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Short-Term TSLA Price Movements - 2013
- Thread starter Robert.Boston
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I am a noob those these whole bond things so please correct me.
so how i am reading your guys statements is as fallowing.
Those Bonds are like a giant Loan. If it stays above 161.88 both parties win because then Tesla wont owe money on the difference and Goldman can hold them and let them gain more value
really its a win/win for goldman and win for tesla only if the price stays above 161.88 for the next 20 days
If it doesnt then tesla will owe that debt to Goldman
So if it stays up then Tesla has win by taking debt off their balance sheet, growing their cash on hand to spend how they please
But really Goldman buying those bonds was betting against Tesla, they would of made more if Tesla doesnt achieve the 161.88.
so if tesla gets the 161.88 then after that 30 days you will probably see goldman come out and say tesla is great and dive up the price to make those bonds worth more
please corret me if i am wrong. that is just what i pulled out of hat you guys are saying
so how i am reading your guys statements is as fallowing.
Those Bonds are like a giant Loan. If it stays above 161.88 both parties win because then Tesla wont owe money on the difference and Goldman can hold them and let them gain more value
really its a win/win for goldman and win for tesla only if the price stays above 161.88 for the next 20 days
If it doesnt then tesla will owe that debt to Goldman
So if it stays up then Tesla has win by taking debt off their balance sheet, growing their cash on hand to spend how they please
But really Goldman buying those bonds was betting against Tesla, they would of made more if Tesla doesnt achieve the 161.88.
so if tesla gets the 161.88 then after that 30 days you will probably see goldman come out and say tesla is great and dive up the price to make those bonds worth more
please corret me if i am wrong. that is just what i pulled out of hat you guys are saying
I found this in a post by Johan when the notes were issued:
In connection with the offering of the notes, Tesla intends to enter into convertible note hedge transactions and warrant transactions which are generally expected to prevent dilution up to 100% over the offering stock price. In connection with establishing their initial hedge of the convertible note hedge and warrant transactions, the hedge counterparties or their affiliates expect to enter into various derivative transactions with respect to our common stock concurrently with or shortly after the pricing of the notes, including with certain investors in the notes.
So riddle me this...am I right in saying that if Tesla stock meets the requirements for conversion and if they purchased hedge/warrant transactions for the 4.81 million shares so it wouldn't be dilutive then didn't they just get $600million of financing for free...or at least for whatever was the cost of the hedge?
Interesting that Citron released a hit piece and it didn't do much to the stock. In that case, I think I'll have to re-enter soon rather than later... Just joined the TSLA train again at $161.50. Gap of $2 where I sold off ($159.50). It now really looks like TSLA will flop around >$161.88 for about 4 weeks.
I had overlooked this on the TESLA website for Q2 shareholder letter and earnings transcript....description of dilutive effect of convertible notes, warrants and offsetting bond hedges.
http://files.shareholder.com/downlo...tive Shares for 2013 Convert and Warrants.pdf
http://files.shareholder.com/downlo...tive Shares for 2013 Convert and Warrants.pdf
According to that chart, we might get another boost into $170s sooner than later.
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I too am waiting for a knowledgable answer. To me, it sounds a small bad thing.
I'm going to guess that since the overall stock market isn't tanking like it was in the morning, I'm thinking the stock will be around $162-163.
Citizen-T
Active Member
Bought some puts to hedge. I'll add more if we continue to go higher. Hope they expire worthless, but I doubt it. =)
Same here. It pains me that I could've waited a little bit longer to re-enter for a lower price.
Tesla is getting way too much coverage for my liking. As some people supposedly started a contra-Cramer fund (essentially doing the opposite of what Jim Cramer recommends), I always invest in the opposite of what CNBC talks about (too much). In this case it is TSLA and I feel like we are heading towards a short term peak. I hedged all of my options positions creating very low cost bull-call spreads and sold off some of my stock, but I still hold plenty of TSLA shares just in case.
I wish all of you guys the best of luck, but I don't think we are going to break $170 and stay there any time soon. If we consolidate in the $150's I might start adding some more options, but I feel like there is just too much talk about TSLA right now and this makes me very uneasy.
CNBC is very good at calling peaks and troughs, you just have to do the opposite of what they talk about. When gold was pushing $2000, they started talking about it every day non-stop; that was your signal to sell. Now they are talking about TSLA the whole time, which is a signal for me to sell.
Don't forget that we have this big Fed BS hanging over our heads. The markets are in correction mode still and I would wait till S&P 500 falls to $1,600 before getting back into this market.
Good luck to all,
sleepyhead
I wish all of you guys the best of luck, but I don't think we are going to break $170 and stay there any time soon. If we consolidate in the $150's I might start adding some more options, but I feel like there is just too much talk about TSLA right now and this makes me very uneasy.
CNBC is very good at calling peaks and troughs, you just have to do the opposite of what they talk about. When gold was pushing $2000, they started talking about it every day non-stop; that was your signal to sell. Now they are talking about TSLA the whole time, which is a signal for me to sell.
Don't forget that we have this big Fed BS hanging over our heads. The markets are in correction mode still and I would wait till S&P 500 falls to $1,600 before getting back into this market.
Good luck to all,
sleepyhead
kevin99
Member
Hilarious! What an accurate portrait of the shorts! Can't stop laughing... "Soon they realize it is just an auto company".
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So what? you are going short?
If you don't like the way it run up so fast, just hedge it and keep walking up the short calls. This way your long position still benefit.
Jonathan Hewitt
Active Member
Sleepyhead has a pretty good point. I was wondering the same thing but thought that maybe the hedgefunds jumping in at $160 would give more upward momentum. I don't want to get greedy so I've sold everything I had on margin and then a little more for some cash in case it goes down. I'm already maxed out on making spreads (only L2 options trading so have to sell covered calls). I still have all my core stock, my leaps, and my spreads for if it keeps going.
NigelM
Recovering Member
callmesam
Member
Good catch.
How do these three concepts work?
When share price hits 184.48 for 20 of 30 days:
1. May 2013, 1.5% convertible senior notes are paid off with a hedge.
2. May 2013, they also issue warrants relating to the same number of shares of their common stock with a strike price of $184.48 that could separately have a dilutive effect on EPS to the extent that the market price per share of their common stock exceeds $184.48.
3. TOTAL ACTUAL DILUTION AT MATURITY increasing with share price so that we see 2% dilution at $300/share
Missing anything?
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