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

MikeC

Active Member
Supporting Member
Jul 9, 2012
3,537
13,632
Los Angeles
Hmm. Is it insider trading for the company to buy shares based on insider information? I’m sure the SEC would have an opinion on that. Ever since they declared that shorts are investors, I’ve lost any kind of faith in them.

I think the board has to approve any buybacks with shareholders or at least pre-announce a buyback plan. Not sure if it’s a legal requirement, but I know Apple did it almost every time.

Filing this under “It would be awesome but I’m skeptical…”

Elon doesn’t sell on the vast majority of days - is the fact that he also wasn’t selling these past four days material? I don’t know the answer.

@mongo gave me the impression in the buyback thread that they could just do it after already announcing it on the ER. Are they required to give notice to let people front run them? I don’t know the answer to this, either.
 
Elon doesn’t sell on the vast majority of days - is the fact that he also wasn’t selling these past four days material? I don’t know the answer.

@mongo gave me the impression in the buyback thread that they could just do it after already announcing it on the ER. Are they required to give notice to let people front run them? I don’t know the answer to this, either.
It's difficult to not sound like a dick about this but did you know it takes less time to google the answer than it did to make 1 of the 2 posts you made?

 
Elon doesn’t sell on the vast majority of days - is the fact that he also wasn’t selling these past four days material? I don’t know the answer.

@mongo gave me the impression in the buyback thread that they could just do it after already announcing it on the ER. Are they required to give notice to let people front run them? I don’t know the answer to this, either.

SEC Proposes New Share Repurchase Disclosure Rules | www.sec.gov › news › press-release

Dec 15, 2021 · The proposal would establish new Form SR for reporting issuer share repurchases and enhance existing periodic disclosure.​

The proposed rules would require an issuer to provide a new Form SR before the end of the first business day following the day the issuer executes a share repurchase. Form SR would require disclosure identifying the class of securities purchased, the total amount purchased, the average price paid, as well as the aggregate total amount purchased on the open market in reliance on the safe harbor in Exchange Act Rule 10b-18 or pursuant to a plan that is intended to satisfy the affirmative defense conditions of Exchange Act Rule 10b5-1(c).

The proposed amendments also would enhance existing periodic disclosure requirements regarding repurchases of an issuer’s equity securities. Specifically, the proposed amendments would require an issuer to disclose: the objective or rationale for the share repurchases and the process or criteria used to determine the repurchase amounts; any policies and procedures relating to purchases and sales of the issuer’s securities by its officers and directors during a repurchase program, including any restriction on such transactions; and whether the issuer is making its repurchases pursuant to a plan that it intends to satisfy the affirmative defense conditions of Exchange Act Rule 10b5-1(c) and/or the conditions of the Exchange Act Rule 10b-18 non-exclusive safe harbor.

So basically as it stands right now, Public Companies only are required to report share buybacks with their regular 10-Q/10-K filings. This new rule would require companies to report buybacks on a similar schedule to insider trades (3-day reporting).

So big difference. I'm not sure on the status of the proposed new rule.
 
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MikeC

Active Member
Supporting Member
Jul 9, 2012
3,537
13,632
Los Angeles

mongo

Well-Known Member
May 3, 2017
16,632
62,523
Michigan
Hmm. Is it insider trading for the company to buy shares based on insider information? I’m sure the SEC would have an opinion on that. Ever since they declared that shorts are investors, I’ve lost any kind of faith in them.

I think the board has to approve any buybacks with shareholders or at least pre-announce a buyback plan. Not sure if it’s a legal requirement, but I know Apple did it almost every time.

Filing this under “It would be awesome but I’m skeptical…”
Yes, MNPI applies to the the company as well.
Avoiding Blowback from Your Stock Buyback | Publications | Kirkland & Ellis LLP
Board did announce a potential buy back on Q3 call. Not that they are legally required to.
No shareholder input required either.

Elon doesn’t sell on the vast majority of days - is the fact that he also wasn’t selling these past four days material? I don’t know the answer.

@mongo gave me the impression in the buyback thread that they could just do it after already announcing it on the ER. Are they required to give notice to let people front run them? I don’t know the answer to this, either.

Ideally, board would have made a 10b5-1 plan, and Elon would not be privy to the details (thus his 'the board' comment since he's on the board) .
 

Ogre

On The Clown Car
Sep 6, 2021
3,919
28,786
Oregon
As with others expressing opinions about Apple on this thread, you haven't a clue. Maybe you have a clue about Tesla.

EDIT: And, as some guy posted: "I mean… you could at least make a tiny effort to back your assertion up with something."
You mean this isn’t the thread where we just post random 💩 with no basis?

I’m pretty sure what I do now is just re-assert the same random conjecture over and over as if it’s reality. Seems to be the trendy thing around here.

/s


You are of course right. Nobody has a clue what Apple would look like if Musk had taken it over.

As a long time Apple investor I am quite happy with Cook at the helm. And it remains my second largest holding. Unlike many here, I’ve made far more money off of Apple than Tesla. My comment was not intended to disparage Cook, rather point out how ludicrous the person I was replying to was being.
 
That’s a proposal. How long to find the actual rule in effect?
Fair enough. It took longer. Maybe 4 minutes. I believe number 3 is what needs to happen.

Under current rule Section 12 of the Exchange Act, which governs share repurchases, issuers are required to (1) disclose the total number of shares purchased by the issuer or an affiliated purchaser during the relevant period, reported on a monthly basis and by class; (2) the average price paid per share; (3) the total number of shares purchased as a part of a publicly announced share repurchase plan or program; and (4) the maximum number of shares that may yet be purchased under the plan. The rules also mandate footnote disclosure of the key terms of all publicly announced share repurchase plans, the number of shares purchased, other than publicly announced plans, and the nature of the transaction.
 

Ogre

On The Clown Car
Sep 6, 2021
3,919
28,786
Oregon
Elon doesn’t sell on the vast majority of days - is the fact that he also wasn’t selling these past four days material? I don’t know the answer.

@mongo gave me the impression in the buyback thread that they could just do it after already announcing it on the ER. Are they required to give notice to let people front run them? I don’t know the answer to this, either.
I was just thinking about the only really big buyback I’ve been part of which is the Apple buybacks. The board authorized the buybacks in advance.

Front running isn’t a big deal when you are doing it continually as opposed to just one big lot purchase. Apple bought millions of shares back (still are I think) over a decade. They had something like $200b liquid and their market cap was around $1T at the time. If Tesla is buying back shares, I would expect they would do something more like what Apple did and buy the shares back slowly over the quarter so they don’t stir the pot too much.
 
If Tesla is buying back shares, I would expect they would do something more like what Apple did and buy the shares back slowly over the quarter so they don’t stir the pot too much.

$5B buyback @ $190/share gets about ~26M shares. 450M shares have traded since the last day covered by Elon's Forms 4. That'd be ~5% of the interday volume, and presumably you'd buy on the big dumps.

Lol, shortzes as 'liquidity providers'... The Universe maximized Irony. :p
 

Ogre

On The Clown Car
Sep 6, 2021
3,919
28,786
Oregon
$5B buyback @ $190/share gets about ~26M shares. 450M shares have traded since the last day covered by Elon's Forms 4. That'd be ~5% of the interday volume, and presumably you'd buy on the big dumps.

Lol, shortzes as 'liquidity providers'... The Universe maximized Irony. :p
When we’re talking about Musk, you probably shouldn’t use a phrase like “buy on the big dumps”. Just for the sake of clarity.

 

wipster

Meanwhile I was still thinkin'...
Supporting Member
Nov 10, 2013
4,791
26,465
Kennewick, WA
While we're on FSD disengagement and so on, some napkin math:
  • Tesla has more than 3 million cars on road.
  • American vehicle, in average, drives more than 12,000 miles per year, let's say 33.3 miles per day.
  • In 2020, death per 100 million vehicle mile traveled is 1.34 (Fatality Facts 2020, The Insurance Institute for Highway Safety).
  • European death per unit vehicle mile traveled is lower, but China is higher
  • Tesla fleet is newer, likely less than two years in average, therefore it travels more per vehicle than average
With that, 3 million Teslas x 33.3 miles/day x 1 death/100 million miles traveled = 1 expected death/day from the Tesla fleet, if Tesla fleet had the same death

And that's on the very minimum end of expected death.

Let that ONE EXPECTED DEATH PER DAY from the Tesla fleet sink in.
,
However, the Tesla fleet using FSD will be substantially safer than the cars currently on the road, not only from the use of FSD, but from just being Teslas, which are the safest cars in the road bar none. So your back of the napkin calculations are seriously flawed my friend.
 

Ogre

On The Clown Car
Sep 6, 2021
3,919
28,786
Oregon

Look out GM is leading, loss leading that is. Imagine planning 1 million EV's a year and still losing money on each one.

A bit from the article
…As first reported by Bloomberg, the company's CEO Mary Barra will tell investors Thursday its EVs won't be profitable until 2025.

By that date, the company aims to sell 1 million EVs a year. Until then, it's set to sell around 44,000 in 2022—reportedly at a loss. Its ICE business is expected to keep funding the losses and other technological developments in the meantime. Even once the electric vehicles break even, Barra reportedly notes that EVs won't be as profitable as gas-powered cars.

I just can’t fathom how people don’t point out the exceedingly obvious flaw in this thinking every time it’s brought up.

GM’s sales peaked in 2015 a little under 3.1 million vehicles. Every year their sales have dropped for a total decline of about 33% from peak (roughly 2 million sold in the previous 12 months). If this decline continues, their total vehicle sales will be under 1.5 million cars total. If their EV sales are 1 million units are only just barely breaking even, that leaves half a million ICE vehicles to pick up the slack.

The assumption seems to be that GM‘s sales will increase, but in the face of 7 consecutive years of declining sales that seems unlikely.

Barra is the emperor with no clothes. Nobody in the media is willing to call her on her increasingly bad projections.

1668497477334.png


(2022 numbers are my projection just based on trailing 12 months sales)
 
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Dangerous Fish

Pilots the Millennium Milkfloat
Supporting Member
Jul 21, 2016
2,277
5,579
UK
I can't answer that question for you, that's between you and your brokerage.

But I will say it is exceptionally hard to prove there is any long term negative impact of Musk's actions on the stock price.
It was more of a rhetorical question than a query, because I know I have. It's just that I have to keep reminding myself because the timing of the current price movements (down) is really not great for me in my current situation.
 

jw934

Member
Supporting Member
Jul 23, 2018
595
12,889
Toronto
Good to know that Elon’s supporters are not wavering.

Tim Draper, an early investor in both Spaces and Tesla is big fan of "awesome" Elon Musk, even with the drama swirling around Musk's takeover of Twitter and investor concerns that it is distracting him from Tesla and SpaceX.

"This is a guy who can get a lot done," Draper said. "So I think you've got a busy person who is getting a lot done and I'm sure he's figured out what he's capable of doing in each place. Good for him."

 

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