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

[Sparky4life]

But they wouldn't be transferring them to the fund, they would be selling them to the fund. So yes, they could front run their own funds to try to make money for themselves. But they could always do that for everything. Of course they have to have the cash lying around to do that. (They can't use the funds money.)

My point is that if they have internal sources for these shares, then they don't necessarily have to buy on the open market on the 14th or the 21st. That would mean that there won't necessarily be a buying spike on those days. I may be missing something.

 

[Dan Detweiler]

Was thinking a bit about Shanghai. It seems MIC Model 3 is close to fully ramped. Model Y MIC production should start soon and be fully ramped in a year. In one year the factory in Shanghai will be pretty much up and running at full capacity. It has been a great success already contributing to profits.Tesla is flush with cash, Austin and Berlin will be ramping for many years. But what is next for China? If building a new factory takes ~1year and then another year to ramp, now would be a good time to start building the next factory.

Shanghai seems like a great success, so why not build another factory in Shanghai. Or in Guangdong. But for what? Model 2? Semi? Energy/Solar? What do you guys think is next for China and when will it be announce?

My bet would be the new small car and the semi. Both would be welcome in the Asian market.

Dan

 

[wipster]

Or MMs went for lunch lol, volume picked up big time.

Or perhaps the
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Mid Morning Dump


Mods, feel free to delete if you feel it's necessary.

 

[bkp_duke]

My point is that if they have internal sources for these shares, then they don't necessarily have to buy on the open market on the 14th or the 21st. That would mean that there won't necessarily be a buying spike on those days. I may be missing something.

They would need to have a LOT of money in reserve to hold these shares. I don't know what they set aside for something like this, if they do it, but that would reduce their liquid assets greatly. That's the drawback I could see with this strategy.

 

[MP3Mike]

My point is that if they have internal sources for these shares, then they don't necessarily have to buy on the open market on the 14th or the 21st. That would mean that there won't necessarily be a buying spike on those days. I may be missing something.

Sure, but that would mean they are selling their own personal shares. Which they can do at any point. The funds have to buy shares. PERIOD. Anybody that has shares can sell them.

But really, why would they sell their personal shares to a fund cheaply and give up the returns for themselves? They literally don't care what the returns are on their S&P500 funds, they just care that it matches the index itself. So they aren't going to do anything to try to juice the funds performance.

 

[amolina]

BMW and Daimler have pretty much axed their autonomous projects. Yet they want to show fancy concept cars to the masses. What a brilliant misdirection. Bravo Bravo
BMW unveils MINI electric van concept to explore what cars could look like in an autonomous future - Electrek

What a great business case study for things not to do

 

[Rb48888]

I wonder if the tranche idea is as much about moderating the (de-balancing) of those other stocks as it is about slowing TSLA purchasing?

With the sheer size of this inclusion, and the unpredictable nature of how it might play out, polling the investment community also could be seen as a proactive way to help minimize potential blowback from their "real" old-guard S&P friends, i.e. Those who might end up on the loosing side of this rebalance.

If it does get out of hand, at least they can say, "We brought it to your attention and even asked your advice."

 

[smorgasbord]

If the S&P 500 administrators decide to have the index funds buy in two tranches, what is going to regulate that they actually buy in two tranches? If I'm a fund administrator and I think the buying in the first tranche will cause the stock price to rise, then wouldn't i want to do all of my buying in the first tranche so my fund gets in cheaper than those that buy in the second tranche? Is there going to be a pinky promise to buy in half and half?

The funds "regulate" themselves, and you can read what they are required to do in their Prospectuses. Some funds have to match the S&P 500 allocation within a certain percentage and within 3 days. Others have more leeway. It's why when you look at the performance of the S&P 500 Index Funds you see that they don't match exactly.

 

[kanweg]

Sure, but that would mean they are selling their own personal shares. Which they can do at any point. The funds have to buy shares. PERIOD. Anybody that has shares can sell them.

But really, why would they sell their personal shares to a fund cheaply and give up the returns for themselves? They literally don't care what the returns are on their S&P500 funds, they just care that it matches the index itself. So they aren't going to do anything to try to juice the funds performance.

I think they do care. It is a product they sell. They prefer the product to become more valuable over time so more people will buy their product. So, they will prefer the index to go up.

 

[MountainRatMat]

Don't worry guys, I just bought 10 shares to take the out of the floating pool of 732,XXX,XXX available chairs and don't plan to put them back in for 10+ years. That'll teach those MMs! Every little bit helps, right?

Edit: I still don't understand who would be selling.

Tesla is grossly overvalued by TODAYS numbers. I feel it is grossly undervalued by future values assuming everything works out as planned. There are many many many short sighted traders. These are the people that are selling, assuming you bought in the $200's pre-split in March and it is now around $450 post 5:1 split. That is a hefty profit!

 

[Mo City]

Nice pickup after lunch indeed

On the other hand, looks like someone had a pretty salty breakfast (I know...not surprising from yahoo)

The guy is so ignorant he embarrasses himself.

 

[ReddyLeaf]

Snip.....it's year-end and maybe some folks will be knocked off the fence to sell with the logic they can lock in their 2020 gains to save their entire portfolio selling TSLA at $580. Personally, I think there are far fewer of those people.

Great point. I think that the S&P committee selecting Dec 21st and allowing at least two dates provides the index funds wide latitude for buying, maybe even the entire month. There will be people selling in 2020 to lock in capital gains due to uncertainty about future tax rates, thus suppressing the SP. Also, mutual funds distribution of capital gains is around this time as well, which tends to reduce buying. How big will the effect be on TSLA? No idea, but it seems to happen every year for other stocks, perhaps a major reason for the so-called Santa Claus rally.

Here’s another wild prediction: Elon feels generous and offers to issue more shares to cover the index funds buying, thereby pocketing enough capital to fund GF 4-10. What would it take? $50B? $100B? Finally, during the ensuing SP run up, there will be a 2:1 split around $840, or perhaps a 3:1 split around $1260.

 

[TheTalkingMule]

I wonder if the tranche idea is as much about moderating the (de-balancing) of those other stocks as it is about slowing TSLA purchasing?

With the sheer size of this inclusion, and the unpredictable nature of how it might play out, polling the investment community also could be seen as a proactive way to help minimize potential blowback from their "real" old-guard S&P friends, i.e. Those who might end up on the loosing side of this rebalance.

If it does get out of hand, at least they can say, "We brought it to your attention and even asked your advice."

We tend to think of everyone outside the TSLA world as lock-step aligned against us, in reality it's just that several big players interests are aligned.

S&P probably held off inclusion because big institutions told them it would be chaos and SP was definitely going back down to $250 in short order. In reality, these big Wall Street houses just want to keep their fossil fuel reality in place as long as possible to collect fees. Sustainable abundance is no place for scumbags who live off recurring refinance fees on fracking operations.

S&P just decided it had to happen this year and is being as accommodating to their scumbag clients as is physically possible. Really they shouldn't be doing all this, traditionally they would have announced yesterday and listed next Monday. Period. This is some extraordinary leeway they're giving to Wall Street, and like all the previous moves it will backfire horribly. All it's doing is giving longs a window to maneuver and some shadier characters time to orchestrate a squeeze.

 

[ZachF]

Been on a little internet sabbatical... Did anything happen?

 

[ByeByeJohnny]

S&P just decided it had to happen this year and is being as accommodating to their scumbag clients as is physically possible. Really they shouldn't be doing all this, traditionally they would have announced yesterday and listed next Monday. Period. This is some extraordinary leeway they're giving to Wall Street, and like all the previous moves it will backfire horribly. All it's doing is giving longs a window to maneuver and some shadier characters time to orchestrate a squeeze.

Yeah, I'm not so sure that survey is for real. It might already be decided and this is possibly all about giving the funds an extra long heads-up.

Does most funds actually state when they can buy? Wouldn't surprise me if it's just assumed (or stated) they can start when the announcement is made?

 

[TheTalkingMule]

Great point. I think that the S&P committee selecting Dec 21st and allowing at least two dates provides the index funds wide latitude for buying, maybe even the entire month. There will be people selling in 2020 to lock in capital gains due to uncertainty about future tax rates, thus suppressing the SP. Also, mutual funds distribution of capital gains is around this time as well, which tends to reduce buying. How big will the effect be on TSLA? No idea, but it seems to happen every year for other stocks, perhaps a major reason for the so-called Santa Claus rally.

It's the best they could do while still retaining some semblance of credibility. They knew how foolish they'd look after Elon guides for 1M next year as SP hit $550+ without inclusion. What on Earth would they have done then?

Here’s another wild prediction: Elon feels generous and offers to issue more shares to cover the index funds buying, thereby pocketing enough capital to fund GF 4-10. What would it take? $50B? $100B? Finally, during the ensuing SP run up, there will be a 2:1 split around $840, or perhaps a 3:1 split around $1260.

I've been advocating for massive cash raising from the start of this run-up. If we can finance 4 more Gigafactories right now, why aren't we? It would cause a momentary glut in stationary storage, but IMO dragging pack production forward 1.5yrs is more important than caring if a bunch of lunatics can buy an island!

 

[TheTalkingMule]

Yeah, I'm not so sure that survey is for real. It might already be decided and this is possibly all about giving the funds an extra long heads-up.

For sure. As many have speculated here, it certainly seems like all of Wall Street has knows about this timeline for like 2 months without a care in the world.

I bet the SEC will look into it real soon. Ha!

 

[adiggs]

My point is that if they have internal sources for these shares, then they don't necessarily have to buy on the open market on the 14th or the 21st. That would mean that there won't necessarily be a buying spike on those days. I may be missing something.

If they buy the shares in an actively managed fund, and xfer them to the index fund and don't sell them to the index fund for a profit, then the shareholders of the actively managed fund are being shafted. Sounds like failure of fiduciary responsibilities to me and therefore grounds for a lawsuit (I am NOT a lawyer).

This is why shares won't be purchased in one fund to avoid the front running the index dynamic, for the benefit of the index.


I suppose the fund management company itself might have enough cash lying around to buy early, and then transfer later. If so, then they would be transferring the fund management's money into the pockets of their index fund investors, which they won't want to do.

If anything, the fund management company trading on it's own account (assuming that is even a thing), and the actively managed funds, will use the opportunity to front their (and all other) index funds to juice their returns.

 

[viridi]

Order to sell 10,000 shares just popped up again as TSLA crossed $445. The order is to sell at $447.78. This order (at varying price points) has been getting put in and pulled for hours now.

 

[bkp_duke]

I've been advocating for massive cash raising from the start of this run-up. If we can finance 4 more Gigafactories right now, why aren't we? It would cause a momentary glut in stationary storage, but IMO dragging pack production forward 1.5yrs is more important than caring if a bunch of lunatics can buy an island!

Pretty sure those GFs would sit mostly idle because the rest of the raw mineral supply chain has not caught up (Lithium and Nickel in particular). Building those would be a big capex to support while waiting on them for 1+ years to start producing product to essentially pay for themselves.