TSLA Market Action: 2018 Investor Roundtable

[mongo]

I see some good musings on how big of a proportion of shares shorted would be recalled in anticipation of the vote. I don't know the answer (although I'd think most, since it's a very important vote).

But more importantly: if the vote is "yes, de-list TSLA from Nasdaq" then surely every single share sold short at that day would be recalled, by necessity? Or is there something I'm overlooking here?

If vote is yes, all shares must be recalled before the effective conversion date (not on the vote date, if that was your question).

 

[Johan]

If vote is yes, all shares must be recalled before the effective conversion date (not on the vote date, if that was your question).

Thanks, I was a bit unclear. I meant all shares would have to be recalled at the latest on the day of the de-listing/conversion.

 

[notacoalminer]

I've read just about every post. I'm just waiting to see what happens. Elon was in a good mood last night, so all's well, I think. I hope the stock goes up to several thousand so I can sell a few shares, then go private with the rest. That's my plan.

One thing that really bugs me, though, is people saying "not an advice".

Since when do you put an 'an' in front of advice? Is this some sort of inside joke?

 

[ruralectric]

I've read just about every post. I'm just waiting to see what happens. Elon was in a good mood last night, so all's well, I think. I hope the stock goes up to several thousand so I can sell a few shares, then go private with the rest. That's my plan.

One thing that really bugs me, though, is people saying "not an advice".

Since when do you put an 'an' in front of advice? Is this some sort of inside joke?

yup. For those who have been here for a while anyway. Then again, I suppose that for newer, non-native English speakers, we've probably just been setting a bad example.

edit: Not an advice.

 

[Ugliest1]

For Canada, and I guess more specifically those who bank with TD Canada Trust: I finally heard back from them and the short answer is: Maybe. Here's the quote from their email: "The main determining factor with the conversion will be whether the private shares will be deemed registered plan eligible."

Since none of my poorly-thought-out(in-hindsight) plans have ever survived contact with the enemy, I'm still assuming there will be a glitch within my registered RRSP/TFSA accounts and I'll be forced to liquidate. NOTE: I don't look at that as being forced to by Tesla or Elon. I'm interpreting the "deeming" to be on the Canadian law or Canadian bank rules side of things, and outside of Tesla's/Elon's control.

At least I still have those few shares in my non-registered account...

 

[Rarity]

I wonder if there would be anything stopping Musk himself from buying at current prices. I assume that he can tap his line of credit for at least a few billion. Would help come vote time. Or would the firm holding his shares as collateral then be the one voting the shares? Any opinion from others here who have borrowed with shares as collateral?

I am assuming that in TESLAP, Musk would own maybe 25% instead of the current 20%.

 

[Fact Checking]

Musk says he "hopes" every current TSLA shareholder will be able to become a TSLAP shareholder.

BTW., if Elon's plans succeed then TSLA shorts will certainly be TSLAPped!!

 

[dmckinstry]

Holy shirt, that’s it, the Tesla FSD neural net is the buyer!

We’re all gonna die...

Naa. Just become slaves "for our own good".

 

[Johan]

I wonder if there would be anything stopping Musk himself from buying at current prices. I assume that he can tap his line of credit for at least a few billion. Would help come vote time. Or would the firm holding his shares as collateral then be the one voting the shares?

I am assuming that in TESLAP, he would own maybe 25% instead of the current 20%.

If that gets announced in a form 4 filing soon it'd be a strong signal to the market that the deal is going to take place, a strong vote of confidence. How long does he have to file with the SEC after buying?

 

[Wooloomooloo]

The SEC comments are overly focused on the announcement Musk made. They were already investigating Tesla because of concerns with their regulatory filings and reports (projections, financials, audits).

Unfortunately it’s bigger than a bread box.

Sorry I have to ask the 7 people who gave this a ‘dislike’ - do you disagree with the facts I stated (er, because they’re actually true...) or just the fact I said it? Seriously just curious.

Peace!

 

[Zhelko Dimic]

Except, Elon did in fact announce already that going private is certain except for shareholder approval. The only reasonable way to read that tweet from the CEO and Chairman of the Board is that there are in fact hard commitments that have a material impact on shareholders right now.

Disagree. I feel Elon improvise on many things, and I would not be surprised he started process with soft information, rather than hard commitments. He just isn't afraid of playing low odds, as long as he can have major influence on the outcome. With a good reason mind you, and I believe he has a very good chance of pulling it off.

But current price, I think, reflects that market thinks there is low chance of success. So unless some more info comes through about who is ready to support him, chance of failure will weight in on the share price.

If buyout fails, I think we fall to $300 in a short term, so I feel market believes about 40-45% Musk can pull this off.

 

[Fact Checking]

If vote is yes, all shares must be recalled before the effective conversion date (not on the vote date, if that was your question).

Agreed, but note that even the shareholder vote itself might involve mass-recall of borrowed shares:

• Most institutional investors will want to vote, but even if they didn't the bylaws of most big funds require them to vote
• To be able to vote shares have to be recalled

I.e. the pure act of voting on such an action could create a shortage of borrow-able shares and a short squeeze.

 

[Lessmog]

Hmm, there must be a fancy all-ice bar there, or is that just in northern Sweden?

You may be thinking of the ice hotel in Jukkasjärvi, Sweden? Not too far from Kiruna and the Esrange rocket station (by Lapland scales, where 200 miles for a hotdog is commonplace ). Better book rooms then, before all the Asians do.

 

[Wooloomooloo]

If you like sci-go then boy, you’re in for a treat.

Be sure to read Iain M. Banks and not Iain Banks. Important.

Pretty much my favorite sci-if author. The Culture novels are incredible... so sad he was stolen from us so young.

 

[aubreymcfato]

Musk says he "hopes" every current TSLA shareholder will be able to become a TSLAP shareholder.

Mmm.
Musk said literally: "My hope is *all* current investors remain with Tesla even if we’re private. Would create special purpose fund enabling anyone to stay with Tesla."

From what I understand, what he hopes is that all TSLA shareholder will remain. He *implicitly* thinks all *can* remain. (see second sentence).

 

[MP3Mike]

What happens if people like Chanos and Einhorn buy public shares before privatization? Is there a way for a private company to decide who is allowed to own shares and force them to divest?

Do we really care if they go long?

 

[avoigt]

Musk says he "hopes" every current TSLA shareholder will be able to become a TSLAP shareholder.

Definitely, does not sound like a hope to me.

Def no forced sales. Hope all shareholders remain.

Yeah, that's what he said in the blog/employee letter. That was a walkback from the "def no forced sales" tweet, which I think he had to back off on because he couldn't keep that promise.

That does not sound like a walkback to me: "First, I would like to structure this so that all shareholders have a choice. Either they can stay investors in a private Tesla or they can be bought out at $420 per share, (...)

Can't find a section where he said and the third option is that you are forced to sell. A choice is a pretty independent decision in my view.

 

[SebastianR]

Agreed, but note that even the shareholder vote itself might involve mass-recall of borrowed shares:

• Most institutional investors will want to vote, but even if they didn't the bylaws of most big funds require them to vote
• To be able to vote shares have to be recalled

I.e. the pure act of voting on such an action could create a shortage of borrow-able shares and a short squeeze.

I'm wondering about this: we were dreaming about a short squeeze at the time of the SolarCity deal, too. That never really happened. I guess any institutional investor who doesn't want to go private will quietly exit / be bought out. There is no point voting "no" against the clear wish of the CEO/the Board/the majority of the stokholders. (all this assuming that Elon did his homework and has lined-up sufficient support, which - for many reasons - I'm pretty sure he has done) - unless you vote yes, you don't need your shares. And in the past far from all shares have voted. So I don't think the voting alone will trigger a squeeze.

 

[mongo]

Agreed, but note that even the shareholder vote itself might involve mass-recall of borrowed shares:

• Most institutional investors will want to vote, but even if they didn't the bylaws of most big funds require them to vote
• To be able to vote shares have to be recalled

I.e. the pure act of voting on such an action could create a shortage of borrow-able shares and a short squeeze.

Total agreement here, the specific question was regarding shares not already recalled at the time of the vote.

 

[immunogold]

Is SpaceX the lynchpin in taking Tesla private?
1. Most of us agree that Mars colonization is Elon's long game.
2. SpaceX launch revenues alone are unlikely to be sufficient. Additional funding sources include Starlink, Earth-to-Earth BFR, and Musk's Tesla compensation.
3. If Elon views meeting his Tesla compensation benchmarks as vital to the Mars plans, then SpaceX's mission success is inextricably linked with the financial success of Tesla.
4. If public status slows Tesla's financial goals, then it threatens SpaceX's mission.
5. Musk wants to maintain control of both SpaceX and of Tesla.
6. SpaceX is currently valued at approximately $21billion. SpaceX has had no difficulty raising venture capital.
7. Is SpaceX capable of an additional and substantive investment in Tesla?
8. In his 4-point letter to Tesla employees, Elon began the paragraph regarding point 3 with, "Third, the intention is not to merge SpaceX and Tesla. They would continue to have separate ownership and governance structures..." Elon doesn't waste words. Should we be paying more attention to this reassurance that the two companies will maintain separate ownership and governance?
Edit: I am not suggesting that SpaceX alone would make privatization possible, only that it could be a central factor that allows Elon to retain control of both companies and to maximize the potential to fulfill the missions of both companies.