TSLA Market Action: 2018 Investor Roundtable

[Rarity]

But it's not even an offer yet. The board is evaluating the possibility of an offer.

 

[S3XY]

You really don't know anything. Uber allows some of its former employees keep their stock compensation.

Then we all become Tesla employees for a day and keep our stock when they go private.

 

[wipster]

That's not wonderful advice, considering how the last 10 years, alphabet went up about 3-6 times, depending on what part of 2008 you select, while SpaceX went up about 42 times over.

Jayjs20, how do you know that? Don't take this wrong, I'm just curious...

 

[Singuy]

I was using the case example you provided - "you" were the guy offering to buy Tesla at $415 per share.

My point is, if it's a non-serious offer, of course it need not be reported. But Elon's plan is deadly serious - funding has been secured, and it is "certain" to proceed, contingent only upon a shareholder vote. Of course the Board is duty bound to file a report on such an offer.

Above you said $415, now you're changing the example to $315 - of course that too, is a materially different offer. A pointless offer would not require reporting, but a serious one would.

No, I never said that an external party securing undisclosed funding would require reporting by Tesla - again, I was using your own example, in which 'you' DID present your offer.

Not sure what you're trying to illuminate with all these variations and subtleties. For me it's pretty simple - a serious offer should be disclosed promptly. Elon has prepared a serious proposal, secured funding, communicated to employees, stockholders, and the Board. Proper disclosure is a no brainer.

Are you sure? Because wall street and shorts are saying Elon woke up Tuesday and decided to sabotage himself and his company. They are all betting that he was sick and tired of his life and mission and wants to spend the rest of his life in a prison cell.

 

[lmaccaro]

Elon staying silent on this is almost certainly a bear trap.

"Oh but surely it would have leaked...."

The investors going in on this likely already own some amount of Tesla stock. They have a huge financial incentive to NOT leak anything. The more bears caught in the bear trap, the less it costs to take Tesla private.

One example theory I like (sorry I forget who came up with this): Tesla could offer 27% of float as a new offering as part of the process to go private and let shorts cover from that. It would generate $14B of working capital overnight while not expanding the ownership base one iota.

Or they could let the short squeeze occur as all the shorts are forced to cover when voting shares are recalled, push the stock price up, and let the vote fail. Then shrug their shoulders and go home, shorts burnt to a crisp. What if all the shorts come back a second time? Run the whole process again, this time at $430. Every time you have a vote, all the shares get recalled, and at 27% float shorted the stock price raises by 1/5th just from the fundamentals of all the shorts having to close their positions.

There is probably a market term for this, but the "true" share price of Tesla is already $433 or so, if 27% of float is short (price will go up as 21% of outstanding long shares disappear when shorts close out).

Does anyone know what that term would be?

 

[gwright]

BUMP! This is what has been in my mind the entire time.

i expect an 8k
https://www.sec.gov/files/form8-k.pdf

followed by an S4 at some point, which will detail the exchange offer
https://www.sec.gov/files/forms-4.pdf

some people i’ve talked to (that handle regulatory reporting for public companies)
weren’t convinced an 8k was needed yet
..they said a handshake agreement between em and a funding party isn’t yet “entry into a material definitive agreement”
but i dunno.
there’s other items to be included on 8k that may require a filing. i guess it depends on what is really going on behind the scene (obv we don’t know).

I would think the problem with NOT filing an 8k would be that Tesla disclosed that Elon's twitter feed was an acceptable place to provide information about the company. In this case, there is no way to determine that he is speaking in an individual capacity rather than as CEO of TSLA.

If I were advising the board, particularly after they acknowledged the discussions were occurring at the board level, how could they NOT file, even if it were under the more general 8.01 section regarding disclosure of information "deemed important" to shareholders? Even if Elon WAS posting in a personal capacity, given the attention, the Board's announcement, and each Board member's duty to shareholders, I cannot imagine they wouldn't file, even if only to say that "Elon's group has made an offer, but the board is still mulling and a material agreement has not yet been reached to take to the shareholders for a vote."

 

[Fact Checking]

interesting the current price is pretty much exactly where the convertible is equity neutral

par 1000 / 2.7788 = 359.8675

so they take off their hedges (make money on that) but exchange basically 1:1 with market pricing ?
is that what’s going on the last two days.. unraveling the hedge, and initiating their conversions?

Not enough buying/selling power: the 2019 convertible notes have a face value of $920m, which is ~2.5M shares at the initial conversion price. Even if all of the note holders decided to take profits (unlikely: the whole $420 plus the potential short squeeze is a high payoff free ride with face value being paid back in the worst case), it 2.5M shares probably wouldn't be enough to explain today's price action - let alone the last 3 days.

My guess is that either more shares or a highly leveraged options position is behind it.

 

[EinSV]

@KarenRei I tried to buy SpaceX stock earlier this year through Equidate, a platform that allows buying privately held shares, but it was a total bust. My understanding is that SpaceX has a right of first refusal on privately owned shares that otherwise would be sold to the public and that as a result SpaceX shares are rarely if ever available for purchase. <snip>

@KarenRei a reliable source told me that they have purchased SpaceX shares through equidate (www.equidateinc.com) so it appears I just did not try hard enough. There may be other platforms that also work.

 

[MartinAustin]

Tesla Board To Meet With Bankers Next Week - Sources

TSLA rocketing up AH as CNBC reports this

 

[Jayjs20]

Jayjs20, how do you know that? Don't take this wrong, I'm just curious...

This link was posted yesterday

Space Exploration Technologies | Invest or Sell Shares | SharesPost

10 years ago, it was 3.88. Today it's 169. I suppose it's up 43.55 times over, not 42.

 

[EarlyAdopter]

Anyone know why the stock just jumped up $12 after hours on decent volume? I don't see anything on ir.tesla.com yet.

 

[gtrplyr1]

Looks like Elon may have found some spare change under the cushions : )

Cheers to the longs ....

Hope the shorts lose their houses.

 

[Boomer19]

Can't initiate the accelerated conversions except in accordance with:

.... if we are a party to a consolidation, merger, combination, statutory or binding share exchange or similar transaction involving us pursuant to which our common stock would be converted into, or exchanged for, cash, securities or other property or assets, or any sale, conveyance, lease or other transfer or similar transaction in one transaction or a series of transactions of all or substantially all of the consolidated assets of ours and our subsidiaries, taken as a whole, the notes may be surrendered by a holder for conversion at any time from or after the date that is 30 scheduled trading days prior to the anticipated effective date of the transaction (or, if later, the business day after we give notice of such transaction) until the close of business on the 35th trading day after the actual effective date of such transaction or, if such transaction also constitutes a fundamental change, until the close of business on the business day immediately preceding the relevant fundamental change purchase date...


A “fundamental change” will be deemed to have occurred at the time after the notes are originally issued if any of the following occurs:

(1) a “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than us, our wholly owned subsidiaries or our or their employee benefit plans, files a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such person or group has become the direct or indirect “beneficial owner”, as defined in Rule 13d-3 under the Exchange Act, of our common equity representing more than 50% of the voting power of our common equity; S-45 Table of Contents

(2) the consummation of (A) any recapitalization, reclassification or change of our common stock (other than changes resulting from a subdivision or combination) as a result of which our common stock would be converted into, or exchanged for, cash, securities or other property or assets; (B) any consolidation, merger, combination, statutory or binding share exchange or similar transaction involving us pursuant to which our common stock will be converted into cash, securities or other property or assets; or (C) any sale, conveyance, lease or other transfer or similar transaction in one transaction or a series of related transactions of all or substantially all of the consolidated assets of ours and our subsidiaries, taken as a whole, to any person other than one or more of our subsidiaries; provided, however, that a transaction described in clause (A) or (B) in which the holders of all classes of our common equity immediately prior to such transaction own, directly or indirectly, more than 50% of all classes of common equity of the continuing or surviving corporation or transferee or the parent thereof immediately after such transaction in substantially the same proportions as such ownership immediately prior to such transaction shall not be a fundamental change pursuant to this clause (2);

(3) our stockholders approve any plan or proposal for the liquidation or dissolution of us; or

(4) our common stock (or other common stock underlying the notes) ceases to be listed or quoted on any of the NASDAQ Global Select Market, NASDAQ Global Market or New York Stock Exchange (or any of their respective successors).​

thanks, sorry to keep at this,

but i thought that convert holders can convert directly with agent at pre-defined times every quarter, until dec 1 2018 at which point dtcc window is open for conversion and the conversion rate is then static for all converts.

once the exchange offer filing is official, is when id expect the rules you listed above to come into play...which i found way deep in the prospectus under the material changes portion (dividends, rights offer, exchange offers, etc etc)

just trying to understand. thanks again

 

[Fact Checking]

Then shrug their shoulders and go home, shorts burnt to a crisp. What if all the shorts come back a second time?

Unlikely I believe: if I'm reading the hedge options positions correctly at most half of them are hedged against a significant short squeeze. This means that a short squeeze could possibly be epic, generating, 10, 20 or 50 billion dollar losses.

The shorts won't be coming back: most of the big players will I think have bankruptcy and a default event behind them. The only place they'll be shorting Tesla will be in a demo account.

 

[Cosmacelf]

Can't believe it's down to $350.

Well, I unloaded shares in another stock and put more into Tesla.

10% of me wants to go get a loan and put in some more, but that's too absurd.

Well, either we're all crazy or they're all crazy.

Guys, no matter what happens, after this is resolved, we all need to meet at a bar somewhere....

 

[Mkorpal]

Link for the report
Tesla board plans to tell Elon Musk to recuse himself, prepares to review take-private plan

 

[The Blue Owl]

Tesla board plans to meet with advisors next week to ramp up going-private talks, likely to ask Musk to recuse himself from process

 

[Joe F]

Tesla board meeting with advisors next week RE going private, asking Elon to recuse himself from process.

Breaking on CNBC

Stock up AH.

 

[jhm]

I have been a long-term bear, but I can't believe Musk is actually lying about the funding being secured and only the shareholder vote being necessary. I went long calls today at $357.50

 

[ggies07]

Hmm, I forgot that one. I keep thinking of these two:

Elon Musk on Twitter

Elon Musk on Twitter

Could make sense - China needs to move into renewable energy/production ASAP, helping take Telsa private could ramp growth at a quicker pace....There's a great synergy between Elon/Tesla and China....unlike here in the US, which the naysayers just dropped the stock, proving people here do not understand the transition that is happening.