TSLA Market Action: 2018 Investor Roundtable

[EnzoXYZ]

Taking Tesla private came out of the left field so to speak. To think this is all EM has up his sleeves you be mistaken. This is a start to his promise of an epic short burn. And a grand one we will get.

 

[Fact Checking]

up to 70% if the volume is HFT. My guess is that manipulated stocks like TSLA will have a much higher ratio.

Most self-sufficient HFT algos are picking pennies around existing price action parasitically:

• For example after a big breakout HFT algos might jump on the move,
• or if they see some pattern they might play the middle man (for a fee) for the real movers of the price,
• they'll also fade 'dumb' market action such as stop cascades or fat fingered trades.

There are also 'directed' HFT algos used by bigger players to accumulate or distribute very large positions. There's VWAP algorithms that are technically HFT too but basically serve as smarter block trades, etc. etc.

But what the overwhelming majority of HFT algos try to avoid is to move the markets materially - i.e. they don't set the price. So I don't think the 14:56-15:09 price action was caused or dominated by HFT algos: first there was a strong breakout to $360, then a very strong pullback, then very strong accumulation and resistance at around $352-$353. If HFT algos were active here they probably lost some money.

Most of the liquidity there looked genuine - to me it had the impression of two big players fighting over the Friday closing price - and the $350+ one winning in the end.

 

[ZachShahan]

I might be missing context here(this thread is insane), but my only objection would be that, from what I've seen of the SEC "investigation", all they've done is informally ask questions. It'd be absurd to think that they wouldn't ask questions, since absolutely everybody else in the world is and it's their job to do so. There have been headlines saying they're "intensifying" their "investigation", but when you actually read the content, it turns out that, nope, still just asking the same informal questions. It's all much ado about nothing.

<3 times 100

 

[loky]

It is primarily to kill put/call premiums running into the weekend. Expect the market makers to nail the $355 at the end of the day unless Elon tweets something (than all bets are off)

355.53 good enough!

 

[Joe F]

I know, but it doesn't say of one share was traded 750k times or if 750k shares where traded one time. For sure at the one minute level one shared traded 750k times is not plausible, but the question is: how many net shares are there involved.

According to
High-frequency trading - Wikipedia
up to 70% if the volume is HFT. My guess is that manipulated stocks like TSLA will have a much higher ratio.

All one needs to do is look at the time and sales order book between the time(s) in question. Simple to do...

 

[Robertj]

Ross Gerber a few minutes ago


37 million Tesla shares short owned buy investors that must be bought back. Tesla tries to buy back shares to $420. There are no shares to buy as current share owners are all in. Looks like the Saudis would make billions on their trade helping Elon. $TSLA

 

[Causalien]

Bloomberg: Terms of Service Violation

From the language, it looks like there are 2 or 3 new large investors that's going to dwarf the current ones so they are looking for more to dilute the share ownership structure.

Of course the shorts publishes an article saying they just now started canvassing for investors and there were no investor lined up beforehand. Saw this in zerohedge.

 

[BioSehnsucht]

Can you imagine a situation where the institutionals mostly stay in? For example.. transfer their ownership from a fund that invests in public companies to one that is focused on privates. Or set up TSLA as an unlisted public company, such that institutionals could remain? Or use some kind of vehicle to directly transfer their stake to the Big Investor? I'm asking from a position of curiosity. There exists clear motivation to think outside the box here on all Tesla long's part.

I have wondered if an institution could internally transfer shares at zero cost versus having to sell into the market and buy into another fund. Of course, if they have limits on how much of any given company can be in a fund, they might still need new funds to be set up, and would have to then buy various other things to fill out those funds to not hit the limits, etc ....

 

[Moderatefan]

robber baron billionaire would control every long share outstanding. He could charge them literally ANYTHING to close. There is no upward limit. This is the situation Elon is setting up, with a conglomerate of investors.

While funny, Elon wouldn't do something like this. He warned shorts to get out. There's heartbreaking story posted today that he took part in, he's not void of compassion. Joнɴɴα on Twitter

 

[EarlyAdopter]

From the language, it looks like there are 2 or 3 new large investors that's going to dwarf the current ones so they are looking for more to dilute the share ownership structure.

Of course the shorts publishes an article saying they just now started canvassing for investors and there were no investor lined up beforehand. Saw this in zerohedge.

I also thought this part of the article was telling:

Bank Fees
According to estimates from Jeffrey Nassof, a director at Freeman Consulting Services, banks advising Tesla could make $90 million to $120 million in fees, while advisers to Musk could take home $30 million to $50 million. If a deal involves debt financing, those providing funding could expect fees of about $500 million.​

All the pigs lining up to the trough to feed. The oinking is deafening.

 

[jhm]

They own about 13,171,000 shares currently, about 7.7% of Tesla.

His exact statement is:

James Anderson, a leading fund manager at the Edinburgh-based Baillie Gifford, which owns $4 billion worth of Tesla stock, told The Times that while the company’s prospects were uncertain, its value was “much higher than $420 a share, probability-adjusted”.

Here's the basic point I've been making. This manager believes that a private Tesla share is worth much more than $420.

 

[kaczmarczyk]

Here's the basic point I've been making. This manager believes that a private Tesla share is worth much more than $420.

Not to play devil's advocate but wouldn't you want a fund manager managing your money to say the stock you own are worth much more than their current value or in this case the proposed private $420 price? How could they say anything else???

Reminds me of real estate agents, it's always a good time to buy!

 

[tinm]

I contacted my broker (Schwab) regarding having an IRA account full of TSLA shares, and what would happen should Tesla go private, and I was told Schwab does not allow private equity in its IRA accounts so I would need to sell all the TSLA shares. I promptly told Schwab, bzzz, wrong answer, that means I have to find another broker.

Question: has anyone found ANY broker who will allow TSLAP shares in an IRA post-going-private?I guess I'm also wondering if this is an IRS/IRA rule, or a broker policy.

If a private-equity IRA broker exists, I gotta start planning to move my entire IRA over to that broker.

 

[beachbum77]

So, in the last 4 days we have this info:
- Elon wants to take Tesla private
- Board on board and will consider the offer
- SEC will check the tweet if the funding was there

I must have missed something, seems kind of scarce.

1) Correct, Musk wants to take Tesla private.
2) No indication BoD is on board with this. They have to evaluate and render an opinion on behalf of shareholders. If I was on the BoD I'd be pissed he went public with this already when the directors have not even been shown any details he can pull this off.
3) For sure.

 

[AlMc]

I contacted my broker (Schwab) regarding having an IRA account full of TSLA shares, and what would happen should Tesla go private, and I was told Schwab does not allow private equity in its IRA accounts so I would need to sell all the TSLA shares. I promptly told Schwab, bzzz, wrong answer, that means I have to find another broker.

Question: has anyone found ANY broker who will allow TSLAP shares in an IRA post-going-private?I guess I'm also wondering if this is an IRS/IRA rule, or a broker policy.

If a private-equity IRA broker exists, I gotta start planning to move my entire IRA over to that broker.

TD probably will: Elon Musk vs. Short sellers

 

[ggr]

Right, but (as I assume @KarenRei sees) a major owner who completely cleared out their position would not care.

That's not right. Done right, over a period of time, they could have sold the shares and only dropped the price maybe a dollar or two. That's about 0.5%. Instead they caused nearly a 2% swing. On a $750M trade, that is $15M wasted. My conclusion is that they were willing to pay $15M to move the stock price down. Also note that short interest increased about the same amount this afternoon.

 

[Lessmog]

Just curious: do you have links/citations that this requires a 66.6% super majority vote?

Sadly no, as I mentioned it is just a vague memory. And dizzy from this high-speed messaging. I'm not in real time right now. But it seems another poster made a similar comment shortly after mine. Can't vouch for the accuracy of that one either, of course.

Anyway, going into landing pattern for weekend in a few.

 

[sundaymorning]

While funny, Elon wouldn't do something like this. He warned shorts to get out. There's heartbreaking story posted today that he took part in, he's not void of compassion. Joнɴɴα on Twitter

Time and time again he’s found ways to impact the lives of people like us, for no other reason than because he cares.

 

[Esme Es Mejor]

To think this is all EM has up his sleeves you be mistaken. This is a start to his promise of an epic short burn. And a grand one we will get.

Agreed. He talked with Softbank about this over a year ago, and suggested in interviews years before that he preferred private. The talks with Softbank broke off because they wouldn’t give him super voting rights.

He now seems to have changed tactics, giving up his demands for super voting rights, but making sure no one investor has a concentrated enough position to exert control. The canvassing they’re doing now makes sense as a way to keep new investors as diluted as possible before an official offer is on the table.

 

[Krugerrand]

This makes it clear that the key issue is, *who will be able to hang on in the private company*. Musk's claim that everyone will be able to is frankly implausible. We will have to find out who will be able to. I'm glad to hear that James Anderson is advocating for his clients to be able to hang on. I hope the rest of us will have similarly powerful advocates.

He didn’t claim everyone would be able to, neordan. He hoped he could find/there would be a way to include all whi wished to participate. There’s a difference.