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

[Artful Dodger]

Fidelity (FMR LLC) has increased their holding in TSLA by 109K shares, to 5,381,220 from 5,272,261

0000315066-20-001263 | SC 13G/A | Tesla, Inc. | SEC filing dated 07 Feb 2020

Meanwhile, were stil waiting to hear from some of these carbuncles barnacles.

ARK Invest excepted; even so, they sold 38.43% of their TSLA holdings in 2019Q4. Their 'trim above 10%' activities still have me scratching my head.

Yeah I know, I know, @Curt Renz has tried to explain it to me, but I guess I'm just slow to sell a winner...

Cheers!

 

[KarenRei]

So I have never made an options trade but had it added to my account two weeks ago. I was wanting to buy some mid 2020 or 2021 $800 calls. I missed my buy day when I got too busy at work and now it seems the call options are very expensive and everyone and their grandmother are buying them because of the instant millionaire stories.

So now what I am thinking is to sell some weekly call options that are $50 or so OTM to at least make the margin interest I have on about 100sh.

I assume you're talking about covered call options, right?

Well, if you think that the price is going to be stagnant, then go ahead. I don't think that it'll be stagnant, but who knows. Remember that $50 is less than a 7% move.

Comparing having a sell limit on 100sh at $800 what is the upside vs selling a call option at $800?

Selling the call gets you the premium plus the sale price whereas having a sell order only gets you the sale price. Is the only down side if you get left behind because of a gap up (if you had a $800 sell order and it gapped you could cancel it before the open)?

Don't mix up comparing changes during the week with changes at expiry. If you sell an $800 on Monday morning, and then the SP climbs up to $800 by the afternoon, you can't just buy it back for what you paid for it so that you have the potential to continue to take part in the rise, the option you sold is now worth dramatically more. Vs. a sell limit for which you can change your mind relatively painlessly at any time.

 

[Buckminster]

 

[Chickenlittle]

089XXX
October 2018 purchase.

Dan

I do not believe we are goin by vins in hw3 upgrades. My vin 41xx with full FSD paid at purchase still waiting in northern va market (huge number of tesla cars and most earlier vins in california)

 

[madodel]

Hopefully they give Roadster 2 owners the opportunity to buy SpaceX so I can sell the argument to my wife.

Or you can sell your wife and buy the Roadster 2.0.
Semper Tesla™

 

[Dan Detweiler]

"And what a vessel it is. Judged from the driver's seat alone, the Taycan is the better car. It meets the high expectations of this storied brand, proves its real-world range, and moves the EV bar on a couple fronts. But price is always a factor; in this case, an insurmountable one."

This, Porsche has been stating this from the get go, it did not build a Model S clone but a Porsche with different metric goals. As regards price, there is a reason Porsche is the most profitable car company.

The Porsche 911 is the most profitable car of 2019

And I find this statement encouraging to the group think sometimes found here.

"As we set up the Model S for a max-charging session, Tesla employees mobbed the Taycan. Sizing it up on a granular level, they were visibly impressed by the build quality on the preproduction Porsche and genuinely excited about a new EV contender. Their level of open-mindedness—far exceeding what we've come to expect from Tesla owners and fanatics—is no doubt one of Tesla's strengths."

In the end, a BIG congrats to Tesla for winning the comparo against the Taycan. I was totally wrong on this one. I respect C&D tests.

Bottom line...

10 years from now the Taycan will join the next gen roadster and probably a few others as the outliers for the ridiculously rich in the EV space. The ultimate niche vehicles that will have little impact on the overall EV market. It's the Model 3, Model Y, and whatever the other OEMs come up with (under 50K or so) that will truly move the market and the public's perception of transportation.

Just my $.02

Dan

 

[Late2theGame]

Yes, it was manipulation. From Tue-Thu, FINRA reported there were 2,136,450 shares sold marked as "ShortExempt", which means they were not located before being sold.

This would be illegal naked short selling except for the Market Makers Exemption (the "Madoff Rule"), which allows MMs to artificially (and without limit) increase the float even during times of high volume (when there is plenty of liquidity). This is an abuse of the exemption, which was intended to 'provide liquidity' but is now being used by unscrupulous parties to crash the SP while they scoop huge profits.

On Wed-Thu this week (in the middle of this bear raid), FINRA reported "ShortExempt" sales reached 9% of total shares sold short: (during a period of huge trading volume when liquidity is NOT AN ISSUE).

View attachment 509185

This had the effect of killing the sustained rally of Tue afternoon, and causing widespread panic selling amongst real shareholders (sorry @Right_Said_Fred this is the illegal practice you got swept up in).

View attachment 509189

This is market manipulation, pure and simple. Your hand waving attempt to explain it away does not change the reality, nor deal with the underlying problem: Regulation SHO (see below).

Let's see if these anonymous MMs can locate all these naked short shares before they are legally required to report their activity in the Failure to Deliver (FTD) report after 13 days. If these MMs are able to locate shares post hoc, it simply means legitimate investors were duped into selling their shares by the panic created by the dumping of millions of non-existant shares. If they can't locate shares, there are no consequences, and the actors involved remain anonymous.

Tell me again how this isn't manipulation? Where is the SEC?

Paging @UncaNed @Hock1
Info: @Fact Checking @KarenRei @lklundin

More here about the Market Maker's Exemption (Regulation SHO):
Regulation SHO | FINRA.org
Key Points About Regulation SHO

A final note: FINRA-reported volume is just a fraction of total trading on NASDAQ. During this week for example, FINRA reported a total volume of just 94,702,898 (94.70M) shares, while we know that total NASDAQ volume was 208,823,482 (208.8M) during that time (FINRA only reports numbers for Pre-Market and the Main Session, does not include the After-Market Session).

We have ZERO visibility into how much the rest of NASDAQ trading is sold short, or conducted under the short selling exemption. We do know that last week, we have no short selling information on 54.65% of all TSLA trades done on NASDAQ.

Think about what that means for Investor confidence and the transparency of the Market.

I tried to find the source of your data - best I found is: February 2020 Reg SHO Daily Files where I had to extract one line from each daily file and it does not have the last column you showed - Please let us know if there is a more convenient way to get them?

I then looked up the data around the last two times I remember the uptick rule being in place for TSLA - April 4, 2019 and July 25, 2019. I also pulled out the data for last week for comparison:

It looks like the exempt interest goes always way up if the circuit breakers are tripped - makes sense now to me as it allows them to short sell ignoring the uptick rule.

It also looks like the exempt interest slowly was creeping up last week already.
Edit: It started the day of the earnings call.
Is that a sign that:
- the MM had problems with the increasing SP and/or volume?
- manipulations started last week already?

Might be interesting to watch in similar situations in the future as an early warning sign???
Like right now ...

 

[Dan Detweiler]

I do not believe we are goin by vins in hw3 upgrades. My vin 41xx with full FSD paid at purchase still waiting in northern va market (huge number of tesla cars and most earlier vins in california)

Yes, I think ragionality is playing a big role. They ARE coming though. A positive sign for sure.

Dan

 

[dww12]

"And what a vessel it is. Judged from the driver's seat alone, the Taycan is the better car. It meets the high expectations of this storied brand, proves its real-world range, and moves the EV bar on a couple fronts. But price is always a factor; in this case, an insurmountable one."

This, Porsche has been stating this from the get go, it did not build a Model S clone but a Porsche with different metric goals. As regards price, there is a reason Porsche is the most profitable car company.

The Porsche 911 is the most profitable car of 2019

And I find this statement encouraging to the group think sometimes found here.

"As we set up the Model S for a max-charging session, Tesla employees mobbed the Taycan. Sizing it up on a granular level, they were visibly impressed by the build quality on the preproduction Porsche and genuinely excited about a new EV contender. Their level of open-mindedness—far exceeding what we've come to expect from Tesla owners and fanatics—is no doubt one of Tesla's strengths."

In the end, a BIG congrats to Tesla for winning the comparo against the Taycan. I was totally wrong on this one. I respect C&D tests.

If they had both cars how could they not do a complete 95% to 5% range test with one following the other? Extrapolating 80% of your graph is BS. I am waiting for Brooks with dragtimes.

 

[Driver Dave]

I disagree, let me explain:

You just forgot the very first wave:

Buyers at IPO, us first gen Roadster owners. If you go back into the history of TMC, you will see that a lot of Roadster owners accepted the offer from Tesla to participate at the IPO at a price of 17 USD. At that time that was super risky move for a small investor. I got 500 shares allocated and I was super happy then, even more so now. The gains we can reap in the future is proportional to the risk we took back then. So please don‘t omit Roadster owners in the history books

I agree.

I would add to my previous post

Wave 0. IPO. The first people with roadster who took the biggest risk of all and if held, are now getting the biggest reward.

Wish I saw it back then. But was still on the fence whether this was an interesting boutique experiment or something real.

I just should have went for it.

Congrats to your 500!

( i’m sure you are now thinking, if only I went 1000... )

 

[Unpilot]

I agree.

I would add to my previous post

Wave 0. IPO. The first people who took the biggest risk of all and if held, are now getting the biggest reward.

Wish I saw it back then. But was still on the fence whether this was an interesting boutique experiment or something real.

I just should have went for it.

Congrats to your 500!

( i’m sure you are now thinking, if only I went 1000... )

Actually at IPO Tesla was IMHO a super risky bet.

Now IMHO it is a super risky bet to go against it.

 

[dc_h]

I like how she keeps repeating in interviews that the competition has a cost disadvantage in EV’s, so that they have to sell their EVs at a loss in order to compete with Tesla, while they see their ICE sales (and profits) go down. The importance here is that this narrative gets exposed on the financial markets, and more and more investors will start to make investment decisions accordingly.

This is a totally different point of view compared to the ‘It’s a piece of cake for the classic car vendors to make an EV that will outcompete Tesla’, which is frankly the general consensus right now.

With all the classic car companies reporting losses quarter after quarter, Katie Wood’s reasoning will get more and more traction.

I think one thing most analysts don't get is that Tesla will become cheaper and cheaper to buy and own and is already cheaper to operate the Model 3 vs any other luxury mid size car and in many instances cheaper to own and operate then a Camry or Accord. They have been reducing the cost to build all of their cars by about 10% a year or more. Based on early Model Y and Shanghai signals from Elon and Zach, it seems likely they can maintain this 10% plus cost reduction trend. If they continue this for 5 more years and then switch to legacy trends, they would have a huge margin advantage over all ICE cars. I think they already have passed that inflection point of cost advantage and that is going to make for an interesting year.

*They are not likely to change to legacy productivity trends in 5 years. The current 10% trend is not likely to continue much past 5 years, but will likely remain way above ICE productivity for decades, which is forever).

 

[Late2theGame]

I tried to find the source of your data - best I found is: February 2020 Reg SHO Daily Files where I had to extract one line from each daily file and it does not have the last column you showed - Please let us know if there is a more convenient way to get them?

I then looked up the data around the last two times I remember the uptick rule being in place for TSLA - April 4, 2019 and July 25, 2019. I also pulled out the data for last week for comparison:

View attachment 509217
It looks like the exempt interest goes always way up if the circuit breakers are tripped - makes sense now to me as it allows them to short sell ignoring the uptick rule.

It also looks like the exempt interest slowly was creeping up last week already.
Edit: It started the day of the earnings call.
Is that a sign that:
- the MM had problems with the increasing SP and/or volume?
- manipulations started last week already?

Might be interesting to watch in similar situations in the future as an early warning sign???
Like right now ...

Thinking about this a little more, it now looks to me as this increasing exempt volume reflecting the increasing buying pressure and less as the fingerprint of the main manipulation which happened. Which in turn would point back to hedge funds a culprits imho.

We could test this by correlating volume with exempt volume for a larger time-span but I don't want to pull that amount of data out of single files line by line.

Edit: And adding it really was the short volume itself which shot up the day of the manipulation, much more than the exempt volume, which for me again points to hedge-funds and not the MM.

 

[Foghat]

Yeah, Austin isn't Mordor. That'd be Port Arthur.

Tesla needs to build a foundry to make their special Stainless steel alloy, then needs to deliver it to SpaceX for Starship production, and Tesla for Cybertruck.

One caveat here: if plans for a 2nd Gen Cybertruck acually do involve a giant casting machine for injection molding the entire hull of CT2, then that process will be done somewhere near the foundry, were they will have easy access to the still molten steel.

Port Arthur and the surrounding industrial area also makes large tanks for the oil industry. SpaceX is planning to build Starship like a water tower (tanks built from loops of steel).

I put my money on the Houston area, specially near the port for logistics.

Great take. Houston seems to hit many objectives.

 

[killianss]

I disagree, let me explain:

You just forgot the very first wave:

Buyers at IPO, us first gen Roadster owners. If you go back into the history of TMC, you will see that a lot of Roadster owners accepted the offer from Tesla to participate at the IPO at a price of 17 USD. At that time that was super risky move for a small investor. I got 500 shares allocated and I was super happy then, even more so now. The gains we can reap in the future is proportional to the risk we took back then. So please don‘t omit Roadster owners in the history books

Congratulations on your 500! Hindsight is 20/20. It was a gutsy move to get a roadster and stock!
Heck, i knew Tesla is GREAT car but i was so worried the company would went under even at 2019.

Bought my Model 3 in Sept 2019 and put most of my assets in TSLA now. I am a believer now .. just trying to figure out how to capitalize this faster to get my model Y

 

[dww12]

I assume you're talking about covered call options, right?

Well, if you think that the price is going to be stagnant, then go ahead. I don't think that it'll be stagnant, but who knows. Remember that $50 is less than a 7% move.



Don't mix up comparing changes during the week with changes at expiry. If you sell an $800 on Monday morning, and then the SP climbs up to $800 by the afternoon, you can't just buy it back for what you paid for it so that you have the potential to continue to take part in the rise, the option you sold is now worth dramatically more. Vs. a sell limit for which you can change your mind relatively painlessly at any time.

Yes, covered. So the main downside is being “locked”? But if there is a slow rise vs a gap up can’t you just buy the stock back (not the call) at the strike (assuming you have the cash or margin) and keep your shares? In that case the down side being taxes on any gain you made, or I guess the possibility the price goes down by expiry and the call does not exercise and you have 100 extra shares. Thank you for your reply Karen!

 

[dmvevguy]

Looks like factory will open back up in Shanghai on Monday 2/10. I thought they would probably keep it closed longer due to the corona virus...

 

[Artful Dodger]

What I find interesting is, that the majority of the short exempt volume happened Wed/Thu - not Tuesday!

Tuesday's ExemptVolume was up too but most of it was used to prevent TSLA from recovering/rallying back on Wed/Thu!
Even if somebody constructs a "legally defensible reason" for doing this on Tuesday, I can't imagine how one would justify these actions on Wed/Thu?

Anybody knows a lawyer or firm knowledgeable in these things?

The bear raid started at 15:48 with just 13 min of trading before the Close. Presumably, the supply of readily available for borrowing shares of TSLA was burned very quickly, yet still 200K shares were sold with out first being located during that day:

A reminder about the FINRA report: they only report on trades made during the Pre-Market and Main session. Their "short exempted" numbers do not include trading in the After-hours market, nor do those trades 'roll over' to be reported with the following trading session.

And still, more than 55% of NASDAQ trading is not accounted for in FINRA volume reports.

Short volume reports from FINRA are like a Bikini: what it reveals is interesting, but what it conceals is vital.

Cheers!

 

[jhm]

There is also a dependency on what you're actually doing. One of the reasons you use Python for the fast iteration is you're doing machine learning / data science type work. There is a relatively large pool of people that know how to use Python for that kind of work. WHen you add a C++ dependency on the skill, you shrink that pool of people pretty significantly.

As best I can tell, it's almost a binary choice - either Python + machine learning skill, or C++ / software engineering skill. The number of people with both is small enough that you use them to do the translation for the software engineers that are reimplementing the work done on the Python side.


Then again, maybe Tesla is such an attractive place to work that they can get all of the outstanding engineers that have both skills they want, and they can do their model development in C++ from the beginning.

(I'm one of the Python + machine learning people, that would be starting with "Hello World" in C++)

I think talent pool analysis is the way to think of the competitive space for vehicle autonomy. All competitors are drawing from the same talent pools. If Tesla has a leg up on recruitment and can maximize the productivity of that talent, it is a a huge "mote" against all competitors. The notion of more here is innovating so fast no one can catch up, nor will they be able to recruit the talent to catch up because top talent wants to be on the leading edge team.

 

[Tslynk67]

This has previously been posted:

It's a must watch if you haven't already. Fridman got owned!

This is the best promotion of Elon I have ever seen/read. Coming from Keller means a lot. Why? - he is top of his game, has worked in different industries and crucially has left Tesla and is free to say what he wants. He wouldn't hold back if he thought otherwise, as Fridman found out.

Lots of chat about stripping out layers of assumptions (1st principles) and how good Elon is at it.

FSD is gonna be easy he reckons.

Now I need to become a craftsman in something....

Wow, that’s a profound discussion. Highly recommended.