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

[brian45011]

I don’t have the figures to hand but there’s a good argument you should also add back in collateralised lending that funded the increase in lease sales. Suspect the adjusted CFO numbers are even more impressive if you do that.

That's cash from financing (debt) which accounts for nearly all the increase in the cash balance.

 

[brian45011]

Steel reinforced concrete tunnel walls in a cylindrical shape are incredibly strong

The Boring Company did not reinforce the Hawthorne tunnel with steel before abandoning it, Are they reinforcing the Las Vegas people mover, Loop to O'Hare, or DC to NYC tunnels?

 

[MC3OZ]

The solar glass is 15" x 45" or about 4.7 sq. ft. How thick? What weight/piece? How are field cuts made for penetrations. ridges, valleys, edges? How are valleys sealed?

Replacing a roof as fast as with composition shingles is an aspiration.

We don't know in detail the system Tesla is using, but nothing you say would surprise them at all.

But my guess is the fast approach is to have all edges and valleys pre-cut, if possible.

So one question is what are the total number of angles, lengths and edges a roofing system needs to cope with and what the the maximum amount of flexibility, adaptability and tolerance that can be designed into the system....

Can a drone fly over the roof and accurately locate all pipes sticking out of the the roof and their dimensions...?

Maximum speed is with everything pre-cut and arranged for that job before they arrive on side, with high adaptability and tolerance... in terms of height, length and angle... essentially clicking together like lego and floating slightly above the supporting structure with adequate tie-down...

I also assume that as it is a roofing system by definition it is designed to be water tight...

We need to keep in mind Elon outlined the ideal, and reality may be far short of that ideal, but no problem in aiming high...

IMO the whole construction is ripe for disruption with automation, pre-fabrication, 3rd printing, and modular click together components becoming increasingly common.

Hardly anyone hammers a nail anyone everyone uses nail guns, cutting wood and tiles and bricks on site is also old fashioned and bespoke, perhaps there is a better way?

I've seen a video of a robot 3rd-printing a house out of bricks stuck together with glue... the tolerance and accuracy was far higher than conventional bricks with cement mortar ... the labour content was close to zero, the robot didn't even stop for meal breaks...

So if there are smarter ways of doing things, Elon and the gang have probably thought of them .. or soon will.

 

[Dan Detweiler]

I've had some of these discussions on the nextdoor as well.
There's lot of FUD around and many people like quoting it.

Did Elon ever create the anti-FUD FAQ on tesla site like he was going to?

We really need the arguments well assembled / organized, so you can quote 1-2 sources versus 10.

I think couple of things that have some merit are:
- lack of battery recycling, so we can only say it's coming and get laughed at;
- higher tire wear due to weight, but that's comparing to the same class car. If someone buys model 3 instead of suv/truck, they are having positive effect.

The argument about being frugal, bicycles, public transport is obviously BS, because it doesn't work today. For every frugal person there will be 10 wasteful people. The only way to get them off their polluting tanks is a technological breakthrough, which we need even if initially this tech is a little bit worse in couple areas - like recycling should come with the volume and volume needs to happen without silly preconditions.

I believe @KarenRei once put together a post that addressed most if not all of the typical arguments. Can't find it right now but maybe she will repost here?

Dan

 

[Singer3000]

That's cash from financing (debt) which accounts for nearly all the increase in the cash balance.

Yes I am aware this is accounted as financing cashflow. My point was that if you want a true understanding of the cash generating ability of Tesla’s business, it’s reasonable to also look at sales by direct leasing, which show up in financing cashflow rather than operating cashflow.

 

[Fact Checking]

Another upgrade by an analyst on Friday that I haven't seen mentioned here yet:

Tesla (TSLA) PT Raised to $396 at Argus

"Argus analyst Bill Selesky raised the price target on Tesla (NASDAQ: TSLA) to $396 (from $333) while maintaining a Buy rating."​

The new price target is higher than the TSLA all time high of $389.

 

[Huskyf]

Pre Market not good -0.80%

 

[KarenRei]

I'm somewhat concerned that people start having expectations of a "short squeeze." I think most people's notion of such a squeeze is something on the order of the price going up several fold in a matter of days due to the bulk of the shorts receiving cascading margin calls. The scale of the VW squeeze tantalizes people.

I don't think there is actually any formal definition of a short squeeze... i.e., no percent of shares covered over X days, no spike in price with Y amount of shares traded involving shares bought by shorts, etc. (fwiw, a quick google search didn't turn up anything but vague & mushy descriptors, no real definitions).

Again, I think most people's assumption is a day where they pull up a quote to find that their stock has doubled, and is just starting an ascent... sort of a jaw dropped, just watching the slot machine jackpot just continue to gush dream notion.

I genuinely think this sort of gusher day or two is what most people think of as a "short squeeze," and I think if any of us want to discuss a short squeeze, but, have in mind a different scale of event, it's most helpful to say clearly the kind of movement you have in mind.

fwiw, in the time I've been following Tesla closely, mid-2012, the short position as its low point was about 18%. That is still a massive outlier short position for a public company, at least in the US. I do not think Tesla has ever experienced a short squeeze, or ever will (of that "slot machine gusher" sort).

If people's expectations are of something like Volkswagen, that's never going to happen. I doubt any company would get away these days with what they had to do to make it happen. But short squeezes - where peoples' covering causes others to cover, causing a spike - do happen. And we're in one (and were in one a year ago). Where will it run out of steam? Who knows. But as of Friday, volume and buying pressure remained high.

A short squeeze doesn't mean a repeat of Volkswagen's squeeze. And it also doesn't mean that every day will be up - just a general trend. That said, significantly up-days encourage subsequent ones.

 

[Fact Checking]

I'm curious where you obtained the 3,359,275 shares sold short number for TSLA shares shorted on 9/18/2018. Last year I queried Dusaniwsky to see if he could give us a rough estimate of actual short-selling on a day when shorts were tagged with 50% of the selling. He felt he could not give an accurate estimate, with the batching of shares issue being a factor (as you mentioned). It seems to me that if you can get numbers like this, Dusaniwsky can too and once you have the actual number it's not hard to come up with an actual percentage of selling by shorts.

We've seen some pretty significant percentage of selling by shorts on days when we're told that short interest has not changed. Therefore, I assume that part of the percent of selling by shorts number is due to batching, part is normal market-maker short-selling as an expedient for trading, and some is part of algobots working the stock with both buying, selling, shorting, and covering to extract value and (I believe from watching the charts) for also manipulating the stock price. Of course some is also shorts opening new short positions in the stock.

Anyway, please let us know where that number came from so that we can better understand the implications.
Thx!

Yeah, so I used the FINRA "Monthly Short Sale Transaction Files", which can be accessed at:

TRF Regulation SHO - 2019 | FINRA.org​

These are monthly releases on a 1 month delay - the September 2019 data is available, the October one not yet. The September short sales transaction log is a large 450 MB file:

http://regsho.finra.org/FNSQsh201909.txt.zip​

The 2018 September one I used for the figure above is:

http://regsho.finra.org/FNSQsh201809.txt.zip​

These files are huge text files when uncompressed: the 2018/09 one is 2.5 GB. All lines that contain 'TSLA' are the Tesla transaction log, which have a fairly simple, easy to parse format:

Q|TSLA|20180918|08:00:02|S|100|296.300000||
Q|TSLA|20180918|08:00:02|S|47|296.500000||
Q|TSLA|20180918|08:00:02|S|10|296.176000||
Q|TSLA|20180918|08:00:08|S|15|296.250000||
Q|TSLA|20180918|08:00:08|S|200|296.999900||
Q|TSLA|20180918|08:00:08|S|100|296.999900||
Q|TSLA|20180918|08:00:08|S|50|296.550000||
Q|TSLA|20180918|08:00:08|S|100|296.980000||
Q|TSLA|20180918|08:00:08|S|100|296.609900||

I filtered these out and added up the volume fields (6th field) - which gave the 3,359,275 shares sold short and 20.3% of daily volume figure. (Note that this includes pre-market and after-market trades as well.)

Also note that these are subject to the usual caveats, but should still be considered an overestimate of short selling activities: it's possible for some of those shares to not be related to short selling due to transaction aggregation - but I think it's not possible to do short selling that impacts the NASDAQ market which wouldn't be present in these transaction logs.

Note that it's possible to have more shorting activity in secondary markets, if a buyer and seller in a secondary pool is matched and crosses out each other without reaching the NASDAQ pool - but my impression is that this is statistically rare, most short sales do reach NASDAQ, as that's the intent of short sellers when they want to visibly mark down the price, plus higher buying liquidity would want to be present in the NASDAQ book as well and not give the shorts a discount via dark pools. Finally, there's also a requirement for dark pools to offer at least as good of a deal as the NASDAQ price - which too pushes most of the liquidity into this transaction log. In short: I think well over 90% of all shorting activities (maybe more than 99%), are present in this log.

To give another example of an 'ordinary' trading day with low volatility: September 17 last month, when the daily range was between $240-$246 and there was only a daily trading volume of 3.87 million TSLA shares, the FINRA transaction log shows short sales of 522,360 shares - or 13.5% of the daily trading volume.

I believe these percentages to be both more accurate and more believable than the daily short selling percentages reported by sites like volumebot.com. There is no way on Earth that shorts are trading around 50% of the daily volume - they don't have the position sizes for that, even on a hugely shorted equity like TSLA.

Just another example: on September 17 I also counted the number of short sales for Apple (AAPL), and it was 3,163,079 shares for the day, of 18.32 million shares traded in total - or 17.2% of the daily volume.

Also note that only a fraction of the transactions marked as short sales are held over the end of the day: I believe a lot of it is intraday trading.

Do you have a different interpretation of the FINRA data?

 

[Fact Checking]

Pre Market not good -0.80%

On very thin volume: just 23k shares traded so far.

 

[jerry33]

- higher tire wear due to weight, but that's comparing to the same class car. .

This argument is garbage to start with. Semi tires last up to 375,000 miles on the original tread, when everything is perfect (not often the case). Last I heard, semis weighted far more than cars. To carry the weight, semi tires have about 500,000 miles built in, which is why retreading is popular. (The goal of the tire industry is to have semi tire tread wear out just before the casing does--hasn't happened yet). Car tires have about 80,000 miles built into the casing, but most current tires don't get that due to tread compounds and belt changes which reduce tread-life to give added performance. Originally, when radial tires came out, it was common to get 70-80,000 miles on the North American boat-cars of the sixties and seventies.

 

[UncaNed]

Almost a mea culpa by Babycharts. First 30 mins or so is worth listening before it goes down into RussiaGate conspiracy theory land

Nothing good till 8:32, so start there.

 

[Mike Smith]

Nio's CFO just resigned for personal reasons, effective in two days. They're releasing earnings next week..

NIO Inc. (NIO) Reports Resignation of CFO Louis T. Hsieh

 

[LN1_Casey]

Nio's CFO just resigned for personal reasons, effective in two days. They're releasing earnings next week..

NIO Inc. (NIO) Reports Resignation of CFO Louis T. Hsieh

Hm, that doesn't seem promising for the company. Of course, they're already sitting at $1.51 a stock, so they can't really go down much further.

 

[mongo]

Solar Shingle:

Good summary of why Tesla's TAM is limited to re-roofs --we tried for over a year to get Tesla to work with our custom new home builder-zero interest and no idea how to make it possible. Tesla may be able to attract a few boutique builders in California, but there is insuficient in-house competence to structure any meaningful relationship with large nationwide or regional tract home builders.

Needing competing teams to figure out at this point the best techniques for installation ought to be a canary.

Tesla was still developing the solar shingle at that point. Your data point of one from a year ago is no long valid.

The solar glass is 15" x 45" or about 4.7 sq. ft. How thick? What weight/piece? How are field cuts made for penetrations. ridges, valleys, edges? How are valleys sealed?

Replacing a roof as fast as with composition shingles is an aspiration.

It will be faster. Composite shingle is 12"x36", but you only get 5" of exposure per row. (Assuming your 15x45 is accurate) Solar is 45" wide and gives you ~12" of exposure. So 3.5 sqft coverage per shingle vs 1.25. About 1/3 the pieces to install.

No field cutting. The have half width pieces stocked (perhaps 3/4 and 1/4 also). Edit: [full and half tabs, maybe every 1/2 tab increnent] Key is shingle trim piece that adjusts row length.

Strip original roof (if reroof)
Full ice guard self adhesive barrier
Flash valleys ( metal?)
Drip edge
Install penetration skirts (large)
Install shingles (end caps, attach to back bone harness)
Ridge cap

Actual install:
Going for it - new Solar Roof install scheduled
More pics on page 3

 

[Hock1]

Yeah, so I used the FINRA "Monthly Short Sale Transaction Files", which can be accessed at:

TRF Regulation SHO - 2019 | FINRA.org​

These are monthly releases on a 1 month delay - the September 2019 data is available, the October one not yet. The September short sales transaction log is a large 450 MB file:

http://regsho.finra.org/FNSQsh201909.txt.zip​

The 2018 September one I used for the figure above is:

http://regsho.finra.org/FNSQsh201809.txt.zip​

These files are huge text files when uncompressed: the 2018/09 one is 2.5 GB. All lines that contain 'TSLA' are the Tesla transaction log, which have a fairly simple, easy to parse format:

Q|TSLA|20180918|08:00:02|S|100|296.300000||
Q|TSLA|20180918|08:00:02|S|47|296.500000||
Q|TSLA|20180918|08:00:02|S|10|296.176000||
Q|TSLA|20180918|08:00:08|S|15|296.250000||
Q|TSLA|20180918|08:00:08|S|200|296.999900||
Q|TSLA|20180918|08:00:08|S|100|296.999900||
Q|TSLA|20180918|08:00:08|S|50|296.550000||
Q|TSLA|20180918|08:00:08|S|100|296.980000||
Q|TSLA|20180918|08:00:08|S|100|296.609900||

I filtered these out and added up the volume fields (6th field) - which gave the 3,359,275 shares sold short and 20.3% of daily volume figure. (Note that this includes pre-market and after-market trades as well.)

Also note that these are subject to the usual caveats, but should still be considered an overestimate of short selling activities: it's possible for some of those shares to not be related to short selling due to transaction aggregation - but I think it's not possible to do short selling that impacts the NASDAQ market which wouldn't be present in these transaction logs.

Note that it's possible to have more shorting activity in secondary markets, if a buyer and seller in a secondary pool is matched and crosses out each other without reaching the NASDAQ pool - but my impression is that this is statistically rare, most short sales do reach NASDAQ, as that's the intent of short sellers when they want to visibly mark down the price, plus higher buying liquidity would want to be present in the NASDAQ book as well and not give the shorts a discount via dark pools. Finally, there's also a requirement for dark pools to offer at least as good of a deal as the NASDAQ price - which too pushes most of the liquidity into this transaction log. In short: I think well over 90% of all shorting activities (maybe more than 99%), are present in this log.

To give another example of an 'ordinary' trading day with low volatility: September 17 last month, when the daily range was between $240-$246 and there was only a daily trading volume of 3.87 million TSLA shares, the FINRA transaction log shows short sales of 522,360 shares - or 13.5% of the daily trading volume.

I believe these percentages to be both more accurate and more believable than the daily short selling percentages reported by sites like volumebot.com. There is no way on Earth that shorts are trading around 50% of the daily volume - they don't have the position sizes for that, even on a hugely shorted equity like TSLA.

Just another example: on September 17 I also counted the number of short sales for Apple (AAPL), and it was 3,163,079 shares for the day, of 18.32 million shares traded in total - or 17.2% of the daily volume.

Also note that only a fraction of the transactions marked as short sales are held over the end of the day: I believe a lot of it is intraday trading.

Do you have a different interpretation of the FINRA data?

With all the different trading exchanges, platforms, dark pools, etc. and the questionable reporting from FINRA members, it is impossible to rely on anything related to short-selling.
I had a long conversation with a recently-retired NASDAQ lawyer a few weeks ago. We talked a lot about this very issue. He confirmed to me what I have believed for some time now that, bottom-line, the DTCC (Depository Trust Clearing Corporation) no longer has any idea how many shares of a particular company are actually in the system. Think about it. The amount of shares that a company actually authorizes and issues is not a hard and fast number in today's market.

 

[electracity]

In Tesla’s case Musk /Tesla can tweet saying they will soon release FSD. Nobody will believe them and then they can buy a million calls

Well, there is you and Elon's mum

 

[electracity]

Good summary of why Tesla's TAM is limited to re-roofs --we tried for over a year to get Tesla to work with our custom new home builder-zero interest and no idea how to make it possible. Tesla may be able to attract a few boutique builders in California, but there is insuficient in-house competence to structure any meaningful relationship with large nationwide or regional tract home builders.

Needing competing teams to figure out at this point the best techniques for installation ought to be a canary.

Tesla had nothing to sell when you were building. At some point in the future the solar roof will be supplied by just another sub. I doubt very much that the sub will be Tesla. It is not cost effective for multinational corporations to supply services to residential. In particular it is a poor use of human resources for Tesla. Hourly jobs belong in the factory and service center were they are leveraging more profitable activity.

 

[Vad42]

Nio's CFO just resigned for personal reasons, effective in two days. They're releasing earnings next week..

NIO Inc. (NIO) Reports Resignation of CFO Louis T. Hsieh

CFO of Chinese TESLA resigns amid Tesla fraud speculation among 3 unverified twitter accounts.

- Tesla Shorts Daily

 

[Fact Checking]

With all the different trading exchanges, platforms, dark pools, etc. and the questionable reporting from FINRA members, it is impossible to rely on anything related to short-selling.

It is true that trading is very fragmented into secondary markets - but note that this is primarily working against short sellers: they'll statistically have fewer chances to hit buyers in the pools they might be using, and even if their trades are aggregated and effectively anonymized, their broker/market-maker is required to mark the transaction as a short sale and there's few incentives for market makers to break regulations for short sellers, only for the very sparsely reported, low value short sales data is distorted even more ... So the fragmented dark pools make it more likely that a short sale ends up being posted to the main NASDAQ trading book. They don't really care, because they are never identified individually.

Shorts are perfectly fine with the current regulations, which doesn't require the identification of short sellers and where the 'uptick rule' was eliminated. In Europe short selling hedge funds were up in arms (and lost against the regulator) when they were required to report short interest above ~0.2% levels a couple of years ago.

Yes, short sellers are the bogeyman in Tesla circles, and it's partly justified due the Chanos/Cramer style negative news fabrication machine - but in the general scheme of things they are maybe 10%-20% of the daily transaction flow - the other 80%-90% of Wall Street generally watches over their own interests and has plenty of influence at the SEC and FINRA too.