Has Tesla CEO Elon Musk Engineered The Short Burn Of The Century?

Tesla CEO Elon Musk

AUG 11 2018 BY CARLO OMBELLO 189

Tesla shorts may be in for a treat, as Elon Musk has just set the stage for an unprecedented “burn of the century”.

By now, everybody knows Tesla’s CEO set Twitter and financial media on fire last Tuesday as he revealed his plan to make Tesla private, withdrawing it from the stock market at a guaranteed $420 per share, or 20% over the price at the time of the announcement. Importantly, Musk also clarified that funding for the buyout is already “secured”: a crucial, jaw-dropping detail which implies tens of billions of dollars would be ready to change hands should the deal go ahead.

*This article originally appeared on opportunity:energy. Author Carlo Ombello graciously shared it with InsideEVs.

Such a bombshell announcement could not go unnoticed, as was the case for last week’s anticipated Q2 earnings call that saw Tesla shares skyrocket by about $50 in one day to ~$350. Musk’s Twitter following is over 22 million people, which means within seconds – via smartphone notification – I knew, journalists knew, everybody knew. The stock market reaction was wild, as could be expected, sending shares near all-time highs just below $380 by day end, after dramatic trading hours and a temporary suspension.

The jump was also helped by prior news from the Financial Times on the same day about Saudi’s recently acquired stake of 3-5% in the company, seen as a big sign of confidence in the company (could the two consecutive news be related? too early to say). It’s just the latest chapter in the years’ long poker game that has seen Musk winning several hands against Tesla shorts, but with no final knock-out. This time though, we may be witnessing its final stages as Elon goes all-in on his challenge to shorts. Given the stakes at hand, it’s hard to anticipate an outcome that won’t see either party compromised in the end.

If you don’t believe Musk’s intentions are true, as Tesla shorts would, simply go on and read what any major financial news outlets are saying, you’ll get a fair idea of the skepticism surrounding the plan. To sum it up, it’s almost impossible. Not only that, but the whole Twitter-storm must have been an unchecked spur-of-the-moment thing, one for which he will pay dearly.

The SEC has since been asked to investigate Musk’s announcements for potential stock manipulation (interesting thought, coming from typically manipulative shorts). This, in turn, means that further clarification on the proposal should be expected any day by way of Musk or Tesla’s board, which is indeed now scheduled to meet next week. One thing is for sure, commentators the world over are confused by Musk’s tweets and the shorts they are interviewing don’t even want to ponder the potential consequences on their bets, if Elon was indeed telling the truth.

While Musk has been warning against shorting Tesla for years, he’s never been as determined as over the past few months, starting in May (see above tweets) when he quoted reports from S3 Partners showing progressively low supply of stock for shorts to cover, and hinted at an event bigger than VW’s 2008 short squeeze, something I would picture as a financial “Supernova”. All these warnings, including a following June tweet giving three weeks to shorts – Elon time – before their position would “explode”, have come at a time when the carmaker has successfully ramped up production of its more affordable Model 3, a car now on the verge of becoming the best selling EV in the world.

Tesla has also made substantial efforts to turn to profitability. We already know that since Q2, despite an average weekly production rate of just over 2,000 cars per week during that period, Model 3 has already turned to slightly positive margins, and Tesla is now guiding over 50,000 units in Q3 (or about an average 4,000 Model 3s per week), which should translate in 15% gross margin for Model 3. Musk clarified that, in the absence of external “force majeure” events, the intention is to become profitable from Q3 onwards every quarter, with Model 3 margins increasing to 25% over another six months.

Recent upbeat news on production progress and looming profitability have already helped Tesla stock heading higher. This week’s tweets have then set the stage for something much clearer. Musk has now set a minimum threshold for a possible short squeeze at $420. Should the next few days pass without feedback on the plan, Musk will seriously expose himself to severe consequences over his words. Should we instead see confirmation of Elon’s intentions and formal backing from the Tesla board, possibly with identified investors for a private plan, shorts will be in for a nasty surprise. Is it so difficult to fund Musk’s proposal?

While certainly unprecedented in its size, this financial operation is not as far-fetched as many are trumpeting. A very good Seeking Alpha article on the subject, titled Tesla: How Much Cash Should It Realistically Secure? (ironic source, I know) elaborates on how such a plan could easily find appropriate financial backing, with some $30 billion on the line or less, none of which from the usual banksters. A summary that is remarkably similar to that of a Cleantechnica article by Maarten Vinkhuyzen, How Musk Could Fund Taking Tesla Private, who separately went to show how $0 to $29 billion could suffice, and with plenty of potentially interested parties. Then what?

If Elon Musk has engineered a similar or better deal, Tesla stockholders will know they have an assured value of $420 per share, which is the price the stock will quickly align to as the plan is confirmed. A minimum loss threshold for shorts. As many will hold on to their shares, availability on the market will plummet, while shorts finally scramble to cover 35 million borrowed shares (~25% of the total), bidding for unavailable stock. What happens next is a wild guess, Elon clearly stated this would be bigger than VW’s squeeze, which saw shares quintuple in value over few days (from €200 to €1000) as 12.8% of stock was borrowed and needed cover, leaving some hedge funds obliterated before stock retraced. So if Musk has genuinely designed a plan for the squeeze of the century, we may be about to experience a once-in-a-lifetime, astronomical… sorry financial, event of epic proportions.

Wanna know someone who got burnt with VW? David Einhorn of hedge fund Greenlight Capital, who accidentally has just received a box of short shorts from Elon Musk (err, actually from a real-shorts seller, Chubbies). The irony!

For more fun on Tesla stock, you may want to hear what CNBC’s Cramer has to say.

Cramer’s 4 reasons for why Tesla’s shorts are facing an uphill battle with Elon Musk from CNBC.

Source: opportunity:energy

Categories: Tesla

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189 Comments on "Has Tesla CEO Elon Musk Engineered The Short Burn Of The Century?"

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TM3x2 Chris

Musk is a smart guy and he knew what he was doing. I’m sure he took some pleasure in unleashing the “short burn of the century” but at the same time, he was serious about taking Tesla private.

SEC will tell us in a few days what its findings are. In the meantime, all the shorts on this website will go wild. Let the trolling begin…

ROFLOL

So far from the usual suspects only eurotroll showed up but I’m sure there will be more. Another wild ride in the snake pit, popcorn time! ROFLOL!

Nix

“SEC will tell us in a few days what its findings are.”

Technically, the SEC hasn’t made any official announcement of any investigation into this specific matter. We have only gotten the classic unnamed “sources say”, with no named official from the SEC making any official statement that they have opened an investigation.

I doubt that anyone from the SEC will make any official findings public at any time regarding this if they don’t find evidence strong enough to take to court. The US legal system isn’t in the business of issuing judgements of innocence. Innocence is implied at all times in the US by the virtue of not being found guilty.

Doggydogworld

SEC does not discuss investigations. Companies sometimes disclose them.

Ashgrave

Everything the sec does is public knowledge, they are the federal government after all.

Dan F.

The fact that the stock has declined almost to its pre announcement value indicates a lot of doubt among people able and willing to bet real money that this going private will actually happen. Typically the stock should be close to the proposed price at this point if the deal was real.

If he can’t demonstrate that the money really is lined up he could be in at a lot trouble for manipulating the stock price. If he is really doing this mainly to hurt the short sellers he should just ignore them and concentrate on running the company and not spend his energy on financial engineering. If the company prospers the shorts loose anyway. My guess is that this will not go ahead but we will see..

MontanaSeptic

The whole idea that Musk was high/joking/ramping is an in-shorts wet dream.

Read this to understand what happens next:

https://www.telegraph.co.uk/finance/newsbysector/transport/3281537/Porsche-and-VW-share-row-how-Germany-got-revenge-on-the-hedge-fund-locusts.html

Doggydogworld

Porsche’s actions in the VW case would be illegal under US law.

Nix

Tesla isn’t doing what Porsche did in the VW case. What is your point?

How many more things that would be violations of the law that Tesla IS NOT doing are you guys going to bring up?

jebise

Short squeeze of the century was definitely VW share back in 2008 jumping to almost 1000euro (was live online – CMC Markets, thought its kind of mistake, we all did, except shorts probably ;))

Kinfeboy

Jesus the Lord has come to America.

TM3x2 Chris

Tell us more.

Kinfeboy

Elon might be the new Babyjesus.

TM3x2 Chris

I see. Why all these religious symbols? Are you an evangelical?

Timothy Hughbanks

I suspect he’s not an evangelical, rather he’s being … (think of a word in which all the vowels appear once, in alphabetical order).

MikeM

Got it! Not telling!

Prad Bitt

No it’s a new strategy to undermine fan’s credibility.

antrik

New? It’s almost as old as the internet, at the very least… Very likely existed even before.

ffbj

The savior of cheese? Cheesus.

Pushmi-Pullyu

Well obviously, this reference to the savior of cheese is not meant to be taken literally. It refers to any rescuers of dairy products.

#PythonLifeOfBrian

Dav8or

Blessed are the cheesemakers.

Dav8or

I suspect that Jesus would be more interested in helping the poor masses rather than helping rich people get to work without having to drive themselves and amassing money and technology so that he can leave this planet with all it’s unsightly poor people behind and build an engineered utopia with only invited guests on another planet.

ffbj
I think in one part of the article you are adopting a short argument but not making it clear, that it’s not your argument. It seems a bit fuzzy. Maybe you should precede with shorts think, or say, etc…”To sum up,(shorts posit)etc… I know you set that up as the short POV in the preceding sentence, it’s just that it seems you switch to 1st person, A minor point, in a well written, thought provoking article. “have already helped Tesla stock heading higher” head higher or it’s heading higher. My own view is that the SEC investigation, which was already underway, may make suggestions but little will come of it, as Tesla actually does go private under an umbrella consortium of big holders, as Musk will get his way. If that’s what he really wants, for even recused from some board discussions, his views will prevail. Of course the shorts will find fault, and gape and jape. file lawsuits, anything, but if Tesla goes private, their long held short positions, which have been like the excruciatingly painful, slow death, embrace, of the iron maiden, will come to a sudden end, with no chance of rescue as your torturer, who has… Read more »
Carlo Ombello

Head higher! you’re right thanks. 🙂

As “To sum up”, indeed I summarize shorts view in a two-liner. Could not go into further details as most articles and journalists already assume Musk’s gone full-retard (see Tropic Thunder).

I fully share your financial views on the matter (but I’m more of a fan of AC/DC… lol).

Another Euro point of view

Musk is very smart no doubt about that. now he has his weaknesses as well. One of them is that he is completely obsessed with the shorts , another one is that he has a thin skin. a third one is that despite all those companies he is running he spend way too much time on social networks which would point to a narcissm issue (which would explain why he has such a thin skin). Still another issue is that some of his late hours tweets seems to have been sent under influence. So his obvious intelligence needs to compensate for some serious flaws. It could end up in all directions. My opinion is that this latest move was 80% motivated by his hate of the shorts which is not good as odviously under prepared.

TM3x2 Chris

I have 2 points:
1. Why did he wait to reveal taking Tesla private after tweeting about the burn of the century weeks ago?
2. His most recent tweets came in the middle of the day (he lives in CA), not likely he was tweeting under influence at that time.

Another Euro point of view

I am also quite sure he dif not send those tweets under influence. That does not mean his mind cant be a bit blurred by his hate of the shorts.

Pushmi-Pullyu

Poor baby. WAAAAAH!!

Another Euro point of view

….to add a last thing. I do not think that even if is his “funding secured” was way too optimistic (thats Elon.. )I dont believe he will be truelly “annoyed” by the SEC. It is just not how it works in the US.

TM3x2 Chris

SEC will slap his wrists and that’s where this will end. That’s how it works in the US.

Another Euro point of view

Agreed.

Another Euro point of view

Reason I believe SEC will do not much is (perhaps) counter intuitively because the financial situation of Tesla is not very robust and Tesla IS Musk. Harming Musk too much could very likely send stock down a lot which (weirdly but anyway) would likely trigger another bond downgrade which could likely wreck the all go private plan and possibly get 35k people out of work. That will just not happen. At worse Musk would need to compensate a few short losses happening those days. If you look at what happened to Maddof. SEC noses had to be rubbed in it with no chance to escape before they acted, and maddof did not have 35k employees and was much worse than an incorrigibly optimistic stock pumper. Now one question for the worshippers, if he dislikes so much public attention on tesla that he wants to go private, why does he not shut down his tweeter account, take some good beauty sleep and quietly mind his business of running his companies ? it is his attitude that attract shorts sellers like flies not the electric car business or whatever complotist believe to be.

Pushmi-Pullyu

Oh, Elon wants lots of public attention to Tesla. It’s short-sellers fraudulently spreading Big Lies about Tesla that he objects too. The kind of lies and FUD you yourself post.

Here’s one of your “classics”:

“How will hubby explain to wifey that their hard won cash just blew up in smoke buying Tsla stock… That may lead to divorce, that to children with substance abuse issues etc.”

https://insideevs.com/vw-ceo-blasts-tesla-low-sales-losing-millions/#comment-1348778

Yeah, I’m going to have a lot of fun watching you panic, and thinking about all the money you might well lose here.
🙂 🙂 🙂

Nix

Seems like a lot of double-speak for you not actually being able to support any claims that any SEC rules have been broken.

Ziv

I was under the impression that if he didn’t dump on the pump, it was not a violation.

zzzzzzzzzz

Insider trading isn’t the only possible violation.

Vexar

Unless everything he’s reported is true, in which case, the SEC is going to go “nope, in short, short-sellers: you’ve been warned and you’ve been burned.”
He actually sent some shorts. Gotta love that.

MDEV

And for that he has all my support

Pushmi-Pullyu

“…he is completely obsessed with the shorts , another one is that he has a thin skin.”

Or maybe you yourself are one of the very short-selling FUDsters that Elon complains about. Duh.

We are going to very much enjoy watching your dreams of making money by driving Tesla’s stock price down, go up in smoke. And laugh while watching y’all lose billions upon billions of money!

Ah, schadenfreude…

Don Zenga

Of course those shorts tried to destroy his company. One of them said that “Tesla is worth zero”.
He has all rights to criticize them.

antrik

I don’t get the impression he spends more time on social media than the average person. Probably less.

antrik

Also, going by the deteriorating editorial quality of your posts, I have to wonder whether *you* may posting under the influence… Or is it just that you feel a need to crank up the FUD posting so much that nowadays you can no longer be bothered to write properly?…

antrik

Heh… The irony of me complaining about editorial quality, and then realising I left out a word in that sentence 😉

Nelson

I will help a short in need and sell 100 shares of TSLA for $900 per share, maybe. LOL

NPNS! SBF!
Volt#671 + BoltEV + Model 3

TM3x2 Chris

I’ll buy your shares when TSLA reaches $1000. I’m looking to build a long position.

Carlo Ombello

Agreed. If Elon has not gone mad like all media say, short burn could peak above $2,000 per share before going back to more normal values.

Lambo Tom

I lamboed up 3 months ago thanks to shorting TSLA.
Everybody can be rich, it’s easy for us.

comment image

TM3x2 Chris

Congrats, but you should have waited for Tesla Roadster. Better performance and better price.

Lambo Tom

You cannot Lambo up with a Tesla bro.
Also, Lambo must be loud af to show you made it.

TM3x2 Chris

The way things are going, nobody will be able to Lambo up in a few years.
Enjoy your toy.

Ziv

Well played.

BoltEV (was SparkEV)

Get more powerful amplifier if you want loud. You will get thousand times louder system with EV since they can deliver thousands of times more power.

windbourne

Well, I guess the car simply matches the supposed owner.
But looking at everything there, I am going to guess that you are not the owner.

Mister G

I hope you have enough money to pay for the oil changes and maintenance LOL CONNECT THE DOTS ON CLEAN AIR WAKE UP co2.earth

Domenick Yoney

Why not show us your Lambo, then, instead of Daniel Clos Álvarez’s?

TM3x2 Chris

So Lambo Tom does not post a picture of his own Lambo. Inconceivable!

Steven Loveday

Hehe

Pushmi-Pullyu

I think that should be “incontheivable!” 😉

#PrincessBride

Vexar

The crowd of boys behind him. Those wouldn’t be paid actors/models, would they? I have pictures of people taking pictures of my Tesla. I know a guy who, as a teenager, bought TSLA with money he made mowing lawns in Wisconsin, back when it was $18 to $30 a share. He not only owns a Tesla now, he works for them (not mowing lawns, I might add).

Ziv

Lambo Tom was trolling us. That photo isn’t him, it is some other guy that actually owns a Lambo. And he did a fairly good job of it, too.

Pushmi-Pullyu

Seriously, anybody looking at that “photo” can see it’s been digitally massaged. If “Lambo Tom” was trying to fool us, then he did a rather poor job.

The only thing worse than a troll is a lazy obvious troll. If you’re gonna troll, then at least put some effort into fooling people!

“Anything worth doing, is worth doing well.” Even trolling.

Pushmi-Pullyu

I’m shocked, SHOCKED I say that a Tesla Death Cultist troll would post a stock photo and pretend it was his own. They are usually so scrupulously honest!
/s
😆 😆 😆

Carlo Ombello

As an Italian, I love Lambos and I love them yellow. Best choice!

Volatility helps buying Lambos for sure, true to both shorts and longs. Like whoever longed between $275 and $370 two-three months ago. I guess my argument is, on latest news, I wouldn’t short no more. 🙂

Mark.ca

I’m inclined to take his post as a joke…

Nix

Yes, even just the name “Lambo Tom” has an implied /s

MDEV

Sure enjoy the last month of raiding your Lambo before you get broke and the Lambo impounded, short sellers are a cancer of capitalism.

trololo
Winger

Maybe but price action in the stock this week doesn’t suggest any short covering so the shorts aren’t convinced. What concerns me is riling up the SEC to the point where they make Elon their hobby horse and ride him continuously. As it stands he’s 24 hours late filing necessary paperwork if his intentions are serious and nobody seems to be able to locate the claimed source of funding for this deal. Not a good use of his time!

John

Agreed. While I’d like to see the shorters buried in their own blood once and for all, I’m not convinced that this is going to end well for Elon.

Carlo Ombello

That’s a distinct possibility, as all media without exception are pointing out. However if Elon’s not gone crazy, shorts will quickly get convinced by their brokers with automatic position covering. They don’t need to do anything, just let their bank work.

Will

Then write a article about the SEC instead of this puff piece. GCR have article about already

Nix

24 hours? To what? File that he is CONSIDERING making a proposal to the board that the board take Tesla private? There is no such required paperwork for one board member CONSIDERING a proposal to the board.

Tesla has 30 days to file an 8K after making voting to go private. They aren’t even there yet.

Winger

‘Financing secured’ = material fact. Filing required with 48 hours. People go to jail for this sort of thing, especially celebrities the SEC can use as examples.

Nix

Are you trying to refer triggering an Item 12 disclosure? That only applies to “registrant’s results of operations or financial condition for a completed quarterly or annual fiscal period”

I realize you guys keep attempting to remove the context, but the context is that it is not material to any current operations at Tesla. The context is to one member of the board CONSIDERING a proposal to the board.

Obviously I can’t post a link to an SEC rule that says no such 48 hour rule exists. But if you want to post a link to whatever SEC rule you think mandates a 48 hour disclosure in a proposed action under consideration but not yet acted upon, please do so.

Winger

There are many more regs governing materiality in disclosures but this is probably the most basic and easiest to understand.

https://www.investopedia.com/terms/r/rule10b5.asp

Had Tesla disclosed their intentions in the quarterly results statements just issued this would be a different matter. Twitter is not the issue, the lack of supporting information is.

Nix

There is no 48 hour rule anywhere in 10b5. Nor does your source mention any 48 hour rule.

Thanks for confirming you don’t actually have any source of any such rule, and you are just parroting the latest line of FUD in the long running game of Tesla-hater accusation whack-a-mole.

Come back when you actually have any source showing any such 48 hour rule that applies in this situation, and not just an investopedia overview of a rule that has no 48 hour requirement.

Roy_H

What your link says is that it is illegal to intentionally deceive in order to manipulate the price of stock. Elon would have to deliberately make a false statement to come under that rule. Since he used the word “considering” it is impossible to prove that he was not thinking of taking Tesla private. In fact simply by expressing it proves that he is. The only other part is the one about “funding secured” , he did not have to volunteer that part but since he did it has to be true. I think the only part you can argue with is the funding secured, and I am sure the board will announce that as being true or false in about a week. SEC will not be concerned about it until Tesla declares their intent to go through with the privatization.

Winger

Check the class action filed yesterday. I’m not saying he’s guilty but shareholders are paying lawyers a lot of money to make the case I’m suggesting. The SEC has already opened an investigation so they’re concerned. The facts on the ground speak for themselves.

https://www.courtlistener.com/recap/gov.uscourts.cand.330489/gov.uscourts.cand.330489.1.0.pdf

Nix

Gee, accusations against Tesla and Musk directly from shorters. We’ve heard that before. Tesla won’t build the Model 3 until 2019, Tesla will go bankrupt, Tesla will never built the Model S, etc. Their record has been very, very poor.

Please post a source where a named official from the SEC states that the SEC has opened an official investigation on this matter.

Winger

“after a significant event like bankruptcy or departure of a CEO, a public company generally must file a Current Report on Form 8-K within four business days to provide an update to previously filed quarterly reports on Form 10-Q and/or Annual Reports on Form 10-K. Form 8-K is required to be filed by public companies”

Going private is a significant event. Do the math on timing. Tesla is now late filing their 8-K.

Carlo Ombello

He said he was “considering”, Musk is pretty ingenious with his words. Or, tomorrow we’ll get the filing. I honestly doubt Elon is sweating his shirt over this like shorts think. He’s actually setting up Tesla’s web shop to sell short shorts… the behaviour of a very self-confident man (or a crazy one, of course). 🙂

Winger

I’m not a short but understand that every trade has 2 sides and they both have the same rights under securities law. Any action seen as an attempt to ‘burn’ a market participant is going to incur the full wrath of the SEC.

A short seller believing they bet wrong will buy shares immediately to cover their position (‘repay’ the shares they borrowed from their broker). I’m sure some shorts did this and may have been screwed if their belief the shares would rise to circa $420 was baseless.

Whatever your opinion of Musk, Tesla and the shorts this is a serious legal matter. Jail is definitely on the menu of possible outcomes. This is a situation easily on par with insider trading, especially given the massive number of shares held by Elon.

Nix

Oh gods. You can’t just admit that there is NOT any 48 hour rule, you made it up. So instead of admitting you were wrong you move the goalposts. Just say “my bad, I got bad info, there is no 48 hour rule”. You can even cut and paste if you like.

But even after you moved the goalposts, you still get it wrong. The 4 business day rule doesn’t actually get triggered UNTIL the event occurs. Not consideration of an event, but an actual event happening. One member of a board considering an idea doesn’t trigger.

TESLA HAS NOT GONE PRIVATE (yet). Now just cut and paste this into your response: “My bad, I got the 48 hour rule wrong, and then after moving the goalposts, I got the 4 day rule wrong too. Nothing has triggered that rule either”

Winger

Yes it’s a 96 hour rule. Nothing else changes. The event was the tweet. 48 or 96 he’s now late. Unless Musk has a great story to tell about his secured financing he’s in for a rough time. The market certainly thinks he’s full of it or the stock would be trading over $400 now.

Nix

Sigh. Goalposts moved, let’s start this whole thing all over.

Please post under what section (1-5) you think triggered a 96 hour rule? Because here is the applicable rule making:

“a company need not file a report … until the company enters into an agreement enforceable against it”

What enforceable agreement do you believe Tesla has entered? Statements of Intent to secure future funding ARE NOT enforceable agreements until the board votes to approve.

Here is the discussion of the relevant rule making for the 4 day rule straight from the SEC: https://www.sec.gov/rules/final/33-8400.htm#seciic

Mister G

GO TESLA GO DESTROY DIRTY GAS GUZZLERS AND DIESELS LOL CONNECT THE DOTS ON CLEAN AIR WAKE UP FOLKS co2.earth

Golgoth2020

Without Elon Musk? If he committed securities fraud, his career is over.

windbourne

why is this one being modded down?
What he said is fact, not opinion.

Pushmi-Pullyu

Because it’s a “concern troll” post. The very type of thing that Tesla bashing FUDsters love to write. FUD isn’t always a lie, but it’s always an appeal to fear.

Nix

Is winbourne a rapist? Well, it is also a fact that if you are convicted of being a rapist, then you are going to jail.

There is nothing I said that was technically false, but if you can’t see the common problem with Golgoth’s post about Musk, and my example, then I can’t help you.

Kbm3

If you committed child molestation, so are you.

The Electric Israeli

I hope he is not going to be in trouble for that. Here are some vids I made about this topic.
https://www.youtube.com/watch?v=6AXBtCyOlK0&t=2s
https://www.youtube.com/watch?v=w9m9JEf7JZ0&t=2s
https://www.youtube.com/watch?v=zfleoVHWMhY&t=1s

Scott Franco

For reference, the WV “short burn” was a corner executed by Porsche. The had %25 of WV stock at that time, and bought an option to buy %31 more stock in the company. %25 of WV was owned by the government, who had no intention of selling, so the total amount of shares “occupied” or unavailable for the shorts to buy back to cover was sufficient to corner the shorts, or prevent them from obtaining stock to pay back their borrowed shares.

Chris

I still don‘t understand all this short hatred. If Tesla is successful (which I think most on this site hope), they‘ll go away.
It‘s not like short sellers can influence day to day business operations.
I really hope this is a genius plan and not just irrational behavior from Musk.

I‘ve sold my shares this week, since this all got too messy for me to be invested with my hard earned money. I might miss out on the gain during a short burn, but I try to stick with my investments to companies that have good corporate governance (even if it‘s ‚boring‘).

I really hope it works out for the people that are staying long. Just too risky for me.

antrik

The smear campaign from the more active shorters does actually affect day-to-day business.

Tim Miser

Not such a smart thing for Musk to do. I’m sure the SEC will be very interested to look into this to see if it warrants a criminal investigation. He knew this announcement would drive up the cost of shares yet if he was seriously pursuing this he would have never announced it to prevent the share price from going up.

Vexar

Aha. CEOs can’t announce their intent to go private. Wow. I didn’t know that was to be kept a secret until… wait, how do you go private if you don’t tell the shareholders?

Doggydogworld

Vexar, there are specific rules a large shareholder and/or insider must follow when pursuing a buyout or tender. The SEC will investigate whether Musk followed these rules.

The author’s contention that the SEC had to be asked (by short sellers) to start an inquiry is ridiculous. The SEC rarely presses charges, but they inquire all the time. This is way too high-profile to ignore. Besides, they already had an open inquiry and probably just tacked this on to that one.

Nix

Please provide a source of what rules you believe were violated.

Elon didn’t actually even announce a buyout or tender, merely that he was CONSIDERING going private.

Are you complaining that it was done on Twitter? Tesla is well within their rights to use any form of electronic distribution they want, including Twitter, under the Electronic Signatures in Global and National Commerce Act of 2000. Ever since 2013 when Elon told investors to watch his twitter feed, his use of twitter ““may not be denied legal effect, validity, or enforceability solely because it is in electronic form”.

https://www.law.cornell.edu/uscode/text/15/7001

Carlo Ombello

Ciao Doggydogworld,

In my article I was only implying that shorts are the ones crying for the SEC to investigate. Of course the regulator will do what they have regardless. I’ve read your SA post, very thoughtful and interesting and goes to show along with few others that a private plan is far from impossible. I think we’ll all be surprised in the end.

Enthusiast

This comment is just dumb. I don’t think anybody has a problem going public with the plan to go private. The problem was he announced it on twitter in a very unprofessional manner. He could have done in the correct and ethical way by announcing it after the markets were closed with a detailed and already vetted plan by the Tesla board. Instead he did it his usual childish way. This doesn’t help Tesla achieve it goals. It doesn’t help them produce more cars or improve their quality. This is another unnecessary distraction that could end up very badly for Elon. He needs to grow up and stop letting his ego control his behavior.

Nix

There is absolutely nothing illegal about using twitter. See my post above about ESIGN.

Nobody has announced a “plan to go private” as you claim. Musk announced that HE (one person on the board) was CONSIDERING the idea of Tesla going private.

I know this confuses people, but just like the Solar City deal, Elon is just one person on a board, and his vote is only worth as much as any other single member on the board. And they have not announced even a decision to go private, much less a solidified plan. Nor is there any requirement to do such, and the board simply is not at that point and that would be premature.

There is no obligation to include a “detailed and already vetted plan” in any announcement of the CONSIDERATION of a financial move.

Enthusiast

You are missing the point. The point is Elon doesn’t need to make every thought public on twitter. He would have to be an idiot to think that statement wouldn’t have an impact on the market. He is not helping Tesla by constantly being involved in drama. And your opinion on the legality of his statements are just that, an opinion. You are not an expert or an authority on the matter so your statements hold no weight. The SEC will determine if action needs to be taken, not you or me, but the point is this wouldn’t even be a conversation if Elon didn’t feel the need to pontificate on serious business decisions on twitter.

Nix

So your drama-laden posts are just to make the point that there should be less drama?

That’s exactly the point of taking Tesla private. Less drama. You pretend like it is Tesla that brought this whole drama to the company, and not the shorters who have blown drama into everything INTENTIONALLY, and potentially unlawfully.

Talking about fomenting drama, if you are against drama, maybe you should wait to talk about what the SEC might do or not do until the SEC actually officially announces they are actually investigating this matter? (they haven’t). That would certainly lower the level of drama.

Will

Secure funding was the key words

CDAVIS

Article OP ARLO OMBELLO said:

“…One thing is for sure, commentators the world over are confused by Musk’s tweets and the shorts they are interviewing don’t even want to ponder the potential consequences on their bets, if Elon was indeed telling the truth…”
———-

Let’s unpack that sentence:

1) “confused by Musk’s tweets”: Seems to me Musk was super clear about what he is *considering* and why he is *considering* it… and Musk’s follow up tweets and explanation letter to Tesla employees (which was made public) provided FAQ details not often publicly available until later. If after all that information provided one walked away “confused” then they have a reading comprehension issue.

2) “shorts they are interviewing don’t even want to ponder the potential consequences on their bets”: No pondering needed… the anti-Tesla Jim Chanos Wolfpack are professional hedge-fund institutional shorters that knew instantly ramifications of Musk’s tweets.

3) “if Elon was indeed telling the truth”: Elon *considering* taking Tesla private to be true means that Elon does in fact desire to be able to run Tesla same as he does with SpaceX… how could anyone suggest that is not true?

Doggydogworld

CDAVIS – the issue isn’t Musk “considering” going private. He’s talked about that before.

The issue is “Funding secured”. And later tweets that he already had investor support, and the only remaining issue was a shareholder vote. Those are material statements from an insider. It’s not an ‘innocent until proven guilty’ situation. He must show the SEC his claims were factual. Fully factual, not “reality distortion field” factual.

I wrote a short blog showing how he might do it with “only” 10-20 billion of cash:
https://seekingalpha.com/instablog/264299-doggydogworld/5197282-funding-tesla-go-private-deal?source=instablogs_title

However, IMHO he’ll need to show more like 20-30 billion cash plus commits from large institutions (e.g. Tencent, T Rowe Price, Fidelity) that they’ll stay in.

Another Euro point of view

It is hard to imagine Elon not having at least an oral agreement on funding (which is pretty weak I admit) but it is also hard for me to imagine investors asking first for 3 consecutive profitable quarters and a board of directors not made of puppets. so getting rid of shorters to end up getting on a short leach maybe.

Nix

Nobody wants to click on your SA link just so you can make money off a bunch of clicks. Stop posting self promoting commercial links where you are paid for people clicking on your links you post. If you have a point, post it here and stop advertising your paid-per-click links you use to make money.

If enough current investors decide to stay, Musk may end up being able to do it with zero dollars in cash, having the entire venture being funded by shorters desperately bidding up TSLA shares into the thousands of dollars in their rush for the exits.

This would not be the first time Tesla has used massive shorter losses to fund their expansion.

ffbj

It’s bad news for the shorts, but how will the stock jump into the thousands of dollars? The take out price is $420.

Nix

$420 is the price that Tesla would BUY shares from current shareholders.

Shorters don’t have shares. They need to buy shares to give back to the people they borrowed the shares from. Tesla isn’t selling shares for $420. Shorters will be competing AGAINST Tesla to buy shares from people who currently hold shares.

Pushmi-Pullyu

I don’t get it, either. But then, I’m not a “financial guy”.

I understand that the “shorts” will be required to actually buy stock to cover what they have, in theory, merely “borrowed”, and that might indeed — probably would — drive the price up above $420. But I can’t for the life of me understand why it would drive the price up to anywhere near $1000, let alone above that figure!

But Nix is very rarely wrong. Obviously the implications of shorting a stock are more complex than I realize.

Nix

The profit on a short is limited to the price of the stock. You borrow a stock for $300 and you buy it back for 1 dollar and you make a max of $299 (minus fees and interest)

But the losses are unlimited. If you borrow a stock for $1 dollar and your broker forces a margin call, or the stock is recalled at $1000 dollars you owe $999. If the stock hits $2001, you owe 2000, etc.

Just having a future offer of buying at $420 does NOT have any magical limit on the stock market. TSLA prices can go to $1000 a share, then down to 100 dollars, then to 500, etc. There are no controls besides the maximum movement before tradings is suspended. When 35 million shares have to be purchased, they have to be purchased per each individual short contract. There is no magic exit out of these short contracts. And when there aren’t 35 million shares in the hands of willing sellers, the price goes up until there are 35 million shares in the hand of willing sellers.

Doggydogworld

Nix, do you ever get anything right?

There is ZERO remuneration for SA blog posts. They only pay for articles, which I have never written.

I’ll address the”thousands of dollars” per share fantasy below.

Nix

If that is indeed how it works, then my bad, I apologize for my mistake. When I get things wrong I admit it. I am not party to the finer details on how Desperately Seeking Alpha profiteering off of hyping falsehoods operates, so I’ll take your word as an expert in that area that I was wrong on that part of my comment.

CDAVIS

Doggydogworld said: “…The issue is “Funding secured”. And later tweets that he already had investor support…”
————-

“Funding Secured”: Likely oversubscribed preliminarily funding support… challenge won’t be raising the funding but instead deciding which available funding option to take.

“investor support”: From what I’m reading seems the key Tesla institutional investors are in support of Musk’s plan… has any key investor say they don’t support it?

Dan F.

It’s the “funding secured” statement that is the issue not the “considering….”

Nix

The two cannot be separated like many are trying to do. One is context to the other.

Arista

You are totally clueless dude.

Nix

Go read the SEC rules on 8-K disclosures, and how they require actual official approved actions of the COMPANY being COMPLETED, not the just what one board member has done in due diligence in CONSIDERING a future action that the company may officially act on at a later date.

Context absolutely matters.

Sorry you can’t actually vocalize any coherent arguments or provide any sources for anything you may disagree with.

Seven Electrics

Another distraction from Musk, this time one which which may carry criminal consequences for materially false statements. All of this to fight a phantom enemy. By dollar volume, FAANG stocks are far more shorted than Tesla, because the market is close to peaking. Short selling is an effect, not a cause. Focus on improving your business, Elon, and you’ll be better able to handle the scrutiny that comes with running with the big dogs. And take fewer drugs.

John

Thank you for bringing balance to this site. You’ve changed my mind, thanks.

Mark.ca

Lol…in light of his posts i came to appreciate the other trolls. They are a class higher.

Nix

He is handy to have around. Upvotes for his comments are a very good gauge of how many other trolls are also posting on the story…. His posts are like a honey pot test for identifying haters!! LOL!!

Nix

It is also funny when he tries to “Lambo Tom” us with all his fake EV’s he claims to own.

Pushmi-Pullyu

Eleventy Pretend Electrics said:

“…one which which may carry criminal consequences for materially false statements.”

I’d love to see you charged with fraud, and attempted stock manipulation, for your hundreds or thousands of materially false statements about Tesla and its cars.

The hypocrisy here is thick enough to cut with a knife; serial anti-Tesla FUDsters, who lie every time they post about Tesla, suggesting that Elon Musk should be investigated and/or face criminal charges for “daring” to talk about taking Tesla private!

CDAVIS

Seven Electrics said: “criminal consequence… materially false statements…”
———————

Lol…

The anti-Tesla Jim Chanos wolfpack know the Elon Tweet is real but desperately trying to cast enough public doubt to pull down TSLA to lower their cover cost… problem for Chanos Gang is that majority of TSLA is closely & institutional held… and those TSLA holders know Elon is serious… and are in support of Elon’s plan for Tesla going private.

CDAVIS

The anti-Tesla Jim Chanos wolfpack will in the end likely be forced to request Tesla to sell them new issued TSLA shares at the $420 to short cover which in turn serves as financing for Tesla going private…

The beautiful irony of it all…

Troy

You’d think for $50B in R&D funding someone could actually spin up a new competitor to Tesla.

$5B would emplace 200,000 chargers (at $25k each)

‘nother $5B would pay 1,000 people $1M/yr for 5 years to get the car out.

Would make most sense to partner with a Toyota, Honda, etc. to actually get the assembly lines going since you’re not going to out-Toyota Toyota.

Doggydogworld

Toyota and Honda aren’t going to rent their assembly lines out to a competitor.

Fiat-Chrysler (FCA) might. But then you’ve got cars assembled by FCA. Magna Steyr and Valmet are good choices in Europe, but there’s nothing really like that in the US.

antrik

Doesn’t Magna have a US plant?

The real problem is that they don’t have the volumes necessary to support a serious Tesla competitor… And if they’d try to scale massively in a short amount of time, they’d likely run into the same kind of problems as Tesla did.

Doggydogworld

Magna makes parts all over, but I’m not aware of any car assembly lines in the US.

CDAVIS

@Troy said: “You’d think for $50B in R&D funding someone could actually spin up a new competitor to Tesla…”
————

There is huge value in a company that has established customer base, product development momentum, and is growing revenue exponentially. Funding $billions in a new startup competitor is funding an expensive dice-roll at the starting line.

Will

Ok. But nothing on SEC investigation on this tweet but other blogs are covering it

Nix

Where has any website quoted any official SEC press release or gotten a named SEC official to state on record that this is being officially investigated? All I’ve seen so far is anonymous “sources say”.

Is an actual official SEC investigation happening? Maybe. Maybe not. Keep in mind an official investigation is NOT the same as the SEC requesting docs — there is a specific process for actually opening an official investigation.

Perhaps those sites who are waiting for an actual official announcement from the SEC itself confirming any investigation into this matter might be the smart ones……

Steven Loveday

+1

Will

Greencarreport. There at least a mention and journalistic integrity to keep on reporting on both sides of the aisle

Nix

If you think the greencarreport story quotes any official statement from the SEC, or any named person from the SEC, you’ve gotten it badly wrong. GCR quotes a Wall Street Journal story as their source. The WSJ story uses “people familiar with the matter” as their source. If these are the same anonymous sources that WSJ used to say that the Model 3 wouldn’t hit production until 2018, and that Tesla would run out of money endless times, there is no reason to trust them now.

This is EXACTLY why Tesla should go private. A news organization who uses anonymous sources, and has a long track record of those anonymous sources being full of bullpuckey, writes a story. The story may end up being false in the end, but because the SEC doesn’t comment on such things, there is no way to officially debunk anonymous unnamed sources that don’t provide proof. So even if this is pure BS, it gets reported as if true on site after site.

If I owned a news organization, I would be reporting this as “unconfirmed rumors”, and making it clear that “The SEC did not confirm the accuracy…”

Golgoth2020

Well, Tesla is now getting sued (class-action) and investigated by the SEC. The funding literally had to be secured at the time of the tweet. If not, he committed securities fraud. I guess the ill-advised tweet can be blamed on insomnia or sleeping on the factory floor.

Or it was true, and shorts are gonna be burned.

Bob Wilson

The funding secured does not mean it has to be disclosed at that time. When the board approves the plan and files the appropriate documents with the SEC is soon enough.

Nix

Bob is correct. And that time line includes Tesla having 30 days to file an 8-K on anything they finally actually decide.

Will

So we have to wait 30 day? Ok

windbourne

no, Elon did not have to disclose it. HOWEVER, he stated that he had funding secured.
He damn well better have had access to that, and had at least discussions with the holders.
For example, the top 16 banks AND Saudi Arabia have already said that they have not talk with musk. And the Saudis went so far as to say that they were not interested.

So, Apple, or perhaps the Google boys, would be enough to pull him off the fire.

Nix

If they are under NDA, they can’t disclose they talked to Musk, and if asked they can’t say “we can’t talk about it because we are under NDA”. They have to deny.

Nix

Only needs to be secured to the extend require for Elon (one member of the board) to CONSIDER asking the board to take Tesla private. That isn’t such a high bar as you make it out to be. Even just a verbal intent from investors is sufficient.

Anybody can sue anybody. Nothing can be read into the existence of a lawsuit.

Shorts are gonna get burned either way. Either Tesla goes private before Q3/Q4 results, and shorts get burned, or shorts get burned by Tesla Q3/Q4 results when their claims that Tesla will keep burning through cash in H2 the same as H1 are proven badly wrong.

Martin Lacey

We’ve all had a few days to digest the announcement(s) from Elon/Tesla. It would appear that $420 will for the next few days be the ceiling for TSLA. Once the SEC have cleared EM of “manipulating the stock” and the Board support this decision as being in the best interests of share holders $420 will become the floor. The Board would have to accept offers from other interested parties which could make way for a bidding war and the shorts who don’t get out in the next week or so will be in for a world of pain.

Nix

Yes, the board would legally have to CONSIDER all bids. Heck, even bids below $420 they have a legal obligation to consider. But it isn’t just a straight bidding war with whoever raises the paddle last winning the bid. The obligation of the board is to accept the deal that best represents investor’s interests based upon the totality of the deal, not just the bid on the share price.

Anybody certainly can try buying up a controlling number of shares outside the board, and going that route. But that would drive up share prices through the roof.

Doggydogworld

There will be no other bids, but the board will fulfill its duty to ask. They also have to get a fairness opinion, etc. These formalities don’t really matter. If Musk actually has the cash the deal will happen. If he doesn’t, he’s in trouble.

Nix

Right now as we speak there are members of boards, banks and investment companies across the world, who are going through their good faith fiduciary duty to investigate the financial benefits to their shareholders and investors for them either backing privatization or making a competitive bid for Tesla.

Pushmi-Pullyu

“…hinted at an event bigger than VW’s 2008 short squeeze, something I would picture as a financial ‘Supernova’.”

A mere supernova? To quote Elon: “What are you referring to, a child’s toy?”

The coming TSLA short squeeze will be the biggest thing since the Big Bang that created our entire universe!
😆 😆 😆

But seriously, I have no idea if this is real, or just Elon giving the short-selling FUDsters, the ones who fraudulently try to manipulate Tesla’s stock price by posting Big Lies and conspiracy theories all over the internet, a swift kick where it will hurt the most.

But one only has to look at Tesla’s stock price to see that most investors are literally not buying that this buyout is real. If they did, then they would bid up the price of TSLA to just under the $420 that Elon cited as the coming buying price.

Either way, whether it’s Elon pulling off a major financial coup or just Elon doing to the FUDsters what they’ve been doing to Tesla for years, the reaction from the FUDsters certainly is entertaining!

Make some popcorn, pull up a chair and watch the fireworks. 🙂

Carlo Ombello

Indeed it’s popcorn time! And yes, big bang is the only known explosion bigger than a supernova. 🙂

Doggydogworld
Tesla longs currently hold 205m “shares”. This consists of real shares and hypothecated “shares” that show on brokerage statements but have actually been lent out. Musk wants to create an even bigger squeeze than VW (which would have been completely illegal in the US, btw) by convincing more than 170m of the 205m “shareholders” to keep their positions in a private Tesla. With only 170m “real” shares, the logic goes, shorts will be unable to buy enough shares in the market to cover their position and the stock price will go to the moon (or Mars, ha). Some problems: 1) Most mutual funds, ETFs, etc. cannot hold private equity, and will have to sell at 420 2) Some funds which can hold private equity will prefer to sell at 420 3) Some individuals will sell, others may be forced to sell 4) Shareholders who lent their shares out may not necessarily get them back 5) Musk may not actually have enough funding, in which case the whole thing collapses Legally pulling off a squeeze is very tricky. Although it’s clear Musk has been thinking about this for some time, the evidence shows he went off half-cocked. He hasn’t filed anything… Read more »
Carlo Ombello

Any shareholder who will want out at $420 won’t have do do so by selling in the open market, but in the privatization phase. Most definitely they won’t be there helping shorts! Whoever – Santa Claus? – is lined up to guarantee this (“funding secured”) is another subject. With ALL shares potentially unavailable (Musk’s plan), where will shorts get cover?

Doggydogworld

Hi Carlo – sorry if I misread your statement about shorts asking the SEC to investigate.

“Any shareholder who will want out at $420 won’t have do so by selling in the open market,”

It doesn’t matter. Shareholders who tender at 420 will get cash from their brokers, who get it from the clearing firm, who gets it from Tesla AND any shorts who still have open positions.

The only issue is how many longs exit. Index and similar passive funds will obviously exit, and they alone probably have enough shares to cover the shorts.

Musk may be planning some kind of two-step deal where his investors buy all the passively-held shares first, then Tesla goes private. That’d be frowned upon, IMHO, but we’ll have to wait to see details. Of course passive funds would be better off selling to shorts at 425 than Musk’s investors at 420, if it came to that.

Carlo Ombello
Hi Doggydogworld, Interesting feedback, very useful thanks. If Elon has been preparing for this moment, i do think he wants to both go private AND burn the shorts. Letting them off the hook at $420 would be a benevolent slap on the wrist… You say brokers would get money from Tesla AND from shorts… but Tesla will be there to fulfill the promise of collecting *ALL* the shares for de-listing, shorts would be additional 35 million buyers to an unavailable stock, which they simply have to give back to the rightful owner. At the end of the day, it’s all about how many buyers vs sellers of the stock there will be in the crucial days following a possible confirmation of the deal. To reinforce the above commitment to all shares, Musk could make sure most of current stockholders stay in (also perhaps call options are in place?), attract new buyers who don’t want to miss out on a private Tesla, and get shorts to cover all at the same time. I see shorts on SA aware of this possibility but assuming the worst would be some $500 per share. Good luck to them! As to how high a perfectly… Read more »
Doggydogworld
Carlo – “You say brokers would get money from Tesla AND from shorts… but Tesla will be there to fulfill the promise of collecting *ALL* the shares for de-listing,” That’s not how it works. Longs own 170 million shares. Longs own another 35 million “lent-out shares”. Lent-out shares look like real shares in brokerage statements, but are just promises from the broker to the customer. They don’t have voting rights and don’t receive dividends from the company. Tesla has no legal relationship with holders of lent-out share – it’s all governed by contracts between the brokers, their clients and the clearing firm(s). I’ve held shares and have shorted shares through acquisitions, tender offers, rights offerings, etc. The company does not deal with lent-out shares. Shareholders do not “recall their shares” prior to the corporate event. It just doesn’t work that way. Retail shareholders don’t bother with it and institutions make too much money off lending to do it. “At the end of the day, it’s all about how many buyers vs sellers of the stock there will be” Yes. If Musk convinces more than 170m worth of shares to stay in some new structure that prevents short-selling, there will be… Read more »
Carlo Ombello
I appreciate your input, and have no doubt in your experience on the subject. What I see though is also a very hot combination of feelings around the stock (love-hate-fear-hope…), which makes its swings hard to predict and un-orderly. Excluding the one-week spike of week 1 in August, in two weeks between 5 and 18 June, stock went from $291 to $370, I think due to Musk’s comments on shorts. That included in good part short covering. Highly irrational, and a window into what could happen if the Musk-case scenario unfolds. Musk being Musk, if he’s onto something, he would clearly like to soon confirm that 100% of the stock is funded and how. As you point out in your piece, it’s not even about 100% of the shares, as a good chunk would be out of the equation (insiders and some institutions). I don’t expect anything “expectable” on this regard, meanwhile the market seems to bet on TSLA to tank (option prices are very biased towards a fall atm). I very much know that what I describe in my article is unlikely, as I try to convey even in the title (which has a question mark). I am just… Read more »
Nix

“Shareholders who tender at 420 will get cash…from Tesla AND any shorts” This is a wildly incorrect. Each transaction is separate. You can’t waive your hands and yadda-yadda them into one transaction.

1) The Shareholder must have a share in their ownership before Tesla will pay 420. This is one transaction. Before this can happen:
2) The Shareholder must recall the share from the shorter. The shareholder’s contract gives that absolute right. This triggers:
3) The Shorter now MUST purchase a share and hand it back to the Shareholder. They don’t get to say “I offered $420 bucks and nobody would sell me one, so here is $420 bucks”. No, he/she MUST buy and deliver that share, and continue to increase their ask price until someone sells.

There is no “I couldn’t fulfill our contract, take $420”. The Shareholder WILL get their share before Tesla will pay out the shareholder.

Carlo Ombello

Exactly the point of my article. Not a ceiling, a price floor.

Musk may have engineered a complete dry up in TSLA stock availability, even superior to Porsches coup, so as to drive shorts to a bitter end and enjoy the show. At this point in the game, why would Musk want to limit the smackdown to his detractors?

The only alternative I see is indeed Elon’s madness, which would now lead to his final demise. I am somehow lead to believe he is still in his right mind, such as when he sent a car into space.

Nix

Any investors would be under a non-disclosure agreement, and if asked they would have to deny any knowledge, even of having been contacted about funding and signing an NDA. Nor would all parts of a large company know what other parts are doing. It would be strictly compartmentalized.

Are you under the impression that if a reporter calls and asks about something subject to an NDA, that the company’s press rep is going to tip their hat by saying they have been working with Tesla, but can’t give the details because of the NDA? No, they will give the Sgt. Shultz answer. “We know nothing! Nothing!”

You are repeating your same mistake that you made over and over when you claimed that Tesla would never go into production with the Model 3 in July 2017, when you kept claiming that unless we had pictures of everything Tesla did developing the Model 3, that it didn’t happen. The truth is the exact opposite, we will never know everything that Tesla does that Tesla doesn’t want to be public.

Nix

This is going to to be one of those posts where it is going to take more posts to correct with all your rapid fire errors than it took for you to write.

Please provide a link to what SEC regulation requires an SEC filing on behalf of the entire company when ONE member of a board announces that they are CONSIDERING proposing to the rest of the board that they take the company private. This has nothing to do with Musk’s disposal of his own shares, so he has no individual obligation to file any SEC filings regarding his own shares.

Obviously I can’t post a link to the SEC saying no such regulation exists, so please provide evidence of any such regulation. The burden is yours.

Nix

4) Shareholders who lent their shares out may not necessarily get them back

No. It simply isn’t up to the shorters whether they give the shares back or not. It is a contractual obligation in the short contract.

Once a short seller has initiated a position by borrowing stock, the borrowed stock may be recalled at any time by the lender. If the short seller is unable to find another lender, he is forced to close his position. This possibility leads to recall risk, one of many risks that short sellers face.

When you sell short your broker will require you to have extra funds set aside in your margin account in case your short sale position starts losing money. Your broker will require that you always have enough funds in your account to close out your position. A margin call is a notification that you either need to add cash to your account, or cover some of your short position to reduce your exposure. If you don’t act, your broker will reduce your short position by buying back the security whether you want to or not.

Nix

Oh, and if your margin account doesn’t have enough money to cover your broker buying back TSLA shares at the current market price, whatever that may be, they just draw your margin account negative and you owe your broker the money. Even if you have to sell your house, liquidate all your holdings, or have to borrow money from someone else, etc.

Nix

This is so painful. So much wrong in one post in short little sentences that require long explanations to debunk.

“Why would anyone willing to invest $5 billion or so at 420 not simply buy in the 350-380 range?”

They wouldn’t buy large blocks of TSLA because the terms of the non-disclosure would mandate that in agreeing to enter into negotiations over being an investor in taking the company private, that these investors don’t ACT or TRADE on any of that inside information.

Those willing to invest would have entered a Non-Compete Agreement along with the NDA. None of these deals would ever work if those wanting to invest in the company going private were able to undermine the process by acting counter to the agreement outside the agreement.

Pushmi-Pullyu

“This is so painful. So much wrong in one post in short little sentences that require long explanations to debunk.”

That is why, when FUDsters use the “Gish Gallop” method of posting FUD, the “overwhelm them with a blizzard of lies” dishonest debate technique, I’ve taken to replying with just the count of the number of false statements and half-truths they’ve posted, and at the most pick out only one or two of the most egregious lies to debunk.

Most readers won’t take the time to read extended posts debunking multiple FUD points… and the FUDsters know it. Let’s refuse to play by the FUDsters’ rules!

antrik

Funny for you to claim that you understand long debunking posts are useless, while being among the three people here most often posting way too long replies to troll posts 😛

BTW, I don’t get the impression that @doggydogworld is trolling. I don’t know enough to judge the veracity of his claims in this case; and I do know that he tends to be opinionated (e.g. claiming that the New Roadster MUST be using solid-state batteries) — but it never looks to me like he is knowingly posting false claims…

F150 Brian

Getting so sick of this short b s
Stick to the cars and technology and start a new site called inside tesla dot corn for the tesla circle jerk.

William

All of the “Tesla dot corn”-holios, will finally have their Bevis and Butt-head C J (not a Jeep) site.

Nix

Sick of stories about Tesla Shorts getting burned? Really?

Then why did you click and read a story about Tesla shorts?
If you aren’t interested, why then go and post on a story about shorts?
Then, why do you keep coming back to that same story and voting and responding to replies?

Just don’t click on stories you aren’t interested in. The whole internet is full of stuff I’m not interested in. I solve the problem by clicking on what I’m actually interested in. Can’t wait for you to come back repeatedly to a story you aren’t interested in so we can all hear your response.

If insideevs doesn’t cover something negative about TSLA stocks, you are one of the first to post links to it, and demand like “Will” above that insideevs cover it. So stop pretending you aren’t interested. You just are a sore loser when the news doesn’t fit your narrative.

Get Real

Isn’t it amazing how the trolls come here and whine about these Tesla articles AFTER they read them!

Clueless moths to a flame just like the shorters (not a coincidence me thinks).

Hopefully most of these losers just go away after Musk’s actions here clean them out of their ill-advised gambling monies.

Speaking of which, I couldn’t help but notice that the formerly prolific shorter troll David not-Green has basically disappeared (along with his shorter money) here so Musk is to be congratulated on fumigating some of the Koch-Roaches.

Pushmi-Pullyu

David “Green” hasn’t posted on the InsideEVs forum for nearly a week, either, after recently being one of the most prolific posters there also. I too would like to think we can thank Elon for that!

William

He’s (D.G.) probably off somewhere, hiding with his little tail curled back between his shivering (shortless) exposed legs.

Hopefully St. Elon and his Silicon Smugs, didn’t pull a “Montana Septic” disappearing act ,”Reeking Moutha” style, on our IEVs resident, and blathering FUD Troll, aka D.G.

Will

I’m burn NiX it’s every single day plus the only reported one side of the story instead what’s going with the sec well

Nix

Will, Please, post a link to ANY official SEC press release, or quote ANY named SEC official who has said anything at all about Tesla being investigated for anything related to this issue.

Instead of actually providing a source, you will either come back with a link to anonymous sources, or no source at all, or you will simply refuse to acknowledge there there has not been any official statement from the SEC or from any named individual working at the SEC.

Again, this is why a reputable news organization would not be reporting on this as if it were fact. And why Tesla needs to go private, because this story is being spread around in the financial press AS IF it were fact confirmed by the SEC, and not just based on anonymous rumors.

Clive

Burn baby burn

disco Inferno 🎵

TheWay

The shorts are getting desperate. They are trying to manipulate the stock by launching a lawsuit against Musk (before the SEC even finished their investigation) and promoting said lawsuit to the media.

Their hope is to cement into public notion that what Musk did is “fraud” (regardless of what SEC rules) to tank the stock.

William

St. Elon can now claim he beat the SEC rules based system, and the Wall Street Shorts, because his “fraud” tweet didn’t rise to the merit of a financial coup.

This Tesla Tale of redemption, will go down in history, as just a good ol’ fashioned “Shellacking of the Shorts”.

Now, get ready, and EVerybody Lawyer Up!

These Sharks are gunna wanna git just about 40% of EVerything.

Carlo Ombello

Is Musk has prepared his checkmate carefully as I think (rather than tweeting while on drugs), no FUD will matter anymore.

zzzzzzzzzz

As far as SEC rules and securities laws are concerned, you would better listen to a person who was SEC chairman at some time, not to fanboyZ wishful thinking.

“Musk’s tweet could be securities fraud if he was trying to manipulate the market…”
https://www.cnbc.com/video/2018/08/07/musks-tweet-could-be-securities-fraud-former-sec-chairman-tesla-market-manipulation.html

“Elon Musk should shut up and stop tweeting, says former SEC chair”
https://www.cnbc.com/video/2018/08/10/elon-musk-should-shut-up-stop-tweeting-former-sec-chair.html

TheWay

I like how you avoid the topic of how these shorts sued before the SEC made a ruling in a sad attempt to manipulate the market.

If they were so confident, they would have sued after the SEC ruling, not before.

As for what the previous SEC chairs had to say, sounds like a lot of “hypothetical scenarios of doomsday” but nothing actually concrete to show any issues.

Nix

If you apply those statements exactly verbatim to the shorters filing a lawsuit IF their intention in filing the lawsuit was to influence TSLA share prices, then they could be doing security fraud under the standards you present.

That’s the problem with what you are trying to present as evidence of unlawful activity. It is missing the key part of the “what if”. Based on those standards, everybody must be guilty of everything that they COULD do IF they had done something illegal.

Don Zenga

Fantastic.

I wish someone really sells short with a tagline
“Shorts for Shorts”
with 1 “Shorts” in Right side and another “Shorts” in Left side with “for” in the middle and the Tesla symbol above the “for”.
That would be nice.

zzzzzzzzzz

Eloon has 4 days to fill SEC form about material event and show the “secured funding”.

Normal companies do it in advance and not at trading time. Otherwise it looks like fraud and smells like “fraud” as former SEC chairman Harvey Pitt named it. Class action is already filled.

And it looks like market didn’t believe “funding secured” either, all the gains after the tweet are erased by now.

Nix

I see the 48 hour rule goal post has been moved again to now be a 4 day goalpost. Please post what rule you believe covers his “secured funding” comment IN THE CONTEXT it was stated?

Let me guess, you guys won’t be able to produce that proof anymore than you guys could back up the 48 hour claim. Because there is no 4 day rule that covers a single member of the board talking about what he his considering taking to the board. In fact, Elon talked about this back in 2017, and guess what? NO 8-k’s were filed back then either.

101101
“…Musk will seriously expose himself to severe consequences over his words.” There will be no consequences for Musk no matter what. You’d have 23 million with pitch forks screaming burn the short villains at the stake. Using the law to obviously enable the undermining of the public interest in a maximally public forum doesn’t work. Also would radically magnify Musk’s status. Its very simple, fossil fuel has been kept around for the last 75 years to enslave people all over the globe with rent seeking, Tesla stands for the destruction of that criminal enclosure and for freedom and liberation. So again there will be zero consequences for Musk regardless regardless of losses for the fossil fuel short pr campaign. Also any effort to create any movement in the direction of a consequence would expose what’s behind the shorts which would be disastrous for fossil fuel even during the time of the capture T. Admin. They will just have to absorb another 12 billion is losses (public subsidy money to begin will) but will be losing a lot more than that as electric cars begin to take share market share from ICE exponentially.
David

Fraud

Nix

libel and defamation

Scoty

Tesla automotive is only a part of Tesla stock. Tesla energy also makes up the stock and is up 160% but no one mentions that. Battery storage is the biggest news and Tesla leads the way with the gigafactory. Plus other car manufacturers must go thru 3rd party to buy batteries for their cars cutting profitability!

K A Cheah

THIS SEC SUIT IS FILED ON BEHALF OF THE SHORTS THAT SUFFERED HUGE BURNS AS THIS IS VERY UNFAIR TO THOSE PIONEERS LIKE ELON MUSK THAT HAS THE SUBSTANCE TO CREATE NEW ADVANCED HIGH TECHNOLOGY THAT CAN DISRUPT THE HUGE OIL INDUSTRIES & ICE COMPETITIONS THAT HAVE HAD TRIED TO OPPOSE HIS EVERY ENDEAVOR & INITIATIVES AND AS WELL AS HIS MAKING THE WHOLE WORLD’S ELECTRIFYING MOBILITY AND ALL TRANSPORTATION SECTORS FOR LAND, SEA , AIR AND SPACE. ALSO THERE IS NO EVIDENCE THAT ELON MUSK HAS HAD COMMITTED ANY OFFENSE AS HE HAS THE UNQUESTIONABLE CAPABILITY TO TAKE TESLA PRIVATE IF HE INTENDED TO EXCLUDE THOSE OF THE TESLA’S SUPPORTIVE EARLY INVESTORS THAT HAVE LIMITED CAPACITY BY THEIR COMPANY’S OWN REGULATIONS TO INVEST IN A PRIVATE COMPANY SIMPLY AND ELON MUSK IS MAGNANIMOUS NOT TO PROCEED ON TAKING TESLA PRIVATE IN CONSIDERATION OF THE PREDICAMENTS OF THESE TESLA’S SUPPORTIVE EARLY INVESTORS RIGHT & SIMPLY OK?