Short-Term TSLA Price Movements - 2016

[electracity]

Anyone has a comment on this article regarding to Solar City's big trouble and thus Tesla is just doing a bail out?
Looks like SCTY SP is affected by this artible a lot today.

SolarCity Has a Big Problem On Its Hands -- The Motley Fool

It's a great short explanation of why solarcity has no value left. The risks to Tesla are substantial, and the medium term upside possibilities are slight.

There is another very positive and well researched article by Randy Carlson at S.A. today.

http://seekingalpha.com/article/400...mhs:85de3c0fe5cd49628a0addc58a3245c6&uprof=46

Some of you battery gurus should take a look at it and report for the more challenged chemistry types like me. Particularly interesting is his assertion that the only way you can change the voltage capacity of the cells is through a software twitch. Interesting because, if I remember correctly, there's only a small difference in the weight of the upgradable 60D or the usual 75D. Why lug around unused cells?

Musk has indicated moderate YOY battery improvements. Randy's analysis is more optimistic than Elon's. Being more optimistic than Elon is not a winning position.

 

[Hogfighter]

I agree with your statement that most car buyers take delivery out of inventory.

I disagree that you do not give any credence to the 'D' issue. If it is not a problem why have so many 'D levers' been pulled in the last couple months.

Announcement of a 100+battery and AP 2.0 could very well reverse this and carry us to the model 3.

I want to be wrong on the 'D' issue. I am wrong as often as right but for the first time since joining this forum I believe demand is a genuine issue to discuss. I suggest it could be caused by multiple issues but I believe that Occam's Razor suggests Osborne is the most logical major force

Here's an article regarding Americans purchasing preference:

Why Americans reject build-to-order cars

Regarding 'D', we may be in fact demand limited at the current run rate. My point is that 3 years ago we were watching the Tesla website like hawks, trying to get a handle on whether the S was a fad or in fact something real. It's now obvious that it's real. There will of course be times in the future where Tesla will have to discount vehicles in anticipation of the next Big Thing....but as an investor, there's a huge difference between an Osborne effect, and the lack of demand for, say, Fiskers.

 

[Lessmog]

Here's an article regarding Americans purchasing preference:

Why Americans reject build-to-order cars

Regarding 'D', we may be in fact demand limited at the current run rate. My point is that 3 years ago we were watching the Tesla website like hawks, trying to get a handle on whether the S was a fad or in fact something real. It's now obvious that it's real. There will of course be times in the future where Tesla will have to discount vehicles in anticipation of the next Big Thing....but as an investor, there's a huge difference between an Osborne effect, and the lack of demand for, say, Fiskers.

Ah, but there surely must be a huge world market for museum cars? I mean, I saw car museum ads in Iceland! Not to mention all those unofficial ones in obscure outfields. Osborne II's, on the other hand, are rare indeed. Strange that S A is not all over that phenomenon.

 

[Drivin]

The car used in demo fleet, even for one day, can not be sold at the same price as car ordered and delivered to a customer that ordered it. This is called depreciation.

Obviously, Tesla can not represent that a demo car is new, but there are no restrictions on what price they can sell it for.

They can certainly try and sell a one day demo that has 50 miles on it for MSRP and given the delay between ordering and delivery, an impatient, motivated buyer may take that deal.

 

[Drivin]

Anyone has a comment on this article regarding to Solar City's big trouble and thus Tesla is just doing a bail out?
Looks like SCTY SP is affected by this artible a lot today.

SolarCity Has a Big Problem On Its Hands -- The Motley Fool

Interesting article but it had all sorts of numbers in it with percentages and stuff, so it lost me.

I was interested to learn that SpaceX bought $165M of the $200M bond offering.

Is SpaceX going to use the panels on their rockets to lower fuel costs? This could be real synergy here!!

 

[drinkerofkoolaid]

A few theories and questions:

1. The conversion ratio for the Merger is irrelevant, for any investor who is long Tesla and believes Tesla the will go much higher. The conversation ratio is almost irrelevant since no money is hanging hands, and the majority of large institutional stake holders aren't planning to sell any time soon.

2. SolarCity went public at the low end of the expected pricing due to the volatility of any stock associated with the Solar Industry. The conservative price might be to confuse the bears and to given those who understand the situation a huge opportunity.

3. SolarCity is cleaning house to ease the transition from its current sales and marketing model to Tesla's approach. My guess is that Tesla plans to do away with the extensive SolarCity advertising and aggressive sales approach.

4. Many SolarCity employees will likely be given the option to work for Tesla, and to be retrained accordingly.

5. Question: Can Tesla count all Tesla employees in buffalo towards the required number of jobs SolarCity needs to create to remain in compliance with obligations? Will the merger require approval from Buffalo New York?

6. SolarCity $25+ calls are selling for almost nothing because of the $25 offer. If I hypothetically buy 1000 December 2016 - $26 SolarCity calls, this would theoretically give me the option to buy $2.6 million in SolarCity at the OPEX date. Would these convert to ~$286 December 2016 Tesla calls? If no, what happens to them?

 

[Gerardf]

Tesla is starting taking orders in South Korea.
Here is some info about the market there. Looks interesting to me.

https://www.ft.com/content/abb5815a-e9c4-11e5-9fca-fb0f946fd1f0

Sales of premium foreign cars priced above Won100m ($86,000) in Korea rose 52.5 per cent in 2015 compared with a year earlier to 22,844 units — double the rate of overall growth for imported vehicles, according to the Korea Automobile Importers and Distributors Association. The portion of $100,000-plus cars also rose from 7.7 per cent of imported cars in 2014 to 9.3 per cent last year.

“Korea is one of the few markets, apart from the US, where people prefer large vehicles despite traffic congestion and cramped parking lots, because cars are seen as their status symbol,” says Yoon Dae-sung, executive director at KAIDA.

 

[Intl Professor]

Is SpaceX going to use the panels on their rockets to lower fuel costs? This could be real synergy here!!

So far as I know Space X does not make satellites. My off the cuff, but amateur guess, would be the panels would be ripped off shortly after takeoff.

 

[Matias]

 

[drinkerofkoolaid]

Wow.

6 years for long term cap gain rate? That's crazy (IMO).
Seems to me that long term cap gains rate helps to spur investment in US equities. Stocks will drop with this tax code change.

Sounds like you're convinced congress will swing to democratic control and pass these long term cap gain changes

If Trump wins, we'll need Elon to speed up his Mars colony program to help all legitimate TMC members, Tesla owners, and many others escape this planet before Trump decides to convince one of his cronies to help him get a permit to detonate the Earth to make way for a Golf Course on the moon, without any meaningful notice or time for public questions.

 

[Intl Professor]

Anyone has a comment on this article regarding to Solar City's big trouble and thus Tesla is just doing a bail out?
Looks like SCTY SP is affected by this artible a lot today.

SolarCity Has a Big Problem On Its Hands -- The Motley Fool

I've forgotten where, but an analysis similar to this has already been reported. Refuted? I don't remember. My impression is that Tesla has a lot more loan power than SCTY. Interest rates may go up, but I doubt by much, and maybe not until December, although Fisher recently was more hawkish. I think it is premature to raise rates now, but that's also a selfish preference. Apparently banks make more money in a high interest environment and the Fed has certainly been under pressure from their base constituents. If the next president and Congress go whole hog on infrastructure, which we need, after awhile the economy will need cooling. Those are big ifs.

 

[Gerardf]

If Trump wins, we'll need Elon to speed up his Mars colony program to help all legitimate TMC members, Tesla owners, and many others escape this planet before Trump decides to convince one of his cronies to help him get a permit to detonate the Earth to make way for a Golf Course on the moon, without any meaningful notice or time for public questions.

Mars, space golf course. Hmmm..
Relevant (to that) : Futurama: Into the Wild Green Yonder - Wikipedia, the free encyclopedia

 

[FredTMC]

If Trump wins, we'll need Elon to speed up his Mars colony program to help all legitimate TMC members, Tesla owners, and many others escape this planet before Trump decides to convince one of his cronies to help him get a permit to detonate the Earth to make way for a Golf Course on the moon, without any meaningful notice or time for public questions.

Well. As it stands today, Trump is far behind in the polls.

 

[FredTMC]

Wow. Enormous vol of TSLA traded right before the close... Anyone have any info?

 

[Gerardf]

Wow. Enormous vol of TSLA traded right before the close... Anyone have any info?

Indeed :

16:00:01$222.93 100
16:00:01$222.93 410,200
16:00:01$222.93 70
16:00:01$222.93

410.210.. on the low volume of the day.

 

[AlMc]

Wow. Enormous vol of TSLA traded right before the close... Anyone have any info?

Indeed :

16:00:01$222.93 100
16:00:01$222.93 410,200
16:00:01$222.93 70
16:00:01$222.93

410.210.. on the low volume of the day.

I decided to sell my trading shares at $223 but had to settle for $222.93.
Lost close to $30k.

 

[MitchJi]

I think you may be confusing Fidelity the broker with Fidelity the investment adviser to publicly-traded mutual funds.

This is all leaving aside the economics that @vgrinshpun observed. If Fidelity approves of the merger, it wants to vote every possible share so that it passes. In addition, Fidelity would never take on additional risk (in your example, increasing its exposure by 50%) just so that it could continue to profit from securities lending. If something happened and the share price declined, their entire "profit" from securities lending could be wiped out and then some.

Please stop sharing your own assumptions, then stating I'm incorrect based on those assumptions!

I believe that the large institutions are trying to avoid large merger related call-backs because of the facts that they don't want to bankrupt or seriously harm their short customers, if for no other reason than doing that would look awful. I realize that directly contradicts @vgrinshpun theory that they are planning to do that intentionally to make a profit. How would that look? The two main reasons I believe that are doing that all of the largest institutional share owners are doing the two things they can do to obtain more shares in order to vote. IMO what they are actually doing carries more weight than theories.

1. They can purchase shares, which they have been doing.

WOW! (Take #2). Price T. Rowe upped their stake in TSLA by 42.6%, or 3,139,231 shares! So just five largest institutional shareowners collectively increased their TSLA position in Q2 by 9.5M shares!

P-s-s-st! Here's What Fidelity Has Been Buying And Selling

Do you invest as successfully as Fidelity Investments does? Would it help your game to know in which large-cap stocks Fidelity's approximately 200 stock and stock-plus-bond mutual funds made some of their biggest second-quarter adds to and sells from?
<snip>
In other sectors, Fidelity added to its stakes in cell-tower owner American Tower (AMT), cable provider Charter Communications (CHTR) and carmaker Tesla Motors (TSLA). Fidelity added 20% to its positions in each.
<snip>
Fidelity's largest stock mutual funds continue to hold many of the largest megacap stocks, even those that the fund family as a group trimmed in Q2, Rosenbluth said. The $19.4 billion Blue Chip Growth (FBGRX) has top-10 holdings in Apple and Visa. Other top 10 stocks included Tesla, which the complex added to.

2. They can stop loaning out more shares which they have also been doing. They are buying shares, the short interest is declining and they have 0 shares available. Why else would that happen?

Fidelity:
Lend TSLA: 8.5%
Short TSLA: 16.5%, 0 shares available to short

Lend SCTY: 29.5%
Short SCTY: 52.0%, 0 shares available to short

Do you think that this is a coincidence or that all of these funds and institutions are that bullish on the merger?

But I wouldn't rule out the possibility that they believe they can profit from this trade because of the probability of smaller institutions calling in shares for voting and between now and the record date any catalysts could produce a bigger than expected result, possibly even a modest squeeze.

I think @vgrinshpun was given his answer by someone on the brokerage side. The brokerage side cares about lending shares held in customer brokerage accounts. Of course they're not going to recall those shares -- they likely don't recall shares when they are voting on behalf of their customers (so-called broker voting).

In this merger, Fidelity brokerage doesn't even have the right to vote its customer shares (non-routine matters are not eligible for broker voting). So, Fidelity brokerage isn't recalling any shares.

The mutual fund holdings are distinctly different.

The SEC made a big deal a few years ago about mutual funds failing to vote proxies. Fidelity will not make this mistake -- it has been under scrutiny too many times. It will adhere to its proxy voting policy and vote all its mutual fund shares.
Thanks for providing some useful information.

Do you think that the SEC will make a big deal over this if the institutions vote the number of shares they owned originally (or more) and their alternative is calling in shares, which would harm their customers?

 

[madodel]

I decided to sell my trading shares at $223 but had to settle for $222.93.
Lost close to $30k.

Isn't that just a rounding error for rich folk like yourself?

 

[Lump]

I decided to sell my trading shares at $223 but had to settle for $222.93.
Lost close to $30k.

You triggered a 426k block trade, wow I need to pay more attention to you

 

[3Victoria]

The institutions may have to vote *all* their shares. So buying more doesn't change anything.