As far as short term impact on the industry I think you are right. Long term though I think that it will be the main reason the SP flies again when it does. And I think other startups are immune to shorting as they aren't publically traded, and by the time they are, I get the feeling the era of EVs as a major market share will have arrived and shorting as an objection to the market shift will no longer be a functional practice.
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As far as short term impact on the industry I think you are right. Long term though I think that it will be the main reason the SP flies again when it does. And I think other startups are immune to shorting as they aren't publically traded, and by the time they are, I get the feeling the era of EVs as a major market share will have arrived and shorting as an objection to the market shift will no longer be a functional practice.
Yes, looks like they're willing to invest a ton of resources into pushing TSLA below 190 today. It would be a huge defeat if their effort failed, but 400,000 shares deployed in the late afternoon is lots of ammo!
There is also the issue that I'm pretty sure shorting the stock has been pretty profitable for most of this year. So rather than exhausting funds they've been accumulating them.
Just to clarify, the draw drawdown could have been any time (or spread over time) before 10:45am and 2:31pm, the two times when I've checked shares available for shorting so not necessarily during the late afternoon.
I'm not sure exactly how much cash reserve short are expected to keep in their accounts, maybe 50%? I would agree that most shorts are in a profitable situation at the moment, having sold into their positions at higher levels. Nonetheless, it's also a matter of how much exposure these shorts are willing to place themselves in. We've seen the short shares number climb above 30 million recently and tomorrow after close we get to see the Nov 30 numbers. The question for shorts is: when does it stop making sense to increase your personal short position in TSLA when you see that the tactics of the past are not producing the desired outcomes?
This is actually not necessarily true. Quantity of shares available to short is not unlimited, and the short sellers that are trying to manipulate the SP do not create short positions and hold on to them. Instead they borrow during chosen times and sell borrowed shares in large volumes, trying to induce panic selling or trigger automatic stop loss orders. Then they slowly and methodically close their positions in a cadence that minimizes any associated SP run up. The whole shebang is repeated at a time of their choosing. The whole game is concentrated selling of borrowed shares designed to provoke abrupt move of SP down, and then covering designed not to cause movement of SP up.
Before borrowing shares for shorting they are required to post cash or equities covering *more* than 100%, up to 105% of their short position. As SP fluctuates, they are required to adjust the collateral according to the above *daily*. So cost of shorting is not only in paying interest and being exposed to the risk of losses due to covering at SP that is higher than during the time when short position was established, but in that it ties significant amount of capital as collateral.
This is low risk and very profitable business for Institutional SO.
But I'm not seeing any corresponding increase in volume. Maybe somehow those shares were recalled?
erthquake
Active Member
Can you describe this cadence in detail? Sounds like one might be able to run an FFT on the shares sold vs time data and detect when this is occurring.
The upside of all the shorting and negative news is that it seems to have forced tesla to be more focused on capital discipline and efficiency at least until model 3 launches. The downside is that it has probably slowed down spending on things like the rate of new superchargers and service centers.
FredTMC
Model S VIN #4925
I'm curious I've never seen more than one tesla at a supercharger in the Midwest. I've been to a number of different locations. It SEEMS like there are more than enough in this part of the country. My assumption has been the only place that it's been an issue is SF and LA area. Anyone outside of those areas feel as if there stalls in their area are overloaded.
Off Shore
Off Topic Member
MartinAustin
Active Member
Looks like TSLA is making a comeback! Shorts unwilling to keep playing? Can it end the day unchanged?
3Victoria
Active Member
Re cylindrical vs pouch. It is not clear to me which is easier to temoerature regulate ... it depends on where heat is generated and how the diffusion and distribution of heat and cooling works. Cylindrical cells have a fixed and likely easily modeled form factor. The shells likely improve heat transfer, and the bottoms of the cells may give an excellent site for cooling effects. I do not think one can comment without data from the cells. Tesla has obviously done a good job at tempersture regulation. Cylindrical cells also give other advantagrs, such as a finer granularity and safety. If non cylindrical forms give better results, then TM would likely convert.
Imagine if an institution slowly sold 100,000 shares throughout a day with volume of 5 million shares. That's only about 2% of the total selling and if it was spread out it probably would have a slight negative but not a big negative influence upon the day's trading. Now consider if that same seller parted with those 100,000 shares in the first minute of market open. The results would be much different because the market would be somewhat shocked by the steep selloff at open. The psychology of the trading that day would have been changed. So, volume of selling within a one minute period is a factor. Then, consider if the selling is done in the first hour of trading, when volume is heavy or in the late afternoon, when volume is especially light. Selling as few as 2,000 shares in late afternoon is likely to depress the stock price, but that volume is insufficient to have much influence during high volume times of the day. So, time of day affects the volume being traded, which influences how much of an effect the selling will have. Consider, too, when short-selling, teamed up with FUD, causes stop-losses placed by longs to be trigged as the stock price descends. These triggers are often set for whole numbers, and so the shorts push to spring a stop-loss. The resulting flurry of selling is a perfect time for a short to cover for the day without seeing too much of a change in stock price.
Hugely off topic, but yeah here in Texas the stalls are lonely places. I usually HOPE to see other cars so I have someone to chat with
On the topic of short sellers: I am willing to believe that there are deep-pocketed interests who could spend a negligible amount of money on shorting TSLA and keeping it down. Doesn't take much of a tin-foil hat. They have the motive and opportunity, and it's legal.
EVENTUALLY it will not matter. If the fundamental value keeps creeping up, eventually the stock price has to go up too. The attempt to keep a lid on the price will eventually fail when the internal pressure is too high...
One interesting thought experiment though: We usually think a low stock price is marginally bad for TM since it raises the cost of capital. BUT and advantage of a lower-stable stock price is that it probably inhibits the startup scene. We ARE seeing some me-too auto startups which may amount to something. But if TSLA was at 450 there would be 10x the startups.
Thanks short sellers!
TSLA dropped a second hammer on the daily chart - first was on Tuesday with the subsequent confirmation of Wednesday. Confirmation of today's hammer, if it comes tomorrow, would probably mean breaking above SMA(50) at $194.8. May be, just may be we are on a cusp of a reversal of downtrend.
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