TSLA Market Action: 2018 Investor Roundtable

[MXWing]

Musk will be ineligible to be re-elected Chairman for three years;

Hopefully not Martian years. They don't sell TSLA leaps that go out that far on Earth.

 

[MP3Mike]

Is it an independent chairman or two new independent board members?? I'm confused here, and I can't find it in the actual settlement letter.

The press release says:

• Musk will step down as Tesla’s Chairman and be replaced by an independent Chairman. Musk will be ineligible to be re-elected Chairman for three years;
• Tesla will appoint a total of two new independent directors to its board;

Does a Chairman qualify as a director? If so they only need two new people, if not they need three. (Well maybe not as they could upgrade an existing independent director to an independent Chairman.)

 

[ZachF]

Is Gwynne busy?

very.

 

[tivoboy]

If you read the entire case from SEC, there's no intent of fraud or crime. The only thing you have to worry about is if Elon texted someone about burning shorts after he tweeted. If no such messages are found then they can't charge Elon for being reckless with his tweets.

the only thing we have to worry about is Elon talking smack after making the deal. That's a total NO NO.. so no saying "oh yeah, I made this deal with the SEC just to xyz., " or "I didn't want to make the deal, I was totally in the right, etc."..

Its say nothing about it pretty much ever.

 

[TradingInvest]

In fact, in the last quarterly conference a couple of weeks ago Elon said that no capital raise, ever:

How do you plan to fund all of this growth without going back to the capital markets to raise funds?
[...]

Elon Reeve Musk - Tesla, Inc.

[...] we will not be raising any equity at any point [...]

For China, I think, our default plan will be to use essentially a loan from the local banks in China and fund the Gigafactory in Shanghai with local debt, essentially. And we certainly could raise money, but I think we don't need to and we – yeah, I think, it's better to – it is better discipline not to.​

So not only are there no plans to raise equity, they don't want to raise equity, and Tesla will fund through internally generated cash and local non-recourse debt for projects like the Shanghai Gigafactory.

Yeah, our default plan is we pay – we start paying off our debts. I don't mean refi-ing them, I mean paying them off. For example, there's a convert that's coming due soon, a couple hundred million, $900 million, something like that. We expect to pay that off with internally generated cash flow.
​

I.e. Elon wants Tesla to self-finance from free cash flow, similarly to Amazon.

I hope Elon will skip future quarterly conference calls. When he says things like "We will NEVRER raise ......, all future quarters will be profitable...", then later for whatever reason it doesn't go that way, he is inviting more lawsuits. Just let the CFO and lawyers to handle the CC, make the CC useless. I as a long term investor couldn't care less. Anyone who makes moves based on quarterly results, is not a long term investor. That's a trader.

At this point, just show results quarter by quarter, year after year. If you need more demand, do some good ads. The car is a great deal, people will see the value. If the stock goes boring and stay low, it will actually help long term investors. If the stock jumps up down, longs get hurt more. I know this by talking to some friends. Forget about a quick short squeeze. It won't happen. Shorts would ask their friends to halt the stock if we ever get there.

We will let the shorts sit on this train and see how far they can go. Let them enjoy the ride for a while. No need to tell them great quarters are coming.

 

[NikeWings]

SpaceX and Tesla have business relationships (see Tesla's being a SpaceX customer for Roadster thruster control systems) that may disqualify Gwynne from being classified as independent?

He is her boss at SpaceX; not happening.

 

[tivoboy]

Don't forget Tesla has gotten the equivalent of many Super Bowl ads out of all these crazy tweets. You've got to really be trying over the past few months not to hear anything about Tesla.

not enough people on twitter or derivatives to get close to a super bowl add territory. but it IS something. As they say, all coverage is good coverage.

 

[sub]

This settlement is a glass half full conclusion to the situation. If I were accused of something I was innocent of, I would fight. However, I’m sure Elon realizes this isn’t just about him. Now, if I could get the FBI to do an investigation to clear me of sexual assault charges that I’m innocent of, sign me up! Guess that’s why I’ve never been nominated for the Supreme Court though.

Little tip to those of you who have a hard time dealing with the volatility of TSLA. You know the saying that “you don’t lose money until you sell”? I take it one step further, I’m not even down on paper if I don’t look at my account. Last I looked at it was the day of the tweet, It’s 100% TSLA, I’m sure the balance is roughly the same.

I want him to buy more shares.

I think Elon should pick up enough shares on Monday to cover the 40mil fine for he and Tesla with a sp rise back to ~307. Now that would be funny.

As for independent chairman, you people aren’t thinking hard enough. I nominate myself. If the orange bafoon can run the World, I’m quite confident I can run Tesla. I’ll just nod when Elon is done speaking.

 

[HG Wells]

Boss Short:
We are going to lose our as*es monday morning.
To reduce our exposure (pun intended) I've come up with the following headline.

Headline: Shortsville Times
Donald Trump to become Chairman of the Board at Tesla.

I expect the stock to drop below 100.

Your Partner in Crime
Chief Editor
Shortsville Times

 

[Krugerrand]

I’m not excited and not expecting the SP to recover all that was lost Friday based on the settlement.

We’ll see, but I don’t think anything has changed in terms of who’s really controlling and suppressing the SP. None of them suddenly are going to extract their heads from their butts and support Elon or Tesla. In fact, there will be a lot of peacocking. FUD media is already continuing.

Nope. We’re still at the mercy of the shorts, who after making a crap ton of money on Friday, will just pour it on again as soon as they can start shorting again.

I also don’t like diluting the board and I’m appalled that the SEC has the ability to dictate those kind of terms.

Me no happy and no understand all the excitement. None of the bad actors on Wall Street and their oil et al associates suddenly are turning over a new leaf. They’re gloating now and will just renew their efforts. That’s their human nature as evidenced over the years. Dr. Phil is right that future behavor is predicated on past behavior.

Blech!

 

[tivoboy]

Boss Short:
We are going to lose our as*es monday morning.
To reduce our exposure (pun intended) I've come up with the following headline.

Headline: Shortsville Times
Donald Trump to become Chairman of the Board at Tesla.

I expect the stock to drop below 100.

Your Partner in Crime
Chief Editor
Shortsville Times

only ONE thing I would like about that. If he said "you're FIRED" to about half of them.

 

[Xpert]

Is Gwynne busy?

Try asking her out on a date next Saturday.

 

[dmckinstry]

David Faber on Twitter

SEC settles for 20M fine and Elon to remain as CEO, but resign as director

I hope shareholders get to vote on the two independent directors or whatever. I don't want to see anyone from big oil, etc. to have any say.

 

[ggr]

For messages that relate to Tesla or contain or could reasonably contain material information to Tesla shareholders.


The question is what the actual rules for Chairman are - does independent mean independent as in not the CEO, or does it mean independent as in independent director? (I believe blood relation disqualifies from independent director, and even if it didn't, Kimbal Musk owns TSLA shares and is therefore disqualified.)

Owning shares is not a disqualification, in fact it would be extremely rare given that directors are often paid with stock. Here's what you get when you google for "independent director definition:

An independent director (also sometimes known as an outside director) is a director (member) of a board of directors who does not have a material or pecuniary relationship with company or related persons, except sitting fees.

A pecuniary relationship would be for example a contract as a supplier or customer or landlord.

 

[bhtooefr]

Found the Tesla settlement: SEC vs Tesla Settlement

Edit: And now I've read it.

• Independent Chairman may be one of the two independent directors if that person is appointed from outside the company, its affiliates, and Musk's affiliates
• Committee solely of independent directors must be formed to oversee implementation of the settlement, controls/processes of senior executives' disclosures/public statements re: Tesla, and HR issues/conflict of interest issues involving executive management, SEC must approve this committee's charter and composition
• designate an experienced security lawyer for as long as the company remains a reporting company, who will review social media communications by senior officers and advise on securities issues
• implement the controls on Musk's behavior that have been detailed earlier in this thread

 

[TradingInvest]

I think Elon should pick up enough shares on Monday to cover the 40mil fine for he and Tesla with a sp rise back to ~307. Now that would be funny.

I hope Elon doesn't buy or sell stocks in the next few years. He has a very large size, will get larger down the road. No need to attract more investigation on potential insider trading stuff.

It would be great if Tesla starts a small share buyback program. $10m a quarter is all I am asking. Increase the size as financials get better.

 

[InDaClub]

Sounds like sentiment is positive for this? Does it bother anyone that Musk will no longer be chairman of the company?

Talk about a roller coaster for all sides. I'll be sticking to my short position obviously. I do expect a rally in the SP monday.

Good luck with that!

 

[Xpert]

I’m not excited and not expecting the SP to recover all that was lost Friday based on the settlement.

We’ll see, but I don’t think anything has changed in terms of who’s really controlling and suppressing the SP. None of them suddenly are going to extract their heads from their butts and support Elon or Tesla. In fact, there will be a lot of peacocking. FUD media is already continuing.

Nope. We’re still at the mercy of the shorts, who after making a crap ton of money on Friday, will just pour it on again as soon as they can start shorting again.

I also don’t like diluting the board and I’m appalled that the SEC has the ability to dictate those kind of terms.

Me no happy and no understand all the excitement. None of the bad actors on Wall Street and their oil et al associates suddenly are turning over a new leaf. They’re gloating now and will just renew their efforts. That’s their human nature as evidenced over the years. Dr. Phil is right that future behavor is predicated on past behavior.

Blech!

A lot has changed actually, with this settlement:

1. Fear of losing Elon as a CEO - CHECK. this is most important of all. A lot of people expect a 50/50 chance (except us in this forum)
2. Lawsuit overhang keeping investors away or force more selling. this is now OVER.
3. independent directors/chairman - this satisfies a lot of big hedgefunds who have been calling for this. CHECK.
4. Filter elon's Twitter use - this make it A LOT safer for investors to stay in the stock. CHECK.

$300+ on Monday, at least we'll be in the $290. then Tuesday delivery will push it further. Sleep well tonight, Longs.

 

[bhtooefr]

2. Lawsuit overhang keeping investors away or force more selling. this is now OVER.

Not entirely, this doesn't prevent other investor suits from proceeding. But, defending against them is still OK despite the settlement.

 

[Singer3000]

As Elon said it during the conference call, they will finance those from local debt - local Chinese bank loans, which is debt not against the global Tesla company, but against the Shanghai Gigafactory project - so it's possibly not even on the balance sheet.

No equity raise.

Tesla Shanghai is a WFOE (wholly foreign owned enterprise). i.e. 100% owned subsidiary of the group. What makes you think it wouldn’t be be a consolidated entity?

We also don’t yet know for sure that this will be a non-recourse financing as far as the parent is concerned.

Current economic wobble in China should make it easier to get this loan done however. Seems like the fiscal and liquidity taps are being switched back on once again and part of this is forcing the banks to lend more.