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

[Johan]

Yes, Monday will be interesting. I am very curious if Fact Checking (Tesla_Truth) is correct and we see demand for shares continue. Gary's thinking has been close to spot on in the last few weeks so I have to put a lot of weight to his ideas, but my hope is we have a little continued rise into the P&D report in January.

However, I would not at all be surprised if we see a push down to shake the tree at the start of Monday which would allow benchmarked funds to begin to establish their positions below the $695 price. It all seemed to work out very well to those large hedge funds at the expense of the passive index fund shareholders.

Your last paragraph describes perfectly what usually happens in the markets.

 

[Sofie]

Anyone know why TDA now says $695 sp? I thought we ended in AH at $677.

 

[Rhoon-NL]

To extent this scenario:

6. Monday morning: The inclusion is completed via deals during the Closing Cross.

7. A huge amount of calls expire worthless --> Reversal of delta hedging --> Share price dips (potentially to pre-announcement level / Lower BB / 50 DMA level).

8. Bench mark funds patiently start scooping up shares at a discount (note they are not obliged to buy and not before a specific deadline).

9. January: Tesla releases a ‘bombardment’ of good news --> FOMO kicks in --> New spike.


Why I think this scenario has become more likely:

a) The S&P 500 committee stated they don’t expect a share liquidity problem. I don’t think they would take the risk to turn the inclusion into a mess / into disruptive price actions.

b) The Closing Cross is a perfect way to buy a huge amount of shares at once at the right price (the closing price) to minimize tracking error with the S&P 500 index. This isn’t possible in the open market.

c) The index funds haven’t started buying yet. They must be confident they will get their shares in time.

d) Timing of the $5bn stock selling by Tesla in hindsight in the vicinity of the ATH. They already knew how the inclusion will be done and anticipated.

e) Why haven’t the bench mark funds started buying yet? They are free to buy. I think they are confident they can buy at lower prices after the inclusion. Or perhaps they will also buy during the closing cross on Friday, but I doubt there is enough liquidity for that.


PS:
- The big players had their information advantage regarding Closing Crosses. I think we have our information advantage regarding upcoming positive news from Tesla.

- Still holding my Jan / Feb calls.


EDIT: replaced 'à' by '-->'

Still on track. Prepared for step 7.

 

[jerry33]

Anyone know why TDA now says $695 sp? I thought we ended in AH at $677.

There was some automated mixup due to the high volume at closing. Over the course of the next couple of hours, the correct $695 closing price was displayed in all the various reporting platforms.

 

[Congo Line]

Did you all have fun yesterday? I wasn't keeping up with the thread, just working through it now (30 pages )

The push-down by the MM's to $633 was epic, the bounce-back to $650's was in a single tick, amazing! I guess they offloaded their $700 hedges.

And the whole event was very educational, the disparity between the close and the updated close price was a very clear demonstration of the closing cross in action.

210m volume according to Tesla's stock quote email. Is it enough? Did they get what they needed? I think yes, but I get the impression too that the front-running wasn't over-subscribed. I guess we'll see on Monday.

And we didn't drop below $600 for the whole week, which was nice.

My theory: the big drop centered around 3:30 was an effect of the indexers selling their 1.5% of other holdings which were to be replaced by TSLA. They have to raise the cash before they buy at the closing cross.

This massive selling confuses the algobots, which in response started selling everything indiscriminately, including TSLA, like a mini flash crash. You can see it in QQQ and other indexes. At 3:50, indexers stop selling and place their closing cross orders. Bots respond accordingly. TSLA is not the only stock with a sudden price jump in the last minutes.

At least seems logical to me.

 

[Sanny]

My logic for the future week(s) is binary: if we do not go down, we have to go up.

Here's the reasoning: Year end window dressing, Q4 results, benchmarked funds will have to start buying at some point, and if there is no dip they will just start buying.

 

[CHGolferJim]

My account is showing the same. At close some of my LEAPS were showing 90% drop. That seems to be corrected now, but still showing a big drop in the options. Seems to be IV crush, since volatility has dropped too.

There seems to be an end-of-day lag in options repricing vs. the repricing of shares. My full-service account (Stephens) shows shares valued at $695, but calls valued at the last trade (prior to the closing cross surge from ~$655 to $695. Emmet Peppers talked about this briefly in his live chat with Dave Lee. His 15Jan21$700 call that has had so much publicity was on his screen at $34 which surprised him, and he thought it would open in the $50s on Monday.

 

[lafrisbee]

Everyone here is acting in a jubilant mood but I am anything but jubilant. The #firstworldproblems of being a super bull..

The negatives

• Closing price was just a 5% rise
• If another 60m shares had been bought during the day, the SP would have spiked much higher
• This closing cross thing is witchcraft
• Shorts will not have received margin calls - no short burn
• Did shorts push it into the red on the day of inclusion or was it MMs manipulating?
• Indexes appear to have gotten the vast majority of the shares needed
• Who sold them all and why did they collude to hand them over cheaply?
• I no longer see major price rises next week
• A drop is quite possible

The positives

• Emmet Peppers has bought Jan 21 900s - let's hope he is right
• I wasn't able to follow suit with risky calls fortunately
• A lower SP is a more stable platform to build from going forwards
• I can deleverage in April and put off my tax payments

I refuse to add ATH to the positives - maybe I will become more grateful over time.

Phew - needed to get that off my chest. Already looking forward to P&D.

As to your negatives, I posted a question about the S&P 500's unique handling of announcing the inclusion of tesla over a month before it was to occur.
There is a reason they usually do 10 days or less. And there was a reason to announce it more than a month before the inclusion date.

And it was NOT to let whoever wanted offer input into some "Do you guys wanna do it twice in two tranches?" kind of discussion. They announced it early so they could have time to work their plan to do exactly what they did (see your list of negatives). If they didn't announce it early, and instead worked behind the scenes to "acquire" the shares while raising the SP as little as possible then the SEC would have "discovered" some insider trading BS. Since the inclusion was announced whatever they did became "legal." And they played it to perfection.
(Kindly disregard this post if the stock goes to $900/share on Monday.)

EDIT: The two tranches was such BS.... So tell me, you gonna rob Fort Knox twice? No. You'd risk being caught by a minimum of 2x, probably several times 2x. And especially after all the evidence was compared to both robberies. One robbery, in and out and gone.

 

[Khamul]

SpaceX just had its 26th successful launch in 2020, with the booster returning to land for the 70th time (in total). It's been such an awesome year for SpaceX.

I also saw someone on NSF say that if SpaceX's 92B valuation holds, then with TSLAs jump yesterday, Elon has now overtaken Bezos. That's just wild. Does anyone know how far behind Bezos he were a year ago?

 

[lafrisbee]

Great country for people who like to do math and statistics

They might not have many Tesla cars sold there. But they surely have world's highest pope density at more than 2 per square kilometer...

Why are you not counting the dead ones?

 

[JusRelax]

@JusRelax @MP3Mike @zach_

Who were the ones that looked at VOO's reported holdings at the end of this week and used it for some calculations? Can you point me to where you found it?

This is what I found on Vanguard's website:

View attachment 619128

And it has TSLA nearly perfectly balanced in accordance with the other top 4:

View attachment 619129

However, it states this on the website:



In other words, these aren't VOO's actual holdings as of this date. Don't bother running calculations on these numbers, because these are supposed to be perfectly balanced now that TSLA is in the S&P.

@FrankSG I must admit that I did not personally take a look at VOO's reported holdings. I only went off of the chart that @MP3Mike provided, comparing shares as of 12/18 to 12/21. Also, I was using FB as my comparison when I probably should have used Apple, since the numbers using Apple would be more granular due to a much larger number of shares.

Thank you for the clarification that the numbers stated by VOO may not be VOO's actual holdings, but moreso a theoretical basket of holdings.

 

[CHGolferJim]

Tesla is again forced to stop construction at Gigafactory Berlin due to missing $100 million deposit - Electrek

Wow, Tesla levered 5B in stocks offering, could Germans give their approbation for this incredible business proposal and stop begging for deposits. Elon must be pissed at all the politics and lobbying working against Tesla since the beginning. The opposite of Giga Texas.

Operating a factory in Germany/France/Belgium comes with a lot of oversight, bureaucracy and resulting headaches (> California!), I suppose this was factored into the location decision.

 

[sparcs]

Operating a factory in Germany/France/Belgium comes with a lot of oversight, bureaucracy and resulting headaches (> California!), I suppose this was factored into the location decision.

I thought California was evil and we should all move to Texas?

 

[JBRR]

@FrankSG I must admit that I did not personally take a look at VOO's reported holdings. I only went off of the chart that @MP3Mike provided, comparing shares as of 12/18 to 12/21. Also, I was using FB as my comparison when I probably should have used Apple, since the numbers using Apple would be more granular due to a much larger number of shares.

Thank you for the clarification that the numbers stated by VOO may not be VOO's actual holdings, but moreso a theoretical basket of holdings.

Does anyone have a good grasp of AP's role in this trade?
Could AP's have delivered TSLA shares to the ETF's without yet having secured them, and as such be naked short?

 

[mongo]

SpaceX just had its 26th successful launch in 2020, with the booster returning to land for the 70th time (in total). It's been such an awesome year for SpaceX.

I also saw someone on NSF say that if SpaceX's 92B valuation holds, then with TSLAs jump yesterday, Elon has now overtaken Bezos. That's just wild. Does anyone know how far behind Bezos he were a year ago?

The rumor of doubling the the value to 92 billion reported by Business Insider was incorrect per Elon on Twitter.
(Update: nope) SpaceX looks to double its valuation on Starlink, Starship promise

 

[Etna]

Good interview with Cathie Wood on Bloomberg, the full version of what I posted earlier.

Cathie talks about the ownership dispute at Ark Invest at 28:55

- The dispute has quieted down and they are in negotiations ... and "I think things will work out, we're well on our way"
- She cannot use the nuclear option of packing up and taking her team along with her, she has a non compete and contractual obligations
- Both sides have an interest to come to the table

 

[CHGolferJim]

Good interview with Cathie Wood on Bloomberg, the full version of what I posted earlier.

Cathie talks about the ownership dispute at Ark Invest at 28:55

- The dispute has quieted down and they are in negotiations ... and "I think things will work out, we're well on our way"
- She cannot use the nuclear option of packing up and taking her team along with her, she has a non compete and contractual obligations
- Both sides have an interest to come to the table

Your summary suggests VERY interesting public lobbying by CW. Can’t wait to watch the video.

PS: I’d like to echo reminders from many others here to share the wealth and support the amazing TMC community. Granted we will soon be sharing the wealth with federal authorities, but it’s the local food banks and others that really need immediate support. Happy Holidays to all, and 3Ws/get vaccinated!

 

[Ipe]

Refers to deleted post

Nice description of a democratic rule of law. Even the German president has to follow the rules! Can you imagine?

 

[ggr]

The rumor of doubling the the value to 92 billion reported by Business Insider was incorrect per Elon on Twitter.
(Update: nope) SpaceX looks to double its valuation on Starlink, Starship promise

Ha, you fell into Elon's trap. He just said that "double" is incorrect. Long haul telecoms is trillions of dollars. It's his way of saying this is undervaluing Starlink.

 

[Sanny]

SpaceX just had its 26th successful launch in 2020, with the booster returning to land for the 70th time (in total). It's been such an awesome year for SpaceX.

I also saw someone on NSF say that if SpaceX's 92B valuation holds, then with TSLAs jump yesterday, Elon has now overtaken Bezos. That's just wild. Does anyone know how far behind Bezos he were a year ago?

I think Elon replied "it is not true" to the article about 92b Space X valuation.