2017 Investor Roundtable: TSLA Market Action

[neroden]

That is approximately correct.

19% short interest, compared to Elon holding about 23%, institutions holding about 65% and some non-trivial fraction of the remainder being held by "never-sell" type of retail investors equals a very full boat.

So, to refresh these numbers, I sat down, reviewed various sources, and calculated:
164.19 million shares total

Here's the ones who will not sell any time soon:
33.63 million held by Musk (after the most recent conversions) -- down to 20.4%
Another roughly 0.5 million shares held by other insiders (mostly JB Straubel and Kimbal Musk)

5.85 million held by Fidelity Contrafund (ultrabullish, never sells)
0.70 million held by Fidelity Contrafund VIP (same management, I think)
4.42 million held by Fidelity OTC (ultrabullish, never sells)
(Other Fidelity funds may sell, see below)

13.29 million held by Bailie Gifford (decidedly bullish and long-term)

(T Rowe Price often sells, see below)

8.17 million held by Tencent (probably much more, since that was *exactly* 5% at the time of report; nobody ever stops buying just *over* the reporting threshold)

2.69 million held by Vanguard Total Stock Market Index (they have to add more as TSLA goes up)
1.54 million held by Vanguard Extended Market Index (they have to add more as TSLA goes up)
1.41 million held by other Vanguard funds (since they're mostly indexes, same thing for the cap-weighted indexes)

3.79 million at Morgan Stanley (MS is a consistent buyer and rarely sells -- Adam Jonas? -- though they sold a little recently)

3.31 million at Bank of Montreal (Also a consistent buyer and rarely sells, though they sold a little recently)

(Jennison and a bunch of other major institutional holders are not long-termers and have sold lots repeatedly and recently.)

1.15 million held by Powershares QQQ ETF (NASDAQ tracker, they have to add more as TSLA goes up)

1.20 million held by Baron Partners Retail and Focused Growth Retail (Ron Baron, "never sell" bull)

1.07 million held by Harbor Capital Appreciation Institutional (seems consistently bullish)

1.17 million held by Primecap (secretive, definitely long-termers, super low turnover; has sold some but might be cash outflows from mutual funds)

1.58 million held by BAMCO (seems consistently bullish after selling out in June 2013 and buying back in March 2014 -- *someone* isn't making the same mistake twice)

And some other big holders which are more likely to sell:
2.38 million held by Fidelity Blue Chip Growth (DOES sell sometimes)
1.88 million held by Fidelity Growth Company (DOES sell sometimes)
1.04 million held by Fidelity Advisor New Insights A
4.64 million held by other Fidelity funds

2.74 million held by T Rowe Price Growth Stock (usuallly bullish but did sell recently)
1.13 million held by T Rowe Price Blue Chip Growth (bought recently)
8.03 million held by various other T Rowe Price funds (many do sell)

1.36 million held by American Funds NVIT Growth II (managed by American Funds, a division of Capital Group)
1.33 million held by VA CollegeAmerica New Perspective 529E (managed by American Funds, a division of Capital Group)
2.07 million held by Capital World Investors (a different division of Capital Group -- they've been selling since 2012)

Anyway, I estimate 50.27 million shares in the hands of long-term "rarely sell" institutional investors / mutual funds. Plus whatever Tencent has accumulated above 5%. That leaves about 79.79 million shares floating (including the "fast trading" and "weak long" mutual funds and institutions). Minus whatever Tencent has accumulated.

There are 31.58 million shares short (as of the 13th, possibly more now). The shares sold short are bought by additional longs, so the "available for trading" shares are around 111.37 million, minus whatever Tencent has accumulated, and any "long-term longs" (like many of us) who I didn't get in my count. To cover the short shares, the short-sellers must buy 28% of this total. To put it another way, more than 28% of the shares currently available for trading were created by short sellers. They will have to buy them back and find enough "weak longs" to buy them back from. Every time there's good news this becomes harder.

If I guess that Tencent has grabbed another 4.9% (to stay just below the 10% reporting threshold), it would be another 8.08 milion shares off the market.

Addition to the S&P 500 would require a minimum of 4% of the "float" (according to certain definitions) be purchased by just the *biggest* S&P tracker funds. It'll probably be more like 10% (including "closest index" funds and funds which aren't allowed to invest in companies which haven't shown 4 quarters of profit). For this purpose, I'm not sure how they calculate "float", but I figure they basically just exclude Musk and Tencent, so 122.39 million. 4% is 4.89 million. 10% is 12.24 million.

This could bring us down to 59.47 million real shares which are really available for sale (not counting the possibility of a macro crisis causing massive index fund redemptions). With a short interest of 31.5 million... well, then the shorts have to buy one out of every three shares available for trading in order to close out their positions. A lot of buying pressure.

 

[MitchJi]

Been thinking about deliveries guidance for Q2. We know Tesla added a third shift at Fremont for S and X. Apparently, the third shift allowed them to make up for the lost week and surprise us with 25,000 deliveries in Q1. We know of no lost time yet in Q2. Assuming that the third shift is still in place, wouldn't we expect that the guidance for Q2 will be 27,000-28,000 deliveries?

I think there's an excellent chance of that happening.

Why would they increase guidance when they could deliver a beat?

So they can announce the beat during the Q1 ER, aka the tornado in Shortville!

 

[MitchJi]

Tesla Started 2017 With a Sales Boom in China

I found this posted in another thread by @EinSV

The first quarter sales boomlet may lead Tesla investors to wonder what happens when Tesla builds cars in China under a joint venture with a local Chinese company and can avoid a 25% tariff and 17% value-added tax, while at the same time making its cars available for government subsidies, which today cut the buyer's cost of some Chinese electric cars by 35%. Those central and local government subsidies are set to be phased out by 2020.

The timing of a joint venture is unknown and Tesla won’t comment. But as Fortune reported last week, Tesla is in the midst of meeting potential partners from different Chinese cities, according to a high-level official from China's auto lobby. Back in 2014, CEO Elon Musk said the company would begin building cars locally in China around 2017 or 2018.

Without a joint venture, Tesla’s sales in China face a ceiling because of their higher costs. Not even the closest-watching analysts can predict what that number is.

But as Tesla’s fast growing first quarter sales attest, for now the company is far from reaching it.

That's going to be a 42% reduction in prices, plus the up to 35% local subsidies. Tesla could announce that they are going to build a Gigafactory in China in the call tomorrow.

 

[Starno]

So tomorrow I think Tesla might go down because macro for automakers is apparently going bad :
https://www.nytimes.com/2017/05/02/business/auto-sales-decline.html

I still expect a 320 close but it is not going to be a piece of cake and the likelihood of a close under 315 is getting higher than previously.

 

[ggr]

1.15 million held by Powershares QQQ ETF (NASDAQ tracker, they have to add more as TSLA goes up)

OK, a serious question, because I don't understand this well enough.

The QQQ marketing page says that it is "rebalanced quarterly". It's supposed to track the value of the NASDAQ 100 index, which is supposed to be 100 highest market cap stocks listed on NASDAQ. Ignoring the fact that some companies might drop off and be replaced by other companies (TSLA is solidly in the top, so that won't be one of them either way), I would have thought that TSLA's effect on the index would be exactly matched to its own performance, and so the TSLA shares that QQQ holds already would be exactly the same needed to match the index value. That is, neither more nor less would be needed. Why would they need to buy more as the price goes up?

One reason I can think of (speculation) is that they would need to keep their percentage of the shares constant, and might have to buy more to cover capital raises, employee grants, etc; but this would be true whether the stock price went up or not, right?

I'm out of other reasons, and googled around, but couldn't find any detail about what they do when rebalancing. Would you mind clarifying? Thanks.

 

[luvb2b]

it's not necessarily correct to say qqq buys more as price rises.

qqq is a cap weighted or float-cap weighted index (I forgot which). in either case assuming no changes to any stock's share structure, the number of shares owned should stay constant as you surmised.

however many of the largest companies are aggressively buying back shares, reducing their market cap and float-cap. then at the quarter rebalance tesla - which adds shares due to stock comp and equity issuance as you mention - has a higher capitalization relative to the other stocks (say). and so qqq buys more.

the change is not due to tesla's price but rather its share count and its resulting impact on capitalization relative the other companies in the index.

OK, a serious question, because I don't understand this well enough.

The QQQ marketing page says that it is "rebalanced quarterly". It's supposed to track the value of the NASDAQ 100 index, which is supposed to be 100 highest market cap stocks listed on NASDAQ. Ignoring the fact that some companies might drop off and be replaced by other companies (TSLA is solidly in the top, so that won't be one of them either way), I would have thought that TSLA's effect on the index would be exactly matched to its own performance, and so the TSLA shares that QQQ holds already would be exactly the same needed to match the index value. That is, neither more nor less would be needed. Why would they need to buy more as the price goes up?

One reason I can think of (speculation) is that they would need to keep their percentage of the shares constant, and might have to buy more to cover capital raises, employee grants, etc; but this would be true whether the stock price went up or not, right?

I'm out of other reasons, and googled around, but couldn't find any detail about what they do when rebalancing. Would you mind clarifying? Thanks.

 

[TrendTrader007]

So, to refresh these numbers, I sat down, reviewed various sources, and calculated:
164.19 million shares total

Here's the ones who will not sell any time soon:
33.63 million held by Musk (after the most recent conversions) -- down to 20.4%
Another roughly 0.5 million shares held by other insiders (mostly JB Straubel and Kimbal Musk)

5.85 million held by Fidelity Contrafund (ultrabullish, never sells)
0.70 million held by Fidelity Contrafund VIP (same management, I think)
4.42 million held by Fidelity OTC (ultrabullish, never sells)
(Other Fidelity funds may sell, see below)

13.29 million held by Bailie Gifford (decidedly bullish and long-term)

(T Rowe Price often sells, see below)

8.17 million held by Tencent (probably much more, since that was *exactly* 5% at the time of report; nobody ever stops buying just *over* the reporting threshold)

2.69 million held by Vanguard Total Stock Market Index (they have to add more as TSLA goes up)
1.54 million held by Vanguard Extended Market Index (they have to add more as TSLA goes up)
1.41 million held by other Vanguard funds (since they're mostly indexes, same thing for the cap-weighted indexes)

3.79 million at Morgan Stanley (MS is a consistent buyer and rarely sells -- Adam Jonas? -- though they sold a little recently)

3.31 million at Bank of Montreal (Also a consistent buyer and rarely sells, though they sold a little recently)

(Jennison and a bunch of other major institutional holders are not long-termers and have sold lots repeatedly and recently.)

1.15 million held by Powershares QQQ ETF (NASDAQ tracker, they have to add more as TSLA goes up)

1.20 million held by Baron Partners Retail and Focused Growth Retail (Ron Baron, "never sell" bull)

1.07 million held by Harbor Capital Appreciation Institutional (seems consistently bullish)

1.17 million held by Primecap (secretive, definitely long-termers, super low turnover; has sold some but might be cash outflows from mutual funds)

1.58 million held by BAMCO (seems consistently bullish after selling out in June 2013 and buying back in March 2014 -- *someone* isn't making the same mistake twice)

And some other big holders which are more likely to sell:
2.38 million held by Fidelity Blue Chip Growth (DOES sell sometimes)
1.88 million held by Fidelity Growth Company (DOES sell sometimes)
1.04 million held by Fidelity Advisor New Insights A
4.64 million held by other Fidelity funds

2.74 million held by T Rowe Price Growth Stock (usuallly bullish but did sell recently)
1.13 million held by T Rowe Price Blue Chip Growth (bought recently)
8.03 million held by various other T Rowe Price funds (many do sell)

1.36 million held by American Funds NVIT Growth II (managed by American Funds, a division of Capital Group)
1.33 million held by VA CollegeAmerica New Perspective 529E (managed by American Funds, a division of Capital Group)
2.07 million held by Capital World Investors (a different division of Capital Group -- they've been selling since 2012)

Anyway, I estimate 50.27 million shares in the hands of long-term "rarely sell" institutional investors / mutual funds. Plus whatever Tencent has accumulated above 5%. That leaves about 79.79 million shares floating (including the "fast trading" and "weak long" mutual funds and institutions). Minus whatever Tencent has accumulated.

There are 31.58 million shares short (as of the 13th, possibly more now). The shares sold short are bought by additional longs, so the "available for trading" shares are around 111.37 million, minus whatever Tencent has accumulated, and any "long-term longs" (like many of us) who I didn't get in my count. To cover the short shares, the short-sellers must buy 28% of this total. To put it another way, more than 28% of the shares currently available for trading were created by short sellers. They will have to buy them back and find enough "weak longs" to buy them back from. Every time there's good news this becomes harder.

If I guess that Tencent has grabbed another 4.9% (to stay just below the 10% reporting threshold), it would be another 8.08 milion shares off the market.

Addition to the S&P 500 would require a minimum of 4% of the "float" (according to certain definitions) be purchased by just the *biggest* S&P tracker funds. It'll probably be more like 10% (including "closest index" funds and funds which aren't allowed to invest in companies which haven't shown 4 quarters of profit). For this purpose, I'm not sure how they calculate "float", but I figure they basically just exclude Musk and Tencent, so 122.39 million. 4% is 4.89 million. 10% is 12.24 million.

This could bring us down to 59.47 million real shares which are really available for sale (not counting the possibility of a macro crisis causing massive index fund redemptions). With a short interest of 31.5 million... well, then the shorts have to buy one out of every three shares available for trading in order to close out their positions. A lot of buying pressure.

WOW! Amazing research. i am floored. thank you for doing this exhaustive research!

 

[Snapdragon III]

So, to refresh these numbers, I sat down, reviewed various sources, and calculated:
164.19 million shares total

Here's the ones who will not sell any time soon:
33.63 million held by Musk (after the most recent conversions) -- down to 20.4%
Another roughly 0.5 million shares held by other insiders (mostly JB Straubel and Kimbal Musk)

5.85 million held by Fidelity Contrafund (ultrabullish, never sells)
0.70 million held by Fidelity Contrafund VIP (same management, I think)
4.42 million held by Fidelity OTC (ultrabullish, never sells)
(Other Fidelity funds may sell, see below)

13.29 million held by Bailie Gifford (decidedly bullish and long-term)

(T Rowe Price often sells, see below)

8.17 million held by Tencent (probably much more, since that was *exactly* 5% at the time of report; nobody ever stops buying just *over* the reporting threshold)

2.69 million held by Vanguard Total Stock Market Index (they have to add more as TSLA goes up)
1.54 million held by Vanguard Extended Market Index (they have to add more as TSLA goes up)
1.41 million held by other Vanguard funds (since they're mostly indexes, same thing for the cap-weighted indexes)

3.79 million at Morgan Stanley (MS is a consistent buyer and rarely sells -- Adam Jonas? -- though they sold a little recently)

3.31 million at Bank of Montreal (Also a consistent buyer and rarely sells, though they sold a little recently)

(Jennison and a bunch of other major institutional holders are not long-termers and have sold lots repeatedly and recently.)

1.15 million held by Powershares QQQ ETF (NASDAQ tracker, they have to add more as TSLA goes up)

1.20 million held by Baron Partners Retail and Focused Growth Retail (Ron Baron, "never sell" bull)

1.07 million held by Harbor Capital Appreciation Institutional (seems consistently bullish)

1.17 million held by Primecap (secretive, definitely long-termers, super low turnover; has sold some but might be cash outflows from mutual funds)

1.58 million held by BAMCO (seems consistently bullish after selling out in June 2013 and buying back in March 2014 -- *someone* isn't making the same mistake twice)

And some other big holders which are more likely to sell:
2.38 million held by Fidelity Blue Chip Growth (DOES sell sometimes)
1.88 million held by Fidelity Growth Company (DOES sell sometimes)
1.04 million held by Fidelity Advisor New Insights A
4.64 million held by other Fidelity funds

2.74 million held by T Rowe Price Growth Stock (usuallly bullish but did sell recently)
1.13 million held by T Rowe Price Blue Chip Growth (bought recently)
8.03 million held by various other T Rowe Price funds (many do sell)

1.36 million held by American Funds NVIT Growth II (managed by American Funds, a division of Capital Group)
1.33 million held by VA CollegeAmerica New Perspective 529E (managed by American Funds, a division of Capital Group)
2.07 million held by Capital World Investors (a different division of Capital Group -- they've been selling since 2012)

Anyway, I estimate 50.27 million shares in the hands of long-term "rarely sell" institutional investors / mutual funds. Plus whatever Tencent has accumulated above 5%. That leaves about 79.79 million shares floating (including the "fast trading" and "weak long" mutual funds and institutions). Minus whatever Tencent has accumulated.

There are 31.58 million shares short (as of the 13th, possibly more now). The shares sold short are bought by additional longs, so the "available for trading" shares are around 111.37 million, minus whatever Tencent has accumulated, and any "long-term longs" (like many of us) who I didn't get in my count. To cover the short shares, the short-sellers must buy 28% of this total. To put it another way, more than 28% of the shares currently available for trading were created by short sellers. They will have to buy them back and find enough "weak longs" to buy them back from. Every time there's good news this becomes harder.

If I guess that Tencent has grabbed another 4.9% (to stay just below the 10% reporting threshold), it would be another 8.08 milion shares off the market.

Addition to the S&P 500 would require a minimum of 4% of the "float" (according to certain definitions) be purchased by just the *biggest* S&P tracker funds. It'll probably be more like 10% (including "closest index" funds and funds which aren't allowed to invest in companies which haven't shown 4 quarters of profit). For this purpose, I'm not sure how they calculate "float", but I figure they basically just exclude Musk and Tencent, so 122.39 million. 4% is 4.89 million. 10% is 12.24 million.

This could bring us down to 59.47 million real shares which are really available for sale (not counting the possibility of a macro crisis causing massive index fund redemptions). With a short interest of 31.5 million... well, then the shorts have to buy one out of every three shares available for trading in order to close out their positions. A lot of buying pressure.

WOW! That looks like it was a ton of work to put together, and was great information. Thank you for taking the time, and sharing it.

Am I right to think that if a short squeeze were to get going Hedge funds that were not previously in the stock would likely smell blood in the water and try to pile in as a short term trade to further squeeze the shorts? I would think that might amplify the shorts pain considerably at least for a few days.

 

[LargeHamCollider]

So, to refresh these numbers, I sat down, reviewed various sources, and calculated:
164.19 million shares total

Here's the ones who will not sell any time soon:
33.63 million held by Musk (after the most recent conversions) -- down to 20.4%
Another roughly 0.5 million shares held by other insiders (mostly JB Straubel and Kimbal Musk)

5.85 million held by Fidelity Contrafund (ultrabullish, never sells)
0.70 million held by Fidelity Contrafund VIP (same management, I think)
4.42 million held by Fidelity OTC (ultrabullish, never sells)
(Other Fidelity funds may sell, see below)

13.29 million held by Bailie Gifford (decidedly bullish and long-term)

(T Rowe Price often sells, see below)

8.17 million held by Tencent (probably much more, since that was *exactly* 5% at the time of report; nobody ever stops buying just *over* the reporting threshold)

2.69 million held by Vanguard Total Stock Market Index (they have to add more as TSLA goes up)
1.54 million held by Vanguard Extended Market Index (they have to add more as TSLA goes up)
1.41 million held by other Vanguard funds (since they're mostly indexes, same thing for the cap-weighted indexes)

3.79 million at Morgan Stanley (MS is a consistent buyer and rarely sells -- Adam Jonas? -- though they sold a little recently)

3.31 million at Bank of Montreal (Also a consistent buyer and rarely sells, though they sold a little recently)

(Jennison and a bunch of other major institutional holders are not long-termers and have sold lots repeatedly and recently.)

1.15 million held by Powershares QQQ ETF (NASDAQ tracker, they have to add more as TSLA goes up)

1.20 million held by Baron Partners Retail and Focused Growth Retail (Ron Baron, "never sell" bull)

1.07 million held by Harbor Capital Appreciation Institutional (seems consistently bullish)

1.17 million held by Primecap (secretive, definitely long-termers, super low turnover; has sold some but might be cash outflows from mutual funds)

1.58 million held by BAMCO (seems consistently bullish after selling out in June 2013 and buying back in March 2014 -- *someone* isn't making the same mistake twice)

And some other big holders which are more likely to sell:
2.38 million held by Fidelity Blue Chip Growth (DOES sell sometimes)
1.88 million held by Fidelity Growth Company (DOES sell sometimes)
1.04 million held by Fidelity Advisor New Insights A
4.64 million held by other Fidelity funds

2.74 million held by T Rowe Price Growth Stock (usuallly bullish but did sell recently)
1.13 million held by T Rowe Price Blue Chip Growth (bought recently)
8.03 million held by various other T Rowe Price funds (many do sell)

1.36 million held by American Funds NVIT Growth II (managed by American Funds, a division of Capital Group)
1.33 million held by VA CollegeAmerica New Perspective 529E (managed by American Funds, a division of Capital Group)
2.07 million held by Capital World Investors (a different division of Capital Group -- they've been selling since 2012)

Anyway, I estimate 50.27 million shares in the hands of long-term "rarely sell" institutional investors / mutual funds. Plus whatever Tencent has accumulated above 5%. That leaves about 79.79 million shares floating (including the "fast trading" and "weak long" mutual funds and institutions). Minus whatever Tencent has accumulated.

There are 31.58 million shares short (as of the 13th, possibly more now). The shares sold short are bought by additional longs, so the "available for trading" shares are around 111.37 million, minus whatever Tencent has accumulated, and any "long-term longs" (like many of us) who I didn't get in my count. To cover the short shares, the short-sellers must buy 28% of this total. To put it another way, more than 28% of the shares currently available for trading were created by short sellers. They will have to buy them back and find enough "weak longs" to buy them back from. Every time there's good news this becomes harder.

If I guess that Tencent has grabbed another 4.9% (to stay just below the 10% reporting threshold), it would be another 8.08 milion shares off the market.

Addition to the S&P 500 would require a minimum of 4% of the "float" (according to certain definitions) be purchased by just the *biggest* S&P tracker funds. It'll probably be more like 10% (including "closest index" funds and funds which aren't allowed to invest in companies which haven't shown 4 quarters of profit). For this purpose, I'm not sure how they calculate "float", but I figure they basically just exclude Musk and Tencent, so 122.39 million. 4% is 4.89 million. 10% is 12.24 million.

This could bring us down to 59.47 million real shares which are really available for sale (not counting the possibility of a macro crisis causing massive index fund redemptions). With a short interest of 31.5 million... well, then the shorts have to buy one out of every three shares available for trading in order to close out their positions. A lot of buying pressure.

Fantastic post, this is why I come here.

 

[doctoxics]

So tomorrow I think Tesla might go down because macro for automakers is apparently going bad :
https://www.nytimes.com/2017/05/02/business/auto-sales-decline.html

I still expect a 320 close but it is not going to be a piece of cake and the likelihood of a close under 315 is getting higher than previously.

If you read the analysts projections for Q1 earnings, you would think that TSLA should sell off prior to earnings. Who wants to chance profits on a bad report. The projections have not changed (may have gotten worse) in the past few weeks. Expecting a big upside surprise, but also well positioned for "bleh".

 

[TrendTrader007]

okay, on the eve of ER here are some of my thoughts from technical perspective:
(not posting any charts to keep this post very clear with the usual disclaimers that this is my personal opinion and NOT an advice and i reserve the right to be terribly and irrevocably wrong, so read it at your own peril and try not to take anything i say too seriously, EVER!)

#1 short term charts look tight and orderly. buying 150% more than selling. U/D volume ratio 1.5

#2 daily chart looks bullish with SMAs/EMAs all pointing straight up. RS rating 93. SP acting quite frisky with potential bollinger breakout in making. Daily setup quite similar to April/May 2013 period

#3 cup w handle breakouts on daily and weekly

#4 Extremely important: Last month's high was $314.80. This month's low so far is $314.81...! is this a coincidence...No way! Certain deep pocketed institutions do not want the SP to go below last month's high and probably expect great ER plus other catalysts to propel SP consistently higher during May 2017

#5 Monthly breakout is so strong that it leaves the upper bollinger band in dust at $303.91 as of today while SP soars in uncharted territory at $318.89

#6 Yesterday stock went up twice as much as pullback today on volume 50% higher than average while today's Vol was 8% lower than average. What it tells me is that TSLA is in strong hands and selling is half hearted. as stated earlier, i fully expect tomorrow to be an UP day followed by ER gap and go on Thursday

#7 Last ER SP gapped DOWN - 6.4 % on 2/23/17
10/26/16 ER SP closed up all of 0.88 % and went downhill from there
8/3/16 ER SP went up all of 2.13 % and went downhill from there
5/4/16 ER SP was rewarded with DOWN - 4.96 % and went downhill from there
2/10/16 ER was the last good ER as far as SP where TSLA went UP 4.73 % next day and mounted a furious rally of approx 79% in less than 2 months ( which in current situation could take SP to approx $570)

So, my dear reader what is the probability of tomorrow's ER failing my bullish expectations?

Damn! I've seldom put so much effort in writing a post like tonight. I'm exhausted! GoodNight!
And, please DO NOT take me seriously. i'm just a short panicking as the doomsday rapidly approaches.....

 

[vgrinshpun]

There was a very active day as far as changes to shares available for shorting at Fidelity go. The large block of shares that increased availability right after open (318K) coincides with initial jump in SP, and then another large block of shares that was apparently borrowed and shorted could be linked with the relentless selloff than followed. The bottom line for me is that there was no uniformity of the mood among the short sellers: some were covering, others are piling on. (Insert your favorite flavor of small print/disclaimer here). The day overall seem to shape out as net shorting day.

The $1M question, of course, is whether there will be a prevailing mood among the short sellers after tomorrow ER. If large portion of them catch up in understanding TSLA with those who seem to be steadily buying the stock over last five month, it could get very interesting indeed. This outcome, however, is far from certain, so I vote for a **measured** optimism.

 

[TradingInvest]

2.69 million held by Vanguard Total Stock Market Index (they have to add more as TSLA goes up)
1.15 million held by Powershares QQQ ETF (NASDAQ tracker, they have to add more as TSLA goes up)
......

If the index trackers already hold the proper amount of TSLA, and TSLA goes up 50%, the trackers don't need to add more, because their TSLA shares would still reflect the proper size. That's my understanding.

Overall I think the available shares for shorts to cover is much tighter than perceived. Tesla is going to China and India in a big way. It makes sense for those countries (China 15% through Tencent?) to buy and hold some shares permanently.

From another angle, real Tesla bulls understand what Tesla is growing into. These bulls don't just sit on the shares, they (including many of us) add more shares as Tesla grow. Also let's say every year another 1000 investors (and some fund managers) turn into real Tesla bulls, and another 1000 investors/traders turn into Tesla bears, eventually much more than 100% of Tesla shares will fall into real bulls' hands. Bears can not do much. I suspect this is already happening and will get worse for bears every year.

 

[racer26]

So, to refresh these numbers, I sat down, reviewed various sources, and calculated:
164.19 million shares total

Here's the ones who will not sell any time soon:
33.63 million held by Musk (after the most recent conversions) -- down to 20.4%
Another roughly 0.5 million shares held by other insiders (mostly JB Straubel and Kimbal Musk)

5.85 million held by Fidelity Contrafund (ultrabullish, never sells)
0.70 million held by Fidelity Contrafund VIP (same management, I think)
4.42 million held by Fidelity OTC (ultrabullish, never sells)
(Other Fidelity funds may sell, see below)

13.29 million held by Bailie Gifford (decidedly bullish and long-term)

(T Rowe Price often sells, see below)

8.17 million held by Tencent (probably much more, since that was *exactly* 5% at the time of report; nobody ever stops buying just *over* the reporting threshold)

2.69 million held by Vanguard Total Stock Market Index (they have to add more as TSLA goes up)
1.54 million held by Vanguard Extended Market Index (they have to add more as TSLA goes up)
1.41 million held by other Vanguard funds (since they're mostly indexes, same thing for the cap-weighted indexes)

3.79 million at Morgan Stanley (MS is a consistent buyer and rarely sells -- Adam Jonas? -- though they sold a little recently)

3.31 million at Bank of Montreal (Also a consistent buyer and rarely sells, though they sold a little recently)

(Jennison and a bunch of other major institutional holders are not long-termers and have sold lots repeatedly and recently.)

1.15 million held by Powershares QQQ ETF (NASDAQ tracker, they have to add more as TSLA goes up)

1.20 million held by Baron Partners Retail and Focused Growth Retail (Ron Baron, "never sell" bull)

1.07 million held by Harbor Capital Appreciation Institutional (seems consistently bullish)

1.17 million held by Primecap (secretive, definitely long-termers, super low turnover; has sold some but might be cash outflows from mutual funds)

1.58 million held by BAMCO (seems consistently bullish after selling out in June 2013 and buying back in March 2014 -- *someone* isn't making the same mistake twice)

And some other big holders which are more likely to sell:
2.38 million held by Fidelity Blue Chip Growth (DOES sell sometimes)
1.88 million held by Fidelity Growth Company (DOES sell sometimes)
1.04 million held by Fidelity Advisor New Insights A
4.64 million held by other Fidelity funds

2.74 million held by T Rowe Price Growth Stock (usuallly bullish but did sell recently)
1.13 million held by T Rowe Price Blue Chip Growth (bought recently)
8.03 million held by various other T Rowe Price funds (many do sell)

1.36 million held by American Funds NVIT Growth II (managed by American Funds, a division of Capital Group)
1.33 million held by VA CollegeAmerica New Perspective 529E (managed by American Funds, a division of Capital Group)
2.07 million held by Capital World Investors (a different division of Capital Group -- they've been selling since 2012)

Anyway, I estimate 50.27 million shares in the hands of long-term "rarely sell" institutional investors / mutual funds. Plus whatever Tencent has accumulated above 5%. That leaves about 79.79 million shares floating (including the "fast trading" and "weak long" mutual funds and institutions). Minus whatever Tencent has accumulated.

There are 31.58 million shares short (as of the 13th, possibly more now). The shares sold short are bought by additional longs, so the "available for trading" shares are around 111.37 million, minus whatever Tencent has accumulated, and any "long-term longs" (like many of us) who I didn't get in my count. To cover the short shares, the short-sellers must buy 28% of this total. To put it another way, more than 28% of the shares currently available for trading were created by short sellers. They will have to buy them back and find enough "weak longs" to buy them back from. Every time there's good news this becomes harder.

If I guess that Tencent has grabbed another 4.9% (to stay just below the 10% reporting threshold), it would be another 8.08 milion shares off the market.

Addition to the S&P 500 would require a minimum of 4% of the "float" (according to certain definitions) be purchased by just the *biggest* S&P tracker funds. It'll probably be more like 10% (including "closest index" funds and funds which aren't allowed to invest in companies which haven't shown 4 quarters of profit). For this purpose, I'm not sure how they calculate "float", but I figure they basically just exclude Musk and Tencent, so 122.39 million. 4% is 4.89 million. 10% is 12.24 million.

This could bring us down to 59.47 million real shares which are really available for sale (not counting the possibility of a macro crisis causing massive index fund redemptions). With a short interest of 31.5 million... well, then the shorts have to buy one out of every three shares available for trading in order to close out their positions. A lot of buying pressure.

Great post, as others have said.

Theatres packed full of shorts, doors are barred. Now all it needs is Elon to bust in yelling fire.

 

[vgrinshpun]

Tesla Started 2017 With a Sales Boom in China

I found this posted in another thread by @EinSV

I was posting about this before. It seems to be flying under the radar, but if the InsideEV monthly sales data in US are to be believed, based on overall sales and registration in Europe data, the Asian/Pacific deliveries increased 2x QoQ. The Chinese import data provided in this article (4,799 MS + MX) seem to be consistent with this conclusion. This is getting zero attention, but if Asia/Pacific sales were indeed as strong as I suspect they were, it is bound to be covered during the ER, which will have important implications for future projections of deliveries. This could be a very good surprise for the analysts which seem to be unaware of this.

 

[1kEE]

For some reason I found myself watching mousetrap videos and thinking about how shorts have been trading this stock for years and, if timed correctly, profiting from it....

Video gets better towards the end, skip first half if you're not patient (have to watch the second half of the vid to see the fun part)....

Does mouse phychology and mass short pshychology have a lot in common?

 

[erthquake]

For some reason I found myself watching mousetrap videos and thinking about how shorts have been trading this stock for years and, if timed correctly, profiting from it....

Video gets better towards the end, skip first half if you're not patient (have to watch the second half of the vid to see the fun part)....

Does mouse phychology and mass short pshychology have a lot in common?

The shorts should consider themselves lucky if they end up living in a forest like that rat.

 

[GoTslaGo]

Wow! Awesome! THANKS!

So, to refresh these numbers, I sat down, reviewed various sources, and calculated:
164.19 million shares total

Here's the ones who will not sell any time soon:
33.63 million held by Musk (after the most recent conversions) -- down to 20.4%
Another roughly 0.5 million shares held by other insiders (mostly JB Straubel and Kimbal Musk)

5.85 million held by Fidelity Contrafund (ultrabullish, never sells)
0.70 million held by Fidelity Contrafund VIP (same management, I think)
4.42 million held by Fidelity OTC (ultrabullish, never sells)
(Other Fidelity funds may sell, see below)

13.29 million held by Bailie Gifford (decidedly bullish and long-term)

(T Rowe Price often sells, see below)

8.17 million held by Tencent (probably much more, since that was *exactly* 5% at the time of report; nobody ever stops buying just *over* the reporting threshold)

2.69 million held by Vanguard Total Stock Market Index (they have to add more as TSLA goes up)
1.54 million held by Vanguard Extended Market Index (they have to add more as TSLA goes up)
1.41 million held by other Vanguard funds (since they're mostly indexes, same thing for the cap-weighted indexes)

3.79 million at Morgan Stanley (MS is a consistent buyer and rarely sells -- Adam Jonas? -- though they sold a little recently)

3.31 million at Bank of Montreal (Also a consistent buyer and rarely sells, though they sold a little recently)

(Jennison and a bunch of other major institutional holders are not long-termers and have sold lots repeatedly and recently.)

1.15 million held by Powershares QQQ ETF (NASDAQ tracker, they have to add more as TSLA goes up)

1.20 million held by Baron Partners Retail and Focused Growth Retail (Ron Baron, "never sell" bull)

1.07 million held by Harbor Capital Appreciation Institutional (seems consistently bullish)

1.17 million held by Primecap (secretive, definitely long-termers, super low turnover; has sold some but might be cash outflows from mutual funds)

1.58 million held by BAMCO (seems consistently bullish after selling out in June 2013 and buying back in March 2014 -- *someone* isn't making the same mistake twice)

And some other big holders which are more likely to sell:
2.38 million held by Fidelity Blue Chip Growth (DOES sell sometimes)
1.88 million held by Fidelity Growth Company (DOES sell sometimes)
1.04 million held by Fidelity Advisor New Insights A
4.64 million held by other Fidelity funds

2.74 million held by T Rowe Price Growth Stock (usuallly bullish but did sell recently)
1.13 million held by T Rowe Price Blue Chip Growth (bought recently)
8.03 million held by various other T Rowe Price funds (many do sell)

1.36 million held by American Funds NVIT Growth II (managed by American Funds, a division of Capital Group)
1.33 million held by VA CollegeAmerica New Perspective 529E (managed by American Funds, a division of Capital Group)
2.07 million held by Capital World Investors (a different division of Capital Group -- they've been selling since 2012)

Anyway, I estimate 50.27 million shares in the hands of long-term "rarely sell" institutional investors / mutual funds. Plus whatever Tencent has accumulated above 5%. That leaves about 79.79 million shares floating (including the "fast trading" and "weak long" mutual funds and institutions). Minus whatever Tencent has accumulated.

There are 31.58 million shares short (as of the 13th, possibly more now). The shares sold short are bought by additional longs, so the "available for trading" shares are around 111.37 million, minus whatever Tencent has accumulated, and any "long-term longs" (like many of us) who I didn't get in my count. To cover the short shares, the short-sellers must buy 28% of this total. To put it another way, more than 28% of the shares currently available for trading were created by short sellers. They will have to buy them back and find enough "weak longs" to buy them back from. Every time there's good news this becomes harder.

If I guess that Tencent has grabbed another 4.9% (to stay just below the 10% reporting threshold), it would be another 8.08 milion shares off the market.

Addition to the S&P 500 would require a minimum of 4% of the "float" (according to certain definitions) be purchased by just the *biggest* S&P tracker funds. It'll probably be more like 10% (including "closest index" funds and funds which aren't allowed to invest in companies which haven't shown 4 quarters of profit). For this purpose, I'm not sure how they calculate "float", but I figure they basically just exclude Musk and Tencent, so 122.39 million. 4% is 4.89 million. 10% is 12.24 million.

This could bring us down to 59.47 million real shares which are really available for sale (not counting the possibility of a macro crisis causing massive index fund redemptions). With a short interest of 31.5 million... well, then the shorts have to buy one out of every three shares available for trading in order to close out their positions. A lot of buying pressure.

 

[Papafox]

According to the Fidelity short shares movement posted by vgrinshpun, the shorts put in a significant effort on Tuesday to lower the TSLA stock price and thereby calm the fears of fellow shorts as the ER approaches. I wouldn't be surprised if we see just the opposite of Tuesday's trading on Wednesday: a dip early on as shorts try to put a little blood in the water and then we nonetheless see an improvement with a positive trend going into the close. In response, if the ER is a good one, it might be fitting that the online music played prior to the beginning of the ER discussion be the theme song from the movie Jaws.

 

[Runarbt]

So tomorrow I think Tesla might go down because macro for automakers is apparently going bad :
https://www.nytimes.com/2017/05/02/business/auto-sales-decline.html

I still expect a 320 close but it is not going to be a piece of cake and the likelihood of a close under 315 is getting higher than previously.

Or maybe a stellar ER will finally break the connection between tesla and ICe manufacturers?

Imo they might do poorly because of tesla doing well.;-)?