General Discussion: 2018 Investor Roundtable

[MarcusMaximus]

General question about put options: It seems like exercising a put would put upward pressure on the stock price, since the buyer of the put would be buying shares on the open market in order to sell to the put writer(the put writer, of course, being able to sell the stock at a loss or hold it). What seems weird to me is I'm not seeing any reciprocal pressure on the call side of things. If a call is exercised, the buyer buys some shares(neutral pressure). If not, they don't and the writer either sells or holds, potentially trying to sell another call(also neutral pressure).

Do I have this right, or am I missing something?

 

[Oil4AsphaultOnly]

General question about put options: It seems like exercising a put would put upward pressure on the stock price, since the buyer of the put would be buying shares on the open market in order to sell to the put writer(the put writer, of course, being able to sell the stock at a loss or hold it). What seems weird to me is I'm not seeing any reciprocal pressure on the call side of things. If a call is exercised, the buyer buys some shares(neutral pressure). If not, they don't and the writer either sells or holds, potentially trying to sell another call(also neutral pressure).

Do I have this right, or am I missing something?

Not quite, since the put buyer is buying the option for downside protection again't their own shares. If they're trying to profit from the stock movement, then they don't have to exercise the options and can simply let it expire or sell the options for a loss. No pressure to the stock.

Edit: Buying PUTS is one of the riskier investment decisions in my book, since you're fighting against the time-value of the option as well - closer you get to expiration, the less value it has.

 

[MarcusMaximus]

Not quite, since the put buyer is buying the option for downside protection again't their own shares. If they're trying to profit from the stock movement, then they don't have to exercise the options and can simply let it expire or sell the options for a loss. No pressure to the stock.

Edit: Buying PUTS is one of the riskier investment decisions in my book, since you're fighting against the time-value of the option as well - closer you get to expiration, the less value it has.

That would assume the put buyer is buying to hedge their shares, right? If they're someone like Mark Spiegel just trying to, in essence, short the stock without the unlimited downside, then they presumably wouldn't already own shares and would look to the open market to buy shares and sell to the put buyer at a gain.

 

[adiggs]

That would assume the put buyer is buying to hedge their shares, right? If they're someone like Mark Spiegel just trying to, in essence, short the stock without the unlimited downside, then they presumably wouldn't already own shares and would look to the open market to buy shares and sell to the put buyer at a gain.

If somebody has purchased a put option, then that specifically gives them the option to sell shares they already own at a pre-determined strike price. That's the insurance usage of purchasing a put option.

If you purchase a put option and you do not own the shares, then you're not insuring your owned shares against downside - you are seeking downside in the underlying share price so that the value of your put option increases, and you can sell the put option direction for more than you paid for it (thereby making money).

In this latter case, you don't need to buy shares to then exercise the option and put those shares to whoever gets chosen from the put sellers (assignment).


I think that's what you're missing. In your final sentence, you could make that "buy shares on the open market to then exercise the put option, and assign the purchased open market shares to the put seller". But really, everything past "sell the put option for a profit due to the underlying stock price decrease" is just extra transactions and transaction fees.

 

[MarcusMaximus]

If somebody has purchased a put option, then that specifically gives them the option to sell shares they already own at a pre-determined strike price. That's the insurance usage of purchasing a put option.

If you purchase a put option and you do not own the shares, then you're not insuring your owned shares against downside - you are seeking downside in the underlying share price so that the value of your put option increases, and you can sell the put option direction for more than you paid for it (thereby making money).

In this latter case, you don't need to buy shares to then exercise the option and put those shares to whoever gets chosen from the put sellers (assignment).


I think that's what you're missing. In your final sentence, you could make that "buy shares on the open market to then exercise the put option, and assign the purchased open market shares to the put seller". But really, everything past "sell the put option for a profit due to the underlying stock price decrease" is just extra transactions and transaction fees.

Ah, that makes sense, thanks!

 

[heltok]

I think it would be good strategy for Tesla to release a few thousand cars to Europe. Make them specced identically, maxed out P3D Red/White to make service of them easier ask if any day1 reservation holders wants them. High margins, ease delivery hell etc etc. Why not?

 

[elasalle]

Weekend OT:

It's always amusing being first in line a red light. As soon as the light turns green, all vehicles start to go. However in like 10 secs everyone else is in your rear view mirror very far away.

I am sure folks in the other motor must be noticing the same as well. I have had folks in Audis, BMs and Escalades drive super aggressive to just catch up ... got the finger once

Anyway, this scenario might actually be an amusing video ..

 

[Krugerrand]

Weekend OT:

It's always amusing being first in line a red light. As soon as the light turns green, all vehicles start to go. However in like 10 secs everyone else is in your rear view mirror very far away.

I am sure folks in the other motor must be noticing the same as well. I have had folks in Audis, BMs and Escalades drive super aggressive to just catch up ... got the finger once

Anyway, this scenario might actually be an amusing video ..

Only once? You aren’t trying hard enough.

 

[neroden]

Regarding the smear campaign against Tesla:

So, it's pretty clear there's a total FUBAR clusterfuck about deliveries. The computer system is failing to schedule production of cars for people who ordered on the first possible day, employees have to put in "placeholder" (i.e. fake) delivery dates in order to get the system to assign cars to them, some employees are not responding to phone calls or emails leaving people to bang on the doors of the delivery centers to try to find out why they don't have their cars, people are unable to get the VIN number when they need it for financing, etc.

These are very real and very serious problems for Tesla.

The smear campaign is *ignoring this*.

Why? It doesn't meet their *narrative*. Because it shows that people are so hungry to get Teslas that they are tolerating appalingly bad customer communications, total disorganization, and getting screwed around with. This situation is *really bad* for the company, but if the smear campaign talks about it, they have to admit that demand for Teslas is through the roof. And they don't want to admit that, so they won't talk about it.

 

[Stretch2727]

Regarding the smear campaign against Tesla:

So, it's pretty clear there's a total FUBAR clusterfuck about deliveries. The computer system is failing to schedule production of cars for people who ordered on the first possible day, employees have to put in "placeholder" (i.e. fake) delivery dates in order to get the system to assign cars to them, some employees are not responding to phone calls or emails leaving people to bang on the doors of the delivery centers to try to find out why they don't have their cars, people are unable to get the VIN number when they need it for financing, etc.

These are very real and very serious problems for Tesla.

The smear campaign is *ignoring this*.

Why? It doesn't meet their *narrative*. Because it shows that people are so hungry to get Teslas that they are tolerating appalingly bad customer communications, total disorganization, and getting screwed around with. This situation is *really bad* for the company, but if the smear campaign talks about it, they have to admit that demand for Teslas is through the roof. And they don't want to admit that, so they won't talk about it.

Not so sure it is this chaotic. I have 2nd delivery scheduled for Sept 27th. VIN assigned on the 20th as expected. Several follow up calls from the Tesla rep to make sure everything is in order. From my perspective they are being pretty thorough to be sure the delivery is not missed. Actually much more followup than on my first Model 3 delivery in the spring. Let see how it goes on the 27th!

Although, I am a little concerned about the inventory cars given people are still waiting for ordered cars. Given the limited configurations you would think they could match these to orders.

 

[mutle]

I think it would be good strategy for Tesla to release a few thousand cars to Europe. Make them specced identically, maxed out P3D Red/White to make service of them easier ask if any day1 reservation holders wants them. High margins, ease delivery hell etc etc. Why not?

Sounds like a great idea but since I will order midnight silver, I think those cars should be in that color instead of red.

This has been the slowest rollout to EU in Tesla’s history, all previous cars (including the Roadster, AFAIK) had their first deliveries within the first year after the US. Having even a few cars on the road would be great to get the word out.

 

[MarcusMaximus]

Not so sure it is this chaotic. I have 2nd delivery scheduled for Sept 27th. VIN assigned on the 20th as expected. Several follow up calls from the Tesla rep to make sure everything is in order. From my perspective they are being pretty thorough to be sure the delivery is not missed. Actually much more followup than on my first Model 3 delivery in the spring. Let see how it goes on the 27th!

Although, I am a little concerned about the inventory cars given people are still waiting for ordered cars. Given the limited configurations you would think they could match these to orders.

It sounds like it varies based on where you are. Up to, and including, having a loan and making payments on a car you don’t have yet.

 

[Sean Wagner]

These are very real and very serious problems for Tesla.

The smear campaign is *ignoring this*.

This is precisely what I observed over the last year when I regularly mentioned the risks Tesla might face in the event of a massive Model 3 recall while making do with a mismatched, heterogenous [aka spotty], and underdeveloped service arm.

Who said you can't combine a fishing-expedition with intimations of reality, after all.

There's not been a single reaction all this time from the army of vociferous critics and feckless detractors [comments in Financial Times articles]. A massive recall does presuppose massive sales, of course.

The risk still exists, though it looks to have greatly diminished.

What I do have trouble accepting is that important parts of Tesla should be overwhelmed when they actually do build five or six thousand cars a week - then proceed to abuse service techs as sales staff in the pursuit of shortest-term goals.

 

[AZRI11]

Regarding the smear campaign against Tesla:

So, it's pretty clear there's a total FUBAR clusterfuck about deliveries. The computer system is failing to schedule production of cars for people who ordered on the first possible day, employees have to put in "placeholder" (i.e. fake) delivery dates in order to get the system to assign cars to them, some employees are not responding to phone calls or emails leaving people to bang on the doors of the delivery centers to try to find out why they don't have their cars, people are unable to get the VIN number when they need it for financing, etc.

These are very real and very serious problems for Tesla.

The smear campaign is *ignoring this*.

Why? It doesn't meet their *narrative*. Because it shows that people are so hungry to get Teslas that they are tolerating appalingly bad customer communications, total disorganization, and getting screwed around with. This situation is *really bad* for the company, but if the smear campaign talks about it, they have to admit that demand for Teslas is through the roof. And they don't want to admit that, so they won't talk about it.

Tesla is very lucky that they are the only game in town. With their lead it will take 3-5 years for anyone to come close. Need many more delivery centers and stores, hopefully they build out their infrastructure to support this. People are on the sidelines because of the delivery horror stories told by their friends. Not a sustainable buisness model.

 

[Bet TSLA]

Not so sure it is this chaotic....

Oh, it's bad. I went with some friends to take delivery of their Model S100D yesterday at the Fremont Delivery Center. They didn't leave with their car until over six hours after they got there. The excuses before they got to see their car: in detailing, should be another 15-20 minutes (over and over and over); having trouble with the DMV connection so can't prepare the paperwork; why not go to lunch and come back later; came back over an hour later to no change; wait some more. About four hours in the car appeared; examined it carefully without any Tesla people involved in any way; pretty much perfect, but badly cleaned so some bits of dust/dirt in every crevice and fold, both interior and exterior. Still no paperwork; DMV, other issues. I left. Eventually done. Got some compensation for their wasted time and dirty car.

This was a truly non-premium experience. And the whole barista thing is gone, so even less like I experienced last December. Lots of Tesla people standing around doing nothing that I noticed, and in addition it wasn't as though they were jamming the cars out either. They apparently had problems they seemed unable to solve.

On the other hand, I didn't see lots of unhappy customers, just lots of apologizing by Tesla people. I would advise anybody given the option to take home delivery. It can't be worse, I think.

I have another friend who had an appointment to get his P3D last week. Tesla rescheduled him for this week with almost no notice, then cancelled altogether with no VIN and no date and no communication. WTF? Every time we talked about him getting his car I warned him to keep his delivery expectations really low, so he's not too angry about this yet, but he's sure not pleased.

 

[neroden]

It's becoming clear that Tesla's computer system for the logistics isn't up to snuff. I sometimes wonder if they have any competent programmers. The other problems, which are more normal, are exacerbated by this.

 

[Ugliest1]

I can’t find a good thread for this so please point me there. I think I’ve read posts in this thread that mention seeing semi’s full of Tesla’s being transported somewhere. Today I’m travelling south on I5, and between MtShata and Corning my eagle-eyed wife spotted 6 semi’s going north: 1 full of X, 5 full of 3.

Oh yeah, and she spotted only 1 (one, uno, un) semi with some other unknown manufacturer hauling their cars north. We also passed one with already-plated cars; being taken to the crusher???

 

[ValueAnalyst]

ZEV/Other Credits Q3

 

[Rarity]

Yes, it looks like delivery is broken. But did we expect any different? Tesla is growing 80% per annum at scale, which I believe is unprecedented in business history. Unfortunately, things break at this speed.

Next year may be no better, with some other piece of the business broken (or some additional piece broken).

 

[elasalle]

Only once? You aren’t trying hard enough.

I had to think hard on this one, and then I realized, it's a Tesla I don't need to