MitchJi
Trying to learn kindness, patience & forgiveness
Uncertainty. We don't collectively know what impact tonight's call will have. The market even less.
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How often does it actually happen, that electricity has zero value? Electricity price must be zero or negative, that it makes sense to use resistors to bleed it. I know that there are rare occasions, when cost of electricity has been zero or negative, but it is rare. If electricity has some positive price, charging batteries costs.
Do you really believe that any short who could have any impact on the stock would read these posts to determine if they should press harder?
Shorts are just a convenient bogeyman and scape goat
What do you think would happen if two weeks ago, going into all the uneasiness and uncertainty Tesla would announce and close 2.5 million shares secondary offering that was not subscribed to, but these new shares would be just sold on exchange in large blocks coincident with the down ticks?
If you think that this would be inconsequential, we clearly have differing opinions. This topic is beaten to death. If you feel that this is inconsequential, ignore this information. There are members on this Forum who think otherwise and find this information contributing to the overall picture. Why are you obsessing with the need to discuss this and talk this subject down?
Krugerrand
Meow
Most here don't care, but since we all want to abide by the forum rules we talk about the shorts in the 'Short' Term thread.
Krugerrand
Meow
Do you believe that only 'us' here read these posts? That all those forum member quoted posts that show up in media articles, blogs and such are just coincidence?
I actually don't want you to answer those questions. Just pointing out the flaw of your argument for anyone who might be giving you any sort of benefit of the doubt.
racer26
Active Member
Uncertain sure, but I think the consensus here is that tonight's call is going to be a good thing. Everything Elon's had to say of late has been good news - but Wall St takes it with a giant grain of salt. Tonight's call is ostensibly to explain the financial rationale for the merger and why its a good idea, which seems to be the thing Wall St is struggling with, and acting like a boat anchor on SP. I see a distinct possibility that tonight is one of those watershed moments where everyone who isn't Elon finally wakes up and sees the light he's been seeing for months.
Every day, for thousands of kWh all over the world? Generation stations generate X, consumers consume Y. In order to provide reliable power to consumers, X must be greater than Y. If X exceeds Y by more than a marginal amount, the excess must be bled off (either into additional load, or bleeder resistors) otherwise the distribution equipment can suffer damage. Some fraction of the energy produced by a generation station is going directly into the bleeders in order to maintain a stable reliable service. If batteries can store that energy instead of simply dissipating it as heat, its essentially free.
One reason the information is of interest to me is simple supply and demand. The data @vgrinshpun posted suggests that expanding the supply of available shares by 2.5 million via shorting would have neutralized the effect of buyers who bought 2.5 million new shares, which otherwise would have exerted upward price pressure on the SP.
You can look at that in a variety of different ways, but in my mind it certainly helps explain why the SP has not increased despite what I believe to be objectively good developments over the past several weeks -- especially the ER.
Shorting in the face of good news and a flat share price also suggests the possibility that short sellers are manipulating the SP to avoid an upward move as @Papafox has theorized and documented.
One thing that I don't think I have seen mentioned is that making risky short bets on shares to defuse upward pressure on the SP would make even more sense for hedge funds who have made bigger bets through leveraged options. It would be worth risking a little money on the underlying asset (the shares) to protect against much larger losses on options. Michael Lewis gave an example of this in the mortgage derivative markets in The Big Short, although in that case the price of the underlying assets were (allegedly) artificially propped up to protect against larger losses on the derivatives instead of held down. That worked great. Until it didn't and the mortgage market came crashing down and the parties holding the derivatives got crushed.
Shorting into good news, if that is what is happening, is a very risky move for short sellers because if the good news continues and they are eventually forced to exit their short positions, the decreasing supply of shares should accelerate the price increases that would otherwise occur. On the other hand, the strategy could succeed, especially if they get bailed out by Tesla stubbing its toe in some way, negative macro developments, successful manipulation of sentiment, etc.
Also, manipulation of the SP is not the only possible explanation. It could be as Ihor D suggests that shorts actually believe the ER was bad news, or the shorts could be making a momentum play, etc. I personally don't find those other explanations very convincing at this point.
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Sure other people read these posts and some things show up in the media.
My point is that is just like just like the meaningless man on the street interviews "bob, what do you think about the crisis in Syria?" Bob: "its bad!"
I don't think the state department or pentagon is then saying "hey, I saw a man on the street interview, some guy named bob says Syria is bad, we need to do something!"
The evil shorts have their models, analysis, discussions with actual experts, so random comments from anonymous longs ain't changing their strategies.
CALGARYARSENAL
Member
Ok. I won't say anything more about the shorts. Apologies to the V man.
Runarbt
Active Member
Man the impact of this SCTY acquisition has been a day traders dream but long term investors "short term nightmare."
I wonder at what point does the stock finally pivot up. We've seen the amazing innovation and engineering that can come from the relationship operating in shadow mode. I can't even begin to imagine how much incremental business will come when things are finalized.
In regards to synergies in the medium to long term, if you don't see it now you are hopeless. I think short term, the discount needs to be taken advantage of.
I wonder at what point does the stock finally pivot up. We've seen the amazing innovation and engineering that can come from the relationship operating in shadow mode. I can't even begin to imagine how much incremental business will come when things are finalized.
In regards to synergies in the medium to long term, if you don't see it now you are hopeless. I think short term, the discount needs to be taken advantage of.
Krugerrand
Meow
That is the typical one person can't make a difference argument. Clearly flawed, especially in today's Internet/social media/extremely connected world.
While some shorts may hold the same thought processes as you, others will not and do not. That's both the beauty and curse of human beings.
Long term investors should be delighted since it provides a longer " sale" period for them to increase their holdings.
Funny
So the minority short opinions can make a big difference but the super majority long opinions have no impact
That is the typical "oh no I heard something I don't like" fear in today's social media extremely connected world "i heard a story about clowns, make it stop, I am scared"
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I think discussing the shorts is not particularly effective.
Clearly, there is opportunistic short selling, often at the right technical points to try to influence the stock price. It's pretty clear if you watch the trading action.
However, the big problem isn't the shorts... it's the longs. They aren't buying in enough quantity, and worse, they are selling. The macro environment is not helping at all. I suspect we would be ok if a slew of non-Tesla related items didn't also point negative, including the NASDAQ at critical times and the whole Comey/Clinton thing. Look at the trading action of the solar stocks for example... look at the price of the TAN ETF. Just as the market was discounting Tesla's ER while digesting the possible upsides, the macro environment stuff made a lot of people just either get out or stay out. We need new buyers or big market makers to increase their stakes.
On top of that, I don't think Mr. Musk has been clear enough. Yes, he has had a slew of good news and he keeps showing us great things that he and his companies are trying to accomplish. However, they still aren't clear enough to signal to the markets that things really are ok. For example, some sort of better idea of the ramp of the Gigafactory and what that means for the financials in 2017 would go a very long way I suspect. A much clearer understanding of the Model 3 production ramp costs. Yes, they said they don't need additional capital, maybe, except to de-risk. However, the market completely discounted that statement. While many people want to hear from Musk, I actually want to hear more from the CFO, Jason Wheeler. I personally don't want Musk making any of the statements with respect to the financials, I want Mr. Wheeler as the CFO to lay out the fundamentals of how the company is getting from where we are today to a successful Model 3 launch and a Model 3 2018 500,000 build plan. I love to hear from Musk about the vision of the future, I want to hear from the CFO how that is going to happen with the financials. Clearly the market does not believe their capex and opex statements and wonders just how engineered the Q3 quarter was... and therefore information about Q4 is a very big deal.
And I want to hear more about exactly what they will be doing with SolarCity. What are the range of capex possibilities? How will they be changing around that company to assuage the fears of the long investors? The Solarcity acquisition has a lot of fear associated with it, and hopefully tonight they make it clearer to cut down on the fear.
The solar roof presentation was not enough. And I thought the presentation was, well, not very well done. They really didn't address a slew of the reasons why solar roof products have failed thus far. Tesla could make it work and differentiate from the various failed and lackluster products that have come before. I had looked at various solar roof products when I spent the $$$ to re-roof a couple of years ago and clearly the Certainteed and the Dow products were not truly viable. Tesla/Solarcity could solve a slew of the problems associated with that, but they didn't communicate the other night how they were going to do it. I have ideas how, but it should come from them how they expect to do it.
The real steak is commercial and utility level stationary storage which sometimes also includes solar. They didn't address Panasonic vs. Silevo vs. others vs. solar roof in a credible fashion. They didn't address margins with Tesla Energy. I suspect this is not the quarter to be talking about that, and it causes competitive advantage problems to tip too much of their hands for 2017. But we do need more clarity that we currently have with respect to 2017 given the situation with the merger. Remember, the Kauai project with 53 MWh of stationary storage + solar is a Solarcity project. Please tell us the important role that Solarcity presents for the expansion of stationary storage, and especially how Tesla will interact with the channel and integrators across the world, in parts where Solarcity has a presence and in areas where they don't.
Clearly, there is opportunistic short selling, often at the right technical points to try to influence the stock price. It's pretty clear if you watch the trading action.
However, the big problem isn't the shorts... it's the longs. They aren't buying in enough quantity, and worse, they are selling. The macro environment is not helping at all. I suspect we would be ok if a slew of non-Tesla related items didn't also point negative, including the NASDAQ at critical times and the whole Comey/Clinton thing. Look at the trading action of the solar stocks for example... look at the price of the TAN ETF. Just as the market was discounting Tesla's ER while digesting the possible upsides, the macro environment stuff made a lot of people just either get out or stay out. We need new buyers or big market makers to increase their stakes.
On top of that, I don't think Mr. Musk has been clear enough. Yes, he has had a slew of good news and he keeps showing us great things that he and his companies are trying to accomplish. However, they still aren't clear enough to signal to the markets that things really are ok. For example, some sort of better idea of the ramp of the Gigafactory and what that means for the financials in 2017 would go a very long way I suspect. A much clearer understanding of the Model 3 production ramp costs. Yes, they said they don't need additional capital, maybe, except to de-risk. However, the market completely discounted that statement. While many people want to hear from Musk, I actually want to hear more from the CFO, Jason Wheeler. I personally don't want Musk making any of the statements with respect to the financials, I want Mr. Wheeler as the CFO to lay out the fundamentals of how the company is getting from where we are today to a successful Model 3 launch and a Model 3 2018 500,000 build plan. I love to hear from Musk about the vision of the future, I want to hear from the CFO how that is going to happen with the financials. Clearly the market does not believe their capex and opex statements and wonders just how engineered the Q3 quarter was... and therefore information about Q4 is a very big deal.
And I want to hear more about exactly what they will be doing with SolarCity. What are the range of capex possibilities? How will they be changing around that company to assuage the fears of the long investors? The Solarcity acquisition has a lot of fear associated with it, and hopefully tonight they make it clearer to cut down on the fear.
The solar roof presentation was not enough. And I thought the presentation was, well, not very well done. They really didn't address a slew of the reasons why solar roof products have failed thus far. Tesla could make it work and differentiate from the various failed and lackluster products that have come before. I had looked at various solar roof products when I spent the $$$ to re-roof a couple of years ago and clearly the Certainteed and the Dow products were not truly viable. Tesla/Solarcity could solve a slew of the problems associated with that, but they didn't communicate the other night how they were going to do it. I have ideas how, but it should come from them how they expect to do it.
The real steak is commercial and utility level stationary storage which sometimes also includes solar. They didn't address Panasonic vs. Silevo vs. others vs. solar roof in a credible fashion. They didn't address margins with Tesla Energy. I suspect this is not the quarter to be talking about that, and it causes competitive advantage problems to tip too much of their hands for 2017. But we do need more clarity that we currently have with respect to 2017 given the situation with the merger. Remember, the Kauai project with 53 MWh of stationary storage + solar is a Solarcity project. Please tell us the important role that Solarcity presents for the expansion of stationary storage, and especially how Tesla will interact with the channel and integrators across the world, in parts where Solarcity has a presence and in areas where they don't.
MartinAustin
Active Member
I was considering selling a large chunk of my TSLA today and buying SCTY with it. (I was really salivating to do this yesterday after SCTY was falling and TSLA wasn't falling as much)
Today the arb gap is a bit smaller, though still substantial. $19.58 is equivalent to buying TSLA for $178.
Should I do this transaction before tonight's conference call? This is my conundrum. Either 1) I do it before the conference call in order to take advantage of the good news it is going to reveal, or 2) I am a victim of stupidly doing it before valuable information is conveyed thru the conference call, making me glad I waited until Wednesday to get a better deal or not do it at all!
Today the arb gap is a bit smaller, though still substantial. $19.58 is equivalent to buying TSLA for $178.
Should I do this transaction before tonight's conference call? This is my conundrum. Either 1) I do it before the conference call in order to take advantage of the good news it is going to reveal, or 2) I am a victim of stupidly doing it before valuable information is conveyed thru the conference call, making me glad I waited until Wednesday to get a better deal or not do it at all!
I'm having a similar problem too. I get this feeling the market has been pricing in this merger going through so it might end up being a wash.
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