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

[wipster]

Has anyone gamed out as a mental exercise what would happen if teslas market cap got so low that Apple/Google/Microsoft (edit: or the saudis or something of that nature) would try to buy it? I feel like the BoD and shareholders would never go for such a thing but hypothetically, how would that play out? Poison pill like with twitter until the board had to capitulate?

Edit: In that scenario is it wise to have cash reserves for that thing where existing shareholders can buy shares on the cheap to dilute out a hostile buyer?

Well, if they offered me $420 a share, I'd prolly take 'em up on it!

 

[WattsHappening]

This indeed feels like capitulation. It's just unheard of maybe because it's happening at the end of a distribution phase following a 13 year bull market. Feels a lot like November 2009. Just gotta hang in there and wait for it to blow over. It'll be alright.

I hope you're right.

I've been watching and waiting for a classic capitulation. In a less chaotic time, I would say the trading was too orderly today for it to be capitulation. I would be looking for accelerated selling throughout the day. Double average volume on orderly selling does not feel like capitulation.

But as you say, this selloff has been over a prolonged distribution phase. So maybe we won't see a classic capitulation. It's obvious I know nothing.

To be perfectly honest, I would welcome a final blowoff, 20% drop on 400M shares traded tomorrow. As painful as that would be, I would feel much better about a reversal/rebound being more than just a dead cat bounce if this were to happen.

 

[vikings123]

This indeed feels like capitulation. It's just unheard of maybe because it's happening at the end of a distribution phase following a 13 year bull market. Feels a lot like November 2009. Just gotta hang in there and wait for it to blow over. It'll be alright.

Yep. If I have to guess this is one or two big institutions selling to take advantage of the last few days left for tax loss harvesting and the domino effect of bulls giving up and liquidating their positions.

 

[dl003]

In terms of TSLA share price....Has this ever happened before with another stock?

Said company is growing at an accelerated rate (>50% CAGR) and decimated.

Not that I know of, but growing this fast presents some significant perspective dissonance. The market and its participants are not conditioned to believe a company can grow 50% at this level. Especially at the end of the bull market, people will find all kinds of one-time reasons to attribute Tesla's success to: maybe it's the low interest rate environment, or the temporarily high car prices caused by supply chain issue, or previously untapped market now saturated, etc... those who don't believe will be proven wrong with every passing quarter and Tesla is still dominating which means more rewards to those who stick around.

I don't think price action after 160 was due primarily to fundamental concerns but rather fear and overleveraging; the sell-off is now on autopilot. Just gotta wait till the last forced seller is done being forced to sell their shares. Can't say how low we'll go at this point.

 

[The Accountant]

Can you confirm that tax is primarily 50% of Medicare Insurance on the gains on the 304M shares? (20,264,042×5×3)

The employer taxes due are 6.2% Social Security tax on up to $147,000 of Elon's gain plus 1.45% Medicare tax on the entire gain.
Last year Tesla paid $340m of taxes on Elon's gain of 23.4B - that comes out to 1.453%

 

[dm28997]

I am glad I own some ARK which is buying at these ridiculous prices. I might just buy more ARKK next year. I invest and don't trade but a tiny bit for the fun of it. I am also enjoying Twitter which is beating my time spent on anything else online.

 

[TrendTrader007]

NVDA market cap $347B now exceeds TSLA market cap $344B
clearly this debacle is not fundamentals driven
probably some big institutional shareholder/s liquidating just before year end for tax reasons plus severe manipulations etc etc
good luck keeping TSLA down long term

 

[vikings123]

In terms of TSLA share price....Has this ever happened before with another stock?

Said company is growing at an accelerated rate (>50% CAGR) and decimated.

I actually looked into this over the weekend and really couldn’t find anything close to this kind of drop for a mega cap company.

The instances I found were single day losses for AAPL, MSFT, META, AMZN etc and pretty much in all cases the stocks recovered the losses in a few months except for META maybe.

Even Meta did not go straight down. That is why this TSLA drop is so perplexing and reason why I think tax loss harvesting is a big reason. It’s like somebody just could not wait to liquidate their position and were time bound. Usually institutions will take a pause and start selling again. In TSLA’s case it’s so much relentless selling almost like the company is going bankrupt.

 

[TSLA Siempre]

Interview with Gene Munster on TSLA - have to suffer through Gene's poor cell reception, though.

TL;DW: He thinks deliveries will give some relief to the stock price, but thinks we'll retrace going into Q4 P&D as investors fret about earnings.

I know he's not a fan favorite here, but here's another interview with Ives from today - talking about conversations he's having with institutional investors, the damage Elon's other venture has caused, and where he thinks TSLA becomes a very strong buy / complete panic in the existing shareholder base (~$95-$100).

Interesting. Both analysts think the Twitter effect is the biggest cause of the stock deterioration. Probably a viewpoint shared my many institutional investors.

 

[nativewolf]

I am glad I own some ARK which is buying at these ridiculous prices. I might just buy more ARKK next year. I invest and don't trade but a tiny bit for the fun of it. I am also enjoying Twitter which is beating my time spent on anything else online.

Just buy TSLA vs ARK is my free opinion. I'd be shocked if that isn't the far more profitable solution.

 

[EVNow]

Interesting. Both analysts think the Twitter effect is the biggest cause of the stock deterioration. Probably a viewpoint shared my many institutional investors.

To the extent this is caused by institutional selling - and that selling was primarily caused by Twitter… we’ll have to hand it to Twitter. Actually nothing else can explain the drop compared to the market or China heavy stock or auto industry or even Chinese auto industry.

 

[verystandard]

I actually looked into this over the weekend and really couldn’t find anything close to this kind of drop for a mega cap company.

The instances I found were single day losses for AAPL, MSFT, META, AMZN etc and pretty much in all cases the stocks recovered the losses in a few months except for META maybe.

Even Meta did not go straight down. That is why this TSLA drop is so perplexing and reason why I think tax loss harvesting is a big reason. It’s like somebody just could not wait to liquidate their position and were time bound. Usually institutions will take a pause and start selling again. In TSLA’s case it’s so much relentless selling almost like the company is going bankrupt.

KoGuan Leo was surprisingly quiet today. Although his shares is nothing compare to Price T Rowe or CWI......

Frank lays out his theory about the $160-$120 $TSLA drop In 17-tweet thread.
tl;dr:
1) Driven by sales by very large (non-Elon) $TSLA owner. Speculates Price T Rowe or Capital World Investors sold >50 M shares
2) Amplified by MM delta-hedging
3) CWI owns a LOT of $TSLA. If they are liquidating, more pain to come.

https://twitter.com/x/status/1606568382228488192

 

[nativewolf]

Interesting. Both analysts think the Twitter effect is the biggest cause of the stock deterioration. Probably a viewpoint shared my many institutional investors.

Institutions also own the vast majority of TSLA.

 

[Brn2Run]

Maybe a conglomerate of oil companies. Buy it up and shut it down. Problem solved. .

Hahaha, or they convert all factories into ICE factories and pump out ICE Teslas..

 

[Artful Dodger]

If Tesla didn't do the Shanghai factory upgrade the market would think demand is great in China and TSLA would be over $200. Improving a factory cut the value of Tesla in half..

Haha, shortzes would have just used any other excuse to short. They've been organizing this bear raid for a long time. For them, it's more just like "whadya got?"

 

[TrendTrader007]

I have to hand it to current Tesla CEO for possibly being one of the most tone deaf CEOs in history. While the stock is down-11% all the guy can talk about is his social media platform
Tesla needs a new CEO. This guy needs to go

 

[Ogre]

Honestly, I think a huge chunk of the downturn is self-inflicted. More Tesla derivatives are traded than any other company. There was almost certainly more Tesla bought on margin than any other large company. Likely more than the next 2 combined.

So much options investing and margin trading has caused massive follow-on effects. The greedier we got, the bigger the weaknesses for the shortz to exploit. Buying Calls? MM need to short the stock to derisk. Buying shares on margins? Surprise, margin call!

Selling shares and buying calls? You are effectively doubling your shorting power even as you are telling yourself you are long TSLA.

I've seen many here have suggested that they are "Invested" in Tesla when what they have actually done is buy calls or use other derivatives which in turn give the MM and shorts more tools to apply against us. Eventually this will unwind and we'll come out the other end, but we've given them so many levers to pull it might last a while longer.

All of this combined with Musk's sales, shutdowns, rising interest rates, COVID in China, war in Ukraine, etc. While we've been leveraging up, what we've really done is given the shorts plenty of leverage to use against us.

 

[Singuy]

I have to hand it to current Tesla CEO for possibly being one of the most tone deaf CEOs in history. While the stock is down-11% all the guy can talk about is his social media platform
Tesla needs a new CEO. This guy needs to go

If you want TSLA to go to zero then sure

 

[Artful Dodger]

This is painful. Day after day of falling share price, it's relentless.
If Tesla hits 420,000 deliveries for Q4, that will mean a 42% increase for 2022 over 2021.
How can a profitable business growing 42% have it's share price reduce 70% in the same year? It makes no sense. The stock is under attack.
To quote Jeff Bezos, the stock is not the company. Small consolation.

To ape Richard the Third:

Now is the winter of our discontent,​

Made glorious summer by this son of Bork.​

This too shall pass.

Cheers to the Longs!

 

[TrendTrader007]

If you want TSLA to go to zero then sure

Really! Don’t be surprised if the guy is voted out within a year
Good Riddance
And I say this for simple reason that CEO is clearly not acting in best interest of shareholders and breaching his fiduciary duty by acting in a manner that is causing direct damages to shareholders
We need someone like Tim Cook. This fellow is best suited to run his social media platform