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

[KarenRei]

How do you guys handle options that are deep in the money and have a long time to expiration? I have a $600 1/15/21 call that's obviously way up. I expect we will be in the 800-1k range for sure at that point. Is it smart to roll it into a 1/15/21 at say $800?

$600 isn't "deep" ITM. But in general, I roll them before they ever get deep ITM. They'll become rather illiquid if you let them get really deep ITM, to the point where it often becomes just better to exercise them early rather than try to find a buyer.

 

[Drumheller]

Citation? One that's current?

Plenty of results on Google. Here is the most recent one I saw (dated yesterday)

In China, the race is on to develop, approve test kits for coronavirus | 2020-01-30 | BioWorld

 

[sundaymorning]

Some thoughts on the battery investor day. Remember autonomy investor day? The stock didn't go up even though what got revealed was quite substantial.

For batteries, it might or might not be similar. I think that if what is revealed is reasonably quantifiable (say, they spill the beans on price per Wh and it's super low), it can move the stock. But as we've seen so far, there simply isn't enough understanding to move the stock if what is being revealed has no obvious/quantifiable immediate business impact and requires specialized knowledge in multiple disciplines to make sense of. Sure, anyone with half a brain now knows Tesla is planning to make their own integrated batteries, and lots of them. So far the market was operating in "show me the money" mode which all longs here are reaping the benefits of at the moment, since we had an arbitrage opportunity of knowing what is going on before it was priced in. Will we have another arbitrage opportunity with the batteries? Personally I think the general advice of just stay long and it'll be all good after some time applies here.

we’ll have a runup and a pullback after; sell the news type of thing.

 

[Derek Vinyard]

Here's more with her responses in that thread. Note that the top tweet is the latest, and the bottom tweet is the one that initiated the thread.

View attachment 506372

Ha! I've been following Andrea since 2013-14 and especially CNBC (could be BBG as well) was literally laughing at her every time when she was giving her analysis and particularly price recommendations...especially, for those who don't know it - she was the very first analyst covering Tesla Inc with a bombastic PT of $500! it was a worldwide laughter and disrespectfulness by lot of media and now, wannabe-analysts as we know...
She is a great person - not anymore employed at Dougherty but she goes her way and with success !!

cheers to all longs! God bless you all!

 

[lklundin]

MarketWatch - 3 hours ago: More fuel for Tesla? Stock could join the S&P 500 by the end of the year

They must assume that 20Q2 will have a non-positive GAAP result, because otherwise Tesla will qualify for S&P 500 inclusion with that quarter as long as 20Q1 has a GAAP result better than -248M$. (Yes, as an engineer I use the minus to indicate a negative number just I like write the unit _after_ the number).

PS. Alternatively, 20Q1 has a result better than 160M$ in which case the S&P 500 qualification comes already with that quarter.

 

[Tslynk67]

How about we just stop analyzing what MBS is saying. There is probably a separate thread for him anyway. I'm personally tired of reading coverage on his movements

 

[Sancho]

C’mon TSLA, give us some pre-Super Bowl fireworks in the last hour of trading.

 

[ggr]

Honestly, I'm not sure I want to tell at this point It's market cap is 3 1/2 orders of magnitude smaller than Tesla's, averages one trade every day or so, and you guys could ruin my cost basis while I'm still acquiring.

You could leak the secret to the people who donated to your trees... eg. me.

 

[mongo]

OT module

They aren't replaceable? At one point he definitely mentioned the replacement cost for model 3 modules.

5 years is forever in Tesla time man. ​

Actually he said the Model 3 modules are not interchangeable. (They are replaceable.) I thought the center two were the same design but the left and right ones were different. So each pack size has three different module designs. Unlike S&X where the pack has 16, or 14, of exactly the same modules. (Actually that isn't true, I've heard rumors that they have changed the design of one, or two, of the modules in a new pack design to help with crash safety.)

Per the local guru, single module replacement is not generally possible:

I've said this here before, but this thread is hundreds of pages now:

Tesla can't just replace a single module in a pack. The modules would go out of balance too quickly for the BMS to compensate due to unequal wear, degradation, etc. Unless they're very close in all metrics, it can't be done. Doing this at a central refurbishment facility is maybe possible if they have thousands of modules to choose from with their "fingerprints", so to speak, databased. This way they can maybe find a module close enough to the rest that it doesn't go out of balance immediately. But a service center won't be able to do a single module replacement inside a battery pack since there is just no way they'd have a matched module available to them.

To put things in perspective, my company is close to ~2000 salvage modules processed to-date... and, according to my testing database (which has data on a bit over the last 1000 or so), I doubt there were any that would have been compatible enough to be useful in a single module replacement situation. The closest mismatched ones would end up going too far out of balance after only a few months.

I believe Elon comments regarding pack refresh were referred to replacing all the modules in a pack while reusing the pack structure and electronics (larger impact with the 3 penthouse). The impact of the left and right modules being interchangeable is negligible for a repair use case since you would just source the correct module type from GF1. There is no reason to swap a left for a right. It does impact inventory and manufacturing equipment though.

 

[KarenRei]

Plenty of results on Google. Here is the most recent one I saw (dated yesterday)

In China, the race is on to develop, approve test kits for coronavirus | 2020-01-30 | BioWorld

Geneodx, one of the first biotech firms that received approval for its test kits, said it planned to make products for 120,000 people and has sent them all over the country, including to Hong Kong and Macau.

Meanwhile, Huada said it will send the first batch of test kits for about 100,000 patients to areas that are hardest hit. It also will double its production in a timely manner and stock up materials to produce more. The company also is said to be working with health authorities and institutes in Brunei, Thailand, Nigeria and South Africa.

Wuhan, a city in Hubei province, remains the epicenter of the outbreak. Local authorities said in a Jan. 29 media briefing that the city has stocked 50,000 test kits so far, and diagnosis is being performed much more quickly.

Vs. less than 10k diagnosed.

Furthermore, the linear infection rate curve does not match what you'd generally expect to be a sigmoid (S curve) for kit production scaleup. Lastly, the fatality rate keeps dropping, which is a consequence of what you'd naturally expect from diagnosis rates getting better.[/quote]

 

[Zero CO2]

ARK Invest CEO Cathie Wood comments on Tesla.

Bloomberg - today:

I think most of us know this but it so cool to watch the Bloomberg Skeptics hear it ... not sure if they understand it ... but "they will "

Telsa today - 14 Billion miles
nearest competitor Waymo -20 Million miles

3 orders of magnitude and growing with every new Tesla vehicle

 

[dw4ngg]

Being held at 645 by a resilient lid. Whoever made that tweet about the 650 cap was not lying.

 

[Fact Checking]

$600 isn't "deep" ITM. But in general, I roll them before they ever get deep ITM. They'll become rather illiquid if you let them get really deep ITM, to the point where it often becomes just better to exercise them early rather than try to find a buyer.

Early exercise throws away extrinsic value though - which is very high for 2021 options.

There's several other ways to utilize illiquid DITM call options:

• Even if the spread is high, you can post a sell limit order into the mid-price, with a few cents thrown to the market maker.
• You can convert it into a bullish call spread by selling a same expiry near the money or mildly in the money call that has good liquidity. You'll effectively be taking substantial profits and leave the rest of the spread to expire.

But I agree that you should avoid the situation - $600 calls are still liquid, just post a limit order into the spread to get a good price.

 

[Robertj]

After listening to Mike Webster on IBD live on historical charts of monster stocks that might match Tesla
I reviewed Taser, now AAXN
Taser in April 2003 came off a base for 15 weeks to reach IBD buypoint / 3.5 months
Then Taser rose for another 35 weeks / 8 months
Run climaxed over 12 months after original bottom

Applied to Tesla that should give us until June,2020

Expect pullbacks , back lots left to run

the other point is that Taser was a one trick pony , Tesla has
Model Y , Trucks , Solar & batteries , all still in ramp mode

 

[samppa]

They must assume that 20Q2 will have a non-positive GAAP result, because otherwise Tesla will qualify for S&P 500 inclusion with that quarter as long as 20Q1 has a GAAP result better than -248M$. (Yes, as an engineer I use the minus to indicate a negative number just I like write the unit _after_ the number).

PS. Alternatively, 20Q1 has a result better than 160M$ in which case the S&P 500 qualification comes already with that quarter.

Lot of talk about this. How often is s&p500 index updated? Quarterly? If so when ecaxtly?

 

[SOULPEDL]

Being held at 645 by a resilient lid. Whoever made that tweet about the 650 cap was not lying.

Yup

 

[sparcs]

Lot of talk about this. How often is s&p500 index updated? Quarterly? If so when ecaxtly?

Shall TSLA be added to S&P500? (out of main)

(here's the more detailed reply from mongo)

 

[CanadaEV]

But as we've seen so far, there simply isn't enough understanding to move the stock if what is being revealed has no obvious/quantifiable immediate business impact and requires specialized knowledge in multiple disciplines to make sense of. Sure, anyone with half a brain now knows Tesla is planning to make their own integrated batteries, and lots of them. So far the market was operating in "show me the money" mode which all longs here are reaping the benefits of at the moment, since we had an arbitrage opportunity of knowing what is going on before it was priced in. Will we have another arbitrage opportunity with the batteries? Personally I think the general advice of just stay long and it'll be all good after some time applies here.

Yes, I think your observations are right on.

So far I haven't seen this specific wording referenced, (I've probably missed others referencing it), but this, almost throw away comment from Musk during the earnings call, seems to encapsulate what he will be saying in April, and if so, it can't help but move the market:

"So tentatively sort of in the April timeframe, we will do a Battery Day and kind of go through what the challenges are, how do you get from here to, I don't know a couple of thousand gigawatt hours a year or something."

 

[ggr]

ARK Invest CEO Cathie Wood comments on Tesla.

Bloomberg - today:

What strikes me about that video is it's the first time I haven't seen the talking heads interrupting and arguing. Cathie was actually able to complete sentences and mention all three of "there are three things...". Must watch if you haven't already.

 

[StealthP3D]

Lot of talk about this. How often is s&p500 index updated? Quarterly? If so when ecaxtly?

Whenever it needs updating, the BoD will meet and vote. They stay on top of things. It wouldn't surprise me to see them include it early, particularly if TSLA stock drops suddenly for any reason that is not fundamental to their growth. Yes, they have the ability to waive "requirements" for S&P500 inclusion. That is one more reason why I don't understand anyone who is maintaining a short position. I tend to believe the vast majority of short positions must be strategic holdings by proxies for oil/ICE interests.