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

[NicoV]

See, now you're thinking ahead! Here's just 2 ETFs (passively managed index funds) that track the S&P 500:

Vanguard 500 Index Fund Investor Shares
NYSEARCA: VOO $130.17B Market Cap
Vanguard 500 Index Fund has total net assets of $520.3B

SPDR S&P 500 ETF Trust
NYSEARCA: SPY
Market Cap: $305.17B​

So if TSLA was added to the S&P 500 index at its current SP of $430, just these 2 Index Funds (and there are many such Index Funds) would need to purchase approx. $1.5B in shares. You recall what the Saudi PIF purchase of $2B did to the TSLA SP in Spring 2018, and that buying was spread out over a number of months.

Further, if TSLA's SP is around $580 when its added to the S&P 500, then the 2 Index Funds mentioned above would need to buy about $2B worth of TSLA shares.

Obviously, if Longs are reluctant to sell, and Shorts head for the exit in a panick, then the SP goes up exponentially, rather than the linear $2B/$175B = 1.2% caused in a neutral redistribution of shares. I'd expect a 10-20x as a multiplier for that redistribution, which then implies between a 12-25% rise in SP caused by Index Funds purchasing $2B of TSLA stock.

But there will be other buyers besides these 2 large funds. Many other buyers.

Cheers!

It has been mentioned here that there will be investors that will front-run the addition to S&P 500, causing buying pressure BEFORE the date of addition. Which will increase the stocj price, which will increase the weight factor, which will increase the number of billions of dollars worth of TSLA which will have to be bought by index funds, which will increase the attractiveness of the front-running, which will increase the pressure on the shorts, which will increase short covering, which will increase the stock price, which will...
I’m stopping here, let’s just conclude that the addition to S&P500 may be the virtuous circle we’re waiting for (a vicious circle for the shorts).

 

[EinSV]

The Netherlands achieved a new ATH of Tesla registrations per day yesterday: 711: Tesla Model 3 op kenteken

Looks like that may be just Model 3s

Reliable source on Twitter reports:
735 total Teslas delivered yesterday
711 Model 3 + 24 S/X

Twitter

 

[NicoV]

Looks like that may be just Model 3s

Reliable source on Twitter reports:
735 total Teslas delivered yesterday
711 Model 3 + 24 S/X

Twitter

True, I forgot I clicked the Model 3 link.
Note that I added that link because it seems to be a new site (at least one I haven’t seen yet) that visualises the official Dutch RDW REST API. As such, this site (and also eu-evs.com) should be more trustworthy than random twitter posts.

 

[Artful Dodger]

Amsterdaaammm...

 

[Dan Detweiler]

So the scuttlebutt seems to be that Tesla China will deliver 15 cars to employees on Monday the 30th. We have all seen the thousands of cars that have run through the factory in the last month or so. Would they not be pushing these cars to delivery because they are confident that they will reach annual guidance without China? That's my thought.

Dan

 

[EV Promoter]

So the scuttlebutt seems to be that Tesla China will deliver 15 cars to employees on Monday the 30th. We have all seen the thousands of cars that have run through the factory in the last month or so. Would they not be pushing these cars to delivery because they are confident that they will reach annual guidance without China? That's my thought.

Dan

I guess the delivered cars will only be 15 and to employees because there must be a way to delay the contabilization to 2020.
It would not make any sense to financially include GF3 in Q4 19.

 

[Prunesquallor]

The “end of decade” lists are coming out. This one is from WaPo “Most Influential Technologies” (although it’s really tech products):

https://www.washingtonpost.com/tech...luential-technologies-decade-it-isnt-all-bad/

"The sexy Model S


Tesla CEO Elon Musk is one of the most divisive personalities in tech, but at the end of the decade, his influence on automobiles in undeniable.
The Model S sedan, which debuted in 2012, is expensive and has long been in short supply. Still, it established that an all-electric car is a viable and even sexy mode of transportation. It shifted perceptions of electric vehicles from awkward contraptions with golf-cart-like acceleration to the halo car of this generation. When you think of a hybrid, you might think Prius. In the same way, electric is synonymous with Tesla.


The Model S also established that a car is a kind of consumer electronics. It was one of the first vehicles that got better with regular over-the-air software upgrades, making the car more like a smartphone."

Others of note: Instagram, Netflix, Alexa, Uber

 

[scaesare]

Doesn’t the fine print have to say, Do not try this at home, professional driver, closed course....

Or maybe:

Screen images Acceleration NOT simulated.

 

[madodel]

I guess the delivered cars will only be 15 and to employees because there must be a way to delay the contabilization to 2020.
It would not make any sense to financially include GF3 in Q4 19.

Everyone always assumes they know why Tesla does something. It could just be that the delivery centers are not yet ready for massive deliveries and they don’t want the mess they have in the US end of quarter. Or something else. Let’s wait for delivery numbers to see how well they performed without GF3.

 

[JRP3]

If TSLA shares reach $580 by the time it is added to the S&P 500 index, it will added at the No. 50 ranking of the 505 stock symbols which comprise the index

Wait...wut?

 

[gerebgraus]

Maybe someone can explain this to me:

My Jan 2021 $690 calls are up over 2% today (to $17.50) while TSLA stock is down almost 0.5%. Conventional theory says time decay coupled with stock drop should have the options declining in value today. These only cost $0.90 each but have appreciated today more than half of their orignal cost! My theory is the market has priced in a small near-term correction in TSLA stock (which is why my 1/17/2020 $320 calls are down 1.8%) but believes TSLA will strongly outperform over 2020.

I think that option pricing is Tesla is not rational. The interesting question to me is why, and how it is not rational. Yours is just one example.
I do not know how option market makers operate. But they do not seem to consider anything other than historical data for volatility for example.

 

[UncaNed]

Yes, climate especially has been most welcome. My smart car felt kinda dumb in regards to some of the basic controls.

The whole market is very much up for the year and you have to put your money somewhere. ​

Do you mean they put it somewhere other than in TSLA? Or that more folks will put it IN to TSLA?

 

[mongo]

Wait...wut?

List of S&P 500 companies - Wikipedia
500 companies, some with multiple shares classes.

Although the index is called the S&P "500", the index contains 505 stocks because it includes two share classes of stock from 5 of its component companies.

 

[gerebgraus]

I believe they report it based on the last transaction (transactions were happening throughout the day). Now that the market is closed they are reporting $16.275 (down 2.98%). And the share price is higher at $430.38.

I met a self-employed guy a few months ago who made his living by trading mispriced options. Skimming small profits. Not for me.

The wide bid-ask spread also means that new lows and highs with huge differences are reported occasionally within minutes with stable stock price.

 

[UncaNed]

Loup Ventures 2020 Predictions: Loup Ventures' 2020 Tech Predictions | Loup Ventures

Tesla Will Exceed Street Deliveries Estimate of 463k (by Gene Munster). With the addition of China Gigafactory, which just started producing Model 3, along with the release of Model Y in the fall, we believe the company can grow deliveries by 28% in 2020 compared to the overall auto industry that will likely be flat. We expect Tesla to increase deliveries quarter-over-quarter, giving credibility to the belief that the electric car theme is here today and opening up a vast addressable market — 97% of cars sold today are internal combustion. If our prediction is correct, shares of TSLA will continue to move higher. Tesla is a pure-play investment in the undeniable truth that the future of the automotive industry is both electric and autonomous. We expect Tesla to exit next year with above 60% US EV market share, compared to about 75% today. As a point of reference, in 2018 GM lead the overall US auto market with 17% share.

But this says Tesla's EV share will drop from 75% to 60%??? Makes no sense. It should increase, shouldn't it?

 

[RFernatt]

But this says Tesla's EV share will drop from 75% to 60%??? Makes no sense. It should increase, shouldn't it?

Not if the total number of EVs being sold increases by more than Tesla's production increase. They are expecting some better selling EVs to arrive and increase the size of the "EV" market. They're probably thinking ID.3 and Mach-E, but we'll have to see how many of these are actually available for sale and then sold.

 

[gene]

Yesterday, sitting on the side of the 101 Freeway, south of Santa Barbara, CA. In the course of one hour I counted 8 transports trucks full of Tesla's heading south towards Los Angeles.

 

[EinSV]

But this says Tesla's EV share will drop from 75% to 60%??? Makes no sense. It should increase, shouldn't it?

Gene tends to be conservative. I agree with him that Tesla cannot maintain 75-80% US EV market share forever, but with Model Y coming online in 2020 and no compelling new offerings from competitors I doubt Tesla's US market share will drop much if at all. Market share could even increase a bit, despite Tesla having two hands tied behind its back:

• $7500 tax credit disadvantage

• Direct sales banned or restricted in many states

Tesla Direct Sales Map (US)

 

[ggr]

With this post, and with the one that @Curt Renz provided, I will stand corrected.....AND notify my broker that Form 8949 is the definitive source - not what they had told me. I apologize for the apparent misinformation....and that I learned something.

Never apologize for learning something.

 

[Right_Said_Fred]

I guess the delivered cars will only be 15 and to employees because there must be a way to delay the contabilization to 2020.
It would not make any sense to financially include GF3 in Q4 19.

How about this one: maybe they DO want the contabilization to fall in Q4 because they already know the financial results will be so good that this quarter can absorb the extra costs and still be profitable. It would make it easier to show a profit in the ‘tough’ Q1. Remember, S&P 500 inclusion is only possible if the last quarter is positive.