TSLA Market Action: 2018 Investor Roundtable

[Don TLR]

If I didn't follow this thread and inherently trust Elon when he says/tweets something, I'd be scared & confused. I think that's the only way to read the movement today. People are spooked from all the chatter of SEC investigations and all the claims Elon is lying or might be lying. #Insane

This thread gave a new investor like myself (only other stock I bought was Sirius) the confidence to dump a bunch of cash,, to me, in it for the long haul. That and I own a kick a$$ car to boot..

 

[brian45011]

Am I missing anything?

The options market and possibly the effect that convertible note holders will likely have a windfall with their right to convert accelerated (and at share prices appreciably higher than previously anticipated.)

 

[Joe F]

"I'm bored"...

"(not a) flame-throwers are fun"...
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I could go on as there are so many, but this thread is big enough. Sure wish folks would stop replying to bums on a beach that you'd probably skirt around and ignore rather than engage, but I guess that's just me.

If anyone doubts^H^H^H^H^H^H THINKS Elon's tweets are the musings of a less than honest person who does not intend to follow through, by now, I have a Roadster in space video which should be a harbinger of future events.

EDIT: Stupid mind numbing day catching up with this thread: If anyone "THINKS" not "DOUBTS"

 

[Boomer19]

The options market and possibly the effect that convertible note holders will likely have a windfall with their right to convert accelerated (and at share prices appreciably higher than previously anticipated.)

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?

 

[c041v]

After thinking I'd be content to side on the sidelines with my long held common, I caved today, moved some things around and increased my position. Love reading the commentary and the last couple days have admittedly not been my most productive at the office.

I'm a fellow Canadian with TFSA/RRSP holdings, curious as to how this will all pan out, but that's a problem for another day.

 

[Unpilot]

Long time TSLA bear Kevin OLeary says shorts should be sweating bullets

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Darn it...STOP making me watch CNBC clips!

 

[neroden]

What are the thoughts out there on this event being taxable when converting to private shares? I would hate to pay 15%+ on my gains. The offering price should cover this.

Wife in the tax field say no way to avoid tax.

Delisting + tender offer would be nontaxable. (Company would still be "public" for SEC reporting purposes, and would be the same company, but stock would not trade.) Every other deal structure I can think of would be taxable...

 

[Cosmacelf]

I wonder if Elon still might go on the Joe Rogan show today?

He was scheduled to go on? How did you find out? When does it usually come out on YouTube?

 

[Dan Detweiler]

I think we all have to admit the way this was executed was bad. I can’t imagine the board is all that thrilled with the tweet, but if everything goes through I guess all is forgiven.

How do you know the board wasn't fully aware of, and supportive of how all this rolled out? Nobody does.

Dan

 

[Curt Renz]

Nearly an hour ago CNBC interviewed Robert Peck, Credit Suisse global head of internet investment banking.

In answer to a question regarding taking Tesla private at 2:56 minute mark,

“I can’t comment specifically on any client that we have or prospective client that we have…”

Link to video: Nasdaq trying for its longest win streak of 2018

 

[mrdoubleb]

Long time TSLA bear Kevin OLeary says shorts should be sweating bullets

.

"I wonder who the 3 board members are who did not sign?" Really? Aren't you a journalist? Shouldn't you find out before you insinuate? By using that tone you imply they did not sign because they were not consulted or disagreed, there is something shady going on.

BTW, the 3 were Elon and his brother (clear conflict of interest) and the 3rd one is the guy who is currently suspended from the board.

 

[Tslynk67]

Sometimes, I get the feeling (from reading this thread) that all sellers are shorts (and only believe in FUD) and thus "bad guys", and all the buyers "get it" and are the "good guys". I would guess a lot of the sellers actually simply want to take profit, og reduce losses. The reality is that shorting two days ago (at 380) would make a profit of $20/share today (at 360). We might dislike it, but in hidsight, thats also the truth... ;(

True, until we get some further info from Tesla it's going to keep dropping. But the moment we get some clarity, it's going to go up pretty damn fast and that's one hell of a risk.

As a long, it can go down to $1 for all I care, I don't lose anything.

 

[Ryan H]

He was scheduled to go on? How did you find out? When does it usually come out on YouTube?

Elon Musk on Twitter

 

[CuriousSunbird]

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?

There’s probably something in that. When it broke that level it gapped down. Maybe Tesla was selling off the bottom half of the hedges?

 

[neroden]

I’m not sure why that would be, but I am not a tax professional. When Bank of America was sold, my shares converted and did not become a taxable event until I sold them many years later. Same with my Safeway stock. And more recently, my employer was purchased by another bank, and my vested holdings remain in my brokerage account, not taxable until I liquidate. Unless you are suggesting this is different because it is a public company going private. Theoretically I don’t see why that would be different.

If you get a choice of cash or stock in a merger, often the deal is fully taxable as if you got the cash, whether you took the cash or the stock. The stock tax basis is then whatever the cash would have been.

However, tender offers work differently and people who *don't take the tender offer* retain their original basis, so that structure would be nontaxable.

 

[ZachShahan]

I so agree with this. I have owned Tesla’s for over 6 years and am so tired of people asking/telling me FUD. these people are strangers but I strongly doubt they are investors. These articles not founded in truth but sink in with the public

As someone who has battled the FUD for 6+ years, as much as I don't like TSLA going private, I totally agree. The rationale is super clear. The noise around all of this comes from not focusing on the rationale. The FUD is hurting Tesla in multiple ways. Elon is trying to do his job — and convince the board of his POV — for Tesla's long-term benefit.

Edit: Also, he trusts himself, so he trusts he will do right by shareholders.

 

[HG Wells]

My Martian senses are telling me that something will POP today or tomorrow.
Don't know if its up or down. Up I hope.

 

[neroden]

Gene Munster figures only $25-30B is needed.

I figure that's about right; could be as high as $42 billion if T Rowe Price and Fidelity want out, but no higher.

 

[neroden]

The problem with the thesis of these high worth individuals is that the majority of their wealth isn't liquid. Big banks must be involved in some way or another, for the simple fact that they would have to approve the massive loan that they'll be extending them based on their stocks.

If Larry Page says "Hey, I'd like to borrow some money against my Alphabet shares", the bank *does not ask him what he's going to use the money for*.

So, sure, technically big banks would be involved, but they wouldn't *know anything*.

Secondly, the structure is not going to be straightforward if the goal really is to allow retail shareholders to remain shareholders and still ditch a majority of the negative consequences that come with being public.

It could actually be pretty straightforward. There's some confusion about the word "private". If the company stays "public" for SEC reporting purposes, but delists from all exchanges, eliminates options trading, and gets a right-of-first-refusal on all share sales, that pretty much accomplishes Musk's goals.

That's.... actually not that complicated. Entities which aren't allowed to hold unlisted stock would still have to sell, which is where the tender offer for $420/share comes in. Tender offers are also pretty simple...

That's another part where high finance and legal must be involved. (True regardless if it is is a cabal of high net worth rollers or something else entirely like a sovereign wealth fund)

Indeed, fancy legal advice will be needed. The usual M&A law firms wouldn't tell you if they were being consulted obviously -- lawyers are confidential!

So there is a lot of scope for the usual underwriters, investment banks and others to get involved. Guaranteed they are all sniffing each other out on who is best positioned to get the deal.

 

[Toolsmack]

So what should we expect if the forms are all filed correctly about considering going private and nothing bad comes out of Elon’s tweets, but then Elon states....decided not to go private, carry on.

I’m of the mind that Elon does want to go private, but I like to consider other possibilities