TSLA Market Action: 2018 Investor Roundtable

[WarpedOne]

yes, the squeeze is transient, sp will 'collapse' back down to 420 IF all the sorts manage to cover.
if they do not than ... I have no clue...

 

[ZeApelido]

Shorts @FirebirdAlpha @MattEnth @YasB @Reality are about to get a harsh lesson in supply and demand.

There is going to be massive demand to buy to cover by the shorts, but the supply of shares willing to be sold (even at $420) will be smaller. $420 is the baseline, not the max. It's up to longs (especially institutional holders) to determine where the price goes.

And in bigger picture supply and demand, shorts hoping for bankruptcy simply could not comprehend the limited supply (ahem, just TSLA) of companies capable of disrupting multiple economic areas, and larger demand of other countries & companies to hedge and put money in TSLA even if "overpriced" based on current day cash flow. This is why there was no way Tesla was going to be bought for pennies on the dollar.

 

[pz1975]

I’m sure one day I will show this thread to my grandkids!! From today until the sale (presumably) goes through has been and will be a wacky, wonderful ride.

 

[Tslynk67]

I m 99% sure I wont be able to hold onto my shares - as I obviously would - with my broker and will be forced out at $420 :-(

Who are you with? I also fear I’ll be forced to sell...

 

[shlokavica22]

this has the chance of being voliatkle obviously as shops all over the street are jockeying for position.
it’s def a risk to be holding calls 420 and above (and any where your premium paid plus strike is above 420) but we’ll see how it unfolds.
even if some people think the deal is a farce, keeping the price where it is now, there could still be a squeeze bc those who do believe will want their loaned shares recalled for the proxy vote.

then there’s the camp that doesn’t want the deal, and instead want multiples of this price (most likely the deal will be structured such that they will still recall their shares in order to vote NO)

so the 420 may be breached ...but we’ll see. there may be some mechanics to cycle through as the market repositions that will keep suppressing the price, or at least keeping it in check for time being.

I agree with you. If the demand is significantly bigger than what is available, many shorts desperate to close positions ASAP can drive the price much higher than $420. If that happens, the options will also increase- after all that's another way to get your hands on stock. Therefore I wouldn't dismiss so early the leaps that are depreciating right now.

The other factor are speculators/longs that want to drive the price higher in order to get better deal than the $420 offered by Elon.

In any case- it will be wild ride.

Same camp here. I am shocked on how many people don't believe anything Elon says. Well pay back time is real close this time.

That's the result of the intense smearing campaign that was in full force for the last couple of quarters. The shorts realized that Tesla = Elon, therefore they did/do their best to discredit him. Like it or not, they sadly did a good job.

 

[Toolsmack]

So if there is an actual squeeze, that may present an opportunity for new shorts or shorts that haven’t gone bankrupt to profit in new short positions from ~$600/$2,000/$3,000(just putting random numbers, I have no ideas what it would go to) down to wherever it settles at.

 

[tivoboy]

You said "They will almost ALWAYS need capital". I don't agree. I see Tesla to use internally generated cash for future growth. Or they could use the Gigafactory 3 model.

We'd love to see that, but I can pretty much guarantee you there is going to be capital needs in the future. New lines, factories, technology is $$.. I know, Shanghai GF will be LOANS and partially funded most likely by Chinese banks, but they may not want to fund as much directly with a private firm. Europe GF and most likely another plant in Europe and Asia, all are $$ and I don't see how they get funded from operations only.

 

[tivoboy]

SpaceX does options in their private owners fund. Not sure if that means Tesla could do the same and grandfather in existing options.

From Tesla's letter today:
"employees would still be able to periodically sell their shares and exercise their options"

Fortunately for me it's not much of a worry. OTM calls were sparse and mostly nicely under $420. One $450 call is likely dead.

Those are not derivative options.

 

[Singuy]

So lets say the short squeeze caused the stock to be 500. Elon can still offer 420 or you keep your shares and go private essentially not having to raise much funds at all since not a lot of people (unless forced) to sell their shares at 420 with a value of 500 right? This option of owning private shares really gives Elon a lot of flexibility on a buyout.

 

[hacer]

So, uhm, I hold a bunch of $475 Jan19 calls. How screwed am I?

(And do we even have all the necessary info to evaluate how screwed I am?)

It depends. If a short-squeeze comes that spikes the price, you can likely sell those calls at a profit. If the spike goes above $475, it could make sense to exercise them instead and sell the stock higher in the spike which is somewhat risky. You aren't in the best situation but it's not hopeless because there is so much short interest.

 

[UnknownSoldier]

How is Elon going to structure the private equity for the retail guys? Normally you're supposed to be an "accredited investor" to hold private equity. Guess we'll see what the plan is there.

 

[Boomer19]

If you believe Elon, then yes, buy TSLA at anything under $400.

I'm late to this thread today (I was out golfing), but I can't believe EVEN YOU GUYS were debating whether or not Elon was serious or joking. Good grief, does no one believe anything Elon says? Even after his "I'm going to send my Roadster in space", and "We're selling flamethrowers next". And his tweet had all the info you needed. $420, funding secured.

Look, just believe Elon, OK? He might be optimistic on timing, but he delivers.

NORMALLY when a company states it might go private at $xx, the stock IMMEDIATELY zooms to 98% of $xx and stays there. Why the rules are different when it is Elon telling us something boggles my mind. The "street" is just amazingly stupid when it comes to Elon.

helluva day to be on the links

...because he’s honest and transparent. WS doesn’t know how to handle to such a thing. they malfunction. they react with lies and hatred instead of openness and trying to understand him.

 

[Starno]

Yes it would. We just all want to make lots of money for doing next to no work.

Investing capital.

 

[Moderatefan]

yes, the squeeze is transient, sp will 'collapse' back down to 420 IF all the sorts manage to cover.
if they do not than ... I have no clue...

Seems if mutual funds can't go private on $TSLA they have to sell for $420 from Tesla or anything above that on the open market. They'll jump on higher prices. The question is how much new demand may show up that wants to join private ship before it sailed.

It's interesting to see almost nobody covered today. Do they expect better prices? Or deal to fall through once SP reaches $500? And then resume the FUD and drive it back down to $300... Not much time for that before Q3 results are in.

 

[ZenMan]

A friend asked me if I thought Musk was bluffing.

Here's my response:

Absolutely not. I think Musk is fed up with Wall Street and the Short Sellers and the outright lies reported in the media. He probably does have the funds to take Tesla private at $420. I had believed Tesla would be a $1000 stock in 2020 (and had positioned myself accordingly in the options market). So getting some Silicon Valley friends together to come up with 20-30 billion to make a 10X return is totally doable for Musk. But I don't think it will go for only $420.

25% of the float is sold short. Once shares are recalled by mutual funds that are required by their bylaws to vote on the buyout, 30 million shares will need to be purchased. Musk set a floor of $420 for the market. Any long should hold out for $420, so where do the shorts get the shares? They will be bidding up the price -- if it was a linear equation 25% on top of $420 is $525, but there will be many longs who won't even sell for that. This could be the next equivalent of the VW short squeeze. $1000 a share is not out of the question.

If the market bid shares up to $1000, Musk wouldn't take Tesla private, but he would have accomplished the same goal -- the shorts would be out and he can focus on his businesses without the constant day to day distractions of the short sellers and the misinformation and sabotage they pay for.

So if you have LEAPS above $420 don't sell them for pennies now, this was the opening shot in the war to obliterate the shorts. Things are just starting to get good.

 

[anticitizen13.7]

(1) I’ve seen some questions about why TSLA didn’t jump all the way to 420. I believe that this reflects some uncertainty as to whether the privatization deal will actually happen. When Intel bought Mobileye last year, the tender offer was something like $63/share. The market price jumped after the deal announcement, but not to the tender offer price. Traded price only crept up to offer price as regulatory hurdles cleared.

I believe that TSLA may behave differently owing to the short interest and media attention.

(2) This was an insane day. I did not expect this turn of events at all.

 

[GSSREDDY]

A friend asked me if I thought Musk was bluffing.

Here's my response:

Absolutely not. I think Musk is fed up with Wall Street and the Short Sellers and the outright lies reported in the media. He probably does have the funds to take Tesla private at $420. I had believed Tesla would be a $1000 stock in 2020 (and had positioned myself accordingly in the options market). So getting some Silicon Valley friends together to come up with 20-30 billion to make a 10X return is totally doable for Musk. But I don't think it will go for only $420.

25% of the float is sold short. Once shares are recalled by mutual funds that are required by their bylaws to vote on the buyout, 30 million shares will need to be purchased. Musk set a floor of $420 for the market. Any long should hold out for $420, so where do the shorts get the shares? They will be bidding up the price -- if it was a linear equation 25% on top of $420 is $525, but there will be many longs who won't even sell for that. This could be the next equivalent of the VW short squeeze. $1000 a share is not out of the question.

If the market bid shares up to $1000, Musk wouldn't take Tesla private, but he would have accomplished the same goal -- the shorts would be out and he can focus on his businesses without the constant day to day distractions of the short sellers and the misinformation and sabotage they pay for.

So if you have LEAPS above $420 don't sell them for pennies now, this was the opening shot in the war to obliterate the shorts. Things are just starting to get good.

And people who are Short on Margin Account will feel the pressure in the next few days and when they try to cover - the price can swing to 450 to 500 easily. All depends on mutual funds want to hold or sell at 420

 

[dmckinstry]

Shorts must cover.
Will sel shares to them for 800 per share

You left off a zero.

 

[Mkorpal]

(1) I’ve seen some questions about why TSLA didn’t jump all the way to 420. I believe that this reflects some uncertainty as to whether the privatization deal will actually happen. When Intel bought Mobileye last year, the tender offer was something like $63/share. The market price jumped after the deal announcement, but not to the tender offer price. Traded price only crept up to offer price as regulatory hurdles cleared.

I believe that TSLA may behave differently owing to the short interest and media attention.

(2) This was an insane day. I did not expect this turn of events at all.

I don't remember, but were there rumors to the mobile-eye acquisition before it was announced?

 

[ggr]

I am simply stunned that you all are believing Elon here. Who is the buyer?

By this time, we should have seen some financial institution stand up and say "Yes, we're willing to buy Tesla shares at 420 per share in order to help them go private."

It sure looks like Elon Musk just torpedoed his career and his company. They're going to need 50-60 billion, making this one of the largest buyouts in history.

The fact that no one is taking credit is shocking.

You seem to have a naive belief that everyone has to tell you everything all of the time. They don't. They do have to make sure that they tell the truth, if they tell anything, and yet you have another naive belief that when they do, they must be lying. If you're trolling, I don't know why you bother any more, and if you were being paid to troll, I think your payroll is about to stop. If you're serious and just very naive, well, good luck.