TSLA Market Action: 2018 Investor Roundtable

[neroden]

My bad I quoted you the wrong year. These were Jan 2020 put LEAPS selling at the 420$ strike that were bid up from 155$ to 162$ per share.

I find that a very odd contract to buy.

Closure of a short put position opened by someone who believed the buyout would happen?

Opening of a short put position by someone who expects the stock price will be above $258 and below $420 in Jan 2020? (Or perhaps not since the market makers wouldn't allow themselves to take that large a trade?)

 

[neroden]

I think we are seeing day-trader activity today.

Don't we always?

 

[Krugerrand]

To each his own, but my take is 1) don't respond and 2) mark it as 'funny'

"Don't forget the power of laughter" -- Kra

Melric the Magician and the Sorcerer by David McKee

But he’s not funny. I work hard for my funny votes, I don’t need some humorless dude being falsely considered funnier than me; I’m trying to win the free blender on page 2 of the catalog - since they’ve been out of ponies for like 4 years now.

 

[neroden]

Tesla will meet its Model 3 goal so buy the stock, Oppenheimer says

Colin Rusch is an OK analyst:
https://www.tipranks.com/analysts/colin-rusch

 

[neroden]

Either Elon is launching a firework this evening on the podcast and sets a new buyout price or I don't see any positives in the next month's.

Third quarter delivery numbers are less than a month away; third quarter financials about two months and a week away.

 

[neroden]

It is not the first time people are reporting getting almost immediate VIN assignment on RWD. What is novel is getting free SC access (if true). Tesla is increasing some of the discounts on new cars on EV-CPO.com. So I could see then offering incentives for RWD M3's. A lot of people canceled orders for RWD when AWD became available, and demand for AWD has been stronger than what Tesla expected.

Worse, while discovering that AWD was far more popular than expected, Tesla seems to have had an AWD motor production bottleneck (also a white interior production bottleneck).

So there really is strong evidence that Tesla is producing more RWDs than they know what to do with, i.e. an RWD demand problem. They're producing as many AWDs as possible, but producing RWDs when they run out of front motors. The AWD-related bottlenecks are almost certainly one of their top priorities (along with fixing the paint shop sabotage, getting delivery straightened out, and spinning up the extra battery lines at Giga). They've been working on it for at least a month so it's probably close to being resolved. The fast delivery on RWDs may disappear by the end of September as they manage to make a larger percentage of AWDs.

Free SC access should be much cheaper than discounting a car, and would not impact Q3 GP.

Free SC access for life costs them next to nothing now that they've prohibited commercial (taxi) use of Superchargers for future cars sold.

 

[neroden]

Actually, now that I read the article, I see that they do have a rational argument (regardless of its merits, it at least is coherent).

In short (heh) they are arguing that Musk *intended* to trigger a price increase with his tweet which would then have caused injury to short sellers. For manipulation you do not necessarily need to have damages, intent can be enough.

However, it is obvious from publicly available evidence that Musk *intended* to take $TSLA private. Largely from annoyance with the shorts, but that is immaterial. The *intent* is what is important.

And going private isn't exactly new news, its just the closest Musk has come to actually doing it.

To weaken the manipulation case even further is the fact that Musk changed course with well documented and rational reasons for doing so that have nothing to do with stock manipulation.

While your statements are all correct, I would add that in order for a *short-seller lawsuit* to collect money on a manipulation case, (as opposed to the SEC collecting fines), they *would* have to have proven actual damages.

Likewise for a long "I bought at too high a price because I thought they would buy me out at $420" case. The max claimable damages from the stock purchases, I started calculating; it's well under a billion dollars. The stock was trading between $354.71 and $358.64 in the five minutes *before* the tweet (12:40 -12:45 PM Eastern Time), so only people who bought above that price would have any sort of damages claim. By two days later, it was back down around that level again.

 

[neroden]

Political allegiances aside, who in their right mind thinks that any type of political protest is appropriate when YOU ARE ON THE JOB ON COMPANY DIME?

Um, everyone?

The NFL has this... weird... thing of jingoistic renditions of the national anthem and flag-worshipping. It is political, and it *demands* political protest response.

Actually, in US sports this flag-waving jingoism dates back to World War I jingoism, if I remember correctly. The government started promoting this because the US entering WWI was *very unpopular*, and they wanted to rally people to support it. They also started imprisoning people who published anti-war pamphlets, and passed a lot of unconstitutional legislation like the "Espionage Act of 1917" to infringe on people's first amendment rights.

So the NFL silent take-a-knee protests are much, much closer to the core of the First Amendment than you think.

 

[bhtooefr]

Taking my response to that over to market politics.

 

[neroden]

We are banking on a positive P/E ratio to draw down the stock price in early 2019 from where it is today

So you are banking on positive earnings to cause the stock to go down in the short term. Uh... huh?!?!

and to rise back up from there.

Well, OK, yes, positive earnings should cause a rise, but why on earth would you expect it to cause a dip first, Donn? Care to explain?

 

[neroden]

Especially given this characterization of how Left operates:
In the finance world, Left, 46, is what is known as an “activist” short-seller. After he places a bet against the price of a stock, he then publishes research designed to torpedo the company’s value, often by airing accusations of fraud or abuse. This is entirely legal, as long as what he publishes is not itself fraudulent. Left takes short positions in companies across a whole range of industries — Tesla, Valeant, GoPro — and though he makes mistakes, he has an unusually high success rate. The Bounty Hunter of Wall Street

Tesla should actually countersue him immediately accusing his lawsuit of being intended to manipulate the stock price. Also file criminal charges with the SEC for good measure.

Left is a criminal who belongs behind bars.

 

[JRP3]

It was the next two words, "funding secured", that rattled the markets and got the SEC's attention.

I think you're being a bit misleading or at least obtuse, especially since you truncate musk's quote prior to the point that is at issue. The fact that he was "considering" taking it private is not at issue. The news article from CNBC says
The suit specifically cites Musk's Aug. 7 tweet about taking Tesla private and claiming that funding for that effort had been "secured." .

I think the problem is the funding secured part...

Yes the fixation with "funding secured" is the "issue", it's also wrong. First, and my point, Elon never made a guarantee Tesla was going private, the word "considering" has a specific meaning. Thus the "funding secured" part carries no guarantee or promise. If people took a chance and traded based on a maybe, (i.e. "considering"), they were gambling. Second, in preliminary discussions "funding secured" does not necessarily mean "documents signed and notarized". If Elon had discussions with potential investors with the necessary capital and they gave him the impression they would back the deal I believe that qualifies. Any case should be thrown out on the first point, but if it makes it past that it should fail on the second. As is often the case with Elon's statements people read into them what they want and don't focus enough on the exact words he uses.

 

[neroden]

So dig up dirt on a company, take a short position, and then air the dirt publicly? How is that not trading on non-public information? How can that be legal?

It's not. Also, the information is often phony.

Left's a criminal.

It's been pointed out that, despite rumor, nobody has actually linked Chanos to the smear campaign against Tesla. I think we now know who's really behind the smear campaign. Looks like it's Left. He apparently works with Linette Lopez...

It's worth nailing Left to the metaphorical wall. He belongs in prison. It's probably possible to get the goods on him and put him there.

 

[neroden]

Forgive my rant.

I'm not happy at all about the short interest going down dramatically.

For all the damage shorts caused, they need to be SEVERELY punished. However, it seems like they're winning.

1. They successfully pushed down the stock price, spread all this FUD, and tarnish Tesla's brand.
2. They are getting away with this, as they're able to cover at very low prices
3. Not only that, they managed to cover millions of shares while STILL decreasing the stock price instead of increasing the stock price dramatically
4. They are destroying Elon as a person, and it is working, even though what he is doing is arguably some of the most effective and beneficial work for humanity and Earth.

WTF????

The big shorts need to be LOSING THEIR SHIRTS! It's one thing shorting to make a profit from trading, that's fine. I do that too. But it's another thing to create massive amounts of FUD and be the driver of negativity. That makes my blood boil. And seeing them get away with it by covering at ridiculously low prices, exactly what they intended, is beyond unjust.

I feel so bad for Elon, and I can't even imagine the psychological torture he is enduring for giving up a perfect opportunity to roast the shorts for the good of the institutional shareholders. I hope the market will be unusually kind to him starting Q3 2018.

At least we finally found out who was actually behind it -- the primary source of the smear campaign is clearly Mr. Left. Hopefully he will turn out to have actually paid some of the saboteurs (he's arrogant enough that he might have).

He's picked a company he can't kill this time. He has made Musk decide to reject all Wall Street funding from now on, though, which is a sort of sick accomplishment; you'd think the NYSE, NASDAQ, and so forth would consider this to be something worth punishing Left for.

 

[BrianZ]

At least we finally found out who was actually behind it -- the primary source of the smear campaign is clearly Mr. Left. Hopefully he will turn out to have actually paid some of the saboteurs (he's arrogant enough that he might have).

He's picked a company he can't kill this time. He has made Musk decide to reject all Wall Street funding from now on, though, which is a sort of sick accomplishment; you'd think the NYSE, NASDAQ, and so forth would consider this to be something worth punishing Left for.

That last paragraph is an insight masterclass and I can't agree more.

Sure, the financial justice system is corrupt as hell, but as you said there is real incentive for the exchanges to punish Left, and I really hope he gets it. He's been nailed in Hong Kong already for issuing false reports, so we know he is a criminal.

That said, I must have missed an article. Why is it obvious that Left is the one behind the FUD? I saw that he sued Musk for damages on the go private tweet, but that doesn't prove he's the source of a lot of the FUD.

 

[dmunjal]

At least we finally found out who was actually behind it -- the primary source of the smear campaign is clearly Mr. Left. Hopefully he will turn out to have actually paid some of the saboteurs (he's arrogant enough that he might have).

He's picked a company he can't kill this time. He has made Musk decide to reject all Wall Street funding from now on, though, which is a sort of sick accomplishment; you'd think the NYSE, NASDAQ, and so forth would consider this to be something worth punishing Left for.

I just listened to Andrew Left on the Quoth The Raven podcast. He's whacko!

 

[SO16]

It was the next two words, "funding secured", that rattled the markets and got the SEC's attention. I admit I bought some calls immediately based on those two words. So I would not be surprised if short-sellers ran to the exits taking big losses, which will have to be proven in court or in a settlement hearing.

Was silver lake able to get 30 billion lined up in about two weeks?

If so, how is that even feasible?

 

[Mike Smith]

 

[UnknownSoldier]

"Because I'm an alien"

Elon is admitting he is Kane
Save us from the Tiberium

 

[beachbum77]

Was silver lake able to get 30 billion lined up in about two weeks?

If so, how is that even feasible?

It is about the timing. Two weeks later does not let someone off the hook. It had to be factual at the time of the announcement.

In most cases, the work is done over months of investigation, coordination, and number crunching before anyone says anything publicly. I believe that is why the BoD was reportedly stunned by Musk's announcement. At that point in time, he had only talked about a go-private plan. We know now he had not even hired anyone to analyze the idea on August 7th. They were hired after the fact.

Those two words and the weight they carried is what prompted action by both long and short positions to buy millions of shares. I believe the SP is still feeling the repercussions of this episode.