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

[⚡️ELECTROMAN⚡️]

Isn’t a forced sale, due to a margin call, a good thing if the stock price keeps going down 10% a day? I wish I had been forced to sell a few months ago.

 

[verystandard]

Isn’t a forced sale, due to a margin call, a good thing if the stock price keeps going down 10% a day? I wish I had been forced to sell a few months ago.

If you forced to sell back then, you will jump back with two feet after sold your home, car, underwear

 

[Nocturnal]

I assume that a lot of you (myself included) are having regrets about not selling when the stock was $400+. However, it's worthwhile to be honest with oneself.....if you did sell at the top, I bet most of you would have bought back in when the SP was in the $300's and would still have gotten clobbered. Maybe that makes you feel better.

Yup. I sold 20% at like 410 or something. Invested that into other companies, lost a lot of it, the rest went back into safe Tesla in the 300s.

:/

 

[Beltsbear]

Counter... Elon selling on the Open Market increased the float in a transparent way (which must be shown in the S&P 500 float, and therefore TSLA weight in the NDX)

P.S. how far up did you climb that "wall"? Did you make it to the "this ends up the same way no matter when Elon sells?"

Your order of operations is wrong here. Elon did all of his selling after those S&P calcs were done, and that would not have made much of a difference anyhow. The daily traded numbers are so high anyhow.

Dark pool trades work and are legal. Elon did not use that tool because of an ideological reason, not because of money, in spite of money.

 

[2daMoon]

Isn’t a forced sale, due to a margin call, a good thing if the stock price keeps going down 10% a day? I wish I had been forced to sell a few months ago.

It seems to me that waiting for a forced sale runs the risk of significantly increasing the number of chairs that will no longer be at the table.

The earlier one chooses to sell to cover margin while approaching auto-liquidation, the more chairs they will be holding when the SP reverses.

I wish I had the foresight to have covered earlier.

 

[Rarity]

Regarding BRCM's fall in 2000/2001, the high was $274.75 in 3Q2000 and the low was $9.52 in 4Q2002. A 97% drop.

The fall was in the midst of large losses 2000 through 2003. Profitability wasn't restored until 2004. Altogether, the financials don't look similar to Tesla's.

Broadcom Corporation Form 10-K December 31, 2001
Broadcom Corporation Form 10-K December 31, 2002
Broadcom Corporation Form 10-K December 31, 2003

 

[insaneoctane]

I've found it does little good as a long-term investor to speculate about things we don't have enough information on to draw solid conclusions. I look at the overall picture and, to me, it looks like the result of orderly strategic decisions in the face of unexpected challenges, not chaos and poor planning.

I've also long cautioned about drawing long-term inferences from the granularity of results at a single location over a single period. It's the big trends that matter and the big trends continue to favor Tesla winning. The market is well-known to be over-reactive to unavoidable impacts. That's understandable when you have a company valued for perfection, but when it's valued this reasonably, it's just an over-reaction.

The plan to grow EV sales to huge volumes at increasingly lower price-points looks as intact as ever, and no one is better positioned in terms of production capacity and cost structure. Investors must remain clinical and calculated, not emotional and prone to bouts of imagination and fear. That's how you get taken advantage of. Remember, stocks can go higher than you ever dreamed of and lower than you ever thought possible. That's largely due to the fact that a lot of investing and trading decisions are made under the pressures of human emotion rather than a cold, calculated decision incorporating all the facts in an objective manner. Fear is the absolute worst enemy of an investor's performance. And if you are long without margin or time constraints, it's a heck of a lot easier to not let the chemicals associated with fear curse through your body and ruin your happiness and cause easily avoidable investing mistakes.

I'm not at risk of selling, but I'm depressed about how far the stock has to climb to get my purchases from earlier in the year out of the deep deep red. It's frustrating to have mis-timed things so badly such that I will own far fewer shares than if I were buying now because of my timing. I fully own that. I want to buy more today, but I am already irresponsibly low on cash. But I appreciate this post (and others) as it helps with perspective which keeps getting shaken these days. Thank you.

 

[Ogre]

Isn’t a forced sale, due to a margin call, a good thing if the stock price keeps going down 10% a day? I wish I had been forced to sell a few months ago.

Its good for the brokerage who gets all of the money from the sale. For you, it just means you are forced to recognize some losses and now you owe the brokerage company slightly less money.

You are I suppose better off if you took out $100k in margin versus taking a $100k second on your home to buy shares.

Reminds me. About 6-9 months ago I mentioned that I own my home free and clear. Someone suggested I should take out a loan and put the money into Tesla.

Tesla can drop to zero, I can lose my job. But worst comes to worst, I still own our funky looking dome house.

 

[Chunky Jr.]

On the bright side, my wife can no longer complain that most of our money is in TSLA. I look forward to her complaining about it in the future though.

 

[petit_bateau]

You are missing the entire Taiga for the forest, nevermind the trees: Within 5 yrs, 4 mths Elon will need to sell ~150 MILLION shares of TSLA just to pay the income taxes he'll owe on executing his CEO stock options before they expire.

How do you think Elon selling 150M shares within 5 yrs affects the SP? That's 30M/yr avg EACH YEAR. That's more than he sold in 2021, and more than he sold in 2022. EVERY YEAR, unless he sells them all at once (either ASAP, or as late as possible).

Look at the limits - first the lower time frame: Elon's excercise price is around $23/share. If the SP was still at that level (it was there 50 mths ago), then he'd owe NO INCOME TAXES (no net gain). He'd just need the $7B in cash in order to excercise the shares. Now as @mongo showed us upthread today, Elon can get that cash by selling half the shares (ouch), or by shaking his OTHER couches to find a space $7B. Then let the SP ride up over time, and pay just capital gains taxes on subsequent sales.

View attachment 889278

Now let's look at the Upper Limit - for convenience let's just call it the ATH of $412 from Nov 4, 2021. If Elon sells 150M shares to pay his imcome taxes at $421, he gets nothing, the Gov't gets $62B, and WORSE for TSLA shareholders, $62B in capital is extracted from the Market. What effect do you think that will have on Tesla's Market Cap?

Let's use the past 13 mths as a guide. Sure some of this drop is macros. Let's factor that out: QQQ down 33% since Nov 4, 2021 while TSLA is down 72.5%. Let's attribute ALL of the difference to Elon selling TSLA and bears jumping in on the shorting opportunity. That's a 40% drop in Mkt Cap, or roughly -500B in Mkt Cap due to the selling.

So that's the estimate of our ratio of Elon's selling to the drop in Mkt Cap: Elon sold ~$40B in shares and it cost $500B in Mkt Cap, so that's approx a 12:1 ratio of shorting to selling. And that's how you estimate how Elon selling 150M shares within 5 years would affect the Mkt Cap: it'd have about the same affect as selling 1.8B shares of TSLA which is roughly 80% of the float. Yeah. Gulp. This is an unavoidable future, IMO. There IS NO dark pool big enough to float 1.8B shares of TSLA. Even the S&P 500 addtion as only about 600M shares (about a third of the selling Elon needs to do)

Where do you think that would leave the SP? Below $23? At what point in selling can he execute and not pay any income taxes? Do you see the point I'm trying to make is that BOTH alternatives (sell now, or wait to the end) winds up with a substantial dip in the SP, and Elon selling most of his shares in a lump while paying minimal taxes? Isn't it better to do this sooner, get the disruption over with, so the company can built value back into its SP?

How can we avoid this? Elon has to excercise all his stock options at a SP low enough that he can pay the income taxes in cash. And given the number of shares involved, it's better if he can afford to but more with any set amnt of cash he may have, then he'll have to sell half of the rest to pay the taxes. It's just that simple. And that's best case, if he still have the fire in his belly after this decades long grind. Maybe he'll want to get out, maybe he'll want to stay in (we're generally not helping ATM).

At any rate, this is my profound hope. And hope is a dangerous thing...

Cheers to the longs!

Well said by you and @mongo . Toss in Musk saying he'll not be selling TSLA for the next year or so. Add in his [other businesses] not necessarily executing iaw his gameplan. Add in the timing of the next US election being Nov-2024, i.e. the dressing of the shop window needs to be ready by Nov-2023. And Ukraine needs to evict their unwelcome Russian guests by late-2023 to fit with this and more. Which all kind-of sets parameters around the recession that is washing around the world at present. It all makes for an interesting squeeeeze.

(I hold, no margin in sight)

 

[Nolimits]

Whelp, looks like it's time for another trip to the store. Hic.

Miss those days when we’re were popping teslaquilas at 10% jumps instead. My 111 limit hit. Not sure if I am happy or sad about this..

 

[2101Guy]

I am interested in peoples views about how low the stock can go and the reasoning to help me time further buys.

I think the first quarter of next year will be difficult due to the effect of higher interest rates and China letting covid work its way through its population.

So I am thinking quarter 2 might be a good time to buy.

My view is that between a combination of the Twitter distraction/impact, continued global supply chain issues, Tesla having reached its peak from the aspect of % of marketshare for EV's globally (competition continues to ramp up..slowly but steadily), Tesla will continue to lower prices and offer incentives/discounts, Tesla nowhere remotely close to having FSD reach the level 5 that its CEO promised, zero chance of Robotaxi service anywhere in the near or mid future, (people starting to truly see behind the curtain), a CEO who has gotten very political vs when he used to only really tweet about technology and its impact..and demand dropping? Those are but a few factors that will continue to push the stock price downward

 

[verystandard]

I'm not at risk of selling, but I'm depressed about how far the stock has to climb to get my purchases from earlier in the year out of the deep deep red. It's frustrating to have mis-timed things so badly such that I will own far fewer shares than if I were buying now because of my timing. I fully own that. I want to buy more today, but I am already irresponsibly low on cash. But I appreciate this post (and others) as it helps with perspective which keeps getting shaken these days. Thank you.

I'm on similar boat as I'm in TSLA more during April/May downturn (buy the dip) on top of what I got from 2019. I stopped pouring cash into this dumpster fire since months ago and avoid using margins.

I'm slowly lining up my money into the trading accounts now but refrain to buy further until 2023. I've catched enough knife this year. No Margin or Calls yet

 

[Nocturnal]

EVs/growth is being doubted by the market. Rivian lucid and Tesla are down 7-10% today. GM and Ford are down like 1-1.5%.

The market is completely wrong here of course. Loose lending, low rates, and supply issues has a lot of people in cars they can’t afford. That is going to really hurt legacy auto.

 

[ntam]

https://twitter.com/x/status/1607828750795956224

Elon is still very happy while some of TSLA investors are wondering if in 10 trading days, TSLA will be below $40. 10-12% drop a day will do it.

 

[verystandard]

Miss those days when we’re were popping teslaquilas at 10% jumps instead. My 111 limit hit. Not sure if I am happy or sad about this..

You mean this guy with his rooftop presentation?

 

[2daMoon]

EVs/growth is being doubted by the market. Rivian lucid and Tesla are down 7-10% today. GM and Ford are down like 1-1.5%.

The market is completely wrong here of course. Loose lending, low rates, and supply issues has a lot of people in cars they can’t afford. That is going to really hurt legacy auto.

You get a gold star for using the word "loose" correctly.

Thank you

 

[TSLA Siempre]

It is a stretch. We don't know how many 4680 lines are ready to go live. The 1000/wk is a mere dot on a curve. They could stockpile for CyberTruck like they did with the early castings, or feed a Semi ramp right now. Yes, that's more likely, but I also think we're long overdue for a surprise. So here's my best guess, then I'm back to work.

stockpiling cells is unlikely as it would only provide a temporary supply. need to match cell supply rate with production rate. otherwise wouldn't make sense to set up the factory for it.

 

[Ogre]

Kind of curious from the TA perspective.

Now that we’ve visited every SP from $400 down to $111. Will people be talking about “Filling the gap” anywhere between here and there? What is the expiration on gap fill need?

If Q4 is a blowout (not a prediction), and Tesla surges to $200/ share in a week. Will TA peeps be talking about “Filling that Gap Up”? What about blasting up to $300 and leaving a bunch of gaps in between?

 

[mongo]

Alternate uptick rule triggered...