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

[jerry33]

Is it like the Texas one that requires the car to be purchased in-state from a dealer? (At least I thought that is how it was in Texas.) And of course they don't allow Tesla to have any dealerships so Teslas can't participate in the rebate/credit.

In Texas cars sold in the state must go through a dealer. There is no problem with obtaining a Tesla directly through the website. There's no requirement that cars must only be purchased in-state. The rebates that Texas has offered haven't been particularly big, and some have run out of funding quickly. Others never got any funding in the first place.

 

[LJS22]

market physchology - so did the showing of hands by Blackrock cause Market to pin down institutional buyer and cause Market to think they have stopped buying temporarily?

With the amount of money BlackRock has access to they could let the price drop 15% then buy more and squeeze new short sellers which essentially doubles the profit. As I’ve said before only a complete moron would short this stock at this moment in time. It’s borderline suicide. If Blackrock is buying then it’s not even fair to play this game.
We haven’t even seen earnings report yet for what could be one of Tesla’s most profitable quarters. This is not the time to bet against the stock.

 

[kengchang]

It's a bad user experience. If you click a disabled button, there should be messaging about what you can do to make it reenabled (add payment info)

It's literally on the left side of the screen, how can you miss it?

 

[capster]

I find that thinking in term of probability helps me with staying buy and hold
(1) Do I think Tesla is going to be the most important companies worth trillion(s) in the future? Yes.
(2) That would make Tesla's SP go up to at least $6,000
(3) We're not there yet.
(4) Therefore, everyday I wake up, there's a higher than 50% chance that SP will advance toward that PT, NO MATTER what today's SP is.
(5) And because I can't tell the future, I will default to listening to the simple argument in (4), instead of pretending like I can.

I believe Tesla is executing a straight up, classic disruption on an epic scale.

For me, it is helpful to think of a decisive victory with history changing consequences, such as the Battle of the Teutoburg Forest - Wikipedia. This is a battle in which three Roman legions were caught flatfooted and obliterated. (Funny thing that each major economy tends towards three automakers)

A nice novelization of that battle may be found here: Roman Mask|NOOK Book

I’m not tempted by the "warm wine and cat-on-a-stick" being peddled to the stands by grifters from the street.

I’ve invested in a company. I’m not just ‘playing’ some random stonk.

 

[M3Rider]

I appreciate the feedback, and you describe the struggle I am going through quite well. I have become great at picking up pennies each week, but in the process I have cut off my own legs and left a lot of money on the table for much of increase from 230-500. While I made a decent 30% gain swing trading, that pales in comparison to what buy and hold would have netted me. I'll just keep listening and learning, and keep making money one way or the other.

If you feel that you can beat the market, you could always buy a small amount option and see if you win or lose with it

Same gambling exercise, but you risk less money.
Don't bet big until you establish a great track record

 

[FrankSG]

What if Larry Fink came out with the announcement yestday (shift to renewables) at the same time as he stopped buying TSLA for now?

If Blackrock was a large part of the cause of the runup, then we might be under test for strength by shorts this morning.

Just a theory...

I thought of this possibility too. It doesn't seem far fetched that BlackRock (and maybe others) knew this announcement would happen this week and have been accumulating TSLA in anticipation of it. I wonder if, and if so how much, this contributed in the recent rally from $330 to $550.

 

[Curt Renz]

market physchology - so did the showing of hands by Blackrock cause Market to pin down institutional buyer and cause Market to think they have stopped buying temporarily?

First we have to assume that intense TSLA buying by Blackrock has been a factor in the current run upward. If true, it may be wise for them to pause and allow a dip before they resume their buying.

During the final three days of this trading week, TSLA may be enduring strong winds related to the tactics of deep pocketed option writers and an army of call owners, before the expiration at low strike prices of a great many options. These were originally LEAPS started over a year ago for those who wanted to delay potential profits into a later tax year.

The big factor here is that options have expiration dates, while stock shares do not. This implies that knowledgeable shareholders can be calm and patient, while those involved with options are in a frenzy.

So any big accumulator of TSLA shares may want to temporarily stand aside before taking advantage of any panicked shareholders, fearful call owners or baited short sellers. Then rather soon without notice, the accumulator could swoop back in for bargains as they initiate another round of their buy program.

 

[M3Rider]

Probabilistically speaking, yes.

But then there's the ER announcement coming up. Will it add more buying pressure speaking probabilistically?

 

[FrankSG]

In terms of actual annual production, I think Tesla could produce anywhere from 500k to 700k in 2020, potentially with Q4 production at ~190k.
Consensus is currently for ~450k deliveries in 2020.
I think Tesla could announce 2020 deliveries guidance of 550k-600k.
600k 2020 production would require ~39GWh of battery Cells at Fremont (vs ~35 GWh capacity at GF1 & ~8GWh S/X cell capacity in Japan) and ~7GWh of cell production in China.

By the end of 2021 I think Tesla is potentially aiming for production capacity of ~1.7 million cars (710k Fremont, 400k GF3, 250k GF4, 300k GF1(or GF5 US). This could potentially correspond to 2021 production and deliveries of ~1.1 million.

This is very similar to how I'm feeling about the next two years.

570k-to 650k for 2020, maybe as much as 700k.

900k to 1.25M for 2021.

 

[FrankSG]

OT:

Regarding this week's price action, I want to point to the post from @Fact Checking from a while ago showing huge open interest in calls ranging from 400 to 520 expiring in 2 days. It is very unlikely these will be taken delivery on. the speculators will take profits and the market makers will sell shares they are using as a hedge against these calls.

While this happens every week, the situation is amplified as this expiry is a leaps series and has been open for a long time. Expect the price to be a bit weak next couple of days as the market accommodates these sales. We are likely to drift towards 500. This will be behind us next week though.

In other words if you are looking to pick up some exposure for the long term, it's hard to get a better opportunity, all else being equal. That said the run Monday and Tuesday was phenomenal and I was expecting a much worse week last week. The Chinese subsidy extension and the upgrade helped quite a bit in absorbing the supply from near-ITM calls.

Alright, that was not OT.

Do you have any insight on when market makers decide is the right time to delta hedge these options?

I always assumed that they don't delta hedge until after they 'lose their battle' trying to defend the strike price, and therefore that all these expiring options might be tailwinds this week after Monday broke through $500 so heavily, because of market makers' need to delta hedge after that?

But according to you it sounds like they may have delta hedged these options before the SP broke through $500?

 

[MP3Mike]

In Texas cars sold in the state must go through a dealer. There is no problem with obtaining a Tesla directly through the website. There's no requirement that cars must only be purchased in-state. The rebates that Texas has offered haven't been particularly big, and some have run out of funding quickly. Others never got any funding in the first place.

From: Why Texas' $2,500 electric car incentive won't apply if you buy a Tesla

However, the Texas legislation creating the alternative-fuel incentive applies only to cars sold in Texas. And although Teslas are often seen on local roads, they aren't sold in the state in the same way as other cars.

You can't buy a Tesla in Texas. You have to but it outside of Texas and then bring it in. As such you don't qualify for the EV incentive.

 

[madodel]

With the amount of money BlackRock has access to they could let the price drop 15% then buy more and squeeze new short sellers which essentially doubles the profit. As I’ve said before only a complete moron would short this stock at this moment in time. It’s borderline suicide. If Blackrock is buying then it’s not even fair to play this game.
We haven’t even seen earnings report yet for what could be one of Tesla’s most profitable quarters. This is not the time to bet against the stock.

And that doesn't take into account if in fact the Model Y begins production this quarter. I normally think shorting is criminal, but doing it now is in fact really dangerous.

 

[generalenthu]

Do you have any insight on when market makers decide is the right time to delta hedge these options?

I always assumed that they don't delta hedge until after they 'lose their battle' trying to defend the strike price, and therefore that all these expiring options might be tailwinds this week after Monday broke through $500 so heavily, because of market makers' need to delta hedge after that?

But according to you it sounds like they may have delta hedged these options before the SP broke through $500?

Used to be end of day, but these days, most, if not all of it computerized. So I'd think it's when it's going beyond some risk threshold, based on what your backtest tells you.

Also, these thresholds tend to be tight. So I don't buy the argument that they take huge exposures and manipulate share price close to expiry.

 

[Vines]

If you feel that you can beat the market, you could always buy a small amount option and see if you win or lose with it

Same gambling exercise, but you risk less money.
Don't bet big until you establish a great track record

I know enough to at least know I am not ready to invest with options. So far my crystal ball has shall we say...limited success

 

[EVNow]

Used to be end of day, but these days, most, if not all of it computerized. So I'd think it's when it's going beyond some risk threshold, based on what your backtest tells you.

Also, these thresholds tend to be tight. So I don't buy the argument that they take huge exposures and manipulate share price close to expiry.

Yes - I find it hard to believe market makers would take huge risk in a lot of securities. They can't be experts in all and some kind of either macro or individual stock news can break out at anytime handing them huge losses (and losing the job for the top guy). Besides, they take risks in their investment desks (trading bots ?), rather than market making.

 

[Artful Dodger]

Glad they didn't cover yesterday?

Lol, those 1.5m shares bought at a high premium in a rising SP during the pre-Market yesterday WAS them covering, due to margin calls and forced covering by their brokers. Now Brokers will walk the price down to save themselves from the hoardes of LEAP holders who's assests expiry on Friday. Did I say Lol yet?

#LONG'N'STRONG #ZEROMARGIN

Cheers!

 

[Mike Smith]

First we have to assume that intense TSLA buying by Blackrock has been a factor in the current run upward. If true, it may be wise for them to pause and allow a dip before they resume their buying.

During the final three days of this trading week, TSLA may be enduring strong winds related to the tactics of deep pocketed option writers and an army of call owners, before the expiration at low strike prices of a great many options. These were originally LEAPS started over a year ago for those who wanted to delay potential profits into a later tax year.

The big factor here is that options have expiration dates, while stock shares do not. This implies that knowledgeable shareholders can be calm and patient, while those involved with options are in a frenzy.

So any big accumulator of TSLA shares may want to temporarily stand aside before taking advantage of any panicked shareholders, fearful call owners or baited short sellers. Then rather soon without notice, the accumulator could swoop back in for bargains as they initiate another round of their buy program.

Short sellers and accumulating longs both want the same thing: lower prices.

 

[Mike Smith]

This article from Reuters probably killed the after market recovery. For anyone above reuters-level knowledge about Tesla this is just pointing out the obvious, but it's still a bad headline.

New Tesla registrations in California nearly halves in fourth quarter: data

 

[EVNow]

Here is something to keep an eye on. First reported instance of a car called for update by Tesla I've seen - but is taking a few days ...

Update. My car has been at the SC since last Thursday 1/9 for the upgrade to 3.0. This has not been a confidence building process with only cryptic updates and little guidance on what is going on and when I’ll get my car back. I was told that the hardware install was expected to be complete today and that hopefully the SW install will be done tomorrow. Mine was a May 2018 build so as has been reported elsewhere it may be a bit more involved for these early builds.

3 working days and counting. Luckily I didn’t need the car this weekend. I just miss it. Will report back.

​

 

[MC3OZ]

This article from Reuters probably killed the after market recovery. For anyone above reuters-level knowledge about Tesla this is just pointing out the obvious, but it's still a bad headline.

New Tesla registrations in California nearly halves in fourth quarter: data

Yet amazingly Tesla still managed record deliveries worldwide on 2020??

Conclusion: If you live in California an think you will drop off the edge of the world if you cross a state boundary - Reuters agrees with that assumption... so be careful /s