TSLA Market Action: 2018 Investor Roundtable

[SOULPEDL]

Regardless, I'm actually hoping we get a bit more of a dip - I've got a buy set for $339

Cool, I'll buy at $339.50

 

[Fact Checking]

I credited the $370 to being artificially inflated by the Saudis buying 5% of the company.

So if voluntarily buying 4.9% of the company makes the price go from $290 to $370 "artificially", what effect do shorts have if they are forced to buy 27% of the company to cover?

What if that short buying/covering has to happen in the open under time pressure, not in stealth over weeks/months like the Saudis have done it?

 

[Moderatefan]

Do you not think that the calculus changes as the delisting approaches, and more and more people want to get in on the private boat before it sails with all our future profits?

I think I will roll about 50% of IRA into private(if allowed) and sell the excess in case of some emergency and I need liquidity.
But we should keep in mind people are only 12% and the rest are institutions selling/buying. So, not much of what happens next is up to us. Shorts will need to get most of their shares from institutions.

Wondering what other people are considering to roll into private as far as % of their money, whether IRA or not?

 

[Fact Checking]

That's a scary thought. Would they really do that though? Surprise! You missed the boat! All options are now worthless

Not worthless necessarily: if there's a short squeeze you could still excercise the options and sell to shorts.

Doing this looks counterintuitive to me though: while it probably helps the Saudis, it weakens the "yes" vote and also forces more people (like yourself) to sell to shorts instead of new investors.

So as the weeks/months pass and the agreement nears completion, it would be useful if Tesla/Elon communicated about this aspect of the deal, to draw in more longs via the options space.

 

[KarenRei]

So if voluntarily buying 4.9% of the company makes the price go from $290 to $370 "artificially", what effect do shorts have if they are forced to buy 27% of the company to cover?

Contrarily, what happens when a 33% of Tesla's stockholders have to sell?

And for the record, that wasn't the only thing moving the needle back then - there was also the 5000 M3s announcement. The Saudis just put a boost on top of that news.

 

[TrendTrader007]

Dell’s buyout financed by Silver Lake in 2013 was extremely contentious and contested and yet only lasted a total of exactly 8 months from start to finish and SP peaked 21/2 months after the initial news
Here’s an approximate timeframe

#1 January 14, 2013 Dell shares spike 13% on buyout rumors

#2 February 5 - Michael Dell and Silver Lake’s buyout offer is announced and a 45-day “go shop” period commences during which a special board committee solicits rival offers.

#3 March 5 - Icahn informs Dell’s board he is a substantial shareholder, later revealing he owns $1 billion in stock

#4 March 29 - Michael Dell warns of the danger of taking on a lot of debt and remaining public, calls the Blackstone and Icahn offers fraught with risk.

#5 July 18 - Shareholder meeting delayed.

#6 Sept 12 - Preliminary voting results show Michael Dell and Silver Lake have clinched shareholders’ approval to go ahead with the buyout, ending months of conflict and removing a cloud of uncertainty that has hung over the company.

Dell SP peaked on 3-25 through 3-28-18 and never traded that high again

My conclusions
#1 expect $TSLA privatization to be a much faster process
#2 selling too soon or too late is not the best thing. Selling at the right time and later buying back at a lower price closer to buyout offer is what I’m considering
Not an advice

 

[Causalien]

I think I will roll about 50% of IRA into private(if allowed) and sell the excess in case of some emergency and I need liquidity.
But we should keep in mind people are only 12% and the rest are institutions selling/buying. So, not much of what happens next is up to us. Shorts will need to get most of their shares from institutions.

Wondering what other people are considering to roll into private as far as % of their money, whether IRA or not?

Really depends on if it is this year or next. I've already maxed out my capital gains for this year. (as in, the amount of tax I can stomach paying)

If the deal is next year. Then maybe 20% I will sell. Assuming 420$. If there's a squeeze, then taxes be damned.

 

[TintDepot.com]

'Coz I just bought some more....

It looks like it is time to buy some TSLA stock at $347 and change. With Q3 & Q4 forthcoming and possible buy out at possibly $420. That's still a 20% return...if it happens.

Just wish I had more available cash...

 

[oneday]

So if voluntarily buying 4.9% of the company makes the price go from $290 to $370 "artificially", what effect do shorts have if they are forced to buy 27% of the company to cover?

What if that short buying/covering has to happen in the open under time pressure, not in stealth over weeks/months like the Saudis have done it?

Its actually more like 20% of all shares outstanding. But your point is valid nonetheless.

Contrarily, what happens when a 33% of Tesla's stockholders have to sell?

And for the record, that wasn't the only thing moving the needle back then - there was also the 5000 M3s announcement. The Saudis just put a boost on top of that news.

It will be during the go private transaction? Won't effect price, hence the buyout.

 

[Jayjs20]

Contrarily, what happens when a 33% of Tesla's stockholders have to sell?

Correct me if I'm wrong, but if 1/3 of investors have to sell, wouldn't the buyer of that 1/3 of investors be Tesla themselves at 420? How would that drive the SP down?

 

[MikeC]

Wondering what other people are considering to roll into private as far as % of their money, whether IRA or not?

For me, this really depends on:

1) What the stock is trading at when it goes private
2) Are we able to buy more shares once we are already in the private company or are we limited to current holdings

If limited to current holdings, I'll try to max out because this would be the last chance to get in. If the share price is super high like 600+, I'd have some thinking to do; the higher it goes, the more shares I'd probably cash out.

 

[Moderatefan]

So if voluntarily buying 4.9% of the company makes the price go from $290 to $370 "artificially", what effect do shorts have if they are forced to buy 27% of the company to cover?

Latest number is 34.27m/170.59m=20% of the company(not float), to be exact.

 

[Fact Checking]

Contrarily, what happens when a 33% of Tesla's stockholders have to sell?

Easy: price won't significantly drop below $420 minus the price of deal uncertainty, until the pool of shareholders at the $420-minus price level is exhausted. (Plus the pool of new shorts with a death wish.)

Price will rise afterwards.

And for the record, that wasn't the only thing moving the needle back then - there was also the 5000 M3s announcement. The Saudis just put a boost on top of that news.

Backpedaling eh?

But yes: first time I agree with you today, 8 million Saudi shares were probably just one of the factors behind the June price action of $290 -> $370.

There was another big factor in June IMO: short selling dropped from 60%+ to 30% until July 2.

(My hypothesis: shorts got spooked by a confident Elon.)

 

[Fact Checking]

Latest number is 34.27m/170.59m=20% of the company(not float), to be exact.

Latest number was almost 35m according to S3 Partners I believe.

But yeah, agreed that shorts are around 20% of common shares.

 

[Jayjs20]

Question. Let's say nothing Elon says about keeping a wide investor base ends up being allowed by the SEC. Is there anything stopping us from just giving them the money directly, having them open a bunch of accounts and having Tesla act directly as the pseudo-broker themselves? Does the SEC have control over all investments in general, or just what passes through official brokers?

 

[Zhelko Dimic]

I visited Tesla store today. I noticed great number of M3s in parking lots, and after all discussion re demand, I was a bit concerned. So while kids were playing in an M3, I was chatting with a salesperson and exploring complexities of trying to do convenience trade-in from MS to M3. I slipped into the conversation question, if any of the M3s are available for pickup now. I got firm 'no', and explanation of the timelines. So I pressed, pointing to all M3s on the parking lot, and asking if they had any in the inventory. Sales-guy almost laughed me out of the showroom, and confirmed that all of these are newly arrived, for delivery. He also stated that he personally sold 3 M3s today. That was at about 2:30pm.

Why is this story important, and in this thread?
Well M3 starts at CAD$65K (the same USD $49K version), and salaries around here are pretty much 1:1 CAD for USD, so it's definitely less affordable than in USA.
More importantly, Ontario government just killed $14,000 incentive, less than a month ago. Tesla was delivering like crazy to Toronto in Q2. Hence, I had expected that demand cools off almost to a stall, for at least quarter or two, but that's not the case.

So finally a conclusion: If Tesla can sell M3 in good numbers in Toronto, where it effectively just became $14,000 more expensive, there is no reason to worry about demand. And I know lot of you don't worry, but I like to be careful. This makes me comfortable that no matter what happens with a buyout, we're heading towards $400 in the next few months anyhow. So I stay leveraged.

 

[Unpilot]

Dell’s buyout financed by Silver Lake in 2013 was extremely contentious and contested and yet only lasted a total of exactly 8 months from start to finish and SP peaked 21/2 months after the initial news
Here’s an approximate timeframe

#1 January 14, 2013 Dell shares spike 13% on buyout rumors

#2 February 5 - Michael Dell and Silver Lake’s buyout offer is announced and a 45-day “go shop” period commences during which a special board committee solicits rival offers.

#3 March 5 - Icahn informs Dell’s board he is a substantial shareholder, later revealing he owns $1 billion in stock

#4 March 29 - Michael Dell warns of the danger of taking on a lot of debt and remaining public, calls the Blackstone and Icahn offers fraught with risk.

#5 July 18 - Shareholder meeting delayed.

#6 Sept 12 - Preliminary voting results show Michael Dell and Silver Lake have clinched shareholders’ approval to go ahead with the buyout, ending months of conflict and removing a cloud of uncertainty that has hung over the company.

Dell SP peaked on 3-25 through 3-28-18 and never traded that high again

My conclusions
#1 expect $TSLA privatization to be a much faster process
#2 selling too soon or too late is not the best thing. Selling at the right time and later buying back at a lower price closer to buyout offer is what I’m considering
Not an advice

So buy low...then sell high??

 

[KarenRei]

Backpedaling eh?

Not at even remotely (do you really not understand the concept that an effect can have multiple causes?), and furthermore, I don't care one whit if you want to make financial decisions based on a fictional "greater than the buyout price" squeeze. I got tired of this conversation topic literally days ago, so by all means, keep talking about it, but I won't be taking part in it any more.

 

[Fact Checking]

#2 selling too soon or too late is not the best thing. Selling at the right time and later buying back at a lower price closer to buyout offer is what I’m considering

The Dell buyout had significant differences to the Tesla buyout:

• The Dell buyout was all-cash: all but a few shareholders were forced out at the deal price. This capped the share price at the buyout price.
• The Tesla deal is a voluntary share conversion or cash buyout deal. A significant portion of Tesla shareholders are allowed to convert to private deals. This makes the share price open ended: the TSLA shares are used to value TSLAP private shares. If Tesla can grow as fast as SpaceX then TSLAP has potentially higher valuation than $420.
• Put differently: what Elon is doing here, Elon is effectively conducting an Initial Private Offering of Tesla (TSLAP IPO), with no ability to buy these shares after they go private. It's a price auction - where prices could easily go up.
• Dell short interest was much lower, plus shorts had an effective price cap of ~$14.75. Tesla short interest is much higher, and there's no price maximum!

Very, very different market and price action is expected.

Not advice.

 

[Fact Checking]

Not at even remotely (do you really not understand the concept that an effect can have multiple causes?),

Now you are arguing not just based on flawed logic, but also in bad faith:

• In your first post you clearly saw the Saudis as the only cause worth mentioning, and then backpedaled when I turned that argument against your point.
• In my latest reply you selectively quoted from my reply, you "forgot" to quote the part where I agreed that there are indeed multiple causes, and in fact listed one more major cause than you did.

You need to learn some discussions etiquette I believe.