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

[Cherry Wine]

Building off of last week's post, this week's volume was even higher than last week's at ~107M shares! I did some digging, last week and this week are the highest volume weeks in TSLA ever with two exceptions: week of 11/4/13 (111M shares), and 5/13/13 (117M) shares. What's even more remarkable is that the week of 5/13/13 was the first full trading week following the Q1'13 earnings call, and 11/4/13 was the trading week during which the Q3'13 earnings call took place.

So we are seeing volumes that are by any measure very high for this stock, historically associated with major market moving events like earnings calls, and which mirror activity seen during one of its biggest growth periods in 2013, on no major news.

I would not be surprised if the week of or following Q4 earnings broke or came close to those previously set records.

So while we wait for the official Nasdaq short interest to post, where did this week's volume end up? 99.5M shares. To put that in perspective, here are the other highest weekly volumes back through 2019:

1. Week of January 6th, 2020 (99.5M shares) Open: 440.47 / Close: 478.00 (current week, first full trading week after release of Q4'19 P&D report)
2. Week of May 20th (98M shares) Open: 202.80 / Close: 190.63 NOTE: First full trading week after infamous cost cutting "10 months of cash burn rate" Elon leaked e-mail
3. Week of April 29th (78.7M shares) Open: 235.86 / Close: 255.03 NOTE: Week after Q1 Earnings
4. Week of October 21st (78.1M shares) Open: 258.33 / Close: 328.13 NOTE: Q3 Earnings Week
   
5. Week of April 22nd (78.0M shares) Open: 269.00 / Close: 235.14 NOTE: Autonomy Day / Q1 Earnings Week
6. Week of June 3rd (76.6M shares) Open: 185.51 / Close: 204.50 NOTE: 52-week low
7. Week of December 16th (73.2M shares) Open: 362.55 / Close: 405.59 NOTE: Week of a number of good news developments including TSLA achieving ATHs.

It should be noted that the next highest volume week is in the 50M range, so these are all significantly higher than average volume week.

 

[PhaseWhite]

What a surprise a) Lora Kolonsky, b) short seller...

Federal agency looking into Tesla driver complaints of sudden unintended acceleration

CNBC has learned that an independent investor, Brian Sparks, submitted a petition to the National Highway Traffic Safety Administration and its Office of Defects Investigations asking them to look into the drivers’ claims.

The petition includes a collection of 127 complaints that were either submitted to the government by Tesla owners, or others filing on their behalf. These complaints, when tallied, allege that unintended acceleration of Tesla electric vehicles may have contributed to or caused 110 crashes and 52 injuries.

Sparks said he conducted primary research and submitted the petition, which CNBC obtained, because he was moved by the personal story of Jennifer Terry. Sparks is currently shorting Tesla stock, but has hedged his bets and been long shares of Tesla in the past.

Was there ever a doubt that short sellers we're not involved... I have to imagine the NHTSA is also getting a bit desensitized at this point with all the antics shorts have pulled in the past, including making false complaints, or perhaps they just lack the sophistication to be able to differentiate?

 

[tinm]

OK, maybe I'm wrong and this is actually THE investigation? Does anybody more well-versed on this topic able to interpret this particular PDF?


To reply to my own post, the answer is YES, this isn't an investigation:
https://static.nhtsa.gov/odi/inv/2020/INOA-DP20001-6030.PDF

This wasn't a "press release" (NHSTA doesn't even have any press releases for 2020) - This was a petition submitted via email that reads:

Summary: On December 19, 2019, the Office of Defects Investigation (ODI) received a defect petition by email requesting a defect investigation of alleged sudden unintended acceleration in model year (MY) 2012 through 2019 Tesla Model S, MY 2016 through 2019 Tesla Model X, and MY 2018 through 2019 Tesla Model 3 vehicles. In support of his request, the petitioner cited 127 consumer complaints to NHTSA involving 123 unique vehicles. The reports include 110 crashes and 52 injuries.

A copy of the petition will be added to the public file for this defect petition and ODI will evaluate the petitioner's allegations to determine if the petition should be granted or denied. If the petition is granted, ODI will open a defect investigation; if the petition is denied, ODI will publish a notice in the Federal Register.

So to sum, whoever submitted this petition (TBD) managed to get a lot of negative press to the point where many news outlets are saying NHSTA *is* investigating Tesla unintended acceleration (aka: pedal misapplication), which is absolutely not true. It'll be interesting to see who actually filed the petition (though it's possible it was submitted via third party, so we won't really know who's behind it.)

Check out the FUD from Car and Driver on this situation. They managed to out-headline Linette Lopez:

NHTSA Investigating 500,000 Teslas for Sudden Unintended Acceleration.

 

[lklundin]

people put way WAY too much emphasis on max pain. its effect on this stock is minimal.

Having seen various arguments, especially from @FactChecking arguing via game theory, I am not at all sure of that.

However, since anyone can look at the open interest and trade on a good guess at the realistic max-pain, this creates a pressure on the stock price that would tend to cancel out the apparent effort of the market makers to reach a max pain (that ignores the hopelessly OTM contracts).

Basically, any open information that one can trade on in a functioning market will always have been priced in by the market.

 

[Tslynk67]

Having seen various arguments, especially from @FactChecking arguing via game theory, I am not at all sure of that.

However, since anyone can look at the open interest and trade on a good guess at the realistic max-pain, this creates a pressure on the stock price that would tend to cancel out the apparent effort of the market makers to reach a max pain (that ignores the hopelessly OTM contracts).

Basically, any open information that one can trade on will always have been priced in by the market.

We see it Friday after Friday, 95% of the time, the SP is manipulated to cause the least losses to the option writers. It's only when you get a big run-up or crash that they lose. So the last 7 months have been quite delicious and the fallout of options bought at crazy-cheap prices last year will cause them pain for some time to come!

 

[RobStark]

Italy's Tiny EV Market Doubles Again — Over 10,000 Sales In 2019 | CleanTechnica

 

[StealthP3D]

this is pathetic that what sounds like a conspiracy theory that shorts are behind the NHTSA petition is actually true.

You say that as if conspiracies don't exist. TSLAQ is the definition of a conspiracy.

A strong case could be made that the report was not filed in good faith because he has strong ulterior motives. It's probably illegal if it could be shown beyond a reasonable doubt that his primary motivator was to benefit his short position.

 

[GBleck]

people put way WAY too much emphasis on max pain. its effect on this stock is minimal.

It does put a bit of drag on it on an up week that has historically popped up on Mondays.

 

[Rammstein]

According to
Opricot Open Interest|Volume|Max Pain
510$ had almost twice as many puts as calls, so I guess the market makers are better off closing slightly above 510$ than below, or no?

Btw, here in Euro-land we ended just above 460 € which seems like a fine place for the week-end.

Next, I am wondering about the announcement of the ER...

I’m confused. I thought they would want to close it around max pain. I don’t know enough about this stuff.

 

[Mkorpal]

Any word on ER date. It was announced “today” last year.

 

[Artful Dodger]

After-action Report: 2020-01-17 16-00

VWAP: $509.74
Volume: 13,267,463
Traded: $6,762,895,425.22​

Summary: Max pain is a thing, with MMs controlling price action in a tight range today, closing within 50 cents of one of the Options strike prices ($510). Too bad the retail investor has no insight into the exposure of these MMs, who manipulated the SP throughout the week. Where is the SEC? Where is Congress? Oh, right...

I will try to update this report when daily short selling infor becomes available around 17:45 hrs EST.

Cheers!

 

[generalenthu]

Check out the FUD from Car and Driver on this situation. They managed to out-headline Linette Lopez:

NHTSA Investigating 500,000 Teslas for Sudden Unintended Acceleration.

And everyone of those Teslas took the fifth to avoid implicating themselves.

 

[humbaba]

You say that as if conspiracies don't exist. TSLAQ is the definition of a conspiracy.

A strong case could be made that the report was not filed in good faith because he has strong ulterior motives. It's probably illegal if it could be shown beyond a reasonable doubt that his primary motivator was to benefit his short position.

Hmm... I dunno securities law, but that would be for a criminal charge, right? Preponderance of the evidence is a common standard, though less frequently cited. I think it depends on what the legal action would actually be. I would think any $TSLA investor would have standing to sue, though I have no idea what the exact legal basis would be. Violation of regulations has, in my rather limited knowledge, quite a bit of context. HIPAA, for example, is nowhere near what I expected (compliance is far easier than I'd thought it would be). But I'm more familiar with wiretap and related legal issues and know essentially nothing about securities.

 

[StealthP3D]

Building off of last week's post, this week's volume was even higher than last week's at ~107M shares! I did some digging, last week and this week are the highest volume weeks in TSLA ever with two exceptions: week of 11/4/13 (111M shares), and 5/13/13 (117M) shares. What's even more remarkable is that the week of 5/13/13 was the first full trading week following the Q1'13 earnings call, and 11/4/13 was the trading week during which the Q3'13 earnings call took place.

So we are seeing volumes that are by any measure very high for this stock, historically associated with major market moving events like earnings calls, and which mirror activity seen during one of its biggest growth periods in 2013, on no major news.

Even more amazing is that volume is measured in the number of shares, not dollars. So probably smashing old records for the number of dollars traded.

 

[Big Earl]

Friday is historically the best day to buy as the MM's and shorty are usually trying to push the SP down.

I picked up a couple more today. Almost at 200 now. Gotta get 'em while the price is still good.

 

[Cherry Wine]

Even more amazing is that volume is measured in the number of shares, not dollars. So probably smashing old records for the number of dollars traded.

Great point.

 

[MP3Mike]

CNBC has learned that an independent investor, Brian Sparks, submitted a petition to the National Highway Traffic Safety Administration and its Office of Defects Investigations asking them to look into the drivers’ claims.

And surprise! Now that he is "famous" his twitter account is locked down: Brian Sparks (@btsparks) | Twitter

 

[StealthP3D]

Hmm... I dunno securities law, but that would be for a criminal charge, right? Preponderance of the evidence is a common standard, though less frequently cited. I think it depends on what the legal action would actually be. I would think any $TSLA investor would have standing to sue, though I have no idea what the exact legal basis would be. Violation of regulations has, in my rather limited knowledge, quite a bit of context. HIPAA, for example, is nowhere near what I expected (compliance is far easier than I'd thought it would be). But I'm more familiar with wiretap and related legal issues and know essentially nothing about securities.

I wasn't even considering securities law. I suspect there are more general laws that, in effect, prohibit the filing of reports with the federal government in bad faith. I don't know of any specific laws but a good prosecutor could probably make a reasonable case. Certainly, the optics are terrible for the person filing this complaint in that it's not much of a leap to see what the real motivation was.

 

[tinm]

Car and Driver insists NHTSA has an open investigation going on (NHTSA ID DP20001), but as far as I can tell the petition has not been approved or declined yet.

 

[jerry33]

All you have to do is hit the stalk up or down and it engages. If I turn the wipers on/off, my hand is literally an inch or so away from it and it doesn't take much to engage cruise control which would be 'unintended acceleration', even though it is a driver error. Since I have done it myself (multiple times in the couple months I've had my car), I can see how others might be doing it as well.

The times I've hit it have just been pushing it in, not moving it in the direction of rotation. All pushing it in does is turn on the ready light.