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

ReflexFunds

Active Member
Dec 7, 2018
1,152
24,429
-
Yeah, I'm still waiting for that.

Oh, sure, any retail shorts who initiated < $300 are almost certainly out at this point, but I've never believed that retail makes up much of the short position. In fact, I expect that there has been additional shorting into the rise, though presumably some profit taking on any fall.

Thanks to the rules favoring short sellers there is no visibility into this activity (no, please don't mention @ihors3 fantasies) but if the end of December short interest is not appreciably lower that would be an indication. So we have to a wait a week or so to find out what the short interest was at the end of December and will never know current short interest.

As was pointed out when I posted about the lack of stability in short interest value at risk (it has varied considerably, contrary to some statements made here) the short interest is also comprised of hedging done by funds, etc., and so it can fluctuate while "the shorts" maintain a constant value at risk. Fair enough, but has anyone done an analysis to show that the changes in short interest value at risk track with that? I don't have the knowledge to do so or I'd take a stab at it myself.

Assuming 80% of converts are delta hedged, these are the changes in $ short interest. The estimate for 6-Jan assume real shorts have maintained the same $ exposure since the last Nasdaq report in mid December. This suggests real short exposure has varied between $7.2bn and $8.3bn and is close to the lows currently. They have lost a very significant amount of $bns to maintain this position over the past year.

upload_2020-1-6_15-52-17.png


These are the changes in short shares outstanding. Real shorts have likely bought back 23.1 million shares since May. This is likely because many have fund $ exposure limits to Tesla and real shorts are capital constrained at $7-8bn. Real shorts would have had to buy ~4 million shares just since mid December just to maintain their same $ exposure to Tesla.

upload_2020-1-6_15-52-38.png


It's worth noting, this methodology predicts short interest of 25.3 million shares on 31-December-2019 (17.5m real shorts, 7.9m convert hedge). @ihors3 predicted 27.5 million short on 31-Dec. The real number will be reported on 10th Jan.
 
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lklundin

Active Member
Oct 10, 2014
2,973
20,516
Bavaria
I am just going to throw this out there:
My broker - comdirect.de - sells options in fractions of 1/10 or 1/100 of the underlying security.

That's right, you buy the right to buy (or sell) 0.1 or 0.01 share. I do believe the minimum order corresponds to a single, whole share. I was very confused by this when I first looked at option prices - because I assumed 100:1 to have the normal meaning, making the option premiums seemingly underpriced by a factor of 10,000.

See attached photo for a couple of soon-to-expire TSLA calls - as one can see the per-contract price for the higher strike is _higher_ because it buys you 10 times more of the underlying TSLA.

A very helpful TMC member has sent me a DM to the effect that the above comdirect.de products are not actually options, but rather something similar (and as it seems worse), namely warrants ("Optionsscheine").
So that should explain part of my confusion.
 

KarenRei

ᴉǝɹuǝɹɐʞ
Jul 18, 2017
9,619
104,589
Iceland
OT: Gave "Love" because that's one of my favourite Eurovision songs.

OT: To me, that song is the "Sound of Eurovision" - overplayed vacuous pop songs that are carefully engineered to get stuck in your head ;)

Which is why I was so happy that we sent Hatari, to go on stage and scream about how hatred will win and Europe will collapse, while the drummer hits one or more cages of demon-eyed women with a sledgehammer and the lead singer abuses a guy in a gimp outfit ;). And why I dread what sort of terrible, generic, eminently forgettable Eurovision act we're going send this year :Þ

It's like... remember when Ireland sent a techno-singing turkey puppet to compete in 2008? Scored terribly, but... you remember that. Anyone remember what Ireland sent in 2007 or 2009? Straight down the memory hole. Come on, Europe, be creative! Go out in a blaze of dadaist glory!
 
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humbaba

sleeping until $7000
Aug 25, 2018
2,249
13,249
planet earth
Assuming 80% of converts are delta hedged, these are the changes in $ short interest. The estimate for 6-Jan assume real shorts have maintained the same $ exposure since the last Nasdaq report in mid December. This suggests real short exposure has varied between $7.2bn and $8.3bn and is close to the lows currently. They have lost a very significant amount of $bns to maintain this position over the past year.

View attachment 497056

These are the changes in short shares outstanding. Real shorts have likely bought back 23.1 million shares since May. This is likely because many have fund $ exposure limits to Tesla and real shorts are capital constrained at $7-8bn.
View attachment 497057
Thanks, I appreciate the information!
 
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SW2Fiddler

We Are Cognitive Dissidents
Mar 19, 2014
2,362
3,270
Houston TX
OT: To me, that song is the "Sound of Eurovision" - overplayed vacuous pop songs that are carefully engineered to get stuck in your head ;)

Which is why I was so happy that we sent Hatari, to go on stage and scream about how hatred will win and Europe will collapse while the drummer hits one or more cages of electrozombies and the lead singer abuses a guy in a gimp outfit ;). And why I dread what sort of terrible, generic, eminently forgettable Eurovision act we're going send next year :Þ

It's like... remember when Ireland sent a techno-singing turkey puppet to compete in 2008? Scored terribly, but... you remember that. Anyone remember what Ireland sent in 2007 or 2009? Straight down the memory hole. Come on, Europe, be creative! Go out in a blaze of dadaist glory!
OT: gave "Helpful" because I ALMOST CLICKED ON THAT EUROVISION SONG VIDEO
 

PeterJA

Active Member
Sep 26, 2013
1,076
11,471
San Diego
I’ve always assumed the $420 tweet was a calculated rear guard action against what he saw as the start of a hostile takeover attempt by the Saudis. It rings more true to me than the official story that Elon had long wanted to take Tesla private and he was panicked into action during market hours by the spiking price. Then again Elon’s brain is built very different to mine.

I really hope he does his own book day some day. Netflix are gonna get the biopic all wrong otherwise.

I love this because it answers a lot of questions I had about Musk's (I thought) naivety re Saudis. I been there and seen those guys. Turns out he knew what he was doing

That was my and @neroden's take as well - and it clearly explained the rush to control the narrative: according to later SEC documents Elon tweeted the $420 tweet from his private jet, with minimal input from other board members.

Back then Elon probably already suspected that Q3/Q4'2018 is going to be fantastic, because they knew their cost base and had a lot of pent-up demand. This was the report that I believe Elon read and which might have increased urgency and triggered the $420 tweet:


And prior August 7 we did notice weird TSLA buying pressure here on TMC, which started after the July 4th bear attack that drove the price below $300:


Note that on the $420 tweet day the price was already at around $350, $365 intraday, fueled by Q2 earnings that already showed a positive inherent cash flow (modulo working capital fluctuation) and the Saudi speculation, which was later on confirmed to be a 4% stake in Tesla.

Also note that "$420" might have been a joke in part, but it was also exactly a +20% buy-out premium over the ~$350 price levels on August 7, so a fair offer. (350*1.2 = 420)

Note how the next 2 weeks after the $420 tweet were spent (successfully) organizing a $20b buy-out consortium that emphatically did not include the Saudi PIF. The Saudis also later on hedged (shorted) their stake and invested in another EV maker, so the relationship clearly cooled down.

Bears immediately hung on to "The $420 tweet was a lie, it's impossible to take Tesla private!" false narrative and started shorting big time, helped by institutionals and eventually the SEC itself.

In hindsight, had the Saudi PIF taken over Tesla and taken it private, we'd possibly not have seen the $400+ levels of today.

So SEC confrontation aside, Elon did Tesla investors a big favor by making Tesla "uninvestable" for a year or so, this avoided the Saudi takeover (the bone-saw memes would never stop ...), and it also kept VW-Porsche from taking over Tesla at the $180 price levels earlier this year, which I'm sure they were looking at...

The German "Manager Magazin" published a well sourced piece that also quoted members of the Porsche family bemoaning Tesla's high share price ... when it was below $200:

Tesla: Daimler, BMW und Volkswagen machen Jagd auf Elon Musk

"Hunting down Tesla"

"Electro-visionary Elon Musk fails due to the downsides of the auto business. Important investors lose confidence, the German premium providers are attacking. Tesla is ready for a takeover."

...


"The Tesla dream still glows in Diess, according to top VW managers familiar with his thinking. He believes that Volkswagen can benefit from Tesla's battery and, above all, software expertise. "He would get in immediately if he could," says one of his top people. The money is there too, for the beginning a participation is enough. It was more difficult with the approval of the major shareholders, the families Porsche and Piëch."​

Right after they leaked this to Manager Magazin, Porsche family members "denied" the report:


I think they wanted to drive the price down a bit more by creating the impression that despite Diess being the super best friend ever of Elon, they are still not interested in bailing out Tesla - and then gobble up Tesla for the EV tech.

Then early September, they were on again:

Tesla: Wolfgang Porsche schließt Beteiligung nicht aus - manager magazin

"Volkswagen co-owner Wolfgang Porsche apparently does not rule out a stake in the US electric car maker Tesla."​

I think they were still under the impression that the Taycan would pressure Tesla, and that Tesla has cash flow troubles and needs a bailout.

Lucky for us, VW-Porsche miscalculated, Q2 already drove the share price to $250 levels, and Q3 financials started the rally to $420 ... and Elon never had any interest in selling Tesla's assets to VW.

I don't think VW-Porsche has the money to take over Tesla at these price levels - and Elon would not agree to a one-sided partnership that gives Tesla's software crown jewels to Volkswagen - which I think VW had in mind in the summer.

So yeah, IMO Tesla investors dodged two takeover/dilution bullets in the span of a single year ...

The possibility of takeovers needs to be understood too when buying options: in a takeover much of the time value of an option can go to zero, which wipes out deep out of the money option holders.

Could someone please explain how Elon's $420 tweet could have prevented a hostile takeover if that was his intention (contrary to his blog about it)?
 

Curt Renz

Well-Known Member
Mar 5, 2013
6,959
95,510
USA
MarketWatch - 2 hours ago: 10 tech predictions for 2020: Apple, Tesla, Netflix and more

Excerpt:
3. Tesla goes from hot to hotter. Despite all the fascination with Tesla’s TSLA, +0.66% new truck, the Model 3 was a game changer for Tesla. With fourth-quarter shipments eclipsing 112,000 units (mostly Model 3s), the company looks prime for a big year. However, explosive growth in 2020 will be happen due to the expected launch of the Model Y, a highly anticipated small crossover vehicle priced similarly to the Model 3, and the company’s expanding footprint outside of the U.S.

I believe the enthusiasm for the Model Y will exceed even the pre-orders for the Model 3, giving Tesla both its biggest backlog yet and a big manufacturing problem to solve. It will do that, potentially driving revenue and earnings to an all-time high in 2020.
 

Don TLR

Active Member
Jul 27, 2017
1,434
5,423
Apache Junction AZ
Twitter is entertaining to say the least
IMO, Electrek's content has improved a lot in recent months and as a result I do visit once per week and take a look.

Lots more positive articles circulating these days all around the web. Cleaned a few things out of the shed and picked up a few more shares at open figuring there wouldn't me a MMD.
 

Chocochip

Supporting Member
Supporting Member
Nov 17, 2017
820
8,709
UK
These are the people on the other side of our trades. The fact that they are so terrified of any dissenting opinions adds even more weight to my bullishness on TSLA. What a bunch of snowflakes. They have literally created a safe space for all their paranoia and conspiracy nonsense.

That moment when the number of twitter accounts on the TSLAQ block list is one order of magnitude larger than the number of TSLAQ members... So much winning!
 

StealthP3D

Well-Known Member
Dec 12, 2018
9,920
81,646
Maple Falls, WA
I think that is almost certain, though we have no way to know if it will be AD .8, .9 or 1.0.
What is certain is Elon rarely if ever gives up on a large scale leap forward concept he's conceived based on first principles thinking. He threw the long pass with M3 and missed. He's likely now to just grind it out yards year by year, GF by GF until machine that builds the machine is one more competitive advantage that no other auto company can touch.

It's interesting to look at what happened after the failed automation attempt in Fremont. The distance from Grohmann was clearly a problem as Tesla was using air freight for heavy equipment and automation experts had a long flight. When Tesla planned G3 in China they said it would take advantage of the cheaper labor and emphasize manual assembly. This de-risked production and lowered capital expenses. G4 was located within easy trucking distance of Grohmann and train travel for expertise. Clearly, G4 is where Tesla will develop and perfect the "machine that builds the machine".
 

The Accountant

Active Member
Aug 6, 2019
1,001
36,800
Connecticut, USA
The Art of (not) Selling
I stumbled upon a very good blog post by Akre Capital (an asset management firm).
The post titled "The Art of (Not) Selling"

The Art of (Not) Selling - Akre Capital Management


For those of you familiar with @StealthP3D 's approach to investing, this article could have easily been written by him.
It is a short read and I highly recommend it.
Some key lines from the article:
  • The mistake, in virtually every instance, has been selling too soon.
  • our investment philosophy involves concentrating our capital in a small number of....growing and competitively advantaged businesses
  • This determination to hold on is a critically important...... At its core, it relates to the power of compounding. We believe these two ideas — (not) selling and compounding — are inextricably linked. Getting the first wrong makes the second impossible.
  • when selling because of valuation, it is often with the idea that there will be an opportunity down the road to buy back in at lower prices. In our experience, it seldom works out this way.
 

Nocturnal

Supporting Member
Supporting Member
Aug 23, 2018
6,729
36,796
Deepening Crisis!
I do wonder how the much different the Tesla and EV growth story would have been if the past decade did not have such relatively low oil prices and low instability in supply etc. A relatively modest increase in gas prices should translate into an even larger benefit to owning an EV compared to the status quo. This Iran business might provide us with a macro event in our favor.
 
Jan 18, 2019
417
4,750
Mars Gigafactory 1
In the comments someone is saying the date on the picture is 2020.3.20. So a Model Y program opening ceremony in March 2020?

That might make the ? mark building the model Y factory in Fact Checking's posts since that is where they are removing the old parking lots and clearing ground.

Something to keep an eye on anyways as we attempt to understand the layout.

That date in the low res picture is definitely 2020.1.7
 
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KarenRei

ᴉǝɹuǝɹɐʞ
Jul 18, 2017
9,619
104,589
Iceland
Note to everyone here: do not be "this guy":

Zack on Twitter

He did apologize, but he also hid the tweets criticizing his behavior, kept the ones making excuses for him basically stalking a woman in a parking lot because she was in a Model Y and calling her a b**** when she asked him to stop filming her, and left his video up.

Note to everyone: cars do not have personal space or bodily autonomy. Go ahead and accost them (within the bounds of property law). But do not act like that to people, under the excuse that you "have the legal right to". The fact that somebody else has something that you want does not, ever give you the moral right to accost them because of it.
 
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FreqFlyer

Member
Jan 24, 2019
795
3,126
Austin,Texas
Note to everyone here: do not be "this guy":

Zack on Twitter

He did apologize, but he also hid the tweets criticizing his behavior, kept the ones making excuses for him basically stalking a woman in a parking lot because she was in a Model Y and calling her a b**** when she asked him to stop filming her, and left his video up.

Note to everyone: cars do not have personal space or bodily autonomy. Go ahead and accost them (within the bounds of property law). But do not act like that to people, under the excuse that you "have the legal right to". The fact that somebody else has something that you want does not, ever give you the moral right to accost them because of it.

Agree 100%, talk about entitlement issues.
 

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