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

[Artful Dodger]

This "I Can Grok The Return" is probably hugely important to motivating retail investors to jump in.

...is probably even more important to motivating retail Brokers to actually buy the shares they now owe to their customers "beneficial owners".

 

[Stargate]

Great post. I don’t own any AAPL shares anymore but has any AAPL investor reported delays with their additional shares showing up in their account?

Maybe not because it was a traditional split vs the dividend based split that TSLA just went through.

I have both AAPL and TSLA shares in my fidelity account and both were handled exactly the same way. Both show as a distribution. Fidelity's system handles distributions/dividends/splits equally in my experience over the past few years. When their mutual funds split in August 2018, there was an outrage because thousands were calling in thinking they lost 90% of their money. The system adjusts the price first, then the quantity later. And then a full business day after that the system updates 100% back to normal with cost basis, daily % gains etc. I've spoken to them about this and their IT is unable to make this happen simultaneously. Google "fidelity mutual fund split august 2018" to see more info.

 

[OrthoSurg]

Will the stock price of TSLA end up like Berkshire Hathaway($300K) in ten years?

No, probably 1T or 2T evaluation like AAPL
Tesla Price Target: Tesla's Potential Trajectory During the Next Five Years

 

[Dancing Lemur]

Giga Texas foundation starting to take shape.
Getting the last layers of dirt and gravel.

So many ICE construction vehicles to build an EV factory...

 

[CorneliusXX]

You could hire someone to do that for you......

All this time reading up on Tesla and you haven't thought of automating?

 

[StealthP3D]

Has a company this large (market cap) post-profitability ever been ignored before? Like is it common for SP to not include a company due to volatility / something else?

No, not that I know of. If they don't include them in a reasonable timeframe, the only believable explanation would be corruption. In other words, a desire to hamper Tesla's growth (most likely in a misguided attempt to protect the value of some really large oil or auto holdings). I really doubt this will happen because it would harm S&P more than it would harm Tesla. Real damage to Tesla would be hard to quantify but very minimal. Damage to the share price would be real but temporary. And you can bet the vote would be far from unanimous. It wouldn't be a good look.

 

[BornToFly]

I love that book! I gave a copy to each of my three kids after high school. One doesn’t remember receiving the book, but two read it and learned. Guess which two own TSLA stock today?

Maybe I need to read it. For years I regretted buying our current house because it was too expensive and the mortgage used up too much of my income, and life would have been so much easier if we had stayed in our old house. But thanks to TLSA, I was able to pay off my new house in February. Now if I stay with my current lifestyle, I have plenty of money if I sell all my TSLA now and I would never have to worry about money again. But with my gains and what I believe will be future gains, I have now started eyeing a couple VERY expensive toys that I never thought I would be able to buy before. If I buy them, I will use up enough of my money that I will worry about monthly spending again (kind of like "house rich, money poor"). I guess I'm a slow learner, or I secretly like to suffer and worry about money....

 

[StealthP3D]

Yet while today was a big up day for me in $ terms, as a percentage bump to my portfolio it didn't even make the top dozen. My "lightening up on TSLA" approach is working!

It sounds like it's working too well!

 

[StealthP3D]

So many ICE construction vehicles to build an EV factory...

All the quicker to get them in the recycling yard!

 

[wipster]

I think you’re spot on. And I think Musk and the other folks involved in structuring this stock split knew exactly what they were doing. They’re that clever. And I wonder who the first first financial “expert” will be who is smart enough and courageous enough to speak of this criminal market abuse publicly. It certainly appears that the SEC is either incompetent or complicit, or both. They won’t take action until there’s enough awareness and outrage over it to force them to.

I really don't want to enter into this conversation, but I was under the impression that the reason Tesla used a stock dividend rather than a regular stock split is because they're incorporated in Delaware and that's what Delaware rules require. I have no doubt that Elon and crew knew what they were doing and planned things out well, but I don't think they had a choice when it came to using stock dividends to facilitate the split. This was discussed at length in this forum when the notice was issued by Tesla.

 

[Singuy]

Maybe I need to read it. For years I regretted buying our current house because it was too expensive and the mortgage used up too much of my income, and life would have been so much easier if we had stayed in our old house. But thanks to TLSA, I was able to pay off my new house in February. Now if I stay with my current lifestyle, I have plenty of money if I sell all my TSLA now and I would never have to worry about money again. But with my gains and what I believe will be future gains, I have now started eyeing a couple VERY expensive toys that I never thought I would be able to buy before. If I buy them, I will use up enough of my money that I will worry about monthly spending again (kind of like "house rich, money poor"). I guess I'm a slow learner, or I secretly like to suffer and worry about money....

Now I am curious what the toys are.

 

[FrankSG]

Shanghai Model Y Production Has Begun!

 

[jpsgoneev]

No, probably 1T or 2T evaluation like AAPL
Tesla Price Target: Tesla's Potential Trajectory During the Next Five Years

Comparing apples and oranges ... @Cat Checking talking BRKA SP, whereas you’re talking TSLA market cap.

 

[Artful Dodger]

Current top 10 USA market caps:

AAPL 2.21T
AMZN 1.73T
MSFT 1.71T
GOOG 1.11T
FB 835.3B
BRK 521.9B
TSLA 464.3B
V 451.1B
JNJ 403.9B
WMT 393.2B

Movin' on up!

Watch out, Warren! It's gonna be a 'Candy Buffet':

@elonmusk

May 5, 2018

"I’m starting a candy company & it’s going to be amazing"​

 

[Anubis]

No. Elon will split the stock again. Maybe sooner then you think. Stocks typically trade UNDER $100 after a split. I am not recommending it, but they could do another 5-1 split next year and the stock price would still probably be well beyond $100.

Tesla should have done a 69:1 split.... as per Rob Mauer's suggestion.

 

[smorgasbord]

I read "The Millionaire Next Door" many years ago. Quick summary for those who haven't:

1. Authored by two college professors based upon research on both high income and high net worth individuals.
   
   
2. They found many MD's (for example) with very high incomes with corresponding high spending levels on depreciable assets (e.g. yachts) and minimal savings. Those people were named "under accumulators".
   
   
3. They found older people with a high net worth that never had high incomes. Their secret: they always spent much less than came in and invested the rest. Those people were named "over accumulators".
   
   
4. They noted the "unders" tended to buy new vehicles and replace them every two years.
   
   
5. They noted the "overs" tended to either buy a used vehicle or a new vehicle and drive it into the ground. My wealthy 87 y/o mom is a classic example. She has over 250K miles on her Lincoln Town Car she bought in the 1980s or 1990s (I don't recall which) and refused to replace it until recently. She lives in NJ where you get a $5,000 discount on a Model Y and pay no sales tax! I'm trying to get her into one. Mom also says "if you can't pay cash for a car you shouldn't be buying one". Mom does splurge on travel she has been to almost every "safe" country for tourists and cruised on Crystal most everywhere, too. She still downhill skis. This summer during COVID-19, she has been playing 9 or 18 holes of golf at her club almost every day and swimming laps in her pool.

For me personally, it depends on the category. I spend on expensive cars but they are 80 to 90% business write-offs. I kept our 2000 Mercedes ML 320 as an ICE back-up. I hardly spend anything on clothes. I buy organic food. We've lived in the same McMansion since 1996 so it's paid off now. I tend to buy quality durable goods (like furniture) that are timeless and expected to last.

By the way, to be in the infamous 1%, the net worth level is $10.3M+; 2% is $5.8M+; 10% is $1.18M+. The 0.10% is $43M+: (You should include your primary home in your net worth.)

"Household net worth sidesteps spending and cost of living questions because net worth is by definition not spent. Regardless of household size or location, net worth is always unspent resources.

Net worth is the accurate measure of how much 'extra 'a household has accumulated. (Top one percent net worth households show up as a hockey stick in inequality, too.)

Is there a correlation between income and net worth?

There is some correlation between wealth and income, but it's not as high as you might suspect - and it changes by age. Wealth is truly the marker of the highest strata.

One interesting stat: going from the top 10% of wealth to the top 1% requires a significant jump while income "only" requires a much smaller bump.

How many people are in the top 1%?

Depending on your preference, there are roughly 1,286,744 households in the top one percent or 1,742,799 workers.

What percentage of wealth is held by the top 1%?

In the second quarter of 2019, the top 1% of households and nonprofit organizations held 32.4% of all net worth in the United States.

What percentage of wealth is held by the bottom 50%?

In the second quarter of 2019, the lower 50% of households and nonprofit organizations held 1.9% of all net worth in the United States.

What is the average and median net worth by age?

Age   Average Net Worth    Median Net Worth
18-24  $93,982.80 $4,394.53
25-29  $39,565.88 $8,971.58
30-34  $95,235.53 $29,125.08
35-39  $257,581.86 $40,666.52
40-44  $316,660.61 $87,842.71
45-49  $599,194.17 $105,717.43
50-54  $838,702.95 $137,866.81
55-59 $1,150,037.78 $168,044.19
60-64 $1,180,377.62 $224,775.17
65-69 $1,056,483.97 $209,575.26
70-74 $1,062,427.63 $233,614.37
75-79 $1,097,415.06 $242,699.75
80+ $1,039,818.04 $270,904.40

"

Does that book say anything about who was happier and who has more regrets?

My parents, raised as children during the Depression (1930's USA), were definitely "over accumulators." Both my parents worked much of the time depending on our ages. When my father died young (52) there were many sad things, one of which was from my mom, regretting that she and he never got to really enjoy together the money they had saved.

It taught me that a life solely spent preparing for a future that may not come is a partially wasted life. My mom lived another 20 years, and she lived quite differently than before. As a family, we'd joke about her spending our inheritance, but to be honest, it was actually hard for her to spend. Like even when she decided to get a new car, I hard to force her to get the air conditioning option (this was in the 1970's).

 

[mongo]

Tesla does not appear to have done anything unusual in regards to their stock split via a dividend.

Practical Law US Signon

Technically, a stock split is effected by dividing the outstanding stock of a company into a greater number of shares (usually by amending the company's certificate of incorporation). However, in practice, most US companies effect stock splits by issuing stock dividends, because this generally does not require stockholder approval.

One for the Lawyers: Forward Split in Delaware Requires Shareholder Approval

Without saying so, it appears the court interprets the word "may" above to "must" and says that forward splits require one to go through the charter amendment procedure in Section 242. Be advised! Check it out yourself - there is no legal advice in this post!!

Which refers to
TITLE 8 - CHAPTER 1. General Corporation Law - Subchapter VIII. Amendment of Certificate of Incorporation; Changes in Capital and Capital Stock

a corporation may amend its certificate of incorporation, from time to time, so as:
...
(3) To increase or decrease its authorized capital stock or to reclassify the same, by changing the number, par value, designations, preferences, or relative, participating, optional, or other special rights of the shares, or the qualifications, limitations or restrictions of such rights, or by changing shares with par value into shares without par value, or shares without par value into shares with par value either with or without increasing or decreasing the number of shares, or by subdividing or combining the outstanding shares of any class or series of a class of shares into a greater or lesser number of outstanding shares; or

 

[Mo City]

Shanghai Model Y Production Has Begun!

View attachment 583045

October has been rumored to be when MIC Model Y deliveries begin. Volume ramp by January.

 

[Knightshade]

I really don't want to enter into this conversation, but I was under the impression that the reason Tesla used a stock dividend rather than a regular stock split is because they're incorporated in Delaware and that's what Delaware rules require. I have no doubt that Elon and crew knew what they were doing and planned things out well, but I don't think they had a choice when it came to using stock dividends to facilitate the split. This was discussed at length in this forum when the notice was issued by Tesla.

It was discussed at length.

With the doubters insisting this was a totally normal stock split, it should be totally transparent and simple to everyone, and it should have no real impact on the stock price or on shorts.


Then the stock went up what like roughly 80% since the split was announced, and tons of brokers had major problems handling, or in many cases even timely delivering, the extra shares.

Almost like it wasn't a totally normal, transparent, split with no impact on shorts or pricing or something.

(insert correlation != causation disclaimer here I suppose)

Is what we are seeing here with Tesla a redistribution of assets from the wealthy to the individual investors who believe in a green mission? If so, I’m loving living through these times!

Didn't an earlier post in this thread (like within the last day or so, but it scrolls crazy fast) point out the vast majority of shareholders were still either institutional investors, or individuals named Elon Musk?

No. Elon will split the stock again. Maybe sooner then you think. Stocks typically trade UNDER $100 after a split. I am not recommending it, but they could do another 5-1 split next year and the stock price would still probably be well beyond $100.

Going back even more than a day or two- wasn't it pointed out there's not enough authorized shares in the charter to do a single 10:1 split- (let alone do a second consecutive 5:1 (effectively making it 25:1)) as well as other accommodations for stock issues (like Elons compensation plan)?

 

[Joe F]

I mentioned this before during the toilet paper shortage... if you are a pre-Teslanaire the upgrade to Charmin is a good choice, but after that get yourself a Toto bidet toilet seat. You won't want to use anything else after that and you'll barely need any Charmin.

Toto Washlet.

What kind of Teslanaire’s are you? Rookies.

If you’re gonna do it, do it right.