TSLA Market Action: 2018 Investor Roundtable

[SpaceCash]

From your article:

"This is somewhat of a historic venture as Tesla is attempting to build the first auto factory in China that is wholly owned by a foreign automaker."

Seriously, how many "firsts" and "bests" and "mosts" and "safests" and "fastests" does Tesla need to rack up to persuade public market sentiment?

Apparently a few more...

 

[avoigt]

If more shares are around then by definition there have been more trades.
If Long Corp starts with 10 shares. Then someone borrows 10 to sell short, then 20 trades have been executed in total, and 20 long positions created, rather than the original 10 trades+long positions.

More virtual shares = more actual trades/transactions. Unless I'm wrong

Definitely more trades but I believe there is a strong confusion here about what a share is be it real or virtual. I tried to explain it with stares traded at a particular time whereby with shares I meant the lent out share and the one the short sold but has to give back if the long want to trade it. But that again created confusion with people.

I believe we should close that topic as I don't feel it can be explained in detail that easy and short.

Nevertheless the summary is that the underling effect of shorts have a negative effect on the SP and enables shorts more effectively to depress and manipulate the SP more easily versus the instruments longs have to push the SP up.

I call this an imbalance of the market instruments. Its unfair and not justified and has in my view no business purpose. Its not allowed in many countries for good reasons.

 

[Sudre]

come on people there has to be at least a few more people on the forum who haven't disagreed? Come on, I'm going for the RECORD!

pls head back to this link and click DISAGREE.

TSLA Market Action: 2018 Investor Roundtable

and while you're at it, make sure to go back and find the posts where I said earnings would be in November, and we'd get under 250$. Make sure to disagree again to those posts soon before any past prediction will turn into fact.

I went back and hit ya up for another disagree. Wouldn't want you to fail on your record attempt.

You may win on the ER in November but miss of the below 250. Going to be a close one.

 

[ggr]

I'm ambivalent on the capital raise (pref debt). I'm just saying... if we're sitting around asking what would cause investors to dive back in and what would bring in new investors... capital raise is one thing (eliminates fear)... because it would eliminate the argument that Tesla won't be able to make due on debt payments. This is a negative... even if it's a falsity, it's being used by shorts/media and harms the SP.

The way my mind works - I would layout all the negatives and then ask how to negate those. If Tesla operates in the public markerts and cares about SP then they have to play politics to some degree. This is why I would prefer Tesla as a private co.

Easy to negate... just pay off the debt. Pay early as soon as the cash situation allows.

 

[humbaba]

I don't see how I was wrong. If a physical share is loaned to a short and then sold, then virtually there are now more total (physical+virtual) shares ie "more shares around". The only way to get to that point is through trading. There can't be a new long buyer who bought the short sellers trade without a trade. Hence more total shares (physical+virtual) requires more trades. But I could be wrong

You weren't qualifying it as short sales. You said number of shares was tied to number of transactions. They correlate extremely loosely.

[edit: I'm not trying to be pedantic, I'm trying to explain why I responded]

 

[MP3Mike]

I don't see how I was wrong. If a physical share is loaned to a short and then sold, then virtually there are now more total (physical+virtual) shares ie "more shares around". The only way to get to that point is through trading. There can't be a new long buyer who bought the short sellers trade without a trade. Hence more total shares (physical+virtual) requires more trades. But I could be wrong

Let's try an extreme example: There is a new start-up going IPO called ACME. Bob, Jim, and Nancy really like the idea and want in and they happen to share the same broker. Bob and Jim use margin accounts with active balances while Nancy is using an account that doesn't permit loaning shares. Mark thinks ACME is a scam and wants to short them. ACME issue 100 shares and Bob gets them all. Mark borrows Bob's shares and sells them to Jim. Mark borrows Jim's and sells them to Nancy. There are now three people that think they own 100% of ACME. Bob, Nancy and Jim all want to hold on to ACME for many years. Bob decided he wanted paper stock certificates to frame on his wall. His broker tries to recall the shares but Nancy, the current holder of them, refuses to sell them at any price, as such Bob can't get his certificates. Now Bob becomes disillusioned and places a sell order for his shares, which Nancy happily buys, so his broker again tries to recall the shares but Mark is unable to return the shares he borrowed since Nancy refuses to sell them. Nancy now owns double the actual available shares, what happens next? How does Mark make the broker whole? Is Nancy's latest trade unwound?

 

[dqd88]

Easy to negate... just pay off the debt. Pay early as soon as the cash situation allows.

Yes, that is months away. I'm cool w/ that. But there are some here, I thought you were one, who seem concerned about nearer term SP.

 

[dqd88]

You weren't qualifying it as short sales. You said number of shares was tied to number of transactions. They correlate extremely loosely.

[edit: I'm not trying to be pedantic, I'm trying to explain why I responded]

My point was that if there are "more shares around" then there have to have been trades. Ie - You can't have more shares without more trades. But you can have more trades without more shares, as you stated.

 

[SpaceCash]

Let's try an extreme example: There is a new start-up going IPO called ACME, Bob, Jim, and Nancy really like the idea and want in and they happen to share the same broker. Bob and Jim use margin accounts with active balances while Nancy is using an account that doesn't permit loaning shares. Mark thinks ACME is a scam and wants to short them. ACME issue 100 shares and Bob gets them all. Mark borrows Bob's shares and sells them to Jim. Mark borrows Jim's and sells them to Nancy. There are now three people that think they own 100% of ACME. Bob, Nancy and Jim both want to hold on to ACME for many years. Bob decided he wanted paper stock certificates to frame on his wall. His broker tries to recall the shares but Nancy, the current holder of them, refuses to sell them at any price, as such Bob can't get his certificates. Now Bob becomes disillusioned and places a sell order for his shares, which Nancy happily buys, so his broker again tries to recall the shares but Mark is unable to return the shares he borrowed since Nancy refuses to sell them. Nancy now owns double the actual available shares, What happens next? How does Mark make the broker whole? Is Nancy's latest trade unwound?

And thus, phantom/counterfeit shares are created. There are instances where this has permanently diluted stock in the literal, classic sense. It's pretty messed up

 

[ZachF]

"Stock price is depressed" is an opinion though. It's not a fact. A decline in macro conditions and this stock goes down further, car sales tank across the board and investors wring their hands about the whole sector in a "sell first, think second" manner. A billion dollars would do a lot for derisking and is a pretty small dilution. The news flow is substantially more negative than otherwise I believe because of the low cash balance. There's always a risk that the media negativity infects the customer demand in a reflexive manner. I consider Tesla a potential 20x return stock and I'm 100% willing to accept a 3% dilution to derisk the downside personally. If everything turns out hunky dory than Tesla's cash demands will increase faster than actual operational cash because at that point they will think more aggressively about cap.ex.

Remember, even at these depressed prices, Tesla is still America's most valuable car company by market cap... Ford and GM have been getting blasted just as hard if not harder than TSLA.

As of today:
$44.52b Tesla
$44.22b GM
$33.52b Ford

 

[dqd88]

Let's try an extreme example: There is a new start-up going IPO called ACME, Bob, Jim, and Nancy really like the idea and want in and they happen to share the same broker. Bob and Jim use margin accounts with active balances while Nancy is using an account that doesn't permit loaning shares. Mark thinks ACME is a scam and wants to short them. ACME issue 100 shares and Bob gets them all. Mark borrows Bob's shares and sells them to Jim. Mark borrows Jim's and sells them to Nancy. There are now three people that think they own 100% of ACME. Bob, Nancy and Jim both want to hold on to ACME for many years. Bob decided he wanted paper stock certificates to frame on his wall. His broker tries to recall the shares but Nancy, the current holder of them, refuses to sell them at any price, as such Bob can't get his certificates. Now Bob becomes disillusioned and places a sell order for his shares, which Nancy happily buys, so his broker again tries to recall the shares but Mark is unable to return the shares he borrowed since Nancy refuses to sell them. Nancy now owns double the actual available shares, What happens next? How does Mark make the broker whole? Is Nancy's latest trade unwound?

Is this going to be on the final exam? Made my head hurt.

Would make for a good Nolan film. #shortception

 

[mongo]

Let's try an extreme example: There is a new start-up going IPO called ACME, Bob, Jim, and Nancy really like the idea and want in and they happen to share the same broker. Bob and Jim use margin accounts with active balances while Nancy is using an account that doesn't permit loaning shares. Mark thinks ACME is a scam and wants to short them. ACME issue 100 shares and Bob gets them all. Mark borrows Bob's shares and sells them to Jim. Mark borrows Jim's and sells them to Nancy. There are now three people that think they own 100% of ACME. Bob, Nancy and Jim both want to hold on to ACME for many years. Bob decided he wanted paper stock certificates to frame on his wall. His broker tries to recall the shares but Nancy, the current holder of them, refuses to sell them at any price, as such Bob can't get his certificates. Now Bob becomes disillusioned and places a sell order for his shares, which Nancy happily buys, so his broker again tries to recall the shares but Mark is unable to return the shares he borrowed since Nancy refuses to sell them. Nancy now owns double the actual available shares, What happens next? How does Mark make the broker whole? Is Nancy's latest trade unwound?

The brokerage would not allow 100% of available ACME to be shorted in either case.

 

[humbaba]

My point was that if there are "more shares around" then there have to have been trades. Ie - You can't have more shares without more trades. But you can have more trades without more shares, as you stated.

sure you can have more shares without trades: a company can always issue new shares. They then own the shares without any trade having occurred. But, really, this is just arguing semantics.

Anyway, the after hours trading seems... non-existent. It will be interesting to see what happens tomorrow.

 

[Intl Professor]

I've never seen a cat in a car

Must be in a Dr. Seuss book.

 

[ThereAre4Cars]

Remember, even at these depressed prices, Tesla is still America's most valuable car company by market cap... Ford and GM have been getting blasted just as hard if not harder than TSLA.

As of today:
$44.52b Tesla
$44.22b GM
$33.52b Ford

I don't understand what inference I am supposed to take from that.

 

[Krugerrand]

Let's try an extreme example: There is a new start-up going IPO called ACME, Bob, Jim, and Nancy really like the idea and want in and they happen to share the same broker. Bob and Jim use margin accounts with active balances while Nancy is using an account that doesn't permit loaning shares. Mark thinks ACME is a scam and wants to short them. ACME issue 100 shares and Bob gets them all. Mark borrows Bob's shares and sells them to Jim. Mark borrows Jim's and sells them to Nancy. There are now three people that think they own 100% of ACME. Bob, Nancy and Jim both want to hold on to ACME for many years. Bob decided he wanted paper stock certificates to frame on his wall. His broker tries to recall the shares but Nancy, the current holder of them, refuses to sell them at any price, as such Bob can't get his certificates. Now Bob becomes disillusioned and places a sell order for his shares, which Nancy happily buys, so his broker again tries to recall the shares but Mark is unable to return the shares he borrowed since Nancy refuses to sell them. Nancy now owns double the actual available shares, What happens next? How does Mark make the broker whole? Is Nancy's latest trade unwound?

Not only is Bob a dick, but he’s a dick magnet. Donut hell is getting crowded.

 

[ZachF]

Actually, looking at the stock prices of almost all motor vehicle companies it's hard to find ones that haven't gotten blasted since this January

Tesla was at ~$350 in January, at $260 now (-26%)
GM was at ~$44 in January, at $31 now (-29%)
Ford was at ~$13 in January, at ~$8.50 now (-35%)
Daimler was at ~€74 in January, at ~€50 now (-32%, and euro has lost ~6% value)
BMW was at ~€93 in January, at €74 now (-20%, and euro has lost ~6% value)
VW was at ~€184 in January, at €139 now (-24%, and euro has lost ~6% value)
Toyota was at $139 in January, at $117 now (-16%)
Honda was at $36 in January, at $27 now (-25%)

etc, etc....

 

[SpaceCash]

Actually, looking at the stock prices of almost all motor vehicle companies it's hard to find ones that haven't gotten blasted since this January

Tesla was at ~$350 in January, at $260 now (-26%)
GM was at ~$44 in January, at $31 now (-29%)
Ford was at ~$13 in January, at ~$8.50 now (-35%)
Daimler was at ~€74 in January, at ~€50 now (-32%, and euro has lost ~6% value)
BMW was at ~€93 in January, at €74 now (-20%, and euro has lost ~6% value)
VW was at ~€184 in January, at €139 now (-24%, and euro has lost ~6% value)
Toyota was at $139 in January, at $117 now (-16%)
Honda was at $36 in January, at $27 now (-25%)

etc, etc....

Wow...

In that context, a casual observer wouldn't see anything remotely amiss or malicious about TSLA price movement.

I honestly didn't realize they were looking THAT bad

 

[ZachF]

I don't understand what inference I am supposed to take from that.

Perhaps the depressed stock price is Tesla following the other Automakers down because it hasn't "proven" to the market that it's well over the M3 production hump (something a positive Q3 report might do though)

 

[SpaceCash]

New Musky tweet about AP!

"Software V9.0 with latest Autopilot is rolling out to North America soon"

Elon Musk on Twitter