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

[UnknownSoldier]

Which to me says the UoM consumer confidence index has some issues in terms of how it's doing it's measurements or that it's confidence index is completely irrelevant and out of touch with reality. It's likely a mixture of both.

GFC was banks on the brink of going under, credit/money freezing overnight, dramatic increase in unemployment, a house bubble built on practically fraudulent lending practices that left millions defaulting.........none of which is present today. How in the world people can take that index like gospel.....all while the unemployment rate is at historical lows, is beyond me.

The price of everything being at all-time highs tends to undermine consumer confidence more than a lot of other things you can think of. Every time a consumer buys something, they will notice it's really expensive. It's hard to be confident in such a scenario. I think the UoM consumer confidence index is working exactly as intended.

 

[wipster]

And here I’ve been wracking my brain trying to figure out what GFC was!

I assume he's referring to the Great Depression (the description fits), even though I've never heard it referred to as the "Global Financial Crisis."

 

[StarFoxisDown!]

The price of everything being at all-time highs tends to undermine consumer confidence more than a lot of other things you can think of. Every time a consumer buys something, they will notice it's really expensive. It's hard to be confident in such a scenario. I think the UoM consumer confidence index is working exactly as intended.

Yeah that's a hard disagree from me.

You think consumers are more worried over paying more for items than a collapse of the banks + credit being frozen + huge spikes in unemployment + mass defaults on mortages??

Sure ok

All the UoM consumer sentiment index is showing here is how irrelevant it really is. My post isn't saying that inflation doesn't affect consumer confidence, it obviously does. What I'm pointing out is that if the UoM consumer sentiment index is saying people are more down on the economy than the GFC.....then it's very much not working like it should and I would say it's quite broken.

Anyone here that tries to argue consumer sentiment is currently on par in the general population as it was with the GFC, since I lived through it, well I'll just say I'm going to very much disagree with you . I live in Seattle, was just in NYC and then Florida, have family and friends across California, Arizona, South Carolina, Texas, Colorado, and Maine.....across every income bracket (mostly in middle income, 2nd most in upper middle income, some just below middle income) and not single person I know would say the economy or the outlook of the economy is even remotely close to the GFC.

 

[StarFoxisDown!]

I assume he's referring to the Great Depression (the description fits), even though I've never heard it referred to as the "Global Financial Crisis."

Great Financial Crisis

 

[wipster]

Great Financial Crisis

That fits the bill too. I just asked Google and it said Global. You say Potato and I say Banana, let's call the whole thing off.

 

[UncaNed]

I wonder what even is the point of splitting the stock if the multiple is so small? I guess I'll never understand the intentions of stock splits to begin with.

They HAVE to have the split they promised if they still want to or not at this point just because they said they'd have it even if they'd planned 10:1 if the stock price was higher.

 

[mongo]

That's a fugly ratio for those dabbling in options. What happens to the 500 or 1000 strike options? In case of a split like 1:5, they can slice the strike price by 5 and increase the count by 5 and it works out.

Now it's not so clean. If they create a basket, like what they did with SCTY options, that will be even worse. In these cases, they will create a TSLA1 basket comprised of 3 post split TSLA shares and your old options will be on TSLA1 which then become pretty illiquid.

Sucking out liquidity like this is not generally great. And the market makers make out like bandits when making market in these illiquid chains.

There is still a big inventory of leaps going out to June '24.

Ugh..

Solar City was a fractional or revers split exchange of 1:9 (0.11:1) with remainder paid out. That meant all contracts turned into nonstandard 11 share sizes.
3:1 will turn 1 contract into 3 at a strike price of 1/3 the original. So there will be some weird strikes for non-multiples of 15. 500 becomes 166.66at(7), 1000 becomes 333.33, but they are still full sized at 100 shares of TSLA.

So bit weird they went for 6B total shares?

They have 1,036,390,569 outstanding now of 2,000,000,000 possible.

They intend to have 6,000,000,000 after the vote.

A 3:1 means of that 6 billion, 3,109,171,707 will be outstanding.

Leaving less than needed for even a future 2:1 split. Similar to the current situation where they can't do a split without another shareholder vote.


Why bother going to 6 billion in that case instead of say 4? And why not go to at least 7 or 10B to make another split at least possible without a vote?

They called this out in the proxy statement. 3:1 split and 3x shares leaves everything the same as it is now, showing no desire to have buffer for further splits nor large capital raises.

Reasons for the Proposed Amendment

The primary purpose of the Authorized Shares Amendment is to facilitate a 3-for-1 split of our common stock in the form of a stock dividend (the “Stock Split”). As of June 6, 2022, we have 1,036,390,569 shares of common stock outstanding, and the current number of authorized shares of our common stock is 2,000,000,000, which is insufficient to effectuate the Stock Split. Our Board intends to approve the Stock Split, subject to and contingent upon stockholder approval of the Authorized Shares Amendment.


Our success depends on attracting and retaining excellent talent, not only through providing a respectful, safe, inclusive and equitable workplace, but also through offering outstanding benefits and highly competitive compensation packages. Unlike other manufacturers, we offer every employee the option of receiving equity. Since our stock split in August 2020 to June 6, 2022, our stock price has risen 43.5%. While this value appreciation has led to our employees benefiting enormously through the years, we want to make sure all employees, no matter when they join, have access to the same advantages. We believe the Stock Split would help reset the market price of our common stock so that our employees will have more flexibility in managing their equity, all of which, in our view, may help maximize stockholder value. In addition, as retail investors have expressed a high level of interest in investing in our stock, we believe the Stock Split will also make our common stock more accessible to our retail shareholders.

Except for shares reserved for issuance under existing equity compensation plans and shares that would be issued pursuant to the Stock Split, the Board has no current plans to issue additional shares of common stock. As such, the Authorized Shares Amendment represents a request for a proportionate increase in the number of authorized shares of common stock based on our planned Stock Split.
While the Board has not proposed the increase in authorized shares of common stock to discourage tender offers or takeover attempts of the Company, the availability of these authorized shares for issuance may nonetheless have the effect of discouraging a merger, tender offer, proxy contest or other attempt to obtain control of the Company.

 

[UncaNed]

I didn’t even think about that.

When solar city went 11 SCTY:1 TSLA (IIRC) there were a lot of random TSLA1 options chains left. They weren’t hard to trade but I suppose the bid-ask spreads would have been better with more open interest.

You have me thinking about changing my LEAPS out to strikes that are a multiple of 3.

Thank you, @The Accountant , for thinking of this. I guess $600, $1,200, and maybe $1,800 strikes would be the most easily divisible... Wish I'd thought about this sooner, and you can bet I'll be thinking about it for the rest of my career in TSLA options.

$300's would work for many split proportions as well...

 

[generalenthu]

So there will be some weird strikes for non-multiples of 15. 500 becomes 166.66at(7), 1000 becomes 333.33, but they are still full sized at 100 shares of TSLA.

I hope so. This is a slightly better outcome than the basket, though I guess the OCC will confirm what happens once the split is ratified. The odd strikes will still get non liquid as there won't be ready buyers other than MMs.

 

[mongo]

I hope so. This is a slightly better outcome than the basket, though I guess the OCC will confirm what happens once the split is ratified. The odd strikes will still get non liquid as there won't be ready buyers other than MMs.

It's the standard treatment fore whole X:1 splits.

Re liquidity: Maybe, but any time an option's pricing becomes disproportionate to the two bordering it, it becones a good deal one way or the other but yeah, $150 vs $166.66...
FWIW, Jan23s currently regions of $5, $10, $20, and $25 increments.

 

[Discoducky]

I wonder if Tesla intended 4680s to ship right before announcing the split? Is there a potential benefit?

 

[heltok]

I wonder if Tesla intended 4680s to ship right before announcing the split? Is there a potential benefit?

They would probably not annouce the split while there was a lot of potentially negative events in the near term such as Shanghai shutdown, Berlin/Austin not delivering, chip/supply chain shortages. So announcing a stock split implies that Tesla are feeling comfortable with most major things right now.

 

[SN_8]

Thank you, @The Accountant , for thinking of this. I guess $600, $1,200, and maybe $1,800 strikes would be the most easily divisible... Wish I'd thought about this sooner, and you can bet I'll be thinking about it for the rest of my career in TSLA options.

$300's would work for many split proportions as well...

Thankfully all my LEAPs are at a $750 strike and will end up beautifully at $250. Otherwise my OCD would be kicking into high gear right about now.

What I don't understand is why Tesla wouldn't request authorization for many more shares than they need for this 3:1 split. That way they'd avoid needing to go through a shareholder vote each time they want to split.

 

[StealthP3D]

Tours and videos have confirmed all Tesla-made 4680 cells (not speaking for Panasonic, but they are not in ramp yet) are DBE. No exceptions.

It really couldn't be any other way. Unless someone can think of a way Tesla could have added a bunch of drying ovens, solvent recovery and refining tanks and increased the manufacturing sq. ft. massively without anyone noticing.

 

[StealthP3D]

For you guys thinking Superchargers are such a great advantage in the competition for sales, you might sample the thread on CCS in the Supercharging section. Owners with late model Ys And 3s are buying CCS adapters from Tesla South Korea via a forwarder. The reasons: CCS prices are cheaper, they are where Superchargers aren’t and they aren’t busy when the Superchargers are.

The Supercharger network is a huge advantage for EV drivers in most of the world who actually need to use on-the-road fast charging. I can't speak to Korea specifically, but Supercharger prices are generally lower and the network is more reliable. The integrated software with live charging information is a huge plus. A Tesla can use either standard with an adapter, the reverse is not generally true in most cases.

But Tesla's biggest competitive advantage is their growing production and falling costs. Tesla already has a huge profit margin that can act like a buffer if they need to lower price to continue expanding production while still selling every car they can make at a profit. And the more they expand production, the less it costs to make each one. This is a growing advantage that is unassailable for at least 6 years, more likely 10-20 years.

Most consumers are very price conscious so the ability to offer more for less is a bigger advantage than the Supercharger advantage (by far). The fact that some Tesla owners might also want to charge at non-Tesla chargers is not a negative. In fact, it can make Tesla's Supercharger buildout more efficient and easier to manage by reducing bottlenecks as other networks are able to buffer peak usage. In other words, who cares?

 

[ZeApelido]

According to Bill Wright, definitely sounds like layoffs happened today.

https://twitter.com/x/status/1535471566565171200

 

[Stone_Watcher]

According to Bill Wright, definitely sounds like layoffs happened

https://twitter.com/x/status/1535472394449522693

Confirmed in a follow up comment. This is unfortunate for the individuals effected. They will surely find success in whatever comes next in their careers.

Yet, this will be another boon for the stock and Tesla as a corporation. Enjoy your weekend folks, it’s all coming together.

 

[Buckminster]

So for those of us that bought in pre pre split our shares will be 15 to 1 after the next split (5x1 times 3x1 = 15x1)

Elon clearly aiming for a 420 split. Just a 4:1 and 7:1 to go:

5, 3, 4, 7

All intelligent replies to this here pls:
Numerology on Twitter

All non intelligent replies here pls:
elon.musk@teslatelsa.com

 

[StealthP3D]

I wonder what even is the point of splitting the stock if the multiple is so small? I guess I'll never understand the intentions of stock splits to begin with.

Huh? My observation over the years has been that most stock splits are 2:1. I would guess 3:1 and 4:1 splits follow that in popularity. Don't under-estimate the long-term implications of multiple splits smaller than 5:1. For example, since 1993 Starbucks has split six times, all 2:1. That means one hundred shares from 1992 has turned into 6,400 shares as of the last split in 2015. And it was done with only 2:1 splits.

The announcement of a 3:1 split this year means one hundred Tesla shares held from 2019 will be fifteen hundred shares by the end of the year. Of course it's all just for purposes of accounting, but fun nevertheless.

The reason for splitting a stock is much the same reason you might cut a large pizza into 12 slices. It makes it easier to distribute. Of course, the unspoken reason to split the shares is to force a full accounting of all the naked shorts. A smaller split ratio allows this to happen more often. This is a good thing (unless you happen to have a naked short position).

 

[WADan]

Rivian's R1T AWD System Gets Praised by a Well-Known Engineer, He Calls It the Holy Grail

There’s no denying that Rivian is turning into a very likable manufacturer. Its vehicles are highly desirable. But besides being a cool, practical, innovative, and forward-thinking company, the R1T is stealing the whole show with its amazing characteristics. That’s why this famous engineer says...

www.autoevolution.com

Pretty impressive!