TSLA Market Action: 2018 Investor Roundtable

[Johan]

For the life of me I don't see how it's possible to buy TSLA for $375 now in the pre-market. Today and the upcoming days are going to be when all the shorts have to run for cover. This is going to be like the final stand and if we have seen FUD and attempts of "price manipulation" before the period between now and the buy-out deal is going to be more of the same. But when have we ever had any reason to doubt a statement from Elon like this, sure he can be a bit optimistic about timelines and such but if he says he has secured financing at $420 I wouldn't bet against him.

So here I am gathering up all the capital I can muster, drawing on my home equity line of credit ready to buy more stock. I'm not going to do option plays here, I'm too scared of the volatility.

 

[SebastianR]

For the life of me I don't see how it's possible to buy TSLA for $375 now in the pre-market. Today and the upcoming days are going to be when all the shorts have to run for cover. This is going to be like the final stand and if we have seen FUD and attempts of "price manipulation" before the period between now and the buy-out deal is going to be more of the same. But when have we ever had any reason to doubt a statement from Elon like this, sure he can be a bit optimistic about timelines and such but if he says he has secured financing at $420 I wouldn't bet against him.

So here I am gathering up all the capital I can muster, drawing on my home equity line of credit ready to buy more stock. I'm not going to do option plays here, I'm too scared of the volatility.

THIS! A hundred times THIS! I'm not going into debt (matter of principle) and I will not add to Options, but every share under $420 is a bargain right now. We had this before with SolarCity.

Then agian, @neroden mentioned that it usually takes a day or two for everyone to smell the coffee. So maybe it is not too unusual that the price is moving slow? Anyways, gotta hit Frankfurt now...

 

[Dan Detweiler]

Anyone knows what happens with Elon's CEO Performance bonus which is based on market caps & EBITDA's?

If wiped out, why would he gives this up?

Because he in no way needs it. How much money can one guy spend? LOL!

Dan

 

[schonelucht]

Anyone knows what happens with Elon's CEO Performance bonus which is based on market caps & EBITDA's?

If wiped out, why would he gives this up?

Irrelevant at this point, Elon already has an agreement on how they are going to handle this with those who are financing the buy out.

 

[Runarbt]

THIS! A hundred times THIS! I'm not going into dept (matter of principle) and I will not add to Options, but every share under $420 is a bargain right now. We had this before with SolarCity.

Then agian, @neroden mentioned that it usually takes a day or two for everyone to smell the coffee. So maybe it is not too unusual that the price is moving slow? Anyways, gotta hit Frankfurt now...

With solar city merger - you also got a 10-15% discount by selling TSLa and buying Solar City after the convertion rate was publiseh- it took weeks for the discrepancy to get down to close to 0%. It was weird.. too bad I only bought some solar city - and didnt sell all my TSLA to grow my position 15%. :-/

I guess its the same thing se wee now. 15% discount until the deal is done and over with. I am buyiong calls with my cash now. Bought sept.350 yesterday the peak after halt was lifted. Luckily I have enough to dbl this position if the SP stay at current level.

Buying calls ITM og share now - does seem like a no brainer as 420$ should be a hard floor not too long?

 

[anon]

Because he in no way needs it. How much money can one guy spend? LOL!

Dan

Actually he does need it - the money is needed for a Mars colony. He's probably one of the few people in the world who can spend that kind of money...

 

[shlokavica22]

Buying calls ITM og share now - does seem like a no brainer as 420$ should be a hard floor not too long?

The question is for what date? If the details about the deal get dragged for too long (leaving uncertainties), then your short term option might even lose money. On the other hand long term call will carry time value that you will lose eventually.

 

[schonelucht]

THIS! A hundred times THIS! I'm not going into dept (matter of principle) and I will not add to Options, but every share under $420 is a bargain right now. We had this before with SolarCity..

This is simply not true. I wish people were more careful with these kind of statements. There is always a chance the deal does not go through and there is always the chance that the stock price will suffer from it. Just because it worked with SolarCity does not mean it will work in this case.

 

[Dan Detweiler]

THIS! A hundred times THIS! I'm not going into dept (matter of principle) and I will not add to Options, but every share under $420 is a bargain right now. We had this before with SolarCity.

Then agian, @neroden mentioned that it usually takes a day or two for everyone to smell the coffee. So maybe it is not too unusual that the price is moving slow? Anyways, gotta hit Frankfurt now...

Like you say, a lot will play out over the next few days. I think the only way a deal does not get done is if the SEC finds some way of shutting it down for whatever reason. I find it hard to believe that Tesla doesn't have an army of lawyers that haven't already thought through any and all objections however. The question now becomes...what will the final buyout price be? Many feel that $420 is the rock bottom price and it can only climb from there. Gonna be a wild and woolly few days on Wall Street for TSLA, that's for sure.

Dan

 

[FirebirdAlpha]

$376 in pre-market folks, for those that have dry-powder.

Seriously, who would be selling now - even if this deal falls-through, the SP is likely to be going to $420 very soon...

I don't get it.

Let me help. There really appear to be only two plausible scenarios:

Scenario 1) We are about to witness the largest private-take in history, for an automaker that's 10.7B in debt and has lost 2.1B over the last three quarters.

Scenario 2) Elon Musk just committed blatant securities fraud by lying to investors when he said "funding secured" at 420/share and "we are just a shareholder vote away."



Evidence of scenario 2:

• Not a single comment from Tesla PR or Tesla IR or Deepak.
• There's still no 8K.
• No other entities have taken credit for participating in this historic purchase.
• They literally just filed their 10Q without a single mention of any of this.
• Musk's letter to employees was exceptionally weak ("I aspire," "I envision" - I thought funding was secured?).
• And.. Scenario 1 is simply astounding. It's simply hard to believe. Consider that, at this price, you could buy Ferrari, Ford, and a few startups.

 

[Dan Detweiler]

Assuming a deal does get approval from all necessary entities, what kind of time-frame are we looking at for implementation? Wondering if a deal can be finalized before the Q3 numbers have to be reported. Any thoughts?

Dan

 

[Dan Detweiler]

Actually he does need it - the money is needed for a Mars colony. He's probably one of the few people in the world who can spend that kind of money...

Pretty sure the plan over at SpaceX is to fund the Mars project with revenue from Falcon 9, Falcon Heavy and BFR earth missions. Once the reuse ability is assured and maximized, every mission becomes almost pure profit with almost nothing going into R&D, leaving profits to be invested in Mars.

Dan

 

[generalenthu]

Assuming a deal does get approval from all necessary entities, what kind of time-frame are we looking at for implementation? Wondering if a deal can be finalized before the Q3 numbers have to be reported. Any thoughts?

Dan

I don't see it happening before Q3 numbers are due.

 

[mongo]

Tesla's board will have to entertain all comers from Apple, Google, sovereign funds who might want to take control, etc. The board is obligated to act in the best interest of shareholders.

Don't know if this slipped by:
@elonmusk: Investor support is confirmed. Only reason why this is not certain is that it's contingent on a shareholder vote. Tesla on Twitter

This deal is different from a normal go private. The idea is not to buy out all investors, the idea is to delist while allowing people to maintain equity.

As @wipster mentioned, Elon likely has >50% of shares on board. Those do not need to be bought out, they just transfer. The only shares purchased by private Tesla are from people who don't want, or can't stay in Tesla. The majority group also likely wants Tesla to stay as-is in terms of management. Putting these together, outside offers would be rejected (even if only due to loss of future gains).

For a typical buy out, the bidder would need to pay on 100% of the shares and it would the last opportunity for stockholders to realize gains from their shares. Whereas in this case, all are invited along with the opportunity for value growth.

As @neroden points out, it may be hard to convert some holdings to private Tesla and will potentially not be without tax consequences. I have a trading account with funds I can't put in Tesla due to liquidity needs, and other shares are in various types of IRAs and former employer 401(k)s, so, worst case, I could transfer at the cost of penalties and tax deferred status, but hopefully I can rollover to the managing fund. Others on a current employer 401k are not as adjustable.

Future share price wise, if they act like SpaceX reportedly does, then every 6 months the company gets appraised and you can sell shares. So a high entry price could put you upside down (depending on how/if future growth is factored in). Equity grows with company and is not impacted by shorts and such. Theoretically a much more monotonic trend.

 

[Revhappy2]

JPM's new target for TSLA: $308

#TSLA - Twitter Search

 

[avoigt]

For what it's worth, I think we have seen this time and time again: Many here (including myself) made a bit of money in the Solar City merger. The FUD was so strong that nobody took the arbitrage opportunity. Look at Mark B.S & Co - they are all so far gone, nobody believes this will happen.

What's more: my bank advisor (who is clueless) just told me with conviction that this will never happen... All of this together? Go figure why the share price is not higher...

What does he know we don't that allows him to use the word "never"?

 

[lklundin]

What does he know we don't that allows him to use the word "never"?

Alternative to having knowledge, they could use the word in error.

I need to be suspicious of my own potential bias, but I do believe there is a saying about never saying never.

 

[juanmedina]

In case of a short squeeze, at what price are you setting your sell limit order?

 

[Cartegena]

For some possible perspective on the timing of all of this, Tesla announced the proposed merger with Solar City on June 21, 2016. They set the date of the shareholder vote as November 18 and this date was announced on October 12. The shareholder vote did take place November 18, and the SCTY shares were converted to TSLA shares on November 21.

I predict that this current situation will occur much faster.

Why faster? Wouldn't the process be similar?
-Form committee of independent directors
-Committee hires lawyers and consultants to evaluate what's fair to share holders
-Obtaining regulatory approval--may be more controversial depending on source (China?) of funding
-Board approves and sets shareholder vote date

The SPIV allowing retail investors to remain in the private entity would seem to complicate the process.

 

[CuriousSunbird]

Elon Musk on Twitter
Am considering taking Tesla private at $420. Funding secured.

Wow. Either Elon just repealed every law of finance, or he's jumped the shark.