Short-Term TSLA Price Movements - 2016

[tanner]

I hope Elon's post brings some good news and macro is up on Monday... Ready to turn this slump around already, damn.

 

[neroden]

Well this IS exciting. We've been talking about "share recall" for SCTY voting and now the Record Date has been announced (Sep 19th).

So, as others have noted, shares sold short need to start being recalled almost immediately. There's only a few days to act before this coming Tuesday.
Tuesday is apparently the last day you have to guarantee recall shares before the 19th (settlement is three days)

Don't wait until Tuesday. Your broker may impose addtional days (as in, if you request recall today they may not do it until Monday). And in the case of "weird *sugar* happening" (to use a technical term) the market maker can have more days to settle. Recall TODAY if you care about voting.

 

[neroden]

I will note one point about the "week of September 19th" record date: options expiration is on the 16th. So I, for instance, am going to have a position which will be acquired after-hours on the 16th and settled by the 21st. If I were at Tesla or SolarCity I would probably think hard about whether to set the record date after or before those options-acquired positions settle.

 

[SBenson]

Here's the only scenario I can think of where the deal doesn't go through: a manipulator borrows large numbers of shares for voting purposes. We wouldn't know about this until the SEC filing.

There's an inherent bias towards any deal supported by management, because those who oppose the deal tend to sell their shares and those who support the deal tend to buy shares. On top of that, one of the largest institutional fund managers holding TSLA and SCTY is totally in favor of the deal, and all the other big holders seem to be at least cautiously in favor. It seems to me like only a concerted and deliberate scheme to sink the deal would be capable of doing so.

As we are talking scenarios, how about this one: SEC drags its feet delaying the merger. Meanwhile SCTY runs out of cash and is forced to declare an immediate bankruptcy.

Yeah I know TSLA could extend a "bridge loan". SCTY's appetite for capital is insurmountable, especially as financial markets close down to say even to the non-recourse debt, TSLA wont be able to keep it afloat for long if markets shut off on it.

Look at the rate of funding announcements, especially the non-tax-equity ones. Press Releases - SolarCity

Just a scenario. Not professing anything.

Many here (not directing at you neroden) in this thread naively assume the arb is "risk free". Its is not.

 

[Yggdrasill]

Forbes...

Forbes on Twitter

Q3 is shaping up to be pretty good for Norway at least.

July: 67
August: 305
September: 160 thus far (21 cars registered today!)

Q3 2015 was like this:

July: 222
August: 220
September: 127

And Q2 2016 was like this:

April: 96
May: 156
June: 291

Tesla needs another 11 cars to exceed Q2 2016, and another 37 cars to exceed Q3 2015. Assuming another 300 cars this month, this will be the best quarter since Q2 2015.

 

[ggr]

sugar, I feel so dumb.

What gives with this "sugar" *sugar* all of a sudden?

Edit: Ah, I tried to post with the four letter version of sugar, and it was auto-corrected. Now I understand.

 

[neroden]

As we are talking scenarios, how about this one: SEC drags its feet delaying the merger. Meanwhile SCTY runs out of cash and is forced to declare an immediate bankruptcy.

Possible, but very unlikely. Companies often stagger along with effectively no cash for really long periods before declaring bankruptcy. Well before that happened, we'd hear that their suppliers, landlords, and/or employees were not getting paid on time (suppliers tend to complain about that, landlords complain, and employees really complain).

The SEC is unpredictable, but they're essentially ruling on whether the proxy statement is honest and contains everything it's supposed to, and it is a pretty darn straightfoward proxy statement (even to the point of airing 'dirty laundry' and presenting SCTY's finances in a pretty dire light). I don't think they'd have a good excuse for a long delay.

Yeah I know TSLA could extend a "bridge loan".

Heck, Musk could personally extend a bridge loan.

SCTY's appetite for capital is insurmountable, especially as financial markets close down to say even to the non-recourse debt, TSLA wont be able to keep it afloat for long if markets shut off on it.

Really, SCTY only needs to refinance expiring loans. They can lay off workers and shut down growth if they have to (only doing cash sales).

 

[esk8mw]

Looks like a lot of people set stops at the 195 level. Hope it bounces off 193 like it should.

 

[W84M3]

$195 broken, now we'll drop hard.

However, the model S spreadsheet latest entries shows the discussed 23-24k deliveries should be very attainable.

 

[dakh]

And it's more or less legal for proprietary trading desks to do stuff like this. Though it's kind of scummy. Suppose one of the Big Banks decided to offer a huge block of SCTY shares for lending; waited as the shorts piled in; and is buying up shares at the bottom, in the full knowledge that they can recall their shares and trigger a runup, while having plausible deniability if anyone accused them of market manipulation ("oh, it was just the Q3 results making the stock go up, and I needed to withdraw the shares for voting, honest").

This theory feels unlikely to me, but I see what Dimic says, it *smells* like it.

How could this possibly work without the lending institution completely destroying the trust of the customers who borrowed those shares and then got burned by the lender?

 

[FredTMC]

Lets see buying pressure at the close via short covering.

I'm ready to believe in "recalled shares" for SCTY vote. Let's do this...

 

[dakh]

Lets see buying pressure at the close via short covering.

I'm ready to believe in "recalled shares" for SCTY vote. Let's do this...

I'm applying my grain of sand worth of buying pressure at the moment.. SCTY J18 LEAPs have some seriously crazy spreads, is that because folks just don't want to trade those in anticipation of very light trading if the merger goes through? Effective transaction costs on those would be nuts! I'd get some of those if not for that.

 

[esk8mw]

$195 broken, now we'll drop hard.

However, the model S spreadsheet latest entries shows the discussed 23-24k deliveries should be very attainable.

Yep. My projections show about 15,000 S VINs and around 10,000 X VINs should be handed out in Q3, if current rates hold. This is very healthy demand. Of course, Q3 deliveries will be a function of these 25k VINs and how the 5150 pipeline coming in to Q3 changes as they attempt to maximize deliveries. Add in the inventory clearout and a number over 25k deliveries suddenly seems possible (though not guaranteed, want to emphasize this) for Q3. Fingers crossed for some eye-popping Q3 numbers to trigger a massive SP increase in early October...

 

[CatB]

FWIW, I also cleaned out the sofa cushions and bought a few more SCTY shares (in the hopes that they turn into TSLA shares). It seems so likely that the merger will go through (else it wouldn't have been proposed), so I am figuring I'm more likely to kick myself in the butt if I don't do this, than if I do.
Thanks to all of you for offering up your analysis and opinions - all worth considering and appreciated.

 

[FredTMC]

Forbes...

Forbes on Twitter

Looks like they got some bad data and ran with it...

 

[MonroeSS]

I think it is funny that TSLA shorts and longs finally agree on the same thing. Both groups think that the merger is a great idea.

Shorts - SolarCity is a disaster in the making. Billions in debt and broken financial model. Will die soon and drag Tesla down with it.
Longs - SolarCity is amazing and cheap. #1 installer, millions of installations, millions $ in revenue. The synergies will make billions for Tesla.

 

[Intl Professor]

What gives with this "sugar" *sugar* all of a sudden?

Sugar is very bad for your gas tank.

Edit: My bad, just another prole. Sugar in the Gas Tank

 

[Turing]

I think it is funny that TSLA shorts and longs finally agree on the same thing. Both groups think that the merger is a great idea.

Shorts - SolarCity is a disaster in the making. Billions in debt and broken financial model. Will die soon and drag Tesla down with it.
Longs - SolarCity is amazing and cheap. #1 installer, millions of installations, millions $ in revenue. The synergies will make billions for Tesla.

You left off the best argument for solarcity, they got the rights to a great deal on one of the best high end solar manufacturing facility's in the world.

 

[dmckinstry]

Sugar is very bad for your gas tank.

And "Sugar" happens.

 

[racer26]

What gives with this "sugar" *sugar* all of a sudden?

Edit: Ah, I tried to post with the four letter version of sugar, and it was auto-corrected. Now I understand.

Yeah. The morality police are out in force here on TMC. I got a PM a couple weeks ago about using the adjective form of that word which did not autocorrect, and was not altered even though the PM told me they would and that continued use of such language may result in bans.

Personally, I dislike censorship in all its many forms, but whatever, rules are rules, and the majority of what people have to say here does not require profanity to get one's point across.