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

[Cherry Wine]

Sixth highest weekly volume of the year at 73M shares. Highest volume weeks of 2019:

1. Week of May 20th (98M shares) Open: 202.80 / Close: 190.63 NOTE: First full trading week after infamous cost cutting "10 months of cash burn rate" Elon leaked e-mail
2. Week of April 29th (78.7M shares) Open: 235.86 / Close: 255.03 NOTE: Week after Q1 Earnings
3. Week of October 21st (78.1M shares) Open: 258.33 / Close: 328.13 NOTE: Q3 Earnings Week
   
4. Week of April 22nd (78.0M shares) Open: 269.00 / Close: 235.14 NOTE: Autonomy Day / Q1 Earnings Week
5. Week of June 3rd (76.6M shares) Open: 185.51 / Close: 204.50 NOTE: 52-week low
6. Week of December 16th (73.2M shares) Open: 362.55 / Close: 405.59 (current week)

It should be noted that the next highest volume week is in the 50M range, so this is a significantly higher than average volume week.

I also think this week's volume is remarkable (almost double last week's), particularly for not occurring in conjunction with any single particularly newsworthy events, but rather a bevy of less significant events, including:

• EV tax credit extension legislation discussion (Monday/Tuesday)
• Shipping of MIC M3s and evidence of substantial MIC M3 production (Monday/Tuesday)
• TSLA breaking and sustaining ATHs into a new trading range (Wednesday - Friday)
• Model 3 acceleration boost DLC announcement (Thursday)
• VW ID3 software delay (Thursday)
• NTSB findings in Florida crash determining excessive speed to be factor (Thursday)
• Announcement of FSD preview / holiday software update (Friday)
• 5,000 Tesla registrations in China (Friday)

I have two thoughts on this: 1) This was a confluence of a lot of good news for Tesla/TSLA, without really any noteworthy bad news. Even so, I find it hard to believe that all of this news is worthy of the type of volume we saw this week. Instead, I am mindful of @DaveT's thoughts that news isn't what is driving this big move, but rather the interest of a (or multiple) new buyer(s) taking out a substantial stake. It is quite possible that the significance of this week's volume will become known only at a later date.

I'm interested in others' thoughts on this.

 

[Runarbt]

Dipping my idiot toe in water,
Does buying 1 ?call? of that mean I suspect TSLA will be _higher_ than $1,000/share by 2022?
How much extra ca$h would I have to pony up to exercise that call if I owned it?
To actually own those shares (pre 7:1 split)

1 call is for 100 share, so to exercise a $1000 call, you would need $100.000 cash.

Most sell/trade the calls before expiry. And, SP doesnt have to reach 1k for you to make money, as long as you dont to long/close up to expiry date. A $1000 2022 call will increase in value if SP grows from 400 quicker than call looses tine value.

Time value is the price you pay/what seller make from selling calls/put. value decreases as time to expiry shortens.

Someone can for sure explain better. :-D?

 

[M3Rider]

Dipping my idiot toe in water,
Does buying 1 ?call? of that mean I suspect TSLA will be _higher_ than $1,000/share by 2022?
How much extra ca$h would I have to pony up to exercise that call if I owned it?
To actually own those shares (pre 7:1 split)

It can mean 2 things, that you either
1) truly believe sp will cross 1,000 in 2 years and will keep your call till then in hopes to cash out (if sp does not cross 1,000 you simply lose all you paid for the call)
2) that you believe sp will go up by enough that a bunch of other people will start believing that 1,000 is a possibility.
Then, say if the current price is 700 and the current call price is 10x of what you paid for it, but you don't believe 1,000 will happen by the expiry, you take the cash and run for the exit

There's of course another option - that you don't know if 1,000 will happen and don't want to wait to find out. So, you use the cash on something more probable to not lose it.

 

[Tslynk67]

Love this guy’s videos - refreshingly short and to the point. Nothing any of us don’t know already, but nicely encapsulated:

 

[Tyler34]

EDIT: let me repost the image:

If I read this correctly, ALL PUTS EXPIRED WORTHLESS!

PS: forgive my ignorance, but how can you buy PUTs that are "bullish"? There are some at ~400 that were probably bought before we surpassed 400, or I'm missing something?

A put spread can be bullish. Example: Sell a 400 put, buy a 390, get paid $5 for that risk.

 

[SpaceCash]

Must be disappointing that
1/22 790c were selling for $19 today

Just a couple of weeks ago @SpaceCash jumped on 1/22 640c and they were like $22 then.

Can't grab a bunch for a buck anymore like some of those 1/21 600+s were going for.

Yes exactly right, my 2022 640's have already gone up about 60%
and my 2021 620's are already up over 100% from when I bought them.
My 50 shares held long? well my avg cost basis is 240.55

Yes I am a genius investor, give me a tv show

 

[Tslynk67]

Since we ended in Green today and since yesterday ended in an ATH,
I guess today sets a new ATH...

Also, intraday ATH of 413...

And ATH opening too

 

[AlMc]

Sixth highest weekly volume of the year at 73M shares. Highest volume weeks of 2019:

1. Week of May 20th (98M shares) Open: 202.80 / Close: 190.63 NOTE: First full trading week after infamous cost cutting "10 months of cash burn rate" Elon leaked e-mail
2. Week of April 29th (78.7M shares) Open: 235.86 / Close: 255.03 NOTE: Week after Q1 Earnings
3. Week of October 21st (78.1M shares) Open: 258.33 / Close: 328.13 NOTE: Q3 Earnings Week
   
4. Week of April 22nd (78.0M shares) Open: 269.00 / Close: 235.14 NOTE: Autonomy Day / Q1 Earnings Week
5. Week of June 3rd (76.6M shares) Open: 185.51 / Close: 204.50 NOTE: 52-week low
6. Week of December 16th (73.2M shares) Open: 362.55 / Close: 405.59 (current week)

It should be noted that the next highest volume week is in the 50M range, so this is a significantly higher than average volume week.

I also think this week's volume is remarkable (almost double last week's), particularly for not occurring in conjunction with any single particularly newsworthy events, but rather a bevy of less significant events, including:

• EV tax credit extension legislation discussion (Monday/Tuesday)
• Shipping of MIC M3s and evidence of substantial MIC M3 production (Monday/Tuesday)
• TSLA breaking and sustaining ATHs into a new trading range (Wednesday - Friday)
• Model 3 acceleration boost DLC announcement (Thursday)
• VW ID3 software delay (Thursday)
• NTSB findings in Florida crash determining excessive speed to be factor (Thursday)
• Announcement of FSD preview / holiday software update (Friday)
• 5,000 Tesla registrations in China (Friday)

I have two thoughts on this: 1) This was a confluence of a lot of good news for Tesla/TSLA, without really any noteworthy bad news. Even so, I find it hard to believe that all of this news is worthy of the type of volume we saw this week. Instead, I am mindful of @DaveT's thoughts that news isn't what is driving this big move, but rather the interest of a (or multiple) new buyer(s) taking out a substantial stake. It is quite possible that the significance of this week's volume will become known only at a later date.

I'm interested in others' thoughts on this.

My thoughts: Retail long buyers and short covering can not explain this week IMO. This is a large buyer(s).......plain and simple.

 

[jerry33]

The ROI is more than just cost savings vs gas/other traditional energy. Can also be business interruption which can be significant depending on industry, reboot/wastage from possibly milliseconds of downtime. Battery switchovers come online faster than having to ignite a flame.

And there are none of the $9999 /kWh prices either (legal limit in Texas).

 

[jerry33]

I have two thoughts on this: 1) This was a confluence of a lot of good news for Tesla/TSLA, without really any noteworthy bad news. Even so, I find it hard to believe that all of this news is worthy of the type of volume we saw this week. Instead, I am mindful of @DaveT's thoughts that news isn't what is driving this big move, but rather the interest of a (or multiple) new buyer(s) taking out a substantial stake. It is quite possible that the significance of this week's volume will become known only at a later date.

I'm interested in others' thoughts on this.

If you are a index fund with an in-house analyst that isn't tied to the FUDsters, and the analyst believes there's a good chance of TSLA being listed on the S&P in the next two or three quarters, wouldn't you want to buy a position now while the price is low rather than compete with all the other index funds when the time comes they have to buy?

 

[Chop110]

Back in after hours in anticipation of Monday’s massive short squeeze.

 

[Tslynk67]

Yes exactly right, my 2022 640's have already gone up about 60%
and my 2021 620's are already up over 100% from when I bought them.
My 50 shares held long? well my avg cost basis is 240.55

Yes I am a genius investor, give me a tv show

No way, my 2021’s are 1300% up - you can be the side-kick on my show, or put on a slinky dress to add some glamour.

 

[The Blue Owl]

Finally, they are discussing TSLA on CNBC. Very sophisticated chatter about mahjong penetration in Florida. No light thrown whatsoever on why the stock appreciated 70% in 90 days. They just asserted this very statistic and then promptly shrugged their collective shoulders (4 highly educated financial analysts) as to why it happened or what it means.

CNBC is obviously pleased with the aforementioned segment.

 

[MP3Mike]

If you are a index fund with an in-house analyst that isn't tied to the FUDsters, and the analyst believes there's a good chance of TSLA being listed on the S&P in the next two or three quarters, wouldn't you want to buy a position now while the price is low rather than compete with all the other index funds when the time comes they have to buy?

But you aren't an index fund if you buy items not in the index.

Now I suppose your company could buy them outside the index fund and hold them hoping to sell/transfer them into the fund if the stock actually joins the index... But the point of being an index is you don't have to think about it or take risks. You just match the index and let it be.

And doesn't the S&P give some advanced notice of when there will be changes to the make up of the index? That is when funds would start to make their adjustments.

 

[StealthP3D]

Which is why I don't much stock in margin calls. Sure, that happens to retail shorts -- but they don't have a large enough position to move anything. The shorts with that size of a position have enough other investments to keep their short for as long as they want. And, with the losses being only on paper, they can keep them forever or cover as they want.

Now, if you are managing money like that your boss may want to know why the $TSLA short has gone from 1% to 5% of the account, but again, that isn't really a margin call.

Margin calls tend to be more widespread during market meltdowns, especially since market meltdowns tend to happen when general bullishness is at an all-time high. But they can also strike, with surgical precision, isolated market participants (even the big boys) when they are over-leveraged and one or more confluence of events come together to cause disaster. When the overall market is not melting down they tend to strike short-sellers because the nature of short-selling (that is not hedged) is that your losses are unlimited. Most short sellers will cover before there is much risk of a margin call but they still happen. If the shorted security rises too far, too fast, it WILL happen.

That said, as it relates to TSLA shorts, we know they are not the brightest bulbs in the room but most of them probably avoid short positions large enough to create a margin call simply from the recent rise to just over $400. But if something occurred to make TSLA go to $1600 in a very short period of time, I suspect there would be a lot of margin calls. But not enough to cause a short squeeze all on their own. Margin calls would simply contribute to any short-squeeze that was already occurring due to voluntary large scale covering of short positions by traders who were protecting themselves against a margin call should the stock continue to rise.

Successful short-sellers are somewhat rare and typically well-disciplined. But reckless short-sellers can have a nasty habit of shorting more when the underlying stock of a short position rises. Then, if the stock rises further they are a prime candidate for a margin call. Institutions, on the other hand, have rules in place designed to prevent such things from getting out of hand. But they are not always sufficient or the rules are not always followed. They might have a rogue trader doing things with the institution's money that are not authorized.

I think the most likely way for a TSLA short squeeze to happen would be for the price to get bid up to a high level, followed by some event that led people to think the price was going to crash. This could cause shorts to confidently double down. Then if the news turned out to be bullish instead of bearish, the stock could gap up and create a short-squeeze (and probably be helped along by margin calls).

I normally prefer natural price rises based on organic demand for the stock as opposed to short-squeezes. But I might make an exception with TSLA since the shorts are betting against humanity itself! I can't say it wouldn't be exciting to have a boatload of high strike price call options that expired right in the middle of a huge TSLA short-squeeze!

 

[Jovian]

Got some positive Tesla coverage in the Robb Report: What Does Tesla’s Self-Driving Mode Really Look Like? A New Software Update Gives a Sneak Peek

This is a magazine aimed at multi-millionaires (with listings of $100k+ watches, yachts, and expensive vacation properties in the magazine). May help attract some eyes from wealthy investors.

 

[ammulder]

The ROI is more than just cost savings vs gas/other traditional energy. Can also be business interruption which can be significant depending on industry, reboot/wastage from possibly milliseconds of downtime. Battery switchovers come online faster than having to ignite a flame.

That's also fair. And I appreciated the prior post with the number of peaker plants in the US. But we're still a long way away from numbers on how big a market opportunity that represents.

So there's this: Tesla Energy is quietly setting its sights on peaker plants

"A study from GTM Research, for one, estimates that the sales of energy storage for both residential and utility markets in the US would likely hit $541 million this year, before passing $1 billion in 2019, and hitting $4.6 billion in 2023."​

That's opportunity for Tesla, but not bigger than automotive.

As a single-plant for instance, there's this: Moss Landing Power Plant - Wikipedia

• There were two natural gas plants built in 1964, with 1500 MW capacity. They have now been closed (for being uneconomical), but just before that, they were being used as peaker plants and operating about 3% of the time.
• There are now two battery-based energy storage systems planned for that site, one of which is 300 MW / 1,200 MWh and one of which is 182.5 MW / 730 MWh -- the latter of which is by Tesla. (One of four storage systems described here: PG&E Proposes Four New Cost-effective Energy Storage Projects to CPUC | PG&E )

It's not clear what the Megapack costs to install, but Reddit estimates <= $1M per megapack: Tesla Megapack cost : teslamotors

It's not clear what the uneconomical plants above cost to operate, but this article mentions a post by Tesla that mentions "millions of dollars per day" for a generic peaker plant: Why Tesla's colossal Megapack battery is a big deal

At 3 MW per megapack, that would be about $161M to install 482.5 MW of storage. Can we assume this actually replaces 1500MW of peaker plant? Maybe, if many of them are old like that and they're being used because they're there not because they're specially optimized for the load.

But if that peaker plant cost, say, $3M/day to run (this came from the vague wording in the Tesla quote above), and runs 10 days of the year (3%), the battery would take a while to break even... like 6 years assuming there's literally zero operational cost, so perhaps we can say "ROI of less than a decade." Still, that's probably pretty good in utility time frames, especially if there's a meaningful benefit to the improved response time.

Anyway, if there are on the order of 1000 peaker plants in the US and it costs $150M to replace each one, that's a pretty substantial market opportunity -- on the face of it it sounds way bigger than the "$4.6B by 2023" quoted by GTM Research.

But this is so back-of-the-napkin, I don't know how you'd come up with real, defensible numbers for any of this stuff. I guess from someone in the utility space, not the automotive space.

 

[RobStark]

In Kazakhstan, a 2nd Supercharger has just been installed in Almaty at the Esentai Mall:

Almaty at Night

from Wiki

In 2008, Almaty was ranked the 9th most polluted city in the world. A 2013 study identified cars as a major source of pollution, and it was noted since 2003 and 2013 morbidity had increased by a factor of 1.5, and that the city takes the first place in the republic on respiratory, endocrine and blood diseases, cancer and bronchial asthma, even though there are no major industrial installations. An independent local air quality monitoring system with a mobile app was launched in 2017.

 

[Curt Renz]

TheStreet - 6 hours ago:

 

[NakedLong]

CNBC is obviously pleased with the aforementioned segment.

That link should have a disclaimer not to click it unless you want to lose 3 minutes of your life and 20IQ points.