TSLA - Tesla Motors

[Spekulatius]

The ideal situation ( imo) would be if Elon would be one CTO and they would hire a competent CEO from the outside. I don’t think it would square with Elon’s ego however.

[Jurgis]

The ideal situation ( imo) would be if Elon would be one CTO and they would hire a competent CEO from the outside. I don’t think it would square with Elon’s ego however.

 

Wasn't this somewhat how PayPal story went?

Much tougher to envision this with TSLA, since Musk has more control, it is much more his baby, and TSLA would lose a huge chunk of aura if Elon was forced out or left. It's zugzwang somewhat.  8)

[Libs]

Puts are fairly expensive $23 for the Dec 21 $300 put. Even if there is no deal, it’s not clear to me that those would be winners.

 

Why so close to the money?

 

If you believe this is binary ($0 or $420), then OTM puts are the way to go here.  There have been plenty of deals recently too.  I picked up some lottery tickets with a ~1,000:1 payoff. It was the day of the fake bid tweet and they still doubled.

 

There are really two, three ways to look at these:

1) Buy near dated puts with almost no premium, continue to roll hoping for a blow up

2) Buy long dated ATM or ITM puts to avoid premium

3) Look for mis-pricings within date structures. (This is where I play, just another 'value' type thing).  They do exist.

 

What fascinates me is the whole short destruction thesis.  Does Musk not realize that most likely 100% of the convertible holders are short the stock as a hedge? Couple that with options makers and there are a lot of shorts who are doing it for structural reasons.

 

It blows me away that short sellers become a boogie man when companies fail to operate.  Ah yes, short sellers are the cause of manufacturing and delivery disfunction.  Why not get heads down focused on the business and let results take care of themselves?

 

I firmly believe this is a donut the way Bear Stearns was.  One day they're "fine" and then suddenly they're trading for a buck.

 

 

Oddball:

 

I've been playing around with these. Can you give an example of a 1,000 /1 shot?

[Spekulatius]

Puts are fairly expensive $23 for the Dec 21 $300 put. Even if there is no deal, it’s not clear to me that those would be winners.

 

Why so close to the money?

 

If you believe this is binary ($0 or $420), then OTM puts are the way to go here.  There have been plenty of deals recently too.  I picked up some lottery tickets with a ~1,000:1 payoff. It was the day of the fake bid tweet and they still doubled.

 

There are really two, three ways to look at these:

1) Buy near dated puts with almost no premium, continue to roll hoping for a blow up

2) Buy long dated ATM or ITM puts to avoid premium

3) Look for mis-pricings within date structures. (This is where I play, just another 'value' type thing).  They do exist.

 

What fascinates me is the whole short destruction thesis.  Does Musk not realize that most likely 100% of the convertible holders are short the stock as a hedge? Couple that with options makers and there are a lot of shorts who are doing it for structural reasons.

 

It blows me away that short sellers become a boogie man when companies fail to operate.  Ah yes, short sellers are the cause of manufacturing and delivery disfunction.  Why not get heads down focused on the business and let results take care of themselves?

 

I firmly believe this is a donut the way Bear Stearns was.  One day they're "fine" and then suddenly they're trading for a buck.

 

 

Oddball:

 

I've been playing around with these. Can you give an example of a 1,000 /1 shot?

 

A financial can go broke much faster than an industrial. TSLA would need at least 2 quarters to go broke, if they weren’t able to raise any money. Likely they would be able to raise some equity or lawn some assets, so it would take longer.

 

Far out of the money puts are not a speculation on deal breakage, which is what I was looking at, it’s a speculation that TSLA goes broke.

[jeffmori7]

I think it's fair to say that Elon Musk is exhausted:

 

https://www.nytimes.com/2018/08/16/business/elon-musk-interview-tesla.html?

[frommi]

I think the biggst mispricing here was/is in the call options above 420$. Who in their right mind buys them? (Probably market makers that delta hedge their book.)

[nickenumbers]

Elon is going to have lawsuits from from the Shorts and the Longs now too!!  Falsely shouting FIRE in a packed theater has its serious consequences.  Just like yelling $420 per share to a public market.

 

The SEC is going to crawl up his dark back door and pitch a tent...  The SEC might build a small city in there...

 

I wonder if the ELON circus is helping Tesla make 5K units per week, or if it is a distraction?

I wonder if the ELON circus is helping Tesla sell 5K units per week?

 

 

What a mess!

[Peregrino]

does anyone have a guess of why Baupost bought TSLA converts? I would think it's some sort of arb trade with the options or CDS.

 

As this article snarkily points out, "it's the chicken way to play a short." 

 

Shares go down, you win with your short, shares go up, you don't lose so much because you can convert the bonds to shares, deliver the stock, limit losses. 

 

Also known as a well constructed position.

 

https://www.bloomberg.com/news/articles/2018-08-15/baupost-hedge-fund-added-200-million-of-tesla-convertible-bonds

[Liberty]

Sad that it has come to this. I'm a big fan of the technology, ambition, and how he pushes the pace of whole industries forward faster than they would otherwise go and such, but he really needs to take better care of himself and rein in his self-destructive tendencies and find help to help better run his companies. Gwynne Shotwell seems to be filling that role at SpaceX, he needs someone (or a few) like that at Tesla, I think.

 

In the interview on Thursday, Mr. Musk alternated between laughter and tears.

 

He said he had been working up to 120 hours a week recently — echoing the reason he cited in a recent public apology to an analyst whom he had berated. In the interview, Mr. Musk said he had not taken more than a week off since 2001, when he was bedridden with malaria.

 

“There were times when I didn’t leave the factory for three or four days — days when I didn’t go outside,” he said. “This has really come at the expense of seeing my kids. And seeing friends.”

 

Two days later, he was scheduled to be the best man at the wedding of his brother, Kimbal, in Catalonia. Mr. Musk said he flew directly there from the factory, arriving just two hours before the ceremony. Immediately afterward, he got back on the plane and returned straight to Tesla headquarters, where work on the mass-market Model 3 has been all consuming [...]

 

Mr. Musk said he had no plans to relinquish his dual roles as chairman and chief executive.

 

But, he added, “if you have anyone who can do a better job, please let me know. They can have the job. Is there someone who can do the job better? They can have the reins right now.”

[Spekulatius]

^ I agree on what Liberty states . I have seen this burnout syndrome on a close relative and Elon appears to suffer from the same. He needs to acknowledge the problem and make changes. I think he needs to hire A CEO who can run Tesla without him being involved day by day and work in a technical and leadership role.

 

Make no mistake, the burnout syndrome is a mental health issue already.

[jeffmori7]

Sad that it has come to this. I'm a big fan of the technology, ambition, and how he pushes the pace of whole industries forward faster than they would otherwise go and such, but he really needs to take better care of himself and reign in his self-destructive tendencies and find help to help better run his companies. Gwynne Shotwell seems to be filling that role at SpaceX, he needs someone (or a few) like that at Tesla, I think.

 

In the interview on Thursday, Mr. Musk alternated between laughter and tears.

 

He said he had been working up to 120 hours a week recently — echoing the reason he cited in a recent public apology to an analyst whom he had berated. In the interview, Mr. Musk said he had not taken more than a week off since 2001, when he was bedridden with malaria.

 

“There were times when I didn’t leave the factory for three or four days — days when I didn’t go outside,” he said. “This has really come at the expense of seeing my kids. And seeing friends.”

 

Two days later, he was scheduled to be the best man at the wedding of his brother, Kimbal, in Catalonia. Mr. Musk said he flew directly there from the factory, arriving just two hours before the ceremony. Immediately afterward, he got back on the plane and returned straight to Tesla headquarters, where work on the mass-market Model 3 has been all consuming [...]

 

Mr. Musk said he had no plans to relinquish his dual roles as chairman and chief executive.

 

But, he added, “if you have anyone who can do a better job, please let me know. They can have the job. Is there someone who can do the job better? They can have the reins right now.”

 

+1

[benhacker]

^ I agree on what Liberty states . I have seen this burnout syndrome on a close relative and Elon appears to suffer from the same. He needs to acknowledge the problem and make changes. I think he needs to hire A CEO who can run Tesla without him being involved day by day and work in a technical and leadership role.

 

Make no mistake, the burnout syndrome is a mental health issue already.

 

Totally agree on the mental health thing.

 

However, I'll feel bad for Elon once he starts taking care of himself and instead of apologizing like a malignant narcissist ("woe is me with my billions and private planes, I work so hard...") and instead apologizes for the other folks lives he's been attempting to destroy lately instead of taking care of his own shit (Tripp, "Pedo-guy", Montana Skeptic, EDIT: "and all the shareholders who believe the $420 lie" etc) and several others who seemingly have already been destroyed by the culture he instilled at TSLA.

 

I want the tech (meaning electric transport) to succeed.  Believe Elon is not a good person despite the outgrowth of this actions which have been undoubtably good for the movement.  When he comes clean, I'll maybe change my tune.  I have come to believe he's just a genius grifter who is a complete narcissist and he's only reinforcing it with interviews like this.

 

Massively short.

 

Sorry to sound like a hater.  Not hoping for folks to lose their jobs.  Just tired of listening to many of my friends and those in the tech industry suck of the complete BS PR that Elon and his minions force feed to the world and believe it hook line and sinker, as if he is the second coming of Jesus.

 

Looking forward to the veil being lifted as it's already starting for many that I know.

[tombgrt]

 

No words.

[frommi]

https://www.forbes.com/sites/jimcollins/2018/05/18/musk-has-heavily-leveraged-his-holdings-of-tesla-while-teslas-financial-leverage-has-jumped/#735faa797099

 

That is what i really don`t understand and is probably the root cause of all the stuff Elon did to pump the share price and why he is burned out. If TSLA stock goes down by 40-50% he will lose his whole fortune, i doubt that anyone can relax with this kind of pressure. Maybe his brother can help him out when the time has come.

[Pelagic]

I think the biggst mispricing here was/is in the call options above 420$. Who in their right mind buys them? (Probably market makers that delta hedge their book.)

 

I believe the rationale here is that if a valid offer is presented for $420 the board has a duty to solicit other offers which could potentially be higher than $420. A long shot but that's what options are for.

[writser]

 

No words.

 

Awesome! If real. Actually, if fake it's awesome too. All these rational value investors with diversified portfolios of boring undervalued stocks and large cash positions ... Boring. Stuff like this reminds me of the 2P2 forum ages ago. It's probably stupid but fun to follow.

[Spekulatius]

One thing about the SEC investigations that are going to occur us that it makes it much more difficult to raise debt or equity. I do t think that a call to Uncle Warren would work either.

[Peregrino]

One thing about the SEC investigations that are going to occur us that it makes it much more difficult to raise debt or equity. I do t think that a call to Uncle Warren would work either.

 

Certainly not after Elon pooh-pooh'ed See's Candy's moat and threatened to try and compete in the space...

[benhacker]

I think the biggst mispricing here was/is in the call options above 420$. Who in their right mind buys them? (Probably market makers that delta hedge their book.)

 

I believe the rationale here is that if a valid offer is presented for $420 the board has a duty to solicit other offers which could potentially be higher than $420. A long shot but that's what options are for.

 

My thinking on call options (I don't own) are that they are a good way for a bearish person to help size their short position higher... so the pricing makes sense in that regard to me (short a lot of stock with $420 call protection).  Basically a VW/Northern railway squeeze hedge.

[Guest cherzeca]

just bought an early 2019 put.  late to the party but I wanted the dog to pull the curtain back around the wizard first

[frommi]

My thinking on call options (I don't own) are that they are a good way for a bearish person to help size their short position higher... so the pricing makes sense in that regard to me (short a lot of stock with $420 call protection).  Basically a VW/Northern railway squeeze hedge.

 

I understand that, they are simply priced by the Black Scholes model. But this is one of the cases where it is flawed in my opinion. If a price >420$ only has a ~10% probability, but implied volatility prices this with a much higher volatility than the pricing is wrong in my opinion. I used this to sell call spreads (sell 420$, buy 500$ calls) for 21$. Maybe my 10% estimation was wrong, but i really doubt that the real probability for TSLA to trade above 420$ in Jan2020 was 25-33% (80$-21$/21$) after Elon twittered "funding secured". To me it looked like a 50 cent on the dollar trade with a high probability of success.

[Guest cherzeca]

musk has this ongoing hagiography that is so absurd. 

 

just look what he did to being able to raise needed cash ($2B) short term.  by tweeting funding secured when he had no funding secured, the SEC is running an investigation that will take its sweet time, meaning that during this period no real institution will fund Tesla since to do so would be career ending for the guy proposing it to the investment committee. 

 

so musk's only source now is the Saudi fund which has cash but commitments to fund that are tying up that cash.  any real BofD would fire a ceo that just did this, but Tesla doesn't have a real board, just a bunch of cronies that subscribe to the absurd hagiography.

 

while all this is transpiring, musk is musked out on ambien.  great situation!

[pcm983]

anyone else think maybe this saga ends this weekend with a late friday afternoon 8-K: Musk taking some "time off"?

[rb]

anyone else think maybe this saga ends this weekend with a late friday afternoon 8-K: Musk taking some "time off"?

I would give that maybe a 10% chance.

[pcm983]

id say 10-20%; that would explain why Musk was so sad. Also, the board's comments seemed to reference Musk's past contributions in a way that a PR does thanking an outgoing executive - i.e., no mention of future contributions from Musk