2017 Investor Roundtable: TSLA Market Action

[geneclean55]

The thing is that when I did previous analysis. as I mentioned, the availability data suggested 0.5x of shorting that was reported by L3 Partners. So it looks like there is no *consistent* good correlation. I agree that data is useful, but it seems that interpreting it is more of an art, than science.

I am actually thinking whether we can organize a group subscription to the L3 Partners short interest data. I can see it as a worthwhile effort if they provide data on *daily* changes in short interest. I understand that their conclusions are also could not be 100% accurate, but combining this data with Fidelity availability data might give us enough of an insight. My main interest is being able to pick up consistent covering activity (rolling squeeze) and be able to determine when it is falling off to try to pick good exit point for short to medium term trading.

Sounds like a plan

 

[vgrinshpun]

Welp, so much for that. Though I'd still like to see a few more comparisons to NASDAQ data, it's reported every two weeks so we could get a statistically significant number of data points in a reasonable time frame.



What would a subscription to L3 Partners data cost?

I have no Idea, and do not know what they actually offer. I would imagine it could be pricey. I will try to use twitter PM to see if I get more information from Ihor, but my hunch is that we need at least 5-10 participants to make it reasonable.

Let's see how many people are showing interest in this over the next day or two, and then I can contact Ihor Dusaniwsky to see what subscription options we have.

I will try to do more data comparison over weekend...

 

[1kEE]

I have no Idea, and do not know what they actually offer. I would imagine it could be pricey. I will try to use twitter PM to see if I get more information from Ihor, but my hunch is that we need at least 5-10 participants to make it reasonable.

Let's see how many people are showing interest in this over the next day or two, and then I can contact Ihor Dusaniwsky to see what subscription options we have.

I will try to do more data comparison over weekend...

I imagine if we do a group buy-in, he would not appreciate it if the data was posted on a public forum. We'd have to share the data privetly...

 

[1kEE]

@vgrinshpun, mind asking what the cost and terms of an L3 subscription to Tsla short data is.... I'm pretty sure 10 or so people here would go for it. I'm tempted to say I'd pitch in if it's not too terribly expensive.

Having that data on a daily basis would be super handy in the event of a sharp rise in SP.

We could text message or email the info...

 

[neroden]

Mark Spiegel's twitter account links to this Times of India article about Grohman's departure. Here's a quote:
"I definitely did not depart because I had lost interest in working," Grohmann said, without elaborating.
The article suggests that when Musk told Grohmann that existing customers would be dropped and the firm would concentrate on Tesla, that is when Grohmann decided to leave.

Sounds to me like someone who had lost interest in working. In fact, sounds to me like someone who planned to quit all along. It was awfully nice of Tesla not to put him in a lock-up contract -- this is what Berkshire Hathaway does, requires the managers of companies they buy to stay for 5 years.

 

[Lessmog]

Sounds to me like someone who had lost interest in working. In fact, sounds to me like someone who planned to quit all along. It was awfully nice of Tesla not to put him in a lock-up contract -- this is what Berkshire Hathaway does, requires the managers of companies they buy to stay for 5 years.

Wasn't Herr Grohmann like 70 or so when he sold his company?

 

[Curt Renz]

Sounds to me like someone who had lost interest in working. In fact, sounds to me like someone who planned to quit all along. It was awfully nice of Tesla not to put him in a lock-up contract -- this is what Berkshire Hathaway does, requires the managers of companies they buy to stay for 5 years.

Wasn't Herr Grohmann like 70 or so when he sold his company?

Perhaps he had calmed his employees during the transition by saying that he would stay, and then found Tesla's policy a convenient excuse to retire as he had actually planned.

 

[Nate the Great]

Any thoughts on closing SP today?

 

[LoL Rick]

Meanwhile, there is some market action this morning with a dramatic see-saw between 310.00 and 308.50. Looks like someone really wants to push the price down but buyers swoop right in to scoop up the shares.

 

[vgrinshpun]

@vgrinshpun

Having that data on a daily basis would be super handy in the event of a sharp rise in SP.

We could text message or email the info...

I do not know what the cost is. I will try contacting L3 Partners to figure this out later today. I think that it would be great to have daily short interest information *and* alerts for an unusual activity.

It is my understanding that so far there are four members interested in group subscription. Post if I am missing anybody or you would like to add yourself to the group.

@geneclean55
@1kEE
@LargeHamCollider
@vgrinshpun

 

[vgrinshpun]

For whatever it is worth, maximum pain for today is $305...

 

[austinEV]

Excellent point, geneclean55. Here are a few:
If you use leaps to leverage:

* Leverage is your friend if the stock price is going up and it is your enemy when the SP is going down. For this reason, you only want to leverage your holdings when you have strong confidence that the SP will be going up. Sugar happens, though. We all get surprised sometimes.

Also to add: Leverage is your enemy when the stock goes sideways. Like in the football forward pass, 3 things can happen and 2 of them are bad.

I do not know what the cost is. I will try contacting L3 Partners to figure this out later today. I think that it would be great to have daily short interest information *and* alerts for an unusual activity.

It is my understanding that so far there are four members interested in group subscription. Post if I am missing anybody or you would like to add yourself to the group.

@geneclean55
@1kEE
@LargeHamCollider
@vgrinshpun

Add myself.

 

[doctoxics]

Bought May 19th call at 310 ($1,170 per contract) with play money . Looking for a positive surprise on Wednesday.

 

[AlMc]

Perhaps he had calmed his employees during the transition by saying that he would stay, and then found Tesla's policy a convenient excuse to retire as he had actually planned.

Having sold my business of close to 30 years to a large corporation I would ABSOLUTELY agree with this Curt.

 

[farzyness]

I would like to bring everyone's attention to $GM's performance today vs. that of $TSLA. This is very eye opening for me.

GM is in sell-off mode after posting what many are calling BLOWOUT earnings (also mirroring S&P/DOW, which is further indication that GM didn't decouple itself from macros even after posting very strong earnings). If investors are selling into any perceived 'strength' in GM, what do you think they will do once they are faced with the harsh reality of Model 3, Model Y, Pick Up truck, etc.? I've positioned myself appropriately to what I perceive is GMs beginning of an end.

 

[ValueAnalyst]

Well, few things depend on your vantage point. Truly DITM calls (strike $100) lose no time-value. So if I can afford to buy 800 shares, I may instead buy 8 contracts (equal movement to 800 shares), and keep 35 percent cash, just in case. Or buy 10 contracts for 125% exposure. You're not gonna lose _everything_ with that kind of strategy. If stocks rises 50%, you will make 1.5*1.25=1.875, i.e 87.5%. If stock drops 50%, you will lose 0.5*1.25=62.5%, actually probably a bit less,as options will recover some time-value as you get closer to the strike.

Point is to think in terms of leverage, and how much exposure in terms of shares you want. At least that works for me...

Why not use 25% margin to achieve the same, at a lower transaction cost, at a lower bid/ask spread, and more flexibility?

 

[ValueAnalyst]

Perhaps he had calmed his employees during the transition by saying that he would stay, and then found Tesla's policy a convenient excuse to retire as he had actually planned.

Having spent a decade in M&A, the founder's retirement, given his age, was likely planned.

I am a bit surprised about the negative public back-and-forth around the issue though.

 

[Snapdragon III]

Having spent a decade in M&A, the founder's retirement, given his age, was likely planned.

I am a bit surprised about the negative public back-and-forth around the issue though.

I could certainly understand how the founder could have ended up feeling hurt and upset if he thought the plan was to keep servicing existing customers after transition. He probably spent a huge portion of his life busting his butt to make those relationships, and just throwing them away for nothing, makes it all seem like a waste. I think what Tesla did was probably the right thing for Tesla, and will work out nicely, but I can understand how the founder ended up pissed off. Fortunately for him, he has lots of money to roll around in to make himself feel better.

 

[ValueAnalyst]

I could certainly understand how the founder could have ended up feeling hurt and upset if he thought the plan was to keep servicing existing customers after transition. He probably spent a huge portion of his life busting his butt to make those relationships, and just throwing them away for nothing, makes it all seem like a waste. I think what Tesla did was probably the right thing for Tesla, and will work out nicely, but I can understand how the founder ended up pissed off. Fortunately for him, he has lots of money to roll around in to make himself feel better.

I certainly appreciate the emotional aspect of the deal, but how could he have possibly expected Tesla to serve its competitors?

If his legacy customers were that important to him, he could have not sold the company, or at least negotiated a binding clause in the transaction agreement.

 

[SunCatcher]

I could certainly understand how the founder could have ended up feeling hurt and upset if he thought the plan was to keep servicing existing customers after transition. He probably spent a huge portion of his life busting his butt to make those relationships, and just throwing them away for nothing, makes it all seem like a waste. I think what Tesla did was probably the right thing for Tesla, and will work out nicely, but I can understand how the founder ended up pissed off. Fortunately for him, he has lots of money to roll around in to make himself feel better.

Speculating; perhaps Grohmann knew what Musk was intending to do when he sold his company to Tesla. If there wasn't an agreement to continue servicing other companies, as Grohmann had been doing, then the seller could be trying to make it look like he was unhappy with Musk as a way to save face with those relationships he had built over the years, which were now cut loose. "Don't blame me."

You don't sell your company expecting it to go on doing business as usual, and not have it written into the agreement.