TSLA Market Action: 2018 Investor Roundtable

[aubreymcfato]

Tesla never said they are not marketing their products - they even have significant marketing expenses (mostly related to the referral system I suspect).

Tesla said that they do not want to do advertising - mass advertising in particular.

Here are their rules in a nutshell:

Referral Program

"Not OK:

• Advertising
• Spam
• Anything misleading or annoying

OK:

• YouTube channels
• Informational & fan websites
• Social media sharing"

It's a pretty straightforward stance.

Yep. I just noticed a few new and important videos *on Youtube*, which I think they use very wisely as a marketing tool. Elon is good with social media (up until he's terrible ;-)), and it's nice to see some efforts regarding this. There's a lot of potential for Tesla, especially on Youtube.

 

[Cosmacelf]

The Merits of Musk

Balanced article, no negative spin. Sometimes in all the drama that surrounds this company we forget how well-loved its products are.

Can you give us some of the better passsages? I don’t have a subscription to Barron’s.

 

[Fact Checking]

Anyone with an opinion on the shrinking of premiums on options once the 'going private' news was announced? ( was kinda surprising to see OTM calls lose value)
Once SEC news is over are we going to continue to see that trend and if so is this a harbringer of things to follow .. i.e. less volatility in SP?

If Tesla goes private at $420 then OTM calls above $420 are probably worth zero. So the over-simplified, naive view is that the drop in the time value of call options is probably a reflection of that outcome.

Now in reality there are (big!) uncertainties, so the time value is a weighted mix of probabilities of the various outcomes, as seen by options traders:

• there's 'X' probability of Tesla not going private - in this case the option is a regular option
• there's 'Y' probability that Tesla goes private but price does not significantly spike over $420
• there's 'Z' probability that Tesla goes private and price spikes (or rises) over $420 significantly (NASDAQ options are American-style, so they have value during temporary spikes as well: as the options can be exercised and a matching number of shares can be sold immediately at the higher price)

The only thing we know for sure right now is that X+Y+Z=100%.

Here's the various properties of these outcomes:

• 'X' increases time value of the $420+ call options, but probably reduces the probability of hitting $420+ to begin with (disappointment over a failure of going-private) - i.e. it's a net loss over vanilla pre-Elon-tweet option pricing
  
• 'Y' zeroes out the time value of the $420+ call options, i.e. a reduction in call option pricing
  
• 'Z' increases the time value of $420+ call options

So the drop in prices suggests that (provided my analysis is correct!) options traders are probably judging that 'Y+X > Z', i.e. that the probability of the two events reducing options prices is higher than the probability of a significant spike or a sustained rise over $420.

Which is a pretty common-sense reflection of the uncertainties at this stage.

I believe things will become really interesting once the price of call options starts rising significantly - beyond their expected 'vanilla' valuation based on the stock's price history...

Because that will be a sign that options traders start seeing a possibility of a short squeeze.

 

[The Blue Owl]

I just read that NYT article. Not understanding why everyone here thinks it is so unfair.

It's not about what it says, it's about what it doesn't say. The conversation lasted an hour. Do you really think the NYT was able to hold a depressed Elon on the verge of collapse for a whole hour on the phone?! Do you think he figured a New York Times reporter was the right shoulder to cry on, so he proceeded to pour his heart out, again, for an entire hour?

No, what actually happened, I'm sure, is that the NYT asked Elon for comment on a piece they had sourced by talking to unnamed close associates, some of which are on the board, and he obliged. I am willing to bet money (which I am, in a manner of speaking, by positioning myself in the market accordingly) that Elon's demeanour was in reality much closer to the one he exhibited in the YouTube recording, posted elsewhere in these threads, of another interview he gave on the very same day, where he talked in the chipper tone he takes when he interacts with people he likes. Yes, you could see he was tired, but he was nowhere close to the doldrums of despair and instability that we were told he is going through.

The NYT just cherry-picked what to include in their piece with the very clear intent to imprint in the minds of their readers the image of an Elon Musk on the verge of collapse. That intent is made very clear by, among other things, the gloating of their reporters on Twitter (with the clear subtext "Elon is broken and we got the scoop").

Of course, plenty of people read it like you: "what's wrong with it? are you saying they are lying, that Musk didn't actually say those things?" No, he likely did say those things, but YES, the NYT is lying. They are lying by omission.

 

[Unpilot]

The very thing that makes Elon awesome is his honesty and the very thing that makes the NYT and other hit pieces like it so repugnant is their dishonesty.

I'm talking about intent ....Elon's intent is as far as I can see always honest. The hit pieces have an intent as well and they do not act in an honest way. They are like slick snake-oil salesmen.

I put my money with the honest man every day.

I'm long Tesla private..or public.

 

[Fact Checking]

I just read that NYT article. Not understanding why everyone here thinks it is so unfair.

In a nutshell, the main author of the NYT article, David Gelles, admitted to his own biases against Tesla by smugly gloating about the TSLA price drop in a tweet a few hours after the article was published:

David Gelles: "Tesla $TSLA stock now down close to 4 percent in pre market trading. Wonder why?"​

As the first reply tweet is asking it incredulously: "...are you bragging about it?"

No decent person, let alone a journalist, expresses joy at such an outcome, unless they feel contempt for Elon and Tesla shareholders, and/or are profiting from the drop in the $TSLA share price.

Both the article and his tweet was highly unprofessional and inappropriate behavior by a leading journalist of the New York Times.

Hopefully the relevant authorities (the SEC) will be investigating whether it was illegal as well: if he mislead the public about Elon and Tesla intentionally, for profit, then that's a clear-cut case of market manipulation.

 

[Driver Dave]

I think it is the feeling that the real interview was probably 5% "it was hard"

But then 95% "but the company is doing well right now"

And what the reported did was lead with the 5% it was hard, then focus on the 5% it was hard, and never even get to the 95% things are good. While quoting anonymous sources to pump up the it was hard.

Then the stock dropped 30 points.

If the article was fair, the stock would have not dropped 30 points.

Because the reality is, Tesla just came through a hard part, but as Q2 showed, and the confidence they have to even consider that they could go private at this point, shows that Tesla made it through in a really great spot.

The stock should would not be tanking if the article, and the ones that came before it that week in the Times, had a fair and accurate view of Tesla as a company. The reality that Tesla is in fact in a good spot and headed in a great direction to become a self sustaining cash cow like Space X is now.

Instead of just the Elon click bait soap opera the reporter contrived.

The only bright side, for a 10 year long term bet, good time to stock up on some more. Let the irrational chaos make a big dip, and then go and capitalize on the knuckleheads.

The other problem is that this "interview" wasn't really an interview article.

The reporter talked with him, but then published only cherry picked lines.

New York Times should print the entire conversation to give proper context, report on a real interview, instead of letting their reporter spin things for his click bait needs.

 

[Driver Dave]

David Gelles: "Tesla $TSLA stock now down close to 4 percent in pre market trading. Wonder why?

[/INDENT]

This is awful. Reporters for the Times should be neutral, not gloating with click bait tweets.

This guy should be fired.

He's obviously a click bait guy and not a real reporter.

 

[22522]

The New York Times must love their advertisers more than anything else. At least that is how it looks.

 

[Driver Dave]

Most of the comments on that article with "Times Pick" on them are pretty clueless.

But one summed up by views better than I could.

 

[The Blue Owl]

Most of the comments on that article with "Times Pick" on them are pretty clueless.

But one summed up by views better than I could.
View attachment 326789

The one you included is the highest rated comment and is listed as such in the Reader Picks column. The NYT editors, on the other hand, push it to number 5, after 4 critical comments. I wonder why.

 

[Open Interest]

Something doesn't add up. Elon has been hinting at a short squeeze for a while now. He even did it after the tweet. He also probably knows that every tweet he send would be subject to an immense analysis by the SEC. Sure, he wanted to tell the retail investors first. However, why risk so many lawsuits by sending a tweet? It sure wouldn't be something that longs would want. Maybe, it just is that he made a mistake. If it is that simple, I am willing to buy it. Confused but still long.

I’ve wondered that too. Was it just a mistake, or is there another piece going on we haven’t seen yet that will result in this short burn? We also thought Elon made a mistake thinking that 5k would result in a short burn when they achieved it and the stock declined.

Oh well, I’m just chugging along, staying long and believing the company is doing well in Elon’s capable hands.

 

[tinm]

It's not about what it says, it's about what it doesn't say. The conversation lasted an hour. Do you really think the NYT was able to hold a depressed Elon on the verge of collapse for a whole hour on the phone?! Do you think he figured a New York Times reporter was the right shoulder to cry on, so he proceeded to pour his heart out, again, for an entire hour?

No, what actually happened, I'm sure, is that the NYT asked Elon for comment on a piece they had sourced by talking to unnamed close associates, some of which are on the board, and he obliged. I am willing to bet money (and I am, in a manner of speaking, by positioning myself in the market accordingly) that the general demeanour of Elon was in reality much closer to the one he exhibited in the YouTube recording, posted elsewhere in these threads, of another interview he gave on the very same day, where he talked in the chipper tone he takes when he interacts with people he likes. Yes, you could see he was tired, but he was nowhere close to the doldrums of despair and instability that we were told he is going through.

The NYT just cherry-picked what to include in their piece with the very clear intent of imprint in the minds of their readers the image of an Elon Musk on the verge of collapse. That intent is made very clear by, among other things, the gloating of their reporters on Twitter (with the clear subtext "Elon is broken and we got the scoop").

Of course, plenty of people read it like you: "what's wrong with it? are you saying they are lying, that Musk didn't actually say those things?" No, he likely did say those things, but YES, the NYT is lying. They are lying by omission.

Having been a tech entrepreneur basically my whole adult life, including CEO/Chairman roles, I’d like to shed some additional light on this. I know from personal experience that it is entirely possible to go from highs to lows in the blink of an eye when it comes to interacting with employees and customers and media and friends and family. I’ve been in situations where I knew I was going to have a friendly media interview and it went fine and a minute later have a deeply depressing staff meeting or board meeting and then have to suddenly jump on a customer call. You learn to flip on the switch. But also as in this 8/15 YouTube interview at the factory, the Elon we see there is the desired state for an entrepreneur: to talk to a fan/customer/media figure (best being a fan + customer + media figure all in one, as was the case here). You know they grok and share the vision and the mission, and it’s gravy when they ask intelligent questions.

Having also been interviewed for hours by NYT reporters over the years I also know that they are extremely selective in what portions of the interview they include in the final story. I once did a glorious 2-hr phone interview with NYT’s top tech reporter, and the resulting top-of-fold Page 1 Sunday NYT story starts out mentioning me in some tiny tangential anecdote we had discussed deep in the interview, but the article never once mentioned my startup company or its product. The article could have single-handedly made the company but instead we never got a single inquiry from the market or the industry. I never forgave the NYT for that.

 

[The Blue Owl]

Having been a tech entrepreneur basically my whole adult life, including CEO/Chairman roles, I’d like to shed some additional light on this. I know from personal experience that it is entirely possible to go from highs to lows in the blink of an eye when it comes to interacting with employees and customers and media and friends and family. I’ve been in situations where I knew I was going to have a friendly media interview and it went fine and a minute later have a deeply depressing staff meeting or board meeting and then have to suddenly jump on a customer call. You learn to flip on the switch. But also as in this 8/15 YouTube interview at the factory, the Elon we see there is the desired state for an entrepreneur: to talk to a fan/customer/media figure (best being a fan + customer + media figure all in one, as was the case here). You know they grok and share the vision and the mission, and it’s gravy when they ask intelligent questions.

Having also been interviewed for hours by NYT reporters over the years I also know that they are extremely selective in what portions of the interview they include in the final story. I once did a glorious 2-hr phone interview with NYT’s top tech reporter, and the resulting top-of-fold Page 1 Sunday NYT story starts out mentioning me in some tiny tangential anecdote we had discussed deep in the interview, but the article never once mentioned my startup company or its product. The article could have single-handedly made the company but instead we never got a single inquiry from the market or the industry. I never forgave the NYT for that.

Thanks for sharing your experience. Very informative.

Just to be clear, I do think Elon is going through a serious emotional rollercoaster. He has talked about this repeatedly in the past, the staring down the abyss while eating the glass sandwich. What I don't believe is that he is out-of-control and that there is nothing to report on the balancing side (they had no choice but to mention in passing Musk's remark that Tesla is close to being out of the woods). If you read the NYT comments, it is obvious that readers are all but convinced he is damaged goods.

 

[MikeQ]

Most of the comments on that article with "Times Pick" on them are pretty clueless.

But one summed up by views better than I could.
View attachment 326789

Need a link to this so we can add more likes.

 

[Open Interest]

Can you give us some of the better passsages? I don’t have a subscription to Barron’s.

From “The Merits of Musk”

The tweet stunned the Street, sending the stock soaring before Nasdaq halted trading. But articles like the Times piece bolster Musk’s case that he erred on the side of disclosure. That’s a good defense under our securities laws.

There’s too much to Musk, Tesla, and his SpaceX rocket company to bet that they will go away. His rockets fly. His cars go.

Musk is bothered by the short sellers who have made Tesla stock one of the most shorted. But even if a buyout doesn’t squeeze out the shorts, Tesla isn’t an easy target. It sold $4 billion worth of cars in the June quarter. That puts it about 10 years ahead of the growth trajectory pre-dicted in a skeptical 2013 Barron’s cover story that called the stock overpriced at $102. A famous short seller says he avoids shorting companies the world would miss if they disappeared. Tesla’s cars are wildly popular. The world would miss them if the shorts prove right.

There’s more, but that’s the gist.

 

[Cosmacelf]

As the risk of piling on, I too was the subject of an in depth article once in my past by a journalist who wrote a hit piece against me and my company by putting my quotes beside sentences that made it appear I was talking about those sentences. It was awful. The journalist parlayed that and other similar pieces to a better gig at some larger newspaper.

The thing that really boils my blood, though, is that these reporters think they are smarter than the people they are attacking. They think they’re so clever and their targets so dumb.

 

[SebastianR]

Wow, Tesla's production must be really really top-notch by now if we look at all the hate/pity/disgust/"I know it better" that is being poured out over Elon. I guess all other arguments against Tesla don't carry any longer and/or it might be too early to slander Roadster 2 / Semi production... (I think we will hear a lot about the Semi in future - "cars are easy, everyone can do them, but Tesla is doing Semis now, that's a different kind of thing, they are doomed!!1!" or so).

Be it as it may, I think we really need to get Tesla private. I have not seen any article lately calling for Elon to be kicked-out of SpaceX. If there truly was something wrong with the guy we should have seen 50/50 articles on both companies, shouldn't we? Anyways, this media circus is all getting too transparent, too obvious and quite frankly too tiring these days...

 

[geneclean55]

Can tweeting about the sp during pre-market and linking to your article be considered manipulation for subsequent regular trading hours?

 

[riverFox]

I also have been thinking that the main reason to go private is not so much to deal with the short sellers, but to access capital markets to be able to move more fluidly and quickly without scrutiny.
Watching the M.Brownlee interview I am now even more convinced that this is the case. EM mentions that they want to do two products at the same time, and that they have a bunch of exciting products all lined up.

Elon's face lit up when asked about new products. It looked like he was gonna blurt something out then he had to restrain himself.