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

[Mike Smith]

Here is proof that the Tesla unintended acceleration issue is NOT under investigation by NHTSA (as has been suggested in this thread). On their site they show it as an investigation which has been 'open' since Jan 13, but that's just when they started evaluating the petition, and they will later decide whether to start a formal investigation. Here is what a NHTSA official told Consumer Reports:

NHTSA Reviewing Tesla Sudden Unintended Acceleration Claims

'NHTSA told CR that, if warranted, it would open a formal defect investigation into the Tesla vehicles after it carefully evaluates the petition. At that point, the petition would be posted on NHTSA's website.

“As is the agency’s standard practice in such matters, NHTSA will carefully review the petition and relevant data,” the agency said in a statement. “NHTSA encourages the public to contact the agency with safety concerns.”'

Edit: Here is the petition summary. Note that they call it an investigation from the date the petition was received.

https://static.nhtsa.gov/odi/inv/2020/INOA-DP20001-6030.PDF

 

[madodel]

I first ordered on the day of the reveal - during the reveal in March - and the final charges including delivery but excluding taxes was $53,500 as my screen shot shows. Now I updated the configuration to the same spec today and it says $51,000

It is insane that I paid for $55k for Model 3 similar config but with cheaper blue paint. Model Y starts cheaper, or if you include the $7500 fed tax credit I received it is only $3500 more expensive.

I paid $132,500 for my Signature Model X 4 years ago. Everything except Ludicrous. Last time I checked same general configuration was around $120k and that is with FSD and hardware which my AP1 will never do, much longer range, as well as ludicrous I didn't really want. Of course I have an automatic spoiler and perfed/cooled seats which no one can get any more so there is that, and I have benefitted from important over the air updates like the emissions control app. ;-) Wouldn't trade my Sig X for anything, though I may be tempted when Plaid X is a reality.

 

[Artful Dodger]

I would be a kind of forced dilution to pull money(dilution) from the future into the present for cash yes.

Yeah, there's no way those strike prices aren't exceeded by 2024. Maybe by May this year?

Anyway it's prudent for Tesla to act now to increase the range of those spreads. can they do that now while pocketing some cash (@KarenRei style - "rolling forward" I think its called)?

Cheers!

 

[UnknownSoldier]

This is getting out of hand, and I am hoping a moderator (@ggr) would help.

There is Electroman the wise - that is me

And then there is <lightning symbol>ELECTROMAN<lightning symbol>. People often don't realize that and I get tagged incorrectly. Worse, I got banned once mistakenly.

I don't even know how this forum software allows one to create handles with some crazy symbols like that?. Not sure if I should change my handle, or if the moderator would remove such crazy characters in the handle and force the other person to change..

In-post Mod comment: Looking into this will be occurring

Clearly, the solution is for both Electromans to fight it out in the Octagon. The winner keeps the name, the loser surrenders it. I hope you've been working on your BJJ.

 

[dl003]

A bit disappointed that Clean Technica also went down the sugar hole.
NHTSA May Recall Every Tesla Ever Made Over Sudden Unintended Acceleration Complaint | CleanTechnica

 

[Mike Smith]

A bit disappointed that Clean Technica also went down the sugar hole.
NHTSA May Recall Every Tesla Ever Made Over Sudden Unintended Acceleration Complaint | CleanTechnica

I expect Tesla will release a statement very soon. I'm amazed they haven't already. All this confusion and speculation is bad for the brand.

 

[CyberDutchie]

I paid $132,500 for my Signature Model X 4 years ago. Everything except Ludicrous. Last time I checked same general configuration was around $120k and that is with FSD and hardware which my AP1 will never do, much longer range, as well as ludicrous I didn't really want. Of course I have an automatic spoiler and perfed/cooled seats which no one can get any more so there is that, and I have benefitted from important over the air updates like the emissions control app. ;-) Wouldn't trade my Sig X for anything, though I may be tempted when Plaid X is a reality.

And signature red, plus the Signature label are unique to your car.

Btw, thank you! We should all be thankful to the early adopters who paid premium, and had to suffer through the early manufacturing problems.

 

[Mike Smith]

Here is proof that the Tesla unintended acceleration issue is NOT under investigation by NHTSA (as has been suggested in this thread). On their site they show it as an investigation which has been 'open' since Jan 13, but that's just when they started evaluating the petition, and they will later decide whether to start a formal investigation. Here is what a NHTSA official told Consumer Reports:

NHTSA Reviewing Tesla Sudden Unintended Acceleration Claims

'NHTSA told CR that, if warranted, it would open a formal defect investigation into the Tesla vehicles after it carefully evaluates the petition. At that point, the petition would be posted on NHTSA's website.

“As is the agency’s standard practice in such matters, NHTSA will carefully review the petition and relevant data,” the agency said in a statement. “NHTSA encourages the public to contact the agency with safety concerns.”'

Edit: Here is the petition summary. Note that they call it an investigation from the date the petition was received.

https://static.nhtsa.gov/odi/inv/2020/INOA-DP20001-6030.PDF

This means the battery issue is also not under formal investigation. They're still just reviewing the petition.

 

[Artful Dodger]

Must admit I can´t add much of value here, but Elon tweeting about a meteor hitting reminds me of him tweeting about a tsunami a while ago... This all sounds too good to be true, proably just a coincidence. Elon Musk on Twitter

Yup. Jus' sayin'.

 

[lklundin]

So I could be wrong about this, but if Tesla is able to recognize income from these options as "Other Income", that goes straight into GAAP income at 100% margins. If they get Q4 GAAP income beyond around ~$970m then 2019 will be profitable as a year and February S&P 500 inclusion is possibly secured...

One counter-argument is that if Tesla did this, then the investment bank who underwrote those calls and warrants would sure know about it, and the TSLA share price would have catapulted up starting around end of December, when Tesla potentially sold the calls for around $200 when the TSLA price hit $400. Wait a minute ...

Warning: Not advice, I might be wrong, and even if I'm right, Tesla might have good reasons not to do any of this.

Sorry for the super-ignorant question, but wouldn't Tesla have to had realized this profit in Q4 by converting the options to cash before Q4 ended?

If I understand things correctly, then the value of the contracts is changing which seems like something that cannot be added to the profit.

Can you explain (again?) how this could be deemed a Q4 profit?

 

[Carl Raymond]

Must admit I can´t add much of value here, but Elon tweeting about a meteor hitting reminds me of him tweeting about a tsunami a while ago... This all sounds too good to be true, proably just a coincidence. Elon Musk on Twitter

Greta is rallying at Davos, calling for an end to fossil fuel subsidies. If world leaders agree we have 10 years to quit fossils, it’s huge for Tesla.

It would also have fossil interests “petrified”, and could be the meteor strike to which Musk refers.

Edit: reference. Twitter

 

[Steve m]

AH but the Shorts are ready to counter those head lines.

Space Force is investigating Tesla for the lack of toilet paper on the unmanned space ship.

The mining union has filed official complaint with labor relations on the lack on sunshine for the Boring employees.

Tesla buys Apple just before bankruptcy after failed FSD.... Tesla next?

Musk in need of finical advice follows Buffet on twitter.

But Buffet will only be an image of his pre-death self caught by his prior to death integration with a Musk Brain Chip implant.

Just remember no mater how healthy you are you could be gone in a neural blink.

 

[SunCatcher]

Must admit I can´t add much of value here, but Elon tweeting about a meteor hitting reminds me of him tweeting about a tsunami a while ago... This all sounds too good to be true, proably just a coincidence. Elon Musk on Twitter

My personal favorite;

 

[Tim S]

I find this example extremely helpful as I bought my first option this past week. I have enough TSLA to cover any margin but no where near enough cash to exercise the option, especially at the strike price. If by chance you were like me and did not have the liquidity, what exactly happens at expiry? Some have mentioned that it depends on your broker but I too have Etrade so thought you may know.
I believe FC explained it upstream as did Karen but it was over my head. I may take another look at those.

If the call option is ITM, can I just sell it at any time and the gains would be whatever the difference between the strike and the SP plus the premium which in your example above is ~$510 SP-$300 x 100=$21k.
Can I sell the option at any time that it shows a profit before expiry?
How is that profit calculated?
To this point, is it only profitable when the SP exceeds the strike price?
I noticed that it initially showed a profit in my account as the SP increased (but was well below the strike price) but it didn't seem to align exactly with the SP movement. Is that the time theta that is calculated since it's based on SP at some time in the future?
Am I still taxed if I buy shares with the profits?
Is there a way to convert the profit into shares immediately to avoid short term capital gains?

Whoa, did you miss the part where I said I was inexperienced? Since we're neighbors, I'll answer what I can. My experience is only with buying call options (in the US)...

I actually did not have enough cash in my account to buy the shares yesterday, so part of it was bought on margin. That happened automatically. If I did not have enough margin available, I would have gotten a margin call.

If you own any option, you can always sell (close) it on or before the expiration date. Your gain (or loss) will be the difference between what you paid when you opened it and what you received when you closed it.

If you sell (close) the option, it is a taxable event (unless it's in a tax-free account like a Roth IRA).

If you exercise a call option (buy shares), it is not a taxable event until you sell the shares.

You can exercise the option at any time, but I don't know of any reason to exercise before expiration.

Full disclosure: The trade I mentioned was by far my most successful option trade. I bought several call options in the first half of 2019 that expired worthless. I bought several call options in the second half of 2019 that I sold for a profit way too soon. It's not easy.

There was a post by @KarenRei a few weeks back with much more option info. Maybe you can find it? I also found good information at www.investopedia.com.

Good luck!

 

[Steve m]

Clearly, the solution is for both Electromans to fight it out in the Octagon. The winner keeps the name, the loser surrenders it. I hope you've been working on your BJJ.

How much would the audience be charged?

 

[HG Wells]

How much would the audience be charged?

Depends on the voltage of the two electromans !

 

[JustMe]

How much would the audience be charged?

Tesla would recommend that the audience be charged up to 80% for daily driving - or up to 100% if it’s a road trip.

 

[sdtslafan]

in case some of you haven't seen this, I think its a compelling explanation of why Tesla vehicles cannot accelerate on their own.

Why drivers are to blame for all sudden unintended acceleration accidents in a Tesla

 

[Artful Dodger]

Sorry for the super-ignorant question, but wouldn't Tesla have to had realized this profit in Q4 by converting the options to cash before Q4 ended?

If I understand things correctly, then the value of the contracts is changing which seems like something that cannot be added to the profit.

Can you explain (again?) how this could be deemed a Q4 profit?

So I think what @Fact Checking is alluding to is that if Tesla had, say, sold all 60,000 of their $310 Strike CALLS on (again, just say) Fri, Dec 27, 2019 when the Closing SP was $430, then we could estimate the value of those CALLS once more using the Black Scholes Calculator:

So the cash payout on Dec 31, 2019 (which IS in 2019Q4 wrt Tesla's Financial Reporting period) would be:

$157.58 * 60,000 * 100 = $945,480,000​

Yes, that's a pool of up to $945 million dollars, from which Tesla could choose (at its discretion) to add to its 'Other Income' line for 2019Q4, with these effects:

• securing a net profit for FY2019 (net profitable over last 4 qtrs, and profitable in the last)
  
• meeting the last outstanding requirement for TSLA to be listed on the S&P 500 (February?)
  
• likely exploding the last of the Shortzes ICE-bergy-bits, triggering a short squeeze.

So yeah, its is kinda a METEOR incoming, spelling DOOM for the DINOSOURS. Or variations thereof. I think that was the jist of the comment that there has been an 'unexplainable' rise in TSLA from $430 at the end of Dec 2019 to $545 early last week. Somebody at a large brokerage knows if Tesla redeemed a large number of those CALL contracts:

One counter-argument is that if Tesla did this, then the investment bank who underwrote those calls and warrants would sure know about it, and the TSLA share price would have catapulted up starting around end of December, when Tesla potentially sold the calls for around $200 when the TSLA price hit $400. Wait a minute ...

Further, Tesla would only redeem enough to make 2019 a profitable year as a whole. FI, if Tesla already knew they had $345M in profits for 2019Q3, then they'd only need to cash in $625M of those CALLS. That would still leave Tesla with over 20,000 CALL contracts at the $310 Strike expiring on Mar 19, 2021. Glorious.

Subtracting known losses for the 1st 3 qtrs of 2019, then adding back in the number of CALLS redeemed also then gives that Brokerage effective early information as to Tesla's likely profitability for Q4.

Knowledge is (TRADING) Power.

Cheers!

 

[Steve m]

Given that Tesla is integrating voice recognition how many people think that yelling "stop" should cause the car to slam on its breaks? How about "whoa, Nellie!" Or "oh my god!"?