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

[dha]

Latest official short interest figures for TSLA have been released: Tesla, Inc. Common Stock (TSLA) Short Interest

24,954,265 shares were held short as of 1/15 settlement. This reflects a change of -1,304,887 shares since the last reporting period.

Once again, Ihor Dusaniwsky's figures were horrifically inaccurate during this period.

On 1/14, he stated there were 26.54 mm shares shorted: Ihor Dusaniwsky on Twitter

On 1/13, he stated there were 26.74 mm shares shorted: Ihor Dusaniwsky on Twitter

If you took Ihor's figures at face value, you would believe that short interest had INCREASED slightly, rather than decreased moderately during this reporting period.

 

[EinSV]

View attachment 504917

Ihor’s algo continues to be shaky — on 1/15 he estimated that short interest was up slightly to 26.90 million shares.

Twitter

Did not seem right at the time given the price action and other factors ....

Clearly there are strong buyers out there but I find it hard to believe that short interest hasn't fallen in January so I'll take the "under" on Ihor's short interest numbers

(Happy to be wrong and have more future involuntary buyers onboard )

Edit @dha beat me to the punch

 

[KarenRei]

Thanks for sharing.

With your chosen Feb. 21 expiration you pay more for time value than with e.g. Feb 7 (or even Jan. 31), even though the significant and potentially catalytic event is the ER, which is prior to Jan. 30.

Why February 21st expiry as opposed to sooner?

Sorry for the delay in responding.

Let's do a comparison for another 50-point spread of about the same cost basis as the 21 Feb $750-$800 spreads ($5,20-$3,50). For 31 Jan, that would be $695-$745 spreads ($3,15-$1,33). Now, we don't have to do 50-point spreads - we could do narrower spreads with more contracts for the same total net reward, but we'll just keep it as an example.

A couple observations:

• For full yield, the stock needs to jump up $187 for Jan and $242 for February. But January has only two trading days post-ER while February has 23 days post-ER. During this time, if it was a good ER, you have analyst upgrades; you'll have given big buyers time to accumulate (or even, first, to decide to accumulate); potential for a Moody's upgrade or S&P rumblings... even some macro stuff going on right now like coronavirus will have time to pass. Two days isn't much; a good ER rarely just causes the stock to jump up big and then flatline.
• If the ER is good but doesn't cause a big enough initial jump, the Jan spreads will quickly become worthless, while the Feb spreads will retain some residual value. The devil is in the details, of course, and both types of spread still definitely fall under the "lotto" category

But really, the short of it is, I just like the look of the 21 Febs more than the 31 Jans. One could also ask why not even longer in the future, but I'm really not looking to price in even more events beyond that in terms of "lotto tickets". I just wanted enough time for the aftermath of the ER to get fully priced in. And again, these are just some minor lotto tickets; my main options are 15 Jan '21 spreads with relatively unambitious strikes ($620-$800 on the bottom end, $900-1000 on the top), so a year's time on them to achieve some relatively modest growth.

 

[Fobble]

I don't think we can call a billionaire who is warning about the job loss caused by automation, has policy responses to address it, and most emphatically doesn't want to destroy machines, a Luddite.

Agree with your statements , except the billionaire part, bc Yang is not

 

[Singuy]

Agree with your statements , except the billionaire part, bc Yang is not

Yeah where did this billionaire thing about yang come from? He is far from one. His net worth is not even 5 mil.

 

[Sancho]

Sorry for the delay in responding.

Let's do a comparison for another 50-point spread of about the same cost basis as the 21 Feb $750-$800 spreads ($5,20-$3,50). For 31 Jan, that would be $695-$745 spreads ($3,15-$1,33). Now, we don't have to do 50-point spreads - we could do narrower spreads with more contracts for the same total net reward, but we'll just keep it as an example.

A couple observations:

• For full yield, the stock needs to jump up $187 for Jan and $242 for February. But January has only two trading days post-ER while February has 23 days post-ER. During this time, if it was a good ER, you have analyst upgrades; you'll have given big buyers time to accumulate (or even, first, to decide to accumulate); potential for a Moody's upgrade or S&P rumblings... even some macro stuff going on right now like coronavirus will have time to pass. Two days isn't much; a good ER rarely just causes the stock to jump up big and then flatline.
• If the ER is good but doesn't cause a big enough initial jump, the Jan spreads will quickly become worthless, while the Feb spreads will retain some residual value. The devil is in the details, of course, and both types of spread still definitely fall under the "lotto" category

But really, the short of it is, I just like the look of the 21 Febs more than the 31 Jans. One could also ask why not even longer in the future, but I'm really not looking to price in even more events beyond that in terms of "lotto tickets". I just wanted enough time for the aftermath of the ER to get fully priced in. And again, these are just some minor lotto tickets; my main options are 15 Jan '21 spreads with relatively unambitious strikes ($620-$800 on the bottom end, $900-1000 on the top), so a year's time on them to achieve some relatively modest growth.

I originally came to same investment decision you did, but then I changed to a 680-730 Jan 31, because for me the purpose of the “lotto ticket” is to cash in on a sudden SP rise. If there is a very strong ER, but it takes a few weeks for the market to fully price it in, then I have plenty of time to cash in on that.

As the SP rises I rollover my ITM calls, but if the SP soars in one pop, my leverage is underoptimized. The Jan 31 lotto ticket covers that possibility.

 

[Singuy]

Solar Roof Extensive Review

Installation seems to be pretty quick for the tiles itself, but it seems like one is upgrading from shingles to tiles. An extensive underlayment is put in from the looks of it which itself took 2 days. Solar tiles itself doesn't seem to be waterproof(just like traditional tiles).

This is actually a pretty big deal since upgrading from shingles to clay tiles just by itself is 40-50k.

The Tesla Solarglass Roof and Powerwall — SolarRoof.Cool

 

[CanadaEV]

Sorry for the delay in responding.

Let's do a comparison for another 50-point spread of about the same cost basis as the 21 Feb $750-$800 spreads ($5,20-$3,50). For 31 Jan, that would be $695-$745 spreads ($3,15-$1,33). Now, we don't have to do 50-point spreads - we could do narrower spreads with more contracts for the same total net reward, but we'll just keep it as an example.

A couple observations:

• For full yield, the stock needs to jump up $187 for Jan and $242 for February. But January has only two trading days post-ER while February has 23 days post-ER. During this time, if it was a good ER, you have analyst upgrades; you'll have given big buyers time to accumulate (or even, first, to decide to accumulate); potential for a Moody's upgrade or S&P rumblings... even some macro stuff going on right now like coronavirus will have time to pass. Two days isn't much; a good ER rarely just causes the stock to jump up big and then flatline.
• If the ER is good but doesn't cause a big enough initial jump, the Jan spreads will quickly become worthless, while the Feb spreads will retain some residual value. The devil is in the details, of course, and both types of spread still definitely fall under the "lotto" category

But really, the short of it is, I just like the look of the 21 Febs more than the 31 Jans. One could also ask why not even longer in the future, but I'm really not looking to price in even more events beyond that in terms of "lotto tickets". I just wanted enough time for the aftermath of the ER to get fully priced in. And again, these are just some minor lotto tickets; my main options are 15 Jan '21 spreads with relatively unambitious strikes ($620-$800 on the bottom end, $900-1000 on the top), so a year's time on them to achieve some relatively modest growth.

I got the Feb 21 for most of the same reasons.
Another reason that usually flies under the radar is that comprehension of what Musk says on a call (or at any time) often takes time to consolidate.

A graphic example of this was the introduction of the Cybertruck. Many people reported negative initial reactions. Then a large number of those flipped to positive.

 

[Opus BC fan]

That's what I love about this forum....the hard left and right turns

Two wrongs don't make a right but 3 lefts do.


okay, I'll show myself out now...

 

[Thekiwi]

Latest official short interest figures for TSLA have been released: Tesla, Inc. Common Stock (TSLA) Short Interest

24,954,265 shares were held short as of 1/15 settlement. This reflects a change of -1,304,887 shares since the last reporting period.

Once again, Ihor Dusaniwsky's figures were horrifically inaccurate during this period.

On 1/14, he stated there were 26.54 mm shares shorted: Ihor Dusaniwsky on Twitter

On 1/13, he stated there were 26.74 mm shares shorted: Ihor Dusaniwsky on Twitter

If you took Ihor's figures at face value, you would believe that short interest had INCREASED slightly, rather than decreased moderately during this reporting period.

Net 5% of Tesla shares short covered in first two weeks of January.

 

[Beltsbear]

View attachment 504917

While the days to cover have gone down, the dollars to cover has gone way up. Interesting.

 

[SageBrush]

Ihor Dusaniwsky's figures were

About 6% over if one ignores the day of difference in the comparison.
Or you can say that he probably missed a small contraction in the short interest.

I say small for two reasons:
~ 25m short interest still puts TSLA at or around the top of most shorted companies
The contraction remains widely divergent from the stock appreciation

For someone like me who would like to understand the movers behind the stock rise for one; and wants to know if a short squeeze/burn has yet to be written, I will continue to follow Ihor.

 

[Yonki]

Once again, Ihor Dusaniwsky's figures were horrifically inaccurate during this period.

"Horrifically"? Is there someone out there doing a better job?

His estimates are his best...estimates, so assign an error band to his numbers or ignore them.

 

[EVNow]

Indeed, he appears to be a Luddite. Politicians often are. Nevertheless, I suspect that even this sort of publicity for Tesla is net beneficial.

Hmmm ... not sure you know much about him. And do you think Musk would support a luddite ?

Andrew Yang - Wikipedia

 

[EV forever]

All in all, turned out to be a reasonably good day today.
Picked up 25 shares at 548 and 25 at 542 - so already made some money on them. Also bought one lottery ticket AKA call option for Feb 21 expiration (thanks for the insight @KarenRei)

At the end, Tesla still ended up above 100B in market cap - so all is well with the world

 

[Chickenlittle]

I have discussed valuation allowance and recognizing differed tax losses with someone who has been at the center of such determinations. Much of what has been previously discussed here is true. I am not an expert on the area but what I gleaned from my conversation is as follows

‘The decision to do so has to be backed by the auditor. This person believes with enough pressure that the PCW partner managing the account could be influenced enough to support it. It’s not an issue the IRS cares about and would not review. However, the SEC could issue a letter to ask about it. Now we all know the short sellers would not stoop so low as to try to influence the Short sellers Enrichment Commission to investigate the decision. The SEC could with an adverse decision force tesla to restate the earnings report. But we all know that the SEC has been so supportive of Elon that this would not be an issue. Is it worth the risk? We will find out. If it’s not done with q4 then it probably not be done till q3 or q4 the qtr where these decisions are usually made

 

[ByeByeJohnny]

Has anyone tried to figure out what it could mean financially for Tesla if they went from selling FSD to not selling it and instead using a subscription model?

Almost every software company in the world has or is trying to switch to a subscription service. Adobe probably being the most prominent (financial) success. Those that still haven't almost all make you pay again every time there is a version with significant upgrades which I think Tesla want to avoid. But they also don't want to give free upgrades for maybe 20 years.

Even when robotaxi fleets exist I believe Tesla would sell/subscribe you FSD for private use for something similar to the current price. If you want to have it join the fleet the price will be much higher.

I can see a number of cases where owners might actually prefer to subscribe while it would also be more profitable for Tesla. $7k is a lot of money to pay at once even if you can afford a $40k car. Even if you take out a loan it will increase your downpayment and might get you a higher rate or even being denied a loan if the total is deemed to high for you income/credit score.

If you are selling to get a new car you'll have to worry about being able to find a buyer that will get you a significant part of those $7k back. If you are buying a used car without FSD you would probably not want to pay $7k if your car is already say 10 years old. For Tesla I think it means they won't sell FSD to hardly any car that is over 5 years old or so. Assuming a 20 year lifespan you would only get 15 years of value compared to 20 when bought new. Older cars even less.

There is also the insurance issue. I've already seen articles about insurance companies not wanting to reimburse FSD in certain situations.

Here's my take on the numbers.

If you let owners subscribe to FSD when it's fully available so that you can sit and read or watch video while in the driver seat I think almost everyone would subscribe if the cost was $50 a month. Even those that will eventually drive a 20 year old Tesla worth maybe $5k then would pay that in most cases.

So for a 20 year lifespan Tesla would get 240 months x $50 = 12k

They could obviously also have different levels with some higher levels getting extra perks and if Elon is looking to expand the life of Teslas, for environmental reasons for example, they could have a slightly higher price for new cars and a little lower for old ones. Also a little less per month the longer you signed op for.

With the correct price point, which I think would be around $50/month, they might get a 90% take. So 10.8k average per car.

I don't think we really know what percentage has paid and obviously have even less idea about how many will pay once it's available but I'm thinking something like 50% at best at a one time $7k fee.

With those numbers Tesla would make something like 3.5k per car on average compared to 10.8k

Lets say Tesla gets to 3 million cars sold per year in the not to distance future. That's only 6 gigafactories. That would mean a difference of 8.5k x 3 million = $21.9 BILLION extra in almost pure profit every year compared to selling it outright. Even if the $7k price got the same 90% take which I think is impossible a $50 dollar/month model would still pull in an extra $11.4 billion.

Granted, it's better to get payment today than spread out over 20 years average but that's a big difference. And just like leasing contracts Tesla could sell those off if they needed the money sooner. Plenty of pension funds that would buy those against just a few interest points.

Either my 3 am math is way off or Tesla will obviously already have figured this out. In that case FSD could be much more valuable than I think almost anyone have figured.

Anyone have any factual numbers or ideas that would change my estimates?

 

[Beltsbear]

Has anyone tried to figure out what it could mean financially for Tesla if they went from selling FSD to not selling it and instead using a subscription model?

Almost every software company in the world has or is trying to switch to a subscription service. Adobe probably being the most prominent (financial) success. Those that still haven't almost all make you pay again every time there is a version with significant upgrades which I think Tesla want to avoid. But they also don't want to give free upgrades for maybe 20 years.

Even when robotaxi fleets exist I believe Tesla would sell/subscribe you FSD for private use for something similar to the current price. If you want to have it join the fleet the price will be much higher.

I can see a number of cases where owners might actually prefer to subscribe while it would also be more profitable for Tesla. $7k is a lot of money to pay at once even if you can afford a $40k car. Even if you take out a loan it will increase your downpayment and might get you a higher rate or even being denied a loan if the total is deemed to high for you income/credit score.

If you are selling to get a new car you'll have to worry about being able to find a buyer that will get you a significant part of those $7k back. If you are buying a used car without FSD you would probably not want to pay $7k if your car is already say 10 years old. For Tesla I think it means they won't sell FSD to hardly any car that is over 5 years old or so. Assuming a 20 year lifespan you would only get 15 years of value compared to 20 when bought new. Older cars even less.

There is also the insurance issue. I've already seen articles about insurance companies not wanting to reimburse FSD in certain situations.

Here's my take on the numbers.

If you let owners subscribe to FSD when it's fully available so that you can sit and read or watch video while in the driver seat I think almost everyone would subscribe if the cost was $50 a month. Even those that will eventually drive a 20 year old Tesla worth maybe $5k then would pay that in most cases.

So for a 20 year lifespan Tesla would get 240 months x $50 = 12k

They could obviously also have different levels with some higher levels getting extra perks and if Elon is looking to expand the life of Teslas, for environmental reasons for example, they could have a slightly higher price for new cars and a little lower for old ones. Also a little less per month the longer you signed op for.

With the correct price point, which I think would be around $50/month, they might get a 90% take. So 10.8k average per car.

I don't think we really know what percentage has paid and obviously have even less idea about how many will pay once it's available but I'm thinking something like 50% at best at a one time $7k fee.

With those numbers Tesla would make something like 3.5k per car on average compared to 10.8k

Lets say Tesla gets to 3 million cars sold per year in the not to distance future. That's only 6 gigafactories. That would mean a difference of 8.5k x 3 million = $21.9 BILLION extra in almost pure profit every year compared to selling it outright. Even if the $7k price got the same 90% take which I think is impossible a $50 dollar/month model would still pull in an extra $11.4 billion.

Granted, it's better to get payment today than spread out over 20 years average but that's a big difference. And just like leasing contracts Tesla could sell those off if they needed the money sooner. Plenty of pension funds that would buy those against just a few interest points.

Either my 3 am math is way off or Tesla will obviously already have figured this out. In that case FSD could be much more valuable than I think almost anyone have figured.

Anyone have any factual numbers or ideas that would change my estimates?

I would absolutely do FSD at $50 a month and I would probably not in its current form do it at $7000. I think the price would actually be higher then $50. I would still sub at $70, and at $80 is where I would consider not subscribing.

I think Tesla/Elon need to re-think the pricing, because they can sell personal FSD and Tesla network FSD separately. FSD does not need to be $10,000 (or more) when FSD fully works. It can be sold for $5000, but it won't do any commercial work. Then the Tesla network can be sold for $10,000 or more, or on a model that Tesla gets much more of the revenue until it is paid off.

 

[phantasms]

Same here. I’m not dropping $10k for FSD. lol Monthly? Sure!

 

[MC3OZ]

because they can sell personal FSD and Tesla network FSD separately.

I agree on this...

I also think cars in the Tesla network can earn the money to to pay off the monthly subscription... so if the customer doesn't purchase Tesla Network level FSD, Tesla simply takes a bigger cut... either way, Tesla gets the money....

I also think cars in the Tesla network should get a discount on personal FSD, if Tesla needs to provide more incentive to get owners on board...

Owners with personal FSD or Tesla Network FSD should also get a discount on their next corresponding FSD purchase.... whether or not they continue to own the old car, and it remains in the network...

This is better than the referral program IMO, existing customers get a discount on FSD but only when buying a new car... Keeping existing customers loyal to the brand is important...

So maybe you need to purchase the cheaper personal FSD as a stepping stone to monthly subscription of the Tesla network service. Or if you don't Tesla takes an even bigger cut, and after a while the car earns you personal level FSD.

So IMO they can do all of these things, anytime they choose to, with lots of upside.... but ultimately it is their call.