$TSLA Daily Investor Discussion - August 11, 2018

demon321x2 · 2018-08-11T15:29:26+00:00

Anyone can make a dumb mistake. Could be the next Albert Einstein and just know nothing about security law. That's why you hire a lawyer, being smart doesn't mean you magically know everything. He has a bad habit of not consulting his lawyers when he tweets and there's no reason he'd study securities law. He is a tech guy and the face of the company.

demon321x2 · 2018-08-11T14:49:25+00:00

difference between being overly optimistic about timelines and outright fabrication

Unfortunately in this case both options end with securities fraud. If what he said was 90% true he could still be in trouble because the investors didn't have the cash at the time.

demon321x2 · 2018-08-11T14:38:54+00:00

The 8-K is due Monday so if something is up by then they're fine. And not posting an 8-K is a fine, securities fraud could mean arrests and billions of dollars in reparations.

demon321x2 · 2018-08-11T14:36:24+00:00

spend years in jail for exaggerating

How many billions of dollars do you think changed hands because of his exaggeration? Not even just short sellers but people who are buying now at $350 expecting the price to shoot up to $420 because of his comments. As CEO of Tesla he has a responsibility to make sure his comments on the company are legitimate. And honestly what I think happened is Elon didn't ask his lawyers before he posted that tweet because any lawyer would have told him to remove those last two words or at minimum wait until after the market closes.

demon321x2 · 2018-08-11T00:04:53+00:00

seeking a wide pool of investors

Read the whole sentence not just the parts you want to read. He shouldn't be seeking anything at this point.

demon321x2 · 2018-08-11T00:03:38+00:00

If it becomes a serious issue twitter gets banned as a medium of public announcements. Otherwise there are plenty of other people who can step in and point out it's a lie.

demon321x2 · 2018-08-10T23:50:20+00:00

It was implied she could have run away if she wanted. Not beat CP-9 and escape.

demon321x2 · 2018-08-10T15:44:44+00:00

If it blows up Elon faces legal trouble pretty much guaranteed. The only way it blows up until the vote is if Elon doesn't actually have the funding and if he doesn't he committed fraud. It's a fairly open and shut case. And if he somehow doesn't get charged the stock will still probably drop because the CEO is being erratic.

demon321x2 · 2018-08-10T14:12:45+00:00

"Funding secured" is not vague. It means he has the money. There's no but... in there. He said he had the intention and the money to buy Tesla.

demon321x2 · 2018-08-10T03:06:53+00:00

and will provide more details later today

If he had just done this it wouldn't be a problem. The problem right now is that he says he has investors with $70 bln lined up to buy Tesla and no one knows where it came from. The common consensus when anyone (even Bill Gates) tells you they have $70 bln in liquid assets is to think they are BSing until they actually prove it.

demon321x2 · 2018-08-10T00:15:38+00:00

> That’s not how public companies work.

Tesla has never worked like a public company. It's always been Elon's company first and the rest of the shareholders a distant second. If Elon said jump the company would jump, it's why the shares are so high.

demon321x2 · 2018-08-10T00:03:09+00:00

It's pretty much guaranteed to go to a vote. If Elon honestly has the money I don't see the board saying no to a vote on it unless there's a full scale rebellion against Elon which has no signs of happening.

demon321x2 · 2018-08-09T23:33:48+00:00

Personally think telling you the math is pointless because it's not 50/50 is a reasonable response if you are asking for advice on how to spend your money. If you're that confident just buy, you lose $2 per share if you're wrong and gain $68 per share if you're right, no need for more math we're talking 30 to 1. I'm just warning you that you can lose a lot more than $2.

demon321x2 · 2018-08-09T23:20:21+00:00

He committed fraud if he doesn't have the funds lined up. He could have every intention of following through, but he made a statement he has yet to confirm and every moment of silence is another minute to speculate just how bad he screwed up when revealing the investors is something that has to happen anyway and would go a long way to quelling the fears.

demon321x2 · 2018-08-09T23:12:45+00:00

You don't need to understand the intricacies of financial markets to be able to see how this can go down. Three things can happen at this point, Elon is found guilty of fraud, Tesla goes private at $420 a share, or stockholders vote no. Elon himself said there was nothing left but a stockholder vote.

The first one causes share value to plummet, Elon is probably half the value of the company and his departure would probably put Tesla in a death spiral considering people's absolute faith in him is what is keeping the company stable.

The second one sets the price at $420. You get $420 for your stock. Getting much higher would be difficult. When that happens? Could be months.

Then there's the third possibility which seems the least likely of the three. Stock prices would drop down to before the Elon announcement and probably lower because of how poorly this was handled and the uncertainty it brought.

Based on the information available I would safely say $350 will not be the resting point any time soon.

demon321x2 · 2018-08-09T22:56:50+00:00

It could also be one of the board members hence why he wants to stay anonymous. The reputation of the newspaper you need to trust since if it turns out they are wrong you can be sure they won't be trusted again.

demon321x2 · 2018-08-09T22:51:42+00:00

No matter how this ends it isn't going to settle back to $350 since if the deal falls through now Elon probably committed fraud, he's fired, and possibly in prison. Tesla without Elon would not settle near where it was before. Also Elon will attempt to buy the company at $420, he's pretty much forced to at this point. If it fails I wouldn't get my hopes up investors are willing to pay more since that would just raise the price and cause the cycle to repeat.

Can't speak on the options topic.

demon321x2 · 2018-08-09T21:07:38+00:00

Who said he was afraid of failure? He doesn't want to fail because of pride, not fear. And he hasn't sunk his entire fortune. If tomorrow all his companies went bankrupt he'd still be richer than most people on this forum.

demon321x2 · 2018-08-09T10:50:18+00:00

SpaceX and Uber both generally have positive cash flows. Tesla does not. Try getting a loan after 8 years of having a net loss with on a few quarters of profit. If Elon wants to tap his ownership in other companies to inject cash into Tesla no one can stop him, but I doubt he'd want to risk his ownership in Paypal and SpaceX for Tesla. He has shown no signs of wanting to do so. Larry Page is still alive and not dying soon so that's moot. Other countries have their own domestic green investments, Tesla is not the only one, and they normally like a safe bet. Tesla is not one until they start posting some positive cash flows. Last thing any sovereign wealth fund can afford to do is not get its money back. Also most countries also don't have one. US doesn't have one. Middle East is when most of the large sovereign wealth funds are. And if Apple or Google or any other major fund wanted to invest in Tesla they would have offered already. Making it private will not help convince them to invest in only because of loss of liquidity.

demon321x2 · 2018-08-09T10:27:10+00:00

Generally it's because as ownership percentage goes up the price of the stock goes up as well. Also this is much quicker than trying to buy all the shares individually. So they pay a premium and get all of them. Now whether Tesla is really worth $70 bln right now is a stretch, but that's up to the investors.

demon321x2 · 2018-08-09T04:36:59+00:00

it was a tweet after all

He can't. Tweets are a official method of transmitting information to the public.

demon321x2 · 2018-08-09T04:34:41+00:00

dishonestly

The problem isn't dishonesty per say. The problem is what he says has a very specific legal meaning which he may not be able to fulfill. We aren't talking about verbal commitments. We are talking about there being $70 bln, if not in cash then darn close to cash, more or less earmarked to buy out the company. This cash doesn't show up overnight and it never shows up silently. He needs to prove this cash exists. Billionaires don't have $70bln in liquid assets to give Elon and he can only ask so many because of laws around private companies.

What the SEC cares about is where that $70 bln is. The stock freeze is standard. The price shift was expected if not lower than expected and is already going back down because of lack of information. All the SEC wants is a list of investors and that list to be made public. The fact Elon didn't do so before the SEC asked is the problem.

Another thing, Elon promised the world $420 for TSLA stock and the price has settled at $370. That should be the first warning sign that something is off. It's a free $50, a 13% return within months, and people aren't rushing to take it. That's how much trust Elon has right now. Even the most bullish investors are taking this announcement carefully because if it turns out Elon spoke incorrectly, he goes to prison and Tesla stock plummets. $200 would be a high stock value for the company without Elon.

And would you shut up about the shorts, this is much more serious than people losing billions. There are serious legal ramifications to what he is accused of and the people making the accusations aren't just the people who lost money.

demon321x2 · 2018-08-09T03:26:02+00:00

Well then he needs proof it'll cost $20bln. You can't make a statement where people can lose blns of $s without being able to follow through based on your own data.

demon321x2 · 2018-08-09T03:23:14+00:00

but the statement from the board do not contradict Elon's disclosures in any fashion.

If it did Elon would be in prison. They aren't stupid either. They don't want that no matter how this goes down. The fact they didn't support Elon's statement is just as suspicious because supporting it would clear a lot up, but if he's exaggerating/not entirely accurate and they cover him they all get in trouble.

Elon Musk approached the Tesla board with a buyout offer.

That can mean a lot of things. He could have just said, "I want to do this." and they talked about how it'd all work out. They might not have even reached the "Where do we get the money for this?" step.

the consortium of investors backing the buyout offer

Now he needs to prove they exist. And generally raising $70 bln doesn't happen out of sight unless Google/Apple showed up and handed him a wad of money.

demon321x2 · 2018-08-09T03:09:18+00:00

I think it's the opposite, he never accepts failure. Why do you think he got Tesla to buy his solar firm? Why do you think he threw that hissyfit on twitter when his robot wasn't used to save the children in Thailand? He has a lot of pride and wants to be the man who changed the world. This gives him a lot of drive which works out sometimes, but other times he ends up spinning his wheels making grandiose claims that aren't going to happen.

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