Short-Term TSLA Price Movements - 2016

[MitchJi]

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!

The only explanation IMO that fits all of the facts is that these institutions loaded up on shares, to avoid doing massive merger related recalls, then sold a lot of those shares to rebalance their portfolios, after the voting date.

I don't think so. Q2 had the secondary and that IMO is the source of the institutional buying. After learning the merger shortly after this (which was already near the end of Q2), they started selling, which we see now in Q3 reports.

If they did that before the September holding date for the vote, that would have exacerbated the epic short squeeze that didn't happen. So once again that explanation is the only explanation that fits the facts.

 

[150 kWh]

I hope you are serious. It's great news if at least one the participants in this thread benefited from an epic short squeeze!
Dryships soars 1,500% amid epic short squeeze

BTW TSLA has the same level of short interest as DRYS had before the short squeeze (around 32%), NVDA was on 16% before earnings.

 

[Tenable]

I feel a bit silly asking this, but a friend has made me feel as though I'm quite incorrect. Does anyone know with certainty the date when we can expect to hear Tesla's Q4 delivery numbers? I am under the impression its typically around 3 business days after the Quarter ends.

 

[MitchJi]

Thanks Mitch. Sometimes it is harder to decide when to sell a winner then it is to buy it.

Edit: I think it is not coupled too closely,
Deep learning, NN and the cloud are all in demand by other companies than TM

Holding shares or options ?

I feel a bit silly asking this, but a friend has made me feel as though I'm quite incorrect. Does anyone know with certainty the date when we can expect to hear Tesla's Q4 delivery numbers? I am under the impression its typically around 3 business days after the Quarter ends.

You are correct. It's officially stated company policy.

 

[AlMc]

Holding shares or options?

You are correct. It's officially stated company policy.

Sent you a PM

 

[schonelucht]

If they did that before the September holding date for the vote, that would have exacerbated the epic short squeeze that didn't happen. So once again that explanation is the only explanation that fits the facts.

Why? They sold mostly to retail investors. Meaning the shares ended up at brokerages that were free to lend them out to short shellers that therefore didn't need to cover anymore. Beyond those active on this forum, I don't think many retail investors explicitly forbade lending out their shares? Also, I think retail investors are less likely to (want to) vote than the large funds. Again less reason for brokerages to explicitly recall the shares those held. The latter is a bit of speculation on my personal behavior : I never bother to vote for shares that I hold.

 

[Oil4AsphaultOnly]

Cross posting from the Model 3 forum as I decided to try and estimate Model 3 deposits in light of the new 600k figure being thrown around. Thought it might be of interest here.

The 12/31/15 deposits number of $283 million contains substantially all of the X reservation money, including probably close to 2800 Sigs (maybe 3,000 total, less 206 delivered in 2015) that were reserved at 40,000 a pop. Sigs alone are $112 million off the $283 million number.

Then consider all the X reservations from past years. There were big reports of reservations but let's be super conservative and say just 12,000 existed at 2015 year end (15,000 total minus 3000 Sigs) at $5k a pop. That's another 60 million out of the $283 million number. I'd say most of the backlog (say 80%?) was completed by 9/30/16. All those older X deliveries didn't increase the $283 figure - they were already factored in and reduce the 283 million figure with every pre-12/31/15 reservation delivery. 48 million + 112 million = $160 million to be subtracted from the $283 figure due to old X reservations clearing out. Of course, these get replaced with some level of new X orders but it's pretty hard to quantify.

Same with S movements. I don't think you can just look at sales and assume deposits went up on account of S. S production in 15Q4 was 13,530, then 12,851 in 16Q1, 12,145 in 16Q2 and 14,735 in 16Q3. So, it's not as if there was massive production/deposit increases here, especially since they sought to deliver every car possible at end of Q3. Orders are rising, but they are also being fulfilled at a faster rate, which moves the deposit off the books. One thing we know is that typical cars in transit at end of quarter has increased from 15Q4, from about 3k to 5k. So, 2k additional deposits * 2500 = 5 million, basically nothing.

690 million - 283 million = 407 million. Conservatively add back 160 million from old X res clearing the books (remember, even order cancellations after 12/31/15 would reduce the deposits figure) = 567 million. Lets say 10,000 people (seems high) have new X $2500 deposits in but no car as of 9/30/16: subtract 25 million = 542 million. There's no good data to suggest there's more people waiting on S with deposits in, but let's assume another 10,000 increase just for fun. Subtract another 25 million = 517 million from Model 3.

TL;DR: 517,000 Model 3 deposits as of 9/30/16 seems like a conservative estimate.

Although still a possibility from your math. If this was in response to the german article, FredTesla @ reddit confirmed that it's a mis-interpretation: Can anyone translate this properly — German article that reports that Elon Musk stated there are 600,000 Model 3 reservations? • /r/teslamotors

Musk said 400k reservations, and capable of producing 600k cars (S, X, and 3 combined).

It would be interesting if we can interpolate what that extra $117 million in customer deposits is for if not the model 3? China orders?

 

[Curt Renz]

I decided to post this speculation, for use (or not) by Nvidia investors. While preparing to answer that question I ran across the fact that Nvidia is charging Tesla a "few thousand dollars" for each Drive PX computer. I think it's somewhat likely that Tesla is developing their own hardware to replace the Drive PX. In addition to the potential savings another potential advantage would be performing the very complex DSP (they check the time stamp of every returned radar pulse) in hardware (faster and potential power savings).

As you imply, Nvidia currently supplies computer chips (monolithic integrated circuits) to Tesla. Are you suggesting that Tesla might manufacture its own chips?

 

[Papafox]

@Papafox, you make the gas engine sound like a nuclear reactor! 99% of the cars sold today, and 99..5% of cars on the road are still ICE cars and those people are doing fine. The new EV buyers may or may not be previous Tesla drivers. So, they will approach the new EV/PHEV car buying with a more open mind than you and other early adopters who are driving Model S for a while.

But you do have a point about AP, which no other car has today. It is not clear how many are buying Teslas because of AP, and not because it is electric. As I mentioned a month or so ago, this colleague of mine got a custom ordered August build Model S, but wasn't happy with fit & finish (trims, seats, etc..). I snapped a picture of the side while it was charging at our work. One side looks fine, but the door on the other side seems misaligned. Unfortunately, Tesla never could get the car into service to fix the issues. Yesterday I caught up with him, and learnt he used the happiness guarantee to return the car. He lost a total of $5000 (value of his trade in). And out of all cars, he replaced it with a new Honda Civic non-hybrid! He did't care for electric or hybrid, mainly bought the Tesla to use AP for the stop and go commute time driving.

Going back to the Model 3, I expect some fit and finish issues in the first year. I also doubt the $35k M3 will be delivered before mid 2018. For the first year, only highly optioned M3 may be sold. The 5 seat MX75 are still not delivered. By the time the $35k M3 is delivered, federal tax credit of $7500 will be gone or halved for Tesla. If Hillary was elected, there was hope of an extension. Now I see very little chance of that happening. Besides, I will see what choices are there at that time. I like to sit in the car and try out a few cars before buying one.

MMD, your posting that photo of a Model S with the trim piece on the side far out of alignment and suggesting that this lack of "fit and trim" is the reason why your coworker turned his Model S back in is just not being honest. Nobody would accept a car with trim that is nearly an inch out of alignment and Tesla would not sell it like that either. Somehow that piece became loose or something happened to it AFTER the sale. Let's be a bit more forthcoming with our claims here, ok?

 

[Fallenone]

If they did that before the September holding date for the vote, that would have exacerbated the epic short squeeze that didn't happen. So once again that explanation is the only explanation that fits the facts.

Not sure I follow you here... So they bought a bunch in Q2, then sold some in Q3. How would this relate to a short squeeze? They can just vote 14 m of shares instead of 16 m of shares.

 

[ZsoZso]

I think you misunderstood me. It looks like you have MiEV in your avatar and as I have several friends with that car I know it is a capable little car (though not really well-suited for long range travel).
...
Cobos

You are right, I misunderstood you, sorry.
The MiEV is indeed strictly a city-car, but it is a very convenient second car to run errands and commute (our main family car is the Model S).

[/off topic]

It seems to me the general sentiment on this thread is that the SP should start moving up once the vote happens and the merger is finalized removing the little bit of uncertainty left. However, I do not really see the logic in that. It is clear that a lot of investors did not like the idea of the SCTY merger and that has pulled down the SP. The remaining 2-3 percent arbitrage reflects the small chance that the merger may still be called off by the vote. What we have seen since the announcement that the initially large arbitrage gap mostly closed by bringing TSLA down rather than SCTY up. So if the market values SCTY that much lower than the 0.11 ratio, then it would be logical to assume that after the merger the final adjustment would be for TSLA to drop by that remaining difference.

Don't get me wrong, I am not wishing it to go that way (as I own some of both shares), but I am expecting the negative outcome and prepared to weather it out.

After all, you can think of the merger as a kind of dilution of the TSLA shares with the converted SCTY shares that represent 2-3% lower value.

 

[Papafox]

You are right, I misunderstood you, sorry.
The MiEV is indeed strictly a city-car, but it is a very convenient second car to run errands and commute (our main family car is the Model S).

[/off topic]

It seems to me the general sentiment on this thread is that the SP should start moving up once the vote happens and the merger is finalized removing the little bit of uncertainty left. However, I do not really see the logic in that. It is clear that a lot of investors did not like the idea of the SCTY merger and that has pulled down the SP. The remaining 2-3 percent arbitrage reflects the small chance that the merger may still be called off by the vote. What we have seen since the announcement that the initially large arbitrage gap mostly closed by bringing TSLA down rather than SCTY up. So if the market values SCTY that much lower than the 0.11 ratio, then it would be logical to assume that after the merger the final adjustment would be for TSLA to drop by that remaining difference.

Don't get me wrong, I am not wishing it to go that way (as I own some of both shares), but I am expecting the negative outcome and prepared to weather it out.

If you look at the movement of SCTY and TSLA over the past few months, I see how you can deduce that the arbitrage gap closed because TSLA lost value, because it did, but you certainly cannot assign a cause/effect relationship here based upon TSLA being pulled down just to align itself with the SCTY numbers. Some investors certainly sold TSLA to buy SCTY and take advantage of the gap when it was bigger, that we know and that phenomenon would support your thesis, but otherwise to believe that TSLA was descending in order to align with the SCTY merger price is a case of claiming the tail is wagging the dog. Rather, I think it is more reasonable to believe that both SCTY and TSLA were under pressure by various issues, Trump elected pres- which caused fears in clean-energy sector and positive expectations in banking and infrastructure-related stocks which led to a rebalancing of portfolios, significant short-selling pressure on both, etc. SCTY performed better than TSLA during this time period because the likelihood of the merger buoyed SCTY during this difficult period for both stocks, not because the SCTY numbers were dragging TSLA down.

Edit: When you look at the market cap for both SCTY and TSLA, a large investor taking advantage of the arbitrage gap and moving money by selling TSLA and buying SCTY would have the net effect of raising SCTY considerably more than it depressed TSLA. It's purely a matter of how that money moved related to the overall market cap of each stock.

 

[NicoV]

As you imply, Nvidia currently supplies computer chips (monolithic integrated circuits) to Tesla. Are you suggesting that Tesla might manufacture its own chips?

Whè would they otherwis have hired Jim Keller and a number of his collegues from AMD?

 

[AlMc]

Whè would they otherwis have hired Jim Keller and a number of his collegues from AMD?

Agree. I had accepted that the assembly of the 'TM chip team' signaled that would be making their own chips eventually??

 

[larmor]

Regarding solarcity, solar roof and model 3. Speculation: package solar (regular solar cells), powerwall and M3 ...

 

[vgrinshpun]

Pretty unusual Twitter exchange:

 

[JBRR]

Agree. I had accepted that the assembly of the 'TM chip team' signaled that would be making their own chips eventually??

I spoke to Robert Scoble at a VR/AR conference.
He seemed quite convinced that Tesla was producing their own set of AR glasses. I'm sceptic but he was basing it on the people they were hiring.

 

[Tenable]

You are right, I misunderstood you, sorry.
The MiEV is indeed strictly a city-car, but it is a very convenient second car to run errands and commute (our main family car is the Model S).

[/off topic]

It seems to me the general sentiment on this thread is that the SP should start moving up once the vote happens and the merger is finalized removing the little bit of uncertainty left. However, I do not really see the logic in that. It is clear that a lot of investors did not like the idea of the SCTY merger and that has pulled down the SP. The remaining 2-3 percent arbitrage reflects the small chance that the merger may still be called off by the vote. What we have seen since the announcement that the initially large arbitrage gap mostly closed by bringing TSLA down rather than SCTY up. So if the market values SCTY that much lower than the 0.11 ratio, then it would be logical to assume that after the merger the final adjustment would be for TSLA to drop by that remaining difference.

Don't get me wrong, I am not wishing it to go that way (as I own some of both shares), but I am expecting the negative outcome and prepared to weather it out.

After all, you can think of the merger as a kind of dilution of the TSLA shares with the converted SCTY shares that represent 2-3% lower value.

I have the same feeling. I am "hoping" the potential dips will be short lived. Yet, I too believe that between short selling and investor sentiment the share price should drop come Friday if the merger is approved. I initially wrote "when" the merger is approved. However, between the recent election and Brexit, I've been reminded too frequently that few outcomes are certain.

 

[Jayjs20]

Pretty unusual Twitter exchange:

View attachment 202541

Just wait until he's down 17% of his net worth like I am, and the stock continues to drop even though almost every tech stock is in the green today.

 

[Yggdrasill]

Agree. I had accepted that the assembly of the 'TM chip team' signaled that would be making their own chips eventually??

There's a lot of possibilities between making their own chips and buying finished chips.

The "TM chip team" may have been formed for multiple reasons:

- Maintaining the *possibility* of making their own chips. That way they get the most flexibility and best prices of Nvidia.
- Increasing competence at Tesla when it come to chips, allowing for much more informed and detailed requirement specifications and improving communication between Tesla and Nvidia.
- Assisting the SW-department in squeezing every last bit of performance out of the Nvidia chips.
- Etc.