TSLA Market Action: 2018 Investor Roundtable

[yngwie_2012]

Is there a source where one can see the realtime number of shorted shares of tsla?

 

[bdy0627]

We will see how this plays out through the day, but if this dip persists, it's a failed look above, which would be expected to send us back down toward the channel low.

 

[sundaymorning]

Japan's Panasonic says it could make batteries with Tesla in China

Looks like a China factory announcement is coming, hopefully during 3rd Q.

 

[shrspeedblade]

Shorting one share of stock effectively adds a share of stock to the total pool of shares, which increases supply of shares. Basic rules of supply and demand apply and the SP tends to drop.

Longer explanation. Shorts are required to borrow shares to sell short. An owner of the share lends his share to the short seller, who then sells it to a second buyer, hoping to buy it back at a lower price. The second buyer is the actual owner of the share. The initial owner who lent the share does not technically own the share but owns rights that track the share price (and he can recall his share at any time and sell it). So in Tesla's case, with ~170 million shares outstanding and ~40 million shares short, effectively 210 million shares have been bought by investors, not 170 million. According to basic laws of supply and demand, if all the shorts covered the effective supply would drop by 40 million shares. When supply decreases, share price increases (even without the dynamics of a short squeeze).

Thank you, I'm doing some reading as well (It's been a long time since personal finance in college!).
I guess the one thing I have a challenge of wrapping my mind around is the lending of shares. Only Wall Street could come up with a system where something you own (stock) could be lent without your knowledge and it still be legal!

 

[Todd Burch]

They're trying so hard to keep this baby from going green.

Cute.

 

[ABC2D]

Only Wall Street could come up with a system where something you own (stock) could be lent without your knowledge and it still be legal!

I've never got my shares lent, but, I believe, share owners get notified when their shares borrowed out - they get interest payment. Lending of shares is often outlined in margin account rules.
Someone please correct me if I'm not accurate. Thank you.

 

[johnnybgood888]

Thank you, I'm doing some reading as well (It's been a long time since personal finance in college!).
I guess the one thing I have a challenge of wrapping my mind around is the lending of shares. Only Wall Street could come up with a system where something you own (stock) could be lent without your knowledge and it still be legal!

The ability to short a stock is not necessarily a bad thing. It helps in adding more liquidity to the stock, and also provides a check on overexuberance. Problem with TSLA shorters is the lying and FUDs thrown around to try and manipulate the price downwards as opposed to letting natural forces take its course.

 

[Tenable]

In a general sense. The decision California took is a game changer. I would guess that, at some point in the future when Tesla ramps Solar Roof production at Gigafactory 2, the requirement will be expanded to include Solar Roof. I would also think that, the states that have adopted mandates similar to California's ZEV Program, would follow California on this front as well. Thoughts?

This seems highly doubtful anytime in the reasonable future. Solar roof is a premium product, not a purely functional one. I'm planning on building a new home and ran the calc on a Tesla roof. I was sad to see that over 30 years a solar roof would cost me 25k more than simply paying for electricity after the savings of not having a traditional roof installed. This may simply be a function of Texas energy rates, but its completely untenable as a practical matter.

 

[bdy0627]

This seems highly doubtful anytime in the reasonable future. Solar roof is a premium product, not a purely functional one. I'm planning on building a new home and ran the calc on a Tesla roof. I was sad to see that over 30 years a solar roof would cost me 25k more than simply paying for electricity after the savings of not having a traditional roof installed. This may simply be a function of Texas energy rates, but its completely untenable as a practical matter.

Yeah, Solar Roof was wayyyy more expensive in Wisconsin for our new home than asphalt shingles with solar panels. We do have a very large roof, but we couldn't justify it. Hopefully the cost will come down over time

 

[ggr]

Is there a source where one can see the realtime number of shorted shares of tsla?

Not that I know of. The closest thing we seem to have come up with is how much interest is being paid on lent-out shares. The higher the interest, the harder they are to borrow, which means that more must have been lent out.

 

[ValueAnalyst]

This seems highly doubtful anytime in the reasonable future. Solar roof is a premium product, not a purely functional one. I'm planning on building a new home and ran the calc on a Tesla roof. I was sad to see that over 30 years a solar roof would cost me 25k more than simply paying for electricity after the savings of not having a traditional roof installed. This may simply be a function of Texas energy rates, but its completely untenable as a practical matter.

Understood. Especially at initial versions of a new product, the math may not make sense for everyone across the country. In the longer term, I would expect the price of the product to decline with each subsequent version.

 

[K_Dizzle]

Shorting one share of stock effectively adds a share of stock to the total pool of shares, which increases supply of shares. Basic rules of supply and demand apply and the SP tends to drop.

Longer explanation. Shorts are required to borrow shares to sell short. An owner of the share lends his share to the short seller, who then sells it to a second buyer, hoping to buy it back at a lower price. The second buyer is the actual owner of the share. The initial owner who lent the share does not technically own the share but owns rights that track the share price (and he can recall his share at any time and sell it). So in Tesla's case, with ~170 million shares outstanding and ~40 million shares short, effectively 210 million shares have been bought by investors, not 170 million. According to basic laws of supply and demand, if all the shorts covered the effective supply would drop by 40 million shares. When supply decreases, share price increases (even without the dynamics of a short squeeze).

So now can the second owner have his shares lent out? How many times can this happen? I feel like researching the big short when Selena Gomes talks about the black jack hands

 

[RobStark]

For a permit to replace a roof on an existing single family residence?

1)Yes.

2) From a solar irradiance perspective it should be Nevada, Arizona,New Mexico,Utah,Texas and Florida that should follow California's lead.

I only see New Mexico as politically possible anytime soon.

 

[jelloslug]

So now can the second owner have his shares lent out? How many times can this happen? I feel like researching the big short when Selena Gomes talks about the black jack hands

I don't think there is a limit to how many times a share can be lent out.

 

[SW2Fiddler]

I was sad to see that over 30 years a solar roof would cost me 25k more than simply paying for electricity after the savings of not having a traditional roof installed. This may simply be a function of Texas energy rates, but its completely untenable as a practical matter.

There was a comment above about Red Vs. Blue states but left out a dimension IMHTO.
Texas is in an odd “Red / Green” orientation of econ / resources / governance.

There’s a Sales Tax waiver for alt fuel cars but I can’t take it because dealers.

(TX Sales Tax waived for rain harvesting installations/equipment, did y’all know that?)

I get free, abundant, Texas Wind Power all night long, meaning an arbitrage PowerWall would be a no-brainer ...but solar doesn’t valuate well as part of home improvements.

 

[theschnell]

Thank you, I'm doing some reading as well (It's been a long time since personal finance in college!).
I guess the one thing I have a challenge of wrapping my mind around is the lending of shares. Only Wall Street could come up with a system where something you own (stock) could be lent without your knowledge and it still be legal!

It may be broker specific, but most brokers will not lend out your shares unless you have a margin account.

 

[EinSV]

So now can the second owner have his shares lent out? How many times can this happen? I feel like researching the big short when Selena Gomes talks about the black jack hands

My understanding is that there is no limit to the number of times the share can be lent out -- so technically you can have more than 100% short interest.

For reasons I don't fully understand, Ihor Dusaniwsky thinks the practical limit in Tesla's case is about 47 millions shares available to short on a sustained basis, and we were at 40.5 million on Friday (and probably higher now if I were to guess).

"If short selling demand continues to grow at this pace, short sellers will feel the angst that Tesla Model 3 buyers are feeling – with demand outstripping supply. Not all long shares are in stock lending programs and we estimate that the total amount of stable lendable Tesla stock is approximately 47 million shares, of which 40.5 million have already been taken down. That leaves approximately 6.5 million shares left to short which may decrease if long shareholders in lending programs begin selling their shares." https://www.s3partners.net/Research/TSLA13.php
​

If Ihor is right, shorts are starting to run out of room to manipulate the SP. If buyers keep buying and pushing the SP up, it could get interesting.

Edit: @jelloslug was faster.

 

[Tenable]

IB borrow rates are now 3.8%. Even the slightest tick up makes me smile.

 

[phil0909]

On a brighter note. I was totally wrong about solar city. The CA ruling changed scty's prospect. That was a great acquisition for anyone who got in at the merger discount.

What exactly is Solar City's value proposition here? Selling installation services to homebuilders? Selling panels/tiles to homebuilders? Both?

I'd expect builders to do their own installations and purchase the very cheapest panels direct from Chinese manufacturers to comply with the new law at the lowest possible cost. Not seeing how Solar City profits from this, but perhaps I'm missing something?

 

[bdy0627]

What exactly is Solar City's value proposition here? Selling installation services to homebuilders? Selling panels/tiles to homebuilders? Both?

I'd expect builders to do their own installations and purchase the very cheapest panels direct from Chinese manufacturers to comply with the new law at the lowest possible cost. Not seeing how Solar City profits from this, but perhaps I'm missing something?

I would expect builders to work with solar installers just like HVAC, electrical, etc...