2017 Investor Roundtable: TSLA Market Action

[Starno]

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.;-)?

I'm talking today until close. The ER is delivered after close

 

[TrendTrader007]

Facing yet another margin call from my buys yesterday. I have until Tuesday to meet this call so either the call will disappear tomorrow or I'll have a ton of more calls. All depends on ER
Interesting times

 

[Cattledog]

Facing yet another margin call from my buys yesterday. I have until Tuesday to meet this call so either the call will disappear tomorrow or I'll have a ton of more calls. All depends on ER
Interesting times

Good luck, I was surprised you weren't listed in Neroden's post of large shareholders!

 

[Runarbt]

Facing yet another margin call from my buys yesterday. I have until Tuesday to meet this call so either the call will disappear tomorrow or I'll have a ton of more calls. All depends on ER
Interesting times

Lets hope the ER give immediate effect on SP. Not as previous ER which has taken 3-4 days to "sink in".

 

[TrendTrader007]

A random observation
Quarterly upper bollinger band at $353.08 if stock makes a powerful bollinger breakout on quarterly chart then all bets off and we shall see the kind of meltup that will be written in history books similar to Porsche VW short squeeze in October 2008
May happen or may not
No guarantees in the stock market just wild guesses and crazy speculations on my part

Yet it could very well happen due to the supercool cup shaped quarterly chart for last 8-9 quarters

 

[TrendTrader007]

What a tight orderly hourly chart... seems to me stock wants $330+ in short order
And $330 may just be the start
Not an advice just my opinion purely for entertainment purposes

 

[myusername]

Facing yet another margin call from my buys yesterday. I have until Tuesday to meet this call so either the call will disappear tomorrow or I'll have a ton of more calls. All depends on ER
Interesting times

the odds of coming out ahead on a blackjack table are significantly higher than Tesla succeeding in the wild dreams you have for it... would you play with millions of dollars on blackjack in Vegas?

of course you guys will immediately see this as trolling... but vegas blackjack odds are somewhere around 49/51 in favor of the house... what's the success rate of new disruptive SV startups?

"but Tesla isn't a startup... look at all their successes!"... yeah... they've succeeded to make it 1/100th the way to all the grand visions you guys have for them... and so now you think the odds of them succeeding are greater than 49%?

worse than blackjack. with millions of dollars. there's got to be a really expensive therapist you could find to tell you how silly this is.

 

[ValueAnalyst]

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.

Let them try.

 

[vgrinshpun]

Facing yet another margin call from my buys yesterday. I have until Tuesday to meet this call so either the call will disappear tomorrow or I'll have a ton of more calls. All depends on ER
Interesting times

You are probably aware, but buying puts, even OTM ones, can lower your margin requirements significantly (at least at Fidelity), and therefore potentially eliminating (or, if done in advance, preventing) margin calls. You can play with different scenarios using their margin calculator.

Do not ask me how I know this.

 

[TrendTrader007]

You are probably aware, but buying puts, even OTM ones, can lower your margin requirements significantly (at least at Fidelity), and therefore potentially eliminating (or, if done in advance, preventing) margin calls. You can play with different scenarios using their margin calculator.

Do not ask me how I know this.

Thanks!

 

[anticitizen13.7]

the odds of coming out ahead on a blackjack table are significantly higher than Tesla succeeding

of course you guys will immediately see this as trolling... but vegas blackjack odds are somewhere around 49/51 in favor of the house... what's the success rate of new disruptive SV startups?

You think I don't know this?

High risk, high reward. I knew buying in years ago that Tesla could fail, and that nothing is guaranteed. Complex manufacturing is inherently risky.

People who are scared should stay away from TSLA and stick to Index mutual funds.

 

[ValueAnalyst]

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.

Thank you for this analysis. It was overall very informative, helpful, and I loved it.

I agree with the majority of your conclusions. The following are three points on which I would challenge you.

• I agree that Elon probably will not sell any meaningful number of shares anytime soon, but it's difficult to gauge at what price Fidelity/T.Rowe/Bailie Gifford would scale back on their ownership.
• I'm not sure if I agree that the Vanguard index funds would need to add more shares as TSLA goes up. Can you explain this some more? Wouldn't the value of their TSLA holding go up in-line with TSLA's market cap as the share price goes up?
• A short squeeze may happen before S&P500 inclusion, which requires the sum of the most recent four consecutive quarters’ Generally Accepted Accounting Principles (GAAP) earnings (net income excluding discontinued operations) should be positive as should the most recent quarter (this is often misrepresented in this forum so take note), and I don't expect this to happen until 4Q17 at the earliest and possible not until 2H18. If the Model 3 ramp up remains on track for 100k+ deliveries in 2H17, a short squeeze may happen before TSLA is added to the S&P500 index.

Thank you again for taking the time to do the research and sharing your thoughts with us.

 

[Navin]

Good luck today shorts - I understand why you may come on here and sound harsh today. But it's really like throwing a cup of water into the ocean.

 

[MartinAustin]

I happened to sell about 20% of my TSLA on Monday at $326.44. Might be handy to have that cash around if the stock falls after the ER. However, I'm hopeful that there will be a surprise from guidance, which is what the investment community appears to be valuing the most, and the stock will go up tomorrow.

1) Model 3 is on track... the risk of delays are going away. I used to figure 5,000 Model 3 production this year, but surely, it'll be more like 50,000 at least.

2) Tesla Energy is growing fast and hasn't been talked about too much by Tesla themselves, in terms of hard numbers. We may get our first taste of guidance today.

3) Tesla Semi - yes, it'll be teasing at this stage, but the prospects could be exciting for investors.

 

[dc_h]

I happened to sell about 20% of my TSLA on Monday at $326.44. Might be handy to have that cash around if the stock falls after the ER. However, I'm hopeful that there will be a surprise from guidance, which is what the investment community appears to be valuing the most, and the stock will go up tomorrow.

1) Model 3 is on track... the risk of delays are going away. I used to figure 5,000 Model 3 production this year, but surely, it'll be more like 50,000 at least.

2) Tesla Energy is growing fast and hasn't been talked about too much by Tesla themselves, in terms of hard numbers. We may get our first taste of guidance today.

3) Tesla Semi - yes, it'll be teasing at this stage, but the prospects could be exciting for investors.

Glad to see some bulls keeping powder dry. Reading about levered longs makes me nervous.

 

[jbcarioca]

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.

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Good points. If, as many suspect, Elon announces imminent Chinese assembly plus planned Gigafactory that should be worth a very substantial share price rise all by itself. If, as has been surmised, tencent now has somewhere between 15-19% of TSLA, we can expect some highly attractive cost of capital benefits from the domestic China developments. All the Chinese BEV market data is readily available, but IMHO it is not really relevant because an almost immediate net benefit of ~35% purchase price reduction will be coupled with freedom to drive in Beijing, Shanghai etc essentially at will. These factors combined, if they happen, could quite easily double Tesla sales while maintaining stable margins.

The preceding is only about cars. Now consider the potential were Tesla allowed to produce photovoltaics and battery storage systems with domestic equivalence. That is another arena that has no easily defined potential.

Finally, while thinking about this one needs only to add the demise of the TPP. Already the Philippines and New Zealand have inked pending agreements with China. Absent US participation there is little doubt that the Asian calculus is shifting towards Chinese agreements. If Tesla can be a bit clever it can manage some very significant market expansions from the TPP replacements plus regional efforts to displace fossil fuels. Note that Tesla is pushing hard to develop Australia, New Zealand, Korea, Japan and others which will benefit from lower costs and increased availability of Tesla products when the Chinese plans come together.

Depending on the announcements made tonight I might do all the work required to evaluate possible impacts on TSLA.

Final notes:
when VW, BMW and Daimler Benz are making China frontispiece for BEV we need to take the market seriously. When Buick sales are now 80% in China we might be even more serious. When China is the largest motor vehicle market in the world, the largest photovoltaic market in the world, we also need to consider how critical that country is.

Almost no consideration has been made in this thread about the single market that could easily dwarf the NA market. Imagine what that market might do with Model 3/Y and Tesla semi, not to mention S and X, Powerwall and Powerpack plus solar tiles (all those Mediterranean style suburban developments).

This lands in Market Action because I think such announcements could be themselves add >15% to share price over a couple of days, prompting even more than the $3.5 bn losses by shorts already.

 

[myusername]

how many of you "activist investors" / Tesla owners live in colorado? for some reason all it takes these days to be an activist is to buy TSLA stock... how many of you Coloradoans are even aware of this:

http://www.bizjournals.com/denver/n...-state-senator-would-tie-colorado-energy.html

"It’s likely, however, that a number of provisions of the wide-ranging bill will run into opposition, including a proposal to raise fees on electric cars to make up for the lack of gas taxes paid by those vehicles."

have you called your state senators?... or did you just hand a company with an over inflated stock some more of your money because that's what activism is in 2017?

 

[RedFiveZero]

Pure speculation, of course, but this is my prediction:

strong earnings + major announcement(s) + SpaceX rumor + short squeeze = my new MS P100D

 

[Irishjugg]

vegas blackjack odds are somewhere around 49/51 in favor of the house... what's the success rate of new disruptive SV startups?

"but Tesla isn't a startup... look at all their successes!"... yeah... they've succeeded to make it 1/100th the way to all the grand visions you guys have for them... and so now you think the odds of them succeeding are greater than 49%?

Yes, I do.

Looking at stats for the whole startup landscape isn't very interesting. Most of the startups that fail do so before this stage for one, so survivorship bias is actually in my favor now, for one.
Secondly, startups and indeed businesses succeed or fail based on their founder and other leadership. This founder has a very strong success rate and the correct personal makeup to always succeed. Small sample size of course, but I am more than happy to put a lot of my money on one of the best entrepreneurs currently active, with a disruptive paradigm shifting product that has already evolved into a set of products disrupting multiple enormous industries. Add first mover advantage, the incredible brand and brand loyalty, particularly amongst millennials, and a deep and clear driving vision for the company allowing them to hire many of the best engineers and yes, I'm quite happy to bet here and quite confident that my odds of winning are well above 75%.

 

[JRP3]

Interesting timing on this SEC probe news SEC Probes Solar Companies Over Customer Cancellations

The Securities and Exchange Commission is examining whether San Francisco-based Sunrun Inc. and Elon Musk's San Mateo, Calif.-based SolarCity Corp. have adequately disclosed how many customers have canceled contracts after signing up for a home solar-energy system, the person said.