I don't see Tesla buys back shares any time soon. Tesla is still a young company and not financially stable enough, and it is still growing rapidly, thus always need cash
It's already thankful that they don't need to issue new shares to raise money
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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
It's already thankful that they don't need to issue new shares to raise money
Fact Checking
Well-Known Member
While I agree that Tesla's won't be buying back shares anytime soon, Elon and Zach said it on the Q4 call that they are not cash constrained anywhere:
Elon Musk
Zachary Kirkhorn
"Well, we're actually spending money as quickly as we can spend it sensibly. So if there's any sensible way to spend money, we're spending it. There is no artificial hold back on expenditures anything that I see that is what looks like a -- it's got good value for money. The answer is yes immediately. So -- but we're spending money I think efficiently and we're not artificially limiting our progress. And then despite all that we are still generating positive cash. So in light of that, it doesn't make sense to raise money because we expect to generate cash despite this growth level."
"Zach, you can…"
Zachary Kirkhorn
"Yes, I completely agree with that."
So Tesla is in full growth mode and is not cash constrained anywhere.
The 790,000/year projected vehicle production capacity guided for this year, an increase over the 415,000/year capacity from last year should make that pretty clear that Tesla is in hyper-growh mode.
Fact Checking
Well-Known Member
Options open interest next week is a fraction of tomorrow's open interest, so I'd say that near or after tomorrow's expiry the price will be moved by fundamentals and stock buying, not derivatives.
But tomorrow's expiry is huge: 172,000 puts and 177,000 puts are expiring.
Here's the distribution of the strikes, rounded to $10 for easier reading:
Code:... PUT $350: 8,877 ### , CALL $350: 89 PUT $360: 4,193 # , CALL $360: 313 PUT $370: 2,101 , CALL $370: 375 PUT $380: 5,520 ## , CALL $380: 360 PUT $390: 3,150 # , CALL $390: 233 PUT $400: 6,774 ## , CALL $400: 2,155 PUT $410: 1,530 , CALL $410: 398 PUT $420: 3,573 # , CALL $420: 985 PUT $430: 4,616 # , CALL $430: 726 PUT $440: 3,359 # , CALL $440: 871 PUT $450: 7,720 ## , CALL $450: 1,578 PUT $460: 5,429 # , CALL $460: 963 PUT $470: 3,962 # , CALL $470: 832 PUT $480: 10,200 ### , CALL $480: 1,597 PUT $490: 4,436 # , CALL $490: 2,003 PUT $500: 17,128 ##### , CALL $500: 3,214 # PUT $510: 5,352 # , CALL $510: 1,976 PUT $520: 8,413 ## , CALL $520: 1,564 PUT $530: 6,551 ## , CALL $530: 1,890 PUT $540: 6,671 ## , CALL $540: 3,223 # PUT $550: 5,377 # , CALL $550: 2,923 # PUT $560: 4,075 # , CALL $560: 4,478 # PUT $570: 4,418 # , CALL $570: 5,319 # PUT $580: 3,419 # , CALL $580: 6,112 ## PUT $590: 2,676 # , CALL $590: 6,504 ## PUT $600: 2,006 , CALL $600: 12,938 #### PUT $610: 364 , CALL $610: 5,599 ## PUT $620: 196 , CALL $620: 4,014 # PUT $630: 220 , CALL $630: 6,224 ## PUT $640: 165 , CALL $640: 6,852 ## PUT $650: 718 , CALL $650: 9,868 ### PUT $660: 809 , CALL $660: 6,690 ## PUT $670: 276 , CALL $670: 3,013 # PUT $680: 23 , CALL $680: 4,311 # PUT $690: 40 , CALL $690: 1,462 PUT $700: 233 , CALL $700: 7,519 ## PUT $710: 27 , CALL $710: 2,582 # PUT $720: 46 , CALL $720: 3,503 # PUT $730: 21 , CALL $730: 3,763 # PUT $740: 12 , CALL $740: 3,080 # PUT $750: 22 , CALL $750: 3,984 # PUT $760: 13 , CALL $760: 792 PUT $770: 31 , CALL $770: 593 PUT $780: 12 , CALL $780: 599 PUT $790: 4 , CALL $790: 797 PUT $800: 3 , CALL $800: 4,504 # ... 2020/Jan/31: PUTs: 172,214 ; CALLs: 177,686
As you can read it from the histogram, unlike normal expiries the peak of puts and calls is at two very different prices: shorts expected a drop to $500, longs expected a rise to $600.
Since there's so few puts above $600, options writers would prefer tomorrow's closing price to be as low as possible. This is why I think the price is capped at $650 despite huge buying interest of 21 million shares already.
If the price breaks through $650 decisively then I'd expect delta hedging related share buying to become dominant in the price action, which could drive the price higher. We saw this the Friday after Q3:
That big move from $300 to $327 on Friday October 25 moved a lot of money out of the pockets of options writers, and I think a fair chunk of the buying that day was call option delta hedging of up to 10 million shares.
Today is options expiry day: open interest is 378,000 contracts, which is very large and reflective of the split bear/bull opinion about earnings.
Here's the summarized open interest for all open expiries, as of today:
Code:
2020/Jan/31: PUTs: 202,053 ; CALLs: 176,763
2020/Feb/07: PUTs: 62,425 ; CALLs: 80,234
2020/Feb/14: PUTs: 21,325 ; CALLs: 18,996
2020/Feb/21: PUTs: 239,701 ; CALLs: 115,669
2020/Feb/28: PUTs: 11,044 ; CALLs: 14,859
2020/Mar/06: PUTs: 2,203 ; CALLs: 3,115
2020/Mar/13: PUTs: 124 ; CALLs: 50
2020/Mar/20: PUTs: 170,994 ; CALLs: 105,195
2020/Apr/17: PUTs: 18,880 ; CALLs: 20,087
2020/May/15: PUTs: 28,694 ; CALLs: 24,720
2020/Jun/19: PUTs: 209,438 ; CALLs: 66,877
2020/Jul/17: PUTs: 13,055 ; CALLs: 10,899
2020/Aug/21: PUTs: 11,170 ; CALLs: 5,075
2020/Sep/18: PUTs: 29,615 ; CALLs: 13,340
2020/Oct/16: PUTs: 6,148 ; CALLs: 2,977
2021/Jan/15: PUTs: 241,426 ; CALLs: 114,423
2021/Mar/19: PUTs: 15,868 ; CALLs: 9,907
2021/Jun/18: PUTs: 25,764 ; CALLs: 26,236
2021/Sep/17: PUTs: 2,670 ; CALLs: 2,782
2022/Jan/21: PUTs: 37,363 ; CALLs: 31,601
2022/Jun/17: PUTs: 9,398 ; CALLs: 17,049
total: PUTs: 1,359,358 ; CALLs: 860,854('1' in the open interest table above represents a 100 shares size standard Nasdaq TSLA options contract.)
Here is an update to options open interest presented in a slightly different format than usual - instead of just posting today's open interest, here's the change in the open interest during the trading day yesterday, split into a put and a call side for easier reading:
In the first table there's the changes to the call open interest:
Code:
January 29 January 30
-----------------------------------------------------------------------------------------
CALL 490: 2,003 |## CALL 490: 1,712 |##
CALL 500: 3,214 |### CALL 500: 2,176 |##
CALL 510: 1,976 |## CALL 510: 1,784 |##
CALL 520: 1,564 |## CALL 520: 1,191 |#
CALL 530: 1,890 |## CALL 530: 1,709 |##
CALL 540: 3,223 |### CALL 540: 2,549 |###
CALL 550: 2,923 |### CALL 550: 2,576 |###
CALL 560: 4,478 |#### CALL 560: 4,086 |####
CALL 570: 5,319 |##### CALL 570: 4,431 |####
CALL 580: 6,112 |###### CALL 580: 4,547 |#####
CALL 590: 6,504 |####### CALL 590: 5,121 |#####
CALL 600: 12,938 |############# CALL 600: 9,941 |##########
CALL 610: 5,599 |###### CALL 610: 4,621 |#####
CALL 620: 4,014 |#### CALL 620: 3,918 |####
CALL 630: 6,224 |###### CALL 630: 6,451 |######
CALL 640: 6,852 |####### CALL 640: 5,877 |######
CALL 650: 9,868 |########## CALL 650: 12,429 |############
CALL 660: 6,690 |####### CALL 660: 9,099 |#########
CALL 670: 3,013 |### CALL 670: 5,942 |######
CALL 680: 4,311 |#### CALL 680: 5,663 |######
CALL 690: 1,462 |# CALL 690: 2,765 |###
CALL 700: 7,519 |######## CALL 700: 10,496 |##########
CALL 710: 2,582 |### CALL 710: 2,628 |###
CALL 720: 3,503 |#### CALL 720: 3,443 |###
CALL 730: 3,763 |#### CALL 730: 3,298 |###
CALL 740: 3,080 |### CALL 740: 2,664 |###
CALL 750: 3,984 |#### CALL 750: 4,554 |#####
CALL 760: 792 |# CALL 760: 1,118 |#
CALL 770: 593 |# CALL 770: 773 |#
CALL 780: 599 |# CALL 780: 676 |#
CALL 790: 797 |# CALL 790: 998 |#
CALL 800: 4,504 |##### CALL 800: 4,465 |####A fair portion of the lower strikes were rolled forward or exercised, and a number of $650+ short term weekly bets were made. These would expire worthless if TSLA closes below $650.
The put side is even more interesting:
Code:
January 29 January 30
PUT 490: 4,436 |#### PUT 490: 3,768 |####
PUT 500: 17,128 |################# PUT 500: 13,988 |##############
PUT 510: 5,352 |##### PUT 510: 4,787 |#####
PUT 520: 8,413 |######## PUT 520: 7,630 |########
PUT 530: 6,551 |####### PUT 530: 5,852 |######
PUT 540: 6,671 |####### PUT 540: 6,205 |######
PUT 550: 5,377 |##### PUT 550: 5,264 |#####
PUT 560: 4,075 |#### PUT 560: 3,467 |###
PUT 570: 4,418 |#### PUT 570: 4,172 |####
PUT 580: 3,419 |### PUT 580: 4,231 |####
PUT 590: 2,676 |### PUT 590: 3,457 |###
PUT 600: 2,006 |## PUT 600: 7,524 |########
PUT 610: 364 | PUT 610: 4,224 |####
PUT 620: 196 | PUT 620: 5,459 |#####
PUT 630: 220 | PUT 630: 8,656 |#########
PUT 640: 165 | PUT 640: 5,539 |######
PUT 650: 718 |# PUT 650: 11,269 |###########
PUT 660: 809 |# PUT 660: 848 |#
PUT 670: 276 | PUT 670: 317 |
PUT 680: 23 | PUT 680: 125 |
PUT 690: 40 | PUT 690: 105 |
PUT 700: 233 | PUT 700: 291 |Around 50k bearish put contracts were established yesterday in what was effectively vacuum before.
The combined open interest for only today looks like this:
Code:
PUT 550: 5,264 |##### | CALL 550: 2,576 |### |
PUT 560: 3,467 |### | CALL 560: 4,086 |#### |
PUT 570: 4,172 |#### | CALL 570: 4,431 |#### |
PUT 580: 4,231 |#### | CALL 580: 4,547 |##### |
PUT 590: 3,457 |### | CALL 590: 5,121 |##### |
PUT 600: 7,524 |######## | CALL 600: 9,941 |########## |
PUT 610: 4,224 |#### | CALL 610: 4,621 |##### |
PUT 620: 5,459 |##### | CALL 620: 3,918 |#### |
PUT 630: 8,656 |######### | CALL 630: 6,451 |###### |
PUT 640: 5,539 |###### | CALL 640: 5,877 |###### |
PUT 650: 11,269 |########### | CALL 650: 12,429 |############ |
PUT 660: 848 |# | CALL 660: 9,099 |######### |
PUT 670: 317 | | CALL 670: 5,942 |###### |
PUT 680: 125 | | CALL 680: 5,663 |###### |
PUT 690: 105 | | CALL 690: 2,765 |### |
PUT 700: 291 | | CALL 700: 10,496 |########## |
PUT 710: 33 | | CALL 710: 2,628 |### |
PUT 720: 54 | | CALL 720: 3,443 |### |
PUT 730: 34 | | CALL 730: 3,298 |### |
PUT 740: 33 | | CALL 740: 2,664 |### |
PUT 750: 29 | | CALL 750: 4,554 |##### |Put contracts are now almost as heavily present in the $600-$650 range as call contracts, and there's a lot of incentives for call writers to keep the price below $650. The $650 barrier observed yesterday was partly maintained from the delta hedging required by the 50k new short contracts established.
Should $650 break decisively, the delta hedging feedback loop outlined by @ReflexFunds in previous posts should help the price propel up - but there's a similar volatility enhancement on the way down as well.
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RobStark
Well-Known Member
Elon didn't mention any ICE parts. He did mention legacy OEMs have 80% of fleet is out of warranty whereas Tesla is the opposite and at least 80% of fleet is in warranty.
Cars do need a constant stream of fluids,filters, and brake pads every 20k-100k miles depending on use.
You don't need a constant stream of alternators, alternators belts and fuel injectors.
All the consumables are commoditize made by third parties and just as easily purchased from non-dealer auto part stores.
It is the more proprietary items and especially those made by the OEM themselves where they can charge an arm and a leg. Remanufactured transmissions and engines. Various computers. These can also be purchased 3rd party but requires a much bigger leap of faith in 3rd party than buying a filter or bottle of oil.
Being the most vertically integrated OEM, Tesla will have a chance to sell many repair items for large profits if it chooses to after Tesla has a large fleet out of warranty.
Automated handles, touch screens, auto opening door/liftgate parts, headlights and tail lights.
For Model X and S at least there may not be a large enough market for third parties to offer parts like fenders and headlights.
Eventually there will also be a market to remanufacture battery packs.
RobStark
Well-Known Member
For some reason EV Sales Blog didn't do a chart for Brands this time.
He wrote this
After a race that seemed like a walk in the park, Tesla has won once again the Best Selling PEV maker trophy, with 366.000 units, winning with over 100.000 units advantage over the #2 BYD, with the Californian brand score a new all-time record in December (63.000 units), just to put the icing on the cake.
More comments in the link.
EV Sales: Global Top 20 - December 2019
My interpretation of this is maybe a bit less rosy than some here. They're learning how to do this thing. Training many models for specific tasks with their respective curated training sets is not exactly "vacation mode". They now have what probably can be described as "driving situations" as training sets that include video feeds from all cameras (and probably radar) and they simply train for desired outcomes. That's why he's talking about AP being able to drive like it's a high speed chase. It'll be able to do stuff that even highly trained humans won't do, and nobody will be teaching it how, it'll learn by example and then by trial (probably in a sim first, then in some controlled reality). Watch this video knowing that nobody taught this thing how to do what it does. It was just given the goal and gobs of simulated learning time. That didn't work well enough so they had to give it some more simulated time with modified environments like different gravity or tied up fingers. And then it started reliably working. Solving Rubik’s Cube with a Robot Hand
So yes it definitely is a substantial breakthrough, they got the hardware and a system that can learn how to drive instead of a bunch of little individual subsystems that learn small tasks and then you still have to make them all work together to solve the overall problem. That doesn't mean they're almost done. That means they built a much better tool, now they still have to do the training, they still have to make up training datasets etc. How much of what they had for training datasets before can they re-use in the new system? How much more will they need to get some minimally working FSD? Is the current hardware powerful enough to run what is needed without being rat-holed into some crazy optimizations to get acceptable performance? All that remains to be seen.
Artful Dodger
"Neko no me"
Elon explained exactly why they aren't replacing 18650s with 2170s during the Q4'19 Conference Call. The same reasons apply to why they won't replace 2170s with the new 'Maxcells':
TESLA NEEDS ALL THE BATTERIES THEY CAN GET.
How is this even a question around here? Ford.
Martin Viecha
Okay. And the last question from investors is the sales of Model S and X have stayed flat for several quarters, the main reason is that they still use 18650 batteries. When we will S & X use 2170 batteries manufacturing capacity of 18650 may be used for battery storage systems since that.
Elon Musk
Sure. Well, actually the core chemistry inside the 18650 cell has improved many times over the years. So, it's really the form factor as opposed to a core technology. So it's, yes, I think we're pretty happy with where the -- the energy content, the cells, the improvements in efficiency of both vehicle. We're rapidly approaching a 400 mile range for the Model S, for example. So this is -- it won't be long before Model S is 400 mile range. Anything you want to add to that?
Drew Baglino
No other than to say that the 18650 line is running smoothly for really long time and in a world where cell-supply is fueling growth like or part of the fuel growth, I don't see a reason to turn that cell-supply off, so…
Okay. And the last question from investors is the sales of Model S and X have stayed flat for several quarters, the main reason is that they still use 18650 batteries. When we will S & X use 2170 batteries manufacturing capacity of 18650 may be used for battery storage systems since that.
Elon Musk
Sure. Well, actually the core chemistry inside the 18650 cell has improved many times over the years. So, it's really the form factor as opposed to a core technology. So it's, yes, I think we're pretty happy with where the -- the energy content, the cells, the improvements in efficiency of both vehicle. We're rapidly approaching a 400 mile range for the Model S, for example. So this is -- it won't be long before Model S is 400 mile range. Anything you want to add to that?
Drew Baglino
No other than to say that the 18650 line is running smoothly for really long time and in a world where cell-supply is fueling growth like or part of the fuel growth, I don't see a reason to turn that cell-supply off, so…
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Fact Checking
Well-Known Member
Not just that, but the 18,650 and 21,700 cells have the same chemistry.
This is how Elon explained it in the conference call:
Elon Musk
"Sure. Well, actually the core chemistry inside the 18650 cell has improved many times over the years. So, it's really the form factor as opposed to a core technology. So it's, yes, I think we're pretty happy with where the -- the energy content, the sell-in, the improvements in efficiency of both vehicle. We're rapidly approaching a 400 mile range for the Model S, for example. So this is -- it won't be long before Model S is 400 mile range."
Improvements in chemistry are flowing into all Tesla models - cell micro form-factor doesn't really matter. If you buy a Model S or a Model 3 today you get the best cell technology from Tesla.
Some thoughts on the battery investor day. Remember autonomy investor day? The stock didn't go up even though what got revealed was quite substantial.
For batteries, it might or might not be similar. I think that if what is revealed is reasonably quantifiable (say, they spill the beans on price per Wh and it's super low), it can move the stock. But as we've seen so far, there simply isn't enough understanding to move the stock if what is being revealed has no obvious/quantifiable immediate business impact and requires specialized knowledge in multiple disciplines to make sense of. Sure, anyone with half a brain now knows Tesla is planning to make their own integrated batteries, and lots of them. So far the market was operating in "show me the money" mode which all longs here are reaping the benefits of at the moment, since we had an arbitrage opportunity of knowing what is going on before it was priced in. Will we have another arbitrage opportunity with the batteries? Personally I think the general advice of just stay long and it'll be all good after some time applies here.
For batteries, it might or might not be similar. I think that if what is revealed is reasonably quantifiable (say, they spill the beans on price per Wh and it's super low), it can move the stock. But as we've seen so far, there simply isn't enough understanding to move the stock if what is being revealed has no obvious/quantifiable immediate business impact and requires specialized knowledge in multiple disciplines to make sense of. Sure, anyone with half a brain now knows Tesla is planning to make their own integrated batteries, and lots of them. So far the market was operating in "show me the money" mode which all longs here are reaping the benefits of at the moment, since we had an arbitrage opportunity of knowing what is going on before it was priced in. Will we have another arbitrage opportunity with the batteries? Personally I think the general advice of just stay long and it'll be all good after some time applies here.
The “part 2” third row interview was fantastic, and is a must listen for any investor. Whereas the first part was also good, it was more discussing past events, whereas part 2 eventually gets into current operational subjects.
any bets as to how soon we see module-less battery packs? (Anyone who listens will know why this is a certainty to happen at some point)
any bets as to how soon we see module-less battery packs? (Anyone who listens will know why this is a certainty to happen at some point)
Autonomy Investor day was really cool for nerds like me (us) and it gave us excellent insight into how Tesla's going to do the impossible. For WS analyst? Way over their head! Also, Autonomy day's most concrete, immediate "product" was HW3 computer, which, again, amazing milestone in AI HW development and will be taught in school a decade from now as a turning point in technology, but not material for WS analyst. 99% of the world still considers FSD a pie in the sky thing and Tesla's target dates were 1-2 years out anyway (hence no immediate bottom line impact).
Now, battery day on the other hand... oh boy.
Unless they come out with nothing but aspirational future tech years down the road, this has much more potential for SP movement. As I said earlier, releasing info on miracle battery tech a year out is a dangerous game that could osborne current products, just like upcoming EVs are osborning (some) ICE sales.
If however they announce, like with HW3, that some of this tech is already in production and this has tangible benefits, it would leapfrog Tesla even further ahead of the competition, in fact osborning some of their announced, but yet unreleased products. This is tangible, major news for analysts with financial benefits they can plug into their models. These benefits could include: SW update unlocks more range on cars produced since e.g. March 1, significantly higher margin on cars in production, less capex needed for ramping battery production capacity, better cell longevity and charging rate, less environmental impact, etc etc. Who knows what they've cooked up.
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If there are any concerns around Osborning from the new pack, Tesla could just solve the problem by pricing it as an option in the purchase screen. Select "Advanced Battery" for an additional 5k. If that doesn't stop the Osborning, charge 10k for it.
Fact Checking
Well-Known Member
I think while there might be some energy density improvements from the new cell technologies, I believe the main advantage is on the mass production scalability side. Announcements in that area won't Osborne existing cells.
I.e. I believe what Elon is going to announce are new approaches to production, new scales of production and lower capex per unit of production capacity - which will be very interesting to growth-investors but shouldn't concern buyers of the current vehicles.
Batteries are good enough.
Battery factories are not.
Battery factories are not.
Disagree. I'd say we need a factor of four to end all discussions once and for all (half the price and double the capacity per volume or mass). Cycle count seems to be no issue right now anymore with a large enough battery.
Elon’s new techno song is pretty good, but I worry that he’s losing focus on the important stuff.
Important stuff like Teslaquila. All this stock ticker watching is making me thirsty, man.
Important stuff like Teslaquila. All this stock ticker watching is making me thirsty, man.
PV4EV
Member
Well, it would certainly help the Tesla-killers make a viable product. Would pretty much make them competitive with current Teslas.
It is properly spelled Efivitis...
That's not going to happen, though. Battery advancements are going to be incremental, until such a time like there's a whole new technology (solid state, or whatever). There's always a "path to" much better cost or energy density, not a product on hand with much better cost or energy density.
I think Tesla has been pretty open that they're trying to grow their annual battery capacity. They've never said anything about maintaining production levels but just trying to eke more range out of each vehicle.
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