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

[Knightshade]

Your Stock Award

Know what tax rules apply to you and learn some strategies that can help to reduce your tax burden.

www.schwab.com

• Restricted stock awards let you take advantage of a so-called "83(b) election," which allows you to report the stock award as ordinary income in the year it's granted and then start the capital gain holding period at that time
• Caution: if the stock fails to appreciate, you don’t get a refund of the tax you paid when you made your election
• Your alternative is to defer paying any tax until the stock is fully vested

"Determine if an 83(b) election is an option for you. If you're granted a restricted stock award, you have two choices":​

1. you can pay ordinary income tax on the award when it's granted and pay long-term capital gains taxes on the gain when you sell, or
2. you can pay ordinary income tax on the whole amount when it vests."

Further, Elon already has share equity loan facilities with 2 large investment banks. He could easily borrow against any new shares to cover a 20% long-term capital gains tax just on the equity in those shares alone.

That is, WITHOUT needing to provide any other collateral. I think that the Barron's article was sensationalizing the situation for clicks.

Paging @st_lopes

Cheers!

Do you have any evidence Elon did this, and that he's even able to on this large an amount?

I ask because Elon himself, quite recently, cited his tax rate on these options would be over 50%- which seems to suggest nothing you cited applies here.

 

[aubreymcfato]

Signs of semi

https://twitter.com/x/status/1448002082292867098

Internal fleet will reduce Tesla shipping costs.

I really hope Elon is in full competitive mode vs Bezos and absolutely wants the Semi before the Rivian van is out.

 

[2daMoon]

Would creating a charitable investment trust when exercising the stock option offer any advantage to Elon for avoiding a tax hit while applying the shares toward supporting some qualifying program that he favors?

 

[traxila]

Further, Elon already has share equity loan facilities with 2 large investment banks. He could easily borrow against any new shares to cover a 20% long-term capital gains tax just on the equity in those shares alone.

That is, WITHOUT needing to provide any other collateral. I think that the Barron's article was sensationalizing the situation for clicks.

Fed LTCG: 20%
Medicare surcharge: 3.8%

If residency still in CA:

13.3%.

Cannot say if any local rates would apply to him. EG I know NYC is another 4%.

These are all top rates for long term gains.

 

[Krugerrand]

Just ~ 10% away from $900..

Good, then my interest payments can begin.

Just a random thought; if this puppy hits $1200 by ‘spring’ (because $900 by year end is in play again), Mom will be allowed to confabulate with the otherworldly again on this topic but MUST include explicit instructions to specify the YEAR, not just the season. All good people, I got us.

 

[Sudre]

Lane keeping in other brands doesn't avoid safety vehicles on the side of the road. It is not a defect, it's a limitation of the current technology. Tesla downloaded new capability. The idea of a recall by NHTSA is stupid. Do all other brands need to recall all their vehicles?

IF Tesla worded the response correctly, they could potentially force ALL the other "lane keeping" systems in other cars to be shut down until they fixed the fact their systems do not slow or move over for emergency vehicles.... or NHTSA would have to publicly back off their assumption it was a recall.

There is something to say about this when Rob M starts thinking Tesla is being singled out. It is extremely off Tesla is the only company that has lane keeping software that is required to do things no other system is. Even on a self driving point, I am sure Ford, WAYMO, and Chevy Cruise do not do anything special so emergency vehicles. It would be interesting to see how WAYMO treats emergency vehicles besides simply seeing them as a regular car. "A recall" needs to be issued by all of them.

 

[TheTalkingMule]

MM's pissing in the wind trying to keep SP down with massive macro tailwinds. This should be funny. I'm headed to the beach.

 

[jbcarioca]

Not saying Elon hates the Y. He can see the numbers and knows how well the thing is selling. The Y as the initial product at Berlin and Austin is obvious.

But I've been watching Elon Musk, his twitter feed, and reading TMC since 2007. And I just can't help but notice he's less invested in the Y than in other Tesla cars. Elon Musk likes the Y, he just doesn't love it like he loved the S, X, or 3, or loves the Cybertruck. It's like the other programs were personally run by Elon Musk while the Y was done by the Tesla team mostly on its own.

This isi a bit odd to read.

Tesla has invested in several Gigapresses to make enormous rear castings for Model Y from Fremont, Shanghai, Grüneheide and Austin. They also are to be building Model Y in all four locations. Plus they're preparing for enormous front castings also.

The first deployment of structural battery packs is to be Model Y in Grüneheide and Austin, possibly Shanghai also.

Those are giant-sized commitments.

Please understand that Model Y is the definitive most scalable product Tesla has offered, even more so than was the Model 3.

The rest of your post also seems to be incorrect, specifically "...the Y was done by the Tesla team mostly on its own.". Every Tesla has been done almost entirely by the teams, but Elon has been personally deeply invested in the enormous manufacturing and design advances that have been made for Model Y. From paint shop, structural battery pack, mounting seats directly on the completed pack, and many more smaller ones Model Y has been the primary point of immediate attention.

Please watch a Grüneheide fair video. Then rethink your premise.

 

[jw934]

There is some guy named Gary Black on twitter that posts all sorts of spreadsheets

But sometimes Gary posts funny tweets too - -

https://twitter.com/x/status/1448618895485640704

 

[jbcarioca]

Does Moody’s rating even matter now that Tesla is paying back it’s debts, rather than taking on more debt?

Yes, it still matters. Mostly because nearly all institutional investors view that as a mark of stability that allows even institutional share investors more confidence. Further, Tesla will still have debt issuances from time to time, even if they end out prepaying them.

 

[Opus BC fan]

 

[elasalle]

Lessons from the Big Short on Rating Agencies (watch from 2:35)

Give Tesla a good rating, and you might lose business from others

 

[Huskyf]

IF Tesla worded the response correctly, they could potentially force ALL the other "lane keeping" systems in other cars to be shut down until they fixed the fact their systems do not slow or move over for emergency vehicles.... or NHTSA would have to publicly back off their assumption it was a recall.

There is something to say about this when Rob M starts thinking Tesla is being singled out. It is extremely off Tesla is the only company that has lane keeping software that is required to do things no other system is. Even on a self driving point, I am sure Ford, WAYMO, and Chevy Cruise do not do anything special so emergency vehicles. It would be interesting to see how WAYMO treats emergency vehicles besides simply seeing them as a regular car. "A recall" needs to be issued by all of them.

Exaclty sent this to Tesla or Elon Musk Tweeter

 

[CreativeName]

While I agree that borrowing $8B is unlikely to follow the typical asset backed loan processes, I don’t agree that Elon will sell shares to fund the tax. It would be way more efficient to take out debt to fund it, even if that debt comes with more restrictions that he has enjoyed on his other loans.


Personal US Tax is outside of my wheelhouse. Though I would suspect there are some kind of limitations on that preferential treatment under 83(b) when dealing with options of this scale.

I do think people are misunderstanding Elon’s comments at code conf. He has to pay tax as these options will expire and he obviously wants to exercise them (which has tax consequences). He doesn’t HAVE to sell his shares (if he takes out debt) until he settles his debts with the bank (that is if he doesn’t liquidate other assets- which he doesn’t have any worth anywhere these values).

Paging @CreativeName

My understanding is that Sec. 83(b) elections generally are not relevant to stock options. I haven’t looked into all of the details of the options at issue, but based on what I know I don’t believe a Sec. 83(b) election would have been on the table.

 

[Tslynk67]

Needham's Rajvindra Gill reveals why he has a sell rating on Tesla: he's clueless. He thinks that in 2030 Giga Texas and Giga Berlin will produce 500k vehicles per year each.

Tesla: Strong Deliveries Don’t Alter the Bear Case

No one can accuse Elon Musk of lacking in ambition and often throughout his career, Tesla’s (TSLA) detractors have had to beat a hasty retreat after underestimating the guru-like CEO’s ability to defy the skeptics. However, following the EV leader’s 2021 Annual Meeting, Needham’s Rajvindra Gill...

finance.yahoo.com

'With a present “production base” of 1 million vehicles, and the potential to add an extra 1 million soon with the Giga Texas and Giga Berlin factories, Tesla would need capacity for 18 million more to achieve this goal (20M deliveries in 2030). Assuming 500,000 vehicle capacity at each plant, then an extra 36 Gigafactories would be needed in order to hit the target.'

Didn't he used to be bullish on $TSLA, then he flipped because he decided he didn't like Elon's mannerisms?

Obviously clueless in any case and anyone believing that nonsense deserves to lose their money

 

[elasalle]

Didn't he used to be bullish on $TSLA, then he flipped because he decided he didn't like Elon's mannerisms?

Obviously clueless in any case and anyone believing that nonsense deserves to lose their money

IIRC correctly, I don't think this guy. What I remember is this guy has the same last name as skaaboskaaa or something, and he has been always a bear

 

[Cobbler]

Elon has the European carbuilders by the balls. In 2022 he'll slowly start to twist his hands...

Europe's carmakers face raw material bottleneck for EV batteries

Major carmakers like Volkswagen , Daimler and Stellantis have been racing to secure battery cell supplies in Europe, but may face a bigger challenge as they seek to go electric - finding enough battery raw materials.

www.reuters.com

 

[pnungesser]

While I agree that borrowing $8B is unlikely to follow the typical asset backed loan processes, I don’t agree that Elon will sell shares to fund the tax. It would be way more efficient to take out debt to fund it, even if that debt comes with more restrictions that he has enjoyed on his other loans.


Personal US Tax is outside of my wheelhouse. Though I would suspect there are some kind of limitations on that preferential treatment under 83(b) when dealing with options of this scale.

I do think people are misunderstanding Elon’s comments at code conf. He has to pay tax as these options will expire and he obviously wants to exercise them (which has tax consequences). He doesn’t HAVE to sell his shares (if he takes out debt) until he settles his debts with the bank (that is if he doesn’t liquidate other assets- which he doesn’t have any worth anywhere these values).

Paging @CreativeName

So far, every analysis assumes EM pays Income Tax in Cali. It seems to me that's primary residence is now in Texas with a significantly lower rate. Can someone knowledgeable comment on that. THX

 

[Spacep0d]

Strong open! My girlfriend bought another 25 shares this morning at $811 and change and boom it jumped to $817 right after the opening bell.

Things are all coming together. It's going to be a huge Q4 (and beyond) all around. I'm thinking of getting a HELOC or home equity loan to invest more. Anyone think this is a bad idea? Has anyone else done this? I could easily get another 50k to invest.

I just saw a good factory tour of the Berlin Giga and wow I was gobsmacked by the size, how clean it looks, the robots! The tour I linked is in 4k and has great camera work.

 

[traxila]

Strong open! My girlfriend bought another 25 shares this morning at $811 and change and boom it jumped to $817 right after the opening bell.

Things are all coming together. It's going to be a huge Q4 (and beyond) all around. I'm thinking of getting a HELOC or home equity loan to invest more. Anyone think this is a bad idea? Has anyone else done this? I could easily get another 50k to invest.

I just saw a good factory tour of the Berlin Giga and wow I was gobsmacked by the size, how clean it looks, the robots! The tour I linked is in 4k and has great camera work.

I think it is a bad idea. But I have PTSD still from 2008.

I am sure there are plenty here who think it makes sense.

Guess it is all about how you sleep at night.

There are other ways to increase your leverage that don’t involve potentially getting wiped out completely if something stupid happens. All about the delta in the end….