TSLA Market Action: 2018 Investor Roundtable

[UnknownSoldier]

Maybe the short's FUD is working and causing some weak longs to exit.

I find it hard to believe there's any weak longs left after the past 1-2 years of this war in the market against Tesla.

 

[MTL_HABS1909]

YA, KSA brings about a lot of ethical concerns. If die hards like us are taking a step back. The more recent starry eyed younger investors might have bailed already. Sentiment on reddit's teslamotor forum seem to be negative on KSA. So I guess many small retails are bailing right now.

I don’t get this mentality. Tesla’s mission remains the same. What’s the alternative? Stop supporting Tesla which makes them more likely to fail and then we continue using Saudi oil?!?!!

 

[tander]

"I don't think Elon intends for the Saudi's to have too big of a stake. The reality is that they have started accumulating so they forced his hand... "

That seems like it could be the case. Or I wonder if he is using the Saudi's as a first of many bidder. IIRC with the scty merger there was a "go shop" period where they had to entertain other bids, I don't recall if there were any but scty looked pretty worse and worse at the time so maybe there wasn't. I wonder if they could attach a "go shop" to this going private deal, that could get interesting considering tsla is supposed to be profitable this quarter and moreso in 4th qtr. Say they had a vote by late November then a 45 day go shop period that went into Jan after 4th qtr sales were posted that could get interesting. Anybody ever heard of doing a go-shop for taking a company private or would they just sort of collect as many bids in the first place and go with the best or try to group them together?

 

[Ellec]

"Silver Lake’s aim is to invest in the carmaker as part of its potential delisting, which could be worth tens of billions of dollars, two people with direct knowledge of the matter said."

Tesla’s Board Moves to Oversee Musk’s Efforts to Take Company Private

 

[Earlian]

And two of Silver Lake’s biggest investments are......

.....Dell and Seagate.

Both companies went private.

Maybe they’re the best at investing a great deal and then secure your investment?

This gets even more serious every day.

 

[Curt Renz]

The brief but sharp TSLA spikes downward seen sporadically today appear to have the fingerprints of a short selling hedge fund hoping to trigger the stop loss limits of weak longs and to entice retail shorts. More conventional institutions tend to spread their selling in a measured fashion so as not to upset the market in a manner that might force the remainder of their selling to be done at significantly lower prices. The hedge funds that sell in such spurts often start covering their shorts for a profit before retail traders realize what had been happening.

 

[McKricas]

Not sure why any weak long would exit now, because as we stand it's $420 to get out before private or we stay public and continue as we were, maybe with a few less shorts.

And as things were, we were going fine. M3 ramp was looking good. Rave reviews. I really think the short squeeze was looking more and more likely.

So I'm also of the opinion that Elon's hand was forced by the knowledge of SA's PIF having bought a big stake and he felt he needed to head-off a potential hostile bid.

But yeah, it's a mess right now and I'm personally very stressed with the whole affair.

<In my Opinion Mode>
Based on price action, I believe $tsla will go down a little bit more before going upwards.

My bet is it will make a minimum on the 340-350 before resume the uptrend.
In my analysis, this is a retrace of the previous up movement after the earnings that will resume.
</IMO mode>

 

[EarlyAdopter]

Something doesn't compute: for example the 2019 CV notes of $920m represent (920m/360=) 2.55m shares exposure, which could be hedged with 25k call options.

When TSLA was down to around $250 then GS could have bought the hedges as DOTM call options for less than $5m?

What are the chances that 4 years after the CV note hedge was sold to Tesla and the price has dipped deeply twice, GS is still exposed and is fighting a rising tide, instead of just flipping their position and rising with the tide?

That doesn't seem to make sense to me, unless GS's short exposure is a lot more than the 2-3m shares from all the CV note hedges ...

Do we have any ideas/rumors about how the 35m short positions are distributed amongst the players?

Because someone is fighting the stock price like there was no tomorrow, and is doing it competently.

I'm also confounded by this relentless selling. The volume and dollars involved just don't make sense from the pov of hedges on the notes, nor does the timeframe as you note.

I can speculate as to two possible entities behind this:
1. Options market makers trying to reconcile a few billion in open interest in long dated options, as well as desperately trying to manage down volatility so as to not lose their shirts on short term ones.
2. Short sellers, like Chanos, who prey on companies with debt. To the extent they can keep the stock price below $360 is the extent Tesla ends up obligated to pay out on bonds starting in March 2019, possibly putting the company at financial risk, driving the stock lower (to $0 in their mind) and thus allowing them to close their short positions at a profit. I believe this has been Chanos' strategy all along. It fits his modus operandi per Jesse's thread.

The take private announcement threw a huge spanner in this. The only way they come out of this alive is to keep the stock below $360 for another 6 months and do everything they can to tank the deal.

 

[Bet TSLA]

Not sure why any weak long would exit now, because as we stand it's $420 to get out before private or we stay public and continue as we were, maybe with a few less shorts....

This "all in" long is going to sell a few thousand shares due to a margin call. That's how it works when the price is held down $20 below where you bought as much as possible.

 

[Cosmacelf]

"Silver Lake’s aim is to invest in the carmaker as part of its potential delisting, which could be worth tens of billions of dollars, two people with direct knowledge of the matter said."

Tesla’s Board Moves to Oversee Musk’s Efforts to Take Company Private

As usual with press reports these days, lots of rumor and innuendo. However, this excerpt from that article also caught my eye:

The firm [Silverlake] isn’t going to be paid for any work it does to help the Tesla co-founder explore his options, said the people, who spoke on the condition of anonymity to discuss confidential negotiations.

Senior executives of Silver Lake, one of the biggest technology-focused private-equity investors, have known Mr. Musk for years and have had him speak at an annual meeting of its portfolio companies on at least one occasion. An arm of the firm, Silver Lake Kraftwerk, had invested $100 million in SolarCity, the solar-power company that Mr. Musk co-founded and is now part of Tesla.

The people wouldn’t say when Silver Lake began working with Mr. Musk on his plan.

If Silver Lake is going to pull together a detailed go private plan FOR FREE, they are only doing it to be able to participate AND everyone involved is going to make sure it happens...

 

[BioSehnsucht]

Cramer: 'We'll be on Mars' by the time the SEC penalizes Tesla for Elon Musk tweet

video worth watch

In that video Cramer refers to Mark Cuban's comments the previous day, which I thought were interesting : Mark Cuban: Tesla's Elon Musk is like Steve Jobs and Jeff Bezos

 

[Unknown_Wizard]

Low volume today... It is getting interesting when the shorts realize that there is no way out.

Very likely that there is "quiet stake building" in process in the 350$ range.

 

[schonelucht]

Would you feel the same way about Norway's soverign fund which is used to hedge oil as I understand it? I understand the human right differences but what is wrong with an oil economy recognizing that it is soon going to be faced with a future witout oil?

It's not just the human rights thing. The Norwegian governance is so much better and stable. It is subject to democratic review under mature state institutions. Compare to SA where a few inner cronies can decide on a whim to jail half of the elites in 5 star resorts to settle some opaque vendetta.

 

[loky]

I find very interesting, that the shorts are exposed now as an easy target to all TESLA market participants...But they haven`t realized yet...

 

[Moderatefan]

it is getting interesting when the shorts realize that there is no way out.

Since we quote him so much...
Ihor Dusaniwsky on Twitter

The VW event was a quick hit - news went public and shares started disappearing immediately, because this more of a "traditional" buyout which will take time to finalize and execute,, shorts will have plenty of time to cover their positions if necessary.

I am getting used to the idea that there will be no squeeze.

 

[Matias]

If shorts are covering but price is not rising, some longs must be quietly exiting as well...

i’ve always wondered this kind of reasoning in the stock market. Isn’t it clear, that there’s a seller and buyer in every trade?

 

[loky]

Since we quote him so much...
Ihor Dusaniwsky on Twitter

I am getting used to the idea that there will be no squeeze.

By my opinion, it mainly depends of time frame in expected "Go Private" proposal.
It will be epic squeeze or multiple "teflon " ones..

 

[Rarity]

Apparently, Silver Lake is already an investor in Tesla.

Silver Lake - Current Investments

Edit: Ah, I see above that it is via its investment in SolarCity.

 

[Unknown_Wizard]

Ok then, please explain to us how there can't be a squeeze? 35m shares to cover... no way!

 

[azaz]

Ihor is saying there should be plenty of shares to cover with, but what if people just dont sell till 420 if the going private deal starts to appear certain