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

[jerry33]

Electrek - this morning: Tesla holds 80% of US EV market despite losing federal tax credit - Electrek

The federal tax credit is meaningless if your product is good and people know about it.

 

[StealthP3D]

"Whether it creates a short squeeze is a seperate question and that would depend upon the size of the (assumed) phantom share problem"

the stock loan/borrow contracts may remain open ended until the short is forced to cover, potentially from some other catalyst like continued rise in price, or mass recall of shares from the lending pool (they may go hand in hand) ...which if that happened now, look out

The phantom share problem is theoretical - none of us know if it exists or not. But if phantom shares do exist, they are not associated with a lending pool - that's what would make them "phantom" shares.

It's beginning to become more clear to me why there appears to be so much confusion on this issue. People are confusing "phantom" shares with legitimate short shares associated with lent shares (not that I think that should be legitimate, but it is recognized as such).

 

[canoemore]

This price action does seem to have a similar quality to yesterday. Sort of a steady advance punctuated by small bursts

 

[bigsmooth125]

Audie's back on this thread?! Now if Karen and FC come back, this would be TMC's best week ever.

A very quick, non-Mod post for all who have GTC Sell orders floating around. Consider what I have alerted our brokers and decide whether you wish to do the same:


Hello _______________

Some mechanicals here:

With the TSLA 5:1 split coming right up, PLEASE ENSURE that the GTC price is adjusted, as follows:

First, alter the number of shares in the Sell Order to account for the changed number in Acct #Musk101, which now is XXXX, and shortly will be XXXXXX. The original GTC order was for, I believe, selling xxxxx shares.

Second, alter the Sell @ to $aaaa <===based on the NEW, post-split price. To be boringly repetitive, this is equivalent to $bbbbb pre-split. It is IMPERATIVE that $aaaa is NOT used pre-split!!!!

I am acutely aware this is very far out of the money and do not expect the target to be reached, but because this is coincident with the stock split I am anxious to ensure that nothing gets confused in the transition,

What a year so far! Watching everything like a hawk, I am,

Very sincerely,

Audie

 

[JustSaying]

Ta

2 billion common shares authorized per the 2019 10K balance sheet.

 

[Boomer19]

If we assume for a moment that this was the case ("scrambling by participants to reduce these balances in time") - how would you define "in time"? Up until today? Meaning they could get back into exposure as soon as next Monday?

i simply dont know. i dont anticipate a catalyst like borrow demand outweighing borrow supply anytime soon.
also, hard to tell how much short covering has already occurred in the last two weeks until we get the short interest report from nasdaq

as of 07/31/2020 - 11,945,253

but the price keeps rising in the meantime!!

 

[oldTAVguy]

The federal tax credit is meaningless if your product is good and people know about it.

Not meaningless but of far less importance. And not if the buyers look carefully.

 

[Intl Professor]

We live off of my two pensions with enough to have leftovers for investing. I am no longer saving for that purpose, now surplus goes to our local food bank after @ohmman suggested stimulus check be given to charity. It is easy to do since the daily growth in our portfolio now often exceeds, sometimes by multiples, the gross sum of my pensions for a year. That is a daily reminder of inequality of wealth in our country, leveraged by access to education.

Edit: Added in bold

 

[Nocturnal]

I have to say that holding at $2000 is more difficult than holding at $200.

edit. lol, I'm surprised not everyone agrees.

 

[SOULPEDL]

First drive of Polestar 2, the electric sedan for buyers wanting European style - Electrek

Dripping with contempt - this is a perfect example of how consumers quickly want to revolt against what is perceived to be becoming mainstream.

Question is, does this new pitch on EVs lead to sales, and for what reason?

Caring about the planet or just wanting some fun with acceleration, while also being ashamed among peers, is a strange person indeed. But if that's their entry point to EV reality, it's one less ICE polluter out there and progress continues. Which, by the way, was somewhat like me in the beginning. But then the facts started adding up and my mind changed - still is. Whatever works I say.

I think this pic says it all (and I've shared my intentions to sell it here before while experiencing this new cognitive dissonance). So I finally sold it back to the original owner. It was my daily driver for decades, and I personally rebuilt all including the transmission, even walked 100's of miles in wrecking yards looking for that single part.

But today, I don't like 13 mpg (or an automatic choke that leaves me choking instead), I don't want to fix cars anymore, and the safety on these old cars is just scary bad. I had to add rear seat belts myself. Ironically, the only automotive tool that I need now is that air hose on the wall. Oh, and I also worry about the planet... but that came later.

Thanks Tesla, I needed a reality check.

 

[Steve m]

And you keep missing the point @Knightshade is making. Yes, the real holder gets his 4 new shares. But the guy the short borrowed from also needs to get his 4 new shares, and the only way for that to happen is for the short to make him whole, either by buying shares on the open market, or borrowing more. If the short takes no explicit action, the broker will just borrow new shares on his behalf, and add them to both the lender and short's balances. But Tesla did not provide those shares. They came from somewhere else. My only disagreement with @Knightshade's post is that the short won't feel like he had to do anything, and the dumb shorts will just sit there, fat, dumb and happy, in a deeper hole.

The short only has to provide the 4 new shares when she closses her short position. The lender just has their IOU increased to 5 shares from the 1 share.

If 5 post split shares have the sane price as the 1 pre split share there is no money lost or gained by anyone.

 

[Tslynk67]

I have been wanking on the 2050 all morning, and now moved up to the 2100s. Good luck!

I know $TSLA's exciting and all that, but I sincerely hope that's a typo...

 

[mejojo]

I know $TSLA's exciting and all that but I hope that's a typo...

Wanking is self-thanking......and leprechaun coins abound!

 

[Mokuzai]

Why do I see TSLA everywhere I go?

View attachment 579022

 

[humbaba]

First drive of Polestar 2, the electric sedan for buyers wanting European style - Electrek

Dripping with contempt - this is a perfect example of how consumers quickly want to revolt against what is perceived to be becoming mainstream.

I've noticed a recurring theme with Polestar reviews: it always starts with an attempt to distance themselves from Tesla. "Please don't compare our vehicle to any of Tesla's" they beg. Some, like this, do so in a nasty fashion, but nice or not it is always the same.

When I was explaining Tesla to a querent he asked about acceleration while acknowledging that it wasn't a requirement -- still something nice to have for fun he said (or words to that effect). But he had a nice question about torque and electric motors so -- for example -- why can't my M3 accelerate as quickly as a RWD LR?

Which allowed me to explain about the relationship between battery size and draw rate, and how good your battery management is. Which is, fundamentally, the reason Tesla's are so quick.

And is why the Polestar2 is not quick. But the reviewers don't want to talk about that, which is why they have shifted to claiming that "Tesla's have too much acceleration" and "no one actually wants that much anyway" with a bit of "unless they are pretentious or something else mean" on the side.

It's sour grapes, pure and simple.

The Fox and the Grapes - Wikipedia

 

[StealthP3D]

If some of you are correct in that part of this is a run for people to cover these mysterious faux shares before the split, that suggests next week we would see a slow decline in the SP right? (barring other catalysts)

Sure, maybe even a sudden decline. But the unknowns are significant. As an example of just one: The week between the date of record and the date of distribution obviously exists to provide time to account for all the shares. While I know very little about the dirty details, it seems obvious this will involve some exchange of information between the company, the brokers and the shareholders. Because the shares aren't actually distributed to their owners for a week, the possibility remains open that the beginning of the week could conceivable be used to finish covering for any phantom shares that may exist.

So, in my mind the timing of any reaction, if any, is uncertain. To add further uncertainty, realize that if you are trying to capitalize on any such expected price movements, you are playing against people who have much better info and knowledge than yourself (not about the company itself, but about the market for their shares). Considering that it's 2020, markets are still amazingly opaque and there's a reason for that - it gives the advantage to the big boys and they want to keep it that way.

This is why I'm a big believer in buy/hold, in not trying to time the markets. If you need to sell a portion of your shares for portfolio rebalancing because TSLA has taken over beyond the level you are comfortable with, then, yeah, it's still a crapshoot but you want to maximize the value. But don't sell simply because you think it might go down (as it's always the case that it might go down).

 

[Yuha]

There's another ownership/accounting issue to address: Tesla uses a specific legal term the "Shareholder of Record" in their announcement. Contrast that to the "Benefical Owner":

Stockholder of record - Wikipedia

"Stockholder of record is the name of an individual or entity shareholder that an issuer carries in its shareholder register as the registered holder (not necessarily the beneficial owner) of the issuer's securities. Dividends and other distributions are paid only to shareholders of record. Stockholder of record may be also called shareholder of record or holder of record or owner of record"​

With certain Brokers, it is the Broker themself who is identified to Tesla as the "Shareholder of Record". Tesla issued a block of shares to that broker, who manages sales of them with it's clients (my Broker does this; in early years, I couldn't even vote at the AGMs). It is those clients who are the actual "beneficial owners" of the shares, however is internal record-keeping which is all done by the Broker themself. Tesla has no knowledge of the internal state of its shares at that Brokerage, other than Broker 'X' is the "Shareholder of Record" for Y shares (its a 'Trust').

Here's where the potential problem arises for Broker X after a a stock dividend: Tesla accounting says Broker X has 1,000,000 shares so Tesla issues 4,000,000 more shares to Broker X as the dividend. Now if Broker X has been trading properly, these 5m total shares will cover all their needs. However, if Broker X has been creating phantom shares (ie: via their Reg. SHO exemption) then clients of Broker X will have claims on MORE than 5m shares after the split. Bbut the Broker does not have the ability to create these shares (only Tesla does).

The Broker either has to go to the Open Market to buy sufficient shares to cover their shortfall before the split (driving the SP up >50% since the Stock Dividend annoucement), or the Broker has to buy the shares back from the "Beneficial Owner":

• scary FUD is on the job (as usual? more than usual?)
  
• 'Sell your Shares' buttons on the Broker's App.

This last behavior is a dead give-away that monkey business is going on at a Broker.

Cheers!

I have no idea if allowed by rules and regulations but from a purely logical perspective there is another possibility: Broker X can create 4 new phantom shares for each phantom share they had before the split and distribute those together with the 4M shares they got from tesla.

 

[Robocop]

I have to say that holding at $2000 is more difficult than holding at $200.

I just bought 3 more at $2090. The shares from months ago I somehow feel a small urge to sell (as they're up quite a bit), yet the shares just purchased I deem more valuable in the future. Brains are weird. Won't be selling any, but the price definitely has some kind of odd effect, that may even go away post-split.

 

[M|S|M MYP]

Sell my 10/16 3500 call's which are up nicely at the moment....or wait till after the split?

Hmm what to do...

first world problems

 

[ktrivedi70]

Wanking is self-thanking......and leprechaun coins abound!

Ok. Now I'm even more confused.