TSLA Market Action: 2018 Investor Roundtable

[SO16]

But do keep in mind, although highly unlikely, if these cars were manufactured before July 11 and they are just being delivered now, they are still eligible for the rebate as long as they get plated before September 10th. We’ll have to see how sales are after September 10th to get a certain confirmation that the rebate does not affect the sales whatsoever.

Tesla was cut off on July 11 because they don’t have dealers. So it is good to still see demand high.

From the article: “Thiago Neves is another of them. The Brampton, Ont., man will pick up his Tesla Model 3 on Wednesday, but he is also missing out on the $14,000 rebate because he's receiving his car after a July 11 deadline. ”

Tesla customers take a hit after Ontario ends charger rebate | CBC News

 

[TDog]

But do keep in mind, although highly unlikely, if these cars were manufactured before July 11 and they are just being delivered now, they are still eligible for the rebate as long as they get plated before September 10th. We’ll have to see how sales are after September 10th to get a certain confirmation that the rebate does not affect the sales whatsoever.

Negative. Model 3s had to be plated by July 11 to be eligible.

 

[TrendTrader007]

The Dell buyout had significant differences to the Tesla buyout:

• The Dell buyout was all-cash: all but a few shareholders were forced out at the deal price. This capped the share price at the buyout price.
• The Tesla deal is a voluntary share conversion or cash buyout deal. A significant portion of Tesla shareholders are allowed to convert to private deals. This makes the share price open ended: the TSLA shares are used to value TSLAP private shares. If Tesla can grow as fast as SpaceX then TSLAP has potentially higher valuation than $420.
• Put differently: what Elon is doing here, Elon is effectively conducting an Initial Private Offering of Tesla (TSLAP IPO), with no ability to buy these shares after they go private. It's a price auction - where prices could easily go up.
• Dell short interest was much lower, plus shorts had an effective price cap of ~$14.75. Tesla short interest is much higher, and there's no price maximum!

Very, very different market and price action is expected.

Not advice.

all your points are very true
thanks for the amazing insight
what's your best guess for the time frame and trading strategy?

 

[EinSV]

Inside sources within the financial community (potential buyers and advisers) will either refuse to comment about Tesla privatization, or suggest that nothing definitive has happened. They would want to avoid affecting the share price before official proposals or agreements are announced.

@Curt Renz you put this much more diplomatically than I would (you have a gift for that), but this is a very important point that is worth highlighting. Uncertainty and fear benefit not just the shorts but almost all of the big players, so I expect more of the same until the Board and shareholders have voted.

 

[abasile]

Well, I ended up selling around 30% of our TSLA shares today, averaging $350/share or so, and I doubt I'll sell any more, at least not anytime soon. This was hard to do, and we'll most likely end up watching TSLA go up to $420/share and beyond in the coming months. But I could not ignore my discomfort concerning the possible buyout and the Saudis' potential lead role. In my years of following Tesla (it's been ten years since I was first fascinated with the Roadster), this is probably the first time that I've really questioned Elon Musk's judgment on a major decision. This has served as a wake-up call to stay diversified in the market and not let too large a share of our wealth ride on a single stock, not even TSLA. In my opinion, it's better to miss out on some gains and be comfortable with one's holdings than to be too aggressive.

As for our remaining shares, it's hard to say what we'll do if Tesla goes private. If the Saudis' stake stays relatively modest, I might want to keep all of our shares including those in IRAs. This would probably entail using an IRA broker/custodian that can hold shares in private companies, but I don't expect that to be very difficult.

Tesla has a very bright future in my opinion. I hope that for everyone's sake, our decision to sell a portion of our shares turns out to have been a bad decision! Part of the trouble is that there's not a huge number of good, public companies that are focused on EVs or clean energy.

Apart from EVs, solar, and batteries, vertical/indoor farming is a relatively new area that I find exciting from a sustainability point of view. I hope to find ways to invest in it. Of course, there's a separate thread for stuff like this: What other tech stock to consider?

 

[TrendTrader007]

while it is not outside the realm of possibility that I am totally losing it I am still comparing current $TSLA daily chart SP action to prior periods where stock has acted in similar technical fashion
here are my findings:
#1 $TSLA is in the incipient stages of a strong breakout and 13, 34 and 200 day EMAs are strongly aligned in a bullish fashion
#2 despite today's selloff the bullish scenario is essentially unchanged with SP so very strong that it has not even touched the 13 day EMA
#3 Volume trends are extremely favorable for bulls with an orderly decline in daily volume since 8-7-18
price action is well contained and volume on UP days far exceeds volume on down days
#4 similar time frames like April 2013 and January 2014 have led to strong gains over the next 20 to 30 trading days
#5 Elon is not the one to suffer fools gladly and I highly doubt that he will let these short sellers off the hook so easily. expect the unexpected and while shorts may think that Elon has played out all his cards and is currently seeking a refuge in Saudi Arabia to evade the SEC, I bet a rip your face 3 to 10% single day stock movement is around the corner any given day now as Elon speeds up and fast tracks the buyout process
#6 my best guess is 20 to 25 trading days and we will reach an all time high which will easily eclipse $420
whether it will be $420 or $430 or $450 or $520 is anybody's guess
I do not bet on SP moving sideways for too long
Time for my Haldol

 

[SOULPEDL]

I was born in Ontario myself, teenage years in BC interior, and now Az. Feeling your pain up there. Fully loaded M3 would be about $90K and no rebate? Sacre Bleu! Since when did Canada not want more EVs?

 

[bdy0627]

while it is not outside the realm of possibility that I am totally losing it I am still comparing current $TSLA daily chart SP action to prior periods where stock has acted in similar technical fashion
here are my findings:
#1 $TSLA is in the incipient stages of a strong breakout and 13, 34 and 200 day EMAs are strongly aligned in a bullish fashion
#2 despite today's selloff the bullish scenario is essentially unchanged with SP so very strong that it has not even touched the 13 day EMA
#3 Volume trends are extremely favorable for bulls with an orderly decline in daily volume since 8-7-18
price action is well contained and volume on UP days far exceeds volume on down days
#4 similar time frames like April 2013 and January 2014 have led to strong gains over the next 20 to 30 trading days
#5 Elon is not the one to suffer fools gladly and I highly doubt that he will let these short sellers off the hook so easily. expect the unexpected and while shorts may think that Elon has played out all his cards and is currently seeking a refuge in Saudi Arabia to evade the SEC, I bet a rip your face 3 to 10% single day stock movement is around the corner any given day now as Elon speeds up and fast tracks the buyout process
#6 my best guess is 20 to 25 trading days and we will reach an all time high which will easily eclipse $420
whether it will be $420 or $430 or $450 or $520 is anybody's guess
I do not bet on SP moving sideways for too long
Time for my Haldol

I definitely agree that TSLA is not going to trade sideways for long. We will see which way this little triangle breaks. My guess is it breaks down and then up. I'm not betting on that though. It just feels to me that the control right now while we are drifting without definitive news is with the bears. Moderately positive news is having no positive effect on the SP, or even a negative effect after it is spun that way. It seems like real longs are frozen right now, maybe added a bunch just after the privatization announcement? Opportunistic longs are still waiting. The stock usually surprises me how far it can go down for no substantial reason. We are only down 10.3% from the $387 high on 8/7. Maybe it will continue to go down against all reasonable assessments of the situation just because that's truly what TSLA often does.

You are in good shape with your J19s. Shares are obviously very safe. I think the real risk right now is going too short term, meaning within just a few weeks out. TSLA will reverse and climb again soon, but it could take a few weeks. I'm starting to think about rolling my SEP calls out to OCT for a little more breathing room. I've been accumulating J19, NOV, and DEC calls over the past few days. Now I think I'm going to sell some puts.

 

[bdy0627]

This is an interesting interview of Gene Munster by Galileo with HyperChange:

 

[phil0909]

Inside sources within the financial community (potential buyers and advisers) will either refuse to comment about Tesla privatization, or suggest that nothing definitive has happened. They would want to avoid affecting the share price before official proposals or agreements are announced.

Do you think Elon Musk is the only exception to this general rule? Or might there be other exceptions, for similar or different reasons?

(Elon of course did tell us that he's a potential buyer, announced his advisors, and even announced a buy-out price. All prior to official proposals or agreements.)

 

[phil0909]

I visited Tesla store today. I noticed great number of M3s in parking lots, and after all discussion re demand, I was a bit concerned. So while kids were playing in an M3, I was chatting with a salesperson and exploring complexities of trying to do convenience trade-in from MS to M3. I slipped into the conversation question, if any of the M3s are available for pickup now. I got firm 'no', and explanation of the timelines. So I pressed, pointing to all M3s on the parking lot, and asking if they had any in the inventory. Sales-guy almost laughed me out of the showroom, and confirmed that all of these are newly arrived, for delivery. He also stated that he personally sold 3 M3s today. That was at about 2:30pm.

Why is this story important, and in this thread?
Well M3 starts at CAD$65K (the same USD $49K version), and salaries around here are pretty much 1:1 CAD for USD, so it's definitely less affordable than in USA.
More importantly, Ontario government just killed $14,000 incentive, less than a month ago. Tesla was delivering like crazy to Toronto in Q2. Hence, I had expected that demand cools off almost to a stall, for at least quarter or two, but that's not the case.

So finally a conclusion: If Tesla can sell M3 in good numbers in Toronto, where it effectively just became $14,000 more expensive, there is no reason to worry about demand. And I know lot of you don't worry, but I like to be careful. This makes me comfortable that no matter what happens with a buyout, we're heading towards $400 in the next few months anyhow. So I stay leveraged.

That does sound encouraging. Can you give any estimate of just how many M3s (or all Tesla models) you saw in the lots?

 

[EVNow]

CNBC - after market hours: Jim Cramer says Tesla bears should think twice before shorting the stock

How does an "expert" who said Bear Sterns was a great buy days before it closed shop get to stay on ?

 

[DaveT]

I definitely agree that TSLA is not going to trade sideways for long.

My guess is we trade sideways between 340-390 until the shareholder vote.

 

[Earlian]

Well, I ended up selling around 30% of our TSLA shares today, averaging $350/share or so, and I doubt I'll sell any more, at least not anytime soon. This was hard to do, and we'll most likely end up watching TSLA go up to $420/share and beyond in the coming months. But I could not ignore my discomfort concerning the possible buyout and the Saudis' potential lead role. In my years of following Tesla (it's been ten years since I was first fascinated with the Roadster), this is probably the first time that I've really questioned Elon Musk's judgment on a major decision. This has served as a wake-up call to stay diversified in the market and not let too large a share of our wealth ride on a single stock, not even TSLA. In my opinion, it's better to miss out on some gains and be comfortable with one's holdings than to be too aggressive.

As for our remaining shares, it's hard to say what we'll do if Tesla goes private. If the Saudis' stake stays relatively modest, I might want to keep all of our shares including those in IRAs. This would probably entail using an IRA broker/custodian that can hold shares in private companies, but I don't expect that to be very difficult.

Tesla has a very bright future in my opinion. I hope that for everyone's sake, our decision to sell a portion of our shares turns out to have been a bad decision! Part of the trouble is that there's not a huge number of good, public companies that are focused on EVs or clean energy.

Apart from EVs, solar, and batteries, vertical/indoor farming is a relatively new area that I find exciting from a sustainability point of view. I hope to find ways to invest in it. Of course, there's a separate thread for stuff like this: What other tech stock to consider?

That must have been some sleepless nights.

And if you were overloaded on TSLA: Well Done. It was definitely a wise decision!

But regarding the Saudis: If we (for whatever reasons) want less influence of them in Tesla, wouldn't it be better if more shares were left with Longtime-believers and we all go into private, so Tesla needs to take less money (influence) from Saudi Arabia? Am I thinking this wrong?

 

[SPadival]

Some members of the board have grown alarmed by what they see as Mr. Musk’s erratic behavior, according to three people familiar with some directors’ thinking.

Since when did NYT have mind readers as sources?

EDIT: The same thinking bit is in another part of the article!!

Directors were upset that Mr. Musk’s tweets forced them to rush out a public statement explaining a transaction that was at an embryonic stage, according to people familiar with the thinking of board members.

I have to conclude that the sources never actually spoke to the directors. Also, my sources are familiar with the thinking of Andrew Ross Sorkin, who considers himself to be a douchebag.

 

[Fact Checking]

all your points are very true
thanks for the amazing insight
what's your best guess for the time frame and trading strategy?

It seems to be very difficult to tell at this point I think:

• Elon appears to be wanting to rush the deal, but rushing it might be counterproductive due to the ~60m current shares that are not convertible. Time is required for new investors to buy out investors unwilling or unable to own TSLAP.
• I think the IPO would be most effective if Q3 (and maybe Q4) results are released as a public company. This maximizes public Tesla valuation that should be over $400 even if the going-private deal falls through.
• It's unclear to me whether Elon wants Tesla to directly earn money from the combined rush of new shareholders and covering shorts to buy TSLA. (There's a few ways they could architect the deal and time key disclosures and plan for the aftermath to maximize this effect - but I don't know whether they are doing it.)
• The interests of small shareholders are only about 70-80% aligned with the interests of the buyout financing companies. For example buyout financing companies do not mind forced sales at all, because it increases their stake after the buyout. It's unclear to me to what extent Elon and the Tesla board will be able to represent 100% of shareholder interest.
• It's unclear to me how smart shorts are. Right now they probably still have a chance to escape with a chewed off arm or leg. A few weeks/months later the injuries of short position liquidation could be life threatening to many shorts. The magnitude of the short squeeze (if any) depends on the short interest percentage and on the position sizes and margin limit distribution of the shorts, compared to the profit target distribution of the longs/investors. These numbers may still vary in wide intervals.

With linear stock position the strategy seems clear to me: hold and maybe buy on dips. (Risk: take a big bath if the deal falls through early and/or Q3-Q4 results are below guidance or expectations or there's WWIII.)

With options it's mostly about timing, and timing seems the most uncertain parameter right now. Most straightforward trade seems to be to map out the most popular trades of shorts and become a counterparty. Be ready to lose it all, shorts are a broken clock that are right four times a day.

(Four times a day, not two times, because Elon is accelerating the clock of the Tesla business cycle to twice its normal speed.)

Not advice!

 

[Ellec]

Well, I ended up selling around 30% of our TSLA shares today, averaging $350/share or so, and I doubt I'll sell any more, at least not anytime soon. This was hard to do, and we'll most likely end up watching TSLA go up to $420/share and beyond in the coming months. But I could not ignore my discomfort concerning the possible buyout and the Saudis' potential lead role. In my years of following Tesla (it's been ten years since I was first fascinated with the Roadster), this is probably the first time that I've really questioned Elon Musk's judgment on a major decision. This has served as a wake-up call to stay diversified in the market and not let too large a share of our wealth ride on a single stock, not even TSLA. In my opinion, it's better to miss out on some gains and be comfortable with one's holdings than to be too aggressive.

As for our remaining shares, it's hard to say what we'll do if Tesla goes private. If the Saudis' stake stays relatively modest, I might want to keep all of our shares including those in IRAs. This would probably entail using an IRA broker/custodian that can hold shares in private companies, but I don't expect that to be very difficult.

Tesla has a very bright future in my opinion. I hope that for everyone's sake, our decision to sell a portion of our shares turns out to have been a bad decision! Part of the trouble is that there's not a huge number of good, public companies that are focused on EVs or clean energy.

Apart from EVs, solar, and batteries, vertical/indoor farming is a relatively new area that I find exciting from a sustainability point of view. I hope to find ways to invest in it. Of course, there's a separate thread for stuff like this: What other tech stock to consider?

Scared money don't make money!

 

[dondy]

I am sure USA is no different, in the Netherlands or Germany anything of financial nature is always accompanied with NDA and you can't say anything without general agreement. You can not disclose, "leak" or even admit you participate. You can not even comment.
If no disclosure agreement is made you actually can not say anything for 5 years after the events. If you are an analyst or researcher participating on some of the stages often it's agreed that you can't even mention such deals. Ever.
It's clear that Musk is not going to share anything with mass-media about the deal.

 

[Dan Detweiler]

So what is Bloomberg's real position on Tesla? They seem contradictory within their own opinion.

Dan

 

[Matias]

I think it is evident, that Elon made a mistake by announcing privatisation idea too early.