TSLA Market Action: 2018 Investor Roundtable

[sundaymorning]

Meanwhile on the other side of the world in Fremont, Tesla is going full headed steam, we just registered 2,304 new Model Vins, highest is approaching 100,000 Model 3s now.

Model 3 VINs (@Model3VINs) on Twitter

Either way shorts are screwed come end of Q3. For the first time in a long time I’m confident going into quarterly reports in Q3

 

[Starno]

Meanwhile on the other side of the world in Fremont, Tesla is going full headed steam, we just registered 2,304 new Model Vins, highest is approaching 100,000 Model 3s now.

Model 3 VINs (@Model3VINs) on Twitter

Either way shorts are screwed come in if Q3. For the first time in a long time I’m confident going into quarterly reports in Q3

I am as well, I'm just concerned toward privatization, I don't like the lack of information.

 

[Dan Detweiler]

I can guarantee one thing and one thing only about all this.

When all the information finally comes out, there are going to be more people watching it than the final episode of M*A*S*H! LOL!

Dan

 

[SOULPEDL]

Theory on why he tweeted vs other methods:

To some investors, Elon's tweets may be the only real-time Tesla news channel. So he wanted ALL his private investors to know before we learned about it in the news (along with all the confusion and bear theories). He was talking to us "at the same time" so we stayed in. Kinda simple and thoughtful if so, and maybe intentional to hold on to everyone who cares.

 

[sundaymorning]

I am as well, I'm just concerned toward privatization, I don't like the lack of information.

The bigger the deal the more necessary it is for secrecy. Consider this kind of like a silent auction, you don’t want to let others know who is auctioning and how much your bid is.

 

[Boomer19]

The credit risk is this. Suppose I hold 100 shares of Tesla in my brokerage account. And my broker has lent out a lot shares of shares. My broker does know know before hand whether I will cash out or demand private shares. Suppose I demand private shares and they have insufficient common shares or private shares with which to fulfill my demand. They must be able to get shares back which they have lent out. That technically is the credit risk. If the short cannot supply the shares, then they are now in position where they must go into the open market to buy private or common shares to be converted into private shares.

So when I demand private shares, the broker becomes short private shares. If shorts cannot return actual shares, then that is a credit risk. Or if the broker accept cash in lieu of actual shares, that cash may be insufficient to cover the cost of buying shares on the market, that's market risk.

So all these kinds of risks are made much more daunting that private shares are illiquid, that a short squeeze could make share prices astronomically high and that all of this could happen at exactly the same time. The risk is not worth taking.

ok agreed. i think we’re both on the same page here, just i was coming from a different path.

i think we both are saying;
if the portion of eligible longs electing private equity exceeds the net of longs forced into cash option vs shorts - the shorts can’t deliver private eq shares

and therein lies the possibility of surge pricing.

to me, i think the offer structure will determine the high end of the price action.

the “credit risk” scenario is more likely to occur if you have a proxy vote or record date type stipulation, which will be the catalyst for shareholders asking their brokers to initiate recalls. in cases where shorts refused to cover they would just be bought in by the broker (like you explained above in “going to open market to buy shares”) and any short worth their salt does NOT want to suffer a buy in.

however, if they do a dell-like deal,
i think this is where shorts are getting the idea that they are capped at 420 (and @Reciprocity had a well described post about this as well)
and @Fact Checking had a post where if i recall, dell never reached the corp action strike price before trading ended.

incidentally i already had the dell occ memo copied bc i was replying to a leaps question. the dell memo describes the dell corp action event terms - less the privatization part
https://www.theocc.com/webapps/info...e=201310&lastModifiedDate=09/13/2014+09:49:55

 

[brian45011]

I advise saying "advice" when you are referring to the noun, and "advise" when using it as a verb.

This is advice.
Mod: You mean: “Not an advise”.

Are you loosing your mind?

 

[dondy]

how can you tell this?
regarding who is buying and who is selling?

it is publicly available information.
I compare with 7 august.

 

[Ratanpara]

If you look at last Tweet from Elon and able to read between the lines, taking private is done deal, he is talking about having line of clothing selling shorts, but he is really sending a message and he has zero worry about law suit, funding is not secured etc, Elon would never do something like this to increase stock price, he has no incentive to do so, his recent purchase of stock is around 295 and 340, this purchase may not say much, but to me its says a lot, Elon has history of telling like it is, he has mention in the past when Tesla stock has run a lot, I believed he said he has lot to prove to justify stock price back then. But his recent purchase indicate opposite is true, Tesla stock is very undervalued. Personally I think Tesla is extremely undervalue at this price, I own considerable amount of Tesla stock already, average cost for my holding is 264, but if someone doesn't own any or not enough and has dry powder to put it to work, its a no brainer to buy at this price. Assuming this deal doesn't go through what is the risk for long term shareholder at this point, stock shot up to 340 after earning based on merit, fundamental business outlook. so if deal doesn't go through stock should be valued around 340 or may be short seller will declare victory in short term and push stock to 300, then buy some more, nothing really has changed. Based on this thinking I sold Nov 350 put on Friday at premium of $39.00, may be I will have to to take delivery of stock at price of 311, ready to do that, funding secured.

 

[riverFox]

Bottom line: Elon holds all the cards and he probably enjoys watching us squirm. Especially the short shorts.

 

[Boomer19]

it is publicly available information.
I compare with 7 august.

oh they released it already? do you happen to have link? thanks!

 

[Cosmacelf]

On the SEC inquery/investigation thing, the worst that will happen is that the SEC will levy a payable fine for being too loose with the facts. Elon will not be going to jail.

 

[dondy]

Nasdaq does it in the end of every day . Trading history is available in different forms and subscriptions.

 

[beachbum77]

I was just going to post the same thing. Elon specifically mentioned SpaceX shares for their employees as a model for a private Tesla.

So what is the problem with for example Fidelity (who do this for SpaceX) buying a large part of Tesla and setting up a fund with exclusively TSLA? The former shareholders would then buy into this fund (or Fidelity buys directly from them and they get shares of the fund in exchange).

Also,Tesla employees are getting stock as part of their payment. Most of them won´t ever be accredited investors. And they are more than 2000. So either Tesla has to stop giving them stock or they have to come up with a model that they might extend to small investors (like most of us), too?!

Please correct me if I am wrong with any assumptions here, I don´t have a finance background as some of you do.

EDIT: This is where I got the info about the structure for SpaceX employees: Crosspost: Asked at /r/SpaceX for former SpaceX employee to answer questions relating to private equity and liquidity events. : teslamotors
Nothing official, but sounds legit to me, redditor seems to have a good reputation.

There are special SEC rules for employees of private firms to allow them to buy shares of the firm. However, if employees leave the firm the shares must be sold back to the special fund that handles those shares. Tesla employees would be allowed the same rules if the company went private. But as far as outside shareholders who are not accredited, they will be forced to sell.

 

[Ratanpara]

Bottom line: Elon holds all the cards and he probably enjoys watching us squirm. Especially the short shorts.

Very much true, even when Tesla purchase Solar City entire investment community was against it and he was able to push it, this time around most investor are willing to go with his plan to go private. There is so much money out there to put it to work, big guns would be very happy to buy Tesla at 420. Current management at Apple doesn't have guts to buy entire Tesla otherwise best move Apple could do is buy the entire Tesla and have Elon Musk as CEO for 10 years, Apple would be valued at 2 trillion dollars then.

 

[brian45011]

It looks like Fidelity FFC is selling (3mln+ in 3 days), drugging a bunch of smaller investors with weak stomach along. (it's like more than 100 of small companies already zeroed their accounts). You guys are just too small to absorb such giant.
Price T Rowe, Vanguard, Baillie, etc. have their accounts frozen.
BlackRock is actively buying: 400+k shares so far. It looks the only active big+ investor in last 3 days.

The all necessary info for proper understanding is up there and is as trivial as financial info can be, ....
Musk will need 20bln. I won't be surprised if this buyout will cost less than 10bln for Tesla and friends...

Engineering.

Those filings show positions that are six weeks old--at the end 2Q18.

 

[TrendTrader007]

Wow! Amazing analysis
I converted all my common stock as well as OTM calls into DITM calls last week expiration J19 . I am a bit nervous about losing time premium and liquidity as the privatization deal nears. Any thoughts on that would be highly appreciated
For what it’s worth my TA chart read suggests SP far exceeding $420 to $520 to 530s within the next 4 to 5 weeks followed my a sharp sell off in Tsla shares

 

[Cosmacelf]

Wow! Amazing analysis
I converted all my common stock as well as OTM calls into DITM calls last week expiration J19 . I am a bit nervous about losing time premium and liquidity as the privatization deal nears. Any thoughts on that would be highly appreciated
For what it’s worth my TA chart read suggests SP far exceeding $420 to $520 to 530s within the next 4 to 5 weeks followed my a sharp sell off in Tsla shares

Just as with Solarcity, market uncertainty will persist right until the day the deal is done. And it could easily take 6 months to finalize this deal. Of course, the uncertainty discount will narrow the closer we get to closing date...

 

[sundaymorning]

It’s business as usual:

Tesla hires key Volvo designer to style future EVs

 

[ClownMouth]

No, you’re wrong.

It was NOT optimism that made him do that. He EXPECTED both Tesla and SpaceX to fail. Why he did them was because he felt it was important to humanity. The reason why he poured every cent into them in 2008 is because he NEVER gives up. EVER.

You don’t know the man at all.

Instead of writing condescending responses to any posts you feel are less than 100% supportive of everything Elon, perhaps you could share the links to the many articles/videos that only your eyes have read/watched. Because based on the articles and interviews that are available to the rest of us it would seem that Elon not only doesn't need your backup he would probably find it as off-putting as many of us do. The vast majority of this forum is pro-Tesla and huge Elon fans as it is.