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

[StealthP3D]

I agree with you that the MM's want those margin calls to trigger, but I still don't agree with you that Q4 is some kind of "time limit" imposed on them.

They are in full control of the stock, and they still will be even after we have a huge Q4 beat. Only a huge influx of new LONG buyers can take the control away from the MM's and I don't see any possible Q4 situation triggering such a wave. We need a larger catalyst, like Moody's upgrading, which would permit an influx of hedge funds.

I think the MM's are pushing for <$150 in a race with the inevitable Moody's upgrade. And it's very likely Moody is waiting to upgrade until the MM's reach their goal too. Q4 won't matter IMHO, I think we're stuck in the basement until the MM's hit their target.

Hopefully next year goes better for us.

I have a different take. I think Q4 results might expose them as the little boy who called wolf. You can only call "wolf" so many times before no one listens to you. My take is they will push it as low as they can before results and then let it run as high as it wants to go, at least to that point where a natural correction and profit-taking is inevitable. There is a run to well over $200 before earnings are even released. After earnings it will go higher if this is a blow-out quarter. Then they may start hammering it down again, we will see. But I do sense we are close timewise to the time they need to execute their big, scary drop and then let er run. They have to do this because as they push it lower, it becomes like a pressure cooker that needs to let off steam. If they wait too long, they cannot successfully execute their big scary drop at the end.

 

[mach-edriver]

I agree. They are not only big boys, they are the ones who make markets in TSLA. It's pure corruption, plain and simple. It's become business as usual. It's always been corrupted since I made my first trade back in the 1980's (I didn't know it though) but it has become steadily more sophisticated and blatant.

I believe the same people who are manipulating the normal action of the stock price are also driving the narrative that Elon's behavior or statements are unacceptable. This gives them cover to hide behind the narrative that investors have lost confidence in Elon, that's why the share price is trashed. In reality, they created the narrative by trashing the share price whenever Elon would say something.

This is one more reason to pay attention to the company, not the share price. Investors who are overly concerned with every little move, the timing of the move, and what caused the move, give power to those who manipulate the price. It allows them to create little narratives in your head that Elon's behavior is the problem, not their daily manipulations.

There are always interminable corruption and conspiracy stories circulating when TSLA is getting clobbered yet they evaporate when it’s on a tear.

Are the market forces uniformly malevolent or do they hop on board when the stock is doubling?

I’m curious because the market manipulation excuse is more closely associated with TSLA than any other stock I’ve traded.

 

[mrmage]

A suggestion that I think could benefit everyone, though I also think no one will do it:

For two weeks, avoid social media, news, advertising, politics, this thread, and stock tickers.

Spend your time working, seeing family and friends, taking walks, reading fiction, playing video games, watching fun movies.

After two weeks, ask yourself a few questions:
1. Was my life negatively impacted by not, "keeping up on current events"?
2. Did I miss the drama?
3. How do I feel now?

That might apply to people who could have taken 2 arbitrary weeks from the past year without any regrets.

Two weeks off at multiple times this year would have driven my assets 50% to 75% down from where they are now. And that's saying a lot considering how much they're down now. I was using options and margin at the time, but hakuna matata only works for some situations.

 

[Mengy]

Option 1: Elon is selling

Option 2: The market is realizing something we are missing. Interest rates are higher so most people taking loans will be able to afford less $$ car.

China demand is obviously down. Europe / US sales may not be down, but it is certainly possible that people are buying less upgrades / options on their cars to keep monthly car payments at a target rate.

It is certainly possible that margins have peaked in the short term.

It is certainly possible that while total deliveries are higher, total profit is the same or just a smaller % higher than last quarter.

That signals to the market that the high earnings growth phase is over. In that case, a PE ratio of 20-30 is reasonable.

A $1.2 EPS in Q4 annualized would give $4.8. At a PE ratio of 30, that gives a stock price of $144.

There is a third option:

Option 3: The MM's are pushing the stock down to trigger margin calls and stop limits.

The most likely situation is we are just seeing blatant manipulation for short term financial gains. Wall Street has seen an opening due to low buying volumes (for a myriad of reasons) and they are taking advantage of it to the extreme while they can.

Elon selling is a rather small negative for a brief moment in time, and I doubt the market knows anything substantial we here do not. I think both of your options are unlikely reasons for this long term downtrend we are in.

 

[StealthP3D]

I totally agree with you, man. We're getting the living daylights beat out of us until Tesla does something, anything to actual defend TSLA. The silence is deafening and ridiculous. Tesla needs to grow a pair and fight for TSLA and the investors who have stuck by Tesla through thick and thin.

I disagreed with you because I think Tesla's silence is not a weakness, it's more likely a signal that they are waiting and watching for the best time to use their opponents' strengths against them. I don't see a lot of point in complaining and moaning unless Tesla has real evidence that can stick. Obviously, they don't, and that would just make them look weak and powerless, so there is no point in thrashing about now. They will act when they are ready to. And it will mean something.

 

[ElectricIAC]

There is a third option:

Option 3: The MM's are pushing the stock down to trigger margin calls and stop limits.

The most likely situation is we are just seeing blatant manipulation for short term financial gains. Wall Street has seen an opening due to low buying volumes (for a myriad of reasons) and they are taking advantage of it to the extreme while they can.

Elon selling is a rather small negative for a brief moment in time, and I doubt the market knows anything substantial we here do not. I think both of your options are unlikely reasons for this long term downtrend we are in.

The GME strategy.

We need to rope WSB into using their retail power to burn the MM’s so bad there won’t be anything left that a broom and dustpan can’t handle.

 

[juanmedina]

It would be nice if Tesla would start the year with a small buy back right after the P&D report is released and crush the shorts.

 

[GrandEnigma]

Well, I am no longer in the cool kids club, lost a comma on my total returns.

 

[Congo Line]

One has to wonder about morale at Tesla as well. I know a couple of people who work in high-end positions in Silicon Valley, while both probably make a nice salary, they actually make their real money from options given as part of the compensation package. Engineers, as well as others, at Tesla have been working their butts off trying to meet the standards that Elon sets. While that is not unlike other CEO's in tech, watching their net worths get destroyed and having a CEO that is more concerned with other issues (running a social media company) has to be hard on them.

I can only hold out hope that Elon will recognize the impact his behavior is having on Tesla's brand as well as it's impact on morale at the company. Until we get some real solid numbers out of Tesla, I'm afraid this stock is only going to move on fear of what Elon will tweet or do next.

I would think it works both ways. My understanding is that employees receive options based on the lowest TSLA closing price for the quarter. So a lower price now means that get to buy in at lower levels. As long as they believe the company's growth and potential value remain intact and they have a longer time horizon, it seems like this recent movement would be good for them.

 

[EverettRuess]

Anyone notice that the DOW has lost 800 points and is now negative.

 

[MikeC]

I wish it were so, but today doesn't feel like anything close to capitulation.

What does capitulation feel like?

 

[SOULPEDL]

One has to wonder about morale at Tesla as well. I know a couple of people who work in high-end positions in Silicon Valley, while both probably make a nice salary, they actually make their real money from options given as part of the compensation package. Engineers, as well as others, at Tesla have been working their butts off trying to meet the standards that Elon sets. While that is not unlike other CEO's in tech, watching their net worths get destroyed and having a CEO that is more concerned with other issues (running a social media company) has to be hard on them.

I can only hold out hope that Elon will recognize the impact his behavior is having on Tesla's brand as well as it's impact on morale at the company. Until we get some real solid numbers out of Tesla, I'm afraid this stock is only going to move on fear of what Elon will tweet or do next.

They would have nowhere to go. Quit Tesla to work where? Moral is likely a bummer, ya, join the crowd. But on the inside, they might have more information than we do, and can see it first hand with the Q4 buzzing.

Also, if the big stock names can't produce growth, the majority of those hiring options vaporize because there's no way to fund it without cash or (dilution which is not going to happen). There was a video on YT, not sure where now but made perfect sense, this is not a risk when all jobs are in question.

 

[growler23]

It is hard today, no doubt about it. We are going through the gauntlet, that is also obvious to me.

Here's how I stay invested.

Has Tesla taken over the auto market? IMHO, yes, this is a done deal, no key man risk, contracts and product roadmap is in place.

Is the team executing? Yes, brilliantly, sometimes the impossible is late though, I think we all get that.

How much of this is due to the macro? IMHO, all of it, Tesla continues to dominate in the face of all 'competition'.

Where is all the FUD/mis-information coming from? Well, how about the 10 to 30 Trillion dollars of disruption Elon is causing to occur nearly all at once.

So, investors divest from those companies and into Tesla then? Yep, but this takes time and most likely won't speed up in a bear market.

So, when is the end of the bear market? Chair Powell holds those keys. SPY fought the bear today and is losing. Let's see what happens tomorrow.

^^^ this ^^^

After I watched that Joe Justice video many moons ago (about Tesla/Elon's management style), one of my biggest concerns - 'key man risk', faded greatly. The ... musk... of Elon has ... diffused ... through Tesla's engineering dept rather thoroughly by now. (No, really, that's a great thing )
Granted, Tesla says little between earnings calls, leaving a 3-month hole for FUD, but what we can see from Austin is positive. What we can see from Berlin is quite positive. What we can see from Shanghai appears to be blowing the roof off of previous delivery records. I haven't heard much about Fremont of late, but I doubt they've dropped off a cliff. Energy looks to continue to improve, and the Supercharger network - the Moat of all Moats - grows apace.
I had no $ but I sold some longstanding index funds and rage-bought a double handful today at these bargain prices.
I really didn't intend to but DANG it's cheap right now.
B E L I E V E
H O D L

(stay the course ...a thousand points of light )

 

[Mengy]

I have a different take. I think Q4 results might expose them as the little boy who called wolf. You can only call "wolf" so many times before no one listens to you. My take is they will push it as low as they can before results and then let it run as high as it wants to go, at least to that point where a natural correction and profit-taking is inevitable. There is a run to well over $200 before earnings are even released. After earnings it will go higher if this is a blow-out quarter. Then they may start hammering it down again, we will see. But I do sense we are close timewise to the time they need to execute their big, scary drop and then let er run. They have to do this because as they push it lower, it becomes like a pressure cooker that needs to let off steam. If they wait too long, they cannot successfully execute their big scary drop at the end.

I do think this is likely how it will play out. The MM's have now driven it down to trigger margin calls and stop losses at extreme low valuations, my feeling is they won't bother to spend the money nor effort to push it down much more than this. It would just be too costly and difficult. Soon they'll position themselves for the next launch upwards and once they are ready they'll let her rip. Again. And when it planes out for a bit they'll take profits and start the process all over again from a new higher plateau.

At some point Moody will upgrade and we'll see an influx of new institutional buyers, this will weaken the control the MM's have become used to. They know this of course, and I think this huge extended pushdown has been a "last gasp" before it becomes impossible to do it to this degree anymore.

The real question is: when does this turnaround play out? After Q4 2022? Later in 2023? Early 2024? I do think it's coming, I'm just unsure of WHEN it's coming.....

 

[Congo Line]

Anyone notice that the DOW has lost 800 points and is now negative.

Feels like institutions are selling into the bounce. SPY hit long-term trend ceiling right at 4100 and has been falling ever since. Seems people also nervous about JPow's comments tomorrow and whether he will put on his hawkish performance again. After CPI numbers came out, it was surprising to witness a number of talking heads who had overall pessimistic view despite the surprisingly low inflation reading. The fact that Jim Cramer was the only one who was optimistic on CPI read should have been a clear omen...

 

[AndrewZ]

Anyone notice that the DOW has lost 800 points and is now negative.

Post-CPI euphoria has worn off and reality is setting back in: the battle against inflation is far from over.

 

[WattsHappening]

I would think it works both ways. My understanding is that employees receive options based on the lowest TSLA closing price for the quarter. So a lower price now means that get to buy in at lower levels. As long as they believe the company's growth and potential value remain intact and they have a longer time horizon, it seems like this recent movement would be good for them.

I don't believe this is correct.

Two different things.

There are option grants given when an employee starts. That is usually a larger amount than annual grants and is pegged to stock price on I believe the start date.

Every employee is given the opportunity to purchase shares on a semi-annual basis. ESPP (Employee Stock Purchase Plan). I believe the purchase price is some percentage (85%?) of the lower of stock price on the first day of the 6 month period and last day of the 6 month period.

So for many employees, their initial stock options are underwater.

And for the ESPP, employees would still be better off if the stock price increases during the 6 month period.

 

[Chunky Jr.]

It would be nice if Tesla would start the year with a small buy back right after the P&D report is released and crush the shorts.

I'm skeptical it would do anything. We all thought announcing another split would be just the thing that was needed to make Tesla get out of its funk. Well we can't have another split, so the stock buyback is taking its place.

The only way I see TSLA recovering is to have a great Q4, emphatically squash all demand rumors, and have Elon STFU on Twitter and put more focus into Tesla (or move into a product role and have someone else be CEO).

 

[bubb]

There is so much work to be done to realize the potential of this company over the next 5-10 years and I really want Elon to be the one overseeing it (and I'm sure as heck not selling a share) but IMO it's time for a role more tailored to him or at least a clear operations #2 below him. Some folks here will tell you (with a straight face) that he can perfectly multi-task N companies (N->∞) but can also spend as much time as he wants tap-dancing in the middle of our culture wars with no adverse consequences for TSLA operations+brand. I don't buy it and neither does the market with TSLA 25-30% off since the bird deal close vs. a flat index. I'd like clarity from the company on who exactly is picking up any slack in senior management and give them an appropriate title and most importantly accountability for the 50% growth target in the years to come. "Trust Elon" might be sufficient here still but that battle is starting to look like the late stages of the Alamo.

 

[WattsHappening]

What does capitulation feel like?

Like the world is ending, the stock price will never recover and you HAVE to sell.

Something like increasing volume throughout the day as the stock price just continues to tank. Something like 3x average volume and the SP down 15%, with higher volume at the end of day and stock price closing at it's lows.

EDIT: if we drop from here to close at $140 on 200M volume, THAT will feel like capitulation.