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

[unk45]

@unk45 I would be really grateful to take up your offer "If anyone really wants to know the arcane rules, several of us, including me, can provide all the excruciating detail." specifically in regard to two UK brokers who I think handle the vast majority of UK private retail shareholders:

- ii (interactive investor – the UK’s number one flat-fee investment platform) who are actually a US private equity front, so I'm sure they know how to run this angle
- Hargreaves Lansdown (Benefit from an award-winning investment service) who are never known to willingly turn down a profit

The vast majority of UK private retail shareholders who trade via those two brokers will be long-only, i.e. they hold their shares "free and clear", like myself. In the case of ii they don't offer options trading at all (Trade options at Interactive Investor) and I think HL is similar (I'm not sure, their fee structure never convinced me). Most UK retail options traders use spread betters as their platforms, not brokerages, unlike the USA.

I think UK retail is second only to US retail in being private holders of TSLA, so this is a question worth pursuing a little. In the past when I've tried to pursue it I've not found an answer. Certainly TSLA appears to be the #1 share choice of all UK private retail investments into USA. As you say this lack of an answer, is likely to be deliberate obfuscation !

So if you can figure out an answer that would likely be of great interest to a lot of folk in the UK.

Bottom line:
- I think UK retail TSLA shareholders are having their stocks lents out to TSLA shorts (via custodians), with no say in the matter;
- I think UK brokerages are profiting all of the short-lending fees, not passing through any to the specific named beneficiaries;
- And there is zero disclosure regarding this to UK retail TSLA shareholders from any of the UK retail brokerages.

Although the specifics are in process I should explain why this takes time.

Under EU rules most of these activities are subject to explicit laws and regulations. Post Brexit
much has changed. Nadhim Zahawi explicitly sought "competitiveness" and adopted a "call in" rule to ensure political control of rule making in finance. Careful research in public sources shows clearly the financial industry enthusiasm for the new approach, which still inhibited City global market dominance due to all the factors those familiar with the UK know.

My best sources in the UK predate Brexit, so require careful updating.
For those who really want to know, the best starting point, in my opinion, is this:

https://www.esma.europa.eu/sites/default/files/library/esma70-448-10_final_report_-_short_selling_regulation_review.pdf

One specific quotation fairly described the dilemma:
"ESMA concluded that the European long-term bans of 2020 had mixed effects, since on one side they entailed a deterioration of market liquidity but on the other side they diminished the volatility of the concerned shares"
With that brief quotation the dilemma is made clear. That is simply stated, brokers, market makers and large institutional investors make huge profits from volatility, that itself is increased by short selling, which benefits large institutions by lending shares, broker/dealers by shorting securities for which they can directly effect pricing movements. In the fine print of background data it is clear that mid-cap securities have the 'sweet spot' because of enough volume to be liquid and small enough volume to manipulate easily. (Note: TSLA has been for some tine the largest cap security with high volume shorting).
Coming next is the post-Zahawi UK issues.

 

[nativewolf]

Because affordability is a bell shape curve where the majority of people would buy a car that cost under 30k. So a 10k reduction in this segment is huge. It doesn't matter much if there's a 10k reduction between a 60k car and a 50k car.

It's almost like the 10 year age gap doesn't matter between a 60 year old and a 50 year old. But a 20 year old wouldn't want to date a 10 year old.

Since price cuts had a dramatic impact on sales that seems to fly in the face of facts and reality.

 

[Singuy]

Since price cuts had a dramatic impact on sales that seems to fly in the face of facts and reality.

Tesla may have gained a few hundred k in customers from their 15k(with incentive) price cuts, but a 10k price cut from 40k to 30k will see Tesla gain a few million new customers. Then if you go from 30k down to 20k we are talking about gaining 10+ million new customers. BYD's most popular car they have a hard time keeping in stock is in the 20k range.

The top down approach ensures Tesla always making the highest margins while scaling production according to potential demand. It's a waste of margins to produce a 20k car when you can't meet a 10m+ yearly demand.

 

[Unpilot]

Don't get me wrong, I'm too are really looking forward to master plan 3 and investor day. However, don't these types of events almost every time end up with being something the broader marked does not understand? So a short term negative?

Perhaps...and if so it is why if you HODL you get rich.

 

[Mengy]

Don't get me wrong, I'm too are really looking forward to master plan 3 and investor day. However, don't these types of events almost every time end up with being something the broader marked does not understand? So a short term negative?

The Master Plans don't move TSLA much on reveal day, the plans are all about finding out what will be moving TSLA in the near future.

My gut feeling is MP3 will be about immense battery production plus the Gen 3 vehicle platform, the two things which are most likely to scale Tesla into a behemoth of a company. You know, a company larger than Apple and Saudi Aramco combined.

 

[DragonWatch]

You have more than seventy legs? No wonder they keep you in a dungeon.

Yes, keeps me one step ahead.

 

[JRP3]

Elon's antics did not do brand damage to Tesla in 2022, and in Q4 specifically.

That conclusion cannot be drawn from the data.

 

[bkp_duke]

That conclusion cannot be drawn from the data.

Let's be more precise.

NOT ENOUGH "BRAND DAMAGE" WAS DONE TO PREVENT TESLA SALES FROM CONTINUING TO GROW BOTH IN MARKET SHARE PERCENTAGE AND ABSOLUTE NUMBER IN THEIR LARGEST MARKET.

 

[2daMoon]

Let's be more precise.

NOT ENOUGH "BRAND DAMAGE" WAS DONE TO PREVENT TESLA SALES FROM CONTINUING TO GROW BOTH IN MARKET SHARE PERCENTAGE AND ABSOLUTE NUMBER IN THEIR LARGEST MARKET.

But, but, but, there were half a dozen TMCers whose regard for the brand were damaged.* What about them?
/s

* These members will identify themselves in the Likes by clicking the Disagree button

 

[JRP3]

Let's be more precise.

NOT ENOUGH "BRAND DAMAGE" WAS DONE TO PREVENT TESLA SALES FROM CONTINUING TO GROW BOTH IN MARKET SHARE PERCENTAGE AND ABSOLUTE NUMBER IN THEIR LARGEST MARKET.

That is the correct assessment.

 

[thx1139]

But, but, but, there were half a dozen TMCers whose regard for the brand were damaged. What about them?
/s

I was one and was perfectly clear were talking long term damage. Will be far more difficult to jump from 10M a year in sales to 20M compared to 1M to 2M.

 

[2daMoon]

That conclusion cannot be drawn from the data.

Still waiting for this data to be added to the post before the edit period expires...

 

[NicoV]

Will be far more difficult to jump from 10M a year in sales to 20M compared to 1M to 2M.

Why?
There will be less reasons not to buy an EV when Tesla is at 10M yearly sales than now.
On the contrary, there will be more reasons not to buy an ICE (when Tesla is at 10M yearly sales I expect range anxiety to have become a problem for ICE owners (gasoline sales is a low margin business that needs volume to survive. That volume will have disappeared by then, and we will see the trend towards less gas stations accelerate tremendously ))

 

[bkp_duke]

I was one and was perfectly clear were talking long term damage. Will be far more difficult to jump from 10M a year in sales to 20M compared to 1M to 2M.

Based upon . . . your gut? Data to support this assumption please, because the available empiric data says this assumption is just flat out wrong. Tesla ACCELERATED sales in the market with one of the largest "groups" he pissed off, according to you. That's staying power right there.

I said it months ago, but it bears repeating - the VAST VAST majority of people make auto purchases based upon quality and finances, nothing else. Virtue signaling is for a super-slim minority (in this case an EXTREMELY LOUD minority).

 

[EverettRuess]

Based upon . . . your gut? Data to support this assumption please, because the available empiric data says this assumption is just flat out wrong. Tesla ACCELERATED sales in the market with one of the largest "groups" he pissed off, according to you. That's staying power right there.

I said it months ago, but it bears repeating - the VAST VAST majority of people make auto purchases based upon quality and finances, nothing else. Virtue signaling is for a super-slim minority (in this case an EXTREMELY LOUD minority).

Everyone I know is disgusted with Elon and will not buy a Tesla. They will find another brand of EV. That is my gut.

 

[bkp_duke]

Everyone I know is disgusted with Elon and will not buy a Tesla. They will find another brand of EV. That is my gut.

You yourself have admitted you live in a far-left leaning bubble.

The DATA, however, is that even in a very left-leaning state, that is also Tesla's largest market on the planet, sales ACCELERATED.

Really sucks when HARD DATA gets in the way of a narrative that people want to spin.

 

[2daMoon]

Everyone I know is disgusted with Elon and will not buy a Tesla. They will find another brand of EV. That is my gut.

Sounds like maybe you aren't hanging with the crowd setting the trend?

 

[EverettRuess]

You yourself have admitted you live in a far-left leaning bubble.

The DATA, however, is that even in a very left-leaning state, that is also Tesla's largest market on the planet, sales ACCELERATED.

Really sucks when HARD DATA gets in the way of a narrative that people want to spin.

I live in a county (the size of Connecticut) that is as far right as anywhere in the country and they will not buy an electric car period. All of my friends are supportive of the Tesla mission but will not have anything to do with Elon. They will buy another brand.

 

[wtlloyd]

I live in a county (the size of Connecticut) that is as far right as anywhere in the country and they will not buy an electric car period. All of my friends are supportive of the Tesla mission but will not have anything to do with Elon. They will buy another brand.

The entire state of Utah has 1% of USA population. Not gonna look there for trend setting, thanks.

*Edit - in addition, 66% of the state population is Mormon. This demographic (religion) quality does not repeat in any other State in the Union. You live in a virtual outlier ("different from all other members of a group or set")

 

[2daMoon]

I live in a county (the size of Connecticut) that is as far right as anywhere in the country and they will not buy an electric car period. All of my friends are supportive of the Tesla mission but will not have anything to do with Elon. They will buy another brand.

Are the auto registration records for the county publicly available?

If so, please post up the stats for Tesla registrations in the county over the past several years. This should definitively show whether or not there is any substance to the claim you are making.