TSLA Market Action: 2018 Investor Roundtable

[MissAutobahn]

I don't understand all those worried discussions here.
By announcing TSLA going private, Elon stung in a shorty wasp nest saying he will stop their nasty games.
How do wasps react, when you remove their nest?
In a few month everything is forgotten and Tesla can work on what they want to be: Bigger and bigger.
If you daily want to play with your money, go visit Las Vegas!
Trust Elon, he is cleverer as anyone, reaching goals

 

[Thumper]

I think your first sentence is really the key about what is going on in the market with TSLA right now: there is a lot of speculation. What is actually known?

1. Elon is seriously considering making a formal offer to the Tesla Board to take Tesla private at the buyout price of $420. He believes he has the funding for it. He is in the process of figuring out which investors would be part of private Tesla. He has indicated he wants to allow current investors to be able to stay invested in private Tesla, and he is going to try to make that happen.
2. The Saudis are a significant part of the investor group but the breakdown of the investors is not known at this time.
3. The Tesla Board is preparing for a formal buyout proposal from Elon.
4. The SEC appears to be formally investigating Elon over his tweet about having funding secured to take Tesla private. Neither the SEC or Tesla have confirmed this. This information has all come from anonymous sources "familiar with the matter."
5. The stock climbed to a close of $379 following Elon's announcement. Subsequently, it has fallen to $305.

There has been very recent speculation from the media that the Tesla Board was blindsided by Elon's tweet, and that several members are angry with Elon. The media is strongly suggesting that Elon needs a leave of absence or maybe should even be fired. The media is also speculating that the Board is now in crisis mode trying to figure out what to do about Elon. The media have speculated that the Board is urgently trying to find a COO to take over day to day operations from Elon.

All of this mixed together has resulted in the stock price dropping to where it is now. Is the stock acting REALLY volatile? Yep. Should it have risen as high as it did based on Elon's announcement? Should it have fallen as far as it has subsequently? There is no concrete evidence to seriously suggest that the Tesla Board won't be getting a proposal from Elon to take Tesla private. If that is in fact the next step we see happen, what will the market do with the stock price? Stay tuned...

Nice summary of actual facts without embellishment or spin.

 

[EVNow]

Elon is seriously considering making a formal offer to the Tesla Board to take Tesla private at the buyout price of $420. He believes he has the funding for it. He is in the process of figuring out which investors would be part of private Tesla. He has indicated he wants to allow current investors to be able to stay invested in private Tesla, and he is going to try to make that happen.

The most significant news event that will shakeup the market is when Elon & friends submit their taking private proposal that is being worked on by Goldman etc.

When do you guys think this will happen ? 1 week / 1 month / 3 months ?

 

[BozieBeMe2]

In the last days, I spoke with several friends about Tesla: 2 of them directly approached me to ask me how to buy stock, and another one (already a small shareholder), wanted to buy more.
This is the tiniest of data points, but I think the TSLAP discussion in really "pushing" a lot of people (who maybe have never bought any stock in their life, as my 2 friends) to buy Tesla.
FOMO is a powerful force (did you see the Bitcoin rise last year?), and we may be see some of that in the future. If Musk really delivers, allowing normal and foreign retail investors to be in, I think we'll see many new Tesla shareholders:
I just can't say if they will be able to move the needle, as I think many of them will buy just "symbolic" amounts of shares.

I see it just like you. The circus aside, Tesla is still a very powerful Juggernaut to deal with. They are making record numbers of cars, (plus more in the pipeline) their power division is getting good returns on their efforts and the Boring Company is on track. Tesla is still Tesla, no matter what pin heads would have you believe. As the capital advancements are put into place, imagine the profits that will come from all of their endeavors!

 

[gringotuanis]

Let's not forget that on CC he mentioned that TSLA will be cash flow positive in Q3/Q4.

Also mentioned in the past is that he doesn't like to live in an ivory tower, so him putting long hours is to lead by example.
.... Yes it is true, TSLA needs to be running 24/7 to try to hit the 6K/wk target.

He obviously needs to rest though and should be able to. Even his workers, work shifts and not the Hopefully he figures out a balance that works for him even if that means he is working 18 hrs a day and sleeping 6.

If that is something that causes the stock to slide, which is possible, then it presents a very compelling opportunity for others.

Precisely.

 

[Sancho]

I only see 1 problem in that tweet: he should have directed it to @BobLutz as a response to his latest bad-mouthing of Elon/Tesla. The one who bankrupted GM should not lecture him about how to run a manufacturing company.

Actually, when I read the tweet I thought that Lutz was one of its intended targets. GM immediately came to mind, the way Musk framed that tweet.

Musk has admitted in various ways over the past month that Tesla is still in the last stages of production hell. Until it escapes this hell, there is still a real chance of a need for a restructuring or even collapse. That risk should be priced into any investor’s purchase of TSLA.

Everything I’ve seen in the last month, however, tells me the risks of production hell are substantially reduced from a month ago. I’m now only slightly discounting Tesla’s potential future value by the risk of near term failure.

 

[generalenthu]

The shorts are seriously playing with fire here. What's their plan when the proposal is submitted? They're totally convinced it is all smoke and mirrors. It boggles the mind.

It will gap up and just stay there, or shoot higher when the proposal comes out in the next couple of weeks.

 

[EVNow]

Doesn't need most of the market.

Dominating top 15% of the market will do.

Tesla also has a record of pulling sales from lower automotive segments to boot.

Just pointing out $25k in India is not the sweet spot it is in the US.

 

[generalenthu]

Tim Kentley-Klay on Twitter

 

[bdy0627]

The shorts are seriously playing with fire here. What's their plan when the proposal is submitted? They're totally convinced it is all smoke and mirrors. It boggles the mind.

It will gap up and just stay there, or shoot higher when the proposal comes out in the next couple of weeks.

They certainly can't say they didn't have the chance to cover. If that is what happens, there is no reason in the world to pity them.

 

[geometro]

I think if he really wanted to hurt the shorts, he would have had everything lined up. Making this “announcement”, which he’s had to walk back, isn’t useful for anyone. It creates drama without any benefit.

As a shareholder, do I care that he informed me? Nope because until there is a concrete plan I can’t make any decisions. Consequently, I don’t see how this is beneficial in the short or long term.

The most frustrating thing is that this is all happening on the heels of a great Q2 conference call. He and the team shined. This past week has removed that shine and momentum.

 

[neroden]

Honestly wouldn’t a simpler staycation at his homestead in LA with a Victoria’s Secret supermodel help with the stress and sleep issues. I know it’s always helped me a lot when under high amounts of stress.

;-0

OK, now I have to ask how many times you've done that, though out of respect for privacy I won't ask *which* Victoria's Secret supermodel.

 

[neroden]

They are experts at pretending they are on your side and that they care about the cause. Elon is a sucker for that and is probably unable to detect human malice.

Those of us on the autism spectrum tend to have that issue -- being naturally open and honest and assuming people are being straightforward, so not spotting deliberate attempts to set up social traps.

 

[neroden]

Just finished watching the Marques video interview. Musk comes across relaxed, great sense of humor, upbeat and excited for the future.

The exact opposite of the impression from the NYT interview.

So, which do you believe: a filtered account of an interview, or your own eyes?

I have subscribed to the NYT my entire adult life, and have always put them on a pedestal. I could not be more disappointed by their coverage of Tesla and Musk, and not just this week.

Tesla and TSLA’s best days are ahead. It’s the NYT and mainstream journalism that I’m now deeply worried about.

You should have been worried since Judith Miller and the Iraq war lie campaign. Or if not that, since the NYT hired professional liar Bret Stephens from the gang of professional liars at the WSJ editorial page.

NYT still has a large circulation, but it's not a good paper any more, and hasn't been for years.

 

[neroden]

I think Elon wanted to explain his intention of the tweet (transparency for the mass) and his rationale of going private to reporters when he agrees to the NYT interview. All he said make sense if you put it under the context of going private to reduce financial incentive for hurting Tesla.

I think he just underestimated how wicked these 'reporters' can be.

So here's another point: I'm not sure the Board was fully sold on going private before.

After the dishonest NYT hit piece... I think the Board is fully sold on going private.

 

[Fact Checking]

The most significant news event that will shakeup the market is when Elon & friends submit their taking private proposal that is being worked on by Goldman etc.

When do you guys think this will happen ? 1 week / 1 month / 3 months ?

Probably more, much more.

Solar City buyout timeline:

• 2016/06/21: merger offer
• 2016/10/12: voting date for 2016/11/18 was announced
• 2016/11/18: shareholder vote that approved the merger

I.e. it took 5 months to get a shareholder vote.

Dell buyout timeline:

• 2013/02/06: Dell buyout offer
• 2013/09/12: Shareholder approval vote
• 2013/10/31: Dell gets delisted and goes private

It took about 7 months to get a shareholder vote.

Also note that the Dell buyout was preceded by months of private negotiations, before they went public with the Dell board's approval of the deal. The first moves in the Dell buyout were done in the summer of 2013. By that timeline it took a year to perform the private buyout.

So I'd expect 5-7 months at minimum - it could easily drag into 2019, unless Elon wants to really accelerate the deal.

 

[neroden]

And now this (don't click it's Azealia Banks)

Weekend at Elon’s: A Tesla Subplot With Azealia Banks

How low can they go?!

The fact that NYT allows these low lives to continue spew venom to the mass is disgusting.

Seriously? Azealia Banks is already known to have a record of making up scurrillous rumors, so the National Enquirer, I mean the New York Times, decides to spread her rumors? Wow.

 

[Lessmog]

Probably more, much more.

Solar City buyout timeline:

• 2016/06/21: merger offer
• 2016/10/12: voting date for 2016/11/18 was announced
• 2016/11/18: shareholder vote that approved the merger

I.e. it took 5 months to get a shareholder vote.

Dell buyout timeline:

• 2013/02/06: Dell buyout offer
• 2013/09/12: Shareholder approval vote
• 2013/10/31: Dell gets delisted and goes private

It took about 7 months to get a shareholder vote.

Also note that the Dell buyout was preceded by months of private negotiations, before they went public with the Dell board's approval of the deal. The first moves in the Dell buyout were done in the summer of 2013. By that timeline it took a year to perform the private buyout.

So I'd expect 5-7 months at minimum - it could easily drag into 2019, unless Elon wants to really accelerate the deal.

Just another wild random guess here: Since Elon seems to be a person of great intellect and somewhat less patience when it comes to suffering fools, I'd say he will very much want to accelerate. Aim point: Just around Q3 deliveries figures and before Q3 Earnings Report. Great -- collides with my holiday!

 

[neroden]

selling J20 $420 puts

I'll warn you, I think there's a real possibility of the go-private price being lowered if the FUD and disinformation manages to keep suppressing the stock price.

Based on my understanding of Elon's psychology, I think he is *hell-bent* on going private. A lower stock price for a long time would give him enough legitimate reason to lower the offer, and the SolarCity offer was lowered from the initial offer. And a lower offer means *less financing needed* and going private more cheaply -- although he does want to treat the people who have to cash out well, his overriding priority will be to go private, and I believe he'll do what it takes.

If I were making the play you're making I'd probably sell $390 puts instead; cashing everyone out above the all-time high would probably satisfy Elon's conscience towards the long-term investors.

 

[Sancho]

You should have been worried since Judith Miller and the Iraq war lie campaign. Or if not that, since the NYT hired professional liar Bret Stephens from the gang of professional liars at the WSJ editorial page.

NYT still has a large circulation, but it's not a good paper any more, and hasn't been for years.

In my liberal micro bubble, the NYT is the Bible. So it’s taken me a long time to reach your conclusion.

It’s also personally mind blowing to find myself anywhere near Trump’s portrayal of the mainstream media as Fake News. If my friends knew about that heretical line of thinking, I would be permanently voted off the island.