[toomuchtodo]

Elon Musk several days ago:

EDIT: My mistake, this was said much longer ago (September 2012). I just read it recently. Thanks to batbomb for pointing this out. My apologies.

“It’s doing pretty well actually given that we’re such a huge short position. In fact I think the short position may be as high as one can actually go. They literally hit the ceiling on the short position. The shorts are in it to the hills. I think it is very unwise to be shorting Tesla, it’s very unwise. There is a tsunami of hurt coming for the short."

http://www.siliconbeat.com/2012/09/13/video-elon-musk-tells-...

[Osmium]

This quote makes me very happy :) There's nothing better than proving naysayers wrong. As if it isn't hard enough making something useful as it is without people betting actual money that you're not going to succeed...

[rz2k]

Shorting is great because it helps minimize how out of control bubbles get. Yet, it isn't free money, because you actually have to be right about a stock being overvalued, as the case seems not to have been here.

Being an underinformed naysayer isn't any worse than being an underinformed cheerleader. The only difference is that the naysayers appear to have been wrong in this case for this earnings period. I wouldn't be surprised if many were over influenced by skepticism about a company run by a large personality. It is easy to err in the other direction, too.

[JPKab]

I'm not thrilled to bring politics into it, but I have to. A ton of the naysaying on Tesla is influenced by the conservative media's hate affair with anything viewed as environmentally friendly. There are a lot of older Americans with tons of money in the market who watch nothing but Fox News, combined with the relatively politically conservative CNBC (not saying they are partisan, but they are hostile to "green" companies, and take a look at their Keystone XL coverage....). These older Americans who probably never would have bought Tesla stock when ahead and shorted it, waiting for the next Solyndra to unfold.

Solyndra sold a highly fungible commodity in a saturated market. Tesla is selling a machine that, when any skeptic sees it in a showroom, starts to impress in a way that is visceral. My conservative, rural father got in one at a showroom I took him to. He was blown away by the build quality. He knows cars, he knows metal, and he knows engineering. He told me that, mechanically, it is the best built car he has ever seen. He is a car guy, and used to drag me to car shows constantly as a kid.

His only objection was that he couldn't use one where he lives because of the two miles of dirt road he has to traverse to get to his home. I told him they were coming out with an SUV. He now owns stock.

[mikeyouse]

Up 26% after-hours almost certainly qualifies as a 'Tsunami of Hurt.'

Some quick math for fun's sake:

If the TechCrunch[1] article is still accurate, Musk owns 28.4% of TSLA. His paper-worth on this ownership this morning was $1.8B. If things stabilize at $70/share, his paper-worth tomorrow morning will be $2.3B.

A notional profit of $500 million in 24 hours isn't too shabby.

[1]http://techcrunch.com/2010/06/28/tesla-ipo-musk-shares/

[adventured]

Not sure I understand what you're referring to.

0.284 * $7.5 billion = $2.13 billion

His gain, assuming a 20% jump, is about $300 million.

At market close TSLA's market cap was $6.39 billion.

[mikeyouse]

Weird, I must've had a different Google Finance tab open at the time? Thanks for the correction.

[mapleoin]

> A notional profit of $500 million in 24 hours isn't too shabby.

It's not a 24 hours profit. He didn't buy that stock yesterday, nor could he have without making the price go a lot higher than 70$. You can't judge his profit on the short term.

[mikeyouse]

That's why I called it a notional profit and repeatedly referred to his net worth as 'on-paper'. Was that not obvious?

It's clear he doesn't have an extra $500mm in a checking account.

[mapleoin]

Yeah, sorry, I skipped over the 'notional' in your comment.

[ankitml]

Yeah, thats correct. I dont know why he misread "notional"

[batbomb]

That's several months ago. If it was a few days ago he'd probably be hearing from the SEC soon.

[MichaelApproved]

Why, is there a quiet period just before the release of earnings?

[tedreed]

I can't find a news story about the incident I'm thinking of, but there are SEC regulations about the release of information to investors. You basically have to try to ensure that they all get the same data at the same time.

[MichaelApproved]

There was a case where material news was released on Twitter. It lead to SEC adjusting their regulation to allow for social media to be an official news outlet for material information so long as the company discloses that it is a source of information ahead of time.

Edit: here's an article referring to the change http://www.lexology.com/library/detail.aspx?g=f8c96f0e-832c-...

[MichaelApproved]

One other point is that what you were referring to is not related to what OP was suggesting. You're talking about how the information is distributed. oP was referring to when it is distributed (too close to earnings).

I believe OP was wrong with regards to a restriction on when information can be released relative to earnings. Elon could have tweeted it a few days ago and it wouldn't have made a difference to the SEC in regards to the timing of the release.

[vxNsr]

I wonder, INAL but if he says something like that publicly then it's not insider trading to act on it, I would think anyway.

[MichaelApproved]

But OP isn't referring to insider trading. The comment was in regards to the timing of the information. The only time that I believe executives are restricted is during/after an IPO.

Another issue is making sure that material information is disclosed properly. Elon was essentially hinting that they were going to have a really good quarter. That kind of information is material and would likely need to be disclosed properly to all investors at once. However, I believe disclosing that information has nothing to do with the timing of earnings release. A company can disclose any information it would like at anytime, so long as it does so properly.

If I'm wrong, please let me know in reply. I'm very curious about whether I am making a mistake.

[vxNsr]

I didn't know that, how does it work with interviews then? Do they like disclose all info that will be said in the interview beforehand? I don't know much about this either, I'm also incredibly curious...

[MichaelApproved]

As I understand it, the key phrase is "material information". Changing CEO, closing a plant, laying people off, better/worse earnings news, and sales figures are all examples of material information.

What likely happens is the company releases the material information through proper channels and then company representatives use that information as talking points during an interview. Some new information could be given during the interview but it's likely to be minor stuff like specifics on features for a product.