Diess always recognised Tesla's leadership in EV technology, but he shares the view that the future must be all-electric.
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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
Elon: “How big battery does it have?”
Diess: “up to 83kwh”
Elon: “Then why it still sucks?”
Diess: “It’s designed to be so.”
Elon: “For a car designed to suck, this is not that bad.”
Warning, this is naive musing regarding the S&P inclusion.
If the $5B offering has anything to do with inclusion (trying to "play nice" with the Committee) I think it is too small an amount to have a significant impact controlling the SP during the expected purchase rush. But, if the Committee establishes a new rule allowing the inclusion over a period of time, say 8.5% per month for a year, then it could.
If the $5B offering has anything to do with inclusion (trying to "play nice" with the Committee) I think it is too small an amount to have a significant impact controlling the SP during the expected purchase rush. But, if the Committee establishes a new rule allowing the inclusion over a period of time, say 8.5% per month for a year, then it could.
Since S&P can do whatever they want in terms of the terms of inclusion. Why not just announce Tesla now, but state the index funds have until next quarters rebalancing to acquire the necessary funds? I can't be the only one that's thought this is the route to go to please everyone
Gives them 3 months to buy at a much slower pace and ease a sharp spike in the share price. Seems to solve a lot of the issues.
Gives them 3 months to buy at a much slower pace and ease a sharp spike in the share price. Seems to solve a lot of the issues.
Knightshade
Well-Known Member
S&P has no control whatsoever on the timeline for a given fund buying or selling stock regarding inclusion, other than date of incusion.
The rules of each fund govern the specifics otherwise..
One funds rules might give them 3 days before inclusion to prebuy, another 7 days, another at discretion of manager, etc.
For example from the prospectus for SPDR
So if S&P announced inclusion as of say Sept 11, that fund would have to do all its buying starting tomorrow and being complete by Sept 16.
if they announced Sept 25 then they couldn't start buying until Sept 22, and would have to be done by Sept 30.
No matter what inclusion date S&P picked the fund only gets a 3 day +/- window to acquire the needed shares.
Still doesn't change the dynamic I'm suggesting. Like you said, its up to each individual index fund as to when they buy. But no one can start buying anything until they announce inclusion. There's nothing stopping the S&P committee from announcing right now and stating the inclusion date is Dec 10th for example. Index funds then have a period of 3 months to chose when to buy.
Question regarding a speculation in here - something I have wondered as well
Can S&P500 transition in TSLA slowly over a period to time to avoid the sudden run up/spike in share price?
Following is a quote from the article:
"Option #2, S&P scales the entry in, say 10bps a month or quarter. To us, this is the MOST likely solution. The index funds don’t swallow Tesla in one bite but a dozen nibbles over 12-24 months."
I personally think 12-24 months is too long of a transitioning in period, but can imagine a scenario where TSLA is phased in over say a 3 month period - effectively allowing the index funds 3 months vs. a few days to buy the stock. This would prevent the sudden spiking, which in the long term won't be healthy for anyone.
Edit: Looks like @StarFoxisDown! has very similar question as well. I am thinking more about where they phase it in systematically - say 25% inclusion Sept 21 into the index, followed by 25% each over Oct, Nov, Dec. By Dec rebalancing, it is completely included in the index.
Edit 2: In this case, the 5B equity offering would also make sense, as you are only trying to manage 25% of the buying pressure at a time. It can be used more effectively as a buffer to prevent MM or other big sharks in manipulating market to reduce float and spike the price.
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The way I see it, the 5B offering, in the strange way of its setup, serves as a buffer to cool down the SP when needed in both directions.
Many of the TSLA investors I know of, and including many in this thread alone hold their shares tightly... not even putting on calls/puts to provide liquidity of shares in any kind.
I think that's one of the underlying reasons why when TSLA goes up, it always goes parabolic (both up and down) because there's simply not enough liquidity (in shares).
By having a 5B buffer, or roughly 12.5m shares that can go into the market on-demand, it can tame down the volatility going at either direction.
Sure 12.5m in a market where there's 731m+ floating is nothing. But I suspect that a significant portion of those 731m is locked into hodl and not moving.
Knightshade
Well-Known Member
Again though they don't have any such choice.
The rules of the fund dictate the window.
In most cases it's a specific, fairly small, window.
They can't just ignore those rules (or change them on the fly just for Tesla).
Notice those rules I cited for SPDR say "the Trustee is required to"
They don't say 'The trustee can if they feel like it"
There's no such thing as a "partial" inclusion. It's in the index or it's not.
Again each fund has their own rules about matching the index, and handling changes to it- most the folks managing the fund are required to match the index within a fairly small time window before/after inclusion date.
To be clear, that was something Buffett came up with as a hypothetical to reduce the inclusion problem, it is not a published in the rules method.
Not speaking from any particular knowledge of course but it seems to me that to make a large inclusion like Tesla, there would need to be resources (cash).
1. Call out the possibility of a top.
2. Sell off across the board to gather cash and drive prices down.
3. Buy back in slowly while complaining about the Fed etc to keep prices modest.
4. Announce the rebalancing having already harvested the cash necessary to take the position in Tesla
5. The market digests the change and considers it optimistic and healthy
Or maybe not, YMMV
Mo City
Active Member
Giga Berlin will have 8 of the huge "giga press" machines. Tesla Giga Berlin to Have 8 Giga Presses for Next-Level Manufacturing
Supposed max production of Giga Berlin will be 2 million per year. Tesla Gigafactory Berlin to produce up to 2M vehicles per year: German report
I think people are sleeping on Berlin. It's a much bigger deal than Elon and Tesla are letting on. Remember, Sandy Munro says Tesla "lies" by purposely understating things (except autopilot, of course).
Supposed max production of Giga Berlin will be 2 million per year. Tesla Gigafactory Berlin to produce up to 2M vehicles per year: German report
I think people are sleeping on Berlin. It's a much bigger deal than Elon and Tesla are letting on. Remember, Sandy Munro says Tesla "lies" by purposely understating things (except autopilot, of course).
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The objective of a index fund is to match an index during each trading day, not to beat it. Any trading risk that might lead to deviation from the index is to be avoided. These are the expectations of investors who buy an index fund.
The managers of an index fund are part of a company that is entirely separate from S&P Global and its committee that determines the constituents of an index.
The managers of an index fund are part of a company that is entirely separate from S&P Global and its committee that determines the constituents of an index.
do you have any info on what the reasoning was? For Tesla it seems like it’s the credits
She has mentioned him a few times...
You're right about her companion ggr, I was referring to our friendly board member... sorry, should have been clearer in my description, like "I don't think Kruggerand is a Mr." However, she may be feline...
BobbyKings
S85D > M3P > S Plaid
VW in trouble ahead of GigaBerlin steamrolling the German market.
https://twitter.com/jpr007/status/1303037790020538368?s=19
https://twitter.com/jpr007/status/1303037790020538368?s=19
ARK Invest - today - ARK Disrupt 09.07.2020
Excerpt:
Is Tesla on Pace to Ramp Production Faster Than Ford Scaled the Model T?
By Sam Korus | @skorusARK
Analyst
Produced on the first moving assembly line in 1908, the Ford Model T is famous for the speed at which it scaled. Interestingly, in its first nine years of production, Tesla has ramped at the same pace as the Model T, as shown below. After learning lessons in “production hell”, Tesla now is preparing to ramp production even faster than Ford scaled the Model T, also shown below.
In China, Tesla broke ground for Model 3 production and hit a 200,000 annual run rate in just a year and a half, increasing its capacity by 33% to an annual run rate of roughly 800,000 in year 10, as shown by the gray bar above. Now with plenty of capital, Tesla has construction projects underway in both China and Berlin which, in only a year and a half, could add another 50%, or 400,000 units, to capacity.
Excerpt:
Is Tesla on Pace to Ramp Production Faster Than Ford Scaled the Model T?
By Sam Korus | @skorusARK
Analyst
Produced on the first moving assembly line in 1908, the Ford Model T is famous for the speed at which it scaled. Interestingly, in its first nine years of production, Tesla has ramped at the same pace as the Model T, as shown below. After learning lessons in “production hell”, Tesla now is preparing to ramp production even faster than Ford scaled the Model T, also shown below.
In China, Tesla broke ground for Model 3 production and hit a 200,000 annual run rate in just a year and a half, increasing its capacity by 33% to an annual run rate of roughly 800,000 in year 10, as shown by the gray bar above. Now with plenty of capital, Tesla has construction projects underway in both China and Berlin which, in only a year and a half, could add another 50%, or 400,000 units, to capacity.
Ford really beat the hell out of Tesla in 1913.ARK Invest - today - ARK Disrupt 09.07.2020
Excerpt:
Is Tesla on Pace to Ramp Production Faster Than Ford Scaled the Model T?
By Sam Korus | @skorusARK
Analyst
Produced on the first moving assembly line in 1908, the Ford Model T is famous for the speed at which it scaled. Interestingly, in its first nine years of production, Tesla has ramped at the same pace as the Model T, as shown below. After learning lessons in “production hell”, Tesla now is preparing to ramp production even faster than Ford scaled the Model T, also shown below.
In China, Tesla broke ground for Model 3 production and hit a 200,000 annual run rate in just a year and a half, increasing its capacity by 33% to an annual run rate of roughly 800,000 in year 10, as shown by the gray bar above. Now with plenty of capital, Tesla has construction projects underway in both China and Berlin which, in only a year and a half, could add another 50%, or 400,000 units, to capacity.
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