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

[adiggs]

Because Battery Day could be after these calls have expired worthlessly. We have no date yet for Battery Day. For these options to become profitable stock had to be at $825 + $85 time premium = $910. Too much risk for me, I sold them at a loss and moved the proceeds into TSLA shares @ 820 today. At least now I can sleep again...

This criteria - being able to sleep - is an important one for me. If I could devise a "pucker factor" edit: or "sleepless night" metric for my short term trades, I'd implement it.

For the long term buy and hold shares, I've been holding since 2012 and never experienced a sleepless night during the long hold (or the planned long hold from here).

 

[MP3Mike]

Yes, we're sure. See Wash Sales and Options - Fairmark.com for instance:

Example: On March 31 you sell 100 shares of XYZ at a loss. On April 10 you buy a call option on XYZ stock. (A call option gives you the right to buy 100 shares.) The sale on March 31 is a wash sale.

It doesn’t matter whether the call option is in the money. This is an automatic rule. If you buy a call option in this period, you’ll have a wash sale. And that’s true even if you never exercise the option and acquire the stock.

And it's also true even if you do the trades in different accounts, as long as one of those accounts is not tax deferred.

That is the opposite transaction and is clearly covered in the wash sale rule. In this case he sold a call and bought shares. Even your source says that situation isn't clear:

Suppose you’ve sold a call option at a loss. Buying another call option on the same stock within the wash sale period may be viewed as a wash sale even if the new call option has a different expiration or a different strike price. The IRS might assert that you have a wash sale if you buy XYZ stock, especially if the call was in the money when you sold it.

 

[Singuy]

It WILL be interesting to see how the media plays the crew heading out the pad in the Model X. They will almost HAVE to mention Musk's connection with both Tesla and SpaceX. Priceless.

We may get 2x the coverage. Here in central FL and the weather is absolute trash the last two days. They may scrub it and launch on the 30th.

 

[Mo City]

Fred is predicting 40k deliveries for Q2 total

I'm not as down on Fred as most forum members, but he's definitely not the analytical type (and shouldn't pretend to be). He embarrasses himself here.

 

[Reductionist]

Well then, Jeff Dahn's new paper should be of no interest either: (May 19, 2020)

Logan, Eric R., David S. Hall, Marc ME Cormier, Tina Taskovic, Michael Bauer, Ines Hamam, Helena Hebecker, Laurent Molino, and Jeff R. Dahn. "Ester-Based Electrolytes for Fast Charging of Energy Dense Lithium-Ion Batteries." The Journal of Physical Chemistry C (2020).

https://doi.org/10.1021/acs.jpcc.0c02370​

From the Abstract:

• Electrolyte systems based on binary mixtures of organic carbonate ester co-solvents have limitations in ionic transport and thus limit extreme fast charge (XFC) and high-rate cycling of energy dense lithium-ion cells with thick electrodes (> 80 micrometers per side) at ambient temperature and below.
• Here, we present LiPF6 in methyl acetate (MA) as an ester-based liquid electrolyte that offers substantial improvements in ionic transport, doubling the conductivity of conventional electrolyte systems.
• Density functional theory-based molecular dynamics (DFT-MD) simulations give insights into the experimentally observed low solvation number for lithium ions in MA solutions and shows a solution system with highly mobile, loosely bound ionic species.
• We show that MA-based electrolytes with suitable additive formulae enable high cycling rates and excellent low temperature cycling performance in lithium-ion cell designs with thick electrodes but come with a trade-off in lifetime at elevated temperature.
• While there are inherent practical issues with MA as an electrolyte solvent, including a low flash point (-10°C), and lifetime penalties compared to state-of-the-art electrolytes, this work demonstrates that excellent ionic transport in the electrolyte can enable fast charging without the energy density sacrifice inherently associated with specifically tailored electrodes.
• Further work in electrolyte design, particularly in increasing ionic conductivity without sacrificing stability, has the potential to enable XFC in practical lithium ion cell chemistries and cell designs.

Sounds good to me! Maybe ready when SpaceX Ed. Cybertruck goes to Mars? That's where the low-temp performance will be most important, and high ambient-temp issues in using this new electrolyte will be least relevent. Sounds like Tesla has a niche market there, the size of a planet.

Cheers!

Whole paper is available on everyone's favorite website, for those interested.

 

[LN1_Casey]

Surprisingly very positive news covering of the pending SpaceX launch. They framed the entire segment as "America company succeeds, rararah." Even when they mentioned the explosions SpaceX had in the past (and the media loves exploding things, as it gains clicks), they followed up with "streak of 62 launches" and had a segment where Lady Gwynne Shotwell details to how the company learned from these issues. They also didn't really focus on Overlord Musk, despite him personally being a force of personality.

 

[StarFoxisDown!]

Hey guys how bout we all go watch some paint dry for the next month? Exponentially more exciting than Tesla stock action for the past month

 

[Krugerrand]

Just to illustrate a real-life example and not necessarily directed at you:

For those that may not know, in the US this would be a prime example of a wash sale, meaning that the loss taken on the options cannot be deducted from profits for the year until those additional TSLA shares purchased today (or within +/- 30 days) are sold.
It gets tricky because sometimes you may take a loss on options but inadvertently wash the sale to a really long-term holding (shares), meaning you basically never get to take the benefit on taxes. This is unfortunately true even if your loss is in a play (taxed) account and your shares are purchased in a (non-taxed) retirement account. Only way it doesn’t matter is if the loss occurs in a non-taxed account.

Can you put that in basket weaving terms?

 

[Krugerrand]

Fred is predicting 40k deliveries for Q2 total

For real?

 

[smorgasbord]

That is the opposite transaction and is clearly covered in the wash sale rule. In this case he sold a call and bought shares. Even your source says that situation isn't clear:

Thanks for pointing that out. Since I do all of my options trading in one account - and most of my TSLA stock as well - I just do whatever the brokerage reports on the 1099. If they report it as a wash, I do that. If they don't report it as a wash, I do that.

 

[CorneliusXX]

To me the mystery: How can Tesla present great future advancement in battery, etc. without Osbourning its current lineup?

Say the products with the new batteries will cost 2x

 

[FreqFlyer]

Another favorable review of the Y

2020 Tesla Model Y Long Range First Drive Review: Bring the Family - MotorTrend

"Another tech marvel is the huge two-piece aluminum casting that replaces and simplifies the rear of the chassis and spans the rear wheels. Its high-speed manufacturing producibility was enabled by SpaceX metallurgists. Several months ago, Musk described the Model Y as being 75 percent composed of Model 3 parts. Having seen these Model Y-exclusive parts in person, we think Musk might need to recalculate that figure."

I thought so after seeing the Y.

 

[woodisgood]

Hey guys how bout we all go watch some paint dry for the next month? Exponentially more exciting than Tesla stock action for the past month

Seriously. Ticker watching used to be quite entertaining. Now what am I going to do? Give attention to my rugrats??

 

[Mo City]

Seriously. Ticker watching used to be quite entertaining. Now what am I going to do? Give attention to my rugrats??

TSLA being added to the S&P 500 index later on won't exactly increase its daily entertainment value.

 

[lafrisbee]

Can someone explain the reasoning to us investors of the drop in volume of shares being traded by about half?

 

[Boomer19]

That is the opposite transaction and is clearly covered in the wash sale rule. In this case he sold a call and bought shares. Even your source says that situation isn't clear:

SEC.gov | Wash Sales


A wash sale occurs when you sell or trade securities at a loss and within 30 days before or after the sale you:

Buy substantially identical securities,

Acquire substantially identical securities in a fully taxable trade, or

Acquire a contract or option to buy substantially identical securities.


It’s clearer than you’d think. the loss from the close out of the calls gets tacked onto the purchase price (in his case $820 per share)

in other words. if you took a short term loss of 10k on the calls

then bought 100 shares worth of stock at $820 for 82k

the wash sale puts your purchase price ~920 per share

(100 shares * 820) + 10k loss = 92,000 cost basis

so you push the loss forward to the next position (the stock position in this case) and trade (when he eventually liquidates the stock lot)

wash sale isn’t always a negative. it just punts the realized loss forward

 

[StarFoxisDown!]

One thing that's really a dark horse in my mind for Q2 is the Model Y. If people remember Q3 2018, when Tesla finally ramped up Model 3 production and it was only doing deliveries of the AWD/P versions and only in the US, we saw Tesla's profitability and margins increase sharply to the upside. The combination of higher revenue per car sold combined with simpler delivery logistics since it was only in the US allowed that dramatic swing. If Tesla can actually ramp up Model Y production quite a bit this quarter, we could see a similar effect that could get Tesla to profitable for Q2, even with a reduction in EV credits from Europe from Q1's level of credits.

 

[dl003]

Can someone explain the reasoning to us investors of the drop in volume of shares being traded by about half?

I did on several occasions:
Institutions are sitting out this fake rally propped up by the Fed
Longs have taken position. B-Day got pushed so far forward that we don't have anything to do but wait
Traders are jumping on the pot, vaccines, e-commerce train
TSLA was hot in February because you couldn't find growth anywhere else. These days, things are so chaotic that suddenly you can find *growth* everywhere. We're back to fundamentals now and fundamentals take time to materialize. What's that, a million mile battery? How about a vaccine that shows promising results on 2 mice?

 

[StealthP3D]

Can someone explain the reasoning to us investors of the drop in volume of shares being traded by about half?

It's normal for three-day weekends to have reduced volume on either side as those in charge of large portfolios take an extra day or four.

And no earth-shaking Tesla news in a long time helps reduce the amount of trading as well. The way I look at it is people who wanted to have already placed their bets and it will take a trigger of some sort to get more trading activity.

 

[adiggs]

Can someone explain the reasoning to us investors of the drop in volume of shares being traded by about half?

One explanation here:
How Retail Investors Took Over The Stock Market

The general idea being that across the whole market, not just TSLA, retail investors are where the bulk of trade volume is coming from right now, while the institutional / hedge fund / investment bank investors are sitting out this rally.