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FED/J.Pow sure got the job done this a.m. You have to go down all the way to #50 ConocoPhillips in the S&P 500 to find the first green equity. 2nd green ticker? #206 Electronic Arts Inc.
Tesla doesn't make things that have already been solved, and by solved I mean in scale. Tesla only specialize in products that solve problems but are hard to scale.
Ant TWO.
ya know?????????
The more I think about it....
What if....
The Credit rating institutions are delaying the increase in credit rating because the People that are controlling the price of the stock now.
The Credit Rating Institutions are either doing it. or getting paid by who is doing it.
Once the credit rating institutions give TSLA investment status. The Institutional investing firms will come in and buy out the retail investor.
And they will Hodl. Which keeps the MM-types from being able to fish in the biggest part of the pond.
Spurious correlations exist everywhere. Most spurious correlations exist either because of comparing two variables with steady long-term time trends or because of small sample sizes, as is the case for all the examples in the Fast Company article you linked. There are many reasons to expect the correlation between the S&P 500 and TSLA is meaningful. Here are some:
1) TSLA has a moderately strong correlation on day-to-day movements when the index moves at least 1.5%, not just over a long time horizon, which means Tesla is actually coupled to the S&P 500 in a way that doesn't just depend on both of them having long-term trends.
2) TSLA is a component of the S&P 500, and also the NASDAQ and the Russell. Passive index funds alone account for 20% of the US market for publicly-traded stocks. Then there are active funds benchmarked against the indices that also maintain a percentage of TSLA, and although some of them might be underweight on TSLA, as far as I know few of the funds have no TSLA at all. Thus, aggregate demand for stocks at any given time affects how much capital is flowing into or out of these funds, which then drives net buying or selling activity on TSLA in proportion to TSLA’s average percentage in the funds.
3) TSLA has a colossal options market that probably amplifies volatility
4) TSLA is the most-watched stock on the market, so if a big move in the market causes increased attention on stocks in general, a proportion of that attention is likely to go to TSLA
5) TSLA is a meme stock with emotional retail traders chasing sentiment and probably buying shares and options on bullish market days and selling on bearish market days
If you continue to argue that Elon dumping 8 million shares on the market on a day had less effect on the price of the stock than macro movements on that day, then I am sorry I cannot help you, you are beyond reason and logic.
According to the SEC filing, Elon has never dumped 8 million shares in one day. The most he's done is 5.2 million, and on the 26th it was 4 million.
Elon has sold non-trivial amounts of TSLA stock on 21 days, not just April 26th, which had the most extreme TSLA action out of all the days in the sample. April 26th also had by far the greatest movement in the S&P 500, with a 2.4% decline from open to close. It is not representative of a typical day of Elon selling. Instead of cherry-picking, let’s examine all 21 selling days.
TSLA price % change from open to close:
n = 20
Sample Average = -2.3%
Std Dev = 4.8%
95% confidence interval = [-4.4%, -0.2%]
99% confidence interval = [-5.06%, 0.46%]
TSLA price % change from the opening price on the day of the sale to the day 5 trading days after the sale:
n = 20
Sample Average = +0.9%
Std Dev = 9.2%
95% confidence interval = [-3.1%, 4.9%]
99% confidence interval = [-4.4%, 6.2%]
Date
Elon Sale Amount
Total TSLA Volume
Elon % of TSLA Volume
TSLA Open
TSLA Close
TSLA % Change
TSLA Close 5 trading days later
TSLA % Change 5 trading days later
S&P 500 Open
S&P 500 Close
S&P 500 % Change
TSLA Expected % Change Based on Linear Model of S&P 500 Influence
TSLA Deviation from Expected performance
8/9/2022
3,040,228
28,748,230
10.6%
870.88
850
-2.4%
919.69
5.60%
4133.11
4122.47
-0.3%
0.2%
-2.6%
8/8/2022
1,583,879
33,121,762
4.8%
885
871.27
-1.6%
927.96
4.85%
4155.93
4140.06
-0.4%
0.2%
-1.8%
8/5/2022
3,300,000
37,724,301
8.7%
908.01
864.51
-4.8%
900.09
-0.87%
4115.87
4145.19
0.7%
0.2%
-5.0%
4/28/2022
5,230,000
41,649,512
12.6%
899.98
877.51
-2.5%
873.28
-2.97%
4222.58
4287.5
1.5%
3.3%
-5.8%
4/27/2022
345,601
25,652,131
1.3%
898.58
881.51
-1.9%
952.62
6.01%
4186.52
4183.96
-0.1%
0.2%
-2.1%
4/26/2022
4,069,399
45,377,887
9.0%
995.43
876.42
-12.0%
909.25
-8.66%
4278.14
4175.2
-2.4%
-4.7%
-7.2%
12/28/2021
934,090
20,107,971
4.6%
1109.49
1088.47
-1.9%
1149.59
3.61%
4795.49
4786.35
-0.2%
0.2%
-2.1%
12/22/2021
340,564
31,211,359
1.1%
965.66
1008.87
4.5%
1070.34
10.84%
4650.36
4696.56
1.0%
0.2%
4.3%
12/21/2021
934,091
23,839,311
3.9%
916.87
938.53
2.4%
1086.19
18.47%
4594.96
4649.23
1.2%
0.2%
2.2%
12/16/2021
934,091
27,590,480
3.4%
994.5
926.92
-6.8%
1067
7.29%
4719.13
4668.67
-1.1%
0.2%
-7.0%
12/13/2021
934,091
26,198,500
3.6%
1001.09
966.41
-3.5%
899.94
-10.10%
4710.3
4668.97
-0.9%
0.2%
-3.7%
12/9/2021
934,091
19,812,830
4.7%
1060.64
1003.8
-5.4%
926.92
-12.61%
4691
4667.45
-0.5%
0.2%
-5.6%
12/2/2021
934,091
24,371,619
3.8%
1099.06
1084.6
-1.3%
1003.8
-8.67%
4504.73
4577.1
1.6%
3.5%
-4.8%
11/23/2021
934,091
36,171,699
2.6%
1167.51
1109.03
-5.0%
1095
-6.21%
4678.48
4690.7
0.3%
0.2%
-5.2%
11/16/2021
934,091
26,542,359
3.5%
1003.31
1054.73
5.1%
1109.03
10.54%
4679.42
4700.9
0.5%
0.2%
4.9%
11/15/2021
934,091
34,775,648
2.7%
1017.63
1013.39
-0.4%
1156.87
13.68%
4689.3
4682.8
-0.1%
0.2%
-0.6%
11/12/2021
1,200,000
25,573,150
4.7%
1047.5
1033.42
-1.3%
1137.06
8.55%
4655.24
4682.85
0.6%
0.2%
-1.5%
11/11/2021
639,737
22,396,570
2.9%
1102.77
1063.51
-3.6%
1096.38
-0.58%
4659.39
4649.27
-0.2%
0.2%
-3.8%
11/10/2021
500,000
42,802,719
1.2%
1010.41
1067.95
5.7%
1089.01
7.78%
4670.26
4646.71
-0.5%
0.2%
5.5%
11/9/2021
3,088,047
59,105,840
5.2%
1173.6
1023.5
-12.8%
1054.73
-10.13%
4707.25
4685.25
-0.5%
0.2%
-13.0%
11/8/2021
934,091
33,445,719
2.8%
1149.785
1162.94
1.1%
1013.39
-11.86%
4701.48
4701.7
0.0%
0.2%
0.9%
So, historically Elon's sales are associated with an expected average TSLA decline of about 2.3% give or take 2 or 3 percentage points. We don't even have high confidence that the true average effect is less than zero, because 0 is on the edge of the margin of error. TSLA actually gained on 5 of the 20 days in which Elon has sold.
It does look likely that when Elon sells more than ~5% of the total TSLA trading volume in a day, there does tend to be TSLA underperformance of about 7%, but the effect appears transitory because in all cases, TSLA reached the same price level again at some point within the subsequent week or two. As a matter of fact, when looking at all of Elon's sales, the potential downward bias appears to be transitory. The data shows no evidence of consistent residual impact on the TSLA price a week after the sale, and on average TSLA has gone 0.9% higher after 5 trading days have elapsed.
The 12% drop on April 26th when Elon dumped 4 million shares onto the market should be looked at in context of the sales he made in the following two days.
Elon had a bigger share of TSLA trading volume on Apr 28th than on the 26th, but TSLA only fell by 2.5%
TSLA recovered to the original price range within a few days of the Elon stock dump
TSLA and S&P 500 were both in steep multi-month downtrends
This was just two months after Russian forces invaded Ukraine, oil & gas prices were sky high, inflation and rate increase concerns were high, and there was a lot of general anxiety about the economy
Date
Elon Sale Amount
Total TSLA Volume
Elon % of TSLA Volume
TSLA Open
TSLA Close
TSLA % Change
TSLA Close 5 trading days later
TSLA % Change 5 trading days later
S&P 500 Open
S&P 500 Close
S&P 500 % Change
4/28/2022
5,230,000
41,649,512
12.6%
899.98
877.51
-2.5%
873.28
-2.97%
4222.58
4287.5
1.5%
4/27/2022
345,601
25,652,131
1.3%
898.58
881.51
-1.9%
952.62
6.01%
4186.52
4183.96
-0.1%
4/26/2022
4,069,399
45,377,887
9.0%
995.43
876.42
-12.0%
909.25
-8.66%
4278.14
4175.2
-2.4%
On the 28th, the S&P 500 rose 1.5%, and TSLA fell by only 2.5% this time. 20% of the time, TSLA falls on days the S&P is up around 1.5%, so a 2.5% loss isn't especially unusual for a single data point. On days where the S&P 500 falls between 2% and 3%, TSLA falls on average 6.2% with a standard deviation of 4.8%. Falling 12% is a (12-6.2)/4.8 = 1.2-sigma event, which is nothing crazy.
All the actual market data contradicts the idea that Elon selling TSLA has a meaningful impact on the stock price at all, and especially not for longer than a few days afterward. It looks like there is probably about a 2% effect which disappears quickly. Not a big deal.
Conclusions
TSLA moves around seemingly randomly when the S&P 500 moves less than 1.5%
Middle 90% of the distribution for the S&P 500
TSLA tends to amplify market gains or losses when the S&P 500 moves more than 1.5%
< 5th percentile or > 95th percentile days for the S&P 500
Elon occasionally seems to influence the TSLA price for a couple of days before it reverts back to normal range
TSLA has gone on a few bull runs in its history that can't be explained by just by reactions to the macros, and these account for the majority of TSLA's stock price appreciation since IPO
The 2013-2014 "Oh wow the Model S is a good car" rally
The 2019-2020 "Production Hell is Over/Cash Flow Positive Now/S&P 500 Inclusion/Stock Split" rally
The 2021 "Shanghai is Dominating/Tesla Makes a Lot of Profit Now" rally
Tesla doesn't make things that have already been solved, and by solved I mean in scale. Tesla only specialize in products that solve problems but are hard to scale.
If there ever is a “Tesla Phone” IMHO, it will just be a simple tethered terminal to your personal TeslaBot. The computer in Tesla Bot will be way more powerful and capable than any phone could be. Tesla Bot could probably fit a Starlink terminal on its back or chest too.
T-mobile was very insistent that current phones would operate just fine with these satellites. I think a Tesla phone would be the company's first flop. Competing with Apple in the phone space would be like competing with Tesla in the EV space.
Now if you've watched any of James' library of Beta test videos, he posts 1 video taken on each of 2 test loops near his home in Santa Clara. This forms a valuable resource because he has documented how FSD Beta software has evolved over the course of the test program (many thanks, and all due credit to James!).
Small correction, but the Plum Canyon area is in Santa Clarita, which is in Los Angeles County. Santa Clara is in the NorCal Bay Area. I recognized the roads in Locke's Santa Clarita test loop videos.
Anyone in CA that does not have at least 300/500 plus an umbrella with a good company is gambling. I won't change to Tesla insurance for this reason and it is 50% less.
Anyone in CA that does not have at least 300/500 plus an umbrella with a good company is gambling. I won't change to Tesla insurance for this reason and it is 50% less.
He might have said it because of the umbrella part? I remember when I took out my umbrella policy, part of the deal was that I was required to set my auto liability to the max.
Once Tesla opens for business in Georgia this November, I'm going to have to see how switching will affect this. It could be that I can't get the umbrella at a decent rate if I don't also insure my cars with the same company.
Maybe I've just been in TSLA long enough to have Stockholm syndrome, but just moving with (or slightly beating) the market on a deep red day feels quite relaxing. As many times as we have been heavily punished it's practically a green day. The stock just needs to tread water until the fireworks start over the next few quarters.
Once Tesla opens for business in Georgia this November, I'm going to have to see how switching will affect this. It could be that I can't get the umbrella at a decent rate if I don't also insure my cars with the same company.
