Short-Term TSLA Price Movements - 2013

[Johan]

Dipped my toe back in the water just before the close. I bought Sept. $160s for $3. Very small move relative to my position, I'm just hoping for a quick double, then I'm back out of that.

Please report back on that trade! i'm considering something similar if we go below $135 (was thinking the $150 strike) but very much in doubt here...

 

[Citizen-T]

There is a story from Benzinga that claims that tomorrow those that bought in the secondary that Tesla did following the Q1 report will be able to sell their shares if they choose.

Is The Coming Tesla Lock-Up Expiration A Signal To Sell? (TSLA) | Benzinga

This is the only source I've been able to find on this though. Everywhere else that it is mentioned leads back to Benzinga. Others are beginning to question whether or not this is true as well. Anyone here have another source?

 

[mitch672]

So Mitch...The way you describe this strategy is that you only 'lose' if the stock goes wild, shoots past $185..on and on....You have lost the opportunity to make more money but you have made some money from your current position. Correct?

Yes. But I had a feeling I was going to close out the position well ahead of option expiration.. If I was %100 sure it would be below $185 in Jan of 2014, I could have pocketed $19.75 per share... I made a small profit instead... The common was in the mid $150's when I sold these covered calls.... And as we know has now dropped, covered calls offer no downside protection... But I look at it as easing the pain of a nearly $15 drop in the common. The beauty of selling and buying back covered calls is, you can do it more than once allows you to make a little money on the volatility, without selling the common shares (though they can be called away if the price rises rapidly near expiration)

 

[Johan]

There is a story from Benzinga that claims that tomorrow those that bought in the secondary that Tesla did following the Q1 report will be able to sell their shares if they choose.

Is The Coming Tesla Lock-Up Expiration A Signal To Sell? (TSLA) | Benzinga

This is the only source I've been able to find on this though. Everywhere else that it is mentioned leads back to Benzinga. Others are beginning to question whether or not this is true as well. Anyone here have another source?

I searched all the SEC-filing from the time around the offering with the key-words "lock" with noe reference to an actual lock-up period. Also searched the documents for the term "august" and no hits...

 

[pfq1982]

There is a story from Benzinga that claims that tomorrow those that bought in the secondary that Tesla did following the Q1 report will be able to sell their shares if they choose.

Is The Coming Tesla Lock-Up Expiration A Signal To Sell? (TSLA) | Benzinga

This is the only source I've been able to find on this though. Everywhere else that it is mentioned leads back to Benzinga. Others are beginning to question whether or not this is true as well. Anyone here have another source?

I would consider it bunk unless there is another source. Benzinga is not known for accuracy, and even more importantly if you look to the primary sources, there is nothing about any lock-up (that I can see).

 

[ggr]

I would consider it bunk unless there is another source. Benzinga is not known for accuracy, and even more importantly if you look to the primary sources, there is nothing about any lock-up (that I can see).

It would be unusual for there to be a lock-up for a secondary offering; they are real investors and should be allowed to sell their shares if they want to. Also almost all of the investors would be institutions or Elon, and they are likely to want to hold. I'm not too worried.

 

[Mr. Farmer]

It would be stupid for those who bought at $93 to sell tomorrow. The bonds Tesla issued convert to $120 shares. Selling tomorrow would result in a lower gain than the bonds, after taking short term as opposed to long term capital gains into consideration.

The bonds are not convertible until TSLA hits $180. So those who bought at $93 are going to consider if TSLA is worth $180. While I think it will hit $180 this year, it's better to make money and pay taxes than not to make any money.

 

[Soundart]

It would be unusual for there to be a lock-up for a secondary offering; they are real investors and should be allowed to sell their shares if they want to. Also almost all of the investors would be institutions or Elon, and they are likely to want to hold. I'm not too worried.

Looking like that's probably the case. If so, I totally fell for it. Just goes to show how gullible anyone can be, including some of us. Here's a link where someone attempts to debunk it:

The Truth About the Tesla "Lockup" Expiration | Kid Dynamites World

 

[AlMc]

Looking like that's probably the case. If so, I totally fell for it. Just goes to show how gullible anyone can be, including some of us. Here's a link where someone attempts to debunk it:

The Truth About the Tesla "Lockup" Expiration | Kid Dynamites World

Wow. Nice find. Just shows you that if enough people repeat something it becomes fact. I got on that bandwagon after hearing the 'lockup' period was expiring...thinking it was like SCTY.....

 

[Curt Renz]

Today I bought back my covered calls that I wrote on Friday. During the days since then I had a paper loss in the shares but realized an actual profit in the shorted calls. I suspected that the TSLA profit taking and shorting seen this week in anticipation of a real or imagined lock-up expiration tomorrow was overdone. Those new shares bought in May are essentially owned by the same institutions that bought the notes that can be converted to shares if they rise above $161.88 (to state the case simply.) They paid a share equivalent of $124.52 for those notes. Those pros undoubtedly want to see that higher price attained, and I suspect are not likely to sell during a weak spell. There are also warrants that exercise at a share strike price of $184.48. The new shares are a small percentage of those outstanding and are not much compared to the daily trading volume, unlike the seemingly similar situation in June with SCTY.

Meanwhile, during his vacation this week the president has been incessantly tweeting about the need to address climate change. He’ll return to Washington on Sunday while Congress stays away until September 6[SUP]th[/SUP]. I wouldn’t be surprised if his administration soon issues a positive response to the Tesla related petition that received the required 100,000 signature within thirty days. Tesla Motors is the green poster child for the administration. The hope is that the constitutional requirement for free interstate commerce be invoked to stifle those states requiring a manufacturer like Tesla to sell and service its products through local middlemen. If the administration proves to be supportive in this matter, it could boost the TSLA share price.

 

[austinEV]

Today I bought back my covered calls that I wrote on Friday. During the days since then I had a paper loss in the shares but realized an actual profit in the shorted calls. I suspected that the TSLA profit taking and shorting seen this week in anticipation of the lock-up expiration before the opening tomorrow was overdone. Those new shares bought in May are essentially owned by the same institutions that bought the notes that can be converted to shares if they rise above $161.88 (to state the case simply.) They paid a share equivalent of $124.52 for those notes. Those pros undoubtedly want to see that higher price attained, and I suspect are not likely to sell during a weak spell. There are also warrants that exercise at a share strike price of $184.48. The new shares are a small percentage of those outstanding and are not much compared to the daily trading volume, unlike the seemingly similar situation in June with SCTY. Details can be found in the 8-K reports issued by the company and emailed to shareholders like me on May 20 and 22.

Meanwhile, during his vacation this week the president has been incessantly tweeting about the need to address climate change. He’ll return to Washington on Sunday while Congress stays away until September 6[SUP]th[/SUP]. I wouldn’t be surprised if his administration soon issues a positive response to the Tesla related petition that received the required 100,000 signature within thirty days. Tesla Motors is the green poster child for the administration. The hope is that the constitutional requirement for free interstate commerce be invoked to stifle those states requiring a manufacturer like Tesla to sell and service its products through local middlemen. If the administration proves to be supportive in this matter, it could boost the TSLA share price.

- - - Updated - - -



Here is the debunking of your debunker. It's wording from Telsa's related 8-K report:

"During the period beginning from the date hereof and continuing to and including the date 90 days after the date of the Prospectus (the “Lock-Up Period”), not to offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose..."

To debunk your debunking of the debunker, his read is that restricts Tesla Motors from selling any more stock during the lockup. So they can't do another offering until tomorrow.

Looks like a gold-plated buy point.

 

[clmason]

Today I bought back my covered calls..."[/FONT][/COLOR]

Curt, thanks for the update. You are a rock star and I am in your fan club. It is always insightful to read your updates...

 

[austinEV]

Let's look at the chart. The bright pink line is the 20 day moving average. It has been tested twice and passed both times, and this is a third (I don't count the pre-earnings day, or that would be a fourth). The stock has developed these little 3 or 5 day bear patterns periodically and they have always signaled a local minimum. Tomorrow is day 5 of the bear run. Coupled with the fact that the lockup was either completely false, or overblown, tomorrow will either open sharply up, or start down and turn around intraday. I plan to take a sizeable call position and catch a little run-up in the next 1-2 weeks. In hindsight the day after earnings going outside of the bollinger band was kind of a sell point, and it was a doji to boot...

Risks: The general market acts like it wants to go down. Or, TSLA might genuinely be entering a doldrums period, in which case it might want to test the 50 day (120/share).

 

[Curt Renz]

Looking like that's probably the case. If so, I totally fell for it. Just goes to show how gullible anyone can be, including some of us. Here's a link where someone attempts to debunk it:

The Truth About the Tesla "Lockup" Expiration | Kid Dynamites World

Good catch. I was fooled by Benzinga for a while too. Indeed, the lock-up appears to apply to Tesla Motors and not the buyers of new shares in the subsequent offering during May.

- - - Updated - - -

To debunk your debunking of the debunker, his read is that restricts Tesla Motors from selling any more stock during the lockup. So they can't do another offering until tomorrow.

Looks like a gold-plated buy point.

You are right, as I noted in my response to Soundart. Apparently you responded to my post before I was able to edit it. Upon careful examination of the 8-K, the lock-up applies to Tesla Motors and not the investors in the May offering.

 

[aznt1217]

I didn't see anything in any of the filings, but typical lockup periods are 90-180 days. Figured it would be standard. Interesting I really wonder who his source is.

 

[Curt Renz]

I didn't see anything in any of the filings, but typical lockup periods are 90-180 days. Figured it would be standard. Interesting I really wonder who his source is.

If you are referring to Benzinga reporter Matthew Kanterman, I suspect he found the word lock-up in the Tesla 8-K and assumed it referred to the buyers of the May offering. One must examine the structure of the 8-K very carefully to realize that the lock-up applied to Tesla Motors ability to offer new shares and not to the buyers of the offering.

I supplied a correction in the comment section following the Benzinga article. I also tweeted a correction to the author. Then I contacted my brokerage where I had originally read a reprint of the Benzinga article. We'll see how much they can get corrected at their end.

 

[GJMcManus]

Long target 160.84
Stop 131.90
15.4% profit

Short target 125.7
Cover 147.76
9.8% profit

 

[justthateasy]

Soundart, Curt, austinEV, thanks for the clarifications and possible explanations about the recent dump in TSLA. I'm confident that we'll see the price go well above $185 one day especially with those convertibles still out there. It's just concerning to see these levels get tested after a great earnings report.

The Lazard downgrade on Monday hasn't helped either. I feel that if Lazard didn't come out with their hit-piece, we'd see TSLA closing above $165 today. How and why are guys like them taken seriously especially after all the others have upgraded or held their opinion about TSLA?

 

[aznt1217]

If you are referring to Benzinga reporter Matthew Kanterman, I suspect he found the word lock-up in the Tesla 8-K and assumed it referred to the buyers of the May offering. One must examine the structure of the 8-K very carefully to realize that the lock-up applied to Tesla Motors ability to offer new shares and not to the buyers of the offering.

I supplied a correction in the comment section following the Benzinga article. I also tweeted a correction to the author. Then I contacted my brokerage TD Ameritrade where I had originally read a reprint of the Benzinga article. We'll see how much they can get corrected at their end.

Ah understood. I should've looked into it more. Too busy at my real job haha. I wonder what will be published/will occur in the following days post industry investor conferences. It can't be coincidence that JPM raised it's targets after day 1 of the conference.

 

[FredTMC]

Tomorrow BULL or BEAR?

No idea. I'd like to see an official announcement from TM on the all around 5 star crash ratings. Helps people understand how superior model S really is.