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

[Lessmog]

Burry is Strongman/Strongman2!
You heard it here first.

Explains the strange eye makeup?

 

[Knightshade]

My gut tells me selling will continue again next week. Don’t know why, but I think they are done this week. Obviously not advice.

What is the time window he has to sell?

https://twitter.com/x/status/1339837859885244417

That's Bill Wright discussing the rules around when employees aren't allowed to sell- they'd apply to Elon as well (the tesla blackout period that is, not etrades rules).

So roughly 5-6 weeks out of every 13 in a quarter depending when the earnings call is held.

[*]Capital Gains tax rate is going up on Jan 1st, 2022 so he'd likely want his selling done b4 then

This is not true. Cap gains rate is currently unchanged for 2022.

(there are other tax reasons he might wish to sell before Jan 1, but that's not one of them)

[*]Elon excersized his 2012 stock options, and sold a portion of those shares to cover their taxes on Nov 8, so the time pressure is ALREADY releaved (next set of Options don't expire till wot 2031? Paging @mongo )

This is also wrong. He exercised a small portion of the 2012 options. The rest still expire August 2022. There's very roughly 24 million shares in the 2012 tranches that he's earned.

(there's also 1 tranche he didn't earn and is very unlikely to)

 

[mongo]

Elon excersized his 2012 stock options, and sold a portion of those shares to cover their taxes on Nov 8, so the time pressure is ALREADY releaved (next set of Options don't expire till wot 2031? Paging @mongo )

Jan 20 2028 is the end date for the 2018 comp plan. No idea on 2012 outstanding @Knightshade looks to have that covered.

This last point I'm unclear about: there is a reference in Elon's Form 4 filings about the "Elon Musk Foundation": it's possible that some or all of those shares were transferred and/or sold to fund his charities and to reduce his tax bill on further sales.

A lot of his stuff is held in a trust.
"The Elon Musk Revocable Trust dated July 22, 2003, for which the reporting person is trustee."
I think it's just indirect ownership for estate planning and 3rd party management.

 

[Sofie]

$1100 pre-market. Up the long ladder.

Let me get this straight. From what I’m reading here it appears that we may just have a constant daily selling influx for the presumable future (likely until years end?) until Elon has finish all these tax sales. And we have a long way to go to finish all these sales.
Is that the consensus?

 

[Singuy]

My gut tells me selling will continue again next week. Don’t know why, but I think they are done this week. Obviously not advice.

What is the time window he has to sell?

Windows open 48hrs after earnings report and remains open for 20 trading days. So 18th or 19th of Nov is the last day?

https://www.sec.gov/Archives/edgar/data/1164964/000101968715004168/globalfuture_8k-ex9904.htm#:~:text=An%20Insider%20should%20never%20trade,a%20legitimate%20Company%20business%20purpose.

 

[mongo]

Let me get this straight. From what I’m reading here it appears that we may just have a constant daily selling influx for the presumable future (likely until years end?) until Elon has finish all these tax sales. And we have a long way to go to finish all these sales.
Is that the consensus?

Well that and the drop was likely not due to Elon's selling of stock.

 

[TheWalkingDad]

If you look closely at the Form 4's filed recently (11/9 and 11/10), they do not seem to be from a 10b5-1 plan. These were most likley unplanned sales as a result of his twitter poll. Could it be they have not fully released all Form 4 from 11/9? Today would be the deadline. Otherwise he still has some additional selling to do. ~20M to cover taxes on his share and options exercise.

 

[Boomer19]

https://twitter.com/x/status/1339837859885244417

That's Bill Wright discussing the rules around when employees aren't allowed to sell.





This is not true. Cap gains rate is currently unchanged for 2022.

(there are other tax reasons he might wish to sell before Jan 1, but that's not one of them)






This is also wrong. He exercised a small portion of the 2012 options. The rest still expire August 2022. There's very roughly 24 million shares in the 2012 tranches that he's earned.

(there's also 1 tranche he didn't earn and is very unlikely to)

the bill wright /carsonight thing seems to reference the employee restrictions

that can be different from executive that is enrolled in a 3rd party managed liquidation plan. those plans aren’t limited to windows around earnings releases

not saying right or wrong…just saying it’s possible the same restrictions don’t apply

note: i didn’t dive into it and don’t care.
but i know from prior experience at company i worked for, executives sold from “time to time” through a managed liquidation plan yet we (the peons) were locked into windows after earnings

also…side note; we were granted RSUs
the grants weren’t taxed up front. the vestings of grant tranches were taxed as bonus compensation. cost basis was close price of vesting date, either realize gain (and more taxes! long/short term) or loss from sale
point is, totally different than stock options plan. not sure if that part dictates the treatment (blackout periods) allowed by reg’s.

 

[SunCatcher]

There's that 11 number showing up again; SP= $1100 at the moment. Never a dull day here at TMC for the market detectives.
Ready for liftoff?

 

[Knightshade]

Windows open 48hrs after earnings report and remains open for 20 trading days. So 18th or 19th of Nov is the last day?

https://www.sec.gov/Archives/edgar/data/1164964/000101968715004168/globalfuture_8k-ex9904.htm#:~:text=An%20Insider%20should%20never%20trade,a%20legitimate%20Company%20business%20purpose.

Note it mentions Rule 10b5-1 trading plans are exceptions to the window period (which it looks like Monday sales were but tues/wed were not)- still potentially lets him trade a bit later into the year if he set one up for that.

but i know from prior experience at company i worked for, executives sold from “time to time” through a managed liquidation plan yet we (the peons) were locked into windows after earnings

Yup, see above.

Trading plans can trade outside the window- but only 1 of the 3 days so far have been via such a plan.

 

[Artful Dodger]

I was configuring a Model S over the weekend to see how upgrades impacted the estimated delivery. One Model S with no upgrades had a very short delivery (November I believe) but adding the $2500 more expensive red paint put it deep into 2022 (I believe it was September)! I thought that was crazy. Typically, Tesla wants to sell the higher margin options. That $2500 for red paint is almost pure profit.

I had to leave the website shaking my head because it didn't compute.

Red paint is a real pita for Tesla production. They have to shut down the paint shop, clean everything, then batch out all the red bodies-in-white before switching back to regular paint process. Tesla clearly is encouraging you not to pick red paint unless you're willing to wait.

 

[elasalle]

The EM Share math -- Addition by Subtraction (not taught in school ...)

 

[mongo]

the bill wright /carsonight thing seems to reference the employee restrictions

that can be different from executive that is enrolled in a 3rd party managed liquidation plan. those plans aren’t limited to windows around earnings releases

not saying right or wrong…just saying it’s possible the same restrictions don’t apply

Indeed, Tesla's restrictions seem pretty loose: from 2021 14A tsla-def14a_20210826.htm

Stock Transactions


Hedging, Short Sales and Rule 10b5-1 Trading Plans


Tesla has an insider trading policy that prohibits all of our directors, officers and employees from, among other things, engaging in short sales, hedging or similar transactions designed to decrease the risks associated with holding Tesla securities. This prohibition encompasses transactions in publicly-traded options, such as puts and calls, and other derivative securities with respect to Tesla securities, but not transactions designed to facilitate portfolio diversification, such as broad-based index options, futures or baskets.


In addition, two of Tesla’s current executive officers and two directors have entered into Rule 10b5-1 trading plans that are effective as of the date of this filing.


Pledging of Shares


The ability of our directors and executive officers to pledge Tesla stock for personal loans and investments is inherently related to their compensation due to our use of equity awards and promotion of long-termism and an ownership culture. See “Executive Compensation—Pledging of Shares” below for more details on Tesla’s policy regarding the pledging of Tesla stock by such individuals.


Stock Ownership by Board and Management


To align the interests at the highest level of our management with those of our stockholders, the Board has instituted the following requirements relating to stock ownership under our Corporate Governance Guidelines.


Each member of the Board and our Chief Executive Officer is subject to the following minimum stock ownership requirements: (i) each director shall own shares of Tesla stock equal in value to at least five times the annual cash retainer for directors (exclusive of retainer amounts for service as Lead Independent Director or as a member or chair of a Board committee), and (ii) our Chief Executive Officer shall own shares of Tesla stock equal in value to at least six times his/her base salary. Each individual shall have five years from the later of March 3, 2015 and the date such person assumed his or her relevant role at Tesla to come into compliance with these ownership requirements. Each person’s compliance with the minimum stock ownership level will be determined on the date when this compliance grace period expires, and then annually on each December 31, by multiplying the number of shares held by such person and the average closing price of those shares during the preceding month. Our Chief Executive Officer and each of our directors is currently either in compliance with these requirements or is in the applicable period to come into compliance therewith.


Our Corporate Governance Guidelines also provide that no equity award as to which vesting or the lapse of a period of restriction occurs based solely on the passage of time that is granted to a named executive officer may vest, or have a period of restriction that lapses, earlier than six months from the date on which such vesting or lapse commences. Furthermore, our Corporate Governance Guidelines provide that no named executive officer may sell, transfer, pledge, assign or otherwise dispose of any shares of Tesla stock acquired pursuant to any stock option, restricted stock unit or other equity award granted by Tesla earlier than the date that is six months after the date on which such award vests or the period of restriction with respect to such award lapses, as applicable.

 

[CLK350]

This is probably from the predetermined plan. We should probably take Elon's word that he is going to sell off 10 percent.

Yes, had to take a break, I completed my earlier post - essentially it's possibly another 'fun /profitable for longs' squeeze in the works

 

[BornToFly]

I show Model S Plaid as December delivery regardless of color. LR as November 2022, regardless of color.

 

[CHGolferJim]

https://twitter.com/x/status/1339837859885244417

That's Bill Wright discussing the rules around when employees aren't allowed to sell- they'd apply to Elon as well (the tesla blackout period that is, not etrades rules).

So roughly 5-6 weeks out of every 13 in a quarter depending when the earnings call is held.






This is not true. Cap gains rate is currently unchanged for 2022.

(there are other tax reasons he might wish to sell before Jan 1, but that's not one of them)






This is also wrong. He exercised a small portion of the 2012 options. The rest still expire August 2022. There's very roughly 24 million shares in the 2012 tranches that he's earned.

(there's also 1 tranche he didn't earn and is very unlikely to)

Trying to paint a simplified picture of EM tax exposure — ordinary income tax rate (likely to rise in 2022 unless BBB doesn’t pass) on difference between SP on date of exercise and the grant price + capital gains on appreciation between exercise date and date shares are sold + wealth tax on unrealized gains (unlikely, but worth planning for as a black swan)?

 

[Nocturnal]

Received FSD beta last night. Amazing that it can do almost everything, but it's still very wonky and unsure of itself. I'm actually feeling better about that nagging worry of a crash and FUD headlines. Based on my very limited testing so far it's not good enough yet to for people to become lax and unaware. All in all it's very impressive and I will watch it closely as it improves.

 

[Knightshade]

Trying to paint a simplified picture of EM tax exposure — ordinary income tax rate (likely to rise in 2022 unless BBB doesn’t pass) on difference between SP on date of exercise and the grant price + capital gains on appreciation between exercise date and date shares are sold + wealth tax on unrealized gains (unlikely, but worth planning for as a black swan)?

If you mean the wealth tax of taxing unrealized gains that's pretty much dead in the water.

The additional millionaires surcharges in BBB (assuming those remain in which is very likely- and assuming BBB passes which is... probably but not assured?) are relevant reasons for him to exercise ALL the 2012 options before end of the year though since those are all short-term gains when exercised- ditto his sale of them to cover the tax bill.

 

[EVMeister]

Martin Viecha speaks the truth.

https://twitter.com/x/status/1458807963829690370

 

[UncaNed]

Charles Schwab

research.tdameritrade.com