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

[AlexS]

I had to sell some shares, but only to tribute to the Mission, again. -> Ordered a Model 3 LR last week.

The staff is hell bound to this quarter, even here in Germany. Looks like they try to do the impossible and
deliver within 3 weeks.

Another key-point: Sold my Model S at 52% after 4 years - That is damn impressive. The best resale value in this class (upper class) is the Bmw 5 series with 52% - BUT after 3 years!

If everything works out like planned, I will get my Model 3 and compensate my share loss, with the calls i added end of may, when no one believed in TSLA.

No advice...

you sold it privately?

 

[shrspeedblade]

I just heard a piece on NPR that Elon Musk deleted his twitter account.

Doesn't anybody in media do any independent verification anymore? It's like they want to spread lies and false information (and jokes they don't get) as fast as possible.

 

[Fred42]

Looks like LR RWD joins the herd of MR and silver unicorns, no longer available "off menu"

Tesla Discontinues Long Range Rear-Wheel Drive Model 3

More profit per cell.

The alleged message from Tesla reads like it was written by someone who doesn't speak English as a first language. I wonder if it's real.

 

[Fred42]

Here Teslas are beeing loaded onto a car transporter in Trondheim, Norway.

It looks like 4 transporters needed so at 8 cars per transporter ca. 32 Teslas arrived in Trondheim today.

Edit: When this post is 20 mins old I belive the car transporter has left. And if they keep on working this evening all the Teslas will be gone from the harbour in 3-4 hours after this post. The cargo ship is probably emptied and will be gone soon too.

Is it possible that it's cost effective for a ship to make a port call to deliver 32 cars? And I'm guessing Trondheim is farther north that the other ports the ship called on, which suggests it went out of its way.

 

[BioSehnsucht]

Benzinga - 30 minutes ago:

Tesla Motors, Inc. (NASDAQ:TSLA) - Baird Analyst Ben Kallo Believes Upside In Tesla Shares On Monday Related To 'The Start Of Short Covering Over The Next Few Weeks'

Tesla Motors, Inc. (NASDAQ:TSLA) - UPDATE: Baird's Kallo Cites Aspects For Tesla Short Covering: 1. Several Upcoming Catalysts, 2. 40M Shares Short, 3. Demand Issue Will Be Proven False

Looking at NASDAQ and TSLA, the jump up today is pretty much the same move, and the movement throughout the day thus far has more or less followed NASDAQ (perhaps not 1:1 but TSLA never does).

So I think all these articles (looking at you, Fred - fake deleting twitter wasn't the cause!) about why the stock jumped are literally missing the bigger picture ... in fact most of the movement of the last week or so has been a reflection of the market.

 

[Buckminster]

As @neroden said it recently: a short squeeze will eventually happen, but at a time when we are the least expecting it.

Any day now then. Doh....

 

[Todd Burch]

FB +4.24%
NFLX +3.21%
TSLA +4.70%

This movement doesn't seem all that Tesla-specific.

 

[Tslynk67]

Ha! $225, I'll take it!

As @neroden said it recently: a short squeeze will eventually happen, but at a time when we are the least expecting it.

Indeed, set your sell orders appropriately.

I'm not one for trading my $TSLA, but I'll cascade sell on the way up a squeeze and re-buy when it drops back to a new baseline.

Fortunately I have no restriction on the limit price at my brokers - they have plenty of other issues, but that isn't one of them.

 

[wipster]

Norway deliveries are going solid. Crossed 200 today.

Makes me proud of my Norwegian heritage!

 

[Sparky4life]

While what you say is correct, noone cares about filling time for ice vehicles

'No one' is two words. In other off-topic news, no one cares about filling time for any vehicle on the investors roundtable thread.

 

[wipster]

Daddy DotCom just changed his twitter name to "Elon Musk".

But he's still a black hole...

 

[scaesare]

While what you say is correct, noone cares about filling time for ice vehicles because it is generally accepted in society that you just refill your vehicle when it is empty. They care about MPG because it is a shorthand for cost.

At the moment with EVs people are worried they will have to stand around all day while their car charges and stop frequently to recharge. They don't care about cost because charging is cheap. Therefore the range per unit time of charging is the better metric for EVs.

The argument is not about comparing the same metrics between ICE and EV, it's what metric covers the most prominent concern for the respective purchasers.

I get the point that people are trying to make... and I don't disagree that calculating time needed to gain range is useful.

The point I'm making is that it's not the ideal metric to compare "charging capability" (which is where this discussion descended from: "The S needs a refresh to be as advanced as the 3").

As an example: Aero wheels can make 10% difference in energy usage efficiency. Does a Model 3 now charge 10% faster when the owner installs his aero caps?

Answer is "No", despite his drivable miles-per-minute charge rate has increased. Same as if one driver sticks to the speed limit and the other drives 15MPH over and uses more energy.

So while the "range gained" metric is helpful, when taken in a vacuum doesn't really compare vehicle charging capability well.

Ultimately, as higher-power charging continues to take hold, much of this will be moot..the differences between charge sessions will become a smaller fraction of the overall time. If one power/efficiency combo is only 2-3 minutes difference out of a 20 minute session, who really cares?

 

[Cherry Wine]

Looking at NASDAQ and TSLA, the jump up today is pretty much the same move, and the movement throughout the day thus far has more or less followed NASDAQ (perhaps not 1:1 but TSLA never does).

So I think all these articles (looking at you, Fred - fake deleting twitter wasn't the cause!) about why the stock jumped are literally missing the bigger picture ... in fact most of the movement of the last week or so has been a reflection of the market.

Tesla is a high beta stock, sure, but a 8x move (in relation to NASDAQ) is a little much to write off as TSLA mirroring the market. I made this same case last week, but I now think the broader market increase is only a part of the rise. With that said, if the market tanks on Wednesday because the Fed doesn't cut rates then I think we're primed to give some of this increase back. Just my 0.02.

 

[Sparky4life]

When Tesla can drive in SanFrancisco, slower but with little disengagements, we will see higher valuation.

Tesla probably already can, in dev mode. Cruise and Waymo are always in dev mode.

 

[Christine69420]

Is it possible that it's cost effective for a ship to make a port call to deliver 32 cars? And I'm guessing Trondheim is farther north that the other ports the ship called on, which suggests it went out of its way.

This ship has been delivering Teslas to Trondheim several times earlier. Usually many more Teslas. I think it stops several places along the Norwegian coast such as Stavanger, Bergen, Ålesund, Trondheim - and possibly up to Bodø/Tromsø but I'm not sure about the last two.

My GUESS is that it was full'ish with Teslas. It's not a very large ship. And then stopped at all these ports up along the coast. And it may have brought the green John Deere and the dump truck too. I did not catch the offload phase.

Now it's returning to Zeebrugge in Belgium.

 

[anthonyj]

Sold some shares (for a profit) and bought some $300c Sept 20

 

[graphix25]

Disclosure: Long Tesla since 2016 so my only interest is in stock appreciation.

You make good points average daily volume is a misleading indicator of short covering capacity. From reports I have seen HFT makes up more like 50-60% of the market volume in 2018. The accumulation / distribution power is driven by true sellers or net new buyers of a stock and I agree is the primary factor of price movement from day to day. 80% correlated to HTF seems high although this I would imagine is very stock and time depended. HFT drives down the spread of bid/ask and provides liquidity to both buyers and sellers. Maybe not net liquidity for the day but intraday they contribute and act like market makers.

There are so many dynamics in stock pricing I don't think it's fair to characteristic price movements in June and October with short squeezes although short covering no doubt plays a role. VW case was a clear short squeeze and the type of mythical event that most people think of in a short squeeze. The stock going up 30%, 40 or even 50% doesn't seem like a short squeeze to me and can be traced to new new buyers, reduction of sellers just as easily. With 46m shares short and a float of about 120m. This stock should skyrocket in the conditions of a short squeeze were met where the stock doubles, triples in months. Instead the short balance over the last several years just ebs and flows between 25m and 45m more or less in line with general price movement of the stock.

I would characterize previous short related price increases in TSLA as gentle embrace rather then a short squeeze. I guess all I'm saying those hoping for a 100%, 200 or 300% price increase in relation to the epic "short squeeze" are likely going to be disappointed.

A short squeeze might or might not realize in 2019 (Q3 is a significant hurdle), but it's highly misleading to calculate short covering capacity of the market by using the daily volume:

• Firstly, there's been several short squeezes already: last June and last October were examples of ~50% up-moves in TSLA, in significant part fueled by short covering. So to claim that Tesla short squeezes are a myth is simply false.
  
• 80% of the daily volume is bots trading with bots, trying to front-run and to pick pennies. The overwhelming majority of HFT and algorithmic trading entities go flat at the end of the day, i.e. they close whatever short or long positions they have opened. They have no effect on net long or short positions and offer no real liquidity for shorts to use to cover.
  
• Long-term trading volume is 11 million shares per day according to Yahoo Finance (TSLA). While there are 15m+ days, there are also ~7m shares traded days - the average is 11 million shares per day. The 20% "true liquidity" of that is only 2.2 million shares of net accumulation/distribution power, on average.
  
• If all of those shares are investors selling to shorts so that they can cover, then it takes about 20 trading days or about 1 calendar month to cover the 46 million shares sold short.
• But during any short squeeze covering shorts will have to compete for liquidity with new investors who are seeing the up-move and the improvement in sentiment - both opportunistic short-term ones and long-term investors. Every failed short thesis is an investor's promising bull thesis. Existing longs will also upgrade their price/profit expectations and will not sell at price levels favorable to shorts.
• If we assume that new investors compete with covering shorts on a 50%/50% basis then during the up-leg of a short squeeze liquidity becomes even thinner: only 1 million shares a day - 46 trading days and over 2 calendar months. This only stops once the up-move reaches price levels that many investors equate with an overheated price. Even today TSLA is far away from such price levels.
• But it gets even worse: the "Summer doldrums" in U.S. markets usually mark an about seasonal 15%-20% drop in liquidity. So if a short squeeze started today, they'd have even less liquidity to cover.

I.e. in practice the TSLA short trade is way overcrowded, and it will be largely bulls/longs who determine the price levels and timing when most of the 46 million shares short will be allowed out of their short positions: them trying to do it only drives up the price. Only longs have the shares they need to cover in any significant quantity.

A recently leaked analysis from Morgan Stanley estimated that around 75% of the selling below $200 levels came from short sellers. Such selling pressure is simply not sustainable, and the TSLA borrowing rate is increasing already.



Around 50% of the short position came in at price levels below $300. Should TSLA reach $300 again all those profits and the trading power will evaporate. I'd say shorts will be significantly weakened in their ability to control the TSLA price at $250 already.

I'd agree that a 2008 VW style "fast" short squeeze is unlikely, but if Tesla posts robust results and the macro sentiment doesn't deteriorate then a 1999 Qualcomm style or a 2013 Tesla style "slow" short squeeze is in play I think.

As @neroden said it recently: a short squeeze will eventually happen, but at a time when we are the least expecting it.

 

[copyhacker]

Tesla probably already can, in dev mode. Cruise and Waymo are always in dev mode.

This +100. Doesn't seem fair to compare Cruise & Waymo's development software to Tesla's production software and say that Tesla is behind, yet everybody does it.

 

[EVNow]

Tesla probably already can, in dev mode. Cruise and Waymo are always in dev mode.

I don't think so. Did you see this hacked Tesla ? It would have hit the divider when turning and had to be disengaged. And is not even SanFrancisco - but Bay area

May be they have better version on HW3 hidden somewhere, if so, I'd like to see it and change my stance.

ps : BTW, I've heard this before - that waymo/cruise are always in "dev" mode. That is not true the right way to look at it. They are only interested in robotaxi scenario. So, as such we won't see their software in retail cars - even when they have solved the FSD problem. Add to this fact that Tesla says their AP/FSD software is Beta i.e. it is also in "dev".

 

[anthonyj]

Disclosure: Long Tesla since 2016 so my only interest is in stock appreciation.

You make good points average daily volume is a misleading indicator of short covering capacity. From reports I have seen HFT makes up more like 50-60% of the market volume in 2018. The accumulation / distribution power is driven by true sellers or net new buyers of a stock and I agree is the primary factor of price movement from day to day. 80% correlated to HTF seems high although this I would imagine is very stock and time depended. HFT drives down the spread of bid/ask and provides liquidity to both buyers and sellers. Maybe not net liquidity for the day but intraday they contribute and act like market makers.

There are so many dynamics in stock pricing I don't think it's fair to characteristic price movements in June and October with short squeezes although short covering no doubt plays a role. VW case was a clear short squeeze and the type of mythical event that most people think of in a short squeeze. The stock going up 30%, 40 or even 50% doesn't seem like a short squeeze to me and can be traced to new new buyers, reduction of sellers just as easily. With 46m shares short and a float of about 120m. This stock should skyrocket in the conditions of a short squeeze were met where the stock doubles, triples in months. Instead the short balance over the last several years just ebs and flows between 25m and 45m more or less in line with general price movement of the stock.

I would characterize previous short related price increases in TSLA as gentle embrace rather then a short squeeze. I guess all I'm saying those hoping for a 100%, 200 or 300% price increase in relation to the epic "short squeeze" are likely going to be disappointed.

If someone has been taking advantage of the liquidity of shares at these low levels, they can hold enough stock to artificially cause a squeeze. Like T. Rowe with its 10.2% stake before Q3 2018. Carl Icahn could have built a 15% stake by now. He would do it for the epic lulz