TSLA Market Action: 2018 Investor Roundtable

[Esme Es Mejor]

Now, the short-sellers probably are borrowing from Vanguard and Bailie Gifford and even Musk, so there is that.

About that:

Why in the world hasn’t Elon replaced those 13.7 million pledged shares of TSLA with SpaceX shares instead?

As long as those shares are pledged as collateral, his lenders can loan them out to shorts. By using SpaceX shares as collateral instead, Elon would instantly decrease the shares available to short by 13.7 million. If that didn’t cause a short squeeze, it would at least increase borrowing costs for shorts, and make shorting more dangerous.

 

[ev-enthusiast]

SP up about 2.5% during early trading in Europe, any news?

 

[BioSehnsucht]

About that:

Why in the world hasn’t Elon replaced those 13.7 million pledged shares of TSLA with SpaceX shares instead?

As long as those shares are pledged as collateral, his lenders can loan them out to shorts. By using SpaceX shares as collateral instead, Elon would instantly decrease the shares available to short by 13.7 million. If that didn’t cause a short squeeze, it would at least increase borrowing costs for shorts, and make shorting more dangerous.

If you're planning to hang the shorts out to dry, giving them some more rope, within reason, perhaps ...

 

[SpaceCash]

SP up about 2.5% during early trading in Europe, any news?

if anything it's the macquieruexquereuce $430 price target upgrade. Or just random market forces, or somebody accumulating because they aren't dumb. Or maybe even short covering. But probably that price target

Edit: 257.xx hitting now.. bodes well. Night fam

 

[gora321]

EU nations divided on 2030 CO2 curbs for cars, vans

Look at that discussions?! It will be 30% or 40% or compromise 35%. They still count for ICE production after 12 years?
We heard IPCC report. Have they fat ears problem? We cannot play with that.

I'm now fully aware that legacy will be doomed by then if legislation do not press them more. Real treat is coming from pure EV companies!
Imagine 12 years of Tesla progress only! They have no choice but to start "cash burning" process or to die.
And 40% doesn't matter any more!

 

[mrdoubleb]

Re the share price uptick... started good yesterday as well, then it turned ugly. So let`s wait a bit before we call 250 the bottom.

Having said that, even though we mostly joke about "well, Elon hasn`t tweeted anything crazy today yet", there is some truth in that. I am not sure if this deliberate, but if it is, I love it: it seems he is now playing good cop / bad cop with his mom. Maye Musk tweeting and re-tweeting articles on the negative media bias and FUD, while Elon only re-tweeting positive stuff like Flint and the latest from his ex, Tesla PR and SpaceX. I can live with that.

 

[shlokavica22]

About that:

Why in the world hasn’t Elon replaced those 13.7 million pledged shares of TSLA with SpaceX shares instead?

As long as those shares are pledged as collateral, his lenders can loan them out to shorts. By using SpaceX shares as collateral instead, Elon would instantly decrease the shares available to short by 13.7 million. If that didn’t cause a short squeeze, it would at least increase borrowing costs for shorts, and make shorting more dangerous.

Good point!
Anyone has an idea if he can do that now(or whenever he decides)?

 

[Singer3000]

About that:

Why in the world hasn’t Elon replaced those 13.7 million pledged shares of TSLA with SpaceX shares instead?

As long as those shares are pledged as collateral, his lenders can loan them out to shorts. By using SpaceX shares as collateral instead, Elon would instantly decrease the shares available to short by 13.7 million. If that didn’t cause a short squeeze, it would at least increase borrowing costs for shorts, and make shorting more dangerous.

From the lender's perspective: Tesla shares can be marked to market on a daily basis. Depending upon the LTV and how big the loan is relative to the float, it's quite conceivable the lender could liquidate the shares through the exchange (or an accelerated book build) and fully recover their loan in a very short time period, with good confidence of no loss.

SpaceX shares cannot be marked to market on a daily basis and are valued only monthly (or even quarterly)? Upon a missed margin call, the bank would require a corporate finance exit (i.e. to find one or several long term strategic investors) which is much more difficult, takes longer and with far less certainty of no loss to the lender. Further, while we can all sit here as citizens of Earth and get very excited about SpaceX, if I was looking at it as a bank analyst, I'd be starting any report with "space is hard". The LTV required would therefore be very punitive and the interest rate charged would need to be commensurate with the risk. I haven't seen any recent/detailed accounts for SpaceX but I wouldn't be surprised if a personal guarantee was also necessary to make a large SpaceX equity financing fly (effectively a second lien over Elon's Tesla shares).

Doesn't mean you couldn't find a bank to do this but there's good reasons why Tesla is an easier levered equity play than SpaceX. I'd also guess that of his "children", SpaceX is closer to Elon's heart than Tesla is, so he'd rather mortgage Tesla and not SpaceX, while he has a choice.

 

[Fact Checking]

Interesting how they have two analyses in one report - the opinion-driven at first, and the quant-driven at the back.

Yes, the obvious thing you are missing is that this contradiction between fundamentals and quant driven analysis of Tesla is the report's investment edge: the Macquerie report is highlighting the big contrast between quant driven valuation (very negative) and fundamentals based valuation of Tesla (very positive, $430 price target).

Their quant analysis is similar to the more rational bear thesis promoted by some Tesla short sellers: it is basically projecting the past on the future - their quant metrics are unable to see obvious improvements in fundamentals like the huge cash flow generated by record Model 3 sales in Q3 and going forward.

But that's where good investors get their edge from: finding undervalued companies like Tesla, which are just before a big break-through quarter based on fundamentals. Bad quant score is good in those cases, as it creates price pressure downwards, which makes it an even better deal. Record short interest is super good for them as well, as it further depresses the price and increases probable returns.

If you were truly an investment banker like you claim you'd know all this: so let's add this slip-up to the pile of evidence that shows that you are just a short liar bullsh1tting on this forum, posing as an 'investment banker'.

 

[YasB]

If you're planning to hang the shorts out to dry, giving them some more rope, within reason, perhaps ...

I'm sorry, but that plan may have a flaw. Some of us mostly covered and took profits this morning. Imho, the decline during the last weeks was a bit too fast. Tiny me is hoping for an interim recovery, while we are approaching the Q3 numbers or shortly after them, depending on how the numbers look like. Of course i'd welcome any other trigger for a price hike. Maybe it's enough, if Elon isn't posting things on Twitter for a while so the bulls have time to refocus on Teslas revenue projections for the next 3-10 years and the mass extinction of the legacy car makers? Anyway, thank you very much for the rope you have given us so far.

 

[CuriousSunbird]

If you were truly an investment banker like you claim you'd know all this: so let's add this slip-up as another piece to the pile of evidence that shows that you are just a short liar bullsh1tting on this forum, posing as an 'investment banker'.

I think the only appropriate response to this is to quote a recent pearl from one of our esteemed moderators "Civility is a matter of growing up."

With that, goodnight to all.

 

[Fact Checking]

I think the only appropriate response to this is to quote a recent pearl from one of our esteemed moderators "Civility is a matter of growing up."

That you are a liar and serial disinformer is a simple fact: here's one example of one of your many lies on this forum, where you pretended to be considering a $1,000 deposit and pre-order for the Model 3, and used that to concern-troll about the 'safety' of the deposit:

"[...] when Tesla might find it difficult to raise cash. Are the deposits in some kind of escrow account, or is there a way to get comfortable that the money will come back?"​

In that thread from a year ago you got 41 replies from helpful forum members, none of which you replied to, which is supporting evidence that you posted in bad faith.

So yes, based on the evidence I'm comfortable calling you a liar - and that you are bulsh1tting is an obvious fact as well, from your comment that I replied to, which shows lack of knowledge about basic investment principles.

I believe liars deserve no fake "civility", and it's pretty telling as well that instead of answering my comment (which I believe you cannot), you tried to deflect by playing the victim card.

 

[Teslie]

But that's where good investors get their edge from: finding undervalued companies like Tesla

Then do some fact checking and tell us how your investment performance was in the last two years...(S&P500 gained about 40% in that time period)

 

[cricketman]

Then do some fact checking and tell us how your investment performance was in the last two years...(S&P500 gained about 40% in that time period)

TSLA share price opened at $201 two years ago today. So we are up 25%!

Not so bad Just goes to show that a bit of historical perspective is needed

 

[-=buzz=-]

FYI:

Just received a Tender Offer from my broker about BAKER MILLS seeking 20'000 shares @ 199.99USD

fishing expedition? triggering panic sells?

 

[mongo]

FYI:

Just received a Tender Offer from my broker about BAKER MILLS seeking 20'000 shares @ 199.99USD

fishing expedition? triggering panic sells?

Whoah, you have 20,000 shares???

(If you know what I mean... No one with sub 20k would care what the number was, unless the point was to instill fear of getting out)

 

[Fact Checking]

So Macquerie initiated Tesla coverage with a $430 price target and I'm reading their report.

The part about competition is well-known on TMC, but it's interesting to see it from a mainstream analyst:

"Competition – it’s good for the industry. Thus far, the competition has shown promise but has yet to deliver and certainly not to a level that surpasses Tesla, which we see as a testament to Tesla’s technology leadership. We expect OEMs will eventually catch up though don’t necessarily see competition as something to fear as more electric vehicles should drive industry growth and, with it, Tesla. We see electric vehicles taking share from internal combustion engine vehicles rather than cannibalizing existing electric vehicle players. We see this as more of an issue when the electric market starts to saturate."​

Of course EVs will only begin to saturate the market sometime in the late 2020s, when they are well over 50% of all new car sales. Until then they'll be cannibalizing ICE revenue.

Their report is listing a lot of moats Tesla has.

 

[gora321]

FYI:

Just received a Tender Offer from my broker about BAKER MILLS seeking 20'000 shares @ 199.99USD

fishing expedition? triggering panic sells?

Panic? would be if we wouldn't know what we are doing

How about you nervous regarding Q3 ER?

 

[Intl Professor]

My son is just learning for the exam to get driving licence (year 2000). I asked myself which generation will make licence for Autonomus drive only?

Mine.

 

[Fact Checking]

FYI:

Just received a Tender Offer from my broker about BAKER MILLS seeking 20'000 shares @ 199.99USD

fishing expedition? triggering panic sells?

It's apparently a common scheme unrelated to Tesla, here's the NASDAQ and SEC warning about such "mini-tender offers", in the context of NYSE:EMR shareholders getting a similar offer from Baker Mills LLC:

Emerson Receives Notice of Unsolicited “Mini-Tender” Offer by Baker Mills LLC - NASDAQ.com​

ST. LOUIS--(BUSINESS WIRE)-- Emerson (NYSE:EMR) said today it has received notification of an unsolicited "mini-tender" offer by Baker Mills LLC, a Delaware limited liability company ("Baker Mills"), to purchase 50,000 shares, or approximately 0.008 percent, of the outstanding common stock of Emerson at $61.00 per share. Baker Mills' price is approximately 20.5 percent below Emerson's NYSE closing price on August 31, 2018, the last trading day prior to the offer.

The SEC has issued "Investor Tips" on mini-tender offers such as this, which note that often in making the offers at below-market prices, "bidders are hoping that they will catch investors off guard if the investors do not compare the offer price to the current market price." The SEC's advisory is available at www.sec.gov/investor/pubs/minitend.htm. Emerson shareowners who have already tendered are advised that, as described in the Baker Mills' Offer to Purchase document, they may withdraw their shares prior to the expiration of the offer which is currently scheduled at 5:00 PM New York City time on October 2, 2018.​

If you think it's a bad deal then I'd suggest you complain to your broker why they accepted payment from Baker Mills LLC to send you an unsolicited message advertising a potentially financially damaging scheme that both the NASDAQ and SEC is warning about.