TSLA Market Action: 2018 Investor Roundtable

[Hogfighter]

So much for the Hog Negativity Index......

 

[Hogfighter]

DAM
Great news but I LOST MONEY !

Had 360 Jan 20 calls trading yesterday at 70
Now 420-360 = 60

Not necessarily....wait and see what the short squeeze does.

 

[Runarbt]

Given that I'm 100% in LEAPS I am having a pretty stressful day. Hoping they are able to somehow convert if we go private.

They won't unfortunately.

They wont convert, but might recover/be profitable yet.

If shorts have to buy back 30 million shares in a short time, how do you think the sp will react. Doesnt matter if tesla goes private at $425. Shorts HAVE to buy back real shares before this. I am not selling mine.

 

[mongo]

Could Tesla issues shares at high high prices to cover the short covering needs and use the proceeds to increase the cash pile of the new private company?

 

[Runarbt]

DAM
Great news but I LOST MONEY !

Had 360 Jan 20 calls trading yesterday at 70
Now 420-360 = 60

Wait for it.. hint: 30million share short have to be bought back.

 

[ggies07]

Elon is Elaine talking to the shorts(Soup Nazi).....NEXT!

 

[Opus BC fan]

Slightly green this morning but the news feed is increasingly FUD crowded today. Looks like MOTS for a while.

Once again I am astounded by my incredible powers of prediction

 

[neroden]

What happens to all that money short with this offer? Do they have to buy shares to close positions prior to the conversion to private. If yes I see a squeeze coming

They absolutely do. A short-seller is obligated to return the shares they borrowed, on demand.

It is quite possible that the squeeze will take the stock price well over $420, which would result in the buyout price being raised or the go-private deal being dropped (depending on financing availability for a higher buyout price).

 

[Hogfighter]

Could Tesla issues shares at high high prices to cover the short covering needs and use the proceeds to increase the cash pile of the new private company?

Yes

 

[Mich]

It might be _the_ shortburn of the century. -1500$ - 2000$ anyone?

Maybe may 40x jan19 600 calls will be deep in the money after all? One am allowed to wish, right? They were at 0.05$ just before halt. Was thinking about doubling down.. damn, might have been smart.

"Bigger then VW" implies a price of about 1300 USD in terms of factor of the share price and total pain for the shorts.

 

[Causalien]

Days like these is why I schedule any meetings until after market close. I am force glued to my chair in case news release and trading resumes. It'll be a close call to rush to my meeting.

 

[neroden]

Anyone know if Charlse Schwab will hold private stock as part of a roth or will I have to roll this to another custodian?

Nobody has a clue. The details have yet to be released. I'm going to be doing a lot of reading :groan:

 

[T-Will]

Elon will definitely want to take care of his shareholders, especially the potential 37,000 employees with TSLA stock.

 

[vwman111]

Is TSLA trading halted?

 

[neroden]

It is with a hint of schadenfreude that I have to break it to you, you're more screwed than you seem to think. The problem (for you) is that there are more shares of TSLA outstanding than there are in the market cap. You're still going to have to buy-to-close, in a market with a lot less liquidity than it currently has. It is entirely possible that the market price goes higher than $420 before the deal settles, and there's no guarantee that the deal will happen at only $420 either... I still expect it to go higher.

So, with the squeeze happening (I am recalling my lent shares so I can vote on the go-private deal), it seems extremely likely to that the price will spike well above $420. The tender offer price may be raised... or the stock price may go high enough that Musk doesn't have the financing for a go-private offer any more. We Shall See.

 

[sub]

Luckily I’m almost all in stock, I have one synthetic long position (sold June 19 345 put/bought June 19 335 call). Worst case is those will wash, already lost some time value on the call. I spent too much time reading here before doing the math and realizing I needed to dump the options and go all in with stock.

I will be staying private, my plan was however to keep trading Tesla and make the shorts buy me 100’s more shares over time. I’ll see how many more shares I can get when it opens back up for sure!

 

[Moderatefan]

Anybody has an idea if shares held in IRA would have any problem converting to private? Can a broker force you to sell?

Would liquidity/upside be much worse in private fund? Are we mostly looking forward to unknown dividends?

 

[neroden]

My take on this: If you are participating in a "fully paid" lending program (i.e you own your shares, no margin) then your contract is with your broker not with whomever they loaned the shares to. Your broker is obligated to return your shares. The only way you would lose is if the broker went under, in which case you would only receive the collateral the brokerage has set aside and you would miss out on any gains in share price beyond what they'd provided collateral. I can't speak to how it works for margin accounts.

Would someone else like to chime in and correct me if I'm mistaken?

You are *almost* correct.

If the broker was completely unable to acquire the shares at any price whatsoever, then the broker would default and give you the collateral, even though the broker wasn't bankrupt.

This is fairly unlikely; *someone* would be willing to sell the shares back to the broker at *some* price. The short interest in TSLA appears to be less than the float. If the short interest were actually *more* than the float, however, it is theoretically possible for no shares to be available at any price, which is when the broker would default.

 

[tivoboy]

Honestly, he better get this done, because nobody is going to want to hold shares going forward if it's just a public company again.

 

[neroden]

Anybody has an idea if shares held in IRA would have any problem converting to private?

Yeah, I am not sure about holding private shares in an IRA. Anyone know?

Would liquidity/upside be much worse in private fund?

Liquidity would be much worse. There are usually some special arrangements made for liquidity, but it's not like public listed stock.