TSLA Market Action: 2018 Investor Roundtable

[KarenRei]

I hate to say it, but Mark Spiegel called Elon's bluff when the stock was at $380 and increased his short position.
The man has balls of steel for making that move. And he's on the winning side now

Although I would never short TSLA, I backed up his argument (that there was not going to be a "above $420 short squeeze", and thus his maximum losses were practically capped), and took no shortage of hatred here for doing so :Þ

The only thing that kept me from selling at $380 (I certainly wasn't buying!) was uncertainty about how long I'd have to get back in. By the time that uncertainty was cleared up, the price had fallen so much that I no longer had an interest in selling.

 

[bhtooefr]

That doesn't make sense. Buying stocks away from shorts is not manipulation.

I think what @MXWing was suggesting was longs selling into the tsunami, to try to bring about a 10% drop, and then rebuying as soon as it's hit.

 

[KarenRei]

Semi-mod: @ggr is also traveling and about to pick up performance M3. Will do what I can to enforce the anti-gloating rule.

Wow, there's a mod in this thread?

PLEASE permaban the astroturfing troll Mike117. You'll find virtually everyone in this thread will thank you for that!

Shorts who are on the level = Should be welcome here.
Astroturfers who pretend to be longs and show up whenever they think they can move the stock = Should be instabanned.

 

[BenPrice]

I think what @MXWing was suggesting was longs selling into the tsunami, to try to bring about a 10% drop, and then rebuying as soon as it's hit.

Yeah:

Until opening bell longs should be selling, shorts buying.

Less than 10% drop at opening bell = manipulation like you wouldn’t believe.

Literally a reverse 280 battle

 

[emir-t]

Does anyone really believe we'll go below 265$? Luckily I had sold my shares at 302$ two days ago because I was going to change brokers so I was saved from the dip. Now I'm tempted to buy shares and call options, preferably 5/10 300$. Due to volatility they're too expensive but it might be like the 'subpoena' dip from a week ago.

 

[KarenRei]

I have been a subscriber to the SEC enforcement updates for almost two years now (because of interest in a different stock potentially subject to proceedings). One can subscribe easily through their website. From that, it appears to me that in a large number (probably the majority) of cases where the rule breaker (i) did not seek direct personal gain, and (iii) settled, the SEC agreed a 5 year D&O ban plus a monetary penalty. I suspect that is what was offered here.

See, comments like this are why I see you as a person who's trying to take an honest part in the discussion here, and not someone who's just trolling. And why I welcome your presence, even though I couldn't disagree more with most of your stances regarding the stock.

 

[mongo]

Let's see if I understand this correctly. I cited a prospective buyer (who bought actual shares on the open market), and your response boils down to "nuh-uh"! Although there weren't any formalized purchase agreement, you can't rule out a verbal one.

More importantly, the SEC's claim is frivolous. Elon's exact words on Aug 7th, were "Am considering taking Tesla private at $420". Why does there have to be a signed purchase agreement in place for a CEO to "consider" persuing an action?

If Marry Barra said that she was "considering" buying a chinese EV builder, would there need to be documents already in place for this? Is comprehension of the english language no longer a prerequisite when dealing with issues of law and regulation?

Elon was not tweeting as CEO in this case. He was personally trying to take it private.

Every short seller will be bombing the stock tomorrow. They will probably hit the 10% drop trigger right away, trading will halt, then it will resume, then this will continue until we're at $200 or someone finally stops trading for the day. This is the moment Chanos and Andrew Left and all the rest has been waiting for 10 years now, he's not going to miss his chance. He's going to try to make TSLA zero a reality. I wonder if CNBC will just have Chanos on for 8 straight hours and not have any coverage of anything else tomorrow. They might just rotate through Chanos, Left, Gordon Johnson, and Mark Spiegel on the hour every hour for the next 48 hours.

The uptick rule kicks in for the rest of the current trading trade and the next when a stock is 10% lower than the previous day's closing price.

I don't think that's sufficient. The lawsuit alleges that he "knew or was reckless in not knowing....". It seems that the standard the SEC wants to apply is not merely what the state of Elon's mind was at the time, but also what it should have been for a CEO acting not recklessly towards the shareholders in his company. As you said, the Dell deal took over 6 months to organize. So there is a case to be made that an informed CEO should know that these take-private deals are not decided in a meeting of 30-45 minutes where nothing of substance is discussed.

Again, Elon as person, not speaking as Tesla's CEO. Also, his sphere of knowledge is SpaceX which has the type of private ownership with employee shareholders that he was wanting to copy. (Issue being employee vs fund/group/general public)

 

[anon]

I read the SEC document. One interesting thing for me was that I didn't see any quotes related to Goldmans Sachs or Silverlake, or the later Saudi involvement (or lack thereof) in the deal that Silverlake presented to Musk. If the Saudis weren't interested at $420, I imagine that the SEC would have included that fact as further evidence that Musk's statement was based on nothing. There have been media reports that subpoenas were sent to Silverlake and Goldman, so the SEC should have full details of that.

To me, this suggests that the Saudis were indeed interested at $420 and wanted to be a major part of the deal, as previously suggested in the media.

If, so we have this:
- Musk and Saudis meet, Musk believes they want to deal on standard reasonable terms, Musk assumes this means a 20% premium to share price because that's a standard thing.
- Musk announces funding secured on the basis of that assumption.
- Musk's assumption is proven to be true within 2-3 weeks.

So is it reckless to state that something is true on the basis of an assumption, when that assumption turns out to be true? I'm not sure and I don't think it's completely clear either way. To me (not a lawyer), this seems to be the key issue.

Then there's the separate matter of saying that the only remaining step was a shareholder vote. Is that reckless if you firmly believe that the other steps involved are just formalities? Again, not completely clear to me either way.

Curiously, they spent a lot of time arguing that Musk's statement about shareholders all being able to remain while private was not true - they really went into some details on this. He had received advice that it would be difficult, but he can point to the SpaceX example to show that he believed it would be possible. I found it curious that they spent so much time on this, as I would guess that it is difficult to try to tie this particular statement to share price movement or significant investor losses.

One last thing I found amusing - in claiming that it was false to make the statements that funding was secured and only a shareholder vote remained, the SEC listed a few things that Musk should have established for his statement not to be reckless. One of them was that he had not asked for proof that the Saudi Fund had the money! I know that there are some doubts in the press over the actual size of the fund and the level of funds they have available at any given time, but it seems surprising to me to claim that he was reckless in not obtaining formal proof that the Saudis had the money that they said they had.

 

[mongo]

Yeah:

Until opening bell longs should be selling, shorts buying.

Less than 10% drop at opening bell = manipulation like you wouldn’t believe.

Literally a reverse 280 battle

It's a 10% drop from yesterday's close. 265 (or whatever) at any point today during regular hours will trigger the uptick rule.
Agree on a battle around that line until reached!

 

[ggr]

If there were any, they would have banned him over a month ago.

If you want a mod to intervene, you need to track one down; they clearly don't read this thread. You have all of our support. He's a long-term astroturfer.

Not so. I read every thread in this part at least daily. What I/we cannot do is respond quickly to breaking news, because of real world responsibilities (in my case to my own employees and stockholders).

 

[Fact Checking]

It's a 10% drop from yesterday's close. 265 (or whatever) at any point today during regular hours will trigger the uptick rule.
Agree on a battle around that line until reached!

Yesterday's closing price was $307.52, so the 10% drop uptick rule activates at around $276.76.

The price is currently slightly below that level, so it could be triggered right on the opening tick. Once triggered it remains active for today and for all of Monday.

The uptick rule prohibits market participants (traders, funds) with a short position to use pressure sales to mark down the price: market sell orders and stop sell orders of any kind, and limit orders below the "national best bid".

They can only use what regular bearish stock holders selling stock generally do: limit orders above the best bid, and of course they can buy as well.

 

[Leo9]

NYT:

"[...]

The S.E.C. approached the Tesla chief with an offer to settle the case, according to a person familiar with his thinking, but he refused to negotiate, adamant that he had done nothing wrong. A person briefed on the talks said they fell apart Thursday morning, setting the stage for the S.E.C. to vote on the action."

Not a surprise.

 

[Ulmo]

The stock manipulation of $TSLA by SEC was released on the day before the last day of the week of trading for the last Friday of the month for the yet to be best quarter for Tesla's future ever, in order to have the maximum stock manipulation possible.

 

[mongo]

The stock manipulation of $TSLA by SEC was released on the day before the last day of the week of trading for the last Friday of the month for the yet to be best quarter for Tesla's future ever, in order to have the maximum stock manipulation possible.

But in who's favor? If we trip the uptick rule, shorts are out till Tuesday and Tesla could (theoretically) release sales numbers Monday. Couldn't Musk have waited till to reject the SEC settlement offer?

 

[Revhappy2]

Yesterday's closing price was $307.52, so the 10% drop uptick rule activates at around $276.76.

The price is currently slightly below that level, so it could be triggered right on the opening tick. Once triggered it remains active for today and for all of Monday.

The uptick rule prohibits market participants (traders, funds) with a short position to use pressure sales to mark down the price: market sell orders and stop sell orders of any kind, and limit orders below the "national best bid".

They can only use what regular bearish stock holders selling stock generally do: limit orders above the best bid, and of course they can buy as well.

I guess, lots of weak longs who bought this week in anticipation of the great Q3 numbers, will panic today and sell.

 

[Tslynk67]

Just bought a few more shares, nothing substantial, already makes me feel a bit better about the drop .

As strange as it may sound, I’ve already normalised the sutuation - just another whacky day as a Tesla investor.

I believe in Elon 100%, warts-and-all

 

[ggr]

If it is true that Elon and SEC had reached an agreement but lawyer pulled it back then I am sure the original agreement did not include Elon stepping down as CEO - there was no way Elon was going to even consider being forced out as CEO. I personally think the lawyer made a bad decision.

Lawyers don't make decisions. They advise their client. But they must act according to the client's direction (or withdraw their services).

 

[Fact Checking]

But in who's favor? If we trip the uptick rule, shorts are out till Tuesday and Tesla could (theoretically) release sales numbers Monday. Couldn't Musk have waited till to reject the SEC settlement offer?

Couldn't the SEC have gotten some more legal advice, or at least wait until the quarter was over, before filing a borderline frivolous lawsuit? The timing was entirely their decision and Elon could not have known that they'd rush to file the lawsuit almost immediately.

Usually the SEC is discouraging market manipulation - this time they actively engaged in it.

 

[KarenRei]

Not so. I read every thread in this part at least daily. What I/we cannot do is respond quickly to breaking news, because of real world responsibilities (in my case to my own employees and stockholders).

This isn't exactly Mike117's first rodeo; he's been doing this repeatedly, and each time people have been calling for mods to act, and each time nothing has happened.

Hopefully you've taken care of the problem.

(ED: Happy 2000th page, everyone! )

 

[Revhappy2]

So does trading halt if the stock falls 10%? I remember Facebook fell 25% on the day of its results, didnt it?