Short-Term TSLA Price Movements - 2016

[esk8mw]

I wonder if @esk8mw can send this through his "change detection" software to find out what is new with the Tesla / Panasonic Gigafactory agreement...

Tesla Motors - Current Report

A quick look* suggests nothing that material. The biggest thing is in Exhibit 10.2, Section 13.1: it now shows the initial term of the agreement as being 10 years after start of production, with discussions to extend the term once per year after year 5. 13.4(c) also shows the termination fees if occurring due to change in control - 1.5 billion, 1 billion or .5 billion, depending on timing.

For the amendment (Ex. 10.1), they just filled in a couple of the [***]. See item 6 of Ex. 10.1; that language used to be [***], now it says that the contract expires when the lease expires, subject to Section 11.3.

What happened here is that Tesla filed the terms for the GGF and heavily redacted it to avoid disclosing proprietary information to competitors. When you do that, you have to file a confidential treatment request with the SEC and it's super annoying. Companies tend to over-redact because they are freaked out about leaking information. The SEC reviews and pushes back on some redactions, as here, and makes you refile without those redactions.

* I may start having to bill you guys! I think the shorts should create a fund and I'll send the invoice there.

 

[Irishjugg]

Free version is limited :/

Uh what?

 

[JBRR]

Uh what?

assumed he was referring to this:
DiffNow

 

[pGo]

I was pretty sure it was only going to be AP 2.0, but working the HUD / Tesla Glass in on the same update might make sense. That gives them three quarters shipping the new hardware/software suite before the M3 hits.

Sorry if I missed this, what is Tesla HUD product. I am not able to relate a consumer focused HUD product from Tesla. Magicleap, different story.

 

[techmaven]

@esk8mw and @racer26 - I found these interesting articles on M&A shareholder lawsuits:

The Death of Merger Litigation? | Commercial & Business Litigation | ABA Section of Litigation
Developments in M&A Shareholder Litigation
Are Merger Suits in Delaware Poised for Drop?

It seems a lot of these are "disclosure only" lawsuits, which means they sue for additional disclosures and attorney's fees. Which basically means its a cash grab by attorneys.

I think though, at least two City of Riviera Beach Police Pension Fund and Arkansas Teacher Retirement System probably actually don't want the merger to go through.

However, the question remains... how often is an injunction granted? I see that the historical stats show that most are not dismissed by the court, but I assume the two institutional shareholders really want the injunction while the rest are just looking for attorney's fees.

It doesn't even look like the Arkansas Teacher Retirement System has direct investments in Tesla. Their 2014 investment plan has all index funds, which would then own Tesla.

 

[TNEVol]

As Esk has properly noted it is extremely unlikely that an injunction would be issued. Normally in most states and the Federal system the Plaintiff would have the burden of proving 4 or 5 particular requirements. We have discussed here many times that it is not "irreparable injury" to the Plaintiff if the injury can be compensated by money damages. In addition, the Plaintiff would need to show "liklihood of success on the merits'. this would be very difficult. The Defendant might choose to oppose the injunction only and file to dismiss or for summary judgment later. Or it could try for dismissal (in some states) at the injunction stage. In my experience cases are seldom dismissed at this very preliminary stage andI would suspect that this injunction request has little or no chance. However TSLA may have to deal with the case for some time after the injunction hearing.

 

[techmaven]

Given that the injunction is unlikely to be granted, does anything think that the SCTY <-> TSLA arbitrage will close somewhat after that?

The difference right now is 19.38 (close) / 19.54 (after hours) versus 200.10 (close) / 200.25 (after hours). Or roughly 11-12%. Of course, it could close by TSLA going down or SCTY going up, or both. Of course, I'd rather both go up.

 

[Value Ev]

As Esk has properly noted it is extremely unlikely that an injunction would be issued. Normally in most states and the Federal system the Plaintiff would have the burden of proving 4 or 5 particular requirements. We have discussed here many times that it is not "irreparable injury" to the Plaintiff if the injury can be compensated by money damages. .

I have some people on ignore, so I must have missed the earlier comment.

That assertion has not been the trend in the last several years.

In the last year alone when they came up for threat of litigation/injunctive relief, the following deals fell apart
Halliburton/Baker Hughes
Staples/Office Depot
Sysco/US Foods
There are more, especially in the healthcare sector.

Besides, the Khosla lawsuit (forgot the actual name of it) seems far more interesting in this case. Although in that case, it won't stop the deal unless the cost is out of hand and Tesla believes they will lose. Khosla is not one to mess with.

 

[esk8mw]

I have some people on ignore, so I must have missed the earlier comment.

That assertion has not been the trend in the last several years.

In the last year alone when they came up for threat of litigation/injunctive relief, the following deals fell apart
Halliburton/Baker Hughes
Staples/Office Depot
Sysco/US Foods
There are more, especially in the healthcare sector.

Besides, the Khosla lawsuit (forgot the actual name of it) seems far more interesting in this case. Although in that case, it won't stop the deal unless the cost is out of hand and Tesla believes they will lose. Khosla is not one to mess with.

Each and every one of these failed due to FTC/anticompetitive concerns. FTC has already signed off on this deal.

Never trust a short to give you good information about anything legal related. Best part is that he apparently won't see this comment because he has me on ignore, lol!

 

[TNEVol]

I have some people on ignore, so I must have missed the earlier comment.

That assertion has not been the trend in the last several years.

In the last year alone when they came up for threat of litigation/injunctive relief, the following deals fell apart
Halliburton/Baker Hughes
Staples/Office Depot
Sysco/US Foods
There are more, especially in the healthcare sector.

Besides, the Khosla lawsuit (forgot the actual name of it) seems far more interesting in this case. Although in that case, it won't stop the deal unless the cost is out of hand and Tesla believes they will lose. Khosla is not one to mess with.

Lawsuits certainly could raise issues and risks that could cause parties to change their positions. Public interest is also important. My point is the Plaintiffs would have to have such an overwhelming case to normally get a preliminary injunction. While I have dealt with injunction requests many times I have not dealt with it as Esk has in this arena of M&A. If he says he sees little liklihood of success and the plaintiffs have not raised some original issues, I think the merger will not be stopped by the Court.

 

[TrendTrader007]

I just had several thousand shares returned to me by Fidelity that were lent out to shorts
Seems like shorts are losing their appetite for TSLA
Also the Interest rate dropped to 5.5%
On sept 27th interest rate was 14%
Sounds like a big move to the upside is coming for TSLA and smarter shorts are liquidating their positions in anticipation
The fact that broader market was down big and TSLA held its own combined with Elon tweets leaves me with the inescapable conclusion that TSLA is about to make a big move to the upside
I couldn't care less for the loss of interest from shorts, if TSLA goes up big time I stand to make a killing
A $1 move in SP will pay me more than a whole month of interest payment from shorts
Still, it was good while it lasted
I'll be watching TSLA like a hawk, every single minute starting tomorrow
I'd be shocked if this thing doesn't melt up pretty soon

 

[bdy0627]

It seems the consensus is that the product unveiling will be AP2. TeslaVision makes the most sense to me. I think they would do a soft reveal for this without too much of a show. Any vehicle unveiling would almost certainly involve invitations and much more of a production. Assuming it is TeslaVision, what do people here expect in terms of a market reaction? I'm guessing fairly modest myself.

 

[bdy0627]

Just to add on to the thoughts on TeslaVision, if that is it, "buy the rumor and sell the news" would seem to apply. Except one must consider the ER a week later. Agree? or Disagree?

 

[Cosmacelf]

Just to add on to the thoughts on TeslaVision, if that is it, "buy the rumor and sell the news" would seem to apply. Except one must consider the ER a week later. Agree? or Disagree?

TSLA appears to be in the penalty box. It got stuck in there when the SCTY acquisition was announced. Institutional shareholders, analysts, and a broad part of the market don't like surprises, and SCTY was struggling selling itself to the markets anyways, so not only was it a surprise, but a negative one.

When stocks are stuck in the penalty box, good news (like the great sales numbers, or no need for capital raise) don't move the stock much. It usually takes stocks several, and I mean several, good quarters to get out of the penalty box.

I suspect the stock isn't going anywhere quickly, and may drift down, until the SCTY acquisition is done, one or two good consolidated quarters, and M3 starts shipping.

 

[Cattledog]

A little OT...

Do you think there's any chance TeslaVision is like this:

If Elon and company come out on October 17th in white suits and goggles, I'll sell everything I own and buy every last share.

 

[TrendTrader007]

TSLA daily chart looking similar to NFLX chart in January 2015
NFLX tripled from $46 to $129 in next 8 months
i suspect TSLA about to explode to major upside similarly

 

[Novice]

TSLA appears to be in the penalty box. It got stuck in there when the SCTY acquisition was announced. Institutional shareholders, analysts, and a broad part of the market don't like surprises, and SCTY was struggling selling itself to the markets anyways, so not only was it a surprise, but a negative one.

When stocks are stuck in the penalty box, good news (like the great sales numbers, or no need for capital raise) don't move the stock much. It usually takes stocks several, and I mean several, good quarters to get out of the penalty box.

I suspect the stock isn't going anywhere quickly, and may drift down, until the SCTY acquisition is done, one or two good consolidated quarters, and M3 starts shipping.

If the point can be proven that there is synergism and potentiation of profits with regards to TE products that can be facilitated through the merger then the tide of battle will turn, and the SP greatly appreciating when out of the penalty box. It's like turning a negative point to a positive point.

 

[CALGARYARSENAL]

Just to add on to the thoughts on TeslaVision, if that is it, "buy the rumor and sell the news" would seem to apply. Except one must consider the ER a week later. Agree? or Disagree?

I ain't selling a thing. Hate that saying! One day the 30% pop will come and the rumour seller will wonder why he/she made such a mistake.

 

[TNEVol]

I don't believe the general investment community would care much about AP2 and TeslaVision much less consider it a "product". I suspect such an announcement would be received as meh. Since the reveal for the 28th is about home roof/solar and Powerwall, could the 17th be about model changes/pricing production and orders for powerpack? This would nicely foreshadow the ER if it has significant TE 4thQ guidance. IMO that could move the SP. Mere optimism on my part probably.

 

[Turing]

TSLA appears to be in the penalty box. It got stuck in there when the SCTY acquisition was announced. Institutional shareholders, analysts, and a broad part of the market don't like surprises, and SCTY was struggling selling itself to the markets anyways, so not only was it a surprise, but a negative one.

When stocks are stuck in the penalty box, good news (like the great sales numbers, or no need for capital raise) don't move the stock much. It usually takes stocks several, and I mean several, good quarters to get out of the penalty box.

I suspect the stock isn't going anywhere quickly, and may drift down, until the SCTY acquisition is done, one or two good consolidated quarters, and M3 starts shipping.

Can you give a past example from which you are basing this view on? Tesla doesn't usually trade sideways for long, unless you count a $50+/- range as sideways.