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

[MP3Mike]

Blame google, who is still showing 1024.

So Google is getting the different simulations crossed. (NASDAQ is showing $1023 as the AH closing price.)

 

[Curt Renz]

Note to self - EM doesn't like stock when prices are too high

He has occassionaly tweeted remarks that unsettle shareholders. Perhaps once in a while he wants to clear out the weak longs.

 

[Curt Renz]

So Google is getting the different simulations crossed. (NASDAQ is showing $1023 as the AH closing price.)

Thinkorswim shows $1024.00 as the final after-hours traded price at 7:59 pm EST.

 

[Singuy]

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The Hot Rodder's Guide to the Tesla Plaid, and How to Beat One in the Quarter Mile

The new Tesla Model S Plaid runs 9.25 at 150 mph in the quarter mile. HOT ROD shows you what to look for and how to beat one at the racetrack.

www.motortrend.com

 

[Artful Dodger]

Primary risk factor - EM disassociating from the company entirely to devote full time to Space X.

That particular risk factor is almost exactly ZERO. SpaceX depends upon Tesla's current products (Model 3 motors, Model S battery packs for Starship, plus shared metalurgy and software).

In the future, Elon's dependance upon Tesla will grow only stronger: Tesla Bots will be the first sentient beings on Mars, and form 95% of the work force. Tesla Vision / autopilot is the core technology.

Indeed, Elon is directing Tesla's future developement to work in synergy with the tech that we will need on Mars.

Just ask yourself, why doesn't Tesla build wind turbines? Yeah, because with only 1% of the atmospheric density on Mars vs Earth, wind mills won't work there. And it not like Tesla couldn't build fine wind mills, with SRPM motor/generators, and Tesla's aerodynamics and power electronics capabilities.

Boring Co. TBMs fit inside the diameter of a Starship. Think that's a coincidence? They're headed to Mars to mine water and dig habitats. It's all part of the Vision (see what I did there?) And Neuralink means virtual telepresence of humans supervising swarms of drone workers.

TL;dr Elon will NEVER disassociate from Tesla; they will in fact grow closer to other Musk Industries / X.com businesses.

 

[Open Interest]

So let me get this straight. We are not sure if Elon has sold his shares or not, even though 50 million shares were traded today? If he did not sell, the volume and 12% drop was caused by uncertainty caused by his weekend tweets?

I’m still not clear why his sale (real or impending) of some stock - which he telegraphed previously - caused such a large move.

 

[UnknownSoldier]

So let me get this straight. We are not sure if Elon has sold his shares or not, even though 50 million shares were traded today? If he did not sell, the volume and 12% drop was caused by uncertainty caused by his weekend tweets?

I’m still not clear why his sale (real or impending) of some stock - which he telegraphed previously - caused such a large move.

Pretty classic example of a gamma squeeze unwinding. We saw an example of this just earlier this year after S&P 500 inclusion.

The sheer size of the options market on TSLA, the most active single ticker options market in the world, means we should get used to this happening over and over again going forward.

I know I will be adjusting my own strategies in the future based on the two gamma squeeze events this year.

 

[SOULPEDL]

Options Market Makers are still allowed to sell short. It's the "Madoff exemption" to the prohibition against naked short selling. You read this forum, right? It's come up before on occasion...

All a short seller has to do is buy a short Put, and that forces the Market Maker who sold the Put to immediately turn around and sell shares to remain delta neutral.

You are a kid running with scissors if you don't understand how Option hedging works, and how hedge funds and shortzes exploit the Market Maker's exexmption to continue short selling AFTER the Uptick Rule is in effect.

This is what happened today. The Uptick Rule triggered @ $1,046.64 (which is -10% from Yesterday's Close). Shortzes had no problem continuing to drive the SP down afterward.

View attachment 731244

Here's your homework for tomorrow: Look at the Options volume (and today's final OI not out until 7a.m. tomorrow). Then try to estimate the net delta heding by Market Makers. This is an estimate to the amount of short selling that occured while the Uptick Rule was in effect (its called the bloddy "Market Maker's Exemption" for a reason).

@hacer FINRA reported 7.1% "Short Exempt" volume today (that's shares sold by Market Makers to delta hedge their Options transactions under the "Madoff Rule"). But just 40% of today's NASDAQ volume went through FINRA; we get no report on the rest done by large financial organizations like Market Makers, Hedge funds, and those which are both (like Citadel).

That's over 36M shares traded on which we have ZERO information, and which will never be reported as 'short' so long as MM's can cover within 13 days (or swap shorts w. another MM) before they have to submit a FTD report. Similarly, today's shorting won't show up in the twice-monthly NASDAQ "Short Interest" report as long a MMs/hedgies can cover within the 2-week reporting period.

Hint: this the 'fog' we operate in: insufficient disclosure, provided in an untimely matter.

TL;dr the game is rigged by and for the Market Makers and Hedge funds. Today was BAU.

Hence your Dark Force message earlier, got it. I was basing my statement on the actual wiki def'n. It was a little light on details, lol. Check it out.

Also, homework doesn't work well for me (learn it in class). Plus, I spent way too many calories on this today and still no real answers. I'm happy with the number of shares now, and one unlucky option (but it ain't Q1 yet). I was really glad I went into the week prepared for a selloff, but then buyback hopes seemed to fade into the night without a tweet.

Earlier I agreed with your theory that Elon would sell and the hedgies would scoop it up if it ever touched the 10% trigger (or at least I thought that was the just of it). Well, that didn't quite happen (yet anyway), so we're all searching for explanations and something is better than being in the dark. I'm quite certain I'm of the appearance of a child running with scissors at times while surrounded by a bunch of professors and bean counters and outright economic gurus here. And I bet there are many others like me learning, spare-time, so maybe someone else gets something out of my naivety or a stupid question occasionally.

We will all know how this plays out in short time no doubt. Meanwhile, I blew off evaluating a zero-crossing digital pot today for ultimate audio silence. That's where my head should really be right now. I know I'd get a lot out of a nice presentation on options, and planning to review the tutorial link on the "other site" someday.

 

[deshkart]

With China numbers out for Oct, I am getting more confidence in 500k deliveries for Q4, 2022.

30 billion revenue . $4 to $5 EPS - $6 possibly ?

Could easily justify 2.5 to 3 trillion market cap. 100 PE for FY 23 of 25 to $30.

Question is when does market see this ?

 

[woodisgood]

So let me get this straight. We are not sure if Elon has sold his shares or not, even though 50 million shares were traded today? If he did not sell, the volume and 12% drop was caused by uncertainty caused by his weekend tweets?

I’m still not clear why his sale (real or impending) of some stock - which he telegraphed previously - caused such a large move.

Because the catalyst for all the call buying that led to the gamma squeeze was the knowledge that underweight funds would be buying. Once there was a real or anticipated supply of shares (no different than a cap raise) to quench the demand, leveraged players know the party is over. Call options are rapidly closed out, leading to sale of the underlying shares. This may have been synergistic with Elon’s actual selling but it is also possible he hasn’t sold yet.

 

[Artful Dodger]

Look at that, happened all on it's own while at lunch. I actually didn't think it would happen today. Oh boy, hang on.

Mid-BB was at $1,020.40 at noon:

Shortzes'n'hedgies were always going to target the Middle Bollinger Band. They have to pick some price target to enter into their shorting robots. Applies until achieved, then they move the goal posts...

 

[lafrisbee]

HOW DO YOU PUT TESLAQUILA BACK INTO BOTTLE?

I can tell ya but first I need to know, male or female?

 

[SOULPEDL]

Shortzes'n'hedgies were always going to target the Middle Bollinger Band. They have to pick some price target to enter into their shorting robots. Applies until achieved, then they move the goal posts...

Do you write algo's for investing? I met someone on a plane who did that. It's a rare person who can code and see the patterns I hear. Do you mind sharing what you used to do up there in the great white north?

 

[SageBrush]

Yeah, 3 million would be sufficient even if growth drastically slowed from there.

30.5% gross margin last Q --> 35% margin at least
3 million units
ASP stays around $50k

The other day I was playing around with this arithmetic ...

One share is ~ 1/1E9 of the company
Every million cars produced is equivalent to the the share equaling 1/1000th of a car

At $10k gross margin per car, the share is $10

So ...
3M cars is $30
4M cars is $40
5M cars is $50
... ...

Earnings will be less OPEX, so I conclude that P/E will be over 200x even at 5M car production annually at a SP of $1,000.
I realize that some people may disagree with my guess of $10k/car gross margin, but is there any arithmetic error in the calc ?

 

[StealthP3D]

It's possible that some of this week's TSLA selling may have been by those who need cash for participation in the Rivian IPO.

*Confused* Did you mean "those who think they need cash for participation in the Rivian IPO". I might understand if the IPO was priced at a fraction of it's $67 billion because then one might have a reasonable chance of matching or beating TSLA returns over this decade. Once Tesla was already delivering the original Roadster they went public at $1.7 billion. Rivian deserves more than that but $67 billion is pretty much telling investors they want them to take HUGE risks for much smaller potential returns. You might say the Rivian IPO valuation is riding on Tesla's coat tails.

Disclaimer: I've been watching TSLA since it's IPO and what prevented me from jumping in with any substantial position before 2019 was it's perceived high risk/reward ratio. However, I see Rivian as much more problematic given it's much higher valuation and the fact that they have given the first mover advantage to Tesla despite having incorporated 13 years ago. In other words, even though they incorporated only 6 years after Tesla, it took them at least 4 years longer to get to a comparable stage and this ignores the fact that the economics of EV battery and drivetrain technology has only become more favorable with each passing year. I have very little to judge them on beside past performance so that plays heavily into my thinking, along with the extreme initial valuation.

I hope Rivian succeeds in wild fashion but I won't be investing because I attribute my exceptional investment returns over the last 30 plus years primarily to two things:

1) Avoiding big risk unless it came with potentially big rewards (and using my own judgement to determine what "big risk" was). Risk/reward ratio is key.

2) Not selling based on valuation being too high as long as growth rate was intact. I did make an exception to this rule with QCOM in 2000 but that was an extreme example of a growth rate that was artificially compressed into one year and an unsustainable valuation. It was an easy decision.

Rivian fails both of these things before I have even been able to own it. Still, I hope they knock it out of the park and, even if they do, the share price will under-perform TSLA's historic rise since the IPO and could easily underperform TSLA, even from here on out. And that's if they hit it out of the park, one possible future of many.

 

[SOULPEDL]

The sheer size of the options market on TSLA, the most active single ticker options market in the world, means we should get used to this happening over and over again going forward.

Looking forward. It's like the kid's bones are having growth spurts, so some awkward moments happen as he gets used to the bigger shoe sizes.

 

[deshkart]

The other day I was playing around with this arithmetic ...

One share is ~ 1/1E9 of the company
Every million cars produced is equivalent to the the share equaling 1/1000th of a car

At $10k gross margin per car, the share is $10

So ...
3M cars is $30
4M cars is $40
5M cars is $50
... ...

Earnings will be less OPEX, so I conclude that P/E will be over 200x even at 5M car production annually at a SP of $1,000.
I realize that some people may disagree with my guess of $10k/car gross margin, but is there any arithmetic error in the calc ?

Do you mean P/E will be at 20 at 5M car production annually and SP @ $1000?

 

[Artful Dodger]

Darkpool sales of 16.8m today, is that correct?

TSLA Dark Pool Statistics | ChartExchange

TSLA Statistics and Dark Pool Volume

chartexchange.com

TSLA Off Exchange & Dark Pool Summary​

Today's Off Exchange & Dark Pool volume is 24,764,400, which is 43.12% of today's total volume. Today's Lit volume is 32,668,350, which is 56.88%.
Over the past 30 days, the average Off Exchange & Dark Pool volume has been 37.94%. The average Lit volume has been 62.06%.

 

[Gigapress]

The other day I was playing around with this arithmetic ...

One share is ~ 1/1E9 of the company
Every million cars produced is equivalent to the the share equaling 1/1000th of a car

At $10k gross margin per car, the share is $10

So ...
3M cars is $30
4M cars is $40
5M cars is $50
... ...

Earnings will be less OPEX, so I conclude that P/E will be over 200x even at 5M car production annually at a SP of $1,000.
I realize that some people may disagree with my guess of $10k/car gross margin, but is there any arithmetic error in the calc ?

No arithmetic error I can see.

$10k gross margin per car is much too low. Only the $25k car will have margin of $10k.

Also should include taxes. Tesla will have to pay corporate earnings tax and eventually when they distribute the profits as dividends those will be taxed too. Net tax is 40% roughly, I think. Not a tax expert.

 

[woodisgood]

TSLA Dark Pool Statistics | ChartExchange

TSLA Statistics and Dark Pool Volume

chartexchange.com

How likely would it be that’s not Elon’s shares? I don’t pay much attention to dark pools regularly so how often do we have that kind of volume?