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

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Ihor Dusaniwsky (@ihors3) | Twitter

A great resource to follow on Twitter is Ihor Dusaniwsky. He regularly publishes details on up to the day short interest using propriety
algorithms. Here was a three year view he published a few days ago just for asking.

Market Watch quotes it at 27.5M @ 13 Dec 2019 with 20.55% of float -- this is the most recent number and was released yesterday. The float figure depends on how you size the public float which apparently varies. Of course, that was right before the recent pop so if there were short covering it would not be reflected in it.

 

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[URL='https://twitter.com/ihors3']Ihor Dusaniwsky (@ihors3) | Twitter -- Latest post on open short interest Dec 24[/URL]

$TSLA short int is $10.53bn ; 25.13mm shs shorted; 18.78% of float; 0.30% borrow fee. Shs shorted down -3.4mm shs, -12%, over last 30 days as price rose +26% & down -325k shs over last week.Shorts down -$2.81bn in 2019 mark-to-market losses;down -$2.31bn Dec & down -$6mm today.

 

[gerebgraus]

WOW, to be quoted by Popafox.

Will inventory of China made model 3's be counted as inventory or work in progress ?

EDIT: Inventory model 3's look very low. Also no SR+'s. I think we will have some people who ordered, that wont get their cars.

Model 3 inventory is indeed very low, but it is higher than it seems. There are SR+ -s as well. We just bought one. Most of the inventory is not listed on the website.

 

[HG Wells]

Recently received a text. Build date is expected to be tomorrow. Either this is a good thing cause it’ll be a ‘Wednesday car’ or it’s going to be built like crap cause people are bitchin’ about working on a holiday. LOL


Order date: 10/19
VIN in source: 12/23
Build date: 12/25
Est delivery: 12/27
Location: Sacramento, CA
M3P blue/black Autopilot

Looks like they are building cars today (Christmas day) !

 

[Fred42]

Water problem can be solved by distilling sea water. Elon mentioned it only costs 10 cents per ton. He is correct regarding cost, he probably looked into this. I'm sure he can find ways to ship the water: pipe, tunnel, truck... then re-use the water. If he decides to build a tunnel to transport water to dry places, that's going to change a lot of things, not just for Tesla usage. New cities could be built.

Maybe so. Cost, environmental challenges, regulation, opposition. But it looks like it could be done if necessary.
Desalination Is Booming as Cities Run out of Water

 

[M3Rider]

I had an urge to reserve one last night. I’m scared to talk about that with my better half, though...

I decided I’d rather have cybertruck over Model Y if it can comfortably seat 6

You decided for her? That's a tough call.

I'm still keeping the Y, it is a more efficient day-to-day car for her. CT can be a better "snow day" option for her due to dynamic suspension / higher clearance and for me it will be a perfect offroad vehicle to take to the mountains - don't need to care about scratches, dings, hail (more frequent in the mountains), plus 500m range means no worries about charging/getting back.

If you want to replace her Y with CT as her primary driver, I'd start coming clean... like, you know honey, I put this refundable $100 down just in case...few weeks later - what do you think about having more space and clearance? ... You know how mean people scratch Teslas? They can't do it to a CT... You know what the safest Tesla on the road is going to be? Mass of the vehicle plays a big role...

 

[Electroman]

I am confused as to how the shorts are holding at this high level of SP. When it was at 280, there was speculation most of them will be squeezed out between 320 to 350, leaving only those that shorted at the previous high of 380.

350 came and went, and the short volume although a bit down, was quite resilient. Then the talk was all shorts will be margin called above 380. Now we at a level that very few even expected three months ago, and even then short interest is very high.

What is happening? how are the shorts holding for so long? Wondering if most of the big shorts like Chanos, Unicorn and the vocal ones like Mark BS are being bankrolled by vested interests like UAW, NADA, Big Oil and the Russians

 

[SteveG3]

I am confused as to how the shorts are holding at this high level of SP. When it was at 280, there was speculation most of them will be squeezed out between 320 to 350, leaving only those that shorted at the previous high of 380.

350 came and went, and the short volume although a bit down, was quite resilient. Then the talk was all shorts will be margin called above 380. Now we at a level that very few even expected three months ago, and even then short interest is very high.

What is happening? how are the shorts holding for so long? Wondering if most of the big shorts like Chanos, Unicorn and the vocal ones like Mark BS are being bankrolled by vested interests like UAW, NADA, Big Oil and the Russians

Yes, that's what, for several years, a growing number of us have come to think is more and more likely. It fits with the breadth and depth of the misinformation campaign. Such enormous players have much more reach then Cramer (paraphrasing), "calling up the bozo reporter at the WSJ ... calling up Pisani* at CNBC... and making sure your false narrative gets in the media."

*(in that video Cramer named a specific reporter at CNBC, I'm not 100% that it was Pisani)

 

[mongo]

I am more and more subscribing to the idea, that this is being done on purpose, in preparation for Tesla's pre-announced, terrible, horrible, no good, very bad Q1. Elon has said for about 2 quarters now, that Q1 will suck - he did not elaborate, but I would think the end of US subsidies, post-high Dutch deliveries/tax change and maybe Model Y production start will eat into deliveries and margins.

NO NO NO NO NO NO NO NO
Elon did not say Q1 2020 would suck .*
What he said in the Q2 earnings call was that it might be tough to get quarter over quarter delivery increases for Q1 and Q2. Since that call, GF3 has entered mid volume production mode and orders have stayed above production.

Tesla, Inc. (TSLA) Q2 2019 Earnings Call Transcript | The Motley Fool

A.M. Sacconaghi -- Sanford C. Bernstein -- Analyst

Yes, thank you. I was wondering if you can comment about whether you felt that Q2 benefited from consumers in the US sort of rushing out to buy Model 3 in advance of the declining federal tax credit, a phenomena that you sort of saw in Q4? And part of the reason I ask is, at least by my analysis, it looks like maybe 70% of the Model 3 sold in the quarter were in the US, which is sort of higher than your normalized percentage of US sales. And so do you feel that, that phenomena may have occurred in Q2? And are you still confident that Q3 deliveries can improve sequentially? And beyond the data point that you provided on the call that the orders quarter data better than last quarter, is there anything else you can point to that provides that confidence?

Elon Musk -- Chief Executive Officer

Yeah. I think we'll -- demand in Q3 will exceed Q2. It has thus far and I think we'll see some acceleration of that. So -- and then I think Q4 will be, I think very strong. So we expect that quarter-over-quarter improvements. I think Q1 next year will be tough. I think Q3 or 4 will be good, Q1 will be tough. Q2 will be not as bad, but still tough. And then I see like Q3 and Q4 next year will be incredible.

Zachary Kirkhorn -- Chief Financial Officer

Yes, just to add on the tax credit step down, so the step down from Q2 to Q3 was significantly lower than the step down from Q4 to Q1. It's also important to keep in mind that there's seasonality in the auto business in Q1, which also is part of the impact. But generally speaking, our order rates so far this quarter is higher than where we were at this point in Q2, and we haven't seen a significant impact on US-based orders as a result of the step down.

Q3 call Tesla, Inc. (TSLA) Q3 2019 Earnings Call Transcript | The Motley Fool
Zachary Kirkhorn -- Chief Financial Officer

My third and final point is around demand and growth. Our global order rate remains strong and continues to increase. Despite increases to production levels, our order backlog has been growing, and quarter to date orders are significantly higher than at this point in last quarter. In the immediate term, we're focused on increasing production of Model 3 and Model S and Model X as quickly as we can. The bulk of this work involves continued optimization of existing equipment. We've also made targeted adjustments to pricing to better balance supply and demand.

Our pace of execution on these factories and capacity expansion has increased significantly. As Elon mentioned, the first phase of Gigafactory Shanghai is already production-ready, and we've been able to pull in the timeline for other major projects. Overall, we are quickly turning the corner for our next phase of growth and our financial health continues to strengthen. We remain focused on reducing cost which enables rapid investments in future programs and growth.

/Quote
Which I read as, GF3 volume addition in Q1, Y volume addition in Q2, demand outpacing production in general.


* Unless you are short TSLA, then yeah Q1 is going to suck, big time

 

[JustMe]

I am confused as to how the shorts are holding at this high level of SP. When it was at 280, there was speculation most of them will be squeezed out between 320 to 350, leaving only those that shorted at the previous high of 380.

350 came and went, and the short volume although a bit down, was quite resilient. Then the talk was all shorts will be margin called above 380. Now we at a level that very few even expected three months ago, and even then short interest is very high.

What is happening? how are the shorts holding for so long? Wondering if most of the big shorts like Chanos, Unicorn and the vocal ones like Mark BS are being bankrolled by vested interests like UAW, NADA, Big Oil and the Russians

Oh, brother they are holding and doubling down because they BELIEVE. I just had a Twitter exchange with the bottom of the barrel at Teslaqueue. A nasty nitwit that cursed, insulted me, and even showed me memes. Not because I argued or poked, but just presented a different point of view and a couple of data points he called out as obvious lies/fakes. Then he was roundly hailed and retweeted by his chums.

They are just as sure as ever Tesla is a fraud. There is nothing that will stop these people short of personal bankruptcy. I don’t know how much of the billions in short interest is held by such but jobs, but billionaires can be crazy too.

Plus oil interest etc. sure.

 

[M3Rider]

I am confused as to how the shorts are holding at this high level of SP. When it was at 280, there was speculation most of them will be squeezed out between 320 to 350, leaving only those that shorted at the previous high of 380.

350 came and went, and the short volume although a bit down, was quite resilient. Then the talk was all shorts will be margin called above 380. Now we at a level that very few even expected three months ago, and even then short interest is very high.

What is happening? how are the shorts holding for so long? Wondering if most of the big shorts like Chanos, Unicorn and the vocal ones like Mark BS are being bankrolled by vested interests like UAW, NADA, Big Oil and the Russians

I bought $350 and held at $180. It was stressful and I started doubting if I am still sane or not.

For retail shorts with comparable conviction in their bet, the same exercise will be tougher, as losses are not limited. If you got puts, the losses are limited, you just lose everything you paid for the puts.

In theory, they can go longer from here before going crazy and seeing there's no way out (if shorted at higher SP).

There's also an option that most retail shorts covered, but new shorts opened new short positions at 380 or 400, so they have more time to roll before seeing the results.

If we're talking hedge funds, etc. and they invested 5-10% of their account into TSLA short, then losses are not yet critical and can be covered by other equity.

If there's a conspiracy/ oil money acting as "expense", then these positions are planned accordingly and will not be wiped out quickly / easily.

 

[humbaba]

if you've been following Ihor then hopefully you've notice that his information on $TSLA short interest is significantly wrong at significant points in time. Like claiming that the stock was dropping due to weak longs and not increased shorting. In fact, he claimed that short interest was dropping (which would have been rational at the low stock price) when in fact it was increasing. That was this last spring and again in the fall. Of course he corrects his incorrect data after the official numbers are released -- to see how wrong he is you can't just take that graph you showed, but instead look at what he was saying at the time.

So, yeah, its nice that he posts his fantasies about what $TSLA short interest is. But anyone using it as a basis for trading? Foolish.

Ihor Dusaniwsky (@ihors3) | Twitter

A great resource to follow on Twitter is Ihor Dusaniwsky. He regularly publishes details on up to the day short interest using propriety
algorithms. Here was a three year view he published a few days ago just for asking.

View attachment 492860

 

[humbaba]

I bought $350 and held at $180. It was stressful and I started doubting if I am still sane or not.

For retail shorts with comparable conviction in their bet, the same exercise will be tougher, as losses are not limited. If you got puts, the losses are limited, you just lose everything you paid for the puts.

In theory, they can go longer from here before going crazy and seeing there's no way out (if shorted at higher SP).

There's also an option that most retail shorts covered, but new shorts opened new short positions at 380 or 400, so they have more time to roll before seeing the results.

If we're talking hedge funds, etc. and they invested 5-10% of their account into TSLA short, then losses are not yet critical and can be covered by other equity.

If there's a conspiracy/ oil money acting as "expense", then these positions are planned accordingly and will not be wiped out quickly / easily.

An important point here is that, unlike longs, shorts are not required to disclose their positions. So investors will know if the Saudis buy back to 5% or more of $TSLA, but the regulators don't think its important for investors to know who has a large short position (and might be lying or otherwise committing securities fraud to protect their "investment").

My expectation is that the retail shorts don't amount to a significant portion of the short interest and that it is a comparatively small number of parties that hold the majority of the short interest. But we'll never know unless they out themselves.

 

[SteveG3]

Oh, brother they are holding and doubling down because they BELIEVE. I just had a Twitter exchange with the bottom of the barrel at Teslaqueue. A nasty nitwit that cursed, insulted me, and even showed me memes. Not because I argued or poked, but just presented a different point of view and a couple of data points he called out as obvious lies/fakes. Then he was roundly hailed and retweeted by his chums.

They are just as sure as ever Tesla is a fraud. There is nothing that will stop these people short of personal bankruptcy. I don’t know how much of the billions in short interest is held by such but jobs, but billionaires can be crazy too.

Plus oil interest etc. sure.

these sound like techniques not so infrequently used by people who know they don't actually have an argument based on facts and reason. a fair amount of tslaq could be just paid disinformers. not saying some aren't just bystanders who got sucked into the misinformation campaign and are just acting emotionally over their own money... but, a fair amount could just be paid trolling, disinforming, well aware their claims are full of, uh, sugar.

quick example: Anton Wahlman actually has a quite capable mind. years ago I'd spend time on Seeking Alpha. I had a back and forth with Wahlman in SA's comments section, where I'd post facts, and he'd post cheeky middle school style twisting from facts and tossing back rubbish. It got to a humorous point, and, I don't remember what I wrote to him, but, I got him to eventually respond by crowing about how one of his greatest gifts is to be able to argue a point utterly apart from whether he agrees with it or he actually believes the opposite.

 

[JustMe]

these sound like techniques not so infrequently used by people who know they don't actually have an argument based on facts and reason. a fair amount of tslaq could be just paid disinformers. not saying some aren't just bystanders who got sucked into the misinformation campaign and are just acting emotionally over their own money... but, a fair amount could just be paid trolling, disinforming, well aware their claims are full of, uh, sugar.

quick example: Anton Wahlman actually has a quite capable mind. years ago I'd spend time on Seeking Alpha. I had a back and forth with Wahlman in SA's comments section, where I'd post facts, and he'd post cheeky middle school style twisting from facts and tossing back rubbish. It got to a humorous point, and, I don't remember what I wrote to him, but, I got him to eventually respond by crowing about how one of his greatest gifts is to be able to argue a point utterly apart from whether he agrees with it or he actually believes the opposite.

Well maybe you’re right. Whatever the case, it’s obviously a total waste of time to engage people like that.

 

[SteveG3]

Well maybe you’re right. Whatever the case, it’s obviously a total waste of time to engage people like that.

yup, I stopped spending time on Seeking Alpha for that reason.

fwiw, what I think can be of some use is trying to raise awareness of the con game that appears to be going on, rather than engage those running the con. this is why I try to point out the long term nature of the massive short position (including my extreme skepticism that 2013 was a short squeeze), the massive disinformation campaign run through such a large portion of the media, etc., all pieces consistent with a big con. could also result in more people thinking critically re where else the media may also be in use to run disinformation cons.

 

[JustMe]

yup, I stopped spending time on Seeking Alpha for that reason. what I think can be of some use is trying to raise awareness of the con game that appears to be going on, rather than engage those running the con. this is why I try to point out the long term nature of the massive short position (including my extreme skepticism that 2013 was a short squeeze), the massive disinformation campaign, etc., all pieces consistent with a big con.

Good points. I expect a lot of the riff raff will be shaken off by the end of 2020. Last I checked, 27 out of 27 analysts covering Tesla predict strongly positive earnings next year. Add to that GF3 ramping, and Model Y, and S&P 500. Geez, I’m getting goosebumps.

 

[Big Earl]

I’ve been traveling for a few days, so I didn’t get an opportunity to post my solidarity buy.

Happy $420, everyone! (And merry Christmas, too).

 

[Artful Dodger]

Oh, brother they are holding and doubling down because they...

Actually, short interest (in monetary terms) has remained consistant at about $10B. The simplist explanation for this is that shorts are being steadily forced to buy shares (either via margin calls or Broker's capital requirements), while their committed capital remains the same (NOT doubling down).

IOW, their total number of shares sold short gradually decreases, but total value of short interest owed remains constant.

The long game for TSLA is that if short interest remains fixed forever at $10B, then through growth TSLA will eventually achieve a 'normal' level of short interest (say, ~2% like other large Cap equities such as Apple or Amazon). However, this level doesn't occur until TSLA reaches a Market Cap of around $500B.

That MktCap for 'normal' levels of short interest equates to a SP around $2,833 which implies roughly 6x revenues, or about 5 years from now at a 50% CAGR.

However, this scenario seems unlikely to me. I think shorts will abandon their positions en masse after S&P 500 inclusion, when the writing on the wall is finally in 12 meter high letters. I say a '5-yr slow burn' is unlikely. Overall, shorts are already looking to buy the dips, rather than shorting the peaks.

I think Christmas 2020 will see a very different market place for TSLA, and a very different public/media perception of the Company.

Cheers!

 

[SteveG3]

Actually, short interest (in monetary terms) has remained consistant at about $10B. The simplist explanation for this is that shorts are being steadily forced to buy shares (either via margin calls or Broker's capital requirements), while their committed capital remains the same (NOT doubling down).

IOW, their total number of shares sold short gradually decreases, but total value of short interest owed remains constant.

The long game for is that if short interest remains fixed forever at $10B, then through growth TSLA will eventually achieve a 'normal' level of short interest (say, ~2% like other large Cap equities such as Apple or Amazon). However, this level doesn't occur until TSLA reaches a Market Cap of around $500B.

That MktCap for 'normal' levels of short interest equates to a SP around $2,833 which implies roughly 6x revenues, or about 5 years from not at a 50% CAGR.

However, this scenario seems unlikely to me. I think shorts will abandon their positions en masse after S&P 500 inclusion, when the writing on the wall is finally in 12 meter high letters. I say a '5-yr slow burn' is unlikely. Overall, shorts are already looking to buy the dips, rather than shorting the peaks.

I think Christmas 2020 will see a very different market place for TSLA, and a very different public/media perception of the Company.

Cheers!

A falsifiable statement re the nature of the bulk of the short position, I like it!

hopefully, that assertion gets put to the test by this summer or so. I'll be happy if it turns out the idea I find more compelling- that the short position is part of a deep pocketed bigger game that still has at least a few more years to it- turns out to be false : )