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

[TheTalkingMule]

Volume on 1050 Puts starting to trend higher. Still lower the volume on 1050 calls but if trend continues, then I would think MM's would let it run to 1100 by the end of the week before stepping.

Is there any indication of which way intra-day volume is pushing open interest? On Fidelity I just have the 7am OI and today's volume, but in theory that volume could net to no change in OI.

 

[jbcarioca]

I had no idea Hertz lent out vehicles for Uber drivers. Interesting.

...

Just for context:
Hertz,pre-bankruptcy, leased cars to Uber drivers under terms structurally similar to those now being done with Teslas. They have done similar activities for decades. Perhaps Penske is better known for that business, but most popularly with business vehicles.Truly, their Tesla deals are only more promoted now because they're having 1/4 of their fleet transition to Tesla. Nearly all major vehicle rental companies also deal in full-service long term rentals, often structured as leases. That is not novel in any way, but the product they're supplying absolutely is novel!

Second, a few few people seem to think the Carvana deal with Hertz is about Tesla. In fact it is built to be a more efficient method, possibly lower cost, than
are traditional auctions and operating Hertz used car lots.

Third, many of us might not know that following bankruptcy Hertz new owners really want to make the business better in any way they can. Keep watching, it will continue to be exciting.

Fourth, Mark Fields, outside big corporate constraints is really retiring to his roots of success. His Mazda story is legendary. His Ford Europe one is only slightly less legendary. I am positively excited! Just think, this Tesla deal was his opening salvo.

 

[Lessmog]

Honestly I am surprised Barra is still CEO of GM.

GM Sales have done nothing but shrink. If you look back at some of the video's during the Bolt launch she really believed the Bolt would sell more than the Model 3. The whole Nikola debacle which they basically backed away from. They needed to launch the EV products they are trying to launch in 2022-2025 5 years ago. No way I believe they will catch Tesla in EV sales, and anyone that just looks at the plans of the 2 companies will easily conclude this.

I am really surprised the GM board keeps her. The legacy manufactures have a crisis on their hands. Yes is doubtful they will survive but they need someone better than this to at least have a chance..

Yeah, but:
Who ya gonna call? Ghost Mustard?

 

[TheTalkingMule]

Second, a few few people seem to think the Carvana deal with Hertz is about Tesla. In fact it is built to be a more efficient method, possibly lower cost, than
are traditional auctions and operating Hertz used car lots.

Dealerships were making more money this summer wholesaling cars than selling new. This is just Hertz cutting out the middle man.

 

[capster]

Honestly I am surprised Barra is still CEO of GM.

GM Sales have done nothing but shrink. If you look back at some of the video's during the Bolt launch she really believed the Bolt would sell more than the Model 3. The whole Nikola debacle which they basically backed away from. They needed to launch the EV products they are trying to launch in 2022-2025 5 years ago. No way I believe they will catch Tesla in EV sales, and anyone that just looks at the plans of the 2 companies will easily conclude this.

I am really surprised the GM board keeps her. The legacy manufactures have a crisis on their hands. Yes is doubtful they will survive but they need someone better than this to at least have a chance..

She is the Bailout Queen. IIRC, ABBA had a song about her.

 

[Lessmog]

By virtue of its association with Tesla, Hertz's market value has increased by about $1.4 billion. Its move from the OTC market to the main board has been smoothed. Its business model has been revived.

It seems you are moving goalposts and changing subjects.
That's not the way to debate productively.
EOM.

 

[TheTalkingMule]

The number shalt be 1050. 1050 shall be the number
The number shall NOT be 1060, nor shall the number be 1065.
1070 is right out.

Volume is finally slowing, so I think you can expect a nice pushdown as MM's look to build some buffer for a $1050 close Friday.

 

[jbcarioca]

That's a good way to open a door for your competitors.

Since I own a Volvo EV in addition to my Tesla I really don't mind too much. Despite that they are one of the few spots that might survive on Geely controlled suppliers.

NOTE: I only bought the Volvo because no Tesla exists where I use the Volvo.

 

[Artful Dodger]

Tesla cannot just swap out current Model SR orders with the new CATL battery packs because the range doesn't exactly line up.

Tela has now upgraded the SR+ bty pack to a 60KWh CATL pack (likely the same one use in the MiC Model Y). And the new SR+ has a greater range with LFP than the old SR+ had with NCA btys from Giga Nevada:

Tesla increases size of Standard Range Plus (SR+) Model 3 battery pack | Drive Tesla Canada (Oct 26, 2021)​

Cheers!

 

[ggies07]

Can someone again explain to me about how Elon feels about "not wanting to pay taxes"?....It's on some type of gains/not gains...whatever that terminology is... I've got my head of school (who is an Elon/Tesla supporter) emailing me all up in arms about it....

 

[jhm]

If it wished, Tesla could refuse the order or remove the price guarantee. Tesla is in firm control of the velvet rope and the line is already very long.

So you would have Tesla abandon its transparent pricing policy and set different prices depending on who the customer is. That is in stark contrast to Musk's long held view.

 

[jhm]

Never under estimate the power of stupid people in large numbers.

There is a network effect to consider: with each stupid node added, the network value of stupid goes up exponentially.

 

[Curt Renz]

Can someone again explain to me about how Elon feels about "not wanting to pay taxes"?....It's on some type of gains/not gains...whatever that terminology is... I've got my head of school (who is an Elon/Tesla supporter) emailing me all up in arms about it....

Under current law, taxes on capital gains are only paid when the gains are realized, i.e. assets (stock shares) are sold. The proposal is to tax unrealized gains based on market prices at the end of the year. In other words, politicians want some of the eventual taxes paid sooner rather than later.

In the case of Elon, he would rather not have to sell Tesla shares to pay taxes. That could shove down the share price and impede the growth of the company. Meanwhile, his ultimate plan is apparently to fund a Mars colony. That would cost a stupendous amount of money.

 

[jhm]

Absolutely. And unlike actually making a changes to a company's core business, a change in travel policy can yield "points" instantaneously and with no real effort. A board makes an ESG decision, all the VPs scratch their heads trying to figure out a way to meet goals, an analyst chimes in with the answer to all their problems.

Travel and entertainment is by far the fattest non-labor cost component of pretty much every corporation. Cost is usually directly correlated to CO2 emissions, so travel is where they'll get a lot of their ESG. Sure as *sugar* don't wanna stop polluting the world within their actual business lines!

Previously "travel program optimization" was done purely to siphon tiny bits of expense into executives pockets, and that came at the expense of employee comfort and peace-of-mind while traveling ("Take Frontier!", "Stay at the Best Western", etc.) Thanks to Elon, and indicative of how pleasant sustainable abundance will be, having Hertz in the travel program means they get a Tesla instead of an Impala.

Hertz can now offer Model 3's for rentals, but more importantly they can tack on discounted(and perhaps prioritized) Model 3 Ubers for corporate clients nationwide. As much as Hertz became an advertiser for Tesla, Hertz now gives Uber greater direct access to corporate procurement. That's how airlines went from junk status to tens of billions in annual profits.

Just thinking about this again is nauseating.

This is by far the coolest thing I've learned today. Thanks.

 

[dmvevguy]

This is by far the coolest thing I've learned today. Thanks.

I was also thinking about how Hertz could utilize "Safety Score" data of its renters to offer incentives like future discounts etc. for Tesla rentals. Win-win for TSLA, Hertz and the rental customer. I think there's a lot more to this deal which will be unraveled...

Hurry up LYFT and jump on the TSLA bandwagon!!!

 

[OrthoSurg]

Under current law, taxes on capital gains are only paid when the gains are realized, i.e. assets (stock shares) are sold. The proposal is to tax unrealized gains based on market prices at the end of the year. In other words, politicians want some of the eventual taxes paid sooner rather than later.

In the case of Elon, he would rather not have to sell Tesla shares to pay taxes. That could shove down the share price and impede the growth of the company. Meanwhile, his ultimate plan is apparently to fund a Mars colony. That would cost a stupendous amount of money.

I see a trend in which politicians always want to f#$& Elon Musk. Either not giving his company EV credits by bringing the Unionized fine print or taxing unrealized gains because he is now the richest man alive. Never saw that discussion when Bozo was the richest man alive from selling toilet paper online with free same day prime delivery while you realize you don’t have any more while sitting on the toilet.

I don’t like that I see conspiracy theories where there should be a free market

 

[22522]

Under current law, taxes on capital gains are only paid when the gains are realized, i.e. assets (stock shares) are sold. The proposal is to tax unrealized gains based on market prices at the end of the year. In other words, politicians want some of the eventual taxes paid sooner rather than later.

In the case of Elon, he would rather not have to sell Tesla shares to pay taxes. That could shove down the share price and impede the growth of the company. Meanwhile, his ultimate plan is apparently to fund a Mars colony. That would cost a stupendous amount of money.

Hi Curt,

Thank you as usual. I think Elon sees a well supported TSLA stock price as foundational for Mars. He does not want to give up on Mars.

[For me TSLA is still an altruistic own. I do not know the future. Just staying invested in people doing productive activities. ]

 

[jhm]

I was also thinking about how Hertz could utilize "Safety Score" data of its renters to offer incentives like future discounts etc. for Tesla rentals. Win-win for TSLA, Hertz and the rental customer. I think there's a lot more to this deal which will be unraveled...

Hurry up LYFT and jump on the TSLA bandwagon!!!

Oh crap! You mean Tesla could inform Hertz about the driving safety score for the renter. Wow! Hertz could flag high risk customers and next time force them the rent a Chevy instead.

 

[StealthP3D]

We all like to laugh at the other OEMs, but serious question, if you were the CEO of one of the majors, what would you do? (assuming quitting the job is not an option).

As CEO of GM / Ford / Toyota / etc.:

• What exactly would you put your capital towards? (don't just say 'electrification'. Be specific - what would you design? what would you build? where? how quickly can you pivot?)
• What would you mothball? How quickly? (don't just say 'all my ICEs now' - it has to be sustainable)
• How would you finance it?
• How would you handle your dealerships?
• How would you attract the transformational talent?
• What would you communicate to
  
  • The public
  • Your employees
  • Your dealerships
  • The union
  • The government
  • The market / investors / your Board

Be creative. Survive. If Elon were transposed into a competing CEO's job, what would he do? Ah! Not so easy, is it? Don't ridicule unless you can do better. Earn all that 'wisdom' that sitting here idle with TSLA shares has made you.

I raise this because obvs Mary Barra's approach (don't let them see you sweat) is different than Herbert Diess' ("we are in a crisis of existential proportions!!"). Which is likely to be more successful?

(I accept that the answers may vary by OEM)

[Wow, for no particular reason, this is my 2nd Mike Myers GIF!]
[and don't get on me about helping the competition - if anybody listened to us here on TMC, they would have bought into our narrative WAY before now!]

Mary Barra is not dumb so if you are asking purely from a self-preservation standpoint, I might do the same thing it looks like she's doing. Specifically, posturing about greatness in EV's but always putting the real-world goal-posts about a year after the point in time that would be optimum for pulling the ripcord on the golden parachutes. This has the added advantage of not having to worry too much about the other things you mentioned like:

• What exactly would you put your capital towards? (don't just say 'electrification'. Be specific - what would you design? what would you build? where? how quickly can you pivot?)
• What would you mothball? How quickly? (don't just say 'all my ICEs now' - it has to be sustainable)
• How would you finance it?
• How would you handle your dealerships?
• How would you attract the transformational talent?
• What would you communicate to
  
  • The public
  • Your employees
  • Your dealerships
  • The union
  • The government
  • The market / investors / your Board

Sure, she can take a half-hearted stab at the issues above to create the appearance she is doing her job but the main thing would be to create the appearance that the appropriate steps are being taken as seen through the eyes of the BoD, the engineers, shareholders and the general public. The rest of the management team can be handled by giving them raises, extra perks (like more time off) and generally creating a fun party atmosphere. Because it's a lot easier to create the appearance that things are swell than it is to make sure your plan is actually going to work in the real world. This has the added advantage of providing a good excuse for declining profits and sales going into the big transition to the kind of margins EV's are able to achieve as evidenced by Tesla. Just one more year and all this hard work will pay off. And pulling that golden ripcord is easy and it's most profitable if done at the last possible moment. If she's not too greedy she can exit a little early so it looks like the next CEO mismanaged the critical transition.

 

[CLK350]

Great explanation of what went on the past few days in the SP bump past 1000 and what to expect going into Friday

Updating his Bloomberg article : How a 2,360% Jump in Call Options Fired Up Tesla’s Share Surge

" .. In the simplest form, when someone buys calls, a dealer must buy Tesla’s stock to hedge the delta exposure generated by those options trades. If the stock keeps rising, it forces dealers to buy more shares, a process know as gamma hedging.

According to Kochuba’s analysis, Monday started with traders selling calls, which led to a slight negative delta reading. As the stock started to lift off around 10 a.m. in New York, these call sellers were forced to cover their positions. That coincided with Tesla’s share advance toward $980.

Around noon, traders began flooding in to purchase calls, sparking a surge in delta hedging that accompanied Tesla’s ascent toward $1,000. Then two hours later, another wave of call buying hit the market. The stock peaked near $1,045, right before the estimated delta hedging started to taper off.

Note: Tesla’s stock price and option delta on Oct. 25. Source: SpotGamma

Notably, half of the calls traded were maturing Friday. The Tesla $1,050 call expiring exactly that day -- the second most active contract on Monday -- surged to $18.19 from 71 cents, a 25-fold increase.

“This was an incredible push by short duration traders to push into calls,” said Kochuba. That “ likely forced market makers to aggressively hedge long.”

The fact that all the trading was concentrated in short-dated options can be viewed as a tactic by some traders trying to take advantage of a phenomenon known as a “gamma squeeze” -- betting that as the value of Tesla shares gets closer to an option’s strike price, dealers will have to buy more and more of the underlying stock.

“This is the definition of ‘weaponized gamma,’” said Nomura strategist Charlie McElligott.
.... "