Numerology on Twitter

[mongo]

This is my prediction going forward:

• Thu, Dec 9, 2021 Tesla announces share dividend (split ratio TBD)

Do you mean:
share dividend pending result of vote to occur no sooner than 10 days post announcement? In which case 9th announce vote, 20th vote, 21st announce split, 31th date of record (matching previous timing), Jan 7th (Trading with new numbers).
Or
is there a special vote announced Nov 29 to occur pre Dec 9th to allow a split to be authorized?

 

[Artful Dodger]

Do you mean:
share dividend pending result of vote to occur no sooner than 10 days post announcement? In which case 9th announce vote, 20th vote, 21st announce split, 31th date of record (matching previous timing), Jan 7th (Trading with new numbers).
Or
is there a special vote announced Nov 29 to occur pre Dec 9th to allow a split to be authorized?

Some scenarios would likely require advance notice and a shareholder vote. A 2:1 split probably doesn't, while a 5:1 probably does. IANAL but with the distribution date being Dec 23, it might be possible that's considered more than the min. 10 days notification period required to the actual date of the split, so both the split announcement and a notice of a shareholder vote could be filed on 12/9. But I don't know enough to judge, so I'll watch and see.

I'm not sure what the utility of a 5:1 spit is. History tells us the SP could march back up to the $1K range just during the runup to the split. It's significant that Tesla doesn't need more capital going forward (local non-recourse loans FTW). So I don't think we'd see a "blow-off top" after the run-up like we did on Sep 01, 2020 when Tesla announced the $5B Equity Offering. I think the shortzes are forced to cover.

So, a 10:1 split might land us at around (maybe) ~$200 SP after the smoke clears, but I really think that's a secondary consideration for Elon: I believe his real target for this gambit is the practice itself of naked short selling via the "Madoff Exemption". Time to finally die, Bernie. "Are you still alive?": Elon.

Cheers!

 

[Lessmog]

So, let's continue exploring this rabbit warren. Way back during the August 2020 5:1 split, there was an interesting coincidence in timing between the Split Announcement and the NASDAQ Short Interest data release.

Specifically, SI data for July 31, 2020 was released just before Tesla announced their 5:1 split during the After-hrs session on Aug 11, 2020: (here was the TSLA SP reaction)

View attachment 735229

At that time, I used the SI volume to estimate the number of phantom shares created via naked short selling (assumed a 1:1 short/naked as a 1st approximation). This allowed me to use a simple supply and demand microeconomics model to predict a 90% increase in the SP due to the forced naked short covering. Turns out that was very close.

In the event, TSLA SP rose exactly 96% from $1374 to $2,700 pre-split (or $540 post-split) peaking in the Pre-market on Tue, Sep 01 just before Tesla's 7:00 a.m. SEC filing for their $5B Equity Offering: (here's the Pre-market reaction from Sep 01, 2020)

View attachment 735230


Recall that during this time, many Retail Brokers were *unable* to deliver the Dividend Shares to their Beneficial Owners (read: Retail customers of the Broker), and MANY excuses were offered as to why they had not received their shares from the Clearing House. Yeah, they were unable because they weren't ENTITLED to any more shares because they were NAKED SHORT. All this occurred as I predicted in advance, and posted here in this thread around Aug 14, 2020.

Let's also take note of this further coincidence: the $5B Equity Offering filed on Sep 01, 2020 was equal to the estimated value of shares that naked shorts would be forced to purchase as a minimum (also predicted by the Aug 11 SI data). IMO, Tesla gave an escape door for MM/hedge funds, who gladly coughed up $5B in about 24 hrs to escape their predicament (caught naked short).

BTW, that $5B paid for Giga Texas in full, with a tidy sum left over for future debt repayments (thanks shortie, wouldn't wanna be ya) Note also that this did not END the practice of naked shorting TSLA, it was just the MINIMUM number of shares required to cover by abusive naked short sellers (mainly MMs with the Options exemption, but TSLA has about 28 different MMs).

So now, fast-forwarding, let's take note of these Dates for Nov/Dec 2021, extracted from the NASDAQ Short Interest Publication Schedule:

November	Settlement Date	Due Date- 6 p.m.	Dissemination Date after 4 p.m., ET
	11/30/2021	12/2/2021	12/9/2021

OH GEEZ. There's that DATE again: 12/9

So this means that any naked shortz not covered as of Nov 30, 2021 WILL be vulnerable on Dec 09, 2021 if not covered via purchasing a real TSLA share (one which is registered with the National Clearing House, not just an entry in the MMs internal ledger).

But this time around, Elon is providing both an escape hatch (his share sales), and fair warning (all those twitter hints) to any MM/hedgies who DID NOT LEARN from the beating they took in Aug/Sep 2020: DUCK AND COVER, or SUFFER. We can attribute some of this week's SP runup to that "learning process" working on shortzes.

We saw in Jan 2021 with the Gamestop $GME trading disaster that highly exposed Retail Brokers are VULNERABLE to default/bankrupcy (mainly Robin Hood and Melvin Capital, but also Interactive Brokers to name a few).

When there are more legal obligations to purchase shares than the total number of shares that exist ($GME short interest was 134% of their total stock on about Jan 26, 2021), its a major problem for the Market. This event nearly caused the collapse of several large players, which desparately halted BUYING ONLY for GME, but retail suckers bagholders traders suckers were allowed to SELL as the SP collapsed. Also, Melvin Capital needed a $2.8B bailout from Citadel (which implies their own risk was even higher, if that was their best solution). It happened to $GME.

Now fast-forward to Dec 2021:

• Tesla does NOT need any Capital; so no rescue forthcoming via an Equity Offering
• S&P 500 Index and Benchmarked Funds combined hold ~$300B of TSLA shares
• large funds are direct holders of their shares, which can not be faked on a ledger
• on the split comes, big players will DEMAND all their rightfully owned dividend shares
• its possible a share dividend may trigger a recall by Funds which have loaned shares
• competition for the remaining float will be intense as legal shortzes scramble to cover

Any remaning naked shortzes will also have to compete for that shrinking float, as HODL'rs won't sell and MOMO traders jump in with both boots. And then it's the ...

SQUEEZE.

This is my prediction going forward:

• Thu, Dec 9, 2021 Tesla announces share dividend (split ratio TBD)
• December TSLA SP run-up continues in an epic "Santa Claus Rally"
• Thu, Dec 23, 2021 new shares Distribution Date (D-Day, Merry Xmas!)
• Mon, Dec 27, 2021 TSLA begins trading with these new Dividend shares
  • certain Retail Brokers are AGAIN unable to deliver those shares
  • excuses and cries of 'foul' flood the Media (who's Xmas is spoiled)
  • the short squeeze begins in earnest with exponential runup
  • Tesla DOES NOT offer an Equity rescue (humming Carols instead)
• Jan 2022:
  • some Financial instititutions collapse (looking at JPMorgan)
  • Congress gets involved (so nothing happens)
  • stalemate is not an option

So what does the end game look like? Well, SEC Regulation SHO, Rule 201 "the options market maker's exemption to the prohibition against naked shorting" a.k.a. the "Madoff Rule" has to be the target of this gambit. If Rule 201 is not fixed in a meaningful way, Tesla can repeat this forever going forward as Elon sells 10% year after year.

Untenable... Must fix... Rasputin... China syndrome... Manhatten Project.

Just one last point to make for any doubters who are still reading this: before Bernie Madoff died in prison for his multi-billion dollar fraud ponzi scheme, before Bernie drafted the "Madoff Rule" which is Regulation SHO, Rule 201, Bernie Madoff was the President of NASDAQ.

This can happen. Worse things have happened in the past. We just don't think much about it.

Word.

Fantastic speculation -- in a good way!
I still don't quite see the significance of the date, Dec 9. Is it that by then it is known to all exactly who are still short tsla and by how much? Is that then only to blame and shame the guilty parties, or can there be some other motivation?

Elon hardly sleeps and he does NOT like unjustice etc, so I think you may well be right that he has long been planning some elaborate scheme to get even with (at least some of) the beastages who made him (and us) hurt. Elon is very inventive.

Too bad I am not a fan of popcorn ...

 

[Artful Dodger]

Soon it'll be time for a genuine discussion of alternative ways to fix the broken'n'abused "Madoff Exemption". I suggested over in Main last week that one obvious fix is to not allow the purchase of Put contracts for shares you don't own (it's like buying the right to sell your neighbor's house). These highly leveraged short bets have a self-reinforcing effect on the SP, literally using the fear of forced share purchases to cause the SP to plummet. Simple principle: no skin in the game, no seat at the table.

Similarly, I think that Calls should only be sold for shares that exist ie: there is a "pool" of shares that the MM has borrowed or owns outright: when that reserve is already committed, further sales of Call options shouldn't be allowed. When the number of shares controlled under Call options exceeds the number of shares that exist, that's when the tail starts wagging the dog. And that's why TSLA options volume exceeded that for all other equities combine on NASDAQ during the 'gama squeeze' 2 weeks ago. This should also be banned.

Cheers!

 

[mongo]

Some scenarios would likely require advance notice and a shareholder vote. A 2:1 split probably doesn't, while a 5:1 probably does. IANAL but with the distribution date being Dec 23, it might be possible that's considered more than the min. 10 days notification period required to the actual date of the split, so both the split announcement and a notice of a shareholder vote could be filed on 12/9. But I don't know enough to judge, so I'll watch and see.

I'm not sure what the utility of a 5:1 spit is. History tells us the SP could march back up to the $1K range just during the runup to the split. It's significant that Tesla doesn't need more capital going forward (local non-recourse loans FTW). So I don't think we'd see a "blow-off top" after the run-up like we did on Sep 01, 2020 when Tesla announced the $5B Equity Offering. I think the shortzes are forced to cover.

So, a 10:1 split might land us at around (maybe) ~$200 SP after the smoke clears, but I really think that's a secondary consideration for Elon: I believe his real target for this gambit is the practice itself of naked short selling via the "Madoff Exemption". Time to finally die, Bernie. "Are you still alive?": Elon.

Cheers!

If the point of the split is just to force a true-up, they could do a 12 for 9 (4 for 3).

 

[Artful Dodger]

Fantastic speculation -- in a good way!

Lol, we'll know more in 20 daze...

I still don't quite see the significance of the date, Dec 9. Is it that by then it is known to all exactly who are still short tsla and by how much? Is that then only to blame and shame the guilty parties, or can there be some other motivation?

Dec 9th is a natural "seam" in the fabrik of the Markets. It's a data distribution date, and aligns well with other reporting, voting, and split requirements. Plus, it's CHRISTMAS!

Elon hardly sleeps and he does NOT like unjustice etc, so I think you may well be right that he has long been planning some elaborate scheme to get even with (at least some of) the beastages who made him (and us) hurt. Elon is very inventive.

Sleep when ur dead. Justice delayed is Justice denied. Look both ways before crossing Elon.

Too bad I am not a fan of popcorn ...

Personally, I have enough left for 2 more weeks...

Cheers!

 

[Lessmog]

Soon it'll be time for a genuine discussion of alternative ways to fix the broken'n'abused "Madoff Exemption". I suggested over in Main last week that one obvious fix is to not allow the purchase Put contracts for shares you don't own. These highly leveraged short bets have a self-reinforcing effect on the SP, literally using the fear of forced share purchases to cause the SP to plummet. Simple principle: no skin in the game, no seat at the table.

Similarly, I think that Calls should only be sold for shares that exist ie: there is a "pool" of shares that the MM has borrowed or owns outright: when that reserve is already committed, further sales of Call options shouldn't be allowed. When the number of shares controlled under Call options exceeds the number of shares that exist, that's when the tail starts wagging the dog. And that's why TSLA options volume exceeded that for all other equities combine on NASDAQ during the 'gama squeeze' 2 weeks ago. This should also be banned.

Cheers!

Fantastic speculation -- in a good way!
I still don't quite see the significance of the date, Dec 9. Is it that by then it is known to all exactly who are still short tsla and by how much? Is that then only to blame and shame the guilty parties, or can there be some other motivation?

Elon hardly sleeps and he does NOT like unjustice etc, so I think you may well be right that he has long been planning some elaborate scheme to get even with (at least some of) the beastages who made him (and us) hurt. Elon is very inventive.

Too bad I am not a fan of popcorn ...

So, you mean the motivation can be to cause such a big ruckus as to force a change of those bad rules? Liking that.

 

[Knightshade]

Some scenarios would likely require advance notice and a shareholder vote.

Every scenario that involves at least a 2:1 or greater split does- as you've had explained to you multiple times.

Especially if Tesla intends to keep offering SBC to employees going forward (those future shares have to be able to exist after all, and have to come out of the "authorized by not issued" share pool.... as would any future shares for Elons next compensation plan)


The part that I keep missing in your whole "NAKED SHORTIES ARE RESPONSIBLE FOR EVERYTHING BAD" narrative is how you connect these two dots:

Thanks to dumb SEC rules they can naked short forever, without any accountability, and just keep passing fake shares around every 2 days with each other to avoid FTD reports- on the books it'll always look like everyone has all the shares they should.

Ok- let's say that's the case.


If they can always avoid responsibility by creating and passing around fake shares- how does the dividend change that?



Are they selling the fake shares only to each other (to make it easy to keep passing them?) If so they can just do that with the higher multiple of fake shares.


If they're selling the fake shares to retail, they can...still just mark off more fake shares can't they?


For example:

Bank A sold retail customer B 100 naked short shares.

Tesla does a 2:1 split. Customer B is now owed 100 dividend shares.

So Bank A just naked shorts another 100 fake shares. Or if for accounting reasons needs be, they ask their MM buddy Bank C to naked short 100 shares to sell TO bank A which delivers them to customer B....and Bank A does the same favor back for Bank Cs customers, and they keep swapping them back every 2 days to avoid FTD reports.


The only time there'd be a problem is if retail did a massive sell-off of shares- like a run on a bank who doesn't actually keep 100% of their deposits sitting around in cash.



So how, specifically, does the share dividend force addressing this immediately if they can always naked print more shares and pass them around to avoid FTDs?


I DO recall a few posters having late delivery of div. shares on the previous split... but it was (almost?) exclusively overseas brokers who attributed it to issues with it being a US stock...and AFAIK everyone got their shares showing up within a couple extra days, before the secondary sale. I don't recall any press coverage on this at all--- was there?



Lastly, if the PRIMARY reason (assuming there's an explanation why they can't naked short their way around it) was to try and stop the naked shorts... why wouldn't Tesla just do a 1.1:1 split every X days or something? Why keep giving them a bunch of time to make $ and move the SP around in between splits?

 

[StealthP3D]

If the point of the split is just to force a true-up, they could do a 12 for 9 (4 for 3).

I believe the only true utility of a share split is to force a 'true-up' and that a 4 for 3 split forces a true-up as effectively as a higher ratio split. It would still require a true-up.

Share accounting (between firms, etc.) is done in bulk using the balance method. Open transactions are those that have not settled yet and these can be more numerous than the number of shares that actually exist. A split causes all the players to have to do a an accounting of all shares at a specific point in time so fake shares can't be floated by taking advantage of the settlement period. That is my understanding.

Splits are only done periodically, when the benefit outweighs the expense, because it's added overhead and inconvenience to the corporation and brokerages. It actually requires real people to do work that, in essence, is non-productive, specific benefits excepted. And some corporations have judged they are *never* worth the expense.

 

[Knightshade]

BTW, Gary Black among others have suggested Elon has not "manually" sold in the last few days because he became aware of material non public information.

https://www.sec.gov/Archives/edgar/data/25743/000138713113000737/ex14_02.htm

Nonpublic, or inside, information about the Company that is not known to the investing public may include, among other things, strategic plans; significant capital investment plans; negotiations concerning acquisitions or dispositions; major new contracts (or the loss of a major contract); other favorable or unfavorable business or financial developments, projections or prospects; a change in control or a significant change in management; impending securities splits, securities dividends or changes in dividends to be paid; a call of securities for redemption; and, most frequently, financial results.

Of course Garys NMPI theory might not be the reason there's been no manual selling last few days- but if it were accurate then the split (or any other material info related to Tesla) couldn't be what the 12/9 thing is about without Elons more recent manual sales being illegal since the 12/9 conspiracy tweets go back to Nov 6th per OP.

 

[mongo]

Oh yeah, another thing they could (I think, not a Delaware Corporate lawyer) is announce a dividend for Q4.
Logistical nightmare, but hard on shorts:
Something with asymmetric value (low to Tesla high to anyone else):
X time of FSD per share (non-transferable)
X miles of free supercharging per share

Something with value that Tesla already has:
$1 of Bitcoin per share (basically zero cost accounting wise)

Something unique:
NTF

 

[Knightshade]

Oh yeah, another thing they could (I think, not a Delaware Corporate lawyer) is announce a dividend for Q4.
Logistical nightmare, but hard on shorts:
Something with asymmetric value (low to Tesla high to anyone else):
X time of FSD per share (non-transferable)
X miles of free supercharging per share

Something with value that Tesla already has:
$1 of Bitcoin per share (basically zero cost accounting wise)

Something unique:
NTF

This is another reason I have trouble with the "stock dividend NAILS those SHORTIES!" narrative. Non-share but hard/impossible to falsify dividends as you suggest could not only do this, they could do it routinely to entirely kill the entire naked short enterprise if it was really a solution to that.

 

[mongo]

BTW, Gary Black among others have suggested Elon has not "manually" sold in the last few days because he became aware of material non public information.

https://www.sec.gov/Archives/edgar/data/25743/000138713113000737/ex14_02.htm

Of course Garys NMPI theory might not be the reason there's been no manual selling last few days- but if it were accurate then the split (or any other material info related to Tesla) couldn't be what the 12/9 thing is about without Elons more recent manual sales being illegal since the 12/9 conspiracy tweets go back to Nov 6th per OP.

Well, that raises an interesting question, doesn't it. If a split is purely an accounting aid, it would not be material. If a split is deemed material, then the SEC would need to explain why (thus acknowledging the broken system).

There were a bunch of permit type filings in Texas. If those indicate Phase 1 going on-line imminently (or, at least, a firm date), that could be material.

This is another reason I have trouble with the "stock dividend NAILS those SHORTIES!" narrative. Non-share but hard/impossible to falsify dividends as you suggest could not only do this, they could do it routinely to entirely kill the entire naked short enterprise if it was really a solution to that.

Is shorting an issue for most companies to the point that the effort is worth it?

 

[FastCompany]

Fantastic speculation -- in a good way!
I still don't quite see the significance of the date, Dec 9. Is it that by then it is known to all exactly who are still short tsla and by how much? Is that then only to blame and shame the guilty parties, or can there be some other motivation?

Elon hardly sleeps and he does NOT like unjustice etc, so I think you may well be right that he has long been planning some elaborate scheme to get even with (at least some of) the beastages who made him (and us) hurt. Elon is very inventive.

Too bad I am not a fan of popcorn ...

May have something to do with International Anti-Corruption Day.

 

[dww12]

So this is where everybody went.

 

[Paracelsus]

Fantastic speculation -- in a good way!
I still don't quite see the significance of the date, Dec 9. Is it that by then it is known to all exactly who are still short tsla and by how much? Is that then only to blame and shame the guilty parties, or can there be some other motivation?

Elon hardly sleeps and he does NOT like unjustice etc, so I think you may well be right that he has long been planning some elaborate scheme to get even with (at least some of) the beastages who made him (and us) hurt. Elon is very inventive.

Too bad I am not a fan of popcorn ...

I am glad to see this - a specific mention to any justification for potential efforts by Elon to restore equity to TSLA shareholders, and more particularly to right the significant wrong he has experienced in his stock sale to compensate him for his World Class performance. And I find the argument presented by @Artful Dodger quite compelling that it is much easier to wrong TSLA Longs and Elon than most retail investors and the public would ever guess.

From the main thread there appears to be growing sentiment that TSLA should be currently priced around $1,800. Elon has only been receiving about 60% of that value for his shares sold over the past couple weeks. It has also been estimated on the main thread that Elon will have about $8 Billion remaining after paying his capital gains taxes………..and that is after selling his shares at 60 cents on the dollar at the current price.

So not only is there the potential for the naked shorting practices discussed by @Artful Dodger to have hurt TSLA Longs, Tesla employees receiving stock compensation, and slowing the growth of Tesla as a company……..those same practices may have just taken approximately $4 Billion out of Elon’s personal pocketbook by artificially depressing the share price during what should have been the most joyous victory lap. Throw in a few politicians very publicly trying to take even more from him while the President of the United States gives all the credit that Elon was just compensated for to GM & Mary, and add to that the delays at Giga Berlin that hammered any potential for Q3 & Q4 production before he received compensation, and it is well justified IMO that he hits back, and hits hard. And what better way to do so than to reward all of those who have shared and suffered in his vision while financially crushing those that delivered that hurt…….all while once again leaving a trail of breadcrumbs to the faithful.

Revenge is a dish best served cold

 

[Gigapress]

I want to highlight one of @Artful Dodger 's gems.

Elon tweeted to Bernie Sanders:
"I keep forgetting you're still alive"
"Want me to sell more stock, Bernie? Just say the word..."

If this was a double meaning about Bernie Madoff living on via his "Madoff Exemption" for naked short selling allowances and warning naked shorts to cover while they still can:

 

[Gigapress]

On 28 Jan 2021 during the explosive climax of the GameStop naked short squeeze, Robinhood and several other brokerages temporarily halted buying of $GME but continued to allow selling.

That same day, Elon tweeted:
"u can’t sell houses u don’t own
u can’t sell cars u don’t own
but
u *can* sell stock u don’t own!?
this is bs – shorting is a scam legal only for vestigial reasons"

Elon subsequently led a Clubhouse discussion with Vlad the Impaler Robinhood CEO concerning the fact that retail investors had been apparently screwed, and as I recall the answers provided were less-than-satisfactory.

Clearly he is angry about the existence of naked shorting and probably the current behavior suggests machinations of a plot for vengeance -- starting 12/9.

Given the apparent trial production in Berlin shown in permits and drone flyovers, and the permit filings in Austin it does seem that a share split short squeeze may be compounded by an official announcement of low rate initial production at one or both factories.

@Artful Dodger Does your microeconomics model have an estimate for the current amount of naked shorts? I thought I had heard that short interest in TSLA is only like 3% of the total float these days. Or is this postulated naked short share split squeeze effect unaffected by the amount of shorting?

 

[Artful Dodger]

On 28 Jan 2021 during the most explosive phase of the GameStop naked short squeeze, Robinhood and several other brokerages temporarily halted buying of $GME but continued to allow selling.

Think about the absolute cast-irony of this situation: there can be NO TRADE without both a Seller and a Buyers. They of course didn't halt buying; they only blocked YOU from buying.

What Robin Hood did in fact was to block RETAIL investors from buying, while they themselves became the buyer for any share that was offered for sale. The collapse ensued, and the SEC remained silent.

You will never find a more retched hive of scum and vilany. Not in Mos Eisley Spaceport, nor in Sherwood Forrest.

They deserve what's coming.

 

[mongo]

Think about the absolute cast-irony of this situation: there can be NO TRADE without both a Seller and a Buyers. They of course didn't halt buying; they only blocked YOU from buying.

What Robin Hood did in fact was to block RETAIL investors from buying, while they themselves became the buyer for any share that was offered for sale. The collapse ensued, and the SEC remained silent.

You will never find a more retched hive of scum and vilany. Not in Mos Eisley Spaceport, nor in Sherwood Forrest.

They deserve what's coming.

My understanding is that what Robinhood did was not anticipate the collateral they needed in the event of an insanely high trade volume (reportedly 10x the normal collateral). They basically tapped out their credit line and, once that happened, the only trades they could process were sales which reduced the needed cash.
What Really Happened When Robinhood Suspended GameStop Trading

What happened this week — Under the Hood