Short-Term TSLA Price Movements - 2016

[Johan]

Question for Europeans. How much of lease financing depends on European banks and are there a lot of people who leases?

I'm late to the party, but I can tell you that in Norway (Tesla's biggest EU market) leasing is virtually non existent. Due to the fact that you then miss out on the entire VAT-exemption.

 

[SBenson]

Thanks. I guess we will see once we see the short interest changes over the next month. If the short interest is unchanged/rising then another explanation for price stability is at play.

So the next official short interest report is July 12 to report the short interest on June 30th. If we see the number of shares going down despite all the increases in the lending rates the theory will hold true. The lending rates are increasing due to a lack of shares to short rather than an increase in demand to short. Just wish these reports were not so delayed as by the time you have the information it is too late to use it!

Looking at the MarkIt daily data, right after the merger announcement, SI spiked up by more than 5 million shares. Then it is gradually coming down but hasn't reached the pre-announcement level yet. So the June 30th exchange report can be misleading. It could show an increase in short interest even if recalls started happening. July 15 report will be a sure shot indicator if this recall theory is in play or not.

 

[DrJohnM]

You all seem bored so I thought I’d chime in and subject myself to some ridicule as a long term bear.


As I have said in the past the extraordinary short positions give TSLA a safety net. Down will be a gradual then sharp, I think, so stop bashing the shorts they are helping you immensely the last three weeks. Being so hard to borrow has probably led to some short term bears to cover here.


As I search my soul there are only confirmations that the business does not justify the current price. Obviously slowing S demand, (see introduction of lower priced 60) and who knows what’s going on with the X. The economics are continuing to deteriorate and these two products look unlikely to carry the load until the Model 3. That vehicle has it’s own troubling financial profile. Departure of the high level executives, the SCTY craziness and the twittering CEO, look like some “soft” variables giving me confidence that 2018 puts, while selling a couple near term puts to knock off premium, will eventually work out. On the other hand I’ve certainly not seen anything in the last month that I would consider a fundamentally positive developments, but perhaps I've missed those?


Whompy wheels, Autopilot issues may turn out to be nothing but based on some experience with the NHTSA I wouldn’t count those issues as resolved just yet. But in any case it is the stock price that is out of whack with the fundamentals of the business.


cheers

Thanks for the advise - Let me dump my TSLA and get some Audi AG stock instead

 

[Johan]

I don't like that Tesla keeps saying that Autopilot is safer than humans by continuing to compare it with worldwide deaths per million miles driven. That's not comparable. Worldwide statistics include miles in India, South America or even Africa where there are no Tesla and the conditions of travel are much worse. Moreover, the model S is a much safer car than the average car so that when it does get in an accident, it is much less likely someone is killed.

What Tesla needs to show is that the average Model S driven with autopilot is safer than the average Model S driven without autopilot. Before autopilot, the model S drove more than a billion (!) miles without fatal crash.

But even there selection bias would be huge: AP can't be used in poor conditions (light, road marking, etc) and in many traffic situations.

The only sensible method is to compare AP equipped cars vs non-American equipped cars (grouped by D/non D and performance level to account for differences in handling) over all miles driven (with and without AP). Only then will you get a real world impression of how much AP reduces accidents. As AP gets better and gets used for a higher and higher percentage of driving this difference should increase, presumably. (The method I'm suggesting would be comparable to an "intention to treat" analysis in the medical sciences).

 

[jhm]

Panasonic expects to double sales of electric car batteries in three years

Note that this is doubling sales in yen, not MWh. In terms of MWh, growth should be much faster. It was about 75% last year over prior. But the revenue per kWh should come down over the next 3 years.

 

[CALGARYARSENAL]

I follow a guy called @sssvenky. He posted this chart. Give him a follow.

 

[CALGARYARSENAL]

I follow a guy called @sssvenky. He posted this chart. Give him a follow.

This is a bullish pattern - bull flag.

 

[Incredulocious]

For information about this, Google "securities lending fully paid", that exact phrase. I don't know if Ameritrade has such a program. Fidelity and Schwab definitely do; you can call them and ask about it (use that exact phrase).

If you have a current Schwab account, the offer pops up as a fairly small link between the headers of the webpage and the contents, when you're looking at your positions list. When you select it... well, uh, the first time I did it, it basically said "please fill out a paper form and mail it back". Anyway, once I did that, then the link listed which stocks they were interested in borrowing. They will only do it for stocks where there is huge short interest, so much that they can't get enough shares to borrow for free -- TSLA's the first one I've ever seen it with because it's never happened to any of my other shareholdings.

If you're actually using margin on an account, you will never get such an offer because if you're using margin, they can borrow your shares for free. At some brokerages this may be true even if margin is authorized and not used, but not at Schwab.

A fine point which might be tripping you up: Whether they can borrow your shares for free is determined by whether there's any use of margin on the *entire account*, so if you borrowed against some other stock in the same account, they can borrow your TSLA in that account even if the TSLA shares are fully paid.

So if you're using margin and want to get this offer, move all your TSLA and SCTY into one account with *no* margin borrowing (you can even call them and remove the margin feature from that account) and do your margin borrowing in an account at a different brokerage which doesn't contain TSLA and SCTY.

That's not true about cash vs. margin at Schwab. I did receive the offer to loan my TSLA shares from Schwab last week even though they're a holding in my margin account. (I'm not using my margin though, except to take advantage of any opportunities during the three days of settling a trade.) They seem to pay a little less than Fidelity and their handling of lending is a little screwy (transferring loaned shares to a new account) but I enabled it.

 

[CALGARYARSENAL]

Remember when Whitney Tilsin famously gave in and closed his shorts against Tesla? He said it was one of, if not the, worst trade of his career. We will hear the same thing from the Greek God Jim Chanod and all his want to be followers.

 

[CALGARYARSENAL]

Remember when Whitney Tilsin famously gave in and closed his shorts against Tesla? He said it was one of, if not the, worst trade of his career. We will hear the same thing from the Greek God Jim Chanod and all his want to be followers.

Jim Chanos.....

 

[geneclean55]

Huge beat on US job numbers. Lets see how the market reacts today

 

[CALGARYARSENAL]

Huge beat on US job numbers. Lets see how the market reacts today

Extremely bullish as economy doing better and the Fed won't hike due to Brexit fallout. Rally on. I wish I had more funds to deploy

 

[SBenson]

Yesterday there were at least 15 negative headlines from major media outlets (yes, I counted), with vast majority outright attacking the company or even stock.

Today there are 2.

Shorts/media running out of ammo?

 

[Irishjugg]

OK, choose it if you like.

No, you'd have negative gross margins so that would be silly! Tesla has gross margins > 20%

I know you understand that gross margin is what's left after just physically building the car prior to deducting all the other costs of running that business which last year meant $924mil gross profit. Unfortunately operating expenses were $1,640 and interest expense was $119mil which are a couple of numbers ignored when using price to sales and gross margin as valuation measures

I don't intend to argue, if you're happy investing based on gross margins and price to sales for this business that's your prerogative. The only reason I even bother to look at this thread and post is thinking perhaps a counter balancing view might add value to a thread that appears to be about investing.

I for one appreciate your recent posts. Well thought out and rained, even though I disagree on the end thesis

Quick question, if you were short say a year ago, the fundamentals were considerably more out of whack than they are now by your measures. How much of a concern is it that the stock price has been reasonably stable while a lot of those metrics have improved? (Obviously they are still negative)

Were you able to take advantage of the Jan/Feb dip to take some profits?

 

[geneclean55]

Extremely bullish as economy doing better and the Fed won't hike due to Brexit fallout. Rally on. I wish I had more funds to deploy

If we get over 220 with conviction today, then it will be painful for shorts.

 

[Johan]

Feeling bullish today. Feels like there should have been no way for TSLA to act to strongly in the last week, with the delivery miss in mind. The strength must be a result of TSLA having been seventy oversold (shorting explains part of this) + I put some credence on the "large institutions recalling stock that has been lent [to shorts] in preparation of boring" theory.

 

[Irishjugg]

As soon as you have something to post worth reading for all of us I know I'll then appreciate your contribution. If you think anything you said in your last few posts is somehow enlightening for the visitors of this forum/thread, think again. I'm all for counter arguments but I've yet to see a short say anything intelligent in this thread.

That's both unfair and not productive. If reasonable shorts can't fully explain their thesis without trolling in any way without crap posts like this attacking them, then this thread has officially become useless. Disappointing post.

 

[vgrinshpun]

Yesterday there were at least 15 negative headlines from major media outlets (yes, I counted), with vast majority outright attacking the company or even stock.

Today there are 2.

Shorts/media running out of ammo?

Yes to both, apparently...
This would be a good starting point for demonstrating what the real practical meaning of "unwise" is...
SMA(50) - $217.53
SMA(200) - $217.96

TSLA pre-market - $218.88

 

[CALGARYARSENAL]

Beginning of Calgary Stampede. Look what I just seen......yep bullish!

 

[electracity]

Yesterday there were at least 15 negative headlines from major media outlets (yes, I counted), with vast majority outright attacking the company or even stock.

Today there are 2.

Shorts/media running out of ammo?

I think that the real short term traders have backed off of TSLA for now, and the panic seller have already bailed on Musk. The SP was 215 in 2014. For all the talk in this thread daily about TSLA fundamentals, the reality is that the stock has traded in a narrow range for literally years.

Edit: I do realize that the stock will enter a new range with the model 3. Hopefully a higher range. Presumably this possible future is what supports the stock today, despite some recent strangely negative press.