Mo City
Active Member
Need TSLA @ $633 to break $600B. Almost there.
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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
I guess I need glasses. I really had to squint to discern today’s MMD.
Driving your brand new Tesla back from Mt Kisco to your home will be a drive you'll remember for the rest of your life!
*Ahem* O/T, but there was talk, some ages ago about a TMC Meetup in Iceland when the SP hit $420.69... PRE-SPLIT. I guess that means we'll all need to make some 7 trips there now, which is fine by me
I think Tesla's diversity report is pretty good. Press response seems to acknowledge that as well. 83% male and 59% white overall. Obviously skewing a little more male/white at management but still decent. With such a software and engineering heavy company like Tesla it's going to be very hard to not have a high percentage of male employees. I hope that this becomes easier over time as more women go into those fields but that's not something Tesla can do much about.
Tesla publishes its first diversity report, here are the key numbers (cnbc.com)
Tesla publishes its first diversity report, here are the key numbers (cnbc.com)
Krugerrand
Meow
While it’s ridiculous on so many levels, here’s the thing about the situation; Texas can voluntarily change their dealership laws or we can just wait for the dealership network collapse that’s already started because OEMs have been less than serious about producing EVs.
Knightshade
Well-Known Member
If there's much time left it's rarely worth exercising versus just selling the option and buying shares at the current price.
For example I can sell my Jan 15 390 calls for $243.45 a share... but buying straight shares only costs me $237.73 per share over the 390 strike right now (SP was $627.73 when post was made)- so I'd be losing almost $6 a share exercising early instead of just selling the option and buying shares.
Time value DITM isn't high, but it's not zero.
Well all...Be prepared for a drop because....Yahoo said so:
3 reasons Tesla isn’t our Company of the Year
3 reasons Tesla isn’t our Company of the Year
TheTalkingMule
Distributed Energy Enthusiast
This is the part of the game where I generally would overthink and screw things up. Perhaps "under-execute" would be a better term.
I'm in good shape with just a few DITM calls and plans to sell CCs on my shares near the peak. If we dip back to $600 this week and I'm forced to buy more calls.....wonderful. If not......wonderful. Lets not try to ruin 2020 any more than it's already ruined!
I'd be happy if someone would just sell me a $90 2022 put for $165 today so I can close this position while maintaining my $20 stubbornness stance. It's the little victories that make it worthwhile.
Wait.....did I have a job I was supposed to do today?
This is a great concept for getting clicks, I'm gonna apply it to my resume.
ZeApelido, PhD, Data Scientist
Employment History
Not at Tesla 2018 - present
Not Google 2016 - 2018
Not Apple 2013 - 2016
Mongo going out a limb.
tl;dr; TSLA will ultimately be added to each index fund as a fixed number of shares and the share price is a non factor regarding the number of shares added. The share price will impact the final % of the index TSLA comprises by dollar value, but that is a separate detail.
High confidence facts:
- S&P 500 is a float weighted index
- The float market cap is IWF * total shares * stock price
- IWF (Investable Weight Factor) is trading_shares/ total_shares
- IWF is not changed continuously
- Percentage in the Index is based on float_cap/total_index_cap (including itself, which has a small impact on the math).
When dealing with inclusion and % of index, the key thing to remember is that that individual stock holdings are determined purely by math, they are not dictated by the committee. Tesla at 1.5% or 1.0% is based purely on the ratio of TSLA float cap to the entire index's float cap. Each index fund has the IWF, stock price, and share count needed to calculate the individual holdings they should have.
Starting with an easy to answer question:
As the stock price changes, the value percentage of a constituent in the index changes, so how/when do index funds internally adjust to match the target percentage?
Answer: Once included at the proper share level, there is no adjusting needed:
Imagine, for discussion, there is a stock that is 10% of the index:
A: IWF*SP*shares = 10
Everything else = 90
Index total value = 100, A is 10% of total
Now, that stock doubles
A: 20
Everything else: 90
Total fund: 110
Actual percentage of A = 20/110 = 18%
Should the fund sell 8% to get to 10? Buy 2% to get to 20?
Neither! The fund has exactly the position the stock should have. The amount of stock the fund should have is the stock's float adjusted cap/ total index cap. That is the 18.2% number. So the index funds are self adjusting (to stock price changes) without buying/ selling shares.
The difficult question: So what about price changes just before inclusion?
If index funds are told the stock will be 10% of the index based on week old price data, and they convert that to a dollar value, then, if the stock doubles in the interim, they will be 8% off of the correct value.Not good.
However, if they take the % at time of the freeze (which is just the market cap relative to the full index) and convert that to shares based on that index's total value, then, as long as they acquire that number of shares, they end up with the correct percentage of the stock.
This means a rising stock price requires more spending by the funds which follows as the stock has a larger market cap which corresponds to a large index weight. It also means they sell more of the other index constituents to purchase the new stock (total fund value is a constant).
Any staggering they do to achieve the final position is beyond me. Regardless, the ultimate number of shares remains the same and, if the doubled price holds, the percentage of the stock by value will be 18.2% . A spike and pull back impacts the funds profits because more stocks had to be sold to acquire the new one, then the new one lost value, reducing the fund's value. So the # of shares in the new position remains the same, but the end value is less (both for the stock and the index). Same thing as a trading account when you sell one stock to buy another only to have the new purchase drop.
Another way to view this:
Ignore the float weighting for the moment. The index is cap weighted, so the dollar amount of a stock in the index is proportional to its market cap. The total value of all stocks is the index value. So:
value_of_stock_in_index = market_cap_of_stock * value_of_index / total_market_cap_value_of_constituents
value_of_index / total_market_cap_value_of_constituents is a constant (in the short term), let's call it 'a'
value_of_stock_in_index = a * market_cap_of_stock
In other words, the index holds a fixed percentage of each company in the index (and the same percentage of each).
But stock is traded in shares, so how much of each company?
Replace market_cap_of_stock with its formula:
value_of_stock_in_index = a * (total_number_of_shares * share_price)
total_number_of_shares is a constant (unique per stock), call it 'b(x)'
value_of_stock_in_index = a*b(x)* share_price
So the index holds a*b(x) shares of each stock to stay in balance and the share price and value track each other. IWF updates handle when the number of shares change.
If your goal is to convert options into shares, and you hold those options in a taxable account, you'd exercise a DITM call to avoid having a taxable event. I did that earlier this year to avoid paying short term capital gains taxes after a spike in the value of some pre-split calls. Otherwise, in a non-taxable account, I agree that there is no incentive to do a conversion, because you give up the time value.
Not at Worldcomm....Not at Enron....Not at Nikola....
Oh, the places you’llgo not have come from!
Oh, the places you’ll
You know what's amazing? While Tesla is one of the 10 largest companies in the US, and TSLA has gone nuts lately, the vast majority of the world has never driven one, never even seen one, and has practically zero knowledge of the company other than what they've heard from the idiots/thieves in the mainstream press. Think what's going to happen when they figure out what's really going on......
Still tentatively on for summer 2021 TMC Iceland Meetup 2020!*Ahem* O/T, but there was talk, some ages ago about a TMC Meetup in Iceland when the SP hit $420.69... PRE-SPLIT. I guess that means we'll all need to make some 7 trips there now, which is fine by me
As always, there are those that think Tesla is overvalued and cannot fathom the recent price appreciation. As a Tesla Bull, I'm trying to better understand why the recent price appreciation has been so spectacular. I realize that the S and P 500 announcement has a lot to do with it, but if that were the main factor I would think the price will eventually fall or taper out about this level based on fundamentals. BUT, do you guys think the FSD beta release is also a significant factor? Are market participants now pricing in that Tesla will solve autonomy in the next 1-2 years? Because to me, that means the stock could still rise much further and be sustained. The FSD videos on Youtube are pretty impressive, but is it being perceived as a high probability outcome? Is it already Game, Set, Match like Elon has said and is thIs a sign that large market players have done the research and agree with him?
If we agree that Tesla will solve autonomy in the next year or two, isn't it a trillion dollar company?
If we agree that Tesla will solve autonomy in the next year or two, isn't it a trillion dollar company?
That story floating recently... Dealerships are paying GM to not have to sell Cadillac EV. Up to a $$$ million per dealer in some cases. Now there's some EV cashflow!
Just look at the future models out there...if the execution carries along as planned...its a multi-trillion dollar company. Not financial advice of course. Buy and HODL forever
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