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TSLA Market Action: 2018 Investor Roundtable

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Is there a way to short the securitization of ICE loans? Sorta joking... but also serious. Kinda reminds me of the movie the Big Short. You might be onto something. Obviously the inflection won't happen for a while but... kinda makes you think.

Given the default cycle of the mortgage market is so long/complicated, many synthetics (credit default swaps, bonds etc.) were created to hedge the risk, repackaged/retraded multiple times over and this is primarily where the shorts scored big.....on the synthetics. Auto paper is easier to liquidate (repo and resale is quick) and doesn't carry the same default risk, so minimal synthetics are created and therefore no significant market depth/trading liquidity. Even Subprime auto securitizations generally yield nicely and carry ample credit enhancement requirements to cover value changes, again dimishing the risk......making them decent long plays for balance.
 

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A share was rented with the right to sell it. It was sold. The person who rented it is obligated to buy a share in the future and return it to the origional owner. But no new share was created.

Only the obligation of the short seller to buy a share in the future and return it was created.

Tesla will only recognize the 170 million shares for share holder votes and to pay dividends to (if tesla were to pay dividends). For dividends it would be the short seller's responsibility to pay those to whom they rented the stock from.
Something about this doesn't add.

Let's simplify to illustrate.

Let's say there's 10 shares at IPO for Long Corp.

John buys all 10 shares. He then lends 5 shares to short seller Bob. Sam buys said 5 shares from Bob.

End result:
John owns 10 shares
Sam owns 5 shares

Now there are 15 shares floating, instead of the original 10.

What am I missing?
 
@Smokey4141 is not wrong about virtual (or other term) shares.

Say I have 1000 shares, and my brokerage lends half of them out and someone else buys those shorted shares. As far as I know I have 1000 shares and as far as they know they have 500 shares. Total 1,500 shares. That is why shorts are on the hook for dividends (assuming the company/stock has them), I should be getting dividends on the stock I own but currently don't possess.

With 30 million shares shorted, and 170 million shares issued, there is a total of 200 million shares people think they have. However, there are still only 170 million voteable shares, thus the need for a share recall before a major shareholder vote.
So then, does a major shareholder vote force a short squeeze? It would seem so by your logic
 
New Ford commercial is trolling Tesla. Even uses paint it black.
This video proves that Ford is tone deaf and doesn't have a clue as to how the world is moving.

1) I'm really mad at Bryan Cranston for doing this. What a f*cking sellout

2) Ford says "So let the other guys keep dreaming about the future; we'll be the ones building it"
  • Tesla is not dreaming, they are doing
  • You'll be the one's building it? When? You're already way behind. Like waaaayyyyyy behind
 
This video proves that Ford is tone deaf and doesn't have a clue as to how the world is moving.

1) I'm really mad at Bryan Cranston for doing this. What a f*cking sellout

2) Ford says "So let the other guys keep dreaming about the future; we'll be the ones building it"
  • Tesla is not dreaming, they are doing
  • You'll be the one's building it? When? You're already way behind. Like waaaayyyyyy behind
Building the future in office furniture is a little bit different than automotive. :D
 
Most of the longs bought their shares years ago and never touched them since -- hence the name "longs".
Shares we purchased years ago have absolutely no influence whatsoever to recent stock price movements.
On the other hand, the 60%-75% of the daily traded volume by shorts has a direct and strong influence.
Thats the statistics you see reported by Papafox every day, and it practically never goes below 50%, mostly above 60%.
So yes, indeed, the shorts have bigger influence than the longs since they do most of the trades.
Pretty obvious logic 101, unless you bury your head in the sand and point to irrelevant numbers sitting in accounts for years.

Your point is well made that the shorts are shorter-term (no pun intended) investors overall and they're much more prolific with trading. We also see methodologies used in the trading by shorts that promote downward pressure on TSLA on days when selling and covering are equal (mandatory morning dip, selling in big clumps to trigger other selling but buying back judiciously, testing market for weakness and when it is found in late-afternoon light trading increasing the selling to game the system and push TSLA down, etc.).

We also know that the methodologies used in short-selling at TSLA are harmful to the stock price because when those methodologies are hobbled by the SEC alternate uptick rule (that comes into effect when TSLA experiences a loss of greater than 10% during market hours in any trading day) the shorts lose a tremendous amount of control over the stock price and TSLA trades much better for us longs. We don't see the heavy-selling icicles in the chart the way we see them on non-uptick rule days, for example.

OTOH, I like to point out that when FINRA says 60% of selling was by shorts on a particular day (we've seen lots of 58% days lately), the actual percentage of short-selling is exaggerated because when a batch of multiple transactions hits the ticker, the whole batch is required to be marked as "short" if there's one short sale involved. We also know there are legitimate uses of shorting that have nothing to do with gaming the system (hedging TSLA convertible bonds, quick moves by market-makers that are followed by actual selling, etc.). I've done everything I can to figure out when FINRA says 60% selling by shorts, how much true shorting is actually going on. I've queried Ihor Dusaniwsky (he makes a living tracking short interest at TSLA and with other volatile stocks), and even Dusaniwsky cannot give me an estimate. He lacks the tools to do so. What I do know, however, is that the daily charts for TSLA look noticeably different when FINRA short-selling data shows 60% vs. when it shows 40% or 45%.

My point is that the prolific short-selling and covering at TSLA has a significant effect upon the stock price, but when FINRA says XX% of TSLA selling was by shorts that day, we have to realize the actual number is a smaller percentage. How much smaller is the big question.
 
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Given the default cycle of the mortgage market is so long/complicated, many synthetics (credit default swaps, bonds etc.) were created to hedge the risk, repackaged/retraded multiple times over and this is primarily where the shorts scored big.....on the synthetics. Auto paper is easier to liquidate (repo and resale is quick) and doesn't carry the same default risk, so minimal synthetics are created and therefore no significant market depth/trading liquidity. Even Subprime auto securitizations generally yield nicely and carry ample credit enhancement requirements to cover value changes, again dimishing the risk......making them decent long plays for balance.
Thanks, you seem well versed in this stuff. So it seems there's no way to short auto paper
 
Tesla acting very well all things considered. Congrats to those who held. I'm over on Twitter fighting TSLAQ the best I can ever since Elon started to act somewhat more rational. If he can keep his tweets rational and deliver a product, I see good things happening. If he lashes out again with an incredibly stupid tweet, I will be selling shares yet again and reconsidering my faith in the man. Good luck to all.
 
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