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Is Elon short TSLA? (Out of general)

Discussion in 'TSLA Investor Discussions' started by mmd, Apr 4, 2018.

  1. mmd

    mmd Banned

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    #1 mmd, Apr 4, 2018
    Last edited: Apr 4, 2018
    I see this repeated often. Not sure if it's supposed to imply something.
    What if Elon holds a 5M short TSLA position at average of $300 in some undisclosed foreign accounts? Does that need to be disclosed if he is not actively trading? Wouldn't that guarantee him a nice payout even if stock goes to $0?

    There were few cases of CEOs shorting right before the doomsday, like here.
    Can a CEO short his own company?

    But if there is no active shorting, will holding a short position be okay?
    What if some other Tesla execs hold short positions to lock in gains in unvested shares? With the high volatility, this won't be too surprising to me.
    Can someone with knowledge confirm if this is even possible?

    Now that I think of it, who tweeted out bankweepsy to millions when Moody's just mentioned cap raise? :)
    Even most bearish analysts like Colin Langan didn't think Tesla was goign bankwupt. but cap raise is coming; doesn't matter what Tesla says.
    Analyst: Tesla will have to raise capital if they don't ramp Model 3 by Q3

    To keep it ON-topic: Too bad I missed out on my call options at $250 for just a tiny bit on the limit price.. This is one big upswing.

    Edit: From this link, it seem US SEC doesn't require disclosing short positiosn yet.
    SEC Might Require Hedge Funds to Disclose Short Positions?

    But UK recently required it? Notification and disclosure of net short positions
     
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  2. Waiting4M3

    Waiting4M3 Active Member

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    What are you smoking? o_O
     
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  3. mmd

    mmd Banned

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    Same stuff Elon smokes when tweeting about bankwuptcy :) Ambien and red wine.

    So I take it, you have no knowledge if this is even a possibility or not, but just felt compelled to reply something impulsively :) That's fine. I'll have to wait till folks like @brian45011 reply.
     
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  4. Causalien

    Causalien "The retired" 8 ball Oracle

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    I think Elon should also sell a brick on fire.
     
  5. Causalien

    Causalien "The retired" 8 ball Oracle

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    There's a persistent high % of short in TESLA stock. I suspect it is Goldman's hedging on the amount of money it is lending to Elon who pledged his shares. So in a sense this is already happening.
     
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  6. Waiting4M3

    Waiting4M3 Active Member

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    You posed a ridiculous straw man argument with no evidence whatsoever, and you continue grasping at straws. Do you really think this will work?
     
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  7. mmd

    mmd Banned

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    Well, if we can't be sure, then what can we infer from "Elon will be the last to sell TSLA. " ?
    Modern financial instruments are waaay too complex for you and me to fathom :)

    To be precise, Elon did sell some shares 2-3 years ago and bought himself a nice new plane, and 5 mansions in LA under some opaque holding companes. I can post the links. But I understand mods don't like pictures of nice planes. ;)

    Good for him. He needs some reward other than just hard work and all the name calling by short sellers. Nothing wrong with this. Bezos is selling billions, so nothing wrong here.
    I'm just pointing this out just to be factually correct.
     
  8. Yggdrasill

    Yggdrasill Active Member

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    Musk has only sold shares to cover taxes and such. He has however borrowed money on the TSLA shares, which he then uses for living expenses.
     
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  9. avoigt

    avoigt Active Member

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    Send prove or it did not happen.

    Frankly, he would have deserved much more than that what you describe but its just not his ambition.
     
  10. brian45011

    brian45011 Active Member

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    That's a one-way ticket on the non-stop express to ClubFed. Tesla's outside counsel would very publicly quit if they got a whiff of anything close to that. Elon, Kimbal, and JB have all pledged shares as collateral for draws against lines of credit with the bank affiliates of the Investment Banks that have been underwriting the debt and equity issues. (IIRC, before it was bought out, SCTY curtailed new pledges of shares by its officers and directors.)

    "Beginning in May 2011, Morgan Stanley Smith Barney LLC, an affiliate of Morgan Stanley & Co. LLC, has made various extensions of credit to Elon Musk. Interest on this loan accrues at market rates. Morgan Stanley Smith Barney LLC received customary fees and expense reimbursements in connection with this loan. As of February 28, 2017, the outstanding balance under this loan is approximately $344.4 million. In addition, beginning in June 2011, Goldman Sachs Bank USA, an affiliate of Goldman, Sachs & Co., made extensions of credit to Mr. Musk and the Elon Musk Revocable Trust dated July 22, 2003, or the Trust, a portion of which Mr. Musk used to purchase shares of our common stock in our public offerings in May 2013 and August 2015 and in private placements in June 2011 and June 2013. Interest on the loan accrued at market rates. Goldman Sachs Bank USA received customary fees and expense reimbursements in connection with these loans. Mr. Musk currently has no outstanding borrowings with Goldman Sachs Bank USA.

    As regulated entities, Morgan Stanley Smith Barney LLC and Goldman Sachs Bank USA make decisions regarding making and managing their loans independent of Morgan Stanley & Co., LLC and Goldman, Sachs & Co., respectively. Mr. Musk and these banks have long-standing relationships of over a decade. We are not a party to these loans, which are full recourse against Mr. Musk and the Trust. These loans, as well as loans of approximately $279.9 million in the aggregate as of February 28, 2017 that Mr. Musk received from other financial institutions which are not involved in this offering, are secured by pledges of a portion of the Tesla common stock currently owned by Mr. Musk and the Trust.

    If the price of our common stock were to decline substantially, Mr. Musk may be forced by one or more of the banking institutions to provide additional collateral for the loans or to sell shares of Tesla common stock in order to remain within the margin limitations imposed under the terms of his loans."
    Tesla - Prospectus Filed Pursuant to Rule 424

    So ~$624.3MM plus I think some of his holding in SpaceX may also partially secure the amounts drawn, but that collateral is far less liquid.

    The terms of the loan agreements have never been disclosed. There may be no restrictions on what the lenders do with the pledged shares as long as shares are returned when the loans are repaid.

    If you want to engage in doomsday hypotheticals, I think a far more likely scenario would be that, if Tesla were ever unable to raise new capital as the corporate debt matures, Elon works out an arrangement with its creditors to take the corporation private in exchange for an ownership interest in the new entity for becoming the new entity's CEO (and chief architect.) Draw commitments against the Asset Backed Credit Agreement (last reported as $1.1 B) must be re-paid by June 2020 unless it is amended or extended.
     
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  11. brian45011

    brian45011 Active Member

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    Elon sold some shares at the IPO in June 2010 (later said it was to fund the SCTY start-up) and again in May 2016 when he exercised options that would have lapsed in December 2016. The Option Agreement states the holder's employment and income tax withholdings must be received by the corporation before the new shares are issued. No other sales reported on Form 4s.
     
  12. Krugerrand

    Krugerrand Is Cat

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    Purposely obtuse.

    Purposely ridiculous.

    It’s as if you’ve lost your brain entirely, which I know you haven’t because you still know how to type and post.

    What exactly is/was your reason for the above? In all seriousness, I’m interested in the real motivation. PM if you’d rather keep it quiet. I won’t share it.
     
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  13. anticitizen13.7

    anticitizen13.7 Not posting at TMC after 9/17/2018

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    When Bernie Sanders lost the DNC Primary to Hillary Clinton in 2016, many of my Bernie supporting friends twisted themselves into intellectual knots trying to come up with any scenario, no matter how bizarre, where Bernie could replace Hillary on the Democratic ticket. That didn’t happen.

    Desperate/bizarre scenarios are in my observation the result of denial. It’s not a good investment strategy. People should step back and check themselves.
     
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  14. Chickenlittle

    Chickenlittle Active Member

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    Interesting. Most liars don’t trust others to be telling the truth. Not calling you a liar——just an observation
     
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