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TSLA Market Action: 2018 Investor Roundtable

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I have to think that with this news and presumably a little more info about SEC/financial backers through the weekend or on Monday that the price is ready to rocket. That said, I've misread the shorts and the power of baseless FUD plenty of times before.
In this case, you are misreading the news, not the shorts. ;)

neroden is the only one reporting that Musk has lined up funding from one or two large investors. The Bloomberg article cited says no such thing.
 

tinm

2020 Model S LR+ Owner
May 3, 2015
2,463
12,331
New Mexico, USA
Good catch, and probably correct.

This is confirming my decision to cash out my IRA stake. I'll just keep the after-tax / owned-outright part (and probably not all of that, because I need liquidity).

This sounds awful in my opinion. My IRA account used to consist of three stocks, one of which was TSLA. Over the years, as the other stocks reached ATH’s, I’d sell and use the proceeds to buy more TSLA. :) Now all that is left in my IRA is 100% TSLA and it has done very, very well.

The idea that I might have to sell it all and take a 10% tax hit on the sale because of the rules of a broker or the rules set by Tesla going private sound quite unappealing.

Frankly I don’t want to take a 10% tax hit if I can avoid it. However if it turns out to be inescapable then I wonder if I should gamble and sell all the TSLA in the IRA right now , close out the IRA, eat the 10% tax, and roll the remaining proceeds into buying more TSLA for my normal brokerage account and make up the 10% tax hit with the rise in share price to $420 and beyond. Thoughts?
 

tinm

2020 Model S LR+ Owner
May 3, 2015
2,463
12,331
New Mexico, USA
As I reported on the General thread, I just contacted Schwab and was informed by Nathan there were no restrictions by Schwab, only by the terms or whatever the conversion process is. Now I'm scared again.

Schwab is like Tesla Service in this regard. Talk to N different people, get N different official, often directly contradictory, answers. :)

But I digress...
 

30seconds

Active Member
Feb 28, 2013
2,272
5,879
SF
If the board is truly acting in shareholders interest, then...

1) the board will make a public statement about whether the $420 offer is a fair offer or not. Given previous statements by Tesla management on expectations about the future of the company, isn’t $420 a very low offer and likely to be rejected by the board? (if its truly acting on shareholders behalf).
2) regardless of whether or not the board judges the $420 reasonable, isn’t it also the boards duty on behalf of shareholders to seek alternative higher offers for the company if available?

I’m thinking about this as I personally think $420 is way too low a price, and if you are a shareholder who is unable to participate in keeping shares after going private, then you would have in my opinion a justified greviance with the board if they accept a low offer without exploring alternative acquirers, or even just recommending against the offer and remaining a publicly listed company.

Thoughts?

First the BOD would need to engage with a bank or two for a fair market option on the $420. Given that it is quite a bit higher than the ATH and in range of almost all analysts opinions I’m not sure if they have much room to judge it significantly undervalued.

In terms of seeking a higher offer than this where it gets more complicated. Since it isn’t a change of control and the large majority would be able to keep their shares the BOD could absolutely say it is to the shareholder benefit to change listing / reporting structure. Especially with the successful example of SpaceX.

We will see with the formal offer but to me this seems much more like a change in shareholder structure with $420 initial price than a buy out.
 
Neroden, and anyone else considering this- somewhere in the past two days, I read a comment that the very fact that nearly all of us keep our shares at our brokerages rather than having them issued in our names, is how Tesla will be able to accommodate retail ownership by so many of us without technically going over 2,000 owners in a private vehicle for the relevant regulator.

Now, I don’t know if that is accurate. I don’t even know if the 2,000 owner cap is accurate, but, wanted to post this as a possible consideration for anyone contemplating getting shares issued in their name. Given the literally thousands of comments I’ve read in the past few days, I do not have a link to that specific post now.
If you are a US shareholder and are not an accredited investor the worst thing you can do for yourself is have the shares issued into your name. You will have assured getting bought out. You cannot participate in a private offering.
 
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jhm

Well-Known Member
May 23, 2014
9,898
37,334
Atlanta, GA
Theory: Musk revealed this in a bizarre way to keep the price well below $420, making it more likely the deal is approved.
I do think that Musk has turned the disbelief of all things Elon against the shorts. Musk tells them how he will blow up their position, and they laugh. They will to display defiance and dumb disbelief even as the building collapse around them. The cult of elon hate takes a few last draughts of kool-aid, preferring mass suicide to awakening. As long as no one flinches, they are safe.

Musk understands that he cannot redeem them with truth. Perhaps going private will mercifully put an end to this madness.
 
Not "Market Action" but relevant to IRA discussion. In 2013 my investment adviser for my 401-k said I was not allowed to buy SCTY IPO and that I should sell my shares of TSLA before it crashed. I took his FUD laced advice into consideration. My next move was to set up my own self-directed IRA and take full control of my investments. My ex-financial adviser was telling me that I was going to be very sorry as I walked out the door. That was another prediction he made that was wrong. It seems to me there should be some vehicle that you could create for yourself to eventually own private shares in Tesla once the details become clear.
Smart move on the SDIRA!

It will all depend on who is or is not accredited. Those who are not accredited will get bought out but can participate through one of the Fidelity or other funds that will keep their TSLA shares just the way you can invest in SpaceX today. But you will probably lose the 100% holding. It will be diluted down with whatever else the fund is invested in. If I recall there is a fund that holds 17% of its assets in SpaceX shares. Or you can buy Alphabet shares. They own 7.5% of SpaceX.
 

jhm

Well-Known Member
May 23, 2014
9,898
37,334
Atlanta, GA
If the board is truly acting in shareholders interest, then...

1) the board will make a public statement about whether the $420 offer is a fair offer or not. Given previous statements by Tesla management on expectations about the future of the company, isn’t $420 a very low offer and likely to be rejected by the board? (if its truly acting on shareholders behalf).
2) regardless of whether or not the board judges the $420 reasonable, isn’t it also the boards duty on behalf of shareholders to seek alternative higher offers for the company if available?

I’m thinking about this as I personally think $420 is way too low a price, and if you are a shareholder who is unable to participate in keeping shares after going private, then you would have in my opinion a justified greviance with the board if they accept a low offer without exploring alternative acquirers, or even just recommending against the offer and remaining a publicly listed company.

Thoughts?
Explan to us why a share of common stock is worth more than $420 at this time. Certain many of this would like to believe it is so, but the market has never countenanced a price that high.

I am inclined to believe that a private share would be worth more than $500, but not a common share. These are two distinct vehicles for holding equity. So the point of the transaction is to transform common shares into higher value private shares.

So what actually makes a common share worth more than $420?

BTW, I'm not trying to be aggressive here. I'm not taking offense. Rather I am speaking from a place of frustration. I actually believe Tesla is substantially more valuable than what the market is willing to give it credit. I am tired of the endless FUD campaign misinforming the market for years. We live in a new social media world that has harnessed very powerful disinformation techniques to manufacture negative sentiment. This is why a common share is worth substantially less than a private share. In a information abundant world disinformation can become more powerful than true information. So I'm very frustrated that it has come to this. But I think that as a private company Tesla will be able execute better and continue to build a very strong rapport with consumers. And this is why a private share is worth more than a common share.
 
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mongo

Well-Known Member
May 3, 2017
14,004
45,577
Michigan
Frankly I don’t want to take a 10% tax hit if I can avoid it. However if it turns out to be inescapable then I wonder if I should gamble and sell all the TSLA in the IRA right now , close out the IRA, eat the 10% tax, and roll the remaining proceeds into buying more TSLA for my normal brokerage account and make up the 10% tax hit with the rise in share price to $420 and beyond. Thoughts?

Interesting point, cashing out early so the 20% gain doesn't incur the 10% penalty...
I'd wait to see what the plan to convert is.
 
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Ratanpara

Member
Sep 29, 2016
232
1,127
Brick NJ
I believe Tesla has seriously lined up investor to buy at 420, I am wondering how it would play out in market, if Tesla clears up all doubts and say Stock opens at $420.00 then what ?, If shorts has not cover at all then they start buying at past $420.00, this buying push stock to say 500, then how willing big investor buy stock at $420.00 ?
 

MarcusMaximus

Active Member
Jan 2, 2017
3,789
16,747
Los Gatos
If there’s anyone still interested in the underlying manufacturing business, Second Measure has some new data out.

Waitlist drives demand for Tesla's Model 3

“One reason may be that Tesla has removed all trace of the long-awaited $35,000 build from its website” -that article

“Standard Battery available in 5-8 months” -Tesla website

If she can’t get basic, easily verifiable information correct, I have little trust in the rest.
 

Artful Dodger

"Ducimus, lit"
Aug 9, 2018
11,053
151,642
Canada
just buy the options before you push the stock in that direction and reverse, make more money.

Seems they could play this game all day, every day.

They do exactly that. Which is why Elon is taking Tesla private. He's scrubbing the barnacles off the hull.
 
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30seconds

Active Member
Feb 28, 2013
2,272
5,879
SF
How are tax effects on existing shareholders addressed in the analysis?

How are the input assumptions for the analysis determined? (Is Elon excluded from partcipating in those determinations?)

Probably some estimate of what percentage of holders would sell and they apply a distribution of likely tax rates. Would be taken into account of valuation metrics.

Elon would not be involved. Banks would be independent but also seek understand the structure and inputs for the company’s internal model as part of diligence.

Needless to say, there is an army of bankers working on this 24/7
 

anticitizen13.7

Not posting at TMC after 9/17/2018
Dec 22, 2012
3,638
5,870
United States
Explan to us why a share of common stock is worth more than $420 at this time. Certain many of this would like to believe it is so, but the market has never countenanced a price that high.

I am inclined to believe that a private share would be worth more than $500, but not a common share. These are two distinct vehicles for holding equity. So the point of the transaction is to transform common shares into higher value private shares.

So what actually makes a common share worth more than $420?

Tesla's execution right now justifies a price of $365/share under my current models, which assume highly probable achievement of selling 100k Model S/X per year, and 400k Model 3 per year, as well as some Energy products in the mix.

My next Price Target is $670/share, but this is a speculative guess, based on gaining probability of selling 100k Model S/X per year, and 900k Model 3/Y per year, as well as some Energy products in the mix.

In my estimation, a common share could be worth $420 or more to an investor who (1) Sees and believes in Tesla's vision towards Model Y and beyond and (2) Does not have anywhere safer with equivalent or better return to invest their capital.

Right now, TSLA isn't jumping to $420 and beyond IMO because the vast majority of market participants who are evaluating Tesla as a company (I am deliberately excluding momentum traders and others who rely mostly on technicals) don't have sufficient certainty or visibility into Tesla's path beyond Model 3.

So far, all we have is a general agreement that Tesla will build a factory in Shanghai and begin production (hopefully) in the next 2 years or so.

As we get more specifics, and more things start to happen to move Tesla towards the next tier of production, I expect the stock price will gradually move upwards to reflect increased certainty.

Anyone remember when TSLA was trading in the 30's range? There was tremendous uncertainty at the time that Tesla would get Model S out the door and even make it to 20k/year. The low price reflected the big risk.
 
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