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I appreciate the spirit of your comment, but, please have another listen to Elon Musk's comments yesterday regarding media coverage of accidents with Tesla's that have autopilot, and the potential impact of that "reporting" on the number of automobile fatalities.
RobStark
Well-Known Member
He said majority share in premium midsize sedans.
Then referred to the Tesla shareholder letter which has a graph with Audi A4,BMW 3 Series,Mercedes C Class, and Lexus IS. What the rest of the world calls premium compact sedans or entry level luxury sedans.
The list should also include 4 door coupe variants like the BMW 4 Series.
Causalien
Prime 8 ball Oracle
True. But I chalk it up to not being to handle it. Somewhere out there in the multiverse, there's one Elon that made the correct remark which made the stock price jump by $100. I can't think of good reply to these misinformation except maybe if I can instill fear in journalists like Peter Thiel had done.
RobStark
Well-Known Member
Musk's Own Borrowing Up as Banks Underwrite More Tesla Debt
Yes, as of March 15,2017 the loans were $624M.
Sorry, replied to wrong person.Fair enough. Though, If he takes the bet he's certainly not going anywhere.
The bet is an interesting idea, and I did run the numbers, but unfortunately the vol is too high for me to make this work.
Mod: unless I missed it, the bet post is gone, and either way this discussion about betting is finished. --ggr.
I'm going with Yoda on this and not opting for trying to instill 'fear', lols. Maybe an all on the table hour with Oprah would do better. Not really kidding there. Imagine Elon having that forum to make the case that AP is about dramatically reducing fatalities. I also suspect she'd be empathetic/corroborating as to how Orwellian media coverage can get.
I'd be good with an hour long Elon sit down with Andrea James as well.
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Causalien
Prime 8 ball Oracle
A better positive and more entertaining plan is to put a human driver and an AI driver through a "destruction derby" style game and have the ai come out unscathed. But that is beyond the current ai.
From the latest shareholder proxy statement:
"Includes (i) 33,632,421 shares held of record by the Elon Musk Revocable Trust dated July 22, 2003; and (ii) 4,220,620 shares issuable to Mr. Musk upon exercise of options exercisable within 60 days after December 31, 2017. Includes 13,774,897 shares pledged as collateral to secure certain personal indebtedness."
Based on these numbers, Musk owns approx. 21% of Tesla. The 13M Tesla shares pledged were worth about $4.3B on 12/31/2017, which is the date for these numbers. Now those pledged shares are worth about $3.9B. If he has already put up SpaceX shares as collateral for other or the same loans, that actually makes things worse, since he has less other equity to pledge.
Also note that Elon DOES sell Tesla stock, but only to cover the taxes due when he exercises his options. So he presumably sold or will sell some of those 4,220,620 shares to cover the tax bill of exercising his options.
The point is that this pledged amount keeps going up for a number of reasons. One, he is spending money like a drunken sailor. He is the majority funder for the Boring company. That company, like all his other ventures, is not cheap. One filing shows he recently invested $100M in it (Elon Musk just bet $100m of his own money on a boring idea).
SpaceX, while a great company, and has a bright future, and I would love to be an investor in it, isn't throwing off cash and may still be requiring cash infusions. The BFR development won't be cheap. And then he has a, what, 8,000, satellite constellation to build and launch?
And then Tesla stock price itself, which is what I'm worried about. If it keeps going down, Elon will have to keep pledging more and more Tesla stock until he's run out of stock to pledge and then it's massive forced stock sales. And yes, it is around $100-$120/share where the forced stock sales would occur, but institutional investors will be nervous long before that price point and start bailing in anticipation of the stock reaching that level, which would, of course, cause the stock to reach that level.
Look, I own a reasonable amount of Tesla stock (like 1,700 shares), so I'm not a short nor am I trying to talk the stock down. I'm long Tesla precisely because I believe Tesla will become another Amazon or Google given enough time and Elon stays involved. But I really wish Elon would tone down his personal spending spree for a bit to not give shorters another lifeline. All it takes is a real stock market correction for us to hit $200 and beyond. Hopefully the Model 3 ramp will take us out of the danger zone of a market correction soon.
ZachF
Active Member
It does.
It includes all variants of the 1 series, 2 series, 3 series, 4 series, 5 series, 6 series, and 7 series combined.
The Mercedes numbers include C, CL, CLA, CLK, CLS, E, and S-series (all types) combined.
If Tesla sells 130k Models 3s and 28k Model Ss, then Tesla becomes the largest premium coupe/sedan manufacturer of all types.
My numbers compare the company lineup(s) as whole to each other.
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I think the Board has forbidden Musk (or any other director) from pledging more than 25% of their shares. Presumably with the intent to reduce the chance of precisely the scenario you outline.
There is a some confusion over nuclear fission and nuclear fusion when it comes to the is it safe question, fission being the old somewhat dangerous type, fusion being the nascent safe type. A strong argument could be made that fusion is Tesla's biggest competitor (if they don't adopt it), especially 10-20 years from now.
It's anyone's guessing game how leveraged Elon really is. For example were these loans just a cheap way to avoid paying income taxes and there is a large different liquid asset base to offset the liabilites? Or is it all pumped in hyperloop, the boring company and capital raises for TSLA and SPaCeX? Who knows. But it stands to reason that as the stock drops, bankers will request more and more shares pledged. If they need $4B collateral to back a $1B loan when the stock price is $320, they are not going to be happy with $2B collateral when the stock is $160. Secondly, his pledged worth of TSLA has only gone up. There is no reason to assume it won't go up over the next 12 months as well.
Obviously, Elon is not going to be margin called. The bigger risk is a smaller drop and a capital raise needed where Elon can't participate, effectively diluting his part in the company. I can't quantify how big that risk is, but I do know that I want Elon to have as large as possible a slice in TSLA.
"You can't build an internet company that competes with the biggest banks in the world."
"You can't build a rocket company, no one can do that. Countries can't even do it."
"You can't build a car company, everyone that has tried has failed. Even GM failed."
"You can't land rockets. Not even NASA could do that. No one can."
"You can't make cars people will buy. No one will trust you."
"You can't sell that many cars, there isn't enough buyers."
"You can't make a rocket with 27 engines, it won't work."
"You can't make a mass market car. You will fail, no one else can do it either."
Today
"You can't be mean the analysts who literally re-ask questions that were just answered".
Pack it up boys, we got this far, but taking questions from a regular investor...that is it...we're done here. Can't get past that.
"You can't build a rocket company, no one can do that. Countries can't even do it."
"You can't build a car company, everyone that has tried has failed. Even GM failed."
"You can't land rockets. Not even NASA could do that. No one can."
"You can't make cars people will buy. No one will trust you."
"You can't sell that many cars, there isn't enough buyers."
"You can't make a rocket with 27 engines, it won't work."
"You can't make a mass market car. You will fail, no one else can do it either."
Today
"You can't be mean the analysts who literally re-ask questions that were just answered".
Pack it up boys, we got this far, but taking questions from a regular investor...that is it...we're done here. Can't get past that.
Why is it obvious that Elon can’t be margin called? There are lots of public companies whose CEO/founder pledged shares and did indeed get margin called, resulting in a stock price debacle.
Could NLP trading algos be a major contributor to the price drop? If I trained an NLP algo on prior data and then read a transcript that the CEO of a company says to sell the stock, that might trigger a big selloff (not to mentioned all the negative media articles posted after).
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