Positive Q3 guidance.
But then again how much credibility there is left in TSLA guidance is questionable. So...
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Positive Q3 guidance.
But then again how much credibility there is left in TSLA guidance is questionable. So...
Sparky
Member
I've been sitting with about a 3:1 TSLA:SCTY ratio. So, thinking very short term let's say SCTY drops to $24 because of whatever (lots of coal-lovers on TV this week, or something) and SMP2 is released and market smiles and TSLA jumps to $230.
If the above happens then switch ratio to 1:3 TSLA:SCTY and wait for re-convergence?
Of course, above is predicated on the steady movement in favor of SCTY purchase.
Let's see how things play out. What's your opinion of the reason why Tesla is releasing its Master Product Plan right now, during an extremely busy time for Elon? He obviously has a reason for releasing an important roadmap right now that he has apparently not written yet. My supposition is that we will see some lift to the stock price from the plan and that lift will help with points 1,2, and 3 that I listed. Actually, I think the lift in stock price the past two Mondays has been related to word that a Master Product Plan is going to be released. So, one could argue that part of the purpose of the Master Product Plan has already been served. My guess is that three items, the normal Monday morning amateur hour buying of TSLA, word of a coming announcement of Tesla's future planes by Elon, and heavy pressure on shorts (interest rates, recalls, etc.) to close their positions combined to bring the SP higher these past two Mondays.
sub
Active Member
Honestly I have no idea why the smp2 now other than smp1 is "expiring" soon and Tesla has become way more than just an auto manufacturer. I'm not a conspiracy theorist, I tend to take people at their word until they prove to me they are distrustful. I don't consider aiming for the stars and landing on the moon sometimes like Elon has done as being distrustful. Isn't that the 10x rule, multiply your goals by 10 so when you come up short you still crushed it?
I do think that Elon cares about the stock price for both business reasons and pride, I have no problem with either. I understand how ignorance and stupidity (not to mention agenda) can trigger a reaction in those that function on a purely logical level, I share this trait. It can be tedious reading through all the emotional responses on this thread when something significant happens.
You and I are on the same team However, I agree with you 99% of the time but I gotta say Krugerrand and I must have been separated at birth, scary how similar we see things.
J'19s: A week and change AFTER what looks to be a strong Q3 ER...was hoping to pick some up at bargain prices.
It will be a tough time to try to get them at a bargain. Usually the buy/sell difference is big once they are released.
Takes a few weeks to calm down
dandurston
Member
That is interesting. I could be wrong, but I thought Elon is normally on both of these conference calls, which are now scheduled to occur at basically the same time. I wonder if they have something fancy planned.
Nope. Just checked, Elon hasn't been at SCTY's conference calls. So the timing might be a coincidence or the announcement of the terms of the merger. But it won't be done together with Elon's presence.
OK, Sub, I have a better picture of your concerns. I agree with you that Elon is a straight shooter. The day after the autopilot issue went public, TSLA had recovered its loss from the autopilot story, presumably because when investors saw the details, their concerns diminished. An objective evaluation would determine that TSLA recovered to the pre-accident level of 212 within 24 hours. Even a negative Q2 delivery number a day later could not sink the SP. Nonetheless, the FUD got turned up and we saw a relentless effort by the media to exploit the autopilot accident and give Tesla a black eye. These stories could indeed pull the SP lower, and I strongly suspect that if it fell below 212 you would have had some black hat purchaser of the equity raise filing a lawsuit against Tesla over the disclosure issue. This was a chess match and the media moved lots of pieces into position in a way that threatened Tesla. Elon neutralized their efforts, both by actively defending Tesla autopilot and by announcing an upcoming Master Plan release. I feel confident that the prospects of the Master Plan release influenced the rallies on Monday and the Monday before. Eight days ago, a drop in TSLA SP could have been harmful to the company and the story that a Master Plan was coming neutralized the threat. In this sense, the Master Plan has already served its purpose, even without being released. I agree with you that a stock price decline now would be immaterial, but it's my belief that a drop in the price 8 days ago may have been a different matter. Cheers.
Tesla CEO Elon Musk Expects SolarCity Acquisition Vote to Pass by Two-Thirds Majority
Elon thinks 2/3 will approve the merger.
Elon thinks 2/3 will approve the merger.
MitchJi
Trying to learn kindness, patience & forgiveness
Mr. Musk s proposed combination of the two companies—both of which count him as the largest shareholder—was first presented to investors in late June, but has been overshadowed by the disclosure of a traffic fatality connected to the Autopilot feature in Tesla s Model S sedan.
In an email, Mr. Musk said the updated blueprint will include an explanation of how Tesla s SolarCity acquisition would help transition the car maker into an energy company specializing in using batteries to generate and store power.
SolarCity s board and advisers are currently reviewing the offer.
Mr. Musk has been talking with Tesla s largest investors, including Fidelity Investments and other big mutual funds, urging them to support the acquisition.
He added, Most just didn t understand how bringing together a car and a solar company made sense from a product standpoint.
Mr. Musk said he expects the end result will be a super majority, a two-thirds majority in favor, even though such a super majority isn't required for approval.
The text above is a summary, you can read full article here.
SolarCity, Elon Musk, Tesla Motors, Chief executive officer, Shareholder
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So that means SCTY and TSLA will track even closer together from now on. Well, with a premium on SCTY of course.
sub
Active Member
Just to be clear, I did not say there would/could not be a lawsuit filed, my point is there would be no grounds for a lawsuit.
I agree with you that had the SP declined since the incident we would be having an entirely different conversation. However, I'm an optimist by nature and therefore assume until proven otherwise that those in position to make decisions at both the NHTSA and the SEC have more than 2 brain cells to rub together. Wish I could say that for the typical short poster in this thread.
Anyone with an IQ above double digits can clearly see there is zero blame to place on AP regarding the accident that started all the FUD.
The article includes some math that is not relevant, while avoiding math that is relevant...
The top five institutional holders of Tesla, including Fidelity, Baillie Gifford, T. Rowe Price, BMO Global Asset Management and Vanguard, made up more than 30% of the shares outstanding at the end of March. Fidelity, Vanguard and BMO are also among the top five holders of SolarCity shareholders, making them more likely to approve the deal, Mr. Burnett says.
These five largest shareholders also held more than 38% of all outstanding shares excluding shares owned by Musk (as he is not voting). Even more significant out of the 44.5M shares owned by these five, at least 22M shares are lent to short sellers, and need to be recalled before the vote. Since these 22M shares represent lion's share of short interest, recalling them will result in massive TSLA move up.
One would think that Mr. Burnett, head of research at Wall Street Access, a brokerage firm that provides research to investors who wager on mergers and acquisitions, should have mentioned these relevant facts, and WSJ should've reported on them...
It's better to have all the bad news out on one day.
Gerardf
Active Member
Should the share recall for voting trigger a short-squeeze, it will be an interesting situation.
In a 'normal' squeeze shareholders will be encouraged to sell while the SP moves up. However in this case there will be no sellers until the votes are placed.
Much will depend on how long the voting window is and how long institutional holders intent to hold the shares during this proces. Will they recall, vote immediatly and offer the shares again ? And will they all do this at the same time or spread over a longer time-window ?
Some big shareholders might want to act early in the voting window as some shorts might struggle to deliver on the shares, get margin calls or even get BK as things get messy.
Could the formal announcement of the vote happen during Q2 ER (August 3) ? That could make Thursday August 4 an interesting day.
In a 'normal' squeeze shareholders will be encouraged to sell while the SP moves up. However in this case there will be no sellers until the votes are placed.
Much will depend on how long the voting window is and how long institutional holders intent to hold the shares during this proces. Will they recall, vote immediatly and offer the shares again ? And will they all do this at the same time or spread over a longer time-window ?
Some big shareholders might want to act early in the voting window as some shorts might struggle to deliver on the shares, get margin calls or even get BK as things get messy.
Could the formal announcement of the vote happen during Q2 ER (August 3) ? That could make Thursday August 4 an interesting day.
It is almost certain that the post vote short interest will not approach levels it is at currently.
I expect significant quantity of short sellers to go bankrupt during the recall of shares and taken out of the game. On top of this, shorting will require much more margin/collateral and command higher fees per share shorted due to much higher SP.
That would be scary for Tesla investors if you check the price histroy of SCTY in the past years.
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