Short-Term TSLA Price Movements - 2014

[eepic]

Daimler selling stake in Tesla.

Sounds like Daimler *sold* its stake in Tesla. That is, they are done selling their ~5mm shares and it won't be an overhang on the stock. Sounds like a friendly divestment that won't affect their partnership. They had a hedge in place since some point in 2013, so economically it wasn't (recently) a full on one way sale as it would have been offset by exiting that hedge. Of course, bears may spin this that Daimler doesn't have faith, etc.

Daimler restructures cooperation with Tesla | Daimler Global Media Site > Company > Business News

 

[MartinAustin]

For now, it looks like the Daimler news is having more effect on the stock (in after hours) than the Michigan Governor's decision did earlier today (which was no effect at all).

Apart from 4% of Tesla's shares becoming available, which may depress the stock a bit for a while, I don't think this will affect TSLA long term.

- - - Updated - - -

they are done selling their ~5mm shares and it won't be an overhang on the stock.Daimler restructures cooperation with Tesla | Daimler Global Media Site > Company > Business News

I was thinking about that as I typed that last post.

Assuming you're right, it means the sale is complete, and now there is no 4% chunk of equity trying to get sold. Less for sale from now on?

 

[joefee]

MB is just profit taking .... keeping the product relationship intact. Timing is interesting: before upcoming ER.

 

[Robert.Boston]

Moderator's Note

I moved the discussion about the Michigan bill up to the main thread (or, it'll get there as soon as it's merged in): Michigan bill to ban Tesla sales at governors office!

- - - Updated - - -

Generally dull day today; although we're up nearly $5 (2.1%), the NASDAQ was up 2.4%. Was TSLA just along for the general ride?

 

[eepic]

For now, it looks like the Daimler news is having more effect on the stock (in after hours) than the Michigan Governor's decision did earlier today (which was no effect at all).

Apart from 4% of Tesla's shares becoming available, which may depress the stock a bit for a while, I don't think this will affect TSLA long term.

- - - Updated - - -



I was thinking about that as I typed that last post.

Assuming you're right, it means the sale is complete, and now there is no 4% chunk of equity trying to get sold. Less for sale from now on?

From the wording it sounds very much like they are done, especially as they cite a $780mm EBIT. In fact, that means an average sale price of about $160.23 on their 4,867,929 shares (as of last filed Jan 10, 2013). Again, they started exiting to some degree when they set up their hedge last year with some sort of synthetic short. By exiting both sides, they effectively recently got rid of the remainder of their unhedged position and it seems like a small amount recently based on that average price net of hedge(going by the chart), assuming they didn't pay outrageous premiums on their hedging instrument.

From last year
http://www.reuters.com/article/2013/12/21/us-daimler-tesla-idUSBRE9BK08U20131221

 

[eepic]

I moved the discussion about the Michigan bill up to the main thread (or, it'll get there as soon as it's merged in): Michigan bill to ban Tesla sales at governors office!

- - - Updated - - -

Generally dull day today; although we're up nearly $5 (2.1%), the NASDAQ was up 2.4%. Was TSLA just along for the general ride?

Yea the Michigan news didn't move the needle and we pretty much followed the NASDAQ generally. The Daimler news sent bots selling to $228.xx for a few seconds before it bounced back.

 

[FredTMC]

Yea the Michigan news didn't move the needle and we pretty much followed the NASDAQ generally. The Daimler news sent bots selling to $228.xx for a few seconds before it bounced back.

Its good they are done. This undoubtedly has been putting pressure on the stock. Now that they are done, no major external downward pressure.

 

[v12 to 12v]

Daimler selling stake in Tesla.

Daimler already sold it. That was the big AH trade last we saw Friday. Daimler said their shares would be on the market after they lost their seat on the board due to the transfer of shares to Aabar (which owns 9% of Daimler).

 

[FredTMC]

Daimler already sold it. That was the big AH trade last we saw Friday. Daimler said their shares would be on the market after they lost their seat on the board due to the transfer of shares to Aabar (which owns 9% of Daimler).

thanks for detail

 

[chickensevil]

Daimler already sold it. That was the big AH trade last we saw Friday. Daimler said their shares would be on the market after they lost their seat on the board due to the transfer of shares to Aabar (which owns 9% of Daimler).

That would indeed explain the extremely large orders that we saw hit the other day.

 

[maoing]

This is inconsistent with calculated selling price ~$160. Last Friday AH trading was around $227 if I recall correctly.

Daimler already sold it. That was the big AH trade last we saw Friday. Daimler said their shares would be on the market after they lost their seat on the board due to the transfer of shares to Aabar (which owns 9% of Daimler).

 

[Tuxedo]

Calculations or not, I don't believe Daimler sold at 160. That would be insanely stupid.

 

[Chickenlittle]

Calculations or not, I don't believe Daimler sold at 160. That would be insanely stupid.

When stock price was in 140s, they got a collar combination of puts and calls that limited their downside and upside. They screwed themselves

 

[maoing]

I see the reason now. It's because of hedge, so Daimler sold 5 million shares last Friday AF @ 227 but only with 160 gain per share. Does that mean the dip to 22x in last week is a reasonable bottom? Daimler don't care to sell shares up or down because of hedge, but the big-hand in buyer side does.

 

[Curt Renz]

I see the reason now. It's because of hedge, so Daimler sold 5 million shares last Friday AF @ 227 but only with 160 gain per share. Does that mean the dip to 22x in last week is a reasonable bottom? Daimler don't care to sell shares up or down because of hedge, but the big-hand in buyer side does.

Indeed, the investment had been hedged for nearly a year, so Daimler could not earn much profit from share price advances or lose much from declines. It now unraveled its financial involvement, and essentially pocketed the profit it earned before setting up the hedge. Daimler says it is better for those shares to now be spread more diversely. They may now be in the hands of strong shareholders willing to hold for long term profits. That's the type that Elon wants as investment partners.

Daimler purchased its stake before Tesla became publicly traded. Back then it wanted to insure the success of a supplier. Daimler has now demonstrated its confidence in Tesla's success.

Daimler says it will continue to purchase motors from Tesla, and will likely be involved in future Tesla projects. Meanwhile, the sale of Daimler's 5 million shares of TSLA has already been accomplished. Large blocks had been traded recently, and now we have the explanation. What had been an overhang of potential selling has been alleviated. That lid on the share price has now been removed.

 

[chickensevil]

Indeed, the investment had been hedged for nearly a year, so Daimler could not earn much profit from share price advances or lose much from declines. It now unraveled its financial involvement, and essentially pocketed the profit it earned before setting up the hedge. Daimler says it is better for those shares to now be spread more diversely. They may now be in the hands of strong shareholders willing to hold for long term profits. That's the type that Elon wants as investment partners.

Daimler purchased its stake before Tesla became publicly traded. Back then it wanted to insure the success of a supplier. Daimler has now demonstrated its confidence in Tesla's success.

Daimler says it will continue to purchase motors from Tesla, and will likely be involved in future Tesla projects. Meanwhile, the sale of Daimler's 5 million shares of TSLA has already been accomplished. Large blocks had been traded recently, and now we have the explanation. What had been an overhang of potential selling has been alleviated. That lid on the share price has now been removed.

I am really believing that the control of keeping the share price at such a flat price would be because of them slowly offloading all those shares. Even when averaging 6 million shares a day, if they were dumping them at a million a day then that would be more than enough volume to "move the pack" as it were. And on low volumes like yesterday it results in a almost perfectly flat chart (at least... Flat for TSLA haha). I really hope this is all that was hitting on the stock and we are now free to move however the wind blows.

 

[Curt Renz]

I am really believing that the control of keeping the share price at such a flat price would be because of them slowly offloading all those shares. Even when averaging 6 million shares a day, if they were dumping them at a million a day then that would be more than enough volume to "move the pack" as it were. And on low volumes like yesterday it results in a almost perfectly flat chart (at least... Flat for TSLA haha). I really hope this is all that was hitting on the stock and we are now free to move however the wind blows.

That could well have been the case. With this overhanging share supply removed, one might have expected the share price to rise after hours. Those after hours traders are not the big guns, and often react impulsively without thinking deeply.

Meanwhile, here's an interesting comment from Daimler's management board member Bodo Uebber, "This will also allow Tesla to broaden its investor base." It may seem to be nice of him to be so considerate of Tesla's interests. But I suspect Elon may have suggested that Daimler divest its hedged shares so they could move to the strong hands of new shareholders intending to hold them for the long term. Daimler's original investment purpose was to prime the pump to keep a supplier afloat. Now some of those shares are better off with people keeping them for their retirement.

 

[v12 to 12v]

Last weekend I took a look at Daimlers last quarterly report. It looked like the "collar" they had on the options were costing them a lot of money over time.

 

[Cattledog]

Three cheers for Causalien, who pretty much nailed the closing price today (1.8% predicted, 2.1% actual). Keep 'em coming.

 

[30seconds]

That would indeed explain the extremely large orders that we saw hit the other day.

I'm not following. A transfer of shares would not have been conducted on open market. I would assume that a sophisticated investor would sell a large block like this over time (typical) and using large block trades on institutional networks

- - - Updated - - -

Last weekend I took a look at Daimlers last quarterly report. It looked like the "collar" they had on the options were costing them a lot of money over time.

I believe you (have not read report), but if properly done Daimer would have limited up and down side when they executed collar and would no longer be in position for additional gain or loss. I assume by their $160 price the collar was done some time ago and they used market makers to execute stock transfers as the upside strike options came due instead of paying cash and keeping the underlying. All depends on how they set up.