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

[JRP3]

Friday was down (with swings to both sides).

Not enough that I noticed. Boring.

 

[StealthP3D]

I’m certain that someone with your intellect, grasps the basic fact that Elon asked the question himself.

And certainly you can grasp that you were critical of Elon for putting the decision to a Twitter poll. I was re-affirming Elon's right to make the decision however he sees fit, you were saying it was too important of a decision to put to a vote.

I suspect Elon already knew the result of his poll would be "Yes" so this is simply the way he is presenting his decision to sell 10% of his TSLA. And, it was either that or continue to borrow more money to take care of his rather large family (and himself). He can't bill personal expenses to corporate accounts and he literally has no income.

I suspect my agreeability with Elon selling a small portion of his shares is not due to me having a more "towering intellect" than you but probably because I too have had stocks as my only source of income for two decades. So I can relate to what it's like to live off the value of my stocks. And, yes, I have to sell some of them sometimes. However, my net worth continues to grow so it's all good. Elon is working so he should be drawing cash from the business however he can.

 

[SN_8]

The folks okay with Elon's poll seem to be those who trust that this is well planned and that he doesn't really leave a $20B decision to twits and bots.

The folks who are upset think Elon has acted foolishly and without forethought. (and well anyone with really short-term calls, may they rest in peace).

As someone who has at times considered his tweets to be reckless, I do not think this is one of those times.

 

[mars_or_bust]

Ths article explains well why Elon has to sell stock in order to exercise his options. He needs 12 billion cash for taxes, i.e. he needs to sell close to 10% of his stock for this.

Thus this is no big deal, he just used this opportunity to further get Biden off his back.

Musk's Expiring Tesla Stock Options Put Elon in Perverse Tax Dilemma

Elon Musk's expiring Tesla stock options have put him in a perverse tax dilemma. This tricky situation is forcing him to either take on debt or sell shares.

www.hffinancial.com

 

[traxila]

Yeah, but it’s not the same, you don’t have to love it or leave it. Regardless, this was just sort of stupid of Elon. Sometimes he does stupid stuff. I do stupid stuff like 30 times a day. He does stupid stuff like once every 30 days. That’s not a bad record. I am envious of that stupidity rate.

But when he does something stupid, it’s ok to say so. Elon has plenty of opinions… so do the rest of us… doesn’t mean any of us should or shouldn’t sell shares.

Sometimes we just disagree with each other and that is fine.

I agree with your assessment that smart people are simply stupid less often, but still stupid a lot of the time. Lowly creatures we are in the end.

But this was not stupid of Elon. It was inevitable. And suddenly he controls the agenda through the ‘people’. Short term traders are going to short term, but this will be just another blip in the chart.

In the Golden Age of Athenian democracy Elon would have been a hit in the ecclesia for sure. He just would have to practice with those marbles in his mouth for a while.

Rich people giving away stuff to curry favor with the masses has a long and solid tradition. Just ask Julius Caesar.

The main concern I have for Elon is his physical security. Stay safe, Mr. Musk!

 

[MC3OZ]

Yeah, people love to tell other's what they should do with their money. Elon is a big boy and this ain't his first rodeo. I suggest we let him do it however he wants. If it's a poll, I support that because they are Elon's shares with which to do it however he wants.

I feel like I'm part of a big gossip circle where no one can do the smallest, most innocuous thing without everyone judging what they did and how terrible they think it was.

The additional thing I will add is, Elon hasn't said when he will sell the 10%.

So I interpret this as selling up to 10% to fund options exercises and taxes as needed, perhaps some additional money to invest in things like Starlink.

My hunch so the poll was genuine, it was an alternative to tossing a coin...

Short term maybe this moves the price, but I can't see how it affects any of the company fundamentals, revenue growth, margins, production expansion etc..
.
It is also about time for another CEO compensation package, and we might see that structured differently, money to pay taxes is a consideration that they may factor in..

 

[Knightshade]

He needs 12 billion cash for taxes, i.e. he needs to sell close to 10% of his stock for this.

That is simply not true.

10% would be significantly more than he'd need to sell to cover the taxes on the options.

I covered the math a page or two ago, but the tl;dr is roughly (rounding a bit)

He will need to sell roughly 12.4 million shares to cover the tax bill.

10% of all his shares, depending if you include the shares from the options or not would be either ~17 million shares or ~19.4 million shares.

So he'd be selling either ~4.6 million or ~7 million more shares than needed to pay his tax bill.

It is also about time for another CEO compensation package, and we might see that structured differently, money to pay taxes is a consideration that they may factor in..

For clarity (you may well already know this) these options are from his 2012 package.

He's got till at least 2028 before the second (2018) compensation package options become relevant/in need of exercise.


One interesting point here-- the 2012 ones require no holding period.

He could exercise and sell all of them immediately if he really wanted to (though this would exceed the 10% threshold he cites).

The 2018 package however does have a holding period.... he can't sell the shares for 5 years after exercise.

BUT... it specifically includes an exemption that let's him immediately sell as much of it as he needs to cover taxes and cost of exercise.


So taxes aren't REALLY an issue for the 2028 exercise, he's allowed to cover them same as he's gonna do these... he just can't sell any of the rest.

So perhaps since the 2012 ones aren't restricted like that.... and he's already going to have to pay all the taxes in full on exercise anyway- he's using this as a chance to build up a few billion cash buffer without any additional tax consequences that any other sale of shares would entail.

Not to mention if the BBA bill passes it'd likely impose higher taxes on any future transactions so a cash cushion now is cheaper than getting one later.

 

[jhm]

I wonder if Musk is also thinking about making his tax fillings public. His choice, of course.

 

[Big Earl]

No need to click through, but it looks like wild colors spotted at Giga Shanghai, likely the wrapping service they were going to roll out.

Tesla spotted building a bunch of cars in wild new colors

Tesla has been spotted producing a bunch of cars in wild new colors out of Gigafactory Shanghai. Could these be...

electrek.co

To see the colors, which appear to include pink, teal, etc., you can check Jason Yang’s latest flyover or click-through to Fredtrek if you desire.

Some really neat colors on the lot. I counted 14 new/unique.

 

[traxila]

I wonder if Musk is also thinking about making his tax fillings public. His choice, of course.

Was thinking the same. Posting up the crazy FED / CA capital gains tax he gets hammered with for all to see.

But I think that by the time tax season arrives for those shares we will have moved on from all this.

 

[StealthP3D]

Hey! Good news for all you "unsafe" drivers out there trying to get your safety score up. I started out with several long drives, some of them with scores as low as 84% and had only managed to get my overall safety score back to 95% in recent days, even with a lot of longer drives with perfect scores (100%) while driving like a scared grandma. I had all but given up ever getting to 99%.

Then my wife mentioned some people had started over. It turns out they had simply opted out of the beta program and then re-applied (using the center screen). I suspected this hole would be fixed by now but late last night I opted out and backed up a few feet, pulled forward and parked. The "Safety Score" disappeared from my phone app. This morning I opted back in and, after a while, my phone app said I would have a safety score after my first drive. So I drove two miles very carefully around my neighborhood and re-parked. After a few minutes I can happily report my new safety score is 100%!

We'll see if this is sufficient to get the next new beta release of FSD. Cheers!

 

[2daMoon]

And to all who Thumbs-downed responses to posts after @Paul_SF ’s post: a word of advice. Read my just-above post, and the tweet in question. And keep on re-reading it until you comprehend.

Very well played, Mr M.

So, you're abiden your time until folks find the humor in his Tweet?

 

[Knightshade]

So I drove two miles very carefully around my neighborhood and re-parked. After a few minutes I can happily report my new safety score is 100%!

We'll see if this is sufficient to get the next new beta release of FSD. Cheers!

It's not.

You need at least 100 miles with a high enough score.

Plenty of threads in the FSD areas with tips on easy ways to make that happen though.


Also they're on a rolling release now for new entrants- so you don't need to really "wait" for the next version drop- generally within anywhere from a few to 24 hours of getting a high enough score with enough miles you get the update/email.

 

[vwman111]

I don't think he will do the standard lobbying - i.e. bribing politicians and media. That would be playing on someone else's playing field, and by their rules - not a strategy a good general would take.

But he definitely wants to reduce culture wars, cancel culture, pervasive wokeness etc. In fact TITS would be an excellent vessel for that, as these negative movements originate mostly in the Ivy League. TITS would be antidote for that - a future world class (perhaps top 5) technology and engineering university, but with freedom of thought, and capitalist mindset, and no cancel culture or wokeness (starting from the name TITS itself )

Imagine how great the US could be without these particular diseases. We will move from the greatest country in the world to a 3rd world dictatorship with these diseased beliefs!

Tesla won't be able to reach it's full potential unless those beliefs are drastically reduced or eliminated from politics...i.e. the exit from California

 

[buttershrimp]

I agree with your assessment that smart people are simply stupid less often, but still stupid a lot of the time. Lowly creatures we are in the end.

But this was not stupid of Elon. It was inevitable. And suddenly he controls the agenda through the ‘people’. Short term traders are going to short term, but this will be just another blip in the chart.

In the Golden Age of Athenian democracy Elon would have been a hit in the ecclesia for sure. He just would have to practice with those marbles in his mouth for a while.

Rich people giving away stuff to curry favor with the masses has a long and solid tradition. Just ask Julius Caesar.

The main concern I have for Elon is his physical security. Stay safe, Mr. Musk!

Sadly, I think his twitter poll is not about putting his agenda to the people, but rather comes off a bit more like the dude from the movie “gladiator”.

Most people in America aren’t like, “wow, how down to earth that he is asking if he should pay taxes!”

Tom Brady doesn’t sit at a dive bar and say to other patrons “yeah, Giselle wants to come home and get freaky tonight…. Ugh, decisions! by vote, who thinks I should get it on with my supermodel wife?”

 

[mars_or_bust]

That is simply not true.

10% would be significantly more than he'd need to sell to cover the taxes on the options.

I covered the math a page or two ago, but the tl;dr is roughly (rounding a bit)

He will need to sell roughly 12.4 million shares to cover the tax bill.

10% of all his shares, depending if you include the shares from the options or not would be either ~17 million shares or ~19.4 million shares.

So he'd be selling either ~4.6 million or ~7 million more shares than needed to pay his tax bill.

Potatoes, Potatos.

Definitely most of the money does go to cover the options. That is the point, so the whole sale is not a big deal. And a 10% tweet sounds a lot better than say a 6.8% tweet. And I am sure he has plenty of good investments with the remainder. Why not for example also cover the personal debt he has to the banks at the same time (his shares are the collateral) - I have no idea how large it is, but it could be large - and the current inflation probably means larger interest rates in the near future and thus larger debt (that is why Tesla is paying off its debt now). Plus, let Elon have some good party money, he deserves it

 

[Stretch2727]

If he does sell I hope he pays off all the loans which he has taken out which have his holdings in Tesla as collateral.

I think Elon was reading the earlier posts here on how dangerous margin can be and decided he needed to sell to cover those loans.

 

[2daMoon]

Solve world hunger for available TSLA shares.

FTFY

 

[UnknownSoldier]

I think I'm bored of making so much money. Elon clearly knows that I'm tired of winning. Thank you, Elon!

In all seriousness, I think this sort of decision should have been brought up at the annual meeting. Random Twittards, most of which are the worst humans living on Earth today, should not be making this decision. Shareholders should be.

 

[buttershrimp]

I think I'm bored of making so much money. Elon clearly knows that I'm tired of winning. Thank you, Elon!

In all seriousness, I think this sort of decision should have been brought up at the annual meeting. Random Twittards, most of which are the worst humans living on Earth today, should not be making this decision. Shareholders should be.

I thought I was the only one that goes on Twitter and weeps at the state of society. It’s like Lord of the Flies with a megaphone.