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

[elasalle]

Sounds like it. He responds to someone in Chinese saying “the last sentence is incorrect”:

https://twitter.com/x/status/1596322964345323520

It’s good wuwa made mistake in translation when market was closed

 

[printf42]

Sounds like it. He responds to someone in Chinese saying “the last sentence is incorrect”:

https://twitter.com/x/status/1596322964345323520

Haha I could translate from the English back to Chinese and understand what he actually means:

https://twitter.com/x/status/1596322536329183232

 

[Ameliorate]

Hello! Long time, just popped in to see if there was any commentary on the large Tesla call options opened this week.
220,000 calls dated Sep 2023 - Jan 2025. 150-175 strike. $1.4B in option premium, will be another 3.5B to execute these contracts for 22m shares. I can't really confirm these trades are real with my platforms but unusual_whales commented on it (twitter)

I was wondering if this was potentially Tesla's "Buyback" at 4.9B over the next 2 years and might be disclosed over the weekend? I don't know of many investors who would / are capable of putting on bets like this.

 

[2daMoon]

Hello! Long time, just popped in to see if there was any commentary on the large Tesla call options opened this week.
220,000 calls dated Sep 2023 - Jan 2025. 150-175 strike. $1.4B in option premium, will be another 3.5B to execute these contracts for 22m shares. I can't really confirm these trades are real with my platforms but unusual_whales commented on it (twitter)

I was wondering if this was potentially Tesla's "Buyback" at 4.9B over the next 2 years and might be disclosed over the weekend? I don't know of many investors who would / are capable of putting on bets like this.

Didn't someone post that a buyback cannot use options?

 

[Ameliorate]

Didn't someone post that a buyback cannot use options?

Certainly could be? I'm trying to get a better understanding of this as it could be tradeable information.
I remember Tesla having calls in the past but they were special like 5 year options they had created, not bought on the open market as these may have been?

My Bank manager sent me this when I asked that question. (I don't know why it's a 2001 paper but it is) and said that yes he thought they could.

Corporate Stock Repurchase Programs
& Listed Options
Portfolio Management Strategies
CBOE INVESTOR SERIES – PAPER NO. 2

Here's a few excerpts:

"B. Public Disclosure Requirements

• No rule of the Securities and Exchange Com-
mission (“SEC”) or any national securities
exchange specifically requires a company to
disclose in advance its intention to buy back
shares of its own stock or to write puts or
purchase calls on such stock.5"


"Buying Calls. A company must not be in posses-
sion of material non-public information at the time
it buys calls on its stock. Long calls acquired by a
company, however, may be exercised at any time
regardless of whether, at the time of exercise, the
company is in possession of material non-public
information.9"

 

[Gigapress]

We need more water than rain can provide: refilling rivers with desalination

Why? We believe that water should be unconditionally abundant. In the face of extended droughts, aspiring for greater usage efficiency is not, by itself, a sufficiently robust solution. The Colorad…

caseyhandmer.wordpress.com

What if we could solve water scarcity not by choosing lots and killing entire industries, but by simply generating more water? Water is not scarce on Earth, only fresh water upstream of our farms and cities.

We propose refilling parched rivers by desalinating sea water and piping water upstream.

We have the technology to convert sea water into fresh, via reverse osmosis (SWRO). Once an extremely expensive, niche technology applied mostly in the Middle East for drinking water alone, SWRO is now relatively mature and ready to be scaled. Much of the cost is energy, and solar electricity is now irresistibly cheap.

To take just one example, Arizona imports 2.8m acre-feet of water from the Colorado annually. SWRO [Saltwater Reverse Osmosis] could generate this with just 1 GW of electricity. Even including pumping and 25% solar utilization, just 20,000 acres of solar panels (a square 6 miles on a side) would be adequate to power 100% of Arizona’s imported water. This may sound like a lot but it’s just 2% of the land that Arizona already irrigates.

We could substitute the entire lower Colorado River’s annual flow of 9m acre-feet/year with about 13 GW of solar power, or roughly 3 weeks of global PV manufacturing output in 2021.

It seems absurd that such a trivial investment of land and energy is all that stands between our future and eternal unconditional water abundance.

While a 1 MW solar plant may be able to generate the equivalent of one barrel of oil, in hydrocarbons, that same solar plant running SWRO can generate 2385 cubic meters of water, which is nearly two acre-feet. Fortunately, per capita consumption of oil is about 300x less than water! If all 8 billion people on Earth consumed as much fresh water as the US average (~1.1 acre-feet/cap/year), and 100% of that use was created with SWRO, we would need about 12.4 TW of solar power. That’s just 248,000 sqkm, or just 31 m^2 of solar array per person. This is an extreme scenario but aptly illustrates that, in 2022, water scarcity or abundance is no longer restricted by the vagaries of weather and climate; it is a choice. We should choose abundance.

Desalination still looks like a major market opportunity for solar and maybe batteries. This article from physicist/engineer Dr Handmer shows a sketch up of what large-scale desal with reverse osmosis could look like for the American Southwest with some comparisons for other regions.

 

[Rarity]

Some background on the frank discussions between the US and Europe regarding the IRA. I don’t think this will impact Tesla’s investment decisions much beyond shifts of a quarter or two. But if Europe creates its own subsidy program, that could impact Tesla’s margins.

Glad that Tesla had the foresight to site a plant in Germany and to keep investing irrespective of subsidies.

Amid an energy crisis that has large parts of the European Union economy staring into an abyss, French President Emmanuel Macron has led the charge against Biden’s IRA, accusing Washington of maintaining a “double standard” on energy and trade. He’s called for Europe to respond in kind by rolling out its own subsidy plan, prompting a visit from U.S. Trade Representative Katherine Tai to an EU trade ministers’ meeting in Prague on October 31.

But rather than try to cajole them with concessions, Tai invited them to get on board the China train by rolling out their own subsidies — which isn’t what the Europeans wanted to hear.

Biden keeps ignoring Europe. It’s time EU leaders got the message

The US president has sparked new outrage in Europe over plans to subsidize industry.

www.politico.eu

 

[MC3OZ]

We need more water than rain can provide: refilling rivers with desalination

Why? We believe that water should be unconditionally abundant. In the face of extended droughts, aspiring for greater usage efficiency is not, by itself, a sufficiently robust solution. The Colorad…

caseyhandmer.wordpress.com

Desalination still looks like a major market opportunity for solar and maybe batteries. This article from physicist/engineer Dr Handmer shows a sketch up of what large-scale desal with reverse osmosis could look like for the American Southwest with some comparisons for other regions.

I replied in the engineering thread linking 3 YouTube videos for those who need a break from the soccer and NFL.

Investor Engineering Discussions

I think basic AP is probably fine with current HW-- because it's mostly relying on the 3 forward cams that actually benefit from the wipers (and redundancy) I've only had basic AP tell me it had to disable itself for weather ONCE--- and it was in truly horrific rain that I pulled over for 10...

teslamotorsclub.com

 

[heltok]

https://www.reddit.com/r/AusFinance/comments/z4wp6q

This effectively makes a Tesla 3 lease for about the price as a midsize sedan lease with 2.5l motor (ie Mazda 6 etc)

Mod: In future, please point out which country this applies to (TMC being US based, that is the default unless stated). In this case, it is Australia. --ggr

 

[mickificki]

Interesting post by Frank regarding short interest in tsla:

https://twitter.com/x/status/1596401436404768768

 

[MABMAB]

Interesting post by Frank regarding short interest in tsla:

https://twitter.com/x/status/1596401436404768768

Maybe, to me it seems to disagree with the facts though: https://www.nasdaq.com/market-activity/stocks/tsla/short-interest

Short interest TRIPLED about the time of the 3:1 split...
otherwise it seems pretty consistent.

 

[Dreadnought]

That SI tripled on the Nasdaq site is due to them not properly accounting for the split. The charts linked to the Frank's thread got it correct, though. There's an increase in SI since end of September, from about 63M to 78M per 11/15. This is the same order of magnitude as Elon sold recently to raise 4 Billion and change. Had someone sold 40M shares in a short period, the stock would've tanked hard. Like, cliffs of Dover style. So, we do see an unintuitive reverse correlation of increase in SI while stock price went down.

TSLA started to decline from ca. $300 by mid September to where we now are. Fact Checking / Truth Tesla attributes it to MM put hedging - and that certainly contributed. I think we also saw some front running of Twitter-related stock sales. I'm not saying that Frank is wrong. Rather, it was likely a combination of factors.

The 11/15 SI figure has just been released and it's anybody's guess whether it peaked since then. Impact to the stock price by short covering will, among other factors, depend on the time frame and magnitude. But we have an idea about the impact of 25M shares sold. And btw it would be a great deterrent to short sellers IMO if Tesla announced to do do buybacks that exactly counter increases in SI.

 

[Buckminster]

https://twitter.com/x/status/1596435205199319042

https://twitter.com/x/status/1596436982518804481

 

[nativewolf]

We need more water than rain can provide: refilling rivers with desalination

Why? We believe that water should be unconditionally abundant. In the face of extended droughts, aspiring for greater usage efficiency is not, by itself, a sufficiently robust solution. The Colorad…

caseyhandmer.wordpress.com

Desalination still looks like a major market opportunity for solar and maybe batteries. This article from physicist/engineer Dr Handmer shows a sketch up of what large-scale desal with reverse osmosis could look like for the American Southwest with some comparisons for other regions.

He is an interesting cat, glad to see he started his own business. The environmental impact of disposing of this much brine is huge, it would have drastic impacts locally and would have to be dispersed across a giant region. Might actually be helpful in some areas were salinity has fallen and impacted critical breeding spawning areas. Since San Diego can’t even get a basic small plant past environmental review I view this as something to launch overseas- Australia is the most logical starting point in my mind- all the sun you need, cheap land, new govt is very pro environmental. You might enjoy reading about the Teal movement.

 

[Chenkers]

He is an interesting cat, glad to see he started his own business. The environmental impact of disposing of this much brine is huge, it would have drastic impacts locally and would have to be dispersed across a giant region. Might actually be helpful in some areas were salinity has fallen and impacted critical breeding spawning areas. Since San Diego can’t even get a basic small plant past environmental review I view this as something to launch overseas- Australia is the most logical starting point in my mind- all the sun you need, cheap land, new govt is very pro environmental. You might enjoy reading about the Teal movement.

Australia has already built significant desalination plants near many of the main population centres to provide a safegauard water source for periods of extended drought. Currently eastern Australia has experienced repeated La Nina events causing massive rainfall and flooding so most water storages are near full. But we know that the overall trend is for a drying climate and we do get extended drought periods where the desal may be needed.

For example my state of Victoria opened a big 150GL RO desalination plant back in 2012 that has largey sat unused but costs us over $600M/yr for regular water orders to keep it functional. Around $18B expected cost over the life of the contract whether the water is needed or not. This plant requires electrical capacity of around 90MW when operating at capacity (approx 1% of state max demand). At the time it was built most local power supply was coal but thankfully that's now rapidly being replaced by renewables and batteries. Victorian Desalination Plant - Wikipedia

For Tesla, RO Desalination just adds a bit extra to the overall demand for batteries to regulate supply in predominatly renewable energy grids (such as we are rapidly transitioning to).

 

[unk45]

I think with the general vehicle shortages over the last year or two, a lot of people have gotten used to ordering cars.

For reference, my neighbor and I are in a race to see who gets their truck first. He ordered an F150 Lightning 14 months ago, and I ordered my Cybertruck within the first hour you could. Still think I'll beat him!

Certainly that is true. However the generalization made by @StealthP3D is true for the majority of sales in high volume countries. Even so, a significant minority of buyers have ordered vehicles, often sight unseen, and waited. Just for the anecdote I reviewed my own history of >50 cars I have owned I waited for 16 of them to arrive as ordered. I waited more than a year for six of them, including two Teslas, a P3D and a Model S Plaid.

In some countries that is the norm. Even in the US many new models have had waiting lists. Thus, the Tesla practice may be unusual to some extent the real tangible difference is the direct fixed price model. That too is not unprecedented, just rare in places like the US where the ancient 'souk' method of the Middle East permeates itself in auto dealers, negotiating everything. Such a method is predicated on immediate sales, so ordering and waiting are discouraged.

As we look at the significance of Tesla deposits and 'pre-orders' we must judge the breakage rate. Nothing material is disclosed by Tesla on this subject so we need to guess. I recall in 2014 there was a large wait for the P85D, and my store at the time said they were delivering on 'nearly all' such orders. The Model 3 and P3D later seemed to be similar to the Plaid story in that there was 'high breakage' apparently, but all the supply was absorbed and waiting lists grew. It seems to be so today. My judgement is that this entire topic is a bit of a 'red herring' because inventory of most models seems to appear fairly quickly when needed in those markets that are not habituated to the 'order and wait' model.

This subject will become immediately relevant if Tesla suddenly begins to have significant new vehicle inventory for immediate delivery. The cash conversion cycle lengthening will be the first solid clue, absent obvious store-level inventory buildup.

In any event Cybertruck, Semi, Megapacks will not have any such issues for years to come. The first one to show signs is certainly Model 3.

Fudsters and legacy fans keep harping on this subject, and some of us seem to be flirting with negativism. The negative is, IMHO, to be a long time coming.

 

[saniflash]

I'm not saying that Frank is wrong. Rather, it was likely a combination of factors.

Agreed. I think another factor that deserves more attention is the crypto meltdown. I believe many people who were long BTC, potentially leveraged, also held TSLA.

So the bankruptcy of FTX might have contributed to the TSLA selloff as well.

 

[nativewolf]

Australia has already built significant desalination plants near many of the main population centres to provide a safegauard water source for periods of extended drought. Currently eastern Australia has experienced repeated La Nina events causing massive rainfall and flooding so most water storages are near full. But we know that the overall trend is for a drying climate and we do get extended drought periods where the desal may be needed.

For example my state of Victoria opened a big 150GL RO desalination plant back in 2012 that has largey sat unused but costs us over $600M/yr for regular water orders to keep it functional. Around $18B expected cost over the life of the contract whether the water is needed or not. This plant requires electrical capacity of around 90MW when operating at capacity (approx 1% of state max demand). At the time it was built most local power supply was coal but thankfully that's now rapidly being replaced by renewables and batteries. Victorian Desalination Plant - Wikipedia

For Tesla, RO Desalination just adds a bit extra to the overall demand for batteries to regulate supply in predominatly renewable energy grids (such as we are rapidly transitioning to).

Right, the scale that Casey describes dwarfs that 90 mw. Rather he'd be advocating for 90GW of power and perhaps irrigating the opal fields. He's proposing simply massive terraforming activity.

Sahara depressions in Libya are a potential spot. Lots of others.

Congratulations on the recent elections.

 

[nativewolf]

Certainly that is true. However the generalization made by @StealthP3D is true for the majority of sales in high volume countries. Even so, a significant minority of buyers have ordered vehicles, often sight unseen, and waited. Just for the anecdote I reviewed my own history of >50 cars I have owned I waited for 16 of them to arrive as ordered. I waited more than a year for six of them, including two Teslas, a P3D and a Model S Plaid.

In some countries that is the norm. Even in the US many new models have had waiting lists. Thus, the Tesla practice may be unusual to some extent the real tangible difference is the direct fixed price model. That too is not unprecedented, just rare in places like the US where the ancient 'souk' method of the Middle East permeates itself in auto dealers, negotiating everything. Such a method is predicated on immediate sales, so ordering and waiting are discouraged.

As we look at the significance of Tesla deposits and 'pre-orders' we must judge the breakage rate. Nothing material is disclosed by Tesla on this subject so we need to guess. I recall in 2014 there was a large wait for the P85D, and my store at the time said they were delivering on 'nearly all' such orders. The Model 3 and P3D later seemed to be similar to the Plaid story in that there was 'high breakage' apparently, but all the supply was absorbed and waiting lists grew. It seems to be so today. My judgement is that this entire topic is a bit of a 'red herring' because inventory of most models seems to appear fairly quickly when needed in those markets that are not habituated to the 'order and wait' model.

This subject will become immediately relevant if Tesla suddenly begins to have significant new vehicle inventory for immediate delivery. The cash conversion cycle lengthening will be the first solid clue, absent obvious store-level inventory buildup.

In any event Cybertruck, Semi, Megapacks will not have any such issues for years to come. The first one to show signs is certainly Model 3.

Fudsters and legacy fans keep harping on this subject, and some of us seem to be flirting with negativism. The negative is, IMHO, to be a long time coming.

Ford's experiencing the same. So is GM. The waiting list for EVs is long. That should end in 2026, it is all about batteries and by 2026 we have massive amounts of battery capacity coming online in the USA and in Europe. By 2028 there will be 30x the original GF capacity open and running and the constraints will surely morph into supply chain issues on batteries. By 2030 battery capacity is such that I would think we'll see a steep decline in costs, we'll have reached scale. Right now we are clearly seeing the impact of scarcity, by 2030 we can safely assume no scarcity and a glut. What happens between now and then ...that's where things get interesting.

 

[Speedr117]

Ford's experiencing the same. So is GM. The waiting list for EVs is long. That should end in 2026, it is all about batteries and by 2026 we have massive amounts of battery capacity coming online in the USA and in Europe. By 2028 there will be 30x the original GF capacity open and running and the constraints will surely morph into supply chain issues on batteries. By 2030 battery capacity is such that I would think we'll see a steep decline in costs, we'll have reached scale. Right now we are clearly seeing the impact of scarcity, by 2030 we can safely assume no scarcity and a glut. What happens between now and then ...that's where things get interesting.

It's also on new models that aren't EVs (i.e. Ford Bronco).