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TSLA Market Action: 2018 Investor Roundtable

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Cosmacelf

Well-Known Member
Mar 6, 2013
8,850
22,574
San Diego
I am. Since IB lends out a proportion of how many shares are eligible to be shorted, I can calculate real-time availability by percent. Since 10% of my shares are being lent out, it means 90% of all eligible shares have not been lent out.

For example if 1 million shareholders (with 1 share each) allowed their shares to be shorted, only 100,000 shares have been shorted indicating that there is "high" availability of shares to short.

IB receives ~1.4% of the collateral value, and they give me half at 0.7%. As the stock becomes harder to borrow, the rate they collect and the rate I collect increases. It is an annualized rate but interest is calculated daily.

So you get an annualized .7% of 10% of the value of your Tesla stock? So currently, an annual interest of .07%?
 

Marsnaut

Member
Apr 7, 2016
311
282
NYC
So you get an annualized .7% of 10% of the value of your Tesla stock? So currently, an annual interest of .07%?

Yes, not much money at all.

For a few days out of the year (<10) you might get significantly higher rates (10-25% annualized AFTER 50% split) with 80-100% of your shares loaned out. Really depends on if people want to short (and remember this is only for IB as shares can be shorted at another brokerage). Higher volatility and a higher share price will invite more shorters.
 
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jhm

Well-Known Member
May 23, 2014
9,822
36,381
Atlanta, GA
Wow, today's TSLA price action:
  • The $320 price barrier seems to be holding strong for a second day. Will it survive end of Friday weekly options expiry machinations?
  • Only around $4 of volatility today - the historical average daily range for TSLA is $10-$17 (!). If the trading range gets reduced longer term due to the barrier and due to constant selling pressure then this would explain recent decreases in options premiums.
  • TSLA ignored the big rise in NASDAQ and the usual correlations with macro were a lot weaker than usual. My guess is that some correlation/arbitration desks noticed the strong barrier and stopped correlation-trading TSLA.
I'm really curious about whether the barrier is going to survive today and whether it will be present next week as well.

If yes then one (speculative) interpretation of the barrier would be that:
  • Elon Musk's Tesla buyout consortium is buying all shares below $320, and are putting them into a common pool.
  • That pool will be distributed among the buyout partners, in proportion of their contributions to the $420 buyout. This solves the 'front running problem' between buyout partners rather elegantly.
  • This reduces the cost of the buyout significantly, especially if they start raising the price barrier to get closer and closer to $420, to trigger more and more selling from shareholders who cannot or don't want to own $TSLAP shares.
Haven't seen anything like this before - does anyone know of a historical example of merger/buyout partners installing a price peg in the open market?

Or could this be a third party perhaps, a really strong buyer or merger/buyout arbitration trader?
I like the idea of a buyout pool. The tricky thing is to avoid boosting the price too quickly. $320 is a huge discount to $420. The problem with consortium members bidding with each other on the open market is that it risks driving up the price prematurely. So buying as a pool may this coordination easier.

So long as they are buying, whether as a pool or individually, shares will find their way into strong hands. The only folks who should be selling now are the shorts.

If such a consortium were buying right now, wouldn't there be some SEC filings to that effect?
 
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AK56

New Member
Aug 24, 2018
2
5
Boston
Curious if anyone is familiar with the going private mechanics? Is it CEO puts together deal to submit to board, board votes whether to put it to all shareholder vote, all shareholders vote? Is that right or can the board just vote it without a large shareholder vote? Is the original submission public or is that only if they put it to a shareholder vote? If all the major shareholders (a majority of shares) have already agreed to the plan before being submitted to the board, is a shareholder vote even required?

Here's the Dell timelinehttps://www.reuters.com/article/us-dell-buyout-timeline/timeline-the-long-path-to-a-dell-buyout-idUSBRE92T00X20130330
Dell-EMC: A Timeline Of A $67 Billion Deal
In that context, we are already @ December 2012 Timeline..i.e. confidentiality Agreement with Silverlake. I matched the Dell historic SP <https://i.dell.com/sites/doccontent/corporate/secure/en/Documents/dell-closing-costs.pdf> with the history. Seems like we are not that far most probably Oct/Nov unless the counter offer comes
 

beachbum77

Banned
Jun 22, 2017
887
1,123
Hot & humid Florida
Wow. Now what?
What the f**k is going to happen to the share price on Monday? Any guesses?
I can't wait to see how the media reacts to this.
I mean, wow.
Seriously guys, wow.
I do not expect a lot of action unless big stakes were accumulated on hopes of going private. The closing price today was about where it was before the Saudi stake was announced.

The unknown is how the SEC will react to this news. At least no investors will get forced out. They get to ride the rollercoaster forever.
 

wipster

Gold Member
Supporting Member
Nov 10, 2013
3,377
15,854
Kennewick, WA
Wow. Now what?
What the f**k is going to happen to the share price on Monday? Any guesses?
I can't wait to see how the media reacts to this.
I mean, wow.
Seriously guys, wow.
Definitely seriously wow... the thing is, wow reads the same regardless of whether you read it backwards or forwards. I'm disappointed, was looking forward to it.

Here comes even more FUD.
 

beachbum77

Banned
Jun 22, 2017
887
1,123
Hot & humid Florida
You mean some FUDsters may question Musk's credibility/sanity?

Wonder if the SEC will be among them.
The bad side is the class actions just got a whole lot stronger for both longs and shorts. If the deal is dead this soon it means there never was a deal at all.

MP3Mike..why do you disagree? Share.
 
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