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

[jkirkwood001]

I don't think all of us know that Elon's behavior is the reason for Q2's QoQ drop from Q1. It may have been a factor, but it is by my math at least 6x less influential than the collapse of the overall stock market which seems to have been triggered primarily by the ramifications of the war in Ukraine, by interest rate increases, and by the terrible natural disasters we've had this year.
...
Overall, the data says that around 80% of the variation in the TSLA price can be predicted simply by knowing the NASDAQ Index for the day in question.
...
Conclusion
Elon Musk is single-handedly crushing TSLA and the entire stock market with his stock selling, antics and controversial Twitter acquisition bid. More complaining about this is definitely warranted, and the author recommends further research and posting about it outside of the designated threads.

This is not investment or financial advice.

Thanks for this excellent and insightful analysis, @Gigapress , as usual!

Okay I've been looking for others to comment or but seen none. Am I the only one looking for the "/S"?? Please, for those like me who take you at your word, tell me your conclusion is hilarious, and that you don't believe Elon's antics are a major factor in TSLA SP. Everything you state in the body seems to contradict your conclusion. What am I missing?

 

[SmokyPeat]

Thanks for this excellent and insightful analysis, @Gigapress , as usual!

Okay I've been looking for others to comment or but seen none. Am I the only one looking for the "/S"?? Please, for those like me who take you at your word, tell me your conclusion is hilarious, and that you don't believe Elon's antics are a major factor in TSLA SP. Everything you state in the body seems to contradict your conclusion. What am I missing?

Sometimes the sarcasm is so obvious it doesn't require the /s.

 

[dhanson865]

Stop lossed got triggered?

If you did have a stop loss triggered you can buy back in now that the price has dropped.

Might make your taxes for this year wonky but at least you can get the shares back.

 

[Artful Dodger]

Arrrg. Stoopid NASDAQ was showing AVG VOL at 87M a few minutes ago. Now it is back to around 30M.
EDIT: and now back to 87M.

They have multiple public-facing servers, not all of which get updated on time. There is a background process which needs to run to update the mirrors. It seems to be done manually/haphazardly, or at least with a very wonky script.

I've seen this issue for years with NASDAQ, esp. with their 'realtime' web pages.

 

[Iain]

Tesla may be down today 1.5% but at least my Neo ( down 70%) is kicking ass today.

 

[jkirkwood001]

Sometimes the sarcasm is so obvious it doesn't require the /s.

But the rest of his post is so funny! /S

'Only 7% of your intended message is conveyed in text'
"In a UCLA study, researchers found that up to 93 percent of communication is non-verbal. The words we use make up just seven percent of what is communicated. Our tone of voice makes up 38 percent and body language makes up the remaining 55 percent.

So where does that leave text messages? A text message, even with your fancy enthusiastic emoticons, is only getting seven percent of your message across. No wonder we’ve all had those text message misunderstandings that make us look we’re in a Three’s Company episode."

 

[Gigapress]

Thanks for this excellent and insightful analysis, @Gigapress , as usual!

Okay I've been looking for others to comment or but seen none. Am I the only one looking for the "/S"?? Please, for those like me who take you at your word, tell me your conclusion is hilarious, and that you don't believe Elon's antics are a major factor in TSLA SP. Everything you state in the body seems to contradict your conclusion. What am I missing?

Yes the conclusion was a joke. The simplest and most empirically supported explanation is that the stock market crashed, and so as expected from beta = 2, TSLA crashed twice as hard, and then better-than-expected execution and numbers from Tesla this year caused TSLA to recover more than the NASDAQ has recovered.

That being said, while the evidence clearly shows that TSLA's short-term movement is dominated by the movement of the overall stock market, it's still true that Elon's antics might be a significant factor. TSLA has moderately outperformed the NASDAQ Composite this year and has outperformed expectations even more when the beta of 2 is taken into account. Would TSLA have outperformed even more in the last 12 months if Elon hadn't tried to buy Twitter, sold a bunch of stock, gotten into political fights, etc? On the other hand, maybe his involvement in these things was a net positive for TSLA due to simply attracting more attention.

However, the timing of the biggest drops in TSLA's price have coincided almost exactly with the broader market collapse days and not so much with major dates in the stock selling and Twitter acquisition saga. Also, TSLA trading activity is now tightly coupled to mutual funds that track or are benchmarked to the major indices (S&P, NASDAQ, Russell) which means that if there's net buying or selling of the indices, there will be net buying or selling of TSLA. Tesla also is the market's emblem of risk appetite, so it probably reflects, to some degree, how much growth risk and investing aggressiveness the market is in the mood for at any given time.

 

[navguy12]

…and FWIW, like last time, CIBC won’t have the extra share posted tomorrow:

View attachment 844707

And of course the “value” of my holdings is now only one-third of what it was yesterday.

 

[insaneoctane]

Splitting the stock obviously broke our beta...

 

[thesmokingman]

Must look beyond this expected dip post split...

Must also fight urge to contact Etrade and yell at them about the incorrect cost basis lol...

 

[Maarten]

We can definitely conclude one thing from the past weeks:
The people/firms that are (naked) shorting know pretty well how to deal with stock splits that are announced long beforehand.

 

[jkirkwood001]

Yes the conclusion was a joke. The simplest and most empirically supported explanation is that the stock market crashed, and so as expected from beta = 2, TSLA crashed twice as hard, and then better-than-expected execution and numbers from Tesla this year caused TSLA to recover more than the NASDAQ has recovered.

That being said, while the evidence clearly shows that TSLA's short-term movement is dominated by the movement of the overall stock market, it's still true that Elon's antics might be a significant factor. TSLA has moderately outperformed the NASDAQ Composite this year and has outperformed expectations even more when the beta of 2 is taken into account. Would TSLA have outperformed even more in the last 12 months if Elon hadn't tried to buy Twitter, sold a bunch of stock, gotten into political fights, etc? On the other hand, maybe his involvement in these things was a net positive for TSLA due to simply attracting more attention. However, the timing of the biggest drops in TSLA's price have coincided almost exactly with the broader market collapse days and not so much with major dates in the stock selling and Twitter acquisition saga. Also, TSLA trading activity is now tightly coupled to mutual funds that track or are benchmarked to the major indices (S&P, NASDAQ, Russell) which means that if there's net buying or selling of the indices, there will be net buying or selling of TSLA. Tesla also is the market's emblem of risk appetite, so it probably reflects, to some degree, how much growth risk and investing aggressiveness the market is in the mood for at any given time.

Okay, but with all due respect, by saying "it's still true Elon's antics might be a significant factor" you're going back to speculation not backed by your data analysis. I thought the point of the post was to debunk those theories.

To me, your data suggests either
a) The broader market is more influential on TSLA's price than Elon's antics, or,
b) Elon's antics are a major factor affecting the broader market - and TSLA - equally.
(That second conclusion may require analysis of correlation between the SP and individual events in Elon's timeline, like August 7, 2018 - see below. And who's to judge which of his hundreds of actions are 'significant'?? You can't just say "Elon tweeted last Thursday and the SP also went down last Thursday" and conclude "aHA! See??". And it's another level of interpretation if a tweet is a positive or negative influence).

I was looking for a serious conclusion from someone who's done the homework.

 

[Gigapress]

Splitting the stock obviously broke our beta...

As I found out yesterday, TSLA has almost no relationship to the NASDAQ index on days it moves less than ~1.5%. The beta of ~2 is still there but the correlation is very weak.

 

[Speedr117]

It looks like there's some rain in Sichuan, which should help with power shortages caused by drought.
At least, this forecast says its raining every day from now on out and there's a deluge coming on monday:

Sichuan 14 Day Weather Forecast - China Local Weather

Updated weather forecast for Sichuan for the next 14 days, including accurate temperatures, wind, rain, and more. Select a date for an hourly forecast in Sichuan.

www.weather25.com

Maybe a serious flooding kind of downpour on monday, but I dont know whats normal for the region.

Supposed to start Monsoon season, so it makes sense...

 

[Artful Dodger]

Splitting the stock obviously broke our beta...

With new money pouring in from Retail on pre-Market momentum, this is what industry 'professionals' refer to as an R.F.O.*

*Retail Fleecing Opportunity

 

[jeewee3000]

We can definitely conclude one thing from the past weeks:
The people/firms that are (naked) shorting know pretty well how to deal with stock splits that are announced long beforehand.

Yes and no. Float-wise there was/is a lot less shorting going on now than before the 2020 runup and split. Also Elon played into the hands of the shorts when selling recently (after the current split was announced). They could cover at bargain prices.

A squeeze was never on the table this split. (and no, this is not hindsight 20/20. See the many posts in the options thread about this weeks ago).

 

[cliff harris]

Did anybody honestly expect a stock bounce the day of the split because... there was a split? I think the real impact of a split is making the stock more affordable for people who cant buy fractional shares. Thats an impact over the LONG run, not for today, this week or this month.

I think there is a good chance the stock moves up from here, but thats due to the fundamentals, not the split. I suspect a bunch of investors are still waiting for the credit rating upgrades, and also a bunch of people may be nervous of investing so close to the new AI day. Tesla events can be huge catalysts or huge disasters, depending on what happens.

Maybe Tesla demo a boston-dynamics style robot walking around on AI day? Or maybe its really low key and they just show some robot hands and some neat robot vision stuff, and people are underwhelmed? Maybe a live tech demo goes hilariously and virally wrong...

We may be long term holders with faith in the stock, but a lot of people who know Elon to be a loose cannon may not want to buy or even hold the stock too close to an event that could be problematic.

Plus twitter in the news means that the perception of a distracted CEO might be holding things down. Power-problems in both shanghai, and potentially soon Berlin also do not help.

My medium term price target is still $1200 pre split ($400), at which point I will take some profits. I expect it to be hit before the end of the year. If Q3 financials surprise everyone, it could be exceeded quite dramatically. I also think the first production run of tesla Semis is going to be a BIG stock pumping event...

 

[jeewee3000]

Interesting observation is that my trader SAXO in The Netherlands does not allow option trading at this time. Stuck with tomorrows options for now. According to the SAXO tradersdesk, option trading was stopped due to the trading chaos. However, the Max-pain website clearly does show option volumes for tomorrow.

Not to go OT but just want to correct this to deflate the "split-conspiracy-talk". I'm with SAXO as well and I can make option trades today. (didn't try at open, but I did just now)

All shares and option contracts were correctly split-adjusted before the opening bell today.

 

[ZsoZso]

However, the timing of the biggest drops in TSLA's price have coincided almost exactly with the broader market collapse days and not so much with major dates in the stock selling and Twitter acquisition saga.

See the biggest red candle in the middle of that chart?
That was April 26, it was a 12% drop in a single day, which was the day Elon started to dump shares for Twitter purchase as documented by his SEC filing later.

So your statement is demonstrably false, the biggest drop coincides exactly with Elon dumping shares.
BTW, the S&P 500 (SPY) dropped 2.2% on that day, so the beta of 2 comes nowhere near to explain 12% TSLA drop.

 

[Kooky675]

Not to go OT but just want to correct this to deflate the "split-conspiracy-talk". I'm with SAXO as well and I can make option trades today. (didn't try at open, but I did just now)

All shares and option contracts were correctly split-adjusted before the opening bell today.

Option trading works OK now, but it took them almost an hour after open.
The stock and option counts and strikes were all OK (split adjusted) prior to the open.