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

[StarFoxisDown!]

And Ihor is the oracle that we take as gospel??

You can bet your sweet ass there is naked short selling happening with TSLA and you can bet the corrupt SEC is not going to do anything about it! Naked short-selling occurs with every heavily traded and volatile stock. If he has really claimed it's not happening with TSLA, everything he says is suspect.

Oh he's claimed it's not happening.......multiple times.

It was so easy to watch the stock action in Q1 and Q2 and be 99.99% sure that naked shorting was being used, and used heavily. The volume alone in march, april, may was so high that there was no way it wasn't naked shorting. The number of available float of tradable shares was traded multiple times in May. In the same month, Ihor was tweeting that theres no naked shorting going on. Oh really Ihor

 

[NakedLong]

Elon said this, Elon said that. I will believe it when I see it. Elon is saying all those with good intentions and with the data he is seeing, but he is known to be a super optimist on some of these things. I trust Elon, but I want to verify.

I don't like to lump all of Elon's predictions in together because some of them are very hard predictions or guesses on difficult technological advances, and others are rather obvious to any insider engineer who is in the position of Elon.

In the case of range I suspect they have reasonably good data on how long current packs will last, and 500 is a simple extrapolation with small error range in its prediction. I would estimate a high confidence in this prediction.

Compare this to his less accurate future predictions of difficult new tech such as FSD or Falcon Heavy. These are entirely new technology stacks which had a lot of unknowns to Elon and Tesla/SpaceX when they first started predicting timelines for these. Even now the FSD predication has a huge amount of uncertainty because of the scale of the problem, although much less than in 2015.

So in gauging the accuracy of one of Elon's predictions you should ask:

1) Is this a current tech or a future tech?
2) Is this a radically new tech which is hard to develop or a continuation and refinement of existing tech?
3) How far along the development curve are they? Predictions get more and more accurate the closer to releasing a product.
4) How much confidence does Elon have in his prediction? He does not give SD qualifiers but you can assume they exist.
5) Is Elon giving a best case estimate, assuming nothing unexpected pops up?

I actually think if you take all of his predictions (taking into account difficult new tech and best case predictions), then he is quite reasonable in most of his predictions, or at the very least he had understandable reasons for giving an inaccurate estimate.

 

[humbaba]

The question Ihor is asking is legit: where's the motivation to naked short sell?

TSLA is easy and cheap to borrow, many of the large institutional owners and many retail brokerages are enhancing their returns by lending out stock. There's very little rational reason to do it.

A good question. I suspect part of it has to do with how they keep the borrow rate low, but maybe I'm just ignorant. Its funny because some people have claimed to not be able to get locates for $TSLA and he insists that there's plenty available. Including when he was very very wrong about the actual level of shorting in $TSLA.

Maybe he's right, but he has certainly made the claim. I was just showing that he has in response to a query by @StealthP3D

edit to add: and as was pointed above, maybe the naked shorting is required to supply the volume of selling the shorts want. I'm not going to claim to know the answer.

edited again: another possible reason is why bother to locate when they aren't intending to hold the short past the settlement period. They get three days before there's a failure to deliver. I think that there are many possible reasons.

 

[Fact Checking]

edited again: another possible reason is why bother when they aren't intending to hold the short past the settlement period. They get three days before there's a failure to deliver. I think that there are many possible reasons.

But that's not 'naked short selling' - it's part of the defined mechanism to short a stock. It only becomes 'naked' if there's a "failure to deliver" - which is rare according to Ihor (who worked at the trading desk of a broker-dealer) and according to market statistics.

The thing is, for large cap equities shorting doesn't in itself reduce the shares available to short, because in most cases the new owner of the virtual share created out of thin air will offer it to be lent out again. So even if there was zero window to short without having a borrowed stock lined up, it wouldn't really matter in practice except in rare cases like the VW short squeeze case where Porsche cornered the shorts via almost-illegal collusion with German banks.

So AFAICS there's no motivation and no need to 'naked short sell', because there's plenty of shortable stock available and the financing costs are very low. The kind of market manipulation shorts are doing is very much possible without naked shorting, it doesn't depend on any technical quirks of the stock market - it's primarily the result of a broad coalition of Wall Street analysts, mainstream and business media and hired trolls smearing Tesla non-stop. The resulting fraudulently negative sentiment, combined with the complex and little understood business model of Tesla, and the aggressive debt financed growth path is what causes Tesla to be shorted so highly - not naked short selling, IMHO.

 

[SarahsDad]

The economic cycle is not dead, but Catherine Wood of ARK Invest makes perfect sense explaining why conditions are ripe for a deflationary boom, lifting the top of the cycle to a new position.

The key ingredient, my interpretation, is a technology that is highly desirable which reduces the cost of energy. (lol, know any?) We saw that happen in 1900 with deployment of electricity grids.

Today we have wind, solar, batteries, EVs. Lazard latest figures put wind and solar at half the cost of fossils and one third the cost of nuclear. We all know that EVs halve the cost of transportation. The conditions are uniquely deflationary, meaning people can buy more with less, which stimulates the economy a little more, all while putting downward pressure on the oil price.

Lots of people on YouTube are saying it’s different this time, but few have worked out why. ARK is the exception.

Inverted Yield Curves Are Signaling a Deflationary Boom

Cathie Wood is either way out in left field or a genius. My money is on the latter ;-)

 

[Singuy]

I have so many conversations at work, and with family and friends about Tesla. Never once in those conversations has the etron or ipace or the Bolt come up. The leaf comes up from time to time, as that's my other car. And the i3 does very rarely.

The only people who talk about the etron and the ipace are either the shorts or diehards on this or other EV forums.

Like I said, no one orders the burger at the Chinese restaurant. I wouldn't buy a gas car from Tesla ever if they offered one. People are generally not very educated in the product they buy. It's really hard work trying to figure out this whole electric thing, so people generally pick the leader and go with that because it's the lazy option.

 

[elasalle]

https://www.businessinsider.com/tesla -model- x- outselling -jaguar-i-pace-audi-e-tron-2019- 8

First Bloomberg, now BI .... Herd mentality Deja Vu' ..All over again

 

[NakedLong]

Just like Nokia had a really hard time killing Apple.

Just like Like Sears had a really hard time killing Amazon.


It's over.

The old ICE companies are on a slow decent towards bankruptcy.

And the nail in the coffin will be all this big investment in EVs that don't pay off because they don't short change it and then can't compete with what Tesla is offering.


In the end it will be:

1. Tesla.
2. Another two or three EV startups that do deals to use Tesla's super charging network.
3. Various stragglers formed by mergers of ICE companies pooling whatever resources they have left to make a go at competing.

I was just thinking today about how existing auto will have a much harder time catching up to Tesla than Android or Nokia had catching up to the iPhone (not that Nokia managed to catch up - it took a new player in Android to compete)

Here are the big moats preventing existing auto from competing against Tesla:

1) Tesla has superchargers - it would take time as well as money to roll out something similar
2) Tesla has direct sales - the dealership model has a stranglehold on existing auto
3) Tesla has vertical integration - few middlemen taking a cut
4) Tesla is skilled at software - existing auto are terrible at software
5) Tesla has a strong company culture/structure/employees
6) Tesla has 17 years of experience in EV research and production - it takes time to research and build things like the gigafactory

It is interesting to compare the pros and cons Android faced in competing with the iPhone as there is quite a bit of overlap:

Android
1) Google had to go through the opcos for sales and bloatware - similar to dealer networks for exiting auto
2) Google had no vertical integration and relied on partnerships for building the hardware - unlike Tesla and iPhone but like existing auto
3) Google was good at software and engineering - like Tesla and Apple, but unlike existing auto
4) Google was bad at UX/UI design - unlike Tesla and Apple but like existing auto
5) Google had a strong company culture/structure/employees - like Tesla and Apple, unlike existing auto
6) Google had to get buy-in from external devs for writing apps for Play Store - as did Apple with the App Store. This is a 'critical mass' requirement similar to the Supercharger network for Tesla.

Despite several negatives listed above, Android was able to eventually be pretty much equal to the iPhone after 2-3 years.

Nokia
Nokia never really made it very far along the smartphone path until they lost all their market share. They basically got hung up on the physical keyboard and never wrote a modern operating system until it was too late. So in the case of Nokia is was simply a matter of company culture/leadership and being bad at writing software which was their downfall.

___

So this might be the biggest take away - that companies which cannot write software or predict how new tech is trending are going to die - much like most of existing auto. Maybe the ones who are embracing the EV revolution will survive if they up their software...

Direct sales and vertical integration are nice to haves - not essential but really help with the bottom line long term and the speed of tech cycles.

Charging networks are essential (as are service networks). You simply can't sell EVs without them.

I feel like the area the iPhone analogy breaks down the most is that building EVs requires the majority of the work in building the factory which builds the car, whereas the iPhone/Android/Nokia battle was won and lost on software and hardware design, but not on hardware manufacturing. Also, existing auto are competent enough at manufacturing not lose to Tesla on this front though.

 

[kengchang]

Did anyone see the information that VW's dieselgate fix only works between 10C-32C?

 

[Thekiwi]

I was just thinking today about how existing auto will have a much harder time catching up to Tesla than Android or Nokia had catching up to the iPhone (not that Nokia managed to catch up - it took a new player in Android to compete)

Here are the big moats preventing existing auto from competing against Tesla:

1) Tesla has superchargers - it would take time as well as money to roll out something similar
2) Tesla has direct sales - the dealership model has a stranglehold on existing auto
3) Tesla has vertical integration - few middlemen taking a cut
4) Tesla is skilled at software - existing auto are terrible at software
5) Tesla has a strong company culture/structure/employees
6) Tesla has 17 years of experience in EV research and production - it takes time to research and build things like the gigafactory

It is interesting to compare the pros and cons Android faced in competing with the iPhone as there is quite a bit of overlap:

Android
1) Google had to go through the opcos for sales and bloatware - similar to dealer networks for exiting auto
2) Google had no vertical integration and relied on partnerships for building the hardware - unlike Tesla and iPhone but like existing auto
3) Google was good at software and engineering - like Tesla and Apple, but unlike existing auto
4) Google was bad at UX/UI design - unlike Tesla and Apple but like existing auto
5) Google had a strong company culture/structure/employees - like Tesla and Apple, unlike existing auto
6) Google had to get buy-in from external devs for writing apps for Play Store - as did Apple with the App Store. This is a 'critical mass' requirement similar to the Supercharger network for Tesla.

Despite several negatives listed above, Android was able to eventually be pretty much equal to the iPhone after 2-3 years.

Nokia
Nokia never really made it very far along the smartphone path until they lost all their market share. They basically got hung up on the physical keyboard and never wrote a modern operating system until it was too late. So in the case of Nokia is was simply a matter of company culture/leadership and being bad at writing software which was their downfall.

___

So this might be the biggest take away - that companies which cannot write software or predict how new tech is trending are going to die - much like most of existing auto. Maybe the ones who are embracing the EV revolution will survive if they up their software...

Direct sales and vertical integration are nice to haves - not essential but really help with the bottom line long term and the speed of tech cycles.

Charging networks are essential (as are service networks). You simply can't sell EVs without them.

I feel like the area the iPhone analogy breaks down the most is that building EVs requires the majority of the work in building the factory which builds the car, whereas the iPhone/Android/Nokia battle was won and lost on software and hardware design, but not on hardware manufacturing. Also, existing auto are competent enough at manufacturing not lose to Tesla on this front though.

To piggyback on your post - one other aspect worth comparing is the hardware exclusivity angle. The most similar aspects from a production standpoint are being able to design software for specific hardware, and vice versa.

But also worth mentioning is another period in the earlier part of this decade when Apple switched to Unibody Aluminium designs for its products, which vastly increased the rigidity of devices while requiring no big weight increase and allowing more room for components. The problem with the unibody design is that there was no existing mass production solution for carving unibody casings from aluminium blocks. It could only be done on boutique milling machines usually used for creating one-off prototype designs.

So how did Apple solve the problem of being able to make this design work at the required rate of millions of units a week?

Simple solution: they purchased tens of thousands of the boutique prototyping machines. The effect being that they locked up the available supply of these machines for literally years - with competitors unable to copy the unibody design production process for mass produced Items.

Its not a perfect comparison, but I think its kind of similar to where Tesla is with its Battery production - competitors literally currently can’t get the component supply they need, not because they aren’t allowed to use them but simply from a lack of available supply. However I think the battery in an EV is a much more crucial element than the unibody design was for Apple products (no Apple competitors were prevented from shipping competing smartphone products for example).

 

[Singuy]

I was just thinking today about how existing auto will have a much harder time catching up to Tesla than Android or Nokia had catching up to the iPhone (not that Nokia managed to catch up - it took a new player in Android to compete)

Here are the big moats preventing existing auto from competing against Tesla:

1) Tesla has superchargers - it would take time as well as money to roll out something similar
2) Tesla has direct sales - the dealership model has a stranglehold on existing auto
3) Tesla has vertical integration - few middlemen taking a cut
4) Tesla is skilled at software - existing auto are terrible at software
5) Tesla has a strong company culture/structure/employees
6) Tesla has 17 years of experience in EV research and production - it takes time to research and build things like the gigafactory

It is interesting to compare the pros and cons Android faced in competing with the iPhone as there is quite a bit of overlap:

Android
1) Google had to go through the opcos for sales and bloatware - similar to dealer networks for exiting auto
2) Google had no vertical integration and relied on partnerships for building the hardware - unlike Tesla and iPhone but like existing auto
3) Google was good at software and engineering - like Tesla and Apple, but unlike existing auto
4) Google was bad at UX/UI design - unlike Tesla and Apple but like existing auto
5) Google had a strong company culture/structure/employees - like Tesla and Apple, unlike existing auto
6) Google had to get buy-in from external devs for writing apps for Play Store - as did Apple with the App Store. This is a 'critical mass' requirement similar to the Supercharger network for Tesla.

Despite several negatives listed above, Android was able to eventually be pretty much equal to the iPhone after 2-3 years.

Nokia
Nokia never really made it very far along the smartphone path until they lost all their market share. They basically got hung up on the physical keyboard and never wrote a modern operating system until it was too late. So in the case of Nokia is was simply a matter of company culture/leadership and being bad at writing software which was their downfall.

___

So this might be the biggest take away - that companies which cannot write software or predict how new tech is trending are going to die - much like most of existing auto. Maybe the ones who are embracing the EV revolution will survive if they up their software...

Direct sales and vertical integration are nice to haves - not essential but really help with the bottom line long term and the speed of tech cycles.

Charging networks are essential (as are service networks). You simply can't sell EVs without them.

I feel like the area the iPhone analogy breaks down the most is that building EVs requires the majority of the work in building the factory which builds the car, whereas the iPhone/Android/Nokia battle was won and lost on software and hardware design, but not on hardware manufacturing. Also, existing auto are competent enough at manufacturing not lose to Tesla on this front though.

Software software software!

Tesla is also going to amass a very nice positive feedback loop in which millions of Tesla cars on the street = new opportunity for revenue stream from 3rd party developers. So the more cars Tesla sells, the more software support they get, which results in more car sells.

The only saving grace Legacy has with EVs will be outsourcing to Google and make a unified software system like what happened with android. But we all know that's not going to happen ever due to good old fashion intradepartmental politics. Also if you leave a 3rd party to handle this, there's a good chance a bug or something will leave people stranded.

 

[RobStark]

Not until they're all customers, including all the people reading the tweets who aren't following.

The choir isn't the customer base.

It is also fans of the company that would buy a Tesla if the had the money and a Tesla product fit their needs. They don't need convincing.

There are approximately 2.5B people in countries Tesla does business in that don't follow Elon Musk and don't read his tweets.

 

[Carl Raymond]

Cathie Wood is either way out in left field or a genius. My money is on the latter ;-)

Yeah. I don’t believe they invented the deflationary boom theory to draw people to their fund. I imagine somebody was a keen historian and observer and identified the parallel conditions, and that led to their selection of disruptive industry stocks.

They’ve been talking about the yield curve flattening for a while. They had no way to be certain it would invert. Prescient.

 

[NakedLong]

Software software software!

Tesla is also going to amass a very nice positive feedback loop in which millions of Tesla cars on the street = new opportunity for revenue stream from 3rd party developers. So the more cars Tesla sells, the more software support they get, which results in more car sells.

The only saving grace Legacy has with EVs will be outsourcing to Google and make a unified software system like what happened with android. But we all know that's not going to happen ever due to good old fashion intradepartmental politics. Also if you leave a 3rd party to handle this, there's a good chance a bug or something will leave people stranded.

The numbers on making Tesla a platform for devs do not work out. There are 500K Teslas now. Compare that to the 3 billion smartphones in the world. Thats 3 orders of magnitude more. You can't make any serious money from a few million devices, and the amount of engineering effort to build a good operating system is very very great, and would require a total rewrite of their current system... think order of 3 years work. Elon said as much recently.. can't remember where, but you can be certain that there will be no app store any time soon, though you might see some specific, tightly integrated apps which collaborate with Tesla - eg Spotify/games.

An analogy is that building a car is quite easy compared to building a factory to build a car. Same can be said of building the Tesla software vs building the Tesla software as an operating system for other apps to run on.

To calculate the numbers an iPhone user spends 88 a year on apps. So if Tesla writes an OS API for devs in the next 3 years and their fleet jumps to 5 million then they can make 132 million a year from this, if they take a 30% cut. This is not worth the effort when the returns on FSD software are in the billions or more...

Also, kick starting an app community costs money - devs don't want to work on a platform with so few users, so you have to essentially pay them. The opportunity cost for a developer is not going to favour Teslas over Android or iOS.

 

[Singuy]

The numbers on making Tesla a platform for devs do not work out. There are 500K Teslas now. Compare that to the 3 billion smartphones in the world. Thats 3 orders of magnitude more. You can't make any serious money from a few million devices, and the amount of engineering effort to build a good operating system is very very great, and would require a total rewrite of their current system... think order of 3 years work. Elon said as much recently.. can't remember where, but you can be certain that there will be no app store any time soon, though you might see some specific, tightly integrated apps which collaborate with Tesla - eg Spotify/games.

An analogy is that building a car is quite easy compared to building a factory to build a car. Same can be said of building the Tesla software vs building the Tesla software as an operating system for other apps to run on.

To calculate the numbers an iPhone user spends 88 a year on apps. So if Tesla writes an OS API for devs in the next 3 years and their fleet jumps to 5 million then they can make 132 million a year from this, if they take a 30% cut. This is not worth the effort when the returns on FSD software are in the billions or more...

Yes but the first 3rd party smartphone app written for 3 billion users. What Tesla is doing already is essentially porting 3rd party apps already. They are paying for the licensing fees at most likely a reduced cost just have the app having an advertisement vehicle (pun intended).

There may not be an app store since all apps must be validated for the safety of the passenger and the car's reliability. But the popularity of a Tesla with many units sold dilutes the licensing fees and the engineering cost vs say the iPace that sold only 190 cars last month. This essentially allows Tesla's true cost per app to be a dollar or two spread out over millions of cars.

 

[Artful Dodger]

I will believe it when I see it.

Tesloop’s Tesla Model S Surpasses 400,000 miles (643,737 kM) — Tesloop

Here is a Summary Table of all Tesloop's high mileage vehicles as of Feb 2019:

 

[S3XY]

Sorry. I wish I could help you. Unfortunately, I have reached the same conclusion: i.e., what is to stop the manipulation? IMO, one of two things would throw a wrench into their ability to cap: 1) The SEC revoking the Madoff Exception (allowing "market makers" to short without locating/borrowing shares) or, 2) reinstating the uptick rule (which they mysteriously canceled in 2007, after 74 years of it working to keep orderly markets). Of course, even if there were no TSLA, the SEC would never undo either of these short-manipulating tools. But now, with their apparent commitment to the conspiracy, definitely not. IMO.

Two words, Elizabeth Warren.

 

[Artful Dodger]

And Ihor is the oracle that we take as gospel??

You can bet your sweet ass there is naked short selling happening with TSLA and you can bet the corrupt SEC is not going to do anything about it! Naked short-selling occurs with every heavily traded and volatile stock. If he has really claimed it's not happening with TSLA, everything he says is suspect.

Yes, Ihor has stated he doesn't believe naked shorting is occurring. On May 24, 2019 Ihor tweeted (in part) "0% are naked shorts, 0% are executed by Yeti or the Loch Ness Monster or set up via Russian collusion."

I wrote a full take-down of Ihor's position regarding naked shorting by market makers in this comment here on May 25, 2019. At that time I wrote that Ihor's argument:

• seeks to trivialize the issue by introducing 3 strawmen
  
• drags in Red/Blue dogwhistle politics to polarize opinions into "us/them"
  
• ignores actual issue, which is naked shorting by Market Makers

On Aug 14, 2019 after the latest SI data became available for TSLA, Ihor explained in response "But +\- 5% is damn good to me." So now at least we know his parameters.

Regards,
Lodger

 

[N5329K]

Here’s a long but worthwhile discussion about the many things Tesla is doing right when it comes to building cars, and some of the things it does poorly. Some interesting insights about the “competition”, battery chemistry, hybrid battery/ultracapacitor systems, , and who and what to be looking out for.

Robin

 

[JRP3]

The choir isn't the customer base.

It is also fans of the company that would buy a Tesla if the had the money and a Tesla product fit their needs. They don't need convincing.

There are approximately 2.5B people in countries Tesla does business in that don't follow Elon Musk and don't read his tweets.

Tesla has managed to grow their market without paid advertising. Not sure why you think that suddenly needs to change now that word of mouth and social media exposure keep increasing.