TSLA Market Action: 2018 Investor Roundtable

[cricketman]

First they ignore you, then they laugh at you, then they fight you, then you win.
Mahatma Gandhi

We are at 3th level.

Exactly, this is all that needs to be said

Buy the dip and hold tight!

 

[DragonWatch]

Watched the start of yet another season of survivor tonight (pre-recorded) and the two tribes are David vs Goliath. I thought how appropriate, the story of my life. Then it was time for bed; first I looked at the after hours stock action ~ shocked, I came here trying to make sense of the knife drop.

Todd I loved your comment as a veteran, thanks for writing out what was on your mind ~ I agree with you. I originally enlisted during the Vietnam conflict (2May69) but I had noticed back when I was transitioning from junior high to high school we as a people were taking things away, as opposed to adding to better ourselves. Our graduation picnic was done away with because the last couple of classes abused the privilege.

Jack a few month’s back got upset about a seeingly derogatory comment referencing those of us that served, and rattled off his list of medals. Someone here played down the intelligence of those of us that serve. First, I am lucky my wife uses a choke chain collar on me these days, because I cannot stand having someone thank me for my service. Just as my right upper lip starts to rise, and the low level growl is only audible to her ~ she yanks hard. Instead, what the receiver just herd was “thanks for your thoughts.” Anyway, Jack I have a pile of medals on the floor (citations and orders) that I am about to shred; because no one cares. When I retired in January 1994, I only had one army commendation medal; that was for a manual driven leadership war game I designed, and published for worldwide distribution. The other five were meritorious medals. During my officer career, everyone got an ARCOM at the drop of a hat when they left a major command. I was like Miky (sp) in the commercial years and years ago “ give it to Miky, he’l eat it.” Jack, herd a good quote from the movie Black Panther ~ something to the affect “spent most of my life serving my country, never thought I would wind up trying to save it.”

Recently, I said here that “Tesla is bigger than Elon” and I meant it. Twice before, solar power was beaten back by fossil fuel, but this time is different. The electric car was tried and failed twice, but this time is different. You may only remember the movie of “who killed the electric car.”

Lodger, no I do not believe a military officer could replace Elon. Unless, and I say again, unless they served three or more years enlisted, obtained their commission from OCS and spent most of their time in the field, then I would consider them. My father, a WWII veteran, was bumped and fired so a retired general could take his promotion to VP at Northrop. My father, as an NCO was the go to guy when B29 navigators needed better head space and timing. Do not worry, my father wiped their butt in court; but moved onto a better job away from Northrop.

None of this is about me whatsoever (hope that is spelled correctly). Elon is David, in a sense, and despite all the turmoil and FUD; of his own creation or outside interests, Tesla will succeed come hell or high water. I have never met a disgruntled Tesla employee, I looked as an investor. Every time there has been a problem, Tesla and employees have risen to the challenge ~ they drop back and punt. Years back when two or three key employees were lost in a small plane accident, Tesla grappled with the loss and moved forward.

What this is about for me is the kind of world my GrandPups will live in once I am gone; yes I know way too many wish it was sooner than later that I might leave I do not give a gD about the money, the country, or the gods ~ I care about my family and Tesla. There is only one Elon; otherwise none of us would be digging through all this fossil fuel poo looking for our pony (that Model S, X or 3). Thought I would goof up and say Model K again too didn’t you I am looking forward to the Y, Semi, and my pickup. These are the times that try ones soul The Tesla employees are good people trying to ensure the company succeeds. I am all in and long.

 

[MXWing]

First they ignore you, then they laugh at you, then they fight you, then you win.
Mahatma Gandhi

We are at 3th level.

I really hate that quote now because Elizabeth Holmes of Theranos used it - and she is a legitimate fraud.

Let’s not create any bridges between Holmes and Musk please.

 

[Artful Dodger]

@SVT Shortville Times: 4:00 pm Sep 27, 2018

“Considering taking Musk private. Jury secured”.

 

[gora321]

This is the critical moment for shorts. It would be break it or make it.

It is the last and only chance for shorters to do something. They are running for life, not Elon, but shorters. All facts are against them. All FUD is revealed. They have 0 chance for success and they know it.

Stay focused on facts. Next week will be mind blowing!

 

[Fact Checking]

Price action: early trading is now open on NASDAQ as well, and $TSLA gapped up and was trading at $275.50, now trading at around $273.

I'm wondering whether Elon is going to counter-sue the SEC, for libel and slander, and for reckless illegal price manipulation performed just two trading days before a critical corporate event that would prove the 'short thesis' outlined in the SEC's complaint largely moot:

"15. In 2018, stock analysts and investors increasingly began to question whether Tesla could meet its previously announced production targets and begin to earn sufficient cash in order to sustain its operations and pay its existing debt load. By August 2018, more than $13 billion worth of Tesla shares were being “shorted,” meaning they were sold by investors who did not own them at the time of the sale. Investors who sell stock short typically believe the price of the stock will fall and hope to buy the stock at the lower price to cover their short positions and earn a profit. If the price of the stock rises, short sellers who then exit their short positions by purchasing the stock at the higher price will incur losses."

https://cdn.pacermonitor.com/pdfser..._Exchange_v_Musk__nysdce-18-08865__0001.0.pdf​

Why is the SEC uncritically repeating Tesla FUD in a legal filing? Why did they do this just two trading days before the production report that would falsify the above false, at best outdated characterization of Tesla's production targets?

Why is the SEC, a taxpayer funded government agency whose core purpose is to protect shareholders, making legal arguments that regurgitate false, discredited talking points by shorts, in an attempt to protect Tesla anti-shareholders (short sellers), while hurting real Tesla shareholders via hasty enforcement action?

Shouldn't it be exactly the other way around?

 

[MXWing]

@SVT Shortville Times: 4:00 pm Sep 27, 2018

“Considering taking Musk private. Jury secured”.

I would give all my shares to be on that jury. Trial of the century.

Though I’d probly get whacked under peremptory challenge wearing a Boring Hat into the court room.

 

[gora321]

This is probably recharge by shorts. Europe trading aprox -11%.
Be prepared for dip from this recharge and remember, time is working for us!

 

[Artful Dodger]

Lodger, no I do not believe a military officer could replace Elon.

Good comment, DragonWatch, you don't disappoint. However what I said was that Telsa could look to retired miliary Senior Officers for hard-working, durable Executives. Not like the shrinking violets we see quitting these days: "oh wah 104 hr work weeks boo-hoo..."

My first C.O. did those kind of hours for 20 years, whenever they needed him. And I worked my butt off for him, 3 years straight with 1 day off. Best time of my life, too.

Cheers!

 

[Lessmog]

The removal of him as CEO things just smells so bad as it follows the WS last mantra that one cannot avoid thinking that the SEC not acting without outside influence.

Also, for the SEC to allege his actions caused mayhem in the market whilst completely ignoring what has been going on in the press dictated by interests against the success of Tesla’s mission is also pretty smelling.

This action truly appears to me to be demonstrative action that indicates a lack of objective enforcement of securities laws, rather, it appears to be tortured interpretation of vague language in order to suit outside influence, political and otherwise.

I pray our justice system is able to maintain its integrity and adjudicate these accusations properly.

I believe Elon Musk is not guilty of the accusations leveled.

I believe that Elon Musk remaining as CEO is material to the continued success of Tesla.

I continue to support him fully as a shareholder as CEO of Tesla.

Fire Away

Not so pretty smelling? The rest, I agree.

SEC should lead by example if they demand clarity in communications. As has been mentioned repeatedly while I was asleep, those who lose when TSLA gains are basically the shorts, who are BY DEFINITION NOT INVESTORS.

This is all just another shameful sham. My suspicion is that the timing aimed at reducing the shame from yesterday's hearing and today's probable blind confirmation of this /sarcasm/ utterly well-balanced, mature person as the final arbiter of justice in the US. /end sarcasm/

 

[schonelucht]

Reading to pages and pages of apologetics here... While the approach of the SEC is seemingly aggressive and in stark contrast with other cases where it also could have reacted but didn't (to this extent), this is entirely self-conflicted.

Now the lawsuit is just their side of the story and Musk will answer through their laywers. But the SEC has subpoena powers and used them on Tesla related parties. Therefore, I consider it near certain that the citations from internal Tesla/Musk communications are genuine. They do paint a picture of a 'Saudi deal' that was barely discussed. (30-45 minute meeting, his own IR department having to verify the authenticity of his intents with his tweets, his own board barely being on board). Even something as basic as the share price had not been discussed. The lawsuit makes the case that Elon made a lot of promises over twitter that he should have known to be difficult to keep (and therefore being reckless). For example that retail investors could continue to invest.

Contrary to @Fact Checking who's contributions I highly value, I am not so confident that the other deal concocted post facto provides relief. First of all, we have the CFO of the lead investing company being on the record that they did not consider taking Tesla private. The most likely take on that is that this second deal suffered from the same ills as the first : it being assumed a 'done deal' on the Tesla side while barely a 'proposal' on the other side.

Full disclosure : I have just liquidated my small Tesla position over this. I am ready to sit this out and buy in at higher prices should Tesla overcome this but the exposure to more downside is just too large for me.

 

[avoigt]

At days like this its best first having a good sleep which I had.

I guess we all agree it never is boring with Tesla. Actually I enjoyed the last days where we had a calm no news situation with a SP moving up in anticipation of good numbers next week. Thats gone for now.

We don't have yet all information but I read what is available and expect more information to be released in the days to come.

First of all there is a lot of excitement , fear and even panic here and in the press about a lawsuit for Elon and it should be clear that this will have zero impact and effect on the strong fundamentals Tesla has and is about to have in the future. If I could choose between that SEC lawsuit and weak delivery, CF and profit numbers guess what I will vote for...

So lets all not get distracted from a fundamental amazing quarter we are about to see and honor it. Its human that our ability to see a situation clear is usually captured by emotions. I only can say that all longs who are uncertain now should stay away from news channels and let the dusk settle before they act. Otherwise they will pay a price to the shorts who of course will attack with full force. Thats the hard part of investing.

To be clear all of those is not good and the SEC did a fine job to write down all the allegations they have in detail. Many people will be distracted and mislead by it. Obviously they used the documents received before from Elon without additional consultation and interpreted them in a way that can be argued.

The writing sounds strong but the chain of arguments and conclusions is in my view weak. If you imagine that they have to prove intent than its even weaker. If intend falls away all they have is a CEO making a wrong uneducated statement because he did not know better at the moment of the tweet. Well, that happens every day with CEOs and if they want to remove all CEOs from their position based on making a wrong uneducated statement than we won't have many left.

Also I am not convinced that all information are in the hands of the SEC yet. Elon may be able to debunk most of the allegations with good lawyers are more information he brings to court. I still do not buy into the allegation they make that Elon did not have a verbal agreement from parties and the defending later should also raise the question if it not would have been misleading the investors not to inform the public what he intends and be transparent. Would love to hear a good lower making that case.

If you read an allegation document you should always imagine how the defending party will write their piece. I would love to have it but find with my limited information already a lot of arguments and conclusions I would pull. Also the SEC piece has a lot of areas where you can with documents make their conclusion provenly not correct or not accurate in their interpretation.

Nevertheless this is not nothing and the market reaction of -10% in Germany based on 20k shares traded sounds bad too. But we tested 250 before and there is still a long way to go down there. Right now it does not look like panic selling here in Germany but given the low volume won't tell us much. US futures look the same. Uncertainty is bad for a stock and this uncertainty will remain but just only because its a threat to remove Elon. If that happens (which I doubts) he still will be a key person in house and Tesla will continue to prosper like before.

For me I have to say what can happen in worse case will not impact the fundamentals so my investment thesis is not in question. Elon removed would be bad but there are ways to keep him in charge and frankly said I would be surprised if a judge makes that sentence on the basis what the SEC has presented.

Finally for those of you who have seen the Joe Rogan show may remember what Elon said about Judges? He said the are making a fine job. I believe that statement can help him as well.

Repeating myself like a broken record:

"be greedy when others have fear". This is one of the moments where a SP is strongly affected by not fundamentals and in my view temporary news and excitement actually about an officer. That fullfills all aspects of my investment rules and therefore me adding more is logic! Not an advice ... just my modest view.

 

[heltok]

Pre-market 275,00 −32,52 (10,57 %)

 

[dqd88]

If this all boils down to "funding secured" or not. Is there any indication that SEC have had any contact with the Saudis? Couldn't all of this just be settled with a simple conversation. Maybe the Saudis have shied away from all contact since they weren't too happy with how public their involvement became.

Its seems that the SEC did talk to the Saudis and the Saudis confirmed that they talked w/ Elon. It seems this will come down to exactly what was said and exactly what was meant between Elon and Saudis.

 

[Fact Checking]

Contrary to @Fact Checking who's contributions I highly value, I am not so confident that the other deal concocted post facto provides relief. First of all, we have the CFO of the lead investing company being on the record that they did not consider taking Tesla private. The most likely take on that is that this second deal suffered from the same ills as the first : it being assumed a 'done deal' on the Tesla side while barely a 'proposal' on the other side.

Well, specific details of funding aside (another contemporary article only mentioned 'German carmaker', not Volkswagen), the WSJ article outlines the Silver Lake / Goldman Sachs buyout plans:

Public Bravado, Private Doubts: Inside the Unraveling of Elon Musk’s Tesla Buyout
​

Silver Lake and Goldman Sachs made that presentation to Tesla's board on 24 August because they thought it's possible to do it, and were waiting for board approval to move forward. There were no deadlines: if they weren't certain yet they could have worked on it a few more days or weeks.

I.e. Silver Lake and Goldman Sachs thought that going private was possible, with funding secured and possibly committed already, up to 30 billion dollars.

Or is it your argument that the WSJ article is entirely made up and not just inaccurate about the Volkswagen detail? My opinion of the WSJ's political values is not particularly high, but in terms of business reporting making up stories entirely is not their style.

The Dell deal took over 6 months to organize:

Timeline: How Michael Dell's Takeover Bid Got Hatched​

I.e. Silver Lake's own involvement in both the Tesla and the Dell deal seems a strong, independent demonstration that it only took two weeks of effort to secure another going-private source of funding to the level of asking further buy-in from the board to proceed.

The Silver Lake / Goldman Sachs buyer obviously wasn't a thing yet when Elon tweeted, but it supports his belief that funding was secured, which could have been based on two independent elements: the Saudis already bought 5% and expressed interest in going private, and he might have been of the conviction that it would be easy to find another source of funding, to make buyers compete.

That's all Elon has to say to the judge or the jury:

"I was under the firm conviction that the Saudi interest was genuine and strong, supported by their words to me on July 31 and their actions of buying a 5% stake on the open market, and I was also convinced that I could also get other sources of funding if required.

The only thing that I was uncertain about was shareholder support: what would institutional and retail investors think about the deal, would they vote in favor of it? And that is why I informed them about the going-private efforts."​

If that's what was Elon's state of mind then that's incontrovertibly supported by all available evidence and is entirely consistent with all his communications, both public and now published by the SEC.

Note that the SEC appears to have subpoenaed every key player's tweets, probably from phone companies directly. If there was anything contradicting such a story, it would been mentioned in the lawsuit. The worst they could find was the apparent joke of the $420 price: the 20% premium Elon calculated resulted in $419 and Grimes apparently told the SEC that Elon rounded that up to $420 as a joke.

I.e. the silence of the SEC's complaint about any genuine proof of deceit on Elon's part is pretty damning against their lawsuit as well.

 

[Lessmog]

lose for shareholders? Shares public are the same shares private. Current price only matters if you selling.

And, as has been hashed (sorry) over over and over over the past month+, some would be forced to sell if taken private. For varying reasons, but still. THAT was the absolute hurdle that stopped the privatisation. Did you happen to miss that?

Myself, I'd manage. I think and hope. Others maybe not. Elon listened and folded out of compassion with them.

 

[j0hn]

only -9.5% premarket now. lets see where this goes. either games being played by shorts to prevent the uptick rule or realisation that it is oversold and traders are stepping in.

 

[Artful Dodger]

Game on buddy! Wild 8 ball says after the early dip it will bounce up to close at the current daily bottom bollinger band of $270 or $281 which seems to be previous support/resistance. If pass that then $290.

Actually just Forget it, TA doesn't apply today. It’ll surely be up to the Saudis vs. Chanos

Closed: Sep. 28, 4:55 a.m. EDT
Pre-market 276.50 −31.02 (10.09%)​

Notice the % drop vs Thursday's close? They'll stay just over the -10% trigger for the Short selling rule. They don't want to repeat their mistake from 2 weeks ago when they were restricted from shorting for 2 days.

(Bitches)

 

[YasB]

Yeah, and here's a quick list of major flaws in the the SEC's lawsuit, which all make the lawsuit internally inconsistent to the level of absurdity ...

Sorry, but enough is enough. The SEC seems to have a problem with Elon tweeting 'Funding secured', when he didn't have it secured at the time. He may have had 'verbal approvement' by the Saudies for .... well ... what price and stake did they agree on and how was the structure of the private company supposed to look like?! Right. You argue that 2 weeks later, he had the funding secured. First, that is irrelevant for the earlier tweets. Second, the article you linked to support your claim says:

On Monday and Tuesday, advisers from Goldman and Silver Lake plowed ahead on a deal that might work.

By Wednesday evening, they had a presentation for Mr. Musk, proposing a roster of deep-pocketed investors, including Volkswagen and Silver Lake itself, that had agreed to contribute as much as $30 billion, people familiar with the matter said. [...] They weren’t the kind of investors Mr. Musk had in mind. He was deeply suspicious of rival car companies, believing they wanted to piggyback on what he called the “Tesla halo.” He also was lamenting a loss of small investors, who had been his most vocal champions. [...] Finally, the deal team advised him, the money would likely come with strings attached: The new investors would want a lot of say in the company, and each would likely want to hammer out terms of their own.

Again, the structure of a private Tesla isn't clear. The article doesn't mention a share price or a timeframe. Before that presentation Musk doesn't even seem to have thought about Volkswagen. How could he have secured that investment with an formerly unknown party? And should there actually have been binding agreements (as opposed to preliminary agreements, letters of intend, verbal stuff) you can be pretty sure the SEC saw them before they sued.

Wasn't it the duty of Elon to inform Tesla shareholders about the efforts that were considering taking Tesla private? Why does the SEC start enforcement action against disclosure of true facts?

Obviously the SEC doesn't share your view about how secure funding was, AFTER TAKING A LOOK AT TESLA INTERNALS.

The SEC complaint is asking Elon to "disgorge gains": "Ordering Defendant to disgorge, with prejudgment interest, any ill-gotten gains received as a result of the violations alleged herein;". But Elon did not sell or buy any stock in this time period, so the gain is zero.

Right. He bought several weeks before that tweet and announced a short squeeze. Maybe he didn't realize direct monetary gains, but was able to avoid losses? Maybe it's just legal boilerplate, that has to be in there, just in case there have been gains? Again, you probably don't know anything about this, while the SEC does. But still you are trying to construct a contradiction from it.

Considering the +6% price action caused by Elon's tweet as "harm to investors" is laughable:

Is a certain action more legal or less illegal because the stock price moves only 6% instead of 20%? Can you please show me the law that's saying "Oh well, as long as the stock only moved by [epsilon] it's fine"?

Secondly, the SEC is on very thin legal ice defining short sellers as "investors": when Tesla stockholders gain, shorts lose, and when Tesla stockholders lose, shorts gain. So per definition it's the fiduciary duty of Tesla's board and Elon Musk in particular to help Tesla shareholders, which causes losses to short sellers. Shouldn't the SEC be enforcing the interests of Tesla shareholders, instead of the interests of Tesla anti-shareholders?

Cool. Some more opinion you disguised as a fact. Who are you to define what an investor is and if shorts are protected by security laws? You also omitted the losses Tesla longs may have had to take, when they bought more at $350+ assuming that funding was secured and nothing but a shareholder vote was needed to finalize the deal. Last but not least the SEC of course shouldn't enforce the interest of Tesla shareholders. They should enforce the law. Again you pretend to know more than the guys doing this for a living.

Why did these SEC lawyers rush enforcement action, and why did they hurry to file the lawsuit just two trading days before the critical Tesla Q3 production report, which is expected to be hugely negative to shorts sellers.

You insinuate they have been rushing, but you can't know. You assume the Q3 report is negative for shorts, but you don't know. You are implying between the lines, that the SEC has some other, dark and ominous motives, to do what they did and base this on your unbacked assumptions. Facts? Not so much.

I believe the SEC lawyers who wrote this complaint should be disbarred for recklessly rushing a frivolous lawsuit that caused billions of dollars of damages to investors, and each and every SEC employee involved in this debacle of a lawsuit should be investigated for illegal leaks and illegal ties to short sellers.

I believe it's hilarious, that you dare to call yourself 'Fact Checking' and write stuff like this. Right now you seem to be in 100% full denial and conspiracy mode, which is dangerous.

End.

 

[Fact Checking]

either games being played by shorts to prevent the uptick rule

They cannot really avoid it: ~$276 is the threshold and it's triggered if TSLA opens below that or anytime during the day. They could keep the price above $276 throughout the day, but they'd risk two things:

• They'd offer liquidity to any investors who got cold feet due to the SEC lawsuit that could take years to resolve
• They'd also set themselves up for Tesla potentially rushing the Q3 delivery report and release it on Monday, before trading opens. That would catch the shorts with pants down.

So I think today shorts will either hold or maybe even cover at these advantageous price levels, and price action would be defined by genuine, real investors selling or buying TSLA.

or realisation that it is oversold and traders are stepping in.

That seems the more likely explanation to me so far, from seeing the early trading price action:

• pre-trading price isn't really conflicted but moving up in bursts,
• volume is higher than average but still much lower than regular trading volume,
• i.e. there's no signs of sell pressure caused by investor panic - but there are signs of opportunistic buying.

I suspect the WSJ article characterizing the possibility that Elon would be barred as a CEO as remote also helped.