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

[MC3OZ]

Car industry could see price war on hybrid vehicles in 2020

The are making hybrids because they can't get the batteries and....

Nevertheless, plug-in hybrids, which can be charged from external sources, are a key part of carmakers’ emission-reduction efforts, because they can use the same factories in which they have already sunk billions of euros in investment.

 

[AudubonB]

GE did too, until it didn’t.

(pay a handsome dividend, that is).

Right. And - do you know what the short interest was for GE right up until the time it almost completely suspended dividends? Quite small.

 

[EV forever]

I don't think there's much manipulation going on when volume is over $50B in a single day.

Seems more plausible that there were some legitimate sellers, be it short term traders or otherwise, that showed up in the final minutes before close.

And they all showed up, simultaneously, exactly between 3:48 to 4:00 pm? Exactly halfway into this 12 min window, the Marketwatch hit piece was posted, then deleted 2 min after market close. Of course, could be all a big coincidence

 

[FrankSG]

And they all showed up, simultaneously, exactly between 3:48 to 4:00 pm? Exactly halfway into this 12 min window, the Marketwatch hit piece was posted, then deleted 2 min after market close. Of course, could be all a big coincidence

Yeah, I just edited my post after reading through the last 10-20 pages of this thread, and I'm now not so sure anymore.

 

[mblakele]

What post?
What pork chop?
What?

Probably this one:

It tells us that high-yield stocks are super-treacherous for shorters. CVX's dividend right now yields 4.6%; XOM a whopping 5.4%. If you're short, you have to pay not only the borrow rate but you also are required to cough up those dividends.
I long since have viewed dividends as nicely analogous to the pork chop necklace that a dog has to wear for other dogs to play with it. If you like, you can consider it the bribe they pay to keep short sellers away.

 

[Boomer19]

The legitimate sellers were likely weak longs with tight stop limits, rather than shareholders simply showing up simultaneously to sell. A short selling hedge fund(s) apparently found a spot late in the session in which they could relatively inexpensively trigger a cascade of stop limits being activated. This was likely amplified by day-traders on special margin who had to close their positions before the end of the session.

yeah, lots of liquidation trades going on in the last two days. these are generally market orders, not controlled limits trying to get the best execution

that gush of 1mm or whatever sales hit when the price was up $180 and promptly cut it in half. it was as stunning on the way down as it was up.

the velocity and volume is breathtaking

 

[RobStark]

Wonder if the upcoming Cybertruck will hurt F-150 sales this year, like the Model 3 started to hurt competitor's sales before it started rolling off the line.

If that Mach-E is delayed in similar fashion to Taycan (production issues) and ID.3 (software issues), maybe Ford will go under before it can even launch the Mach-E?

Their profits have been tumbling badly over the past 12 months, I wouldn't be surprised if Ford was the first traditional auto company to end up in serious financial trouble in the next few years.

Ford took a $1.7B pension charge for Q4 2019

Available surveys and anecdotal evidence suggest it is not current F150/F Series/Detroit 3 owners that are intending to buy Cybertruck(with the exception of concurrent Tesla and EV ownership) but non truck owners and owners of Japanese branded trucks.

The weakest OEMs are FCA,Nissan-Mitsubishi, and Renault. And Renault may have no choice but to sell its 43% stake in Nissan. I am not so sure FCA joining PSA makes the resulting company that much stronger.

 

[DFibRL8R]

Ford made $47m in profit for the entire year... Tesla made twice that much profit in Q4.

What the heck are they spending 5.6 million dollars on a Mach E Super Bowl ad for? That seems like a bad move spending 12% of your profits on a 30 second spot.

 

[larmor]

And they all showed up, simultaneously, exactly between 3:48 to 4:00 pm? Exactly halfway into this 12 min window, the Marketwatch hit piece was posted, then deleted 2 min after market close. Of course, could be all a big coincidence

Amateurs, real HFT could do this in a few micro seconds with a quantum computer... or an apple II and a good AOL connection....

 

[UnknownSoldier]

What the heck are they spending 5.6 million dollars on a Mach E Super Bowl ad for? That seems like a bad move spending 12% of your profits on a 30 second spot.

They probably should have spent more money on properly designing and building the new Explorer, the most successful (in both sales volume and lifetime revenue) SUV of all time.

Oh right, everyone's expecting Big Auto to suddenly wake up and decide to crush Tesla when they are good and ready. And yet Ford cannot even properly design and build the new version of what is unarguably the most critically important current product that they sell.

Kind of makes you think, doesn't it?

 

[EV forever]

A while back @Fact Checking had posted a theory that Elon's $420 tweet was in response to his concern that Saudi's were positioning themselves for a hostile takeover of Tesla. Folks here said it was a conspiracy theory, but there may be truth to that.

Saudi's had taken a 5% stake in Tesla 3Q-2018. This was followed by the $420 going private tweet and all the craziness that occurred. In effect, it also exposed the Saudi's. The coalition that Elon tried to create to take Tesla private did not include the Saudi's. By early 2019 it was obvious that a takeover of Tesla or going private was not going to happen. So then the Saudi's dumped their shares as they wanted control if they were investing.

If that was really the case, I am really glad that they withdrew support. Can you imagine Tesla with interference from the Saudis?

Maybe @Fact Checking could post his theory again?

Found the previous post by @Fact Checking It is worth a read

That was my and @neroden's take as well - and it clearly explained the rush to control the narrative: according to later SEC documents Elon tweeted the $420 tweet from his private jet, with minimal input from other board members.

Back then Elon probably already suspected that Q3/Q4'2018 is going to be fantastic, because they knew their cost base and had a lot of pent-up demand. This was the report that I believe Elon read and which might have increased urgency and triggered the $420 tweet:

Tesla shares rise on report Saudi Arabia sovereign wealth fund has $2 billion stake​

And prior August 7 we did notice weird TSLA buying pressure here on TMC, which started after the July 4th bear attack that drove the price below $300:

View attachment 496967​

Note that on the $420 tweet day the price was already at around $350, $365 intraday, fueled by Q2 earnings that already showed a positive inherent cash flow (modulo working capital fluctuation) and the Saudi speculation, which was later on confirmed to be a 4% stake in Tesla.

Also note that "$420" might have been a joke in part, but it was also exactly a +20% buy-out premium over the ~$350 price levels on August 7, so a fair offer. (350*1.2 = 420)

Note how the next 2 weeks after the $420 tweet were spent (successfully) organizing a $20b buy-out consortium that emphatically did not include the Saudi PIF. The Saudis also later on hedged (shorted) their stake and invested in another EV maker, so the relationship clearly cooled down.

Bears immediately hung on to "The $420 tweet was a lie, it's impossible to take Tesla private!" false narrative and started shorting big time, helped by institutionals and eventually the SEC itself.

In hindsight, had the Saudi PIF taken over Tesla and taken it private, we'd possibly not have seen the $400+ levels of today.

So SEC confrontation aside, Elon did Tesla investors a big favor by making Tesla "uninvestable" for a year or so, this avoided the Saudi takeover (the bone-saw memes would never stop ...), and it also kept VW-Porsche from taking over Tesla at the $180 price levels earlier this year, which I'm sure they were looking at...

The German "Manager Magazin" published a well sourced piece that also quoted members of the Porsche family bemoaning Tesla's high share price ... when it was below $200:

Tesla: Daimler, BMW und Volkswagen machen Jagd auf Elon Musk

"Hunting down Tesla"

"Electro-visionary Elon Musk fails due to the downsides of the auto business. Important investors lose confidence, the German premium providers are attacking. Tesla is ready for a takeover."

...


"The Tesla dream still glows in Diess, according to top VW managers familiar with his thinking. He believes that Volkswagen can benefit from Tesla's battery and, above all, software expertise. "He would get in immediately if he could," says one of his top people. The money is there too, for the beginning a participation is enough. It was more difficult with the approval of the major shareholders, the families Porsche and Piëch."​

Right after they leaked this to Manager Magazin, Porsche family members "denied" the report:

Volkswagen not interested in buying Tesla stake​

I think they wanted to drive the price down a bit more by creating the impression that despite Diess being the super best friend ever of Elon, they are still not interested in bailing out Tesla - and then gobble up Tesla for the EV tech.

Then early September, they were on again:

Tesla: Wolfgang Porsche schließt Beteiligung nicht aus - manager magazin

"Volkswagen co-owner Wolfgang Porsche apparently does not rule out a stake in the US electric car maker Tesla."​

I think they were still under the impression that the Taycan would pressure Tesla, and that Tesla has cash flow troubles and needs a bailout.

Lucky for us, VW-Porsche miscalculated, Q2 already drove the share price to $250 levels, and Q3 financials started the rally to $420 ... and Elon never had any interest in selling Tesla's assets to VW.

I don't think VW-Porsche has the money to take over Tesla at these price levels - and Elon would not agree to a one-sided partnership that gives Tesla's software crown jewels to Volkswagen - which I think VW had in mind in the summer.

So yeah, IMO Tesla investors dodged two takeover/dilution bullets in the span of a single year ...

The possibility of takeovers needs to be understood too when buying options: in a takeover much of the time value of an option can go to zero, which wipes out deep out of the money option holders.

Sorry, didn’t realize the Saudi sell-off story was already covered this morning. Hard to keep track in this forum

I have to say that if true then this is great relief to me personally and I'm sure to many Tesla investors - having Saudi influence within Tesla might have become a toxic combination.

Edited - to re-order the quotes

 

[Boomer19]

And they all showed up, simultaneously, exactly between 3:48 to 4:00 pm? Exactly halfway into this 12 min window, the Marketwatch hit piece was posted, then deleted 2 min after market close. Of course, could be all a big coincidence

whoa..i missed the mktwatch hit piece. totally not surprised, but what was it?

 

[EV forever]

You mean the article that was probably posted a few seconds too early (like the one we saw last year?)
The SEC will not do a thing about it so is it worth the time?

yes, I know nothing will get done. I need to stop getting so angry about this, just feels like a bitter finish to a perfect day.

If a week back someone told me that Tesla would finish a day up by over 100 and another 20 after hours, and I would be dissatisfied by that, my response would be to question that person’s sanity!

 

[Carl Raymond]

Doesn’t take carbon out of the ground and unlock it from a hydrocarbon chain. No long term net change to atmospheric carbon content. Carbon needs to be left in the ground.

Fire Away!
(It’s the batteries, Stupid!)

Also... when a tractor plows or a harvester reaps grain for feed, that’s ICE emissions likely tagged to agriculture rather than transport. BEV and solar technology will hopefully eliminate such emissions, an indirect win for Tesla’s mission.

 

[EV forever]

whoa..i missed the mktwatch hit piece. totally not surprised, but what was it?

This was the title- misleading because Tesla was up over $100 even then. Don’t have a screenshot

Tesla stock turns negative
MARKETWATCH 3:57 PM ET 2/4/2020

 

[MikeC]

I missed it too. It coincided with the time of the huge late session drop. Perhaps that drop was not hedge fund manipulation, but algobots reacting to that incorrect headline and triggering a cascade of stop limits just as day-traders had to exit positions.

Theory: It was a premeditated huge dump by a group of shorts, synchronized with a timed article release. They knew they would be dropping the share price 100 bucks, but didn’t anticipate that wouldn’t actually put it in the red because of the monster gain today.

And they forgot to adjust the headline before it came online at the predetermined time.

 

[Romand]

this got me scared

 

[Tenable]

In case some options newbies are watching -

The risks associated with this
1) if it was a covered call, you will miss out on any gains over $1035/share.

2) if it was naked call, good luck and hope that TSLA doesn't rise significantly above $1035 in which case you will be forking over $(TSLA price - 1035) / share.

In both cases, if $TSLA end up above $1035, you can buy further OTM call to turn it into a spread and cap the loss to (difference of the strike price - difference in premium)/share of the two legs

I sold weekly 1400 options for $7. The other option is he can roll the calls. Of course this doesn’t work forever, but if you’re planning to hold long term and are selling weeklies you have a lot of runway.

 

[staran]

Maybe. I'm no expert, but to me it looked WAY too coordinated to be random people grabbing profits. It looked like a determined effort to get the price below $900 by EoD... We'll see what Pops tells us!

I agree and was wondering exactly the same about this dip...

 

[mongo]

This was the title- misleading because Tesla was up over $100 even then. Don’t have a screenshot

Tesla stock turns negative
MARKETWATCH 3:57 PM ET 2/4/2020

It was updated post close: