TSLA Market Action: 2018 Investor Roundtable

[Boomer19]

Why would a short try to cover above $420 though? Still trying to learn how this works..

said short wouldn’t be trying, but rather forced to, as liquidity dries up (nobody willing to sell their shares to the shorts that are trying to cover)

 

[Remus]

Why would anyone believe Elon is bluffing? This is beyond comprehension.

He has answers ready to many questions on Twitter. Apparently this is a prepared announcement, not a at-the-moment vent.

Bluffing like that is a blatant violation of regulations and a sure way to hurt Tesla as a whole, which Elon care most about.

Unless if one think Elon is plain stupid. He is a self-taught rocket engineer. The delusionals who think he's stupid will pay.

A friend asked me if I thought Musk was bluffing.

Here's my response:

Absolutely not. I think Musk is fed up with Wall Street and the Short Sellers and the outright lies reported in the media. He probably does have the funds to take Tesla private at $420. I had believed Tesla would be a $1000 stock in 2020 (and had positioned myself accordingly in the options market). So getting some Silicon Valley friends together to come up with 20-30 billion to make a 10X return is totally doable for Musk. But I don't think it will go for only $420.

25% of the float is sold short. Once shares are recalled by mutual funds that are required by their bylaws to vote on the buyout, 30 million shares will need to be purchased. Musk set a floor of $420 for the market. Any long should hold out for $420, so where do the shorts get the shares? They will be bidding up the price -- if it was a linear equation 25% on top of $420 is $525, but there will be many longs who won't even sell for that. This could be the next equivalent of the VW short squeeze. $1000 a share is not out of the question.

If the market bid shares up to $1000, Musk wouldn't take Tesla private, but he would have accomplished the same goal -- the shorts would be out and he can focus on his businesses without the constant day to day distractions of the short sellers and the misinformation and sabotage they pay for.

So if you have LEAPS above $420 don't sell them for pennies now, this was the opening shot in the war to obliterate the shorts. Things are just starting to get good.

 

[AudubonB]

As a long term holder of TSLA I'm fine with this. I appreciate the opportunity to take share in the private company.

The downsides:

- no more stock option trades (I like to sell time value, Puts and Calls alike); TSLA offered fabulous premiums most of the time
- less liquidity
- probably not marginable, just cash; thats a big one, because just the option of getting into margin gives me peace of mind when liquidity gets thin
- no more TSLA investor discussions on TMC<===MOD: I thought you were listing downsides
- what to do with the spare time?

Maybe we should start discussing other stocks/trading strategies. Anybody want to suggest a proper venue?

 

[hockeythug]

I am simply stunned that you all are believing Elon here. Who is the buyer?

By this time, we should have seen some financial institution stand up and say "Yes, we're willing to buy Tesla shares at 420 per share in order to help them go private."

It sure looks like Elon Musk just torpedoed his career and his company. They're going to need 50-60 billion, making this one of the largest buyouts in history.

The fact that no one is taking credit is shocking.

Not everyone is going to sell so it's not going to be anywhere near $50-$60B.

 

[Henchman]

I'm still going to hold my shares for 10 years.

 

[Dan Detweiler]

I am simply stunned that you all are believing Elon here. Who is the buyer?

By this time, we should have seen some financial institution stand up and say "Yes, we're willing to buy Tesla shares at 420 per share in order to help them go private."

It sure looks like Elon Musk just torpedoed his career and his company. They're going to need 50-60 billion, making this one of the largest buyouts in history.

The fact that no one is taking credit is shocking.

The fact that you believe that is the fuel that makes this all so satisfying.

Dan

 

[madodel]

I am simply stunned that you all are believing Elon here. Who is the buyer?

By this time, we should have seen some financial institution stand up and say "Yes, we're willing to buy Tesla shares at 420 per share in order to help them go private."

It sure looks like Elon Musk just torpedoed his career and his company. They're going to need 50-60 billion, making this one of the largest buyouts in history.

The fact that no one is taking credit is shocking.

You certainly don't give up, you just double down on the insane nonsense. Just because you spend all your time doing it, everyone else isn't a liar.

TSLA up $37.58 today. Very nice vertical spike at the end. Would be higher except for the halt. Nothing you can do to stop it.

 

[Remus]

Wow, just wow! You must be God, so that any wealthy institution or individual trying to make money have tell you their intensions!!

You must have been informed of Tencent's intention for buying Tesla share on open market before they actually did.

You must have known about Buffet's intention for aquiring significant stake on Apple as well. With all these information, you must be the wealthiest person on this planet.

I am simply stunned that you all are believing Elon here. Who is the buyer?

By this time, we should have seen some financial institution stand up and say "Yes, we're willing to buy Tesla shares at 420 per share in order to help them go private."

It sure looks like Elon Musk just torpedoed his career and his company. They're going to need 50-60 billion, making this one of the largest buyouts in history.

The fact that no one is taking credit is shocking.

 

[dmckinstry]

I have some knowledge of this and do not doubt that SA is smart enough to know what the cheapest source of energy is for them at this point and to invest accordingly.

I also 100% believe they have no intention of stranding their assets currently valued at trillions.

Once their own energy needs are satisfied, they can hold their oil for use other than burning. I don't think they want their air polluted either, and pollution in the rest of the world also gets to them eventually. I've heard (hearsay) that the air you breathe has molecules in it that has been in every living animal at some point in history.

 

[ggr]

Even though Tesla will pay you $420 for 1 of your shares...

what if you valued that share at more than $420?

The fact that Tesla backers will buy the share for $420 has no bearing on what a short will have to pay to buy the share. They are competing for the same purchase! All it does is establish a floor price.

I'm amazed that we're still $40 below that floor at this instant. Hmmm... need spreadsheet...

 

[Cosmacelf]

In the event that happens and the deal falls apart or shareholders don't vote for it, wouldn't the stock then quickly plummet?

Yes.

 

[Mkorpal]

Anywho, I’m done thinking about this today. Tomorrow will be interesting.

 

[hacer]

Maybe because, it destroys OTM calls? Not every investor is in 100% shares.

Call owner's don't get to vote shares since they don't yet own them.

 

[dmckinstry]

I think we have to wait to hear more details... Offhand, I'm guessing Tesla could essentially manage its own stock market, providing a console through which to buy/sell private shares, but presumably without any of the more exotic share lending and such?

Eliminate day trading and options. All you people doing that should convert to common shares as quickly as possible.
An Advise?

 

[dmckinstry]

I think I am aging about 10 years in the last hour....and I don't have that many years left!!

It's a good thing I was away from my computer and didn't have my cell phone with me since 11 am PDT.

 

[Sancho]

(1) I’ve seen some questions about why TSLA didn’t jump all the way to 420. I believe that this reflects some uncertainty as to whether the privatization deal will actually happen.

I would put the chance of Tesla going private (or it stays public because the stock price is driven much higher than Musk’s financial buyers want to pay to take it private) at 99%. There aren’t the same risk factors that make a merger somewhat speculative. Given the way this is being structured where anybody can stay in, it really makes no sense for shareholders to oppose it.

The sp will be at least $415 tomorrow. Investors with trillions of capital don’t need to know anything about cars, or the auto industry or market. They don’t need to have an opinion about Musk. This is just a simple calculation of what are the risks that a deal structured like this will not happen.

 

[Cosmacelf]

I am simply stunned that you all are believing Elon here. Who is the buyer?

By this time, we should have seen some financial institution stand up and say "Yes, we're willing to buy Tesla shares at 420 per share in order to help them go private."

It sure looks like Elon Musk just torpedoed his career and his company. They're going to need 50-60 billion, making this one of the largest buyouts in history.

The fact that no one is taking credit is shocking.

Yes, this is the current thinking on the street. Because no US institutional capital provider is talking, wall street is very confused and/or smelling a rat. But there are a bunch of possibilities. Maybe more oil money is interested (the Saudi wealth fund news got completely overshadowed today), or maybe various Chinese sovereign or other funds are interested. All very plausible.

 

[MarcusMaximus]

I would put the chance of Tesla going private (or it stays public because the stock price is driven much higher than Musk’s financial buyers want to pay to take it private) at 99%. There aren’t the same risk factors that make a merger somewhat speculative. Given the way this is being structured where anybody can stay in, it really makes no sense for shareholders to oppose it.

The sp will be at least $415 tomorrow. Investors with trillions of capital don’t need to know anything about cars, or the auto industry or market. They don’t need to have an opinion about Musk. This is just a simple calculation of what are the risks that a deal structured like this will not happen.

Agreed. I wish I could buy more right now... By the time I could transfer the money to my brokerage to buy more, it'll be too late though.

 

[generalenthu]

I’m sure one day I will show this thread to my grandkids!! From today until the sale (presumably) goes through has been and will be a wacky, wonderful ride.

You have the scty deal discussion for that already. You could have driven a Tesla semi thru that arb spread.Good times. Looks like it's happening again.

 

[Electroman]

Yes, this is the current thinking on the street. Because no US institutional capital provider is talking, wall street is very confused and/or smelling a rat. But there are a bunch of possibilities. Maybe more oil money is interested (the Saudi wealth fund news got completely overshadowed today), or maybe various Chinese sovereign or other funds are interested. All very plausible.

Larry Page