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In my (admittedly limited) experience, it happens within a few days of the final roadblock, and my current understanding is that the shareholder votes are the final roadblock(s).
Yes. I just searched the recent Chancery Court cases in Delaware: No evidence of a decision Opinions - Delaware Courts - State of Delaware
3Victoria
Active Member
Lawsuits can proceed post merger. They will not affect the merger.
MitchJi
Trying to learn kindness, patience & forgiveness
The only explanation IMO that fits all of the facts is that these institutions loaded up on shares, to avoid doing massive merger related recalls, then sold a lot of those shares to rebalance their portfolios, after the voting date.
I don't think so. Q2 had the secondary and that IMO is the source of the institutional buying. After learning the merger shortly after this (which was already near the end of Q2), they started selling, which we see now in Q3 reports.
Would also explain why the stock was so unexpectedly resilient for a while there even in the face of negative news and then started dropping even as some of the best q3 news and numbers ever came out.
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Or then understand that " Buy the Rumor, Sell the News" is powerful. Tesla News; even profitability, has resulted in flat stock price.Investors are looking for the Model 3 intro spike; likely to happen again around Oct next year. This is the short term thread,and 10% of institutional investors are interested in the short term.
larmor
Active Member
Just my opinion: if i were an institutional investor i would not be interested in a high volume low gross margin product-M3, in fact i would want that delayed as much as possible. I would really be interested in selling more batteries to an existing base of MS and MX customers: easy sale. I would be interested in on the go and OTA upgrades, 60 to 75 was a great idea. I would want all my MS and MX customers on speed dial to get them solar... Where are the P100Ds MS and MX and 100kw batteries for regular MS/MX?
Zhelko Dimic
Careful bull
I've just voted all mine and my wife's shares 'against' merger
Not that I have hope I can change anything...
Not that I have hope I can change anything...
racer26
Active Member
Why do people keep insisting that Model3 is going to be a low gross margin product?
Upper management at Tesla all have stock options that vest on a condition of achieving 30% automotive gross margin for a specified period of time. So they've got the motivation to ensure a high gross margin.
Elon has talked many times about how the Model 3 lines (both on the battery and car ends of the world) are going to be faster than state of the art lines today by as much as 10x. Less human intervention and faster line speeds equal higher gross margin.
The investing world continues to view Tesla by comparing it to its peers in the auto industry. Everything Tesla is about from day one has been about breaking the mold, and not doing things just because everyone else does them that way. This necessitates analyzing the company differently than their peers.
Stock options have been manipulated before. Look at MX related grants Elon received at the end of q3 last year even though it barely met the discription on paper. No good faith. Management can show zev and other credits as part of automotive margins like they have been doing. Hard to see M3 getting 25% where MS is not able to get 30% margin.
Me too, it is weird, I see the merger as Tesla getting a heckuva deal, and likewise for 2019 SCTY LEAPS. But I have to remind myself that most people/bloggers/even analysts don't realize that SCTY is basically Musk's baby too, and if he wants to marry two of his babies, not much can stand in the way. They look at this as if it were two distinctively separate companies, which usually raises the odds of failure. And then the conflicts of interest add to the FUD, even though in reality they kind of make the merger more probable. And then there's sort of a cloud over Midas Musk because his cousins are portrayed as morons that he has to bailout, and remember Tesla is down quite a bit off it's ATH, and SCTY has gone down over 60% YTD, and some question whether he even has enough control over his companies to complete the bailout. And then on top of all that, there's the SCTY is a dead company/bailout theme sort of thing.
Who is president isn't a big deal, most funds will probably do whatever is recommended by the board, and they only need yes votes from the top 5-10 shareholders for it to pass. Trump may ignore climate change, back out of the Paris accords, and support fossil fuels, but that doesn't change the fact that Tesla is making some of the best cars that can be bought, employing over 10,000 U.S. citizens, manufacturing in the U.S.
One other thing that might be worth noting. The votes haven't occurred yet. So technically we don't know that SCTY will vote in favor of being "bailed out", and we don't know Tesla will vote to be the bailer. Not sure if trading is frozen or what during the voting process, but I noticed that the SCTY meeting is during trading hours on Thurs, so I wonder if SCTY might close the gap a bit toward TSLA if the yes vote is public before the end of trading.
Anyone else get the feeling that after merger is approved we'll see a series of huge deals become public? SCTY got its name doing residential solar but I get the feeling the Tesla Energy business on the utility side is potentially orders of magnitudes bigger and will all be purchased from tesla rather than PPA.
racer26
Active Member
ZEV and other credits *are* part of automotive margin.
Why do people treat that income like its not real income? I promise you - ZEV credits are sold for greenbacks just as real as the ones the cars themselves are sold for. The rules of the regulatory environment the cars are sold in generate the credits when you sell the cars, and the credits are themselves an asset you can sell. If you can, as Tesla has, sell those to improve your overall gross margin, why should that be seen as a bad thing? The ZEV program is doing exactly what it was designed to do - incentivize building ZEVs by rewarding those that do, at the expense of those who don't. You can argue that they might not be there forever - and you're right - but for the forseeable future, they ARE here, and they generate real income, so treating them like that income is somehow tainted is insane.
Elon's CEO Grant's 30%GM vest condition is "Gross margin of 30% or more for four consecutive quarters"
That's a pretty tough thing to manipulate your way into without actually having GM be very close to or exceeding 30% for 4 consecutive quarters.
The MX related conditions were:
Successful completion of the Model X Engineering Prototype (Alpha);
Successful completion of the Model X Vehicle Prototype (Beta);
Completion of the first Model X Production Vehicle;
Delivering 1 MX was sufficient to satisfy that. That's not barely meeting the description on paper, that's just what the condition was.
You can argue that what the condition was should have been different, but trying to paint it as manipulative that Elon claimed his granted shares based on delivering just a few MXs is, itself, manipulating the truth.
Why do you think it will be hard for M3 to achieve 25% GM when MS/MX are already generating 29.4% GM (and still climbing as production rate increases)? M3's will be produced a minimum of 5x faster than MS/MX already are (500k vs 100k/yr), and they're talking about being up to 10x more efficient than today's state of the art factory.
Also, anyone else notice the one company that never seems to complain about self driving regulation like in this link or the Detroit free press the other day is Tesla, the only company with a product out that is ready to begin regulatory approval (I say begin, in aware the product out is not self driving. They did have a video suggesting that it is possible already, almost as if they themselves are the ones who suggested, "ok, it's ready, but give us a year to work with you to prove it before we release it publically"
http://www.autonews.com/article/201...ect-to-california-rules-for-self-driving-cars
http://www.autonews.com/article/201...ect-to-california-rules-for-self-driving-cars
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