TSLA Market Action: 2018 Investor Roundtable

[loky]

SpaceX is valued at $27.5b:

"SpaceX valuation shows ‘an unlimited amount of funding’ available in private markets, Equidate says"​

Elon owns maybe 60% of it, which is $16.5b. He wouldn't be able to borrow nearly as much though - but a couple of billion certainly.

Not sure he has to do any of this: Q3 financials are only ~3 business weeks away.

Kudos to Fact Checking for great contribution to this forum.
Just to add, approximately, EM trust owns 54% of Spacex stock, but has 78% of voting rights.
Edit: exact numbers..

 

[dqd88]

I don't think the two qualities are necessarily exclusive: I'd like an idealist shark.

That was Steve Jobs

 

[dqd88]

Don't forget that TSLA shorts want this forum to go away.

Just curious - did they actually state that somewhere?

 

[dondy]

This probably futile, but...

How are longs any different? If I buy a share of Apple tomorrow and go long, my bid will have some microscopic effect on the share price (or "opinion"), I will have contributed nothing of value to the Company, and I will absolutely be trying to make money off the labor of others. Aren't we all really playing the same game? How can I be good when I'm long, and evil when I'm short?

of course you are playing very different game. One is building his personal 401, you just gamble hoping for stupids.
And the worst problem is because Exchanges earn money on the people like you, they advertise shorting, and even pay some BS "professors" to rational shorting.
How on earth an intermediary who takes big "fee" can "help" buyers and sellers find each other is beyond my understanding....

 

[Jayjs20]

Man, never thought I'd lose 40k twice in one week. Oh well, still waiting for it to shoot up to 380 again.

 

[BioSehnsucht]

his issue is with index funds managers making money by the lending shares they don't own personally, which are used to suppress or drop value of respective companies. Which would also mean that the owners of these shares actually are loosing real money.

I recall one of the reasons TSLAP didn't happen was all these big institutional holders had their own rules that would prevent them following TSLA into TSLAP, even if by some miracle something was crafted that let us small time retail investors stay in.

Maybe that wouldn't be so bad? Sure you lose a few friends, but he seems to be implying that quite a few more big time holders might actually be actively harming the value of the stock by lending to shorts ... and if they got locked out, so would the shorts (even if the shorts could otherwise have continued to obtain shares to short).

 

[Tslynk67]

Holy crap. I can take the rollercoaster of the Elon Musk Experience and the SP ride, but catching up with this forum twice a day is taking a massive toll on my available free time

So, after dredging through, 25 pages this morning - 20 pages = 1 hour in my experience, here's some responses rolled-up into one single post that you can easily skip.

TL;DR - not selling anything, I'm going down with the ship or up to Mars on the BFR, not sure which as of yet...

Musk has lost his mind. First he calls Montana Skeptic "Hannah Montana", now this.

Actually, he referred to MS as "she" and I responded that he mean HM, which he then responded to with the twerking photo. No idea if he meant HM from the outset, I guess Montana is a girlie name in the USA too, right?

The extreme hypocrisy on this board baffles me! 95% of the people on this board wanted Elon to fight the SEC and said they were helping shorts. If you can’t handle Elon saying what ALL of us were thinking, get out.

I wanted him to fight the SEC charges as I think they're not correct on this, but when he settled, I decided to move-on. So I'm not sure why he's stirring the pot again, but I do know he has a strong aversion to injustice, so can just be that.

But now the tweet about v9 rollout progress almost seems like business as usual, makes me think he isn't planning to step down after all!

Yeah, don't think he's drunk or anything, he's just angry.

Are we calming down now? Where did all these hysterical people come from?

Always the same when there's some kind of shitstorm ongoing - loads of trolls suddenly show up and a few that were borderline reveal themselves for what they truly are.

Apart from a few snide comments, I haven't really commented about this news. My take (and it starts with Elon's tweets:

In each case, I started writing a reply, about how yes, but the company's value is boosted by a perceived benefit of being a trendsetter led by a renegade upstart, and that Musk's actions eliminate this boost, as well as opening up the company to potential liability. But each time, I stopped myself, because, honestly, at a fundamental level...

He's right.

Tesla is not Musk. Musk could die in a plane crash tomorrow, JB would take over, and business would keep going as usual. I'm not even sure that there's an actual stock benefit to Musk's presence right now. I actually think the opposite, that he has a depressing effect on the stock. I don't believe that, fundamentally, Tesla's high revenue to market cap ratio is due to Musk; it's due to Tesla's reputation. Yes, the market would freak out if Musk was gone, but as soon as the next several pieces of good news come out about how the company is eating everyone's lunches in the march toward the future (electric vehicles), people would remember why they invested in the company to begin with.

Remember the freakout over Eberhard's departure? People left and right threatening to cancel their Roadster orders? How did that play out? People forgot about it amazingly fast, because... well, Tesla is Tesla. A damned good company making damned good things.

Once you stop caring so much about the "how will the market react if Musk is gone???" panic, you realize that what you're left with is... Tesla. And that remains a great thing. And even if people forget that for a few weeks, reality will keep butting its head in.

Does that mean I want Elon gone? Hell no; I love his aggressive moat-bridging strategies. Would I like him to be filtered on Twitter and to take a vacation? Hell yes. But ultimately, he's right. This is noise.

So Elon is having some "human time" right now on Twitter. I write "human time" because it's oh so easy to forget, Elon is a person too, a person who's going through some pretty awful times right now, and wants to vent. We take for granted that we can come here and vent our feelings and hear back from our peers who share our interests. Strangers. Friends. Foes who you love to hate. It's why we're bloody well here. But Elon can't do it without the entire world freaking out and billions of dollars disappearing overnight.

And he's clearly taken the attitude: "Well, F*** that." What matters "probable value of future cash flows". Wall Street can think he's the freaking devil, it doesn't matter; he has no plans to turn to them for capital. So long as Musk doesn't cut into Tesla's fundamentals - sales and margins - it's immaterial. And FYI, most of the things we freak out about, like him smoking pot on Joe Rogan, actually only serve to increase demand by increasing Tesla's publicity and establishing him as an iconoclast that you either love or hate. Yes, he does take it too far sometimes - he needs a filter to catch the actually damaging controversial statements (e.g. "pedo guy"), versus the ones that just freak out the market for a week or two.

But in general, he's right: it's noise. It's all those dips on the stock chart from months ago that you can't even remember why they happened.

Now, could the noise hurt him, rather than Tesla? Of course. Bit by bit, "outside forces" (pressure from institutional shareholders, mandates from the SEC, etc) have been weakening his hold on Tesla. He could be thrown to the wolves at any point. Does he fully grok that? Maybe; I don't know. But as a shareholder, it's not Musk's fate (and the temporary dip that would follow his ouster) that I care about. It's the long-term horizon.

Keep some dry powder. Expect freakouts. Maintain an investment horizon, and don't let it be too short. And watch the fundamentals. Elon is not a fundamental. The ability to massively scaleup sales while growing margins is what we care about.

Longs shouldn’t care about the daily stock price unless we are looking for buying opportunities.

This is a great post. Tesla is where they are today thanks to Elon's vision, ambition and determination. Does that mean he's needed to push it forward to the next level? I don't know the answer to that, but he has my total trust, regardless.

Maybe he is trying to trigger the up-tick rule?

Excellent plan - drop the stock 10% on purpose to stop it dropping 5% from shorting!

He *never* cared about that.

Don't actually agree with this. He's seemingly not motivated on a personal level by money, after all he has enough now that he can live any life he pleases. However, Mars colonisation needs funding, so that's what he's after.

What are you referring to? I don't see any follow-up tweets.

On Twitter you beed to go to @elonmusk and click on the "Tweets and replies"

Oh no - he is still on Twitter. Is there an app that can send notifications to me when EM is on twitter ?

Erm yes, it's called "Twitter" - you can set a notification for when Elon tweets

Short selling is often unpopular with retail and with the more ignorant or cynical kind of politician, but I've never met a serious economist or market participant who didn't understand it makes the market more efficient and less prone to over-shoot.

Sounds all very nice, but an idealistic and naïve point of view. When shorting is used as a tool to manipulate the SP, that's another thing, when the shorts spend all their time spreading FUD and lying about the company on social media that's another level again.

If you’re talking about TT007, from what I’ve seen, he plays options a lot and has lost a ton from that. Holding out doesn’t help much when your calls expire worthless.

He was holding around 55k common shares until the some months ago, then he converted all to options.

52 is young. For some of us 52 sounds very young.

Yah, I'm young!!

That’s almost 5x the average daily volume. How could 51m shares be accumulated without a significant increase in price?

So how long does it take for Deepak to work through the numbers for the quarter? Is it something that Elon would have known on Monday 10/1? Or does it take some days for confirmation? If they were good, would it be reasonable to expect Elon to somehow share this information, especially with the stock tanking? Because we haven't heard anything, is that a bad sign?

Thing is, are Tesla/Elon allowed to say anything before the Q3ER? And why aren't they allowed to say anything? Why do they need to wait? Is this this US company law?

 

[dondy]

Short selling is often unpopular with retail and with the more ignorant or cynical kind of politician, but I've never met a serious economist or market participant who didn't understand it makes the market more efficient and less prone to over-shoot.

Shorts do exactly opposite. Stocks with minimal shorts behave better and less over-shoot. Shorts add volume and time for variations, thus add significantly volatility. Volatility requests analysis and expertise from long traders, hence many funds bail too quick, or follow speculative buys.

 

[Fact Checking]

How confident are you that shorts and FUDmeisters will magically stop when confronted with 1 quarter of positive news?

The delivery statement was possible to neutralize because it's a Tesla specific report, where most investors are not prepared to interpret them, so they rely on proxies.

Earnings reports, issued by thousands of companies every quarter and read by many, many specialists is an entirely different matter. The 2013 "short hug" started with an ER as well.

I count on shorts not quitting. The people who will come out of the woodwork after the Q3 or Q4 ER are money managers who see, based on the quarterly statement, that TSLA is significantly undervalued. More will do so in Q4, and even more in 2019 when Tesla is upgraded by Moody's and added to the S&P 500 later that year.

The most shorts will be able to do at that point is to provide liquidity.

 

[gora321]

WLTP is hammering:

UK sales drop 21% after WLTP introduction
German sales fall 31% on WLTP
Italy sales plunge 25% on WLTP change

 

[Ellec]

Re Elon's tweets. He is making sure the cannon is packed full of gunpowder before igniting the fuse.

 

[dqd88]

You're not getting it. I do NOT hope my action will make the market reduce the price. I simply expect the combined wisdom of the market will eventually reduce the price, regardless of my modest investment. Same as I expect the market will increase the price, when I am long.

Shorting is a problem when the shorts spread lies. They should be jailed for that

 

[dqd88]

Seems illogical. Over the long-term shorts can't make a stock go down because we have to buy it back. All that we can do is smooth out some peaks and try to assess the fundamental value.

You HAVE TO make the stock go down because you have to BUY IT BACK at a PROFIT. Hence you are super incentivized to spread lies and deceit and if you do so you should be locked up in solitary confinement for a few years.

 

[Right_Said_Fred]

Man, never thought I'd lose 40k twice in one week. Oh well, still waiting for it to shoot up to 380 again.

Stop speculating, start investing.

 

[dqd88]

And this is where his mind plays tricks on him.
You can have the best product in the world, if the image is ruined nobody’s interested.

It’s uncool.
Tesla is becoming uncool through his fallouts.

It only seems that way to us because we're in the weeds (of the stock hubub).
I asked a couple people who don't follow stocks if the drama would affect their decision to purchase the car and they said no.
I think most people just don't care or think about it, if they like the product they'll buy it.

I think it does make institutional investors skiddish though. They have to show decent returns as they have pensions and stuff to pay, so they can't be making huge gambles and will pare down if things looks shaky.

 

[Teslie]

Shorting is a problem when the shorts spread lies. They should be jailed for that

Yeah, please...sue me or it is not true...

 

[dqd88]

Now he's thinking like a short!

I have no problem with shorting based on overvaluation. It's only when shorts spread lies... they should be prosecuted. They can get away with it because it's a bunch of "little guys" supposedly, but if you add them up in aggregate it's very damaging. And when media outlets (NYT, Bloomberg, et al) do it, they should be sued for libel.

Netflix I think would be a sound short.
Or some of these stocks that pop from an IPO frenzy
Snapchat would've been a decent short.
RH might be a good one.
I'm sure there are hundreds, maybe thousands.

I get it.

But Tesla I would never short. Too much revenue acceleration. Awesome product. Really the only player in a new industry is how I see it. EV is very different than ICE and Tesla is years ahead. Plus I've hated ICE since I was a kid, I always though it was an antiquated way to move things around. I connect w/ Elon's thinking; to me he's the most pure and logical thinker around. He makes total sense.

I get the short's thesis on Tesla (though even within the short community there are various theses and motivations it seems, most quite nefarious). They are desperate to find the next Enron and they are 100% certain it's Tesla. Though the two are night and day. You hear most shorts brag about their earnings... yet in the macro I read that shorts have mounted heavy losses in this long bull run. So they are desperate for a comeback, and it has to be Tesla. The perfect target.

But they aren't seeing far enough into the horizon. A changing world. A paradigm shift. Tailwinds from governments, consumers. Lowering battery costs. And a man who has figured out a viable path for EVs. Not many can see the path. Most on this board do see it. Tesla is executing quite well. Nothing's guaranteed. But the model 3's success, now undisputable and realized, has ensured escape velocity for Tesla and the EV revolution.

 

[aubreymcfato]

So, given the current Elon and Tesla situation, do we all agree to NOT lend our shares to shorts?

 

[Chartered321]

Short term the market can manipulate the stock price, that's the rule of the game. Long term is all about fundamentals, NOT technical analysis. Options, naked short selling and structured products should be only used as insurance strategies. People that buy options without the aim of hedging their core positions are cowboys, plus, if their strategies are based on technical analysis, they're just fools that need to go back to school and learn how the stock prices move. If you lose speculating the one and only person you should blame is you.
The trend of TSLA the stock is clearly negative, it has to be supported by fundamentals to experience an inversion of trend. That has to be supported by actual 3Q18 results. Manipulation and macro can hinder the valuation for a while but never forget: the price of a stock is today's discounted value of the future cash flows. And it seems that many institutionals are blind for the moment...
As I said TSLA is not a normal stock or unicorn or concept, it's a WAR stock, with all the consequences that you know.
It's up to you if you wan't you mummy and cry or hold tight and don't panic.

 

[mrdoubleb]

So right now TSLA is down in Germany (DAX) 1.92%, while the entire market is down ~0.6%. I really don`t see anything overly dramatic, certainly nothing like the SEC panic a week ago.

Hopefully this chills some nerves here.