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

[Artful Dodger]

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 : )

FALSE.

Cheers, Brother!

P.S. Nasdaq 100 Futures are UP: 8,737.00 +7.50 +0.09%

 

[ZeApelido]

A great resource to follow on Twitter is Ihor Dusaniwsky.

Another great resource to follow on Twitter is Treelon Tusk.

 

[Tenable]

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

Most funds holding TSLA short have massive positions long elsewhere. Their TSLA position would be protected by portfolio margin, they are unlikely to be at risk of being forced to cover. Some funds have rules that dictate their actions and may be required to reduce exposure as the position increases in $ value.

I think (my opinion) its most likely that these large shorts view Tesla as primarily (or exclusively) an automaker. An automaker valued at $76BN dollars while making a fraction of the cars and profit of lesser valued competitors. They believe that the valuation of Tesla is built on hopes and dreams and that time is on their side. They believe that unless everything goes perfectly, eventually "reality" will catch up with Tesla and its share value will implode. They are playing their perceived probabilities. In life things rarely go perfectly. They are waiting for the inevitable slowdown, fatigue, or failure of the company. These aren't nefarious foreign interests. Just greedy funds with little aversion to risk.

 

[StealthP3D]

Just a look-see on the chart:

View attachment 492753

TSLA just touched ~180 4 times (as a downtrend):
1. 3/2015: Tesla announces hands-free driving (i.e. Autopilot) Search
2. 1/2016 - 3/2016: Paris Climate Accord was signed in 11/2015 - 12/2015, Operation of Giga1 started, Model 3 unveiling Search
3. 11/2016: Trump elected as POTUS
4. 5/2019: 1/2019 - 5/2019 was the main building phase of Giga3, car insurance, safety features, massive FUD Search

Just wanted to share. Don't know what to make of it right now (in a general sense all of the dates kinda make sense from a market reaction standpoint).

I love this long-term chart view!

IMO, this is the look of a real break-out. Where she ends, no one knows!

 

[Artful Dodger]

Dec. 26, 4:04 a.m. EST
Pre-market 426.00 +0.75 (0.18%)

Update:
$429.00 (04:17:50 AM)

 

[sundaymorning]

Dec. 26, 4:04 a.m. EST
Pre-market 426.00 +0.75 (0.18%)

$428 now, what’s going on, morning margin calls?

poor Tim from CNBC is going to get squeezed, he should have covered at $370 like he originally planned. Oh well, I’m glad he was so convinced about his short position that he decided to ride this one out, maybe he meant $470s?

 

[Artful Dodger]

$428 now, what’s going on?

SP has been riding the Upper-BB over the last 9 trading sessions, increasing an avg of about $7.75 per day ($62/8days). Look at the RED curve in this chart: (EDIT: Updated chart to 09:30 am, Dec 24, 2019)

If shorts need to cover at this low volume time of the trading day, they should expect to pay full price!

EDIT: Notice the Upper-BB at the Opening Bell on Dec 24 was $423.34 and the Upper-BB has increased by an avg off $7.67 over the last 9 days. A Pre-market price of $429.00 is only $5.66 above that, and we could anticipate an upward bound move of at least that for today's Open. We'll know by 09:30 EST but of course traders buying in the 4 am hour have to guess where the market price will be at the Opening.

Cheers!

 

[NicoV]

$428 now, what’s going on, morning margin calls?

I love the smell of a new ATH in the morning. 428.99

 

[sundaymorning]

SP has been riding the Upper-BB over the last 9 trading sessions, increasing an avg of about $7.67 per day ($62/9days). Look at the RED curve in this chart:

View attachment 492897

If shorts need to cover at this low volume time of the trading day, they should expect to pay full price!

Cheers!

This is one of the strongest pre-market I’ve seen since earnings back in October.

I’m only seeing 3k shares in volume so far on my phone, anyone seeing something different in volume?

 

[UncaNed]

SP has been riding the Upper-BB over the last 9 trading sessions, increasing an avg of about $7.67 per day ($62/9days). Look at the RED curve in this chart:

View attachment 492897

If shorts need to cover at this low volume time of the trading day, they should expect to pay full price!

Cheers!

Why would they have to cover at this time instead of MMD?

 

[lascavarian]

I love the smell of a new ATH in the morning. 428.99

Humm, must have been some bullish a Tesla talk at the family get together.

 

[sundaymorning]

I love the smell of a new ATH in the morning. 428.99

Rise and shine shorts, 2019 hasn’t ended yet. You still have to wake up, brush your teeth, put on a grin for work and start thinking about digging a bit deeper into your 401k retirement account to cover. Retiring at 65 isn’t ideal anyway...

 

[Artful Dodger]

Why would they have to cover at this time instead of MMD?

Couple of reasons to buy now:

• voluntarily: Short thinks SP will be higher at the Open, and/or
• involuntarily: Short has been margin called, Broker will force purchase of shares at the Opening

This is the very definition of a mini-squeeze. But as the SP advances by $5/day, more and more capital reserves are required for shorts to maintain their positions.

I think we've seen they're not adding Capital, but gradually buying shares to keep their accounts above their broker's reserve requirements. This is a slow burn, but I like it. Each ATH throws fuel on the fire.

Then dem Shortzes got this to worry about:

• P&D Report by next Friday, anticipation is high for record numbers
  
• When does GF3/Shanghai splash 1st Deliveries Headlines all over the News?
• Profitable Q4 results likely coming in 4 weeks
• Even a chance of a blowout Q4 makes shorts queasy

Cheers!

 

[Sudre]

Why would they have to cover at this time instead of MMD?

Could be they had a margin call Tuesday and they didn't cover so the cover is now being forced.

 

[deffu]

Could be they had a margin call Tuesday and they didn't cover so the cover is now being forced.

I think for retail investors, brokers allow them 1 week to add funds or cover for margin calls. So short squeez may happen 1 week after sp run up. But this is for retail investors， not sure about hedge funds. This is based on my personal experiences been margin called couple times being long tsla in 2018/2019

 

[T@oo]

I see a couple of not so fun posts have been deleted. Good. And guys, remember:

Go Tesla!

 

[Dreadnought]

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

Since there is no "Thank you, couldn't agree more" button, have to do it verbally.

And despite increasing production capacity in Fremont and GF4, I am not worried about demand, either. Most of EU has been starved all of Q4 in favour of NL. There is right now some inventory in Norway but there is just exactly one lonesome M3 in Germany and UK and France have just a handful, not enough to put one in every showroom. Throughout the quarter, I didn't check the other countries but DE has been like this whenever I looked.
My expectation for Q1 is that EU will absorb the additional supply (including the portion formerly allocated to China) without a need to pull demand levers. Even if bad came to worse, the FCA credits give more wiggle room for tweaking the ASP in order to optimise overall revenue.

 

[Navin]

Rise and shine shorts, 2019 hasn’t ended yet. You still have to wake up, brush your teeth, put on a grin for work and start thinking about digging a bit deeper into your 401k retirement account to cover. Retiring at 65 isn’t ideal anyway...

This isn’t a fair statement. Some shorts brush their teeth and work at the same time.

 

[winfield100]

An important point here is that, unlike longs, shorts are not required to disclose their positions...........But we'll never know unless they out themselves.

@humbaba
Are you sure? Could there be a way to force their hand?
(Does this need it’s own investment thread?)
The “going private” upset a lot of folks, as everyone would be ?”cashed?” Out but longs might get some kind of restricted shares with minimal trading possibilities in non margin accounts

Could the be (a real “pain in the arse to do and irritating to all) forced “ conversion” of one kind of TSLA shares to another kind, “non shortable”, to sweep out those pesky shorts.

This seems to be discussed from time to time, but brainiacs somewhere have done decision trees of “if this then that” and pruned the bad branches.
Put some AI’s to thinking about it, present results, recurse the results to eliminate “oopsies”, some simulations and present.
Is this doable or a 420 pipe dream?
(Got another 2 shares, 1 at a time Monday and Tuesday at $420.soixante-neuf)

 

[Mike Smith]

Tesla price target raised to $370 from $270 at Wedbush TSLA - The Fly