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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
That just made my day lol!
It's a good one but too bad it wasn't in the original presentation
That's unsettling. So your account won't reflect reality by the time the markets are open? Does that mean you won't be able to buy or sell options?
Are all stock splits this crazy with Options pushed 1 day at ML?
If not, sure looks like a scamble to me. Could be that our microscopes out? Just asking... normal, not normal?
If not, sure looks like a scamble to me. Could be that our microscopes out? Just asking... normal, not normal?
I read this whole thread in early 2015, while researching Tesla before sinking all of my money in it.
What I remember finding is that few months after this thread last post (at the time), there were 2 traders investigated and sentenced/punished(?) for doing this. The best my memory serves me is that they were executing massive coordinated short call orders with each other, and just by the sheer volume of orders, they'd catch huge majority of them in their own account. One of them sells massive amount of short calls, MMs execute delta hedging, drop SP, and the other buys them at the lower price. And then second account sells those or similar calls, before they have to post collateral, first account buys, etc. This is how they were able to maintain naked short position, and victims were actually MMs, due to their delta hedging. Which is probably why they eventually got caught.
It was a small news, barely reported, and TSLA was mentioned just as a vehicle they were using for their strategy, onus of reporting was on their abuse. You needed to know both thread and read this news to assemble probable facts. I don't think this news was ever linked back, and at the time I wasn't contributing to this site, I was quiet observer.
I am too lazy to search and find the news now, and it may be impossible with proliferation of everything Tesla since - at the time I think I read everything I could've found on tesla, part of my due diligence process. I was going 100%, actually more like 200-300%, with all my gains from FB, NFLX, AMZN at the time...
You may be referring to this:
SEC.gov | SEC Charges Two College Professors in Naked Short Selling Scheme
"Washington D.C., Jan. 31, 2014 —
The Securities and Exchange Commission today charged a pair of college professors in Tallahassee, Fla., with perpetrating a complex naked short selling scheme for more than $400,000 in illicit profits.
Abusive naked short selling occurs when shares are sold without having the shares to deliver, and then intentionally failing to deliver the securities within the standard three-day settlement period. An SEC investigation found that Gonul Colak and Milen Kostov repeatedly engaged in a series of sham transactions designed to perpetuate a naked short position as part of an elaborate options trading strategy. Colak and Kostov were required to deliver the securities underlying their short positions within the standard three days. Instead, their sham reset transactions created the illusion that they had delivered the underlying securities when in fact they had taken no steps to do so. They maintained the uncovered naked short positions and profited.
"
paging @Artful Dodger and @FrankSG
I’ve lost all skepticism in the theory that a stock dividend/split was meant (at least in part) to shake out this behavior.
If so, will it still result in significant buying this coming week, or are they done covering?
Knightshade
Well-Known Member
Per note from ML:
Closing options trades won't be available online Monday (you can allegedly place them over the phone by calling them).
Presumably one would be able to open new options positions online since those won't be "old" positions they need to figure out how to split or whatever stupidity is holding them up a day compared to shares.
smorgasbord
Active Member
Etrade and Fidelity have their act together this morning (although Fidelity's page caching algorithm temporarily shows yesterday's incorrect high value for a brief second while it recalculated), but Vanguard is still showing me able to buy islands.
TD Ameritrade is definitely having some issues calculating options post-split. That, or it temporarily switched my account with one of the shortzies. (Discrepancy is that some legs from my options are not calculating properly yet)
Joe F
Disruption is hard.
Weak hands. Not that there’s anything wrong with taking profit, but the points you cite are, IMHO, not a compelling reason to sell. The dips created were all reasons to accumulate, which many here did.
While I’m not interested in buying an island, had I not passed on the IPO and instead invested with the amount I have invested today, I would have been able to buy several islands. Still a sobering thought, at least for me.
Do you have options at E*TRADE? Because my options are still showing a ~30,000% gain instead of the ~600% gain that they should be.
My Ally account shows no changes yet at all, but my Merrill Lynch account is really messed up. It shows my actual number of shares (pre-split) and the old stock price from closing Friday, but it is multiplying my pre-split number of shares by the new /5 share price, so the value in my account shows down by 80%.
Same here with ML account, old # shares times new price. The best part is that I’m still up > 50% in unrealized gains.
I think the issue here can be broken into multiple categorizations.
(1) Shorts who intended to profit, mostly a mix of long-term and short-term positions. Andrew Left, Big Short Guy, David Einhorn, r/realtesla, and all of the other retail shorts. They are all done covering and have closed their positions when it became clear they would not profit. This is why I actually believe the nutjobs in r/realtesla when they claim none of them are short, because they have all been blown out of their positions already with massive losses and all they have now is their bitterness and hatred for Elon.
(2) Shorts who intended to use Tesla’s death as a prestige play. Jim Chanos. He will never cover, because his short position is a small part of the Kynikos short portfolio, and he will absorb infinite losses because his reputation as a genius short seller who called the collapse of Enron or whatever ego nonsense drives his smooth brain is on the line.
(3) Shorts who are trying to destroy Tesla because otherwise their survival is at risk. Oil companies, major auto companies, Russia, etc. These are industry-level plays and geopolitics plays, with positions held through proxies. They will never cover, because they literally need Tesla to fail or their entire industries and countries are at risk.
So one of the most interesting issues about Tesla is that there are essentially “permanent” shorts who will not or cannot ever cover, fighting against hedge funds and institutionals who have discovered the infinite money glitch in the current market structure. In summary, Market Makers are supposed to remain delta neutral because it’s their job to supply liquidity in the form of the day’s trading shares to buyers and sellers. But now people have found that you can purchase vast quantities of far-OTM calls and unbalance the MM’s neutrality requirement, forcing them to buy shares on the open market to hedge against their own sold calls. This drives the share price upwards, which forces the eternal shorts to cover part of their positions to maintain whatever position size they limit themselves to, which causes more buying of far-OTM options, which drives the price upwards. You can see the problem here.
So basically all we have to do is keep buying shares and far-OTM options and we can drive the share price upwards in a kind of slow-motion infinity squeeze, because the shorts who are still short absolutely will never cover and will continue to give us money forever or until someone who is a big hedge fund or instutitional whale finally decides enough is enough and starts a massive selloff, triggering everyone who is FOMO’ing into also selling their positions. Be vigilant, watch your TSLA portfolio daily and hourly, when the infinity squeeze ends it will be as sudden as the end of the legendary VW squeeze.
Same here. Some options are up a crazy amount and some are present but zeroed out. Core shares seem ok.
smorgasbord
Active Member
Weak hands. Not that there’s anything wrong with taking profit, but the points you cite are, IMHO, not a compelling reason to sell. The dips created were all reasons to accumulate, which many here did.
While I’m not interested in buying an island, had I not passed on the IPO and instead invested with the amount I have invested today, I would have been able to buy several islands. Still a sobering thought, at least for me.
A true review of the threads' histories will show a very mixed bag. What you're saying is 20-20 hindsight, and those who went all in then were often wrong on the timing of their leveraged invests and suffered large losses as TSLA stagnated longer than their option expirations.
While Tesla had the right product, business model, and plan, execution was always a risk, as was legacy OEM's potential to wake up. Sometimes it's better to be lucky than smart, but even just Elon at his word at how close Tesla was to failing on a number of occassions shows that investing in Tesla was never as easy as some people make it out to be today.
Two thoughts - one conservative and one more radical.
1. Rule of 72 means that over 5 years a stock will double if the compounded growth is 14% a year. That means TSLA SP at $4400 in 2025. Two doublings (to $8800) in 6 years is compounded growth of 24% a year. I think either case is reasonable if Tesla grows at over 50% per year compounded, allowing the P/E to catch up with the price.
2. As far as Tesla becoming a mature stable company, I think what is underestimated is the power of the mission and success that Tesla has already achieved in attracting the very best young talent. With that pool of talent and the mission (which means their idealism focused on survival of human beings on the planet) I would be very surprised to not see a series of ongoing innovations, some on the scale and disruptive power as transportation and energy. What I have read is that the two most sought after companies for a graduating engineer are SpaceX and Tesla.
1. Rule of 72 means that over 5 years a stock will double if the compounded growth is 14% a year. That means TSLA SP at $4400 in 2025. Two doublings (to $8800) in 6 years is compounded growth of 24% a year. I think either case is reasonable if Tesla grows at over 50% per year compounded, allowing the P/E to catch up with the price.
2. As far as Tesla becoming a mature stable company, I think what is underestimated is the power of the mission and success that Tesla has already achieved in attracting the very best young talent. With that pool of talent and the mission (which means their idealism focused on survival of human beings on the planet) I would be very surprised to not see a series of ongoing innovations, some on the scale and disruptive power as transportation and energy. What I have read is that the two most sought after companies for a graduating engineer are SpaceX and Tesla.
I should mention that Russia and China are quietly in a proxy war here over electrification, because Russia’s economy is a ruin and dependent entirely on oil and gas sales but China is a net importer of energy which is all-in on electric vehicles and is trying to use development of an electric vehicle industry to try and take over the world automobile industry because they obviously cannot take over the ICE industry. So there is a geopolitical battle going on between Russia, the “old” opponent of America from the Cold War era, and China, the “new” opponent of America in this burgeoning information age. When Tom Clancy imagined the Bear and the Dragon going to war, he was correct when he predicted it would be over energy, but he ended up being 20 years too early and predicted a shooting war instead of an economic one.
Tesla is meanwhile fighting a lonely battle against Big Auto, which is a multi-national juggernaut that is a key industry to the economy of multiple nations, most notably Germany which is the most important economy in the European Union. The geopolitical aspects of this are also notable, because traditionally strong economies and nations also had strong auto industries. The EU is at significant economic and geopolitical risk if their auto industry collapses and is replaced by (American) Tesla and Chinese electric vehicle manufacturers.
The United States, being the birthplace and home of Tesla and also China’s primary competitor, is the player around which all these geopolitical battles revolve. Russia has already signaled they are willing to try and undermine the US by covert means, and the recent attempt at a cyberattack on Giga Nevada is just the opening play on a growing geopolitical theater involving electrification. Entire nations and industries will be reshaped and destroyed in the next 20-30 years.
Tesla is meanwhile fighting a lonely battle against Big Auto, which is a multi-national juggernaut that is a key industry to the economy of multiple nations, most notably Germany which is the most important economy in the European Union. The geopolitical aspects of this are also notable, because traditionally strong economies and nations also had strong auto industries. The EU is at significant economic and geopolitical risk if their auto industry collapses and is replaced by (American) Tesla and Chinese electric vehicle manufacturers.
The United States, being the birthplace and home of Tesla and also China’s primary competitor, is the player around which all these geopolitical battles revolve. Russia has already signaled they are willing to try and undermine the US by covert means, and the recent attempt at a cyberattack on Giga Nevada is just the opening play on a growing geopolitical theater involving electrification. Entire nations and industries will be reshaped and destroyed in the next 20-30 years.
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