TSLA Market Action: 2018 Investor Roundtable

[Moderatefan]

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.

Maybe I need to paraphrase... wondering not about how much of your TSLA you will sell, but overall % of money going into private.
I.e. when you consider diversification vs "this is it, deal of the century" and I think the latter consideration should be the strongest on this forum, what is the outcome?

 

[Curt Renz]

Inside sources within the financial community (potential buyers and advisers) will either refuse to comment about Tesla privatization, or suggest that nothing definitive has happened. They would want to avoid affecting the share price before official proposals or agreements are announced.

 

[SOULPEDL]

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

FYI, I'm working my own IRA in TD Ameritrade (without a money manager because they keep telling me I'm crazy with 50/50 TSLA/Cash only). It's all tax free gains until I start pulling it out slowly (only 2 yrs to go). As far as Tesla is concerned, these are my shares and no different than anyone else's shares here. I'm likely taking this to 75% then pull out 25% at or above $420, back to 50% private. I'd go to 100%, but stupid stuff can happen.

Not an advice! (but counting on it myself)

 

[rallykeeper]

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?

Unfortunately, there's a lot to stop you and Tesla from doing this.

SEC enforces U.S. securities laws which generally cover all securities transactions, private or public (and even across borders!), regardless of whether there is a broker or underwriter involved.

 

[Moderatefan]

back to 50% private.

That's what I'm thinking too, 50%.
Anybody up for 100%? I bet some day traders will only roll 10% and gamble with the rest

 

[Duffer]

That's what I'm thinking too, 50%.
Anybody up for 100%? I bet some day traders will only roll 10% and gamble with the rest

If you mean roll 100% of our shares into private Tesla? Yes. My wife and I are planning on that IF we are allowed to so.

 

[MikeC]

So I sold 25 shares today (not a weak long, I converted to a call) and my order was broken into 15 1-share orders, 3 2-share orders, and a 4-share order. I got 19 confirmation emails for one trade - I have never seen a single sell order broken into so many small orders.

A bullish interpretation might be that someone is trying to accumulate without raising the price? Someone who doesn't pay per trade transaction fees, presumably. Anyone have another explanation?

 

[Moderatefan]

If you mean roll 100% of our shares into private Tesla?

Not just 100% of Tesla shares - of the entire portfolio. If you only have 10% of money in TSLA and rolling 100% of 10% that still does not show a high level of confidence.

 

[beachbum77]

I actually think it's a case of follow the leader; there may be some bandwaggon jumpers who go along for the ride that wouldn't have otherwise. MbS is a natural leader, and there are probably now lots of billionaires coming out of the woodwork trying to get a piece of the pie that wouldn't if Tesla was a publicly traded stock that just moves around like the stupid East Coast traders want. There could be private investors lining up right now. The stock price upside (~2x to 3x or so in a decade, and that's somewhat optimistic AND somewhat conservative) is muted compared to some of Tesla's competitors (since their SP's haven't been reflecting such potentials like Tesla's already has), but none of Tesla's competitors are at the same stage as Tesla is right now and none of them seem that obviously serious just yet (lots of announcements have come to nothing), so it's impossible to pick one of them. Tesla is the only one in this market segment with this much going on.

Hmmm... "Investors lining up" to pay 20% more for a stock than they can buy it for today? Seriously?

I'm sorry but some of you seem clueless why people take companies private. It is to increase their individual stakes in the company. Normally it is done with leverage (borrowing money to buy up shares reducing the total number). The debt is hopefully paid back with the profits generated by the company. With fewer shareholders, those remaining own a bigger piece of the pie. Tesla has no profits, certainly nothing Musk can borrow against.

But Musk says that is not going to be the case here. Nonsense. Those selling shares will be consolidated in the PIF or whoever steps up to the plate to buy them. Small investors will be forced out no matter what Musk "thinks" or "hopes". Only employees would get special treatment like the SpaceX employees.

 

[bdy0627]

Only problem with very long dated puts are time premium stick around, If stock goes to 420, premium probably still around 50 , I sold Nov 16, 350 put at $39.00 other day, for the first time I think Tesla current quarter guidance looks too conservative, they are already getting close to 6K M3 production.

IMO J20s are a pipe dream at this point. I give them a pretty small chance of ever utilizing the time premium, which means the time premium is going to drop precipitously when the shareholder date is known or for sure when the delisting date becomes known. If the buyout falls apart then yes, time premium is the issue there. Selling J20s at $400 or $420 is a play on a set price that we already know is likely but not certain, as well as a buyer of the J20 who is paying a higher premium for 17 months when he will likely only get about half of that at most. Why sell March or June puts when the people are willing to pay quite a bit more for the J20s right now? I fully believe that if the buyout falls apart, there will be a short term drop followed by ATH within 6 months. It's also more cash up front to buy shares that are quite discounted right now.

 

[graphix25]

Inline with my logic.

1156 Shares @ avg price of ~$200 a share

Sell 400 and keep 707 in my IRAs, maybe sell 300 and keep 856. The cash account require liquidity as it's my rainy day fund and the kidos educational IRAs likely can not hold private shares. My 856 shares in IRAs are for 15-20 years from now so can just let the shares ride till Tesla comes back to the public market. Not all in on Tesla but do have a sizable position. Bulk of retirement is in S&P and smaller positions in mixed small/mid cap index and international funds. Cash is an all time low at 10%, usually I'm 20-25% cash. Could not resist adding to my Tesla position when we dipped blow $250 recently. Saving $40k - 50k a year with company match so long term Tesla % balance will stay inline at reasonable levels.

The market action in Tesla has been sadness in the the last few trading session. My confidence in a short squeeze are diminishing by the minute. My current logic is it's going to be slow slog to 420 with mixed sideways trading for months. Hopefully the Q3 delivery numbers and earnings will speeds things up. Tesla moves fast so I'm expecting 4-6 months till we close the transaction. I have near 100% certainty Tesla is going private. 50/50 that we will be given the option to hold shares due the sheer complexity of dealing with millions of individual shareholders in 195 countries which will be logistic nightmare. No one has ever kept individual shareholders in place when going private to my knowledge. Accredited Investor restriction may come into play for many. Country and account limitation will hit others. This transaction is not for the little guy, they never are unfortunately. Not even with our beloved TSLA. If I get taken out I will hunt down one of Ron Barron's funds or something similar that is 10-15% Tesla and call it a day for those funds.

FYI, I'm working my own IRA in TD Ameritrade (without a money manager because they keep telling me I'm crazy with 50/50 TSLA/Cash only). It's all tax free gains until I start pulling it out slowly (only 2 yrs to go). As far as Tesla is concerned, these are my shares and no different than anyone else's shares here. I'm likely taking this to 75% then pull out 25% at or above $420, back to 50% private. I'd go to 100%, but stupid stuff can happen.

Not an advice! (but counting on it myself)

 

[EinSV]

That's what I'm thinking too, 50%.
Anybody up for 100%? I bet some day traders will only roll 10% and gamble with the rest

120% of TSLA into TSLAP here — I added 20% to my shares after the announcement last week.

 

[bdy0627]

"Only reason why this is not certain is that it’s contingent on a shareholder vote."
- Elon Musk

Yeah, this is true. Elon's language definitely suggested the only doubt about a buyout at $420 was a shareholder vote. I think he managed to bust not only some shorts, but quite a few longs who got caught up in the near certainty of the idea. It has definitely been walked back since then. I really don't know why he used that language to describe where things are at. I'm guessing there was some reason - urgency, the Saudi investment as a threat, who knows, but his language indicated the buyout only depended upon shareholder vote. I can certainly see how longs got caught on some short term trades with it.

 

[Richgoogol]

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.

But do keep in mind, although highly unlikely, if these cars were manufactured before July 11 and they are just being delivered now, they are still eligible for the rebate as long as they get plated before September 10th. We’ll have to see how sales are after September 10th to get a certain confirmation that the rebate does not affect the sales whatsoever.

 

[SOULPEDL]

Accredited Investor restriction may come into play for many.

Not including the home, I squeak over the line if we count $TSLA ~$500, my wife's 401K, and my signed Beatles album. I'd definitely file for it. If I have to take out a second mortgage so be it. I will be Bonafide as they say in O Brother Where Art Thou!

 

[Curt Renz]

CNBC - after market hours: Jim Cramer says Tesla bears should think twice before shorting the stock

 

[gene]

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

I have 1600 shares in my trade account that I will turn into private. I have 1000 shares in my SEP IRA that I will likely cash out. Though I did talk to my account rep at Etrade today and he thought I would be able to go private with my IRA shares as well.

Hmm....but if the price gets down to 330 or so, I'll likely buy 200 more shares from trade account> privatize.

TSLA is the only stock I own., long term like over 6 years. I am clearly accredited. What I will miss is this thread, all you guys (some of whom I've known for 6 years).

Even though I almost always lose money on solar, I do have fun trading smallish amounts of solar stocks such as EDGE, SPWR, RUN, and FSLR. These solar stocks are fun because they are so volatile which gives me a sort of adrenalin thrill.

 

[shortburn]

CNBC - after market hours: Jim Cramer says Tesla bears should think twice before shorting the stock

If we get any more love from Cramer, I afraid I won't be able to take it

 

[dmckinstry]

120% of TSLA into TSLAP here — I added 20% to my shares after the announcement last week.

I'll probably do 90% if the SP doesn't change much between now and conversion. If it appreciates much much higher, I may do as low as 80% and use the other 20% to buy my X.

 

[Ratanpara]

IMO J20s are a pipe dream at this point. I give them a pretty small chance of ever utilizing the time premium, which means the time premium is going to drop precipitously when the shareholder date is known or for sure when the delisting date becomes known. If the buyout falls apart then yes, time premium is the issue there. Selling J20s at $400 or $420 is a play on a set price that we already know is likely but not certain, as well as a buyer of the J20 who is paying a higher premium for 17 months when he will likely only get about half of that at most. Why sell March or June puts when the people are willing to pay quite a bit more for the J20s right now? I fully believe that if the buyout falls apart, there will be a short term drop followed by ATH within 6 months. It's also more cash up front to buy shares that are quite discounted right now.

I am not a expert on subject but I don’t see it would be that easy, If someone holding say 2020 leaps and Tesla goes private in Jan 2019, I think option premium Doesn’t go to zero, time remain would be calculated based on historical volatility etc and one need to buy back put option at that price, I could be wrong.