Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[Robocop]

TSLA opening around $454 in Frankfurt.

 

[jamaatta]

So, when it's time for a next stock split..?

 

[Favguy]

So, when it's time for a next stock split..?

As soon as we get to $1000 I reckon

 

[Robocop]

As soon as we get to $1000 I reckon

To be clear, Tesla can still do a 2:1 split without further authorization? But if they wanted to do a 5x again, then something something needs to be filed?

 

[Tslynk67]

Would adding TSLA in one or two tranches matter at all on how many shares that will be bought? If two tranches then there will be two deadlines so to speak for the fund managers to address.

They're thinking about it...

Index News Nov 16, 2020 5:28 PM S&P Dow Jones Indices Consultation on the Implementation of Tesla’s Addition to the S&P 500

 

[Sparky4life]

Based on the technical, 460 is suppose to be a massive resistance level like how the 410s is a good support level. We pretty much need to break through 460 tomorrow or eventually to see stocks go higher.

technical analysis in a nutshell. In order to go above $460, we need to break through $460.

 

[StealthP3D]

It might make the volatility worse, as there will be a significantly smaller number of shares available to trade.

I see what you're saying there but I don't see it like that. At least not in terms of volatility to the downside (which is what I think you mean by "worse" volatility). Or maybe you think high volatility is a bad thing.

New investors will continue to add TSLA to their portfolios as time goes on. While the smaller float might allow for manipulators to jerk the share price around, the overall trend for a stock like TSLA should still be accumulation. So by raising volatility they will be see-sawing it higher and higher as accumulation continues and there are fewer shares to be had. What really controls the dynamic here is not just how many are willing to buy, it's just as much how many are willing to sell. And sometimes there are only enough sellers if the price is high enough. With a stock having the potential of TSLA, that number can be pretty high. We don't know how high that number is but I'm confident it's not $450.

In short, the share price will need to rise to entirely new levels before manipulators can jerk the price around at will. There is a limit as to what manipulation can achieve and it's mostly only useful for taking advantage of short-term movements, not holding the price at low levels for extended periods of time. If manipulation could do that, we wouldn't be where we are at today (or this year).

The volatility is primarily a function of the difficulty of precisely valuing a stock like Tesla. It's not really possible to do so therefore the price bounces around a lot. As a long-term investor I have leaned to accept volatility and not pay too much attention to it. It's the overall direction that matters.

 

[Johan]

I've been AWOL far too long from this Bulletin Board System... But just like the rest of you I've been waiting for this day for quite a while. Will be nice to see the stock stabilize and more of the shorts getting squeezed out once and for all.

 

[StealthP3D]

This is way OT (especially with everything going on) but I had to post this It's a song by a band called the Rentals who I used to like in the 1990s. The main guy is one of the members of Weezer. It's actually a very cute and funny song.

Love the lyrics, not the music so much!

No doubt Elon will watch this at some point and be moved. I have to assume he will find a little inspiration in it to continue being the person he is.

I actually think the theme behind this song explains much of the hate Elon/Tesla get. Exceptional people with exceptional achievements make some people, people who do not like themselves, feel even smaller and more inadequate so they try to tear them down.

I like myself so I can celebrate the fact that people as amazing and dedicated as Elon even exist!

 

[Tslynk67]

Did you liquidate part of your TSLA holdings already or is this spike just in time for your real estate ventures?

i sold my 20th Nov $300 calls last Monday while we were trading in the $440’s, and sold off a few hundred trading shares as I felt that was a local high given the recent trading patterns.

Haven’t touched my core shares though.

Obviously would be more profit if I still held those calls and shares now, but as this was a totally random event, you can’t plan for it and I was happy de-risking last week.

Now I’m looking for an IV spike to sell covered calls against those core shares.

EDIT: apology for the typos - iPhone from the sauna...

 

[StealthP3D]

My plan is to watch the SP obsessively (more so than normal) and pay attention to the smart people here. I have a few plays in mind. Sell my calls on an Iv/price spike, sell shares in a staggered ladder based on price, maybe sell covered calls on some.

Wow. That sounds like a lot of selling. Sell, sell, sell!

You must be one of those people who don't believe they have gained anything unless they sell! Myself, I see that the company I have fractional ownership in is intertwining itself into the economy and the system we live in. It's becoming a pillar of the world. But it's still the early days. Plenty of time for the tentacles to slide and slither into every major nook and cranny.

 

[Tslynk67]

S&P estimates that $51 billion of TSLA will be bought by Index fund holders. At $408.09 per share, that's about 125M shares of TSLA that need buying.

The total MAX. float is about 770M shares (counting even those that wouldn't sell, but technically COULD sell).

125/770 ~ 16% of TSLA's float will be up for grabs between now and Dec 21st. That's gonna leave a mark...

Merry Christmas!

Plus the passive tracking funds, which amounts to around $70b - but not mandatory, of course

 

[StealthP3D]

Completely wild conjecture on my part, but there was an odd thing in Berkshire hathaways 13-F filing today: They had one new position blacked out as "it would move the market too much if it was revealed" apparently they were able to get permission to do this.

I'm trying to think of a stock that is not TSLA that might fit that description.

Yep, still coming up blank.

 

[StealthP3D]

First time ever there will be two large groups of people willing forced to buy Tsla at any price, short sellers and Indexers.

FTFY

 

[T@oo]

Just two quick questions after the great news. Will the inclusion have any effect on credit ratings and / or margins requirements with brokers?

 

[MikeAtkinson]

I am going back and reading thru bookmarks for peoples thoughts on S&P inclusion and I noticed Mike has hit some pretty good numbers. Here's hoping his 2021 and S&P thoughts hold too. Great job Mike.

These are pre-split numbers.....

Thanks for the kind words! Quite a bit of luck in any forecast, but if it makes me look like a genius I'll take it.

Here is my prediction from 13th July (i.e. pre-spit). Since then I have purchased about 70 shares (post split). Apart from that my plan is pretty much the same, try and take advantage of any spike, but HODL with most of my shares.

At the start of the year I did an evaluation based on product roadmap, production plans, competition, margins, expected free cash flow and various other factors that a fair market price for TSLA was in the $700 - $900 range. With reasonable execution and absent vast improvements by the competition and with no contribution from Tesla network their revenues would grow by 70% and free cash flow by a bit less than 100%. This would continue for several years. So that by the end of the year a fair market price would be $1350 - $1900.

Since then execution has been excellent (not just reasonable), the roadmap still looks good, production plans seem ahead of schedule, competition has been a big disappointment and margins on the Y look very good. So I would now put the end of year TSLA price at $1600 - $2200 and for the end of 2021 as $3200 - $4400. Similarly for 2022, after that I expect Tesla and TSLA to grow more slowly, but still much faster than their peers (Apple, Microsoft, Amazon).

If this evaluation is correct then the current share price is not high and even $2000 is only ahead by a few months, and being at such a price could continue without a significant drop until after Q4 earnings. A share price of $3000 in the next few months would be ahead by a year or so and one of $4000 by 18 months in both cases I would expect a correction back to something around $2000 by the end of the year.

For the share price to reach $4000 or above might happen due to a short squeeze and S&P 500 inclusion, but to stay there would be irrational. However "The market can stay irrational longer than you can stay solvent" applies in this case.

My current thoughts on strategy are to sell 1% of my holdings at $3500 and then another 1% for each $200 raise above that. The on the way down buy back shares. As I plan to buy a house in the next year it doesn't matter too much if I am left holding some cash, my UK capital gains tax allowance would allow selling about $30000 worth of shares tax free, which would be enough for a deposit on the house. That however is second best as I really plan to HODL with most of my shares.

 

[StealthP3D]

Between 4th Sept and 21st Sept:
-ETSY: rose a bit from 112.04 on 4th to 116.01 on 21st
-TER: dropped a bit 78.60 on 4th to 76.92 on 21st
-CTLT: dropped quite a bit from 52.52 on 4th to 43.93 on 21st
Neither of them had any considerable action (spikes) between announcement and inclusion either...

I sure hope that the anticipated rise for TSLA is going to happen but I just wonder what the reasons would be for this to simply be a given, because why did the other 3 back in Sept not jump up then?

Probably because you are comparing grapes to watermelons - even though they can grow in the same field, they have different prices, different sizes and different flavors. Grape does not equal watermelon.

 

[Causalien]

i sold my 20th Nov $300 calls last Monday while we were trading in the $440’s, and sold off a few hundred reading shares as I felt that was a local high given the recent trading patterns.

Haven’t touched my core shares though.

Obviously would be more profit if I still held those calls and shares now, but as this was a totally random event, you can’t plan for it and I was happy de-risking last week.

Nom I’m looking for an IV spike to sell covered calls against those core shares.

Ya. Good idea. After fighting for so long, you earned it. Time to enjoy life, let the younger newer investors dig the new trenches and do the fighting.

Man, I feel like those old veteran jar heads who scream at new recruits not to be too eager to run to the front line and into machine gun fires. Stay back at base camp and enjoy your hot chow.

 

[amolina]

Go over to this twitter feed to have fun. I was smiling non stop as I scrolled through the tweets. Only if they had a little idea
https://twitter.com/markbspiegel

 

[StealthP3D]

To be clear, Tesla can still do a 2:1 split without further authorization? But if they wanted to do a 5x again, then something something needs to be filed?

That's my understanding and I wouldn't be surprised if it (2:1) happens at a price below $1000/share.

Elon loves to burn short-sellers so it could happen anytime the stock seems wildly over-valued and short-interest rises.