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

[Fact Checking]

Sorry to burst the bubble but Y line was not ready when I did tour late December....

Nor was the Model 3 line in Fremont ready in May 2017, nor was the new Model 3 line in Shanghai ready in September-October 2019 - yet first production started ~2 months later.

So the fact that the Model Y lines were still under construction last month (3 weeks ago?) does not necessarily falsify the idea of first (limited volume) Model Y production in the February-March time frame.

We should also consider the fact that historically Tesla uses the first week of January to perform "intrusive" upgrades to production lines - a quiet week overworked line workers can take off. @Doggydogworld also noted that in the first two weeks of January there were relatively low levels of production going to Pier 80 compared to Q4.

 

[Cherry Wine]

We'll be able to tell how big the U.S. order book is by watching price changes, and by when the last ship arrives at a key international market (EU or CN).

This is what happened in 2019:

quarter

Q1

Q2

Q3

Q4

[TD2] last ship arrival at destination before end of quarter [/TD2] [TD2] last ship departure from SFO before end of quarter [/TD2] [TD2] 6 days [/TD2] [TD2] 21 days [/TD2] [TD2] 9 days [/TD2] [TD2] 26 days [/TD2] [TD2] 8 days [/TD2] [TD2] 25 days [/TD2] [TD2] 11 days [/TD2] [TD2] 32 days [/TD2]

(Note: I filtered out obvious outliers such as late ships.)

I.e. in Q4, in an otherwise record quarter, Tesla was able to dedicate about ~32 days of production to the U.S. market alone at 7k/week M3 production, in Q1 this was only ~21 days at 5k/week.

Note that the last EU ship arrived 11 days before the end of the quarter, a comfortable buffer ~twice the size of the delivery buffer at the end of Q1, despite Tesla having been able to sell all the cars they were able to deliver to the Netherlands.

The last two ships in Q1'2019 were sent on March 7 and 10. If Pier 8 empties out by end of February or early March then we can probably conclude that Q1 U.S. demand is fine - otherwise they'd try to keep sending as many cars to the U.K., Norway and South Korea as possible.

So Pier 8 emptying in ~40-50 days should be one of the early indicators of the health of Q1 deliveries and, assuming Q4 GAAP profits are $200m+, of S&P 500 inclusion probability.

Franco Mossotto on Twitter

Franco Mossotto has posted a Twitter thread detailing expected arrival / departure dates of ships #2-#6 (? I believe he erroneously states #5 twice) to Pier 80 in Q1'20 through February 1st.

 

[JustMe]

According to Ray4Tesla, GF3 Model 3 is practically sold out for Q1.

RayTesla️ on Twitter

 

[lklundin]

Good morning...

At the small German market maker Lang & Schwarz (which has very extended hours) TSLA is at 477 Euro, 6 Euro up from yesterday's close in Frankfurt (and 3 up from when L & S themselves closed):

Tesla Inc. Aktie | Aktienkurs | Chart | A1CX3T | US88160R1014

PS edit: Main EU market makers are now open, up 2%, broke 480 Euro.

 

[CanadaEV]

I do all that I can to advance renewable energy and sustainable transportation. I am a “true believer.”

Those things said, I do not underestimate our adversaries. They too, are true believers — backed by the financial resources of the fossil fuel industry.

They are wrong; they are criminally culpable. I am not a conspiracy theorist, nor is the fossil fuel industry. They fight passionately, openly, and aggressively.

It is time to fight back with the heart of a warrior. To speak with voice of a lion.

JB Leonard

You are right, we do have to fight back.

It seems like there’s been a bit of a reprieve from the FUD. I think it’s quite likely that this is because there was obviously going to be powerful catalyst information to bolster Tesla; GF3 spectacular success, a promising Q4, GF4 announcement, and more.

The adversarial media channels may have been reigned in a little to let this happen because it was going to happen anyway.

However I doubt that anybody was expecting what we have seen in Tesla’s valuation, and how quickly it happened. I won’t be surprised to see the FUD media come back with a vengeance. Media will likely be warned that if this valuation cannot be dampened, there will not be any advertising money to pass around.

As far as I can see, the only real source of revenue for traditional media these days is to publish propaganda, and the auto industry is the biggest advertiser in the world.

 

[Mike Smith]

538 in Germany

 

[joyhi]

Best analysis of how and why TSLA on I’ve seen. Check it out.

 

[JustMe]

You are right, we do have to fight back.

It seems like there’s been a bit of a reprieve from the FUD. I think it’s quite likely that this is because there was obviously going to be powerful catalyst information to bolster Tesla; GF3 spectacular success, a promising Q4, GF4 announcement, and more.

The adversarial media channels may have been reigned in a little to let this happen because it was going to happen anyway.

However I doubt that anybody was expecting what we have seen in Tesla’s valuation, and how quickly it happened. I won’t be surprised to see the FUD media come back with a vengeance. Media will likely be warned that if this valuation cannot be dampened, there will not be any advertising money to pass around.

As far as I can see, the only real source of revenue for traditional media these days is to publish propaganda, and the auto industry is the biggest advertiser in the world.

After snubbing EVs for years, these automakers are going to start advertising their new EV models more. Like the electric hummer, MachE, electric F150 etc. There will be many more - and these ads raise awareness and support the legitimacy of EVs among consumers. In short, carrying out the work of Tesla’s master plan and very likely bringing Tesla more business.

 

[Buckminster]

Advice on making it through 20 pages a day:

• Positive mental attitude - you can do this
• Reduce the burden
  • "Ignore" function is your friend
    • Shorts, trolls won't help you
  • Scan
  • Only read posts with 5+ likes etc.
    • Let other suckers read the dross
      • Accept the charity
• Carve out extra time
  • I read during the day now
    • On the train
    • As a reward for reading a work email
• Turn it into a sport
  • Set goals
    • 1 page every 5 minutes
    • Push yourself to improve day after day
  • Enjoy yourself
• No pain, no gain
  • This is the easiest money you're ever gonna make but nothing in life comes for free
• Listen to the following on loop:

 

[Mad@gascar]

Based on today's closing options open interest for the Friday expiration, Opricot calculates MaxPain to be $390. Don't laugh. That's due to the incredibly large open interest in puts at strikes less than half today's closing share price. At the $50 strike alone, there remains open over a 100,000 put contracts involving over 10 million shares.

While this will not be a Triple Witching (quarterly) expiration, it will be a high volume monthly expiration for what earlier were LEAPs that might have pushed potential profits into the next year (now this year) for tax purposes.

A more meaningful MaxPain target for this expiration can't reasonably be determined until Friday afternoon, when big option writers can survey the nearly final options open interest and volume figures.

Link: Opricot Open Interest|Volume|Max Pain

Interesting max pain point. However, your explanation involving the bankruptcy puts is not correct. The max pain point is the closing price that maximizes the pain for the option buyers, and maximizes the gain for the option writers. Here is an example of how it's calculated. For any given closing price, only in-the-money options contribute to the tally. The max-pain point is the closing price that balances (in a marginal sense) the cost to the option writers of the ITM puts being exercised against the cost of the ITM calls being exercised. Deep out of the money options (puts or calls) expire worthlessly in any case, so they make no difference.

The real reason the max pain point is so low is the large number of calls with strike prices above $390, which were written/bought when the stock price was much lower. Most of these calls are now in the money, but if the stock price could be pushed back down to $390 upon expiration, they would all expire worthlessly, saving the writers of those calls (market makers) a sugar-load of money.

 

[CanadaEV]

After snubbing EVs for years, these automakers are going to start advertising their new EV models more. Like the electric hummer, MachE, electric F150 etc. There will be many more - and these ads raise awareness and support the legitimacy of EVs among consumers. In short, carrying out the work of Tesla’s master plan and very likely bringing Tesla more business.

I like your take on it, and I hope you’re right. You are correct this is Tesla’s master plan.

We are so accustomed to dishonesty in the media that it is hard to get used to the idea that they could be an agent of positive change.

On the optimistic side, this change will be coming, EVs are the future. If the old guard can accept that they must be part of it, I’m definitely all for it.

 

[StealthP3D]

“I believe any additional sales coming from Model Y in the U.S. in 2020 will be cannibalized from Model 3, which is exactly the phenomenon that has occurred with M0del S sales”

I'll make this real simple:

1) There is no doubt that Model Y will cannibalize Model 3 sales.
2) It won't matter because Model Y will have higher margins.
3) It also won't matter because the demand for Model 3 is higher than Tesla can currently supply.

In other words, Tesla will sell every car they produce and the Model Y will simply increase the profit margins while the both cars (Model 3 and Model Y) will continue to sell as many as they can make. This is a production question, not a demand question.

 

[AlexS]

View attachment 499917
Yep, looks like Monday morning's buyer exuberance got the buying going enough to bring some of that profit-taking money back into TSLA, which then set off a number of developments. Once it became apparent that Monday would be a strong climb day, shorts started covering after realizing the recent dip was anemic compared to the potential pain ahead. I'll be very curious to see Dusaniwsky's numbers for Monday, but I suspect they'll show substantial covering underway. Part of the reason for the covering may have been that although Dusaniwsky's charts (bottom of the two) as late as Jan 9 suggested net shorting in December, the more recent chart (top one) showed noticeable covering during that time period. The result, I believe, is that some shorts suddenly realized other shorts were sneaking out, and this revelation gave the inspiration to not be the last short holding the bag with TSLA.

Rest assured that with a rise of nearly $50 today, a number of shorts have received margin calls and will be covering in the next couple of days. Also note that the stock price rose in after-hours trading, suggesting a carry-over of some buying pressure to Tuesday morning. Today's losses by the shorts were an astonishing $1.25 billion (in a single day!). In S3's recent article about TSLA, they said, "With 2020 losses mounting, we should see a continuation and probably an acceleration of Tesla’s multi-month short squeeze." My guess is this isn't going to be a VW type of squeeze, but rather a continued run-up of the stock price from these already painful levels as more an more shorts eventually capitulate. Fingers crossed.

In other news, Colin Rusch of Oppenheimer, probably today's best bullish analyst for explaining Tesla's potential and someone with growing credibility, spoke on CNBC today in this clip. His price target is an eye-opening $612. It's interesting to note that the interviewers are not attacking his credibility the way they would have at another time in Tesla's past.


View attachment 499916
Although the Dow was up only slightly, the NASDAQ closed up 1.04% on improving sentiment regarding the Asian economy.

View attachment 499908
Notice the slanting gold line in December on this newer chart suggests covering by shorts underway

View attachment 499919
This slightly older chart suggests net shorting during the month of December.

View attachment 499910
Shorts were tagged with 54.5% of TSLA shorting today. Bottom line: there was no was that manipulations were going to stop the steamroller today.

View attachment 499912 Here's a tech chart going back to the June 2019 lows so that you can get a feel for this long rally. It includes some extreme dips and gap ups as well. Put into context, the dip that ended last week was pretty tame by TSLA standards. The December and January rally appears relentless. For the first time, the upper bollinger band reached above 500 to 512.96 today.

Congratulations to longs who have held through this rally. Not only did TSLA top 500 today but it did so with great momentum.

Conditions:
* Dow up 83 (0.29%)
* NASDAQ up 95 (1.04%)
* TSLA 524.86, up 46.91 (9.77%)
* TSLA volume 26.6M shares
* Oil 58.11
* Percent of TSLA selling tagged to shorts: 54.5%

I was always wondering what is that volume volumebot is showing, it is always way lower from real traded volume on given day, can you tell? eg yesterday volume was 26.6mm, but volumebot shows total volume 12.6mm

 

[MC3OZ]

Neoen wants Tesla big battery expansion to be on line in March | RenewEconomy

 

[AlexS]

Is Gerber wimping out again?

Ross panic sold when TSLA dipped to $200 area. Now he wants back in, he have only 200 shares left, per his post yesterday.

 

[ReflexFunds]

I just happened to look at the 21 Feb Option Chain, and noticed some unusual things:

View attachment 499847

There's some really high volume and open interest in $800 and even $900 call options expiring five weeks from now.

It looks like as a result of this, some of the ASK prices have gotten out of whack. I know there can be very large spreads on certain options, but the spread on some of those is absurd. Just look at the $890 and $860 in particular. ASK price is 5-6x the BID price for those.

To me this looks like:

• Some big players are making big bets on a huge squeeze after earnings.
• The market makers are reluctant to sell these at 'normal' prices, so they've significantly increased the ASK price on some of them.

Disclosure - I own some of these $800 strike February 2020 calls.

Obviously they are most likely to end worthless. But I talk often enough about these Tesla stock positive feedback loops I thought I might as well have a small bet on it continuing uncontrollably.

 

[Causalien]

Just in case: I put 5% of my shares for sale at $840.

We shall see how that goes.

I set one around 800 and 900 as well.

 

[KarenRei]

New permits
View attachment 499892

Looks like South paint will be online soon

Just wanted to say that I really appreciate you posting these.

Any clue where in the factory south paint is?

Sorry to burst the bubble but Y line was not ready when I did tour late December....

No question that it's not operational yet except for testing purposes. The notion is however that they'd start production a month from now if the time between getting that certificate and shipping is similar to the Model 3. My reaction to that possibility is a solid: maybe.

That said, "starting the line" and "mass producing from it" are two entirely separate things. Even "starting the line" doesn't mean immediate deliveries.

Franco Mossotto on Twitter

Franco Mossotto has posted a Twitter thread detailing expected arrival / departure dates of ships #2-#6 (? I believe he erroneously states #5 twice) to Pier 80 in Q1'20 through February 1st.

Strange how the first half of January only had one ship, but the latter half is packed. I suspect they were having to restock the drawdown in North America, esp. stores, test drive vehicles, etc, and meeting the orders that they weren't able to deliver in Q4.

 

[Tslynk67]

Halfway through catching up, my thoughts so far...

well, Claudia Assis did what I did not expect and published an article on $TSLA being over $500. I didn't read closely, but it was a positive piece that I didn't detect any snark or sniping in.

Tesla stock tops $500 for the first time

Interesting, didn't realise there was a $700+ PT out there already (aside Cathie's, that it):

Oppenheimer’s new price target is the second highest of the 32 analysts surveyed by FactSet, behind just Elazar Advisors analyst Chaim Seigel’s $734 target.

Lol @ the deep pocketed investors that didn't back Elon's proposed 420 buyout.

Of course, many of us are quite pleased that it didn't go through!!!!!!

At the time, I thought $525 was a fair valuation, now we're there, I would say if there was a "go private" deal today the minimum I'd consider would be $1575

You spooked me there, because you said you know how to turn $100 call into $100k.

I only have 1 and could not split it in half, so I let it ride.

Yeah, I chickenshitted it last week and intensely regret it now. I'm trying to let it go, but it's on my mind a lot. I suppose the good news is that the 5 options I left in are now 53x and could easily go to 100x if this continues, at which point I would sell and roll to 2022's, lowest stoke I could afford. Not advice.

Thank god the Oppenheimer guy corrected that nonsense CNBC just tried to spew. They had to get in some sort of dig on Tesla and went back to an oldie - "You have to dig up a lot of coal and burn natural gas to make the energy to run those cars....."

Oppenheimer dude shut down that crap super fast by pointing out how coal is rapidly being shut down and replaced by renewable because the cost factor is so much cheaper.

Colin Rusch is a smart cookie and he's one of the more combative in interviews. At this rate though, will need a another upgrade before the end of the week.

Sail to Iceland and the Faroe Islands with Smyril Line

Not so cheap though, I'd have to sell 8 shares if I wanted to bring the the wife and the X (as in car, not ex, although that's an interesting proposition ).

 

[Tslynk67]

I set one around 800 and 900 as well.

Weak longs!