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Good morning, all. I’ve been up since 0320, so if you think there’s a bear growling, it’s just me.....
First off, Mod Hat ON:
The following is a repeat of a portion of yesterday’s post. I suspect I’ll re-post this at irregular intervals.
There is as of end-of-day Tuesday a lot of uncertainty wrt many, many aspects. PLEASE READ EVERYTHING in this forum and in other venues with the utmost care. There is much, much misinformation; mal-presented information; guesswork put forth as hard fact....and possibly, as has happened once or twice in the past????....F.U.&D.
/Moderator
I couldn’t get through at market open, but -
I do not make a habit of buying on strength. From our initial position in TSLA between $35 & $53, I amassed another 30% or so with that ‘gift’ of $16.99 SCTY, giving us TSLA at $155; and then this spring at $249 a further 17%.
However, I determined to make an exception today; we added a further 14% at $375. This strains our liquidity; I have some non-liquid investments needing to be effected in the fairly short term and so had amassed a fair amount of cash for same....it now is tied up which puts me in a position I didn’t want to face. The extraordinary nature of the current situation presented, however, an opportunity I find magnificent.
Good luck to all...longs
First off, Mod Hat ON:
The following is a repeat of a portion of yesterday’s post. I suspect I’ll re-post this at irregular intervals.
There is as of end-of-day Tuesday a lot of uncertainty wrt many, many aspects. PLEASE READ EVERYTHING in this forum and in other venues with the utmost care. There is much, much misinformation; mal-presented information; guesswork put forth as hard fact....and possibly, as has happened once or twice in the past????....F.U.&D.
/Moderator
I couldn’t get through at market open, but -
I do not make a habit of buying on strength. From our initial position in TSLA between $35 & $53, I amassed another 30% or so with that ‘gift’ of $16.99 SCTY, giving us TSLA at $155; and then this spring at $249 a further 17%.
However, I determined to make an exception today; we added a further 14% at $375. This strains our liquidity; I have some non-liquid investments needing to be effected in the fairly short term and so had amassed a fair amount of cash for same....it now is tied up which puts me in a position I didn’t want to face. The extraordinary nature of the current situation presented, however, an opportunity I find magnificent.
Good luck to all...longs
Gotcha, the end-of-the-line no-one-home, tumbleweeds, where'd-everybody-go, pond-done-dried-up point in the curve...
was there a spike of sell upon opening, like a few million shares? A/D line spiked down, now going up
Ulmo
Active Member
It seems like the shorts are all calling up their buddies and turning them into more useful idiots just so someone else takes the opposite end of their exiting trade.
So much buying....
10 million shares in and still over opening price.
Edit: 250k shares/ minute average, that is 2.5 times the rate that would produce the MMD.
Hogfighter
Professional Lurker
So the shorts don’t believe Musk.
Which will make him want to take Tesla private all that much more.
Which will make him want to take Tesla private all that much more.
Dealbook: Two Huge Questions Hang Over Elon Musk’s $70 Billion Deal for Tesla
2018-08-08 13:57:57.862 GMT
By Peter Eavis
Elon Musk is plotting the biggest ever attempt to take a company private, but
it’s unclear how he’ll pay for it — or if it’s really worth it.
Mr. Musk, Tesla’s chief executive, shocked investors on Tuesday by tweeting
that he was considering taking the company private at a stock price of $420.
If he does, it would cost more than $70 billion. The company’s board of
directors met several times last week to discuss the idea, and six of its
members issued a statement saying that it is “taking the appropriate next
steps to evaluate” it.
Typically, those taking a company of Tesla’s size private would borrow tens of
billions of dollars to buy the shares held by public stockholders. But Mr.
Musk provided scant details about his plan. In his first tweet on the
transaction, he simply wrote: “Funding secured.” He did not say how much money
would be needed or from where it was going to come. When asked for more
information on the financing, Tesla declined to comment.
Investors were not too bothered by this lack of clarity: Tesla’s shares jumped
11 percent. They should be.
Tesla may find it difficult to line up banks and investors to lend it large
sums. Typically, companies taken private have somewhat steady cash flows.
Tesla does not. In the second quarter, it recorded another huge loss and
burned through hundreds of millions of dollars in cash.
Companies that are taken private usually have low valuations and are unloved
by investors. Tesla does not fit that description, either, which could prove
partly useful.
In theory, Mr. Musk could pull off the transaction without taking on massive
amounts of debt. He could persuade as many current investors as possible to
exchange their public shares for new ones in the private company. The more
that agree, the less debt needed.
Mr. Musk is Tesla’s biggest shareholder, holding 20 percent of its stock. The
next four largest hold nearly 30 percent combined. He might not get all of
those to buy into his plan. (One, Fidelity, also has a stake in SpaceX, a
private company led by Mr. Musk.)
He could also turn to his individual investors, who own nearly 13 percent of
Tesla’s shares. Many of those are incredibly bullish about the company.
To increase the chances of success with all of his investors, Mr. Musk has to
convince them that their shares in a private Tesla will one day be worth more
than the $420 that the transaction offers them.
Doing so will require convincing them that Tesla will perform better out of
the spotlight. Shareholders would also have to be willing to potentially get
less information about the company’s performance and have less opportunity to
sell their shares if it is no longer publicly traded.
Would Tesla perform better as a private company? Mr. Musk thinks so, on
Tuesday writing:
Some companies have indeed done better after going private (though there are
plenty of examples of those that have gone on to flounder). And Mr. Musk is
correct that Tesla has attracted a large number of short sellers — investors
who profit by betting on a stock’s decline. (He has waged a very public fight
against them.)
Arguably, though, the public markets have been very good to Tesla. The company
has successfully tapped them for capital, and, even when it has racked up
losses and consumed cash, its market value has marched higher and higher. Its
stock market value currently exceeds that of General Motors.
Investors are, in effect, giving Tesla much the same leeway as it would get if
it were private. Big institutional shareholders have remained patient as the
company strives to achieve long-term objectives, and have stood by the company
even when Mr. Musk’s behavior was unorthodox. They have even tolerated a board
that has been criticized for its oversight.
What is more, many of the problems at Tesla are of the company’s own doing.
Mr. Musk, for instance, last month described how problems with robots
contributed to production problems. When asked how these difficulties had
occurred, he told Bloomberg: “Because we were huge idiots and didn’t know what
we were doing.”
Investors must now weigh whether giving even more freedom to Mr. Musk, and the
extra debt the deal may incur, is worth it. It very well may not be.
2018-08-08 13:57:57.862 GMT
By Peter Eavis
Elon Musk is plotting the biggest ever attempt to take a company private, but
it’s unclear how he’ll pay for it — or if it’s really worth it.
Mr. Musk, Tesla’s chief executive, shocked investors on Tuesday by tweeting
that he was considering taking the company private at a stock price of $420.
If he does, it would cost more than $70 billion. The company’s board of
directors met several times last week to discuss the idea, and six of its
members issued a statement saying that it is “taking the appropriate next
steps to evaluate” it.
Typically, those taking a company of Tesla’s size private would borrow tens of
billions of dollars to buy the shares held by public stockholders. But Mr.
Musk provided scant details about his plan. In his first tweet on the
transaction, he simply wrote: “Funding secured.” He did not say how much money
would be needed or from where it was going to come. When asked for more
information on the financing, Tesla declined to comment.
Investors were not too bothered by this lack of clarity: Tesla’s shares jumped
11 percent. They should be.
Tesla may find it difficult to line up banks and investors to lend it large
sums. Typically, companies taken private have somewhat steady cash flows.
Tesla does not. In the second quarter, it recorded another huge loss and
burned through hundreds of millions of dollars in cash.
Companies that are taken private usually have low valuations and are unloved
by investors. Tesla does not fit that description, either, which could prove
partly useful.
In theory, Mr. Musk could pull off the transaction without taking on massive
amounts of debt. He could persuade as many current investors as possible to
exchange their public shares for new ones in the private company. The more
that agree, the less debt needed.
Mr. Musk is Tesla’s biggest shareholder, holding 20 percent of its stock. The
next four largest hold nearly 30 percent combined. He might not get all of
those to buy into his plan. (One, Fidelity, also has a stake in SpaceX, a
private company led by Mr. Musk.)
He could also turn to his individual investors, who own nearly 13 percent of
Tesla’s shares. Many of those are incredibly bullish about the company.
To increase the chances of success with all of his investors, Mr. Musk has to
convince them that their shares in a private Tesla will one day be worth more
than the $420 that the transaction offers them.
Doing so will require convincing them that Tesla will perform better out of
the spotlight. Shareholders would also have to be willing to potentially get
less information about the company’s performance and have less opportunity to
sell their shares if it is no longer publicly traded.
Would Tesla perform better as a private company? Mr. Musk thinks so, on
Tuesday writing:
Some companies have indeed done better after going private (though there are
plenty of examples of those that have gone on to flounder). And Mr. Musk is
correct that Tesla has attracted a large number of short sellers — investors
who profit by betting on a stock’s decline. (He has waged a very public fight
against them.)
Arguably, though, the public markets have been very good to Tesla. The company
has successfully tapped them for capital, and, even when it has racked up
losses and consumed cash, its market value has marched higher and higher. Its
stock market value currently exceeds that of General Motors.
Investors are, in effect, giving Tesla much the same leeway as it would get if
it were private. Big institutional shareholders have remained patient as the
company strives to achieve long-term objectives, and have stood by the company
even when Mr. Musk’s behavior was unorthodox. They have even tolerated a board
that has been criticized for its oversight.
What is more, many of the problems at Tesla are of the company’s own doing.
Mr. Musk, for instance, last month described how problems with robots
contributed to production problems. When asked how these difficulties had
occurred, he told Bloomberg: “Because we were huge idiots and didn’t know what
we were doing.”
Investors must now weigh whether giving even more freedom to Mr. Musk, and the
extra debt the deal may incur, is worth it. It very well may not be.
Ulmo
Active Member
This is how I interpreted it as I read it:
The board has a say. So, if Elon communicates this with the board, automatically, the board has a say. The legal and polite way to say it is one of the following:
- Explore (desperate)
- Ask (weak)
- Addressed (the strongest possible way to do it while recognizing that the board legally has a say)
- Told (not legal (or more to the point, not true))
Try these out: "I addressed the employee that I fired them." "I told the employee that I fired them." Now try these three: "I asked the crowd." "I addressed the crowd." "I told the crowd."
Correct. It is ambiguous, and was intended to be ambiguous. Lawyers wrote the statement for the Board Members' signatures, and they use words carefully.
People can read into it what they will, but the board members did not actually say ANYTHING substantive about funding. Deliberately.
or not...
With conversion to private, those investors that want to stay in already have their position/stock paid for, and not at $420.
You need to get over the fact that they just don't have to tell you until they want to.
A lot of retail investors are waking up and realizing the price difference between 380 and 420 isn’t worth the risk to hold on. If you need the investment money, selling now is prudent. Myself, I more than doubled my long position at this price point yesterday. I’ll take every freebie Elon throws my way (last one was the SCTY arb). When the deal is finalized, I may very well sell that large stake I bought yesterday at 420, just keeping my regular long position in private Tesla.
If the deal falls apart (very unlikely IMHO), I’ll be stuck holding a bunch of TSLA stock for quite a while I suspect.
If the deal falls apart (very unlikely IMHO), I’ll be stuck holding a bunch of TSLA stock for quite a while I suspect.
Apple is certainly one of many possible candidates. Remember the constant stream of "Apple should buy Tesla!" articles from analysts over the course of this year? They're flush with cash and seem not to know what to do with it.
The Saudi Sovereign Wealth Fund is another one. They're worth trillions and looking for good hedges against oil.
I'd also add the Norwegian Sovereign Wealth Fund. Huge fund, they only do environmentally friendly / morally responsible investment, and the country is big on EVs in general and Teslas in particular.
China these days seems to be throwing cash at anything that moves, particularly if it has a plug.
Should we bother to bring up that Musk is good friends with Larry Page?
There's tons of possibilities.
It's important to remember that $420 is only 20% more than $350. They're not offering that huge of a premium for investment in a private Tesla over a public one. And for that, they get to kick out all of the shorts that are driving down the price at present.
Well, what I worry about is the limits of his power.
I do hope this gets rid of some of the smear campaigns, but it won't get rid of all of them. The Russian government trolls will happily continue smearing renewable energy, it's never been about the stock market for them...
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