Short-Term TSLA Price Movements - 2016

[schonelucht]

I think the idea is that institutions need to recall the shares prior to the merger in order to vote them. Once recalled, shorts are forced to cover. Thus, the increased covering must occur prior to the vote if this theory holds water.

According to recent reports, 2.5 million shares were already recalled. If that's what balances the bad news and makes the stock move neutral then it's possible we might see an orderly resolution of the short recall with 'bearable' price rises without a real squeeze.

The short sellers can reload only if they are solvent at that point in time, which is not very likely, at least for some of them.

Given the superhigh short interest in TSLA I would not bet on this. Some may loose their shirts today but there seems to be an endless supply of them itching to have their go at it, all convinced that finally this is the quarter that it will all fall down. And the higher the stock goes, the more may come out.

 

[X Yes?]

One - I don't see any evidence of executives cashing out stock.

Did you miss Elon Musk's stock option cash out? You do realize there was net cash from that transaction.

One, no executive other than Elon has the power to move the stock price through buys.

Is he forbidden from buying stock on the open market?

Even stock transaction by an executive is reported on a Form 4 and is publicly available.

True, but it will be months before we see it.

 

[Drax7]

Drax, you often mention this idea that 1800/week is what they need for revenus to cover all fixes and variable costs. Could you expand on this? What are you assumptions in coming up with this? Thanks.

Of course i will , give me time to retrieve the income statement calculations that i did a week or 2 ago.

 

[esk8mw]

According to recent reports, 2.5 million shares were already recalled. If that's what balances the bad news and makes the stock move neutral then it's possible we might see an orderly resolution of the short recall with 'bearable' price rises without a real squeeze.



Given the superhigh short interest in TSLA I would not bet on this. Some may loose their shirts today but there seems to be an endless supply of them itching to have their go at it, all convinced that finally this is the quarter that it will all fall down. And the higher the stock goes, the more may come out.

I tend to agree - I don't think the recall will trigger a squeeze. I hope it does but I'm certainly not banking on it. I think the price could drift upward on the continued recalls, however, especially if we don't continue to see 23542345 negative TSLA articles posted every day from here on.

 

[Irishjugg]

Despite higher interest cost I'll bet most are confidant their opportunity is near. So many unresolved negative issues.

Sorry, but this is nonsense. There aren't unresolved negative issues other than the NHTSA looking at the may crash. It's not even an investigation!
Nothing will come of that, the worst case is just tesla being told to make sure driver touches the wheel and is paying attention happens more often.

I can't tell if you are just playing devils advocate or see negative issues the rest of us are missing the last few pages.

 

[esk8mw]

Did you miss Elon Musk's stock option cash out? You do realize there was net cash from that transaction.


Is he forbidden from buying stock on the open market?


True, but it will be months before we see it.

Elon didn't cash out. He sold shares to cover taxes that he could not otherwise cover with cash. This is extremely common, far more common than paying cash for taxes.

He is not forbidden from buying on the open market.

Every transaction must be posted within 2 business days on Form 4. Not months.

Once again, basically everything you say is flat wrong or 98% misleading.

 

[dc_h]

Haha, Hammerstone Institutional chatroom is getting a little desperate.

When Tesla stops hiring desirable talent and building on those talents, to create very desirable employees at other leading companies, than we should all sell. Losing 8 of 15,000 employees in the last year is not exactly an unplanned exit from the market. Some of these were sidelined at Tesla due to real or perceived performance issues also. A year ago I was sweating that they had not brought in a Gwynne Shotwell, now I think they are building out a strong leadership core that will continue to take pressure off of Elon. Short term right now the SCTY forced short covering and watching the delivery threads seem to be the primary signals.

 

[Jayjs20]

And we end in the green today. I wonder what news will come out this evening to sink the SP for tomorrow.

 

[dakh]

The short sellers can reload only if they are solvent at that point in time, which is not very likely, at least for some of them.

Recalling shares into the rising SP forces short sellers to buy at a loss. If there is indeed a short squeeze dynamic, a lot of short sellers will be forced to buy at much higher prices than they borrowed the shares, essentially wiping them out financially (and in this lies the true meaning of Elon's "unwise" remark). The degree of this phenomenon could be argued back and forth, but I think there is one thing that is clear, and that is that there will be significantly less amount of money available for shorting activities post squeeze. There will also be a fear factor deterring "non-ideological", or, in another words "technical" shorts.

So you're saying those are not the same shorts that got wiped out in the last squeeze?

 

[X Yes?]

There aren't unresolved negative issues other than the NHTSA looking at the may crash.

Did you forget these:
1. NHTSA investigation on suspension issue.
2. NHTSA investigation on AutoPilot death
3. Second AutoPilot crash
4. Material disclosure before secondary offering.
5. Demand issues
6. Production issues
7. Earnings release
8. Model X

 

[austinEV]

And we end in the green today. I wonder what news will come out this evening to sink the SP for tomorrow.

BREAKING: FLAMINGOS DRIVING MODEL X AUTOPILOT MISS DELIVERY FORECAST RESULTING IN VEHICLE FIRE.

 

[MartinAustin]

Has TSLA risen for five straight days?

 

[vgrinshpun]

But they need to sell their shares to pocket any potential gains.

First, Fidelity needs to attract inflow of money into their funds - a task which is somewhat difficult if the value of their funds is depressed as compared to market and/or particular segment of it. So they have zero to gain if TSLA SP is depressed by the excessive shorting activity, and, on another hand have nothing but gain if TSLA SP goes up, freed from the excessive burden of short interest.

Further, if TSLA SP rises sharply due to short squeeze, way above their internal price target, they will most definitely sell some of their holdings, booking a nice profit, while freeing the funds for another investment, or even reloading TSLA after a post squeeze drop.

Any way I look at it they have a lot of interest in facilitating squeeze dynamics, all the while having "insider" information to play it right.

As a side note and a reminder, Fidelity is the largest institutional holder of TSLA - at the end of Q1 they owned 16.3M of TSLA shares, increasing their position during Q1 by a whopping 23%

 

[X Yes?]

Elon didn't cash out. He sold shares to cover taxes that he could not otherwise cover with cash. This is extremely common, far more common than paying cash for taxes.

Are you stating there was no net cash received by him from this transaction?

Every transaction must be posted within 2 business days on Form 4. Not months.

Very true. But when do think you will be able too confirm this non-theory?
His latest report shows we wont have visibility for 6 mos.
Insider Trading - Musk Elon - Form 4 SEC Filings

 

[MikeC]

As a side note and a reminder, Fidelity is the largest institutional holder of TSLA - at the end of Q1 they owned 16.3M of TSLA shares, increasing their position during Q1 by a whopping 23%

So does this mean that Fidelity itself owns the shares, or is it that their clients collectively own those shares in their Fidelity accounts?

If it's the latter, the decision to recall the shares would be with the individual investors.

 

[vgrinshpun]

Given the superhigh short interest in TSLA I would not bet on this. Some may loose their shirts today but there seems to be an endless supply of them itching to have their go at it, all convinced that finally this is the quarter that it will all fall down. And the higher the stock goes, the more may come out.

Well, you are assuming the infinite supply of funds available for shorting TSLA. You are also assuming that 100% of short sellers in TSLA are "ideological" shorts. Neither of these is a reasonable assumption IMO, by a long shot.

 

[Curt Renz]

This is regarding the lending of shares to short sellers by TD Ameritrade. It’s too late to edit my post #23460. I got back to TD Ameritrade after reading two sentences within section 9-h of the Client Agreement related to margin trading and the lending of securities to short sellers:

In certain circumstances, such loans may limit my ability to exercise voting rights with respect to the securities lent. I may request that fully paid securities not be used in connection with short sales.

The agent consulted his supervisor who told him that such a request could only be honored if I were willing to revert my margin account to a cash account. That would also end my ability to trade options. If I do not have this done and my shares are lent to a short seller who immediately sells those shares to a third party, that third party would be able to vote my shares and not me.

So today I have spoken with three TD Ameritrade agents who consulted two supervisors. The opinions conflicted. However the latest and apparently most definitive ruling seems to be what I have written in the above paragraph. I was told that the brokerage may have to clarify the second sentence posted above in italics to explain that a margin account would have to revert to a cash account in order for the request to be honored.

 

[vgrinshpun]

So you're saying those are not the same shorts that got wiped out in the last squeeze?

I am saying the the quantity of people/entities that are willing to short TSLA AND having funds to do so post hypothetical squeeze will be significantly less than prior to it.

 

[SBenson]

I think you make a good case for the long side. Hard to dispute anything you said if you are long, long term.

But this is the Short term thread.

Recently up days are propelled by low volume. Tesla has good reason to try to keep the stock above the recent secondary offering price.
Questions are being raised about what material information should have been disclosed. (particularly the AutoPilot death). If they can keep the stock near the offering point, most of the complaints become moot. This is not hard to do when some executives have recently cashed out significant amounts of stock. It would be wise to feed some of that back into the market to keep momentum in the right direction. Many of the institutions are under water with SolarCity are holding both, hoping a merger goes through.

For some the Gigafactory announcement could be catalyst. But the earning announcement is not likely to be good, with lower sales, earnings estimates coming down, and heavy Service Center costs on the Model X. Volatility is assured, I think there will be a good entry point in the double digits.

Genuine question, how long have you been following Tesla/TSLA?

Dude, double digits?? I can't tell if you are utterly uninformed or if you are an outright troll (my gut sense is the latter).

DOUBLE DIGITS??

It didn't go to double digits, when it was "obvious" that Tesla will go bankrupt with cars catching fire left and right. Now, after these many years and no imminent death in sight and a phenomenal march towards a great product line, all of a sudden people decide to dump to double digits??

You are here to merely waste other people's time. Prove yourself that you are not a troll.

 

[austinEV]

Has TSLA risen for five straight days?

Up 6 of 7 last days. Up 1.02% in July... Astonishing still.