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

[Prunesquallor]

Message sent to E*Trade:

 

[enzo]

FINRA Short Selling Report for Thu, Sep 03, 2020

"Short Exempt Volume" a.k.a. Market Maker's naked shorting was 9.57% of "Short Volume", which ranks at the 126th Percentile (very unlikely to occur by chance).

Note in the table below yesterday's "Naked Sht" ranking has been revised to the 105th Percentile:

View attachment 584093

As predicted yesterday, with 'Uptick Rule' in effect today, Naked Short Selling was extremely high again. The next FINRA report data will become available tomorrow after 3:30 PM EDT, Sep 04, 2020.

With the Uptick rule in effect for a 3rd consecutive day tomorrow, I predict another session with extremely high naked shorting by Options Market Makers.

Comment: There were 1,245,045 (1.25M) shares of TSLA sold today which where tagged as "Short Exempt" by Market Makers. This on a day when they was ABSOLUTELY ZERO PROBLEM in the functioning of the Market, and NO LIQUIDITY problems in this stock.

This GOES AGAINST the purpose of the Options Market Maker's exemption to the prohibition against naked short selling. Regulation SHO grants that exemption only to provide liquidity in the Market. There were 83,685,688 shares traded by FINRA-reporting entities. There IS NO liquidity problem, and Market Makers are abusing their position of priviledge in the Market for their own proprietary trading. This is ILLEGAL.

Would anyone with experience be so kind as to draft a template complaint letter, which we shareholders could submit to the various authorities and/or regulatory bodies?

 

[smorgasbord]

Message sent to E*Trade:

View attachment 584113

All my ETrade lots were correctly processed, and pretty quickly, too.

 

[dww12]

Troy updated his delivery estimates.

“
Hi everybody. My Tesla delivery estimate is now,

• 140,000 for Q3 2020
• 194,000 for Q4 2020
• 513,387 for 2020

For more details, see my first @CleanTechnica article here:
cleantechnica.com/2020/09/03/tes…

The next update will be around 10-15 Sep.”

 

[StealthP3D]

To me, "anticipation" is after S&P announcement of what will be added and what will be subtracted or else the fund will be guessing, especially which will be subtracted.

I generally agree with that interpretation in practice but, from a legal perspective, the prospectus is designed to give as wide of latitude to deviate even when normal practice is to NOT deviate much. They will only deviate when they feel there is a clear advantage to doing so, and when they deviate it will likely be more of a hedging with a portion of their position, not big bold moves.

In other words, they could legally "anticipate" inclusion after Tesla reported the profit but probably would not take action on it in practice unless they figured doing so gave them a clear and low-risk advantage to outperforming. Even in that case they would only do it with a portion of the expected weighting.

Most S&P 500 index funds are very conservative with the discretionary measures they can take because a couple of mistakes can compound and make them look very bad when their performance doesn't match the actual index.

 

[BornToFly]

At this rate, we are going to need S&P500 inclusion tomorrow just to get back to Monday's close next week.

 

[StealthP3D]

Not sure about your numbers. The below link shows iPhone users to be over 50% recently.

Mobile OS market share in the U.S. 2019 | Statista

Mobile phones are a global market. Data is limited to the U.S.

 

[SunCatcher]

Steven Mark Ryan:

"Now look, I'm not really sure how to say this, without potentially melting a few snowflakes, and causing a few trigger happy people to get butt hurt, but the great thing about YouTube is I'm here to make content, and not friends. So, here goes; I feel that at this point in time, if I'm being completely honest and transparent with you guys; Tesla as an investment opportunity is a gigantic IQ test. Yes, I did just say that.

A test of people's ability to look at the information, and infer accurately about the likely outcomes in the future. And right now, I think that the people who are identifying Tesla's autonomous opportunity, their battery supply opportunity, their huge software components, their increasing margins, their decreasing manufacturing costs, economies of scale, their dominant... I could keep going. People that get this; they're passing the IQ test. Those who are looking at Tesla as a terrible opportunity, again over the long term... I'm not making any comments over the short term, the price is very high at the moment, I totally get that. But over the long term, those who aren't seeing the opportunity in Tesla; they're missing the autonomy component, battery supply, software, etcetera; They are failing the IQ test.

Now, there's many kinds of intelligence, OK? There's emotional intelligence, which I have approximately none of. Okay, you've got street smarts, okay, I get all that, but in terms of being able to look at an investment opportunity, and intelligently assess that opportunity; I think that this is where we're seeing a huge bifurcation of intelligence. There's one camp that's saying WTF is going on? This valuation makes NO sense, I... NO! Then another camp who says, 'Well hang on a minute... forget about today, look at the future, look at where the technology is going, what's inevitable? What's going to happen?' "

I think we know what's going to happen.

 

[FrankSG]

I'd be curious to hear reactions to this Tweet by JRP007. In a nutshell, he's arguing that much of the buying in recent weeks was from hedge funds hoping to engineer a squeeze when S&P500 index funds learn they must acquire TSLA. When Tesla announced the details of their $5 billion cap raise, it became apparent that Tesla was going to do what's necessary to keep a massive squeeze from taking place. Since Tesla's cap raise announcement, we've been seeing a decline in the stock price, which is some of these hedge funds unwinding their positions (still at a profit for most) because the big squeeze plan is going to be foiled by Tesla.

I don’t believe JRP007’s explanation at all. If funds were front running then explain:
1. Why wouldn’t Baillie Gifford wait until the infinity squeeze to sell? They sold their shares even before Tesla’s cap raise announcement, so they clearly weren’t spooked by that.
2. If funds are front running then why are they selling right now with the risk that inclusion announcement could happen any night? People are trying to say the funds are spooked by $5 billion cap raise. That amount is less than 10% of what the Index funds alone must add. That doesn’t even take into account the amount the benchmarked funds must add.
3. Folks on CNBC that are fund managers have given interviews stating that they haven’t added TSLA yet and are happy that their benchmarks haven’t either because they would be underperforming their benchmarks. @FrankSG posted one such video last week.

I'm not really buying into that theory, mainly because of the terms of the stock offering. If Tesla really wanted to signal that they would help out with liquidity in number of shares and prevent a massivesqueeze, they wouldn't have put a cap of 5 billion on the offering AND be able to set the price of any shares they decide to offer. They also have the right to withdraw from the offering entirely.

Now if they had put a number cap range of say 5 to 20 billion while setting their own price for the shares, that's another story. It seems to me like Tesla is positioning themselves to capitalize on the incoming squeeze by giving themselves the freedom to let the stock fly and then sell their offering shares at higher prices(above 500).

As for the stock action, it honestly feels as though their some inside information out there that is pointing to the inclusion announcement happening Friday or later and they knew it, which gives them free reign to go to town on the stock.

But in reality, the stock was up nearly 13% post split, they were always going to at some point try a panic sell-off to shake out the emotional investors.

I'm not buying that either. While Tesla could issue $50B more of stock, I can't imagine they would. That would be way too much dilution, not to mention what would they possibly do with that much cash? Elon has already said that they aren't cash constrained.

I'm not on board with JRP007's theory either. I think the very large almost 20% drop over the last few days can simply be explained by:

1. Profit taking.
2. (Momentum) Traders.
3. Macro sell-off.
4. Delta hedging mechanisms amplifying the selling from #1-3.

Here is what the delta hedging inventory did over the past few days as per @generalenthu 's table:

In reality MMs will have sold a little less than 60M shares, because they are not short 100% of option open interest, but selling by option market makers will nonetheless have been very significant.

TSLA's humongous options market and the resulting delta hedging mechanisms dictate that any price movement will be amplified, which is why at times it will trade at a certain multiple of the NASDAQ / SPY. Therefore, it doesn't take as much real selling to accomplish this kind of price movement as it would in many other stocks. I think a combination of profit taking, traders exiting and/or going short, and the macro sell-off could be enough real selling to explain the almost 20% drop over the past three days.

The same holds true for the run-up from $900 -> $1,500 pre ER, and from $1,400 -> $2,500 after the split announcement. There were obviously real buyers, and probably a fair amount of them, but their buying was amplified by delta hedging. There could've been some naked shorts covering, there likely was some positive reaction to Q2 P&D and Q2 ER, there likely was some retail buying because of the (anticipation of the) split, and there very likely was at least some S&P 500 inclusion positioning.

I don't think only one thing explains any of these large price movements, but I do believe delta hedging amplifies every single one of them.

 

[StealthP3D]

I love Rob! but he did not win. He is to open minded and polite. I watched every second and it was painful... In the end whatshisface was grandstanding and picking out his next TV personality opponent so he could get more fame... Rob said maybe they could make that happen ;( ouch. Still love Rob.

Rob won. Anger never wins. I interpreted Gordo's grandstanding at the end differently from you:

Rob called Gordo out a number of times using actual numbers recited from memory with the result of making Gordo look amateurish, biased and stupid. At the end Gordo expressed his desire to debate two specific personalities known for having a much weaker grasp of the financials, Jim Cramer and The CNBC host, (forgot his name). I took that as a wish for a softer opponent with a bigger audience. Rob's command of the facts and financials was brutal for a snake oil salesman like Gordo and he knew it.

 

[SPadival]

I wouldn't mind an internal company email about the end of quarter push.

Will you settle for an article by Troy on CT?

Tesla Delivery Estimate: Q3 2020: 140,000 | Q4 2020: 194,000

 

[Ameliorate]

Kimbal Musk and Jerome Guillen sold respectively about 9.9M and 7.5M dollars worth of shares on Tuesday, filings just appeared in my inbox. Probably not massive stakes for them but worth pointing out.

 

[FrankSG]

Edit: in JPR007s theory, Tesla has the ability to do another $5 billion cap raise and another and another, if needed. The excess shares would then be bought back from the market at a lower price than they were sold, once the dust settles.

I don't believe Tesla will do enough $5B cap raises over the next few weeks/months to have much impact on a S&P 500 inclusion. I think it's even less likely they would buy back shares shortly after inclusion.

 

[StealthP3D]

GJ has a strange interpretation of production. He seems to divide production by the number of factory locations. Do it all in one factory vs 2 factories and he gets different results. Very odd way to attempt to discount increasing production.

Yes, he actually said Tesla is not growing production because the increased production is coming from additional factories!

Well, how else do you increase production after the first factory approaches capacity?

He's a BS artist (and not a very good one at that).

 

[Prunesquallor]

All my ETrade lots were correctly processed, and pretty quickly, too.

Yep, it’s weird. Just those three seem stuck.

Have you checked your August account statement?

 

[FrankSG]

FINRA Short Selling Report for Thu, Sep 03, 2020

"Short Exempt Volume" a.k.a. Market Maker's naked shorting was 9.57% of "Short Volume", which ranks at the 126th Percentile (very unlikely to occur by chance).

Note in the table below yesterday's "Naked Sht" ranking has been revised to the 105th Percentile:

View attachment 584093

As predicted yesterday, with 'Uptick Rule' in effect today, Naked Short Selling was extremely high again. The next FINRA report data will become available tomorrow after 3:30 PM EDT, Sep 04, 2020.

With the Uptick rule in effect for a 3rd consecutive day tomorrow, I predict another session with extremely high naked shorting by Options Market Makers.

Comment: There were 1,245,045 (1.25M) shares of TSLA sold today which where tagged as "Short Exempt" by Market Makers. This on a day when they was ABSOLUTELY ZERO PROBLEM in the functioning of the Market, and NO LIQUIDITY problems in this stock.

This GOES AGAINST the purpose of the Options Market Maker's exemption to the prohibition against naked short selling. Regulation SHO grants that exemption only to provide liquidity in the Market. There were 83,685,688 shares traded by FINRA-reporting entities. There IS NO liquidity problem, and Market Makers are abusing their position of priviledge in the Market for their own proprietary trading. This is ILLEGAL.

You seem to label "short exempt" volume as naked shorts. Why do you believe all "short exempt" orders are naked shorts?

I pointed out in this post yesterday that "short exempt" volume is, according to the SEC's Regulation SHO and Investopedia, a short sale on a downtick while "the uptick rule" is in effect. Nowhere does it say this has to be a naked short.

Then again, going by that description I am unsure how there could be "short exempt" volume on days where "the uptick rule" is not in effect, yet there is. Do you have an explanation for this?

Under the rule, an order can be marked “long” when the seller owns the security being sold and the security either is in the physical possession or control of the broker-dealer, or it is reasonably expected that the security will be in the physical possession or control of the broker or dealer no later than settlement. However, if a person does not own the security, or owns the security sold but it is not reasonably expected that the security will be in the possession or control of the broker-dealer prior to settlement, the sale should be marked “short.” The sale could be marked “short exempt” if the seller is entitled to rely on an exception from the short sale price test circuit breaker.

 

[SPadival]

tsla below 400, no one is really buying anymore. needs to break this downtrend or it could hit 300 again

OMG. You are still here, trying to talk down the SP

 

[Congo Line]

Kimbal Musk and Jerome Guillen sold respectively about 9.9M and 7.5M dollars worth of shares on Tuesday, filings just appeared in my inbox. Probably not massive stakes for them but worth pointing out.

Yes it does seem that insiders are selling these days; Robyn Denholm sold shares not that long ago. Also:

https://apple.news/A9tw3tN_4ROmjoczqVEr3f

She picked the perfect day to sell!

 

[Artful Dodger]

Message sent to E*Trade:

View attachment 584113

Imma leave this here (my comment from Monday):

I think Rob has spoke too quickly. If the Split were complete, wouldn't all "beneficiary owners" of TSLA have their dividend stock by now? Many have not been made whole yet, even though the shares were transmitted on Saturday to "beneficial owners" (only the largest, or institutional shareholders) and "shareholders of record" (most Brokers).

If there is a big drop in the SP over the next couple few days, but before these Blighters "Brokers" deliver these dividend shares, such that rightful TSLA owners miss the opportunity to sell at the ATH, there is going to be the "Mother of All Class Action Lawsuits", Ralph-Nader-esqe in scale.

And the clue is "We haven't received your shares yet from the Transfer Agent". Bee.eSS. You assigned fake shares that you don't own, and now the Transfer Agent is shorting you? That's rich, but you'll soon be poor (or bankrupt).

Word.

 

[StealthP3D]

Thanks from me too to @AimC (hope I typed that correctly as for some reason your username doesn't pop up).

QuantamScape has been on my radar for a bit, but was unaware of the SPAC. I jumped in in after hours based on seeing a few interviews with the founder Jagdeep Singh, and based on the support of JB Straubel. Bill Gates, and his investment fund (which Branson, Jack Ma and others have invested in)

I vaguely remember seeing an interview with Elon sometime back, and I remember him saying that he only owns 1 stock - TSLA, but he does invest in friends ventures. Full disclosure: I have no idea if he's in on this one.

Didn't land the $16.31 deal that you got @StealthP3D , but landed my position @ $20.11.

I have no relation to the company other than the position I just took in it today. Thanks again to you and this amazing community @TMC for sharing !

It must be @AlMc (with a lowercase "L" in the middle).

Well, I know almost nothing about the company or technology (yet) so for me it's a highly speculative investment (especially considering it had just jumped 60% on the announcement). But I figured JB wouldn't waste his time on the board of a company that was likely to go nowhere, VW and Bill Gates are involved and that the next few days would bring more interest and I could research it in the interim.

It just "smelled" good.

Plus, I'm for anything that could help accelerate the transition to sustainable energy!