do ask this. Elon has a few billion good reasons to make sure the SP goes up according to his comp plan. There are many ways how you can evaluate the assets of Tesla and Wall Street is transparent, irrational and always right or wrong at the same time depending on how you look at it. Shorts are gone so we don't have people who want the SP to go down invested.
Ones we are TESLAP I learned that an external consultant will calculate the SP twice a year.
How do they usually do that, who does control it, who is usually in charge picked by (whom) the board or shareholders and to what extend would that be called a fair and transparent process.
A couple of reasons why I do ask this. Elon has a few billion good reasons to make sure the SP goes up according to his comp plan. There are many ways how you can evaluate the assets of Tesla and Wall Street is transparent, irrational and always right or wrong at the same time depending on how you look at it. Shorts are gone so we don't have people who want the SP to go down invested.
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