Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[dc_h]

I’ve often wondered about this because that’s how Elon generates income but maybe I’m missing the obvious. How do you pay off the loan if you never sell the shares?

Volume!

 

[Artful Dodger]

She’s like 19 years old. She has no life experience.

Yeah, CNBC Reporter Kayla Tausche is 34 yrs old.

Kayla Tausche

That little 'slip' about Elon being the first businesman ever to play two States against each other was intentional, and more likely originated on the Editor's Desk rather than with the reporter on camera.

Cheers!

 

[Krugerrand]

Yeah, CNBC Reporter Kayla Tausche is 34 yrs old.

Kayla Tausche

That little 'slip' about Elon being the first businesman ever to play two States against each other was intentional, and more likely originated on the Editor's Desk rather than with the reporter on camera.

Cheers!

Made yeah look!
So, considering how times have changed and all, about 19 years old.

Side note; editors still dictate what lies and untruths one spews on live TV? Interesting that people who have to face the public after the garbage comes out of their mouths still go for that kind of control.

 

[Artful Dodger]

I expect Elon Musk will grow Tesla’s market cap to whatever level necessary to build a city on Mars with his CEO compensation. Not joking

Such an endeavor will cost at least $1 trillion, and Elon owns about 1/6 of Tesla - so that seems about right. 10x from here.

Agree with the need, purpose, and intent for Elon's fortune, However, I think it's actually closer to 1/3rd of TSLA: Elon owned ~20% of TSLA common stock for many years. However, his 2018 CEO compensation plan grants him ~1% of the company's equity (# of shares to be awarded was set as of 2018). So with 12 tranches coming in rapid order, Elon will be granted about ~10% more of total TSLA Mkt Cap.

BTW, I track Mkt Cap each day, and TLSA's 30-day and 6-mth average closing Market Cap are set to unlock Elon's 6th tranche on Mon, Dec 7th (add. operational milestones req'd). The SP would have to Close around $520 on Mon for the tranche NOT to be unlocked, and then it's just delayed a day. IE: SP would need to go to $180 on Tue to further delay the inevitable. Of course, that will not happen as Elon's CEO Comp. package continues to emit 1% tranches about once every 2 months since June.

This, BTW, is GOOD NEWS for investors: Elon's success is why ur stankin' RICH...

Cheers!

P.S. Elon's stake in SpaceX is about ~55%, so its valued similarly as his stake in Tesla. But 2 or 3 Trillion USD is just SEED MONEY for building a city on Mars.

 

[AperiodicCoder]

New update for the Roundtable Roundup: you can now select multiple dates at once. I've also added data for the last week.

If you have any suggestions or feedback, please post them in the Roundtable Roundup thread!

 

[Zaxxon]

Weekend PSA: Tesla seems to be having a sale on upgrades from EAP to FSD. I bought EAP on one of our cars during the Sept window for $4k. This weekend, the upgrade cost to go to FSD is $5k, down from $6k.

Thought this might be of interest here with FSD streets access set to widen soonish.

 

[Spacep0d]

Not advice: Don't go in all at once, spread your accumulation of TSLA over a few purchases (six to ten) so that you get a lower average cost. Keep the loan.

Also good not advice. I thought about this too for dollar cost averaging. I think I will do something like this, also in case it goes down after the 21st. Thanks!

 

[Spacep0d]

Invest it all in rocketing Tesla stock. Finance the car at historically low rates....

This is an option too, and my credit keeps getting better over time so I could re-finance the car as well. Thanks!

 

[mongo]

Agree with the need, purpose, and intent for Elon's fortune, However, I think it's actually closer to 1/3rd of TSLA: Elon owned ~20% of TSLA common stock for many years. However, his 2018 CEO compensation plan grants him ~1% of the company's equity (# of shares to be awarded was set as of 2018). So with 12 tranches coming in rapid order, Elon will be granted about ~10% more of total TSLA Mkt Cap.

More data on this. With full granting of the 2018 plan, plus the tenth tranche of the 2012 plan (low likelyhood), he was projected to wind up at around 28%. However, that number was before the 2.7B cap raise in 2019 and 5B raise in 2020. So ~1/4 eventually, if things go well.

From the plan:

Potential Ownership of Securities As a Result of the CEO Performance Award As of December 31, 2017, Mr. Musk beneficially owned 37,853,041 shares of Tesla’s common stock, including 33,632,421 shares held of record by the Elon Musk Revocable Trust dated July 22, 2003 and 4,220,620 shares issuable to Mr. Musk upon exercise of options exercisable within 60 days after December 31, 2017. Based on 168,796,945 shares of Tesla’s common stock outstanding at December 31, 2017, and assuming that all shares of common stock subject to options held by Mr. Musk that were exercisable within 60 days of December 31, 2017 were outstanding as of such date, Mr. Musk beneficially owned 21.9% of the outstanding shares of Tesla common stock as of December 31, 2017. For illustration purposes only, if (i) all 20,264,042 shares of common stock subject to the CEO Performance Award were to become fully vested, outstanding and held by Mr. Musk; (ii) all shares of common stock subject to the other options held by Mr. Musk that are currently vested and exercisable were outstanding, (iii) the 527,491 shares of common stock subject to the tenth and final tranche of the 2012 Performance Award were to become fully vested, outstanding and held by Mr. Musk, (iv) estimated dilution as a result of potential exercises or conversions from the existing employee equity pool and the outstanding convertible notes and warrants were to be considered; and (v) there were no other dilutive events of any kind, Mr. Musk would beneficially own 28.3% of the outstanding shares of Tesla common stock.

However, except as indicated above, this calculation does not account for any future dilutive events over the next ten years, such as the issuance of additional equity as compensation to employees, as consideration for mergers and acquisitions, or for capital-raising activities, which would have the effect of diluting Mr. Musk’s ownership of Tesla common stock, nor does it account for any sales of Tesla stock that Mr. Musk will likely have to make in order to pay required taxes upon the exercise of expiring stock options. Therefore, it is impossible to provide the exact or true percentage of Mr. Musk’s future total ownership of Tesla common stock upon the vesting of one or more tranches of the CEO Performance Award. Given that some amount of dilution and/or stock sales to cover required tax payments will occur, we believe that Mr. Musk’s future potential ownership of Tesla common stock will be significantly less than 28.3% if 100% of the CEO Performance Award, as well as the tenth and final tranche of the 2012 Performance Award, were to vest.

 

[corduroy]

Weekend PSA: Tesla seems to be having a sale on upgrades from EAP to FSD. I bought EAP on one of our cars during the Sept window for $4k. This weekend, the upgrade cost to go to FSD is $5k, down from $6k.

Reading your post may end up costing me $5k this morning.

 

[BornToFly]

I’ve often wondered about this because that’s how Elon generates income but maybe I’m missing the obvious. How do you pay off the loan if you never sell the shares?

At least with my brokerage, you don't ever have to pay off the principal. You can pay interest indefinitely. So if your account is $10M, you can easily borrow and pay interest on $1M. By not selling shares, in five years hopefully that account is now worth $20+ Million, and maybe your borrowing for living expenses and purchases has increased to $1.5M. Your kids can sell stock and pay off your loan when your dead. I'm having a hard time doing this however. I hate debt, and I'm worried my account will lose value with a black swan event that forces me to sell shares, when they are worth little, in order to pay off the marginal loan (margin call). Personally, I'm trying to decide if I sell some of my shares to buy a new plane, or take a margin loan. If I was really bullish, I would take the loan. However, I'm worried that we drop a lot in the end of December, so that makes me want to lock in some of my 10X gains by selling some shares (of course, I should be asking myself what those shares will be worth in 1-5 years, not at the end of the month).

 

[Rarity]

This is what FactChecking suggests will happen on 18th to TSLA.

Basically a closing cross bid.

https://twitter.com/truth_tesla/status/1334978389866844163?s=21

Related to this, the NASDAQ net order imbalance indicator for closing is released every five seconds from 3:55 to 4:00. So those with access to the data (I don't) may wish to follow it for the last five minutes of trading on the 18th and a trial run on the 11th.

https://data.nasdaq.com/pdf/noii_support.pdf

 

[gabeincal]

Selling for retirement is unnecessary. Just get a line of credit with the shares as collateral: 1) you don’t sell your shares so you don’t pay taxes 2) your shares continue to appreciate while you take from the line of credit, very likely they will appreciate much more than the low interest (I pay 2.2% at E*Trade) you pay over the principal balance.

I just got 1.94% margin interest with etrade. Negotiate your rate down!

 

[Rarity]

I don't think it was a waste at all. A portion of it is going to fund my early retirement.

I don't think the shorts provided long-term buying or selling pressure. Well, maybe a few percent of the float. So they are not funding your early retirement, but rather are just quickening your aging process beforehand.

Contrast to S&P 500 inclusion, which will permanently increase buying pressure as well as lock away a large portion of the float.

 

[Rarity]

P.S. Elon's stake in SpaceX is about ~55%, so its valued similarly as his stake in Tesla. But 2 or 3 Trillion USD is just SEED MONEY for building a city on Mars.

Rather, as of April 14, his stake in SpaceX was 47.4%, with 78.3% of voting shares. In August, SpaceX raised $1.9 billion on a $46 billion post-money valuation. So I guess his stake is probably around 45% now.

Your point stands, but because the valuation of SpaceX will probably be increasing substantially, those differences do have an impact on his total bankroll.

 

[EV forever]

This is what FactChecking suggests will happen on 18th to TSLA.

Basically a closing cross bid.

https://twitter.com/truth_tesla/status/1334978389866844163?s=21

Related to this, the NASDAQ net order imbalance indicator for closing is released every five seconds from 3:55 to 4:00. So those with access to the data (I don't) may wish to follow it for the last five minutes of trading on the 18th and a trial run on the 11th.

https://data.nasdaq.com/pdf/noii_support.pdf

Would it be a good idea to get my account approved for after-hours trading just in case?

 

[bkp_duke]

Would it be a good idea to get my account approved for after-hours trading just in case?

Always a good idea. Just bear in mind and pre-market and post-market typically have much lower volume, so trades usually do not execute as quickly.

 

[Rarity]

Would it be a good idea to get my account approved for after-hours trading just in case?

For the vast majority of people here, it would probably just scratch their curiosity itch. I'm all-in for the duration so it doesn't really matter to me.

Of course, each person's situation is their own.

 

[MP3Mike]

At least with my brokerage, you don't ever have to pay off the principal. You can pay interest indefinitely. So

With E*TRADE you don't even have to pay the interest, they will just add it to the principal...

 

[Discoducky]

Telsa factory workers declared “Essential” a few weeks ago. I would assume this “lock-down” will not effect the factory.

- California gives Tesla 'essential workforce' exemption from new Covid-19 health orders

I've lived in Fremont, CA since 1988 [1]. The mayor bought her family home from the real estate broker wife and me, we're good friends, and yes, Lily drives a white Model 3 Dual Motor just like my wife's car.

It *was not* Fremont that shutdown the factory before. It was the former Alameda County health officer, Dr. Erica Pan of Oakland. Our Gov. Gavin Newsome made the astute political move of getting Pan the hell out of Alameda County by hiring her to be California's top infectious disease doctor on June 30, 2020.

Now, the State health department has decreed that "workers at Tesla's California vehicle factory are deemed essential" and are not impacted by the latest COVID-19 restrictions.

Of course the only thing Tesla's Fremont workers are "essential" for is to maintain our collective wealth!

Counties are allowed to impose stricter rules than the State as the Bay Area has already done by announcing an earlier "stay at home" mandate today. Hopefully, with Pan out of the way, that won't happen re: Tesla. The bottom line is I think as long as the Fremont factory does not become a "super spreader" workplace, it will remain open.

[1] The SFO airport I will be using to award travel business class the hell out of California on 12/31/2020 arriving in Taipei on 1/1/2021 has been declared "essential infrastructure" so it won't close, either. I never thought that marrying (and staying married to!) a Taiwanese-American 20-something I met in SF in 1983 would prove so useful, since normal tourist visas to Taiwan are not available during COVID-19. Only 620 hours to go...

Thx so much for pointing out that article! And all your feedback!