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

[Ameliorate]

This only matters if you are a day trader. If you believe in Tesla’s future, you simply buy and hold for x years. Do you think Ron Baron and Baillie Gifford obsess over the market makers every single day? Stocks don’t go up in a straight line. End of story. Stop pulling your hair out with this insane conspiracy theory that market makers are going to cause Tesla damage. They sure didn’t cause Tesla damage when Elon raised capital at $767, which was a very generous valuation

I'm sorry, I have to disagree. The short attacks and lowering valuation of the stock over the years definitely posed a huge risk to Tesla as a company and is keeping value away from shareholders, many of which I'm sure have given up on TSLA over the years. Unless you were successfully trading the ups and downs, most gains happened in 2013 and 2019-2020 with violent upswings which are not nearly as sustainable as a slow steady rise.

The recent cap raise was brilliant but that option should be on the table every single day for a prime company like Tesla, not waiting for all the planets to align. Plenty of times I'm sure it would've been beneficial to cap raise but the SP was so low it would have diluted shareholders too much.

I don't blame all negative price action on shorts, definitely not. Was trying to point out we're still tied to oil prices seemingly. But to say the shorts don't do damage long term is irresponsible. There are a lot of (gullible) potential customers turned away because of the lies they read. Yeah we hit 960, who's to say if we hadn't had massive shorting the stock could have slowly walked up to 1200 before NCOV? Would a cap raise at 1100 be better than 767? sure would. Doesn't even sound like Waymo is relevant any more and it's still probably valued more than Tesla as a whole, (Was 120B last I heard, 180B prior to that) that's absurd. To say we end up in the same place shorts or no shorts can not be true. Tesla can and probably will dominate EV's and grid energy in spite of shorts, but they are not helping and I doubt you could change my mind on the matter.

You should look into what other industries stand to lose as the world transitions to sustainable energy. Shorting a few billion into Tesla to slow it down or ideally stop it is pennies in comparison to the Billion/s they stand to lose per day going forward.

When people comment on shorts losing money over the years, how they're dumb etc, sure some may be retail and whatnot, but it's short sighted to assume they've even shorted with the intention of making money on the short position. More likely is it's just deemed an acceptable loss. You have to consider how much even slowing Tesla down a year or two would reduce BEV output 10 years later. If the major transition away from oil happens 1 year later that's an extra (really rough guess) 700B oil and gas can pocket. I'd happily trade 10 Billion for 690B/year all day long. Sure it's a conspiracy theory but motivation is high. If everyone was pro Tesla from the start, wouldn't be surprised if they were pumping out 1M+ vehicles in 2020.

 

[Nocturnal]

Sometimes when you do good things you just trust that you’ll get something back. If it’s simply goodwill towards Tesla, or a government credit for helping out this will be good for all of Musk’s brand, going to the negotiating table during a crisis would not have been the way to go.

Agreed. It's the right thing to do, it will bring consumer goodwill, and will bring goodwill from people like Trump/congress whose behinds are on the line right now.

 

[StealthP3D]

They sure didn’t cause Tesla damage when Elon raised capital at $767, which was a very generous valuation

Generous valuation? Obviously, you are free to have your own opinion on how much Tesla is worth at any given time but there was $2.3 billion dollars of real money whose owners thought it was a low enough valuation to jump on it. That $2.3 billion manifested itself almost instantly. We can assume these were not naive investors who didn't know how to value a company like Tesla.

Granted, given the disruption being caused by the Coronavirus those same shares can be purchased for much less right now. But that's not to say they were valued "very generously" at that point in time.

 

[dc_h]

Sooooooo, last year Tesla released Q1 numbers on the morning of April 3rd. This year could be easier to release on time or early, since (noted in thread earlier) that they are doing less end of quarter push. I don't doubt the numbers will be manipulated in the press and by Tesla trolls, but what is the consensus here for a successful covid19 quarter? MIC model 3 should be about 15,000, which will make up for a lot of end of quarter push miss, but touchless delivery probably can't make up for all traditional delivery center or the big Netherlands dockside hand offs in Q4. I'm still thinking 90,000 is possible, but I think anything from 65,000 to 90,000 are reasonable.
If deliveries are over 80,000, will the stock bounce? If 90,000 will it shoot up to 750?

 

[TheTalkingMule]

Is today the typical run up so that shorts have shares to dump on Production numbers?

We need to remember the thought process of people buying and selling TSLA at the institutional level. To them, government subsidies are everything for EVs. Today China extended the EV subsidy by two years. That's something they can understand and digest quite readily relative to yesterday. Hence +5%.

Also, reading a bit more into it....there's an exemption for used car VAT tax as well. That could uniquely benefit Tesla since there are everyday inherent and government-originated advantages to owning an EV in China and most used EVs will be Tesla's in a couple years.

 

[Curt Renz]

Is today the typical run up so that shorts have shares to dump on Production numbers?

I suspect that TSLA is benefiting today from end of quarter window dressing. That's the tendency of money managers to load up on the quarter's winning stocks and sell losers, so that the snapshot of their holdings at quarter's end makes them appear to have been smart all quarter long. TSLA shares are nicely up for the quarter, while the overall market is well down.

The rebalancing this quarter is enhanced by fund managers who need to match their prospectuses' requirements to own a certain percentage worth of stocks relative to fixed income investments. Due to the large drop this quarter in the overall prices of stocks, many fund managers need to buy more stocks before the quarter ends. That may be causing the overall market to be performing better than it might have today.

As I've reported before, I sold all my TSLA shares on March 12 and bought a large portion back on March 24. Mid-morning today, I again sold my TSLA shares. Yesterday I sold my other stock and ETF holdings, so am flat for now. I'll wait for the dust to settle, as a healthy 74-year-old who nevertheless is remaining at home in self-quarantine.

 

[TheTalkingMule]

Sooooooo, last year Tesla released Q1 numbers on the morning of April 3rd. This year could be easier to release on time or early, since (noted in thread earlier) that they are doing less end of quarter push. I don't doubt the numbers will be manipulated in the press and by Tesla trolls, but what is the consensus here for a successful covid19 quarter? MIC model 3 should be about 15,000, which will make up for a lot of end of quarter push miss, but touchless delivery probably can't make up for all traditional delivery center or the big Netherlands dockside hand offs in Q4. I'm still thinking 90,000 is possible, but I think anything from 65,000 to 90,000 are reasonable.
If deliveries are over 80,000, will the stock bounce? If 90,000 will it shoot up to 750?

Imagine how much easier it is to coordinate an end of quarter push in China.....

 

[anthonyj]

I'm sorry, I have to disagree. The short attacks and lowering valuation of the stock over the years definitely posed a huge risk to Tesla as a company and is keeping value away from shareholders, many of which I'm sure have given up on TSLA over the years. Unless you were successfully trading the ups and downs, most gains happened in 2013 and 2019-2020 with violent upswings which are not nearly as sustainable as a slow steady rise.

The recent cap raise was brilliant but that option should be on the table every single day for a prime company like Tesla, not waiting for all the planets to align. Plenty of times I'm sure it would've been beneficial to cap raise but the SP was so low it would have diluted shareholders too much.

I don't blame all negative price action on shorts, definitely not. Was trying to point out we're still tied to oil prices seemingly. But to say the shorts don't do damage long term is irresponsible. There are a lot of (gullible) potential customers turned away because of the lies they read. Yeah we hit 960, who's to say if we hadn't had massive shorting the stock could have slowly walked up to 1200 before NCOV? Would a cap raise at 1100 be better than 767? sure would. Doesn't even sound like Waymo is relevant any more and it's still probably valued more than Tesla as a whole, (Was 120B last I heard, 180B prior to that) that's absurd. To say we end up in the same place shorts or no shorts can not be true. Tesla can and probably will dominate EV's and grid energy in spite of shorts, but they are not helping and I doubt you could change my mind on the matter.

You should look into what other industries stand to lose as the world transitions to sustainable energy. Shorting a few billion into Tesla to slow it down or ideally stop it is pennies in comparison to the Billions they stand to lose per day going forward.

I’m talking strictly about price action, they are no longer relevant and have lost their grip. Fudsters do damage to Tesla, yes. Short interest actually went down the past month, most of the slide down was caused by macro uncertainty, weak hands shaken and gamblers getting margin called. Waymo valuation was recently downgraded to $30b I think.

my point is this. Don’t gamble core shares. Sell a small portion in times of uncertainty if you want to raise some capital. Make a plan and follow it, for example I’m selling 5% of my shares at $1,000, 2.5% at $2,000, etc. Make a separate trading account if you want to have fun. Don’t use margin and don’t stress over a chart. It’s a waste of time because Tesla’s trend is clearly upwards

 

[ByeByeJohnny]

All vehicles destined for non-USA delivery were already in-country prior to the explosion of COVID19. With the exception of Italy, Spain and some other places, I think those nations will have seen the majority of their Q1 shipments delivered successfully.

There probably would have been an upside surprise on deliveries IMO without COVID19. I'm of the opinion that only USA will see a major deficit, as that is the last market to get vehicles. My global guess is no lower than 85,000 vehicles. Anything higher than 90,000 will be a great surprise for the stock IMO.

I'm sorry but with Norway/Netherlands at about 30% of Q1 2019 (7k less deliveries) and Spain/Italy and certainly others not doing record numbers there has to be a significant inventory left here in Europe. If any other country has had year over year gains of thousands of cars delivered we would have heard of it.

They supposedly sent 7 ships this Q1 compared to 6 ships Q1 2019.

I'ld guesstimate somewhere between 5-10k cars not delivered in Europe in Q1. Some of these will be delivered in April

 

[Drax7]

Sometimes when you do good things you just trust that you’ll get something back. If it’s simply goodwill towards Tesla, or a government credit for helping out this will be good for all of Musk’s brand, going to the negotiating table during a crisis would not have been the way to go.

Maybe New York will find a way to allow Tesla to open more showrooms
In exchange for help during crisis.

 

[StarFoxisDown!]

I suspect that TSLA is benefiting today from end of quarter window dressing. That's the tendency of money managers to load up on the quarter's winning stocks and sell losers, so that the snapshot of their holdings at quarter's end makes them appear to have been smart all quarter long. TSLA shares are nicely up for the quarter, while the overall market is well down.

The rebalancing this quarter is enhanced by fund managers who need to match their prospectuses' requirements to own a certain percentage worth of stocks relative to fixed income investments. Due to the large drop this quarter in the overall prices of stocks, many fund managers need to buy more stocks before the quarter ends. That may be causing the overall market to be performing better than it might have today.

As I've reported before, I sold all my TSLA shares on March 12 and bought a large portion back on March 24. This morning I again sold my TSLA shares. Yesterday I sold my other stock and ETF holdings, so am flat for now. I'll wait for the dust to settle, as a healthy 74-yer-old who nevertheless is remaining at home in self-quarantine.

I actually think the vast majority of rebalancing already happened. I'm looking for intensified selling as we go into close. I foresee a lot of these kinds of days like 1-2% drops on a regular basis to eventually take us closer to the lows we had recently. I don't think Tesla is benefiting from rebalancing though.....if anything you could say there's been weakness in the stock as investors took gains from the recent run up in the stock.

 

[Buckminster]

What about now? Up $40. You guys keep blaming shorts and manipulators. Those days are over. The shorts clearly got wiped, they are only 12% of the float which is at all time lows.

Up $20 now.....................................................................................

 

[anthonyj]

I would say some big traders may be making complex trades buying and selling the stock with options on the other side. Manipulating the market may be more a byproduct of this work, where they are finding models to profit from high volatility. I agree that shorts like Chanos are not relevant anymore, there are twitter trolls and such, but as a market force, team tslaq is not relevant. Market makers using complex models selling on the open market, buying black pools in a high volatility stock like TSLA is probably a relatively easy target to pick up millions to ticks using high frequency trading. If there is an enemy, its more likely an algorithm then tesla polls and diogenes.
That's my opinion anyhow, I have no idea how much skin Chanos or the other hedge funds still have in the game, but most of them have lost billions the last 5 years, while the rest of the market has been making new highs.

There are big players that make huge money from this volatility, but there is no room to model this in a long term bull thesis. It’s super irrelevant and doesn’t fit in an investors thread, it belongs in the trading thread. We can’t look at this volatility and say, “wow in ten years Tesla will sell 700k less cars because the stonk moved 5% down on a green macro day with no news, those damn shorts/M&Ms!”

 

[mongo]

It’s not 60% of all trades, it’s 60% of trades hitting the bid (sell orders). It’s called short selling volume. In fact think about it, higher short selling volume is bullish, as that means a smaller % of actual longs are selling to the bid. Also, short volume accounts for HFT market makers shorting, then covering, which is common in all stocks

It's not that either.

When FINRA is calculating percentage of selling that is tagged to short-sellers, a group of transactions included in one ticker unit are all considered sold by short-sellers if a single transaction in the group is a short-sale. I've tried to get a handle on how much a percentage of selling actually is short-selling when we have, say 60% of sales tagged to shorts. I asked Ihor Dusaniwsky once and he couldn't tell me.

My best WAG is that the lowest we ever see percentage of selling by shorts is something around 30% with TSLA. That would be the zero manipulations point where batching of sell transactions on the ticker and normal market-maker short transactions account for about 30% of the selling on a no-manipulation day. The difference between 30% and 60% is 30%, so maybe about a third of all transactions are actually manipulative selling by shorts on a day when the official figure is 60%. That's my best guess, and I have low confidence in its accuracy. Maybe someone else has a better calculation.

 

[anthonyj]

It's not that either.

40-60% is pretty average, check out any tech stock

Daily short sale volume percent for stock ticker AAPL is 60% on Mar 30, 2020
Daily short sale volume percent for stock ticker GOOG is 54% on Mar 30, 2020
Daily short sale volume percent for stock ticker AMD is 65% on Mar 30, 2020

 

[StealthP3D]

Sooooooo, last year Tesla released Q1 numbers on the morning of April 3rd. This year could be easier to release on time or early, since (noted in thread earlier) that they are doing less end of quarter push. I don't doubt the numbers will be manipulated in the press and by Tesla trolls, but what is the consensus here for a successful covid19 quarter? MIC model 3 should be about 15,000, which will make up for a lot of end of quarter push miss, but touchless delivery probably can't make up for all traditional delivery center or the big Netherlands dockside hand offs in Q4. I'm still thinking 90,000 is possible, but I think anything from 65,000 to 90,000 are reasonable.
If deliveries are over 80,000, will the stock bounce? If 90,000 will it shoot up to 750?

Q1 is not a good time of the year for auto sales even without Coronavirus. Last year Tesla produced 77,100 and delivered 63,000 cars in total in Q1. Whatever the numbers are for Q1 2020, the market will find many different ways to spin them. Personally, I find it hard to believe even very good results would cause the shares to rally very hard considering the overhang of the unknown production and demand looking forward into Q2 considering it's unknown when production will restart and also unknown how big of an impact the loss of jobs might have on sales. The market doesn't like uncertainty.

My personal belief is that forward-looking demand is not likely to be an issue because most people with good jobs will not be losing them while Tesla's continue to become more well-known and grow their reputation as a more mainstream company that you can trust to be around in the future. I believe demand is growing faster than CV or even a recession can impact it (although CV might impact the immediate demand until we are past the stage where wearing a face mask in public would be a reasonable thing to do).

I'll be looking the hardest at the production ramp in China. Analysts will need to normalize the production figures to account for the 2-week break over the Chinese New Year (as well as the extra week due to CV shutdown) but I think the numbers here will be pretty important to the market. And I expect them to look robust considering all the downtime. The size of the market and the profit potential in China over the next few years is big enough to make my head spin.

Also important is how many Model Y's they were able to produce in Fremont during the time they were able to produce. A faster ramp than Model 3 will be a big positive and I think that will be the takeaway here. I think they will be able to sell almost all of the Model Y production even with the headwind of CV because it's a new model and the unmet demand is huge.

To summarize, I think that given all the headwinds the numbers will be impressive but that market uncertainty going forward will limit the chances of a strong rally and a sell-off is a definite possibility even with good numbers. I have plenty of dry powder ready to ignite but Tesla already makes up an unwisely large portion of my account. The net result is that I have never been more ambivalent as to whether TSLA rallies or sells off.

 

[powertoold]

Last year Tesla produced 77,100 and delivered 63,000 cars in total in Q1.

Wasn't most of the "demand" problem last year attributed to the difficulties of expanding Model 3 distribution globally?

 

[StealthP3D]

I actually think the vast majority of rebalancing already happened. I'm looking for intensified selling as we go into close. I foresee a lot of these kinds of days like 1-2% drops on a regular basis to eventually take us closer to the lows we had recently.

Well, that didn't take very long to start smelling bad! Not a 1-2% drop but a 4.36% gain.

 

[StealthP3D]

Wasn't most of the "demand" problem last year attributed to the difficulties of expanding Model 3 distribution globally?

That was probably the dominant factor.

When I said Q1 was historically difficult for auto sales I was speaking across all brands and over decades. This is just a consistently bad quarter for auto sales in general.

 

[StarFoxisDown!]

Well, that didn't take very long to start smelling bad! Not a 1-2% drop but a 4.36% gain.

I meant 1-2% drops in the overall market until it retraces back to its lows...not Tesla in particular