TSLA Market Action: 2018 Investor Roundtable

[SageBrush]

which is objectively supporting the transition away from fossil fuel.

How so ? I'm not trying to be argumentative here, but my impression is that the low price is a reflection of labor costs, close to free land, and very attractive financing terms.

The main benefit I see is an additional market for Chinese panels, thereby mitigating the potential harm to PV scale from the US tariffs introduced by the maggot in the White House.

 

[ZsoZso]

It is somewhat disturbing the money comes from Saudis. I am no longer sorry that I will have to cash out 90% of my investment due to this deal.

Now, let's read a bit between the lines of Elon's update blog post. He said talking to the largest investors, he has so far gathered that about 2/3 of shares held by the large investors are willing to go private. IMHO, this means the vote is pretty much secured too, since those would obviously vote yes, so he already has 2/3 majority. So all that is left is going through the bureaucratic motions, working out the fine details of the whole system how he wants to allow most investors to transfer to private ownership, then present the package for voting etc. All technical details but no more major roadblock, not even the slight doubt of the original tweets regarding shareholder vote.

Any short not jumping out now is following the logic of the frog in the boiling water...

 

[ProtomanX]

How to make shareholder vote in public company without timely public announcement and multiple level negotiations? How to make financial planning of buyout without having voting results of at least all major investors?
Initial tweet was informing of all shareholders about incoming events.
All of them.

In addition, by announcing on Twitter, it will prevent inside trading. Once Elon starts talking to other investors, it is really easy for these news to be leaked so what better way than to tell the public than tabling on which investors to talk to

 

[Mike Smith]

Now that a deal looks likely it will soon become clear that more entities that were letting on will want to be a part of it. This is the last opportunity to own Tesla before it goes private, and it's a unique company for anyone who is interested.

 

[SOULPEDL]

I was just hoping that the explanation for funding that had already been secured would come from 4-5 different sources. All your eggs in one basket type risk with only one source. If anything bad happens with 4-5 sources, there’s opportunity for others to raise %. A homerun announcement would be a follow up to this blogpost that an additional set of investors are also on board to go private.

Several have expressed concern on having just one strong player. I share this concern along with EM which is why he's likely shopping for others as well. However I wonder if the Saudi's would still be interested in sharing vs "owning" or at least owning with a couple other friends that could (somehow) control Tesla. What did their interest actually mean? Their 3-5% shows healthy participation, but if they could only get 20%, would they still buy in? That would be the telltale sign of their true motive. Isn't Saudi already too close to Trump? At least the interest was... wait, ~2 yrs ago he said?

Would we be as excited if Ford were the buyer? The same arguments could be made about hedging there as well. Recall the Tucker car? That was before my time, but I sure remember the movie.

I'm just not as excited as most of you, so I'm just sitting tight at my current levels. Stocks not going anywhere without something more concrete with other big players named.

 

[Ovulation]

Exactly. If Musk wasn't willing to let Softbank gain too much voting power, what makes anyone think he'd be willing to let the Saudis gain too much voting power?

It's really simple: the Saudis want a hedge against oil; they're not morons. There is no better hedge imaginable against oil than an EV manufacturer. There is no more obvious candidate than Tesla in this regard.

China got all in on electrification of the transport sector and pulls the whole industry down that path so there is no point to burn your investment to slow down the uptake of electric car's because the is no significant slowing down possible anymore.

btw. Aren't the Saudis big into Uber? melting Tesla's with Uber would make perfect sense when self-driving is ready because Uber has the network!

 

[Boomer19]

Wipe out the news about the Saudi investment and the buy-out news and go back to where we were before those less some additional discount for loss of Musk credibility and increased legal risk.

i think underestimating elon’s drive is a mistake, but thats just me

 

[bhzmark]

After reading the blog, lawsuits look to be frivolous.

His intention was to inform investors.

He expressed intention as a buyer.

He consulted the board before the announcement on his intentions as well as sought approval for further announcement to broader investors.

He also expressed long standing “negotiation” process with the Saudis. A more acceptable offer had been put forward to Elon(chief negotiator) at a July meeting. Elon and board is now ready to entertain this deal at the $420 price. At this point in the negotiation process the broader investor input is brought in. The details worked out. Vote put forward, then close.

Bottomline, short lawsuits going nowhere.

I think it is a factual issue as to whether the funding commitment at the time was "secured." But the short lawsuits may still be dismissed without getting to the factual issues because of problems with how they prove their standing and their damages and the causation of their damages. I think they are likely to be dismissed without getting to discovery. @croman I think is a lawyer and may have thoughts.

 

[Boomer19]

Would you care speculate about how will the SEC react to: ?

He has expressed support for proceeding subject to financial and other due diligence and their internal review process for obtaining approvals. He has also asked for additional details on how the company would be taken private, including any required percentages and any regulatory requirements.​

what exactly do you mean? is there an infraction there that i’m missing?
ok, i see where you were going (after reading @bhzmark post). thanks

 

[Moderatefan]

He said talking to the largest investors, he has so far gathered that about 2/3 of shares held by the large investors are willing to go private.

First, estimated, not gathered.
Second, all investors, not large investors.

This likely points to no solid feedback yet from the large investors.

My best estimate right now is that approximately two-thirds of shares owned by all current investors would roll over into a private Tesla.

 

[Unpilot]

What to make of the large volume...yet little SP movement?

 

[brian45011]

Important fact: it will be MBO. Or in other words it will be equity buyout.
I wonder how Musk is going to secure his leader position. As events with Canada show Saudis are crazy and don't follow financial common sense.

If the MBO proceeds, all future capital needs will have be financed in the private markets.

 

[ggr]

What to make of the large volume...yet little SP movement?

"A fair question, one which has been much on my mind of late!" (spoken with a Welsh accent. Monty Python.)

 

[BenPrice]

I’m buying a car. (Ironically, not a Tesla in this example).

I get a pre-approval letter from my credit union.

I go pick out my car.

I negotiate it’s price.

I negotiate warranties and consider all financing options. I commit to one, likely my credit union because it has offered great rates. I call them from the dealership and provide the final details. I drive home in the car, drop off the check the next day.

When am I telling my wife “funding secured”?

When I get pre-approved from my credit union.

There are still a number of options, including not using the credit union, but that’s when I’m telling any interested parties.

Unless the SEC has some obscure ruling where the term “funding secured” is defined in its legal sense, then I don’t understand any concern over this. I don’t understand how a normal, unbiased person finds this confusing.

 

[Toolsmack]

Several have expressed concern on having just one strong player. I share this concern along with EM which is why he's likely shopping for others as well. However I wonder if the Saudi's would still be interested in sharing vs "owning" or at least owning with a couple other friends that could (somehow) control Tesla. What did their interest actually mean? Their 3-5% shows healthy participation, but if they could only get 20%, would they still buy in? That would be the telltale sign of their true motive. Isn't Saudi already too close to Trump? At least the interest was... wait, ~2 yrs ago he said?

Would we be as excited if Ford were the buyer? The same arguments could be made about hedging there as well. Recall the Tucker car? That was before my time, but I sure remember the movie.

I'm just not as excited as most of you, so I'm just sitting tight at my current levels. Stocks not going anywhere without something more concrete with other big players named.

I would feel completely different if the update mentioned Apple, one of the google guys and the Saudis were already on board collectively. I’d open new debt accounts to buy at current price levels if that had been the case.

I think that is what the consensus among longs were baking into the deal already, this update just left me underwhelmed and a bit leery of having only a single source that even at 95% confirmed is leaving a bit of wiggle room for ‘financial approvals’ and quite honestly even if done 100 with the saudi’s only still has a lingering question about how much to trust them long-term

 

[Causalien]

It is somewhat disturbing the money comes from Saudis. I am no longer sorry that I will have to cash out 90% of my investment due to this deal.

Now, let's read a bit between the lines of Elon's update blog post. He said talking to the largest investors, he has so far gathered that about 2/3 of shares held by the large investors are willing to go private. IMHO, this means the vote is pretty much secured too, since those would obviously vote yes, so he already has 2/3 majority. So all that is left is going through the bureaucratic motions, working out the fine details of the whole system how he wants to allow most investors to transfer to private ownership, then present the package for voting etc. All technical details but no more major roadblock, not even the slight doubt of the original tweets regarding shareholder vote.

Any short not jumping out now is following the logic of the frog in the boiling water...

Ya, this outcome means I take TSLA more as a business decision now as opposed to believing in its mission. There are potential interferences from big oil to consider. Instead of just negative articles, we are now faced with direct voting right from big oil.

Like the scty deal that burdened tsla with unecessary debt, SA money it'll sap energy from TSLA in other ways.

 

[winfield100]

How can investor support be confirmed if according to the blog post today he hadn't talked to any major investors prior to his tweet on Tuesday,

"Going back almost two years, the Saudi Arabian sovereign wealth fund has approached me multiple times about taking Tesla private"
Update on Taking Tesla Private

you _might_ want to re-read and edit your post if allowed

 

[MP3Mike]

How can investor support be confirmed if according to the blog post today he hadn't talked to any major investors prior to his tweet on Tuesday, I doubt he was able to get on the phone with all major investor in the 30 minutes between tweets.

The investors he was referring to was the investors that he was going to do the buy-out option with, not the shareholders.

 

[TintDepot.com]

The Saudis are doing significantly more to convert their own infrastructure over to renewables than most western countries are.

This isn't unusual. Just look at Norway, another country that became rich off of oil and spearheads the way into a renewable future. Oil-producing countries generally see the writing on the wall, they know where it's headed.

Right, Norway has been migrating to renewables and now Saudi is too.

They are playing both sides: oil side & renewable side. Agreed, they know where the markets are headed.

 

[Ellec]

What to make of the large volume...yet little SP movement?

Saudis and other potential private investors accumulating shares. The idea is this deal can almost be done on the open market and then offer people a last way out at $420. I doubt there will be many investors who voluntarily sell at $420.

The problem will be if short's leave it too late to cover they'll be squeezed