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

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This can't be right. Shares only go up unless something fishy is going on. So I've been thinking. Is it totally impossible that Putin missed the train on Tesla and realizes that to fix the economy he needs like 100 million shares. So that's why this rumor about Russia invading Luxembourg makes sense. It'll tank the SP and then he can buy for less than the cost of war. I think we are all screwed.
 
What an absolute joke. Tesla, a high credit risk, after adding 500m to their cash on hand during a pandemic. Up yours, Moody’s.

Among the jokes within Moody's explanation:

Tesla does not compete in what will be the much larger hybrid electric vehicles, nor does Moody's anticipate that Tesla will develop products in that market.
 
I hear you but they are dark pools, not dark oceans. Fact Checking calculated 63m shares need to be bought by S&P funds alone. We will find out soon enough.
Interesting. Institutional investors already own 107m shares, 73% of the 147m float. For comparison, institutions own 63% of Apple's float or 68% of Amazon's float. It looks like institutions already have plenty of shares to trade in dark pools, perhaps more than institutions will hold after the dust settles. So the question is whether institutional investors are really going to let retail investors front-run them on such an obvious play. Besides if prices go too high, the shorts can double their position and pocket the folly of index funds that let retail investors front-run them. We shall see.
 
Who still buys the notion S&P 500 inclusion will cause a huge spike in share price?

I still do. Today doesn't change anything for me. If it stays flat for the next two weeks as well, I'd think a major $3k+ or $4k squeeze is a lot less likely, but even then.... I don't believe the index funds can buy until after the official announcement, so there's still going to be ~26M shares taken out of circulation at some point in the near future, so simple supply and demand dictates that there'll most likely be an increase in share price.
 
I highly suggest you read @FrankSG write up located here:

Tesla's S&P 500 Inclusion: Predicting TSLA's post-inclusion stock price

This will provide a lot of insight to investing in TSLA.

Although the S&P 500 post is a great blog post, because @Maxstorz is asking about help valuing Tesla, I'd recommend him to read one or both of my theses instead:

My Tesla Investment Thesis: Why Tesla is the most exciting thing going on in the world today

My Tesla Investment Thesis 2.0: Tesla's Monopoly Potential
 
Among the jokes within Moody's explanation:

Tesla does not compete in what will be the much larger hybrid electric vehicles, nor does Moody's anticipate that Tesla will develop products in that market.

No, that’s not even a little bit funny. That’s unadulterated stupidity or bandito behavior. The funniest jokes in the world actually need to have an element of truth in them; it’s that truth element that splits the gut.
 
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Moody's is still years behind the reality of BEVs over hybrids. For instance, they actually said:
"Tesla does not compete in what will be the much larger hybrid electric vehicles [market], nor does Moody's anticipate that Tesla will develop products in that market."

Even the other legacy OEMs, except Toyota, admit that BEVs, not hybrids, are the future.

Moody's also underestimates Tesla's sales growth:
"[Moody's] anticipates Tesla's 2020 sales growth will be in the mid-to-high single-digits -- considerably outperforming the industry, but significantly lower than the company's historic pace."

Tesla delivered 367,500 vehicles in 2019, and we just heard them affirm they still think their goal of 500,000 is achievable. That would be 36% growth. Even if Tesla only delivers 450,000 vehicles, that's more than 22% growth. To only grow 9% (the high end of Moody's estimate), Tesla only needs to sell 400,575 vehicles. That appears to me to be a slam dunk.


And, of course, they can't resist disliking how Musk operates:
"However, important additional risks are posed by Tesla's governance structure. There is considerable latitude to the company's CEO, Elon Musk, with a board that has a mix of inside and outside directors. In addition, Mr. Musk's executive responsibilities with outside ventures such as SpaceX could tax his ability to adequately focus on Tesla's challenges..."

In other words, they're worried about the one thing that has made Tesla successful so far - Elon Musk.

Crazy stupid if you ask me.
Is there a way to short Moody's? :confused:

Edit: I guess there is... stock symbol is MCO. I am tempted, but it's probably safer just to buy more TSLA.
 
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I still do. Today doesn't change anything for me. If it stays flat for the next two weeks as well, I'd think a major $3k+ or $4k squeeze is a lot less likely, but even then.... I don't believe the index funds can buy until after the official announcement, so there's still going to be ~26M shares taken out of circulation at some point in the near future, so simple supply and demand dictates that there'll most likely be an increase in share price.

Still so many people sure about S&P inclusion. I’ve got way more confidence that @Unpilot is going to attempt an invasion of my island than I currently do about S&P inclusion. All *these* people are big, fat, overpriced E-trons. The whole lot of them.

My Chi is so messed up right now, I need to go meditate to Jimmy Buffet now.
 
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https://twitter.com/elonmusk/status/1286360612415692802?s=21

It's good to hear Elon himself thinks of Gali first when he wants to point out a Tesla retail investor/analyst that has good insight. If anyone would know what constitutes good insight into Tesla it would be Elon. Back in October, when the share price was under $250, I posted this:

My favorite TSLA analyst, by far, is Galileo. He can cite numbers with uncanny accuracy and present complicated ideas quickly and in a way that's easily understandable. He is also not hung up on week to week share price fluctuations. He really "gets it". I love the speed of his presentations and his enthusiasm is contagious.

I received quite a bit of push-back with people saying he was a "hype-man", fanboy, over-enthusiastic and unrealistic, etc.

Now, only 9 months later, the share price is over six times that and Elon himself has listed Gali as a prime example of someone with good Tesla insight.

Yes, I feel vindicated! :cool:
 
CNBC cut that video right after he finished making the case that the distributed energy business is a market measured in trillions of dollars.. Does anyone know how I can see how CNBC responded?
My view of things (which doesn't make me right) - today looks a lot like a typical buy the rumor, sell the news kind of day around earnings. The two companies I've ever followed closely do this routinely.

And it even makes sense - there is a high level of uncertainty leading into earnings that is resolved with the actual report. In the options market, that manifests as very high values for implied volatility (like 160-200 yesterday, and 70-90 today) that then drop immediately after earnings. I had sold some 1700 calls that were priced at $60 yesterday, and dropped to $10 today while the share price was still only $7 down. (After dropping to $80 down, that same option premium was down to $3 or so).

The point is that the bulk of that drop wasn't the share price change - it was a day of time decay (when there were 2 days of trading left) and mostly - the ~70 points drop in IV.


The pattern is so strong that you can find people teaching that particular option strategy. And if retail is using that as an option strategy, you can be confident that the hedge funds and other big market participants are trying to milk every dollar out of it.

And more simply: buy the rumor, sell the news. Lots of selling today, now that the news has arrived.


This is all technical and short term analysis, and MHO, has nothing to do with the company products, strategy, or execution. The longer term view and value of the earnings report, as others have pointed out, will come out over the next few weeks. For the long term view, today's stock price action is irrelevant (whether it went up to $2000, or down to $1300). The details about product, strategy, and execution in the earnings report are what matters - the numbers just need to be indicate that we're still directionally good (I'm assuming a long investment window - mine is 10+ years).
i wonder if sell the news has a math explanation? Prior to big news, options/hedges are placed to limit risk. After the news options are unwound and market makers can sell stock associated with the options.
 
Who knows at this point :oops:

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He's right imo. @Fact Checking is of the same opinion.

Index funds buying ahead of the official announcement and thereby effectively speculating on it completely goes against the nature and objective of an index fund.

Keep in mind an index fund's objective is to track an index, not to maximize returns.
 
Crazy idea but with SoftBank looking for a buyer for ARM Holdings, I wonder if anyone at Tesla has given it a thought.

If they had fabrication facilities it might be worth a look but otherwise seems like there wouldn’t be enough synergies across Tesla/SpaceX/etc

Sounds like Apple isn’t interested and they’d have a better case for it than Tesla
 
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That was my thought, as well. Were they part of the AAA ratings on mortgage derivatives that actually were garbage just before the housing bubble burst?

Why does anyone give any value to their ratings?

Does the rating affect Tesla at all short term?

They have plenty of cash and might be asked to do a secondary offering as part of S&P inclusion.

The only way I think they need to raise more cash, is if they are getting into mining and processing in a big way, after the earnings call my expectations in that area have dipped a bit..

Either way I'm not seeing Tesla requiring more loans, or even issuing more convertible notes anytime soon..

It is still surprising how slowly perceptions about Tesla change... that is because many in the media are funding it hard to change their perceptions....
 
Ihor Dusaniwsky of S3 Partners just a few hours ago released an analysis of TSLA short selling: TSLA Short Squeeze Getting Tighter – Shortsight.com

" By beating consensus expectations its 2020 rally will probably continue and its short squeeze will not only endure but get even tighter as this year’s massive mark-to-market short losses continue to mount. Tesla short interest is $20 billion; 12.54 million shares shorted; 8.51% short interest % of Float; and a 0.30% stock borrow fee. TSLA is the largest short in the domestic equity\ ADR market."

Note also that he says: "TSLA has been in the grips of a short squeeze for all of 2020 with 13.82 million short shares, worth $22 billion, covered since 12-31-19 as its stock price rallied over +270%. TSLA’s short covering has been relatively consistent throughout the year with only a 2 month stretch of time, in March and April, when short selling increased or remained flat. The short covering trend had continued ahead of yesterday’s earnings release with 214 thousand short shares covered, worth $341 million, over the last week and 626 thousand shares covered, worth $997 million, over the last month."

and

"Tesla short sellers had the worst performance of any equity\ADR short in the U.S. market and are down -$20.97 billion in net-of-financing mark-to-market losses in 2020."

and for the future:
"Upward price pressure on Tesla’s stock price will continue to be reinforced by the short side of the market as the feedback loop of higher stock prices forcing even more short covering helps drive prices higher. If enough short sellers cover their exposure, we may soon see Tesla give up its number one spot as the most shorted equity\ADR in the U.S. market and Elon Musk will have successfully “burned the shorts”." (emphasis added)


I continue to believe S&P 500 inclusion is the main driver, the short-covering adding ooomph to rallies. I know it's unpopular, but long term fundamentals just aren't the main drivers for TSLA prices right now. IMHO.
 
Ihor Dusaniwsky of S3 Partners just a few hours ago released an analysis of TSLA short selling: TSLA Short Squeeze Getting Tighter – Shortsight.com

" By beating consensus expectations its 2020 rally will probably continue and its short squeeze will not only endure but get even tighter as this year’s massive mark-to-market short losses continue to mount. Tesla short interest is $20 billion; 12.54 million shares shorted; 8.51% short interest % of Float; and a 0.30% stock borrow fee. TSLA is the largest short in the domestic equity\ ADR market."

Note also that he says: "TSLA has been in the grips of a short squeeze for all of 2020 with 13.82 million short shares, worth $22 billion, covered since 12-31-19 as its stock price rallied over +270%. TSLA’s short covering has been relatively consistent throughout the year with only a 2 month stretch of time, in March and April, when short selling increased or remained flat. The short covering trend had continued ahead of yesterday’s earnings release with 214 thousand short shares covered, worth $341 million, over the last week and 626 thousand shares covered, worth $997 million, over the last month."

and

"Tesla short sellers had the worst performance of any equity\ADR short in the U.S. market and are down -$20.97 billion in net-of-financing mark-to-market losses in 2020."

and for the future:
"Upward price pressure on Tesla’s stock price will continue to be reinforced by the short side of the market as the feedback loop of higher stock prices forcing even more short covering helps drive prices higher. If enough short sellers cover their exposure, we may soon see Tesla give up its number one spot as the most shorted equity\ADR in the U.S. market and Elon Musk will have successfully “burned the shorts”." (emphasis added)


I continue to believe S&P 500 inclusion is the main driver, the short-covering adding ooomph to rallies. I know it's unpopular, but long term fundamentals just aren't the main drivers for TSLA prices right now. IMHO.
What will happen when shorters start covering their positions?
The short squeeze will bring it over $2000?