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

[Beltsbear]

And the dividend... Unless they can attract a different set of investors, they have to maintain their dividend.

It will be interesting to see the type of investor base that Tesla will have post-S&P.

Ford will probably not have enough earnings to continue paying the dividend. It will be years before they do again If they get their act together at all. There seem to be no plans big enough to matter in the electric vehicle space. Until they have GF1 level ambitions, they are screwed.

 

[gabeincal]

Wow, why am I watching dirt being pushed around in Austin, that looks like some interesting sugar!

Happy to take more - just ask for location.

 

[StarFoxisDown!]

The "general public" does not own stock. Those who do own any significant amount of stock are not quite that stupid.

The run-up of 50% since the split makes no fundamental sense. There wasn't anybody, even the most bullish here, who were saying before the split was announced that the stock should be 50% (or even 20%) higher by the end of August. There was much speculation about how high it could go upon S&P 500 inclusion, but that is yet to come. Battery day is yet to come. So whatever has caused it to go up 50%, perhaps fear on the part of the shorts or some mysterious accounting related to the split that may screw those with naked shorts, it all goes away on August 31st. My guess is that this will become clear, and this coming week will see the last of this mystery rise, with only the last stragglers participating so fairly muted. And then the next week will be down, maybe one third of what the final split rise turns out to be after the coming week. Maybe even down hard on the 28th in anticipation.

So back to 1750 or so by September 4? Of course all bets are off if S&P 500 inclusion is announced. So that wild card will prevent the stock from falling too far. But I think the week starting August 31 is likely to be rather tricky for traders.

I expect I'll write a few puts for fun this coming week, and then not play the week after. And perhaps even turn some calls into a bull spread to protect my gains.

So you're just going to ignore that the stock was sold off after blowout Q2 earnings and went from 1660 down to 1400 before the 50% rise? A Q2 earnings where Tesla reiterated 500k+ deliveries meaning a very large ramp in production and delivieries in 2nd half 2020?

A "logical view" of the stocks trading since Q2 earnings is that it should have been at least 1700 after Q2 earnings . That 50% rally quickly goes to down a 20% rally. Kinda crazy how people forget the stock trading action after Q4 and Q1 earnings.

Edit: Also yes there were some of us saying that Tesla could be as high as 2,500 by the end of 2020 and that the stock could rally hard in anticipation of production ramping in Q3. So 2,000 at the end of August is not surprising to some of us

 

[Prunesquallor]

Yeah, made a mistake on the addresses.. But to make up for said mistake, I went and did some fieldwork.

I heard the Shorty Air Force had to downsize. You might consider signing up!

 

[dl003]

The "general public" does not own stock. Those who do own any significant amount of stock are not quite that stupid.

The run-up of 50% since the split makes no fundamental sense. There wasn't anybody, even the most bullish here, who were saying before the split was announced that the stock should be 50% (or even 20%) higher by the end of August. There was much speculation about how high it could go upon S&P 500 inclusion, but that is yet to come. Battery day is yet to come. So whatever has caused it to go up 50%, perhaps fear on the part of the shorts or some mysterious accounting related to the split that may screw those with naked shorts, it all goes away on August 31st. My guess is that this will become clear, and this coming week will see the last of this mystery rise, with only the last stragglers participating so fairly muted. And then the next week will be down, maybe one third of what the final split rise turns out to be after the coming week. Maybe even down hard on the 28th in anticipation.

So back to 1750 or so by September 4? Of course all bets are off if S&P 500 inclusion is announced. So that wild card will prevent the stock from falling too far. But I think the week starting August 31 is likely to be rather tricky for traders.

I expect I'll write a few puts for fun this coming week, and then not play the week after. And perhaps even turn some calls into a bull spread to protect my gains.

Does it make any sense that TSLA rose 60% earlier this year off a profitable Q4? Its still the same company. The earning report didnt change the fundamentals one bit. It only changed the public perception of TSLA and its all that matters. The same is going on with this stock split. We dont know whats going on on the collective mind of the market, but this "doesnt change the fundamentals" narrative is pretty meaningless. If the fundamentals mattered that much in the short terms, we should see SP magically go up with every car delivered, every R&D breakthrough, every wall erected, etc... but it doesnt.

 

[dww12]

The "general public" does not own stock. Those who do own any significant amount of stock are not quite that stupid.

The run-up of 50% since the split makes no fundamental sense. There wasn't anybody, even the most bullish here, who were saying before the split was announced that the stock should be 50% (or even 20%) higher by the end of August. There was much speculation about how high it could go upon S&P 500 inclusion, but that is yet to come. Battery day is yet to come. So whatever has caused it to go up 50%, perhaps fear on the part of the shorts or some mysterious accounting related to the split that may screw those with naked shorts, it all goes away on August 31st. My guess is that this will become clear, and this coming week will see the last of this mystery rise, with only the last stragglers participating so fairly muted. And then the next week will be down, maybe one third of what the final split rise turns out to be after the coming week. Maybe even down hard on the 28th in anticipation.

So back to 1750 or so by September 4? Of course all bets are off if S&P 500 inclusion is announced. So that wild card will prevent the stock from falling too far. But I think the week starting August 31 is likely to be rather tricky for traders.

I expect I'll write a few puts for fun this coming week, and then not play the week after. And perhaps even turn some calls into a bull spread to protect my gains.

@Fact Checking was calling for an infinite squeeze since 7/17/20. The split was just the straw that broke out the new trend. We have not even seen actual S&P buying and you are calling a reversal? I know people that are waiting until after the split so they can buy at a “lower” price. Demand for shares is not going to drop after the split.

 

[gabeincal]

Demand for shares is not going to drop after the split.

I personally have three friends who are waiting to pull the trigger at post-split prices. Yeah, I know....

 

[MC3OZ]

You are totally wrong about a cash dividend of any size. Short sellers can easily come up with any amount of cash. (in-lieu-of payment). They can't come up with shares that don't exist.

From my point of view Frank and I started out with an open mind., my position shifted because thinking logically through everything we knew, there was no strong evidence for the impact of the dividend split on naked shorts, and even less solid evidence for a large pile of naked shorts.

Still not enough IMO to rule the theory out entirely, but not enough to rule it in.

A cash dividend as 2 effects:-

1) Short-sellers of all types need to come up with the money.

2) It puts upward pressure on the stock price via the following mechanisms:-
a) New buyers are attracted to the stock.
b) Existing shareholders can use the dividend to buy more Tesla products, or reinvest the dividend in more Tesla shares.
c) Large share-holders like Elon. no longer need to sell shares to finance a number of activities.
d) Many short sellers are highly likely to head for the exit.

1) Makes short sellers of all types want to close, 2) makes it very hard to close without a loss.

My point in context was accumulating a large naked short position is Tesla, is financial suicide. It is very high risk for low reward, so no one sensible would do it willingly. That is one reason why I doubt a large naked short position exists.

Obviously if we get strong evidence in any area, I'll change my opinion, and I expect Frank will change his opinion.

But overall this subject has been beaten to death, we can agree to disagree, in a well mannered way.

 

[dw4ngg]

@Fact Checking was calling for an infinite squeeze since 7/17/20. The split was just the straw that broke out the new trend. We have not even seen actual S&P buying and you are calling a reversal? I know people that are waiting until after the split so they can buy at a “lower” price. Demand for shares is not going to drop after the split.

The catalyst behind this idea has not even materialized yet

 

[dl003]

This stock split is so powerful in that it fills the 7 weeks window when no action from the SP Committee could be expected with 100% certainty, which gave MM complete freedom to control the price, as evidenced by the drop to 1375. This split takes that away. Think the change in perception that took place when TSLA no longer headed for bankruptcy. Same concept here. People know what will happen at the end of this window: B Day followed by P&D. Elon just gave them infinite ammo to hang on.

 

[ByeByeJohnny]

So you're just going to ignore that the stock was sold off after blowout Q2 earnings and went from 1660 down to 1400 before the 50% rise? A Q2 earnings where Tesla reiterated 500k+ deliveries meaning a very large ramp in production and delivieries in 2nd half 2020?

A "logical view" of the stocks trading since Q2 earnings is that it should have been at least 1700 after Q2 earnings . That 50% rally quickly goes to down a 20% rally. Kinda crazy how people forget the stock trading action after Q4 and Q1 earnings.

Edit: Also yes there were some of us saying that Tesla could be as high as 2,500 by the end of 2020 and that the stock could rally hard in anticipation of production ramping in Q3. So 2,000 at the end of August is not surprising to some of us

Yes, wasn't there a poll here and a large majority had the expected SP at over $2000 after the Q2 earnings report came out? That was with no stock split. So more like shenanigans brought us down 20-30% and the stock split undid that and a little extra.

 

[MC3OZ]

This stock split is so powerful in that it fills the 7 weeks window when no action from the SP Committee could be expected with 100% certainty, which gave MM complete freedom to control the price, as evidenced by the drop to 1375. This split takes that away. Think the change in perception that took place when TSLA no longer headed for bankruptcy. Same concept here. People know what will happen at the end of this window: B Day followed by P&D. Elon just gave them infinite ammo to hang on.

I'm 100% on board with this theory, MMs did not need to be long term holders to cap the price, just sell at strategic times.. and they could usually find convenient times to reverse the transaction.

The split is a strong signal that new buyers might enter the stock and that S&P 500 addition is probably coming. capping now caries the risk that it may not be easy to reverse the transaction without taking a loss.

Once they lose control, they need to delta hedge options.... that puts further upward pressure on the stock.....

Tesla is a lion MMs find hard to tame...periods of tame activity can be deceptive...

 

[Singuy]

So you're just going to ignore that the stock was sold off after blowout Q2 earnings and went from 1660 down to 1400 before the 50% rise? A Q2 earnings where Tesla reiterated 500k+ deliveries meaning a very large ramp in production and delivieries in 2nd half 2020?

A "logical view" of the stocks trading since Q2 earnings is that it should have been at least 1700 after Q2 earnings . That 50% rally quickly goes to down a 20% rally. Kinda crazy how people forget the stock trading action after Q4 and Q1 earnings.

Edit: Also yes there were some of us saying that Tesla could be as high as 2,500 by the end of 2020 and that the stock could rally hard in anticipation of production ramping in Q3. So 2,000 at the end of August is not surprising to some of us

Wouldn't call q2 a blowout for everyone. What was the first batch of FUD after earnings? Shenanigans with EV credits was the only way Tesla could be profitable. Q1 was the same, so to some, it looked like Tesla was brute forcing their way into S&P with accounting tricks. I was one who didn't think Tesla sp was going to sustain until q3 knock out that narrative.

 

[kbM3]

Like @MP3Mike said, according to Rob the entire automotive industry ex-Tesla plans to produce 80M EVs in aggregate between now and 2030, not per year.

You and @MP3Mike need to Rewatch the video. The pertinent section starts at 26:30. He is talking about the entire addressable light vehicle market over the next 10 years. He specifically says 80 to 100,000,000 vehicles per year for a total of 800 million vehicles.

 

[dl003]

Wouldn't call q2 a blowout for everyone. What was the first batch of FUD after earnings? Shenanigans with EV credits was the only way Tesla could be profitable. Q1 was the same, so to some, it looked like Tesla was brute forcing their way into S&P with accounting tricks. I was one who didn't think Tesla sp was going to sustain until q3 knock out that narrative.

The thing is, if you have a functional brain, and I dont mean you personally, you should be seeing the trend of increasing sales, revenue & profit margin. There should be no doubt that TSLA will soon be profitable without the credit. We are not playing a gentlemen game where we suddenly get more points without it. This ER gave the market a short term catalyst and confirmed the long term trend of growth. Those who keep harping on the credit have no market moving power.

 

[MC3OZ]

The thing is, if you have a functional brain, and I dont mean you personally, you should be seeing the trend of increasing sales, revenue & profit margin. There should be no doubt that TSLA will soon be profitable without the credit. We are not playing a gentlemen game where we suddenly get more points without it. This ER gave the market a short term catalyst and confirmed the long term trend of growth. Those who keep harping on the credit have no market moving power.

If we think about it logically, Q3 earnings may be when the penny drops for the slowest learners...

Being profitable without credits is one big thing....

Continuing to grow deliveries and earnings in the face of apparent competition is another..

Assuming both of these are true I wonder what arguments they Bears will have left, they will have to resort to "Overvalued" or "Accounting Fraud".

Valuation is the one thing that can always be debated.. but only up to a point...

 

[OrthoSurg]

I buy my Teslas on lease though my company, but can only get one at a time like that. A mere 30 shares would get my wife a Model 3 right here, right now... not ruling it out...

Or 5x 19/3 c3500 would do it.

I did the same

 

[FrankSG]

You and @MP3Mike need to Rewatch the video. The pertinent section starts at 26:30. He is talking about the entire addressable light vehicle market over the next 10 years. He specifically says 80 to 100,000,000 vehicles per year for a total of 800 million vehicles.

Watch from 27:20 to 27:45, that's the relevant bit.

The 800 million vehicles is the total automotive market. He talks about OEMs' plans afterwards, and mentions they have plans to build EVs for 10% of that market: 80 million EVs, leaving 90% of the market open for Tesla.

 

[dl003]

If we think about it logically, Q3 earnings may be when the penny drops for the slowest learners...

Being profitable without credits is one big thing....

Continuing to grow deliveries and earnings in the face of apparent competition is another..

Assuming both of these are true I wonder what arguments they Bears will have left, they will have to resort to "Overvalued" or "Accounting Fraud".

Valuation is the one thing that can always be debated.. but only up to a point...

Its so hard to value Tesla right now. Market's appetite for growth is through the roof. Given a couple of quarters free of disruption, we might just earn this SP outright. Im of the opinion that we are still in a price discovery period where you just have to go with the flow. This is why MMs are so desperate trying to hold us down. Nobody seems to care about valuation anymore, *cough* ZM, *cough* SHOP. If they let it run, which seems inevitable now, it might settle well above the current level and stay there while waiting for fundamentals to catch up. Exciting time indeed.

 

[Artful Dodger]

NASDAQ-100 Futures Sep 20 +23.25 +0.20% 20:44:24 ET