TSLA Market Action: 2018 Investor Roundtable

[Singuy]

Tesla Board To Meet With Bankers Next Week - Sources

TSLA rocketing up AH as CNBC reports this

This is the easily money one can ever make as long as you don't think Elon is suicidal or wants to tank his own company for shits and giggles.

Huh. So, it sounds like Elon might actually not be lying about this? So if I'm short the stock, now is probably a great time to consider covering? Or would it be better to hang on in case the stock drops further? Asking for a friend....

If Elon wants to go private and even worked on this personally to make it a reality, it'll become a reality. I suggest you cover asap before caught in between the big leagues covering. All it'll take is one big domino to fall.

 

[gtrplyr1]

Let's be honest .... Elon can "recuse" himself all he wants ... that board does what Elon wants ... period. And that how it should be. IMHO.

 

[KarenRei]

Definitely hold onto it. Elon is a liar

You're mean

 

[mongo]

Ok what happen if this scenario comes, Tesla publicly declared to go private, I think they have no obligation to declare who is providing funding, most long term investor want to stay with Tesla so let’s assume Tesla has lined up big investor with 30 billions, Short sellers and Mr market doesn’t want to believe privatization will happen, Mr Elon tells their big investor you know what start buying stock in open market with aggrement from them not to sell, short sellers will stay in denial and big investor buying will push stock to $420, then panic start from short sellers and stock even go further up from $420.00, this would be a short burn of century.

Yes, with the caveat from @Reciprocity that call options and funds that must divest could provide liquidity above $420 to reduce the squeeze.

Which does help in terms of choosing to stay in Tesla or cash out on the squeeze.

 

[dandurston]

He said he's already doing it with SpaceX. Why can he do it there but not with Tesla?

I'm no expert on this, but what I'm reading is that once a company has more than 2000 shareholders they need to go public but employees don't count towards this number. A few years ago this limit was 500 and it forced Facebook to IPO. I think ex-employees do count towards the cap, so eventually SpaceX will get there.

But what Elon is talking about with TSLA seems to be something different. I think it's more of an unlisted stock than a true private one. But my learnings run out there.

 

[Causalien]

I don't know how common is your scenario. Mine probably isn't either, except on this forum. Both wife and I have decent salaries. We both have decent RRSPs

I had some RRSP-s and then did over 7x in mine and 2.5x in my wife's.

Because of high marginal tax on our income, there is no effective way to scale back our RRSP until we retire, especially if investments continue doing well. I'm not gonna invest worse just to pay less tax We could dabble with lending ourselves a mortgage, for second or commercial property, to initiate some transfer of wealth, many reasons against it.

You should consider retiring now and use the time to slowly take out rrsp (since you have a higher balance) . Start a corp and funnel all your income (and reinvest into corp) into that corp in the mean time.

A equivalent loan can be taken out to fund tsla shares and your rrsp money you take out goes into repaying the loan gradually. There's some loss, but it's not max tax. A good time to become an entrepreneur for you.

Then again, I am describing how I would've done it. I don't bat an eye on transitions like these. But it is life changing for most people.

Or you can buy a house and have your mortgage inside your rrsp so you are just paying yorself the mortgage. Cost about $30000 to setup though.

 

[lklundin]

This is the easily money one can ever make as long as you don't think Elon is suicidal or wants to tank his own company for shits and giggles.

Yes, it is almost as if - how should I put it -
one should not bet against Elon Musk.

EDIT PS. I will excuse myself for a little while, to lurk over at the shorts for the lols.

 

[jhm]

Yes, it is almost as if - how should I put it -
one should not bet against Elon Musk.

The house always wins.

 

[Ulmo]

"Boring" question that has been on my mind lately....

If the private deal goes through, can he easily fold Boring Company into Tesla? Would it make sense? Would the combined entity make it more profitable for private investors longer term?

There's certainly some synergy (more than with SpaceX) as the plan is to have TSLA design all pods and drivetrains for tunnel scates. Thoughts?

Oh yes, theoretically, tunnels are great for energy, utilities, and transportation! But, practically speaking, *no*. Tunnels interact with huge swaths of owners and governments. Tesla doesn't want that hot rail right now. Have you actually *seen* Boring Company's announcements?

1. We will primarily service independent car owners that are driving direct from where they are to where they are going, in hope to improve life for everyone. Buy a hat & a flame thrower!
   
2. We will primarily service mass transit, and allow car owners on maybe. Watch a Tesla on a drive in our tunnel, but remember, you are not allowed to do this.
   
3. We are only doing mass transit, and are actively partnering with anti-car agencies. Watch our rail cars inside our tunnel!

Ok, um, enough said.

Edit: I kept thinking. Other companies that would fit Tesla's buiness model to go shopping for once they have spending money but are a bad idea to buy:

• Lawn care: machinery. Buy one EV mower & trimmer company and one ICE mower & trimmer company, and fold them into Tesla as EV mower & trimmer products. Difficulty: liability for injuries.
  
• Tractors: ditto. Farmers would love to be liberated from the chokehold Deer has on them, but John would hate it. Tesla would get clobbered from both sides. Plus, when I lived in Iowa, farmers were always dying from tractors "accidents"; I assume most were murders, but I'm sure the murderers would love to also catch a liability payout in addition.
  
• Cement factories: get a hand in the construction business! Good synergy with tractors and energy. Convert the cement factories to solar powered. Resistance? Much. (Unions, construction companies, all manufacturers scared of being "Greened", cement buyers, cement companies, and EVERY SINGLE POWER-HUNGRY "ENVIRONMENTALIST" (cement factories are notorious polluters; reducing 99.9% of the pollution would STILL put you in all sorts of trouble, but even worse than that, you could have LOADS of pollution still coming from your cement factory, but fake power-hungry "environmentalists" would HATE you for the 40%, then 80% reduction, then 95% reduction etc. that you already achieved as you go since you would be SOLVING THEIR ISSUE that THEY want to own (and NEVER solve)).
• HVAC. Replace gas heaters and fireplaces with efficient electric heaters. Would be smart grid compatible with all other Tesla energy products and competitors' products. Would require sufficient home solar and home battery to provide that energy, since the grid doesn't have enough capacity at the neighborhood street block level. This is coming, but the regulations would be a huge pain. Occasionally, utility transformers would blow out; huge huge problem.
• Drones that replicate the natural cleaning of forests that have been mismanaged; artificial forest management. This is a huge political hot potato: the power hungry people want the fires as a problem.
• Desalination: desalination for days and decades and eons and miles and continents and planets. Ditto the power hungry people.

I did think of one thing Tesla should do though:

• Temporary power. Actually, this one should be easy for Tesla to do. I don't see a lot of downside. It requires the GigaFactory 1 (battery) producing way more. They could come out with this at the same time as their pickup; similar market segment.

 

[Chartered321]

I feel like a girlfriend I'm deeply in love with says she wants to leave me, but the day after she says she needs time to think and now she's kind of sure about ending our relationship.. I don't wanna sell my shares
I remember when I first sold all of my shares in June 2013, I felt so bad that the day after I went all in again.
Rule n1 of trading: never fall in love with a stock.. I guess with TSLA everything is different

 

[graphix25]

Good thing there are 195 countries in the world. The 137 countries remaining we can party like it's 1999!!

Daddy Elon's Wild Ride is a real trip. If this was a roller coaster it would be banned from theme parks in 58 countries.

 

[defc0n]

Huh. So, it sounds like Elon might actually not be lying about this? So if I'm short the stock, now is probably a great time to consider covering? Or would it be better to hang on in case the stock drops further? Asking for a friend....

I am almost always respectful of the value the stock market assigns to a company. The last few days however has forever scarred my confidence in the market after what I perceive to be an obvious $420 price point for the stock at this time. Nevertheless, gave me an opportunity to load up more with the pullback I guess.

I’m much less confident of the feasibility of it going much higher than $420, but I’ll be open minded about that too I guess since some of you seem sure about the possibility.

 

[Johann Koeber]

A bar in Reykjavík?

Love it.

See you all at the private company shareholder meeting in Reykjavik

 

[KarenRei]

Love it.

See you all at the private company shareholder meeting in Reykjavik

I'd offer to pick everyone up at the airport in my Model 3, but.... (checks the schedule for when Eurospec is supposed to come out...)

 

[beachbum77]

Tesla board meeting with advisors next week RE going private, asking Elon to recuse himself from process.

Breaking on CNBC

Stock up AH.

Board has to treat this as a real bid. Otherwise, it would make Musk look like a fool with his tweets and could get him in hot water with the SEC. I just hope he really has his ducks in a row. Time will tell. It all rests on who is funding $60 billion or so for a company that has never had an annual profit.

This is starting to look like the RJR Nabisco deal form back in 1988 when KKR thwarted F Ross Johnson's efforts to take the company private. Except I do not expect anyone to try to outbid Musk at $81 billion including debt.

 

[Fact Checking]

Curse my hesitation to go into margins! This is why I suck at this.

Remember: to the average person investment loss hurts about 2-3 times as bad as the pleasure brought by investment gains. Being annoyed by excess free margin is better than a margin call.

Or that the float is 127, not 145 million. Unless they assume a bunch of insiders are getting out for some reason.

They also seem to ignore that 27% of the float is held short. If all the shorts cover, as they must before delisting from NASDAQ, that will reduce the number of shares floating by 27%!

I.e. the ~126M float will be reduced to about ~100M shares, by a generous (and admittedly involuntary) anti-dilution share repurchase program executed by the TSLA shorts, which will increase the real per share value of Tesla by something like $70 at current price levels?

 

[avoigt]

Tesla's Strengthening Case to go Private | Loup Ventures

 

[phil0909]

Huh. So, it sounds like Elon might actually not be lying about this? So if I'm short the stock, now is probably a great time to consider covering? Or would it be better to hang on in case the stock drops further? Asking for a friend....

I see no indication in in the MSNBC article that Elon is or is not lying about having secured funding. It says:

"It also still isn't clear if Tesla has committed financing. Musk tweeted he had "funding secured" on Tuesday when he said he was considering taking the company private at $420 per share. Tesla has declined to comment on funding for the transaction, leading to speculation Musk doesn't have committed financing and drawing a request for more information from the U.S. Securities and Exchange Commission."

Where are you seeing any new evidence in support of Elon's funding assertion?

 

[EinSV]

Remember: to the average person investment loss hurts about 2-3 times as bad as the pleasure brought by investment gains. Being annoyed by excess free margin is better than a margin call.


They also seem to ignore that 27% of the float is held short. If all the shorts cover, as they must before delisting from NASDAQ, that will reduce the number of shares floating by 27%!

I.e. the ~126M float will be reduced to about ~100M shares, by a generous (and admittedly involuntary) anti-dilution share repurchase program executed by the TSLA shorts, which will increase the real per share value of Tesla by something like $70 at current price levels?

Exactly. I don't know why no one in the media seems to understand that the shorts are buying back something like 1/2 of the shares necessary to close Elon's deal that will burn their position into the ground. Poetic justice.

Here is the math according to Gene Munster in the post above:

"Insiders, including Musk, own just over 25% of Tesla shares. Individual investors account for 12% of shares, and large institutional investors like Fidelity and T. Rowe Price make up the remaining 63%. We believe nearly all investors would be supportive of going private, but not all institutional funds would be able to participate in private investments. For that reason, we assume half of Tesla’s institutional ownership (~30% of the company) needs to be bought out. Individual investors, who see greater upside than 13.5%, would likely prefer to maintain ownership if they are able to, depending on fund structure and accredited investor requirements. In short, the more shareholders that decide to roll their shares into the private entity, the less funding Tesla will need for a buyout. By our math, Tesla will need between $25 and $30B."

But Munster does not account for the fact that there are effectively 205 million shares outstanding because shorts have borrowed 35 million on top of 170 million actual shares outstanding.

Once the short sellers are forced to buy those shares back for ~$13billion, the new investors only need to pay something like $13-$15B to get the deal closed. The shorts buy out the rest of the institutions and retail shareholders who don't want to be part of the private Tesla.

 

[Moderatefan]

Elon is suicidal or wants to tank his own company for shits and giggles.

Mind you, if he goes to jail, he will be screwing at least 4 companies. That would be a masterpiece screwup.