TSLA Market Action: 2018 Investor Roundtable

[brian45011]

but we know that’s a probably a load of BS..
reuters said they aren’t, nyt says they are - they turn every single thing elon says into a he said she said divorce court spat!
typical manipulative techniques meant to fleece the herd.

Regardless, some one asked about the possible causes for a late day drop.

 

[Boomer19]

exactly, its far from done.
i believe it will end that way though, bc elon knows that is the way forward. to get away from the noisy BS of public trading. it’s become ringling brothers on a daily basis. no reason to try and operate like that. f it, go private. good riddance.

this media gravy train has to end too, they won’t stop until they simply don’t have a window into the activities and ongoings, at least not nearly as much as what’s available now.

they are spewing hundreds of articles a day, with very few facts and tons of opinion, because it makes them relevant. they quote one person saying something benign and then two other unnamed sources saying sec enforcement measures are likely, effectively nesting the bullsh!t into the same paragraph as one factual but benign quote. the technique works on the sheep that have become the piñatas of this country, otherwise they wouldn’t do it.

one can say musk brought a lot of this on himself (he attacked media, he shouldn’t have tweeted, he did this, he didn’t do that). too bad!!!
he plays his own game, not yours. if he had to make a move to protect his baby and figured, well i have enough $ to pay a fine, i’ll skirt the thin line, it’s worth it for the stakes...as far as media, most of them deserve it, they don’t even try to hide their bias. reap what you sow.

Regardless, some one asked about the possible causes for a late day drop.

yes i know, i wasn’t assuming you implied any meaning one way or another, hence the quotes around sources.

 

[bdy0627]

it’s a joke. everyone has something to say about how incompetent em is, can’t wait for this to go private so all these ‘experts’ shut tf up. agonizingly tired of it.

and today more price action meant to scare everyone. just another pathetic manipulated joke of market action. the more a deal looks imminent, the more resources they throw at striking the fear of god into everyone.
how low does it have to go to get anyone here to sell? i’m not selling. i think a deal will happen.

if a deal doesn’t happen, and elon “loses his credibility” and the stock takesa dump, i’m still not selling. they’re on the verge of crushing it. nobody even knows anything about the model 3 yet. barely anyone has seen or driven it. we know everything about it. we are not ‘common’ in this case. the product is exceptional! so, bring it on.

Sell? Why on Earth would any of us be selling shares here unless we somehow know that we can buy those shares back at a lower price? I'm strongly considering selling long dated puts. I'm shocked at the premiums for J20 $420 puts. Someone is willing to pay over $100 premium for those puts. Even if this deal falls through, I like my odds that TSLA will be trading above $420 in 17 months. If the buyout happens next Spring, these puts will expire worthless since the time value will plummet once a delisting date is known. Anyone have a great argument against selling these to capture the crazy premium?

 

[Causalien]

I don’t get this mentality. Tesla’s mission remains the same. What’s the alternative? Stop supporting Tesla which makes them more likely to fail and then we continue using Saudi oil?!?!!

No idea what the young ones are thinking. But they shouldn't cause this much downturn due to a think bankroll.

More likely those hedge funds going from 3x leverage to 5x. Imaging 1 hedgie going from 100mil short to 500mil short. I am not familiar with the new limits on how leveraged you can be nowadays. But 5x should be doable.

Institutions would take time to sort out the deal and I'd be surprised if they don't wait for $420 at least to get the best deal.

 

[dailo]

I could see some folks selling now and hoping to re-buy at a lower price. I've thought about doing the same thing, except I thought it was going to go higher first ...

 

[Boomer19]

Sell? Why on Earth would any of us be selling shares here unless we somehow know that we can buy those shares back at a lower price? I'm strongly considering selling long dated puts. I'm shocked at the premiums for J20 $420 puts. Someone is willing to pay over $100 premium for those puts. Even if this deal falls through, I like my odds that TSLA will be trading above $420 in 17 months. If the buyout happens next Spring, these puts will expire worthless since the time value will plummet once a delisting date is known. Anyone have a great argument against selling these to capture the crazy premium?

yes that’s my point. the market knows the deal is going through eventually bc elon has the power and influence to make it happen. this temporary movement is just the big boys pulling everyone’s pants down, all the while the media keeping the bass line going.

plenty of premium on the OTM puts, why risk so deep ITM ones. even if they’re still public at that time they’ll likely be raising $ next year

 

[Jayjs20]

Alright. Hoping for a morning dip tomorrow because I'm going to go back into call options tomorrow. DITM this time, so hopefully it won't obliterate me again. J20 $200 call options currently have a break even price of 362.5, which according to my calculations, has a 32% upside if the SP hits 420, even if time decay goes to 0.

 

[Boomer19]

Alright. Hoping for a morning dip tomorrow because I'm going to go back into call options tomorrow. DITM this time, so hopefully it won't obliterate me again. J20 $200 call options currently have a break even price of 362.5, which according to my calculations, has a 32% upside if the SP hits 420, even if time decay goes to 0.

so something, say march or june of 2019 isn’t cheaper outlay with same or more upside?

 

[Jayjs20]

so something, say march or june of 2019 isn’t cheaper outlay with same or more upside?

We, or rather, I have absolutely no idea how long this deal will take to go through, so I'm being extra safe.

 

[Fact Checking]

~35M shares to cover. Ballpark of 60M shares not taking part in TSLAP. Largely run by people who aren't idiots and would prefer to sell to shorts at $421 rather than the Saudis at $420, and will gladly recall early and / or not vote (on a likely foregone conclusion) if that's what it takes to

Questions:

• How do you arrive at 60m, and couldn't this number go down significantly if the deal takes months to finalize?
• Wouldn't the "smart" profit maximizing response of these TSLA shareholders be to sell to the last shorts remaining at higher price levels, instead to the first ones at $421? The risk of waiting too long is only $1 per share - a fraction of TSLA daily volatility.
• I.e. if the deal materializes aren't TSLA shares equivalent to put options with a $420 strike price and a matching shares position as well, where only the shares can be sold before expiry?
• I.e. isn't it in fact an incredibly dumb strategy to sell shares at $421, one dollar above the put option strike price, unless you are very close to the expiry date?

I believe this chain of logic almost mandates a short squeeze, unless:

• Shorts manage to close before the price reaches $420. (Which could trigger a squeeze in itself: forget daily volume based "days to cover" metrics which are bogus: true daily accumulation/distribution is about 1 million shares on average.)
• Shareholders are dumb and instead of maximizing profits via a preductable squeeze end up stupidly donating shares to shorts almost for free, bailing them out and rescuing them from a bear trap.

These are incredibly strong assumptions IMO.

 

[Boomer19]

another thing to keep in the back of our minds, if this deal ends up with some record date stipulation to elect for private shares, you’re going to want settled stock position as of that record date...

dunno if this will end up being a clause or not, but if you are able to meet any criteria applicable for private shares election, you don’t want that to be the reason you miss out. what i’m saying is, since we have no idea what’s going to happen, best to have at least some stock if you’re playing the options game too but plan to carry tesla into privatization. i exercised some deep ITM calls to add to my position in case there’s no time to react (retroactive r/d at time of filing) if/when we finally get word of the deal terms.

 

[Fact Checking]

The brief but sharp TSLA spikes downward seen sporadically today appear to have the fingerprints of a short selling hedge fund hoping to trigger the stop loss limits of weak longs and to entice retail shorts.

Yes!

I've been speculating about the motivations of the spike-seller for 2-3 weeks: I believe it's a single terminal trader executing these trades semi-manually, for a big hedge fund or on behalf of a group of coordinating funds.

The short term goal of the spike-seller appears to be $350 - and the significant buying after breaching $350 last Friday could have been him covering via much less visible limit orders.

It takes only one big buyer to screw up this kind of aggressive price manipulation - but maybe most big buyers are unable to buy right now due to trading restrictions while they have non public (insider) information about the go-private-deal. In particular the Saudis might not be able to accumulate at the moment.

Note that today this pattern of "pressure selling" was stronger than in the last two weeks, which could be a sign that the end game is near.

 

[Unpilot]

Elon Musk say's "I'm long ...and strong...and I'm about to put the hurting on"

 

[Ratanpara]

Only problem with very long dated puts are time premium stick around, If stock goes to 420, premium probably still around 50 , I sold Nov 16, 350 put at $39.00 other day, for the first time I think Tesla current quarter guidance looks too conservative, they are already getting close to 6K M3 production.

 

[KarenRei]

How do you arrive at 60m, and couldn't this number go down significantly if the deal takes months to finalize?

Based on Elon's estimate of the percentage of people who will be bought out. And no, if anything the number of people liquidating would go up. Why would people "get out" the closer it gets to a sale when they can make a guaranteed minimum $420 on their shares? You expect more people to "get in" just to make the $420.

Wouldn't the "smart" profit maximizing response of these TSLA shareholders be to sell to the last shorts remaining at higher price levels

That's not how the law of supply and demand works. If you wait for a higher price, someone will undercut you. Supply outstrips demand. If someone tries to sell for $500, someone else will sell for $499 to get the sales instead. Meaning you have to sell for $498, meaning they'll sell for $497 ... all the way down to just over $420. Except it will never get up to $500 because everyone knows where it will end up.

Nobody wants to be stuck with a bunch of shares at "only" $420 at the end.

The risk of waiting too long is only $1 per share - a fraction of TSLA daily volatility.

That's $1 on top of what they'd make for selling at $420. There's no risk; they get their $420 minimum regardless.

I.e. isn't it in fact an incredibly dumb strategy to sell shares at $421, one dollar above the put option strike price, unless you are very close to the expiry date?

The only thing dumber than that is being stuck with a bunch of shares that you could have sold at $421, but have to sell at $420 instead.

 

[Fact Checking]

i exercised some deep ITM calls to add to my position in case there’s no time to react (retroactive r/d at time of filing) if/when we finally get word of the deal terms.

While anything is possible, wouldn't that kind of deal make it impossible for new investors to buy in, reducing the chance of a "yes" vote?

I.e. wouldn't it make sense for Elon to give people a chance to buy stock after the full details of Tesla going private are announced?

 

[Johan]

It takes only one big buyer to screw up this kind of aggressive price manipulation - but maybe most big buyers are unable to buy right now due to trading restrictions while they have non public (insider) information about the go-private-deal. In particular the Saudis might not be able to accumulate at the moment.

This makes a lot of sense. Having privileged/not-yet-public information and trading on it would definitely be regarded as insider trading and I think the SEC would want to know about trades having been conducted on the open market during the negotiations.

 

[Moderatefan]

Note that today this pattern of "pressure selling" was stronger than in the last two weeks, which could be a sign that the end game is near.

Bought some at 352 and did not expect we'd breach 350 and go into 40s... this is getting ridiculous, I think they may force me to buy more on margin if we go into 340

 

[phil0909]

There was a promise?

"Am considering taking Tesla private at $420."

"Only reason why this is not certain is that it’s contingent on a shareholder vote."
- Elon Musk

 

[dmckinstry]

I could see some folks selling now and hoping to re-buy at a lower price. I've thought about doing the same thing, except I thought it was going to go higher first ...

This is why a number of us are setting limits of $1k and higher. We don't want to sell a price that isn't high enough to practically guarantee that it will drop enough to repurchase. With hindsight I could easily have doubled to septupled my holdings by repeatedly selling within 10% of an ATH and selling within 10% of the previous 52 week low. I'm just too chicken. I don't want to chance doing anything that reduces my number of shares.