TSLA Market Action: 2018 Investor Roundtable

[AudubonB]

A perfect case in point was the now-deleted thread two posts after the Moderator Note. Member warned.

 

[tander]

Anybody have any experience with what happens to options/LEAPS if they go private? I guess Dell is probably a pretty good recent example but I wasn't paying attention to that.

 

[NicoV]

That means reading the link that if the deal structure requires to be an AI all shareholders with a smaller income as stated or net worth are squeezed out taking some exceptions into account.

The normal Jo on the street with "normal income" who bought 10 or 100 shares would be for instance. IOW, the big guys win the small guys loose.

This is fully against Elons fundamental values and understanding how his smaller shareholders should be treated and against what he communicated via Twitter and in his letter to his employees including all shareholders.

Assuming he still would do it implies he either lied to all his employees and shareholder or he is dump and did make one of the most important announcement for Tesla without knowledge of a rule that you can read in Wikipedia.

I did never found him to be a liar no dump.

Therefore I believed he solved that issue already long before he announced the privatization and would not have if he would be forced to apply the AI rule w/o a good workaround

Elon also needs less money to take Tesla private if he finds a way to let the small investors stay with Tesla. That alone is enough reason to solve this issue.

 

[traxila]

It would be interesting to evaluate if “accredited investors” have been more a barrier then a protection mechanism for the “little guy.”

As this system funnels retail investors to the public stock market only, where big banks/funds get the first dibs on any new upstart before the public market.

Structurally, the little guy always gets seconds or whatever is sanctified by accredited investors who always get to benefit first off the rush of little guy investors when it goes public.

Right on. Grab for your wallet whenever they say they are protecting your interests.

That’s right, not quick enough. It is gone...liked that wallet too.

 

[xhawk101]

Didn't Musk mention Warren Buffet in some of his tweets a few month ago, did he? If I do remember right, the tweets were about moats or something...

Buffet is already invested in chinese BYD...

Buffet's investments in utility companies are rather oppositional to sustainability on the other hand.
Warren Buffett Doesn't Want to Quit Oil

 

[Intl Professor]

If you were Elon, you’d have stopped at $230M. I believe the success of Tesla does affect his mood - he was super stressed w M3 production hell etc. I think he’s v happy he’s found a way to get away form all the FUD. He cares about his mission to cut greenhouse gasses etc.

Probably a mistake if someone conflates happiness of monetary gain with success of the business. You didn't imply that. Surely he has enough money for normal tastes regardless of TSLA price. (Not my situation, however.) Up thread someone wanted to be in his shoes. A caveat. The richest man I know at various stages working toward a successful, third marriage, often lamented: "a problem of being rich is not knowing whether a significant other loves you for yourself or the money." Musk seems to have some trouble, as we all do in figuring out women (men too, I presume, but don't know). So far as I know that is not a money worry for Elon although some investors were worried at the time of his first divorce and it seems, withal, he has a good relationship with his kids and exes. No small feat even without the stress of his work and commitments.

 

[Remus]

Several wise members pointed out that it's very possible that Elon had been too optimistic to the point that he stretched the meaning of ''secured".

But Elon is not all by his own. It's a safe bet there are people in Tesla and space X that are close to him and care a great deal about him.

And he does learn from his mistakes. He tweeted after q1 call that he shouldn't brush off those questions, and apologized later.

If he's truly going to jail, I would think nice people around him would already let him know the colossal screw up, not only for himself, but also for the cause he is pursuing. I don't think he is such a square head that wouldn't take close friends advice.

As a result I treat his recent tweet as a positive sign.

 

[hobbes]

Umm, so, isn't the whole accredited investors thing moot because Elon said he wanted to create a special fund for us smaller investors?

Or has it been confirmed that Elon absolutely can not set up such a fund?

I was just going to post the same thing. Elon specifically mentioned SpaceX shares for their employees as a model for a private Tesla.

So what is the problem with for example Fidelity (who do this for SpaceX) buying a large part of Tesla and setting up a fund with exclusively TSLA? The former shareholders would then buy into this fund (or Fidelity buys directly from them and they get shares of the fund in exchange).

Also,Tesla employees are getting stock as part of their payment. Most of them won´t ever be accredited investors. And they are more than 2000. So either Tesla has to stop giving them stock or they have to come up with a model that they might extend to small investors (like most of us), too?!

Please correct me if I am wrong with any assumptions here, I don´t have a finance background as some of you do.

EDIT: This is where I got the info about the structure for SpaceX employees: Crosspost: Asked at /r/SpaceX for former SpaceX employee to answer questions relating to private equity and liquidity events. : teslamotors
Nothing official, but sounds legit to me, redditor seems to have a good reputation.

 

[Intl Professor]

Now I don’t know what to think

Another Socrates, born every minute.

 

[Boomer19]

While the broker might be lenient if an incompetent retail trader got stuck 100 shares short across a corporate event (not worth the broker's time and probably totally legal across most corporate events), but the broker won't be nearly so accommodating if the closing price for TSLA was $874.50, driven up high on a few last-minute attempts to cover short positions plus last-minute purchases from late investors who wanted to be part of the "Tesla story" and see the $5,000+ future share price.

Especially if the client is 10,000,000 shares short.

The broker will say: "I want $8,745,000,000, I could have sold those 10,000,000 shares for much more than $420, had you given them back to me as you promised contractually".

yes, that is a buy-in

Also, brokers/banks/institutionals would likely see this scenario folding out weeks or months in advance, and would have asked those 10,000,000 shares back much earlier.

Really, I think the most interesting story is "what will happen to the traders short millions of TSLA shares", not the "what will happen to traders short 34 TSLA shares".

agreed,
stock contracts can be recalled, shorts eventually have to cover or they get bought in.

 

[Boomer19]

Thanks, couldn't find the name of the panelist.

someone earlier in the thread said that the cnbc guy who on air, said he was buying the august 365 calls and then suing if he lost his money, was terranova..

so what did seymour do?

 

[Ratanpara]

Anybody have any experience with what happens to options/LEAPS if they go private? I guess Dell is probably a pretty good recent example but I wasn't paying attention to that.

I have same question as you, I wish someone really know this, I have Jan 350 Put written(sold) at premium of 7000, my worse case I would own stock at 280.00, one possible outcome would be if deals goes through, option holder must close their position what ever price stock is on last day of trading on Nasdaq. Premium remain on time will be calculated based on historic volatility and other factors used in calculating option prices.

 

[SOULPEDL]

I was just about to post, then read the red msg. I hope I'm not one of those, but I've been chewing on this thought for a while, and thanks for the heads up notice.

States also have provisions that permit existing investors in a private company to continue buying its shares, even if they don’t meet the income or net worth thresholds, Weingold said."

My company was formed with 7 members and all chipped in as time went on which was OK as we were existing members from time of formation (which may be a critical difference - at time of formation). After that point, I was always cautioned against exchanging any shares with outsiders that weren't bonafide as described - including exchange of services or promises. FYI, I agree with most here that he's likely already figured this out, I'm just trying like you to catch up with him...

So my question: Can Tesla create a new private entity that represents a portion of Tesla? The idea being they are not members of Tesla, they are members of a Trust or separate Entity or Company held by Tesla where original private parties could sell their shares back to Tesla or maybe to one another if needed, and the value of the trust is regularly matched with Tesla. Because it's a new entity (with a new Operating Agreement that contains all these new rules) then members do not have to be bonafide but would all have to sign the new Operating Agreement. To be clear, I'm asking as I don't know and I'm not a CPA or lawyer, it just seems to satisfy the requirements as I understand them.

Furthermore, as a shareholder intending to keep at least 50% of my retirement with this mission, I would have no problem in not voting for Tesla decisions, because of the "Trust" I have with Tesla. And to maintain this trust moving forward, I wonder if Tesla is exploring alternate investors to better diversify so that no one group of investors can derail the mission. Even though they already lined up investors in the last few weeks, why not try to dilute or qualify a bit more to strengthens control... looking for the right people with a proven track record aligned with the mission and not just anyone with big money.

FYI, even if Tesla changes their mind because it smells bad, I'm still hanging in there. The rest of my retirement is in cash for post recession buying, or a really great sale on Tesla at $150... either one will do. I can't think of a better cause.

 

[tti_7]

Another BI article, I know I know... but I wanted to see how they cover Einhorn's short shorts story. And then they said this:

"Tesla is down 0.86% in trading Friday and up 9.1% since the beginning of the year."

So up is now down. I guess they see those shorts as slacks.

 

[Opus BC fan]

I am relatively new to this thread. I know nothing more than anyone else (and definitely a good deal less than others). I just wanted to offer an observation that with all the unanswered questions our collective anxiety level is way up. In reaction to this, we are creating our own FUD. The discussion of "accredited investors" is an example of this. We don't know. We will have to see.

I have been kicked to the curb on previous investments that went private. In those cases, it was "here's your check and goodbye". This feels and looks much different. I do not think it will happen that way with TSLA. I take Elon at his word. I am going to go with "We all get to board the next ship" unless I am told otherwise.

 

[beachbum77]

Did I miss something? Where is this accredited investor thing coming from? Is that official?

Thanks

SEC regulations for people investing in private offerings.

 

[EVNow]

Is there some kind of consensus in this thread among longs - as to why the stock price is at a big discount from what I view as the floor price - $420 ? I'm wondering whether to buy more (for eg. move some of my fidelity 401k to brokerage link and buy TSLA on Monday).

 

[Jayjs20]

Is there some kind of consensus in this thread among longs - as to why the stock price is at a big discount from what I view as the floor price - $420 ? I'm wondering whether to buy more (for eg. move some of my fidelity 401k to brokerage link and buy TSLA on Monday).

From what I gather, it's due to uncertainty that the deal will go through. Basically, if it goes through, it'll go up a lot. If it doesn't go through, it'll go down a lot, so it's currently hovering in the middle.

The narrative right now seems to be primarily on what Elon meant by "funding secured". He won't(?) reveal the source of his funding right now, so if it turns out there is no funding, that can be considered market manipulation and he can get in serious trouble, crashing the price, and the shorts rejoice. If/when he does reveal the source of his funding, then shorts are entirely screwed and it'll likely jump to 420-ish, and the longs rejoice, barring further straw grasping and potential sabotage.

 

[oneday]

Is there some kind of consensus in this thread among longs - as to why the stock price is at a big discount from what I view as the floor price - $420 ? I'm wondering whether to buy more (for eg. move some of my fidelity 401k to brokerage link and buy TSLA on Monday).

Not sure I can speak to a consensus. But I will postulate my theory.

MM are trying to push down the stock because $420 would mean a big loss for them, especially in a few days time.

Investors weighing the likelihood of Elon's proposal actually happen, discounting it and therefore discounting the price.

Shorts seeing this as an opportunity to take advantage of the media's new penchant for pushing Tesla FUD and adding to their position as has been documented. Them adding to their position is selling pressure.

The market doesn't like uncertainty, and this has indeed created uncertainty.

Scared money.

Profit taking.

 

[mongo]

Reading again Elon`s letter to Tesla employees,

this two sentences:
"Third, the intention is not to merge SpaceX and Tesla. They would continue to have separate ownership and governance structures...."

doesn't make sense unless Spacex (supported by.....) is the mysterious investor...

Elon already has one private company, I think it is a logical question to wonder if Tesla would be added to that entity or remain seperate. And so he addressed that early on.

(Which is not to say that SpaceX isn't part of this, I think most of us agree TSLA(P) is a great way to gain monies long term)