TSLA Market Action: 2018 Investor Roundtable

[Unknown_Wizard]

1,000 M3 more just from yesterday...

 

[sundaymorning]

Looks like Gelles felt compelled to defend his Friday morning sp tweetView attachment 326955

How does it feel to be attacked Gelles? If you don’t have the balls to speak the truth then stay out of the war.

 

[sundaymorning]

1,000 M3 more just from yesterday...

Wow so Bloomberg has us close to 6k/week now. This is wonderful news and VIN registration would seem to back up the data.

Model 3 VINs (@Model3VINs) on Twitter

 

[sundaymorning]

My financially savvy neighbor (Worked on the street for 20 years) does not believe the $420 private buyout is possible and I couldn’t provide a compelling reason why it is.

He said when Warren Buffett was asked why would you pay a 20% premium to take a company private, his answer was control. Control of the company gives you a lot of power.

My neighbor says that there is no way a consortium of buyers would pay such a premium for the stock in the absence of such control and that board seats would be a sufficient inducement. There is no reason for them to do this and not be purchasing the stock now at such a discount to $420.

Does anyone know of a past instance of several entities coming together to pay a premium to delist a company?

Your friend is thinking in terms of corporations and entities. He needs to change his mindset to a country called Saudi Arabia, where its funds are entirely reliant on oil, a commodity that may not be as popular 20-30 years from now as it is going to be replaced. The Saudis are hedging against an epic downfall of oil prices, which will be replaced by alternative energy that is cleaner and more efficient. If the Saudis don’t make that hedge, their country may fall not only into poverty one day, but they might be looking at revisiting the Stone Age.

 

[Matias]

Sure.. but time frame matters?

In Finland we had one minister (Ahti Karjalainen), who had Yogi Berra like quotes (which are simultaneously stupid and wise). One of them is suitable for stock markets “Predicting is difficult and especially difficult is predicting the future”

Or as Yoda said “Difficult to see. Always in motion is the future.”

 

[Matias]

Your friend is thinking in terms of corporations and entities. He needs to change his mindset to a country called Saudi Arabia, where its funds are entirely reliant on oil, a commodity that may not be as popular 20-30 years from now as it is going to be replaced. The Saudis are hedging against an epic downfall of oil prices, which will be replaced by alternative energy that is cleaner and more efficient. If the Saudis don’t make that hedge, their country may fall not only into poverty one day, but they might be looking at revisiting the Stone Age.

That is good for Saudis, but Musk is going to sell them less than 20 percents. What about the rest?

 

[Fact Checking]

How does it feel to be attacked Gelles? If you don’t have the balls to speak the truth then stay out of the war.

He is clearly trying to walk back that tweet, which fanned the flames before the even bigger drop on Friday:

David Gelles: "Tesla $TSLA stock now down close to 4 percent in pre market trading. Wonder why?"

Will be hard to explain away the "Wonder why?" flippant gloating about other people losing money, some of them permanently: his article caused shareholders of an American company, of which company all progressive liberals should be proud, lose a billion dollars in value.

His biased tweet also calls into question the accuracy and impartiality of his article.

It is absolutely crutial to clarify whether his article, which was apparently a summary of an hour long interview, was a true, accurate representation of what was said in the interview. All involved journalists should preserve recordings and notes about the interview.

Both the SEC and the NYT should investigate whether David Gelles deceived investors with his article.

 

[Fact Checking]

If the Saudis don’t make that hedge, their country may fall not only into poverty one day, but they might be looking at revisiting the Stone Age.

It's even worse than that: the Middle East is going to be in a worse situation than dropping back to the Stone Age after oil revenues are gone, projections suggest that due to global warming temperatures are expected to reliably stay above 50°C in the summer - which will render vast areas of the Middle East uninhabitable to even healthy adults - let alone children and the elderly.

So they need advanced industrial economies with robust dwellings, robust power generation networks, air-conditioning and water purification plants. Stone age societies will not be able to survive there.

A catastrophic drop in demand for oil might also happen much faster than 30-40 years: in 5 years the various renewable energy and EV transition projects might already have such an effect to start the inevitable slide. The 2016 drop in oil prices was just a warm-up.

Which IMO is one of the reasons why the Saudis bought ~5% of Tesla for 3-4 billion dollars, contributing to the price spike in June - and explains why they are apparently willing to negotiate about buying an even bigger chunk of Tesla for $420 a share.

 

[sundaymorning]

That is good for Saudis, but Musk is going to sell them less than 20 percents. What about the rest?

First, how do you know it’s 20%? Are you receiving inside information from the top? It could very well be 25-40%.

Second, if Elon is estimating that 70% of shareholders will take their holdings private, then 30% is enough.

Third, have you thought about SpaceX getting involved?

Fourth, if the Saudis buy 20%, another 10% won’t be hard to dig up. If history has any indication of capital raises, then Tesla may be oversubscribed when it’s all said and done. Meaning Elon could be grossly overestimating the amount of sellers and underestimating the amount of buyers willing to take this company private. We just have to wait and see.

Lastly, asking who what when where and how isn’t going to help as this forum is the wrong place for that. To get this answer, you’ll either need to be a board member or speak directly with the head hancho himself. And if you can get through to him, Elon won’t be able to answer your question openly because it would be revealing insider information, which is illegal. If someone here has insider info, they obviously will not publish it on the forums, because it could mean jail time. You have to be smarter than to post such a nonsense question, which of course, you already know better...

 

[Fact Checking]

My neighbor says that there is no way a consortium of buyers would pay such a premium for the stock in the absence of such control and that board seats would be a sufficient inducement. There is no reason for them to do this and not be purchasing the stock now at such a discount to $420.

Does anyone know of a past instance of several entities coming together to pay a premium to delist a company?

That's an interesting question and normally your neighbor would be right - and if Tesla was any other company I'm convinced we would have seen a hostile Saudi takeover bid of Tesla back in April/May when the price was the best for them and Tesla was the weakest.

But your neighbor is wrong, because he is missing the one key Tesla value the Saudis cannot purchase: Elon Musk. If Elon doesn't agree or simply isn't happy with the outcome, he might just sell and start Tesla v2 elsewhere, and many key employees would follow him. I think that's why the Saudis came to Elon twice in the last 2 years, that's why they are negotiating with him about the $420 going-private buyout offer.

Look how quickly Elon got the Boring Company going.

I am convinced that the Saudis would be 100% happy about a Dell like outcome: a forced buyout of all but a few shareholders. But Elon said no.

That's also why the shorts are trying to attack Elon, to devalue him in the eyes of the Saudis. (Little seem they realize that by painting Elon the stubborn macho who goes through heaven and hell, they are likely increasing his cult value in middle-eastern cultures...)

So if this was any other company the Saudis would not have stopped at 5% in June.

Ask your neighbor a probing question: if the Saudis want Tesla, why did the Saudis stop buying, and why are they in talks with Elon, the board and Silver Lake of Dell fame? They could buy a controlling stake on the market right now for less than what they paid for the 5% initial stake. Why aren't they buying?

Pretty much the only answer that makes sense in this context is because the Saudis know how important Elon is to Tesla and want him aboard. Owning 18% of a disruptive company (slightly less than Elon's 20% share) is so much better than owning 25% or even 50% of a company that is a burnt out shell of its former self.

Elon's price is apparently going private with a specific corporate structure that keeps him and Tesla free to shape the future. That's what the $420 price and going-private is about, I think.

 

[Lessmog]

CA is a two party consent state I believe, but Elon might have informed them and made it a condition of granting an interview, in which case it would be legal. The NYT guys, if they acted in bad faith, might not have done a recording - on purpose...

Even if he didn't make a recording, I think he will record future interviews...

He is clearly trying to walk back that tweet, which fanned the flames before the even bigger drop on Friday:

David Gelles: "Tesla $TSLA stock now down close to 4 percent in pre market trading. Wonder why?"

Will be hard to explain away the "Wonder why?" flippant gloating about other people losing money, some of them permanently: his article caused shareholders of an American company, of which company all progressive liberals should be proud, lose a billion dollars in value.

His biased tweet also calls into question the accuracy and impartiality of his article.

It is absolutely crutial to clarify whether his article, which was apparently a summary of an hour long interview, was a true, accurate representation of what was said in the interview. All involved journalists should preserve recordings and notes about the interview.

Both the SEC and the NYT should investigate whether David Gelles deceived investors with his article.

To me it is absolutely inconceivable that the NUT did not record the entire phone interview. That would befit (maybe) a hack from 1935 scribbling notes on a small paper pad.

OF COURSE NYT COULD SHOW THE TOTALITY OF AN HOUR-LONG DISCUSSION, NOT JUST FIVE EDITED SNIPPETS.

Apologies for shouting, but it overdue to lay cards on the table -- or spill it to the SEC. But I'd like to know too!

 

[Lessmog]

Sorry for chattering, but:

But your neighbor is wrong, because he is missing the one key Tesla value the Saudis cannot purchase: Elon Musk. If Elon doesn't agree or simply isn't happy with the outcome, he might just sell and start Tesla v2 elsewhere, and many key employees would follow him. I think that's why the Saudis came to Elon twice in the last 2 years, that's why they are negotiating with him about the $420 going-private buyout offer.

Look how quickly Elon got the Boring Company going.

I wonder what murch Elon would sell to finance v.2.0? Hats: 1M, Not-a-F: 10M. Gnome Underpants: 50B?

 

[Matias]

First, how do you know it’s 20%? Are you receiving inside information from the top? It could very well be 25-40%.
.

Musk has 20%. He is afraid of a coup. If Saudis had more than he, it would put him at risk.

 

[Fact Checking]

How does it feel to be attacked Gelles? If you don’t have the balls to speak the truth then stay out of the war.

BTW., David Gelles should not be "attacked", he should be investigated, to see whether his article, which caused a ~$30 price drop in Tesla on Friday, was a fair, accurate and truthful representation of the hour-long phone interview they conducted with Elon Musk, and whether Gelles or any associates profited from the drop in Tesla's stock price.

If a positive tweet by Elon Musk that caused a $30 rise in the stock price is investigated by the SEC then the accuracy of a negative article that caused a $30 drop in the stock price should be investigated with equal intensity.

 

[STARR X]

Is it in Elon’s best interest to let the stock price fall for a while so the smart shorts get out? Was the negative NYT’s article just a helpful catalyst for this that Elon orchestrated? A squeeze would be kinda cool but I really do not believe this is what Elon wants. He just wants the shorts out.

 

[anon]

What concerns me most for next week is that even pro-Musk commentators like Andrea James and Gene Munster seem to have genuine concerns, with Gene Munster saying that it is "interesting insight into the mental toll...". If even people who follow Tesla closely like that came away with this impression, I think almost everybody will continue to believe that Musk is finished and we could be looking at a big drop again next week.

I'm really surprised that they think there is something new about Musk's mental state there, given that they must have seen him discussing lack of sleep, Ambien, and the pain of the Model 3 ramp before. Perhaps they just saw the account in other media, even further removed from context.

 

[madodel]

I don't have a Twitter but people should be going at him right now for openly gloating and then trying to walk it back like normal journalists gloat about crashing a company's stock price on Twitter.

Then again, this might be considered normal journalism these days at NYT.

I replied yesterday to his gloating tweet how people can report him to the SEC. The idiot bragged about manipulating TSLAs drop in price. Report him.

 

[YasB]

There is a lot of speculation here about the possible partners that may have an interest to aquire a big stake in a private Tesla. This ranges from the Saudis over Silver Lake, to current institutional investors and what not. A lot of people seem to believe in a buyout at 420$ a share and some are speculating, it might even happen at a much higher price. There seems to be little doubt, that big money is interested enough to actually pull this off. Meanwhile the shareprice is more than $100 lower than the supposed buyout price.

My first question is: If a) the interest is there and b) going private at $420 and keeping the current investors around is a realistic option given the legal constraints, why aren't those parties accumulating shares all the time? How can the stock trade where it is, if a) and b) are true?

My second question is: If a) or b) should not be true, doesn't that imply ... uh ... bad things, regarding the current investigation in Elons Tweets and the lawsuits?

I've tried to catch up with the current situation after my holiday and read most of the last 50 pages or so. If there was a convincing explanation regarding my first question, i must have missed it. From my perspective it looks like that deal isn't going to happen.

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Pretty much the only answer that makes sense in this context is because the Saudis know how important Elon is to Tesla and want him aboard. Owning 18% of a disruptive company (slightly less than Elon's 20% share) is so much better than owning 25% or even 50% of a company that is a burnt out shell of its former self.

That assumes the Saudis want a controlling stake, but Elon would not be willing to give up control. Yet they would still be available for a deal, where they do not get a controlling stake and have to pay more, since that's better than Elon quitting. Why wouldn't they just increase their current holdings at the discounted price to let's say 10% or 15%, leave it at that so they do not scare Elon away and safe a few billions in the process? And at the same time you'd have to assume non of the other interested parties is soaking up shares in the market.

 

[Matias]

There seems to be little doubt, that big money is interested enough to actually pull this off. Meanwhile the shareprice is more than $100 lower than the supposed buyout price. t.

Those two sentences are mutually exclusive.

 

[bdy0627]

He is clearly trying to walk back that tweet, which fanned the flames before the even bigger drop on Friday:

David Gelles: "Tesla $TSLA stock now down close to 4 percent in pre market trading. Wonder why?"

Will be hard to explain away the "Wonder why?" flippant gloating about other people losing money, some of them permanently: his article caused shareholders of an American company, of which company all progressive liberals should be proud, lose a billion dollars in value.

His biased tweet also calls into question the accuracy and impartiality of his article.

It is absolutely crutial to clarify whether his article, which was apparently a summary of an hour long interview, was a true, accurate representation of what was said in the interview. All involved journalists should preserve recordings and notes about the interview.

Both the SEC and the NYT should investigate whether David Gelles deceived investors with his article.

Perhaps, there is an opportunity for Elon and the Board to reveal falsities from that article, the Board more so. For Elon, it would be difficult to prove his version of the interview is different than what was edited and published. He could come across as whining and pouting by going after the NYT for the article. However, there are lots of things attributed to the Board in that article. One statement has already been suggested to be false, that of the Board actively searching for a COO. There was an article published the next day, in Teslerati I believe, refuting that claim. NYT can say their sources indicated to them what they did, so much of it likely comes down to hearsay. If the Board indicates that none of the claims are true, I'm not sure even then how exposed the NYT would be since it was citing anonymous sources who were speculating. The devil is in the details, and the real issue is the way the hearsay was depicted on the whole as factual rather than speculative. A journalist gloating on twitter about his article dropping the stock? As long as he (and the others) don't have any direct financial motivations, I don't think there is anything there for the SEC. That's one of the reasons why articles can be so powerful. How do you hold the writers accountable? You need rock solid ethical editors in that role.