TSLA - Tesla Motors

[oddballstocks]

This is amazing.  SEC case, CAO resigned, execs flying out the door.  And the price is still levitating.

 

I've read the complaint.  What I find most interesting is Musk's own testimony is included.  They interviewed him and then included it in the case against him.  I just don't see how you argue against that unless you lie or say what you told them wasn't true.

 

It seems the company is in chaos mode and I just don't see what Musk's endgame is at this point.

 

And finally, who is buying? 

[ERICOPOLY]

Bill Gates stepped down as CEO and became "Chief Software Architect":

https://www.forbes.com/2000/01/13/mu7.html#5d41a9975d83

 

I wonder what role they will come up with for Musk.

 

[BG2008]

I've been amazed that at some point Tesla didn't try to do a $2-5 bn equity raise.  Non of these cash crunches would be an issue today.  At a $50bn market cap, it was only 10% dilution, but it secures the future franchise. 

[rb]

Musk reportedly refused to sign the deal because he felt that by settling he would not be truthful to himself, and he wouldn't have been able to live with the idea that he agreed to accept a settlement and any blemish associated with that, the sources said.

 

This IS like that scene in Billions. Musk is now trolling the SEC.

 

I'd venture that if he was a bit more concerned with truthfulness when typing "funding secured" then he wouldn't be in this pickle.

[Guest cherzeca]

I've been amazed that at some point Tesla didn't try to do a $2-5 bn equity raise.  Non of these cash crunches would be an issue today.  At a $50bn market cap, it was only 10% dilution, but it secures the future franchise.

 

my best guess why they didn't do equity raise recently is that they were spooked by prospect of a lower stock price as a result.  but I don't see how they can do an equity raise now as the SEC will make it very difficult...decline to declare any prospectus supplement effective without a pound of flesh in disclosure (at a minimum)

[Spekulatius]

This is amazing.  SEC case, CAO resigned, execs flying out the door.  And the price is still levitating.

 

I've read the complaint.  What I find most interesting is Musk's own testimony is included.  They interviewed him and then included it in the case against him.  I just don't see how you argue against that unless you lie or say what you told them wasn't true.

 

It seems the company is in chaos mode and I just don't see what Musk's endgame is at this point.

 

And finally, who is buying?

 

TSLA stock is like a cat who’s got seven lives. You through it out the seven story window on a busy street and think it’s dead for sure, but it comes back with a few scrapes 5 min later. I think TSLA stock will be back above $300 in a few days, on the back of some great news announcement ...

[boilermaker75]

This is amazing.  SEC case, CAO resigned, execs flying out the door.  And the price is still levitating.

 

I've read the complaint.  What I find most interesting is Musk's own testimony is included.  They interviewed him and then included it in the case against him.  I just don't see how you argue against that unless you lie or say what you told them wasn't true.

 

It seems the company is in chaos mode and I just don't see what Musk's endgame is at this point.

 

And finally, who is buying?

 

TSLA stock is like a cat who’s got seven lives. You through it out the seven story window on a busy street and think it’s dead for sure, but it comes back with a few scrapes 5 min later. I think TSLA stock will be back above $300 in a few days, on the back of some great news announcement ...

 

Yep, either long or short it's like pulling a lever on a slot machine with TSLA.

[rkbabang]

This is amazing.  SEC case, CAO resigned, execs flying out the door.  And the price is still levitating.

 

I've read the complaint.  What I find most interesting is Musk's own testimony is included.  They interviewed him and then included it in the case against him.  I just don't see how you argue against that unless you lie or say what you told them wasn't true.

 

It seems the company is in chaos mode and I just don't see what Musk's endgame is at this point.

 

And finally, who is buying?

 

TSLA stock is like a cat who’s got seven lives. You through it out the seven story window on a busy street and think it’s dead for sure, but it comes back with a few scrapes 5 min later. I think TSLA stock will be back above $300 in a few days, on the back of some great news announcement ...

 

I agree.  I no longer want to own it, but the shorts are crazy.

 

[Pauly]

i remember Charlie Munger said something like Elon Musk is a guy with 150 IQ but thinks he has 300 IQ. That is exactly the type of guys that Warren said is going to be dangerous many years ago because they are crazy.

 

I vaguely remembered that too so I looked it up:

 

"Put me down as saying I've always been afraid of the guy whose IQ is 190 and he thinks it's 250.  I like to think there’s a little of that risk with Elon. He is a certified genius." - 2014 Daily Journal AGM

 

If Warren is an Oracle, then what does that make Charlie?

[tytthus]

This is amazing.  SEC case, CAO resigned, execs flying out the door.  And the price is still levitating.

 

I've read the complaint.....

 

TSLA stock is like a cat who’s got seven lives. You through it out the seven story window on a busy street and think it’s dead for sure, but it comes back with a few scrapes 5 min later. I think TSLA stock will be back above $300 in a few days, on the back of some great news announcement ...

 

Spec is Spanish perhaps....I've always heard cats have nine lives, but colloquially have seven in many Spanish speaking regions, while Turkish and other Arabic legends claim six lives.

 

Sorry, nothing to add about TSLA, except maybe they are on their eighth, sixth or fifth life depending on where you are from....

[Grant]

I agree.  I no longer want to own it, but the shorts are crazy.

 

The credit default swap market is now estimating a 47% chance Tesla debt will be defaulted on: https://www.bloomberg.com/news/articles/2018-09-28/tesla-default-insurance-jumps-to-new-high-after-sec-sues-musk

 

The upside is what, $420? Now that a capital raise is even less likely, the downside is zero.

[Spekulatius]

This is amazing.  SEC case, CAO resigned, execs flying out the door.  And the price is still levitating.

 

I've read the complaint.....

 

TSLA stock is like a cat who’s got seven lives. You through it out the seven story window on a busy street and think it’s dead for sure, but it comes back with a few scrapes 5 min later. I think TSLA stock will be back above $300 in a few days, on the back of some great news announcement ...

 

Spec is Spanish perhaps....I've always heard cats have nine lives, but colloquially have seven in many Spanish speaking regions, while Turkish and other Arabic legends claim six lives.

 

Sorry, nothing to add about TSLA, except maybe they are on their eighth, sixth or fifth life depending on where you are from....

 

No, I am Made in Germany. Our cats have seven lives here too, not nine. I have lived in the US for quite a while, but these  small cultural idiosyncrasies still trip me up like this:

https://youtu.be/4dpLBM4rBPM

 

 

[ERICOPOLY]

I was going through the 2013 posts on this thread and reading where people are making comparisons between Tesla and DeLorean.

 

Five years later, Tesla is presently selling more sedans in the US than is BMW.

 

It's quite incredible really. 

 

I find it surprising that their demise is now considered to be imminent, once again.

 

[meiroy]

 

I don't see this politically going through.  He'll survive it and at worse someone buys the company.  I'm going to keep an eye on this and will go long [calls] for the first time if it drops enough, as a trade.

 

Can you walk me through the math and assumptions on the long?

 

:)

 

No.

 

It's a speculation based on qualitative assumptions, the market isn't that efficient. Note it would be call options to increase the reward for the risk (e.g. you're aiming at 0/BK right? so that's the risk), I'm not saying go long underlying. We'll see.

 

[meiroy]

The decision to decline a settlement offer that generous is more concerning than the initial crime.

 

 

https://www.cnbc.com/2018/09/28/teslas-musk-pulled-plug-on-settlement-with-sec-at-last-minute.html

 

Tesla and the Securities and Exchange Commission were very close to a no-guilt settlement Thursday, reported CNBC's Andrew Ross Sorkin on Friday, citing sources. But, these people say Musk pulled out of the agreement at the last minute.

 

Under the terms of the deal, Musk and Tesla would have had to pay a nominal fine, and he would not have had to admit any guilt. However, the settlement would have barred Musk as chairman for two years and would require Tesla to appoint two new independent directors, reported CNBC's David Faber, citing sources.

 

Musk reportedly refused to sign the deal because he felt that by settling he would not be truthful to himself, and he wouldn't have been able to live with the idea that he agreed to accept a settlement and any blemish associated with that, the sources said.

 

Yeah, crazy.  Also, may reveal a fair amount about how the SEC views the strength of its case.

 

+1

 

&

 

How many employees Tesla has right now, 40k?

 

[A Dhandho Investor]

 

I don't see this politically going through.  He'll survive it and at worse someone buys the company.  I'm going to keep an eye on this and will go long [calls] for the first time if it drops enough, as a trade.

 

Can you walk me through the math and assumptions on the long?

 

:)

 

No.

 

It's a speculation based on qualitative assumptions, the market isn't that efficient. Note it would be call options to increase the reward for the risk (e.g. you're aiming at 0/BK right? so that's the risk), I'm not saying go long underlying. We'll see.

 

it is always nice to let one of the major shareholders (8%) guide you (well, in a certain way) through the math (at about 3:40 before the end of the interview):

http://citywire.co.uk/money/james-anderson-vicious-short-sellers-are-tesla-s-big-problem-not-elon-musk/a1154739

[A Dhandho Investor]

I was going through the 2013 posts on this thread and reading where people are making comparisons between Tesla and DeLorean.

 

Five years later, Tesla is presently selling more sedans in the US than is BMW.

 

It's quite incredible really. 

 

I find it surprising that their demise is now considered to be imminent, once again.

 

Eric, I would say that the main reason Tesla has been outselling BMW over the last couple of months is due to pent up demand for the Model 3.

 

The M3 run-rate demand seems 1k / 2k per week and there is more than circumstantial evidence (piling inventory, discounts being provided, etc)

that domestic M3 backlog has been depleted, so I believe the numbers will again be different for the coming months.

 

For me there is a clear difference compared to 2013 in the sense that:

1. Tesla definitely has less access to capital markets

2. More and more key personnel is leaving

3. Mismanagement (focusing on short term M3 production & deliveries instead of long term viability)

4. Debt is coming due

5. Elon's fraudulent statements are more and more being exposed

6. Sec / DoJ investigation (I am sure this week was just an appetiser)

 

In fact, I cannot see a single reason why this still sports a 45 billion market cap.

 

There are some knowledgeable Tesla shorts on Twitter, like @TeslaCharts, @Gatorinvestor, @Skabooshka and many others who have already done a great deal of research.

 

@Skabooshka for instance better predicts M3 production than Bloomberg via its VIN-tracker.. He  has indicated that current M3 production rate is about 4k / week but that Tesla might post higher "production" rates in its Q3 report as it seems that Tesla is now also using Fremont to re-processing cars that were already built before.

https://twitter.com/skabooshka/status/1045587110994927616

 

Actually, I am 95% sure that Tesla will try to cook the Q3 books..

 

[A Dhandho Investor]

Excellent interview with Montana Skeptic: https://www.youtube.com/watch?v=62_-yEm_6gU&feature=youtu.be

[Guest cherzeca]

the SEC has apparently been investigating tsla's disclosures re car delivery forecasts, and the SEC may add that investigation to its going private action (or use it to show a pattern of false and misleading statements).  clearly the best thing for the company would have been for musk and the company to settle all SEC claims.  musk is placing his ego before the company's best interests, but I suppose most longs think the company's value rests upon musk, ego and all.  I was short for awhile and closed with a small profit as this saga has become too volatile to be rationally investable imo

[Liberty]

Musk settled:

 

https://www.cnbc.com/2018/09/29/sec-settles-charges-with-teslas-elon-musk-will-remain-as-ceo.html

[Gregmal]

Another slap on the wrist. This is why people with money do whatever they feel like. Elon s penalty is basically the same as if the shareholder proposal on seperating chairman/CEO went through. No big deal.

[gary17]

ha. stock to rally on Monday

[benhacker]

Good outcome for Musk... on the lowest end of what I thought was probable.  Curious turn of events...

 

[EDIT: Also I think this is bullish relatively for shareholders as it signals Musk is willing to admit at least if not guilt, but willing to compromise which is a good sign.  Also, it appears Board will be required to at least partially do their job, which is good for shareholders too]

[Spekulatius]

$20M is chump change for manipulating the share price upwards by billions of dollars. Maybe now some of the shorts cans sue him. I have no clue. I agree the stock will move up significantly  on Monday. I said it before TSLA has seven or nine lives...

[ERICOPOLY]

 

@Skabooshka for instance better predicts M3 production than Bloomberg via its VIN-tracker.. He  has indicated that current M3 production rate is about 4k / week but that Tesla might post higher "production" rates in its Q3 report as it seems that Tesla is now also using Fremont to re-processing cars that were already built before.

https://twitter.com/skabooshka/status/1045587110994927616

 

 

They will produce higher than 4k/week numbers at times because they are ramping up in "bursts".  The company I think said it was going to make about 55,000 cars in Q3 which is just a bit more than 4,000 a week.  They achieve a new peak week of production and identify the bottlenecks, then they scale down again while they work on fixing the problems.

 

Tesla has explained this.

 

It is extraordinary that they have ramped up this fast this quickly and people are making a big deal that they are running into problems.  It is to be expected that they will run into a lot of problems but they are getting through them as production ramps up.

 

I read the comments of one of the departing Tesla executives and the reason given was that he felt like he was being ignored at Tesla.  Fully translated, that probably means "Elon Musk will only listen to himself".