TSLA Market Action: 2018 Investor Roundtable

[tivoboy]

So Elon pulling earnings forward a week has caught me in the unfortunate position of having sold 295 weeklies on my 4000 shares this week for some cash flow.. not expecting any runup this early (wasnt going to take any covered call risks on the actual earnings report). Anyone have suggestions for recovering from this predicament? Im going to be kicking myself pretty hard for holding steady the last 8 years and blowing all the gains missing this earnings ==(

you could buy some back (at a premium) and sell a higher upside call. Minimize your risk exposure and cut some of the cost to buy back. Depending on when you sold the 295$ weeklies, they couldn't have been that much. but yeah, they are up 20X today!. It's a bitter pill to swallow but if you want to hold the shares that's what it takes.

Frankly, depending on where your adjusted share price is, I'd just let them call them if they want at 295$. Save the power, take your profits on the shares and re-deploy later. I will still say, it's not all up from here. We could certainly be there or lower by Friday. Nobody really knows at this point-well ELON probably knows.

 

[elasalle]

Life gives you Citron, drink Citronade

 

[theschnell]

I bought more shares today near the HOD. First purchase in at least a year. If Left is really switching sides, this could be a game changer in other shorts bailing due to strong fundamentals.

Before I bought, I had to think about whether Tesla is at risk for a near term demand issue on Model 3. It seems obvious that production outran demand on RWD LR Model 3 in North America, unless the change can be purely attributed to cell supply constraints but I doubt that. But they have not yet opened orders in the rest of the world. I think they are wanting to maximize US. tax credits before supplying the rest of the world. So they introduced MR.

But I think this car will sell gangbusters in the rest of the world. So near term demand is not an issue. Fundamentally they are looking very strong. I hope Left is long for the long-term and not pulling a pump and dump. We shall see.

 

[Right_Said_Fred]

That's true, broadly, but I believe their wording was always a cautious "approximately 100,000 units" - which allows for higher production, if Panasonic is able to deliver more cells.

While Panasonic is unlikely to have expanded their production of 18,600 cells in any capex intense manner, I find it pretty unlikely that over the course of 2 years they found no way to increase cell supply. At this point it's clear that Tesla is going to migrate to 2170 cells eventually, and it's in the best interest of Panasonic as well to sell as many 18,650 cells as they can make.

So there could be a bit of an upside surprise there.

The higher margin cannot hurt either: especially if the Model 3 margin has improved, in which case they'd want to eliminate lower margin options from the S/X line-up, to convert those customers to the Model 3 or to higher price Model S/X versions.

What would happen to the Japanese production capacity for those old cells when they switch to the new Gigafactory cells for Model S and X? In this battery constrained world it would be a pity for Tesla to give up on that capacity. It’s still very useful for storage.

 

[j5drive]

@j5drive

I'm curious, since I'm interested in doing this in the future, what is your general strategy for doing this? I imagine you typically avoid anything around ERs. How far above the SP do you sell calls at? 10%? 15%? Weeklies, or two weeks out?

I've got a very simplistic plan... aim for 2%/month premium through selling weeklies. Example being @300 I would sell whatever nets me $1.50/share in premium. It used to be on average 10-15% out of the money. In general I sit out on weeks that I expect announcements or reasons for growth. It served me relatively well all year aside from this week and a week back in May when we took off from 276 to 330 and I was off the grid in Namibia. That moved my cost basis up $30 (20 weeks of premiums) so ive been slowly recovering form it.. and now im hit again!

 

[Zaxxon]

The shorts are turning on their own: Why Citron Is Wrong on Tesla

I couldn't get past the multiple grammatical errors in the first freakin' line.

 

[tivoboy]

You know, in writing my nasty (sorry) response to Tivoboy, I got to thinking, each of these "Tesla killers" are the first ones off of the line for Jaguar, Audi, Mercedes, et al, and we all remember the difficulties that Tesla had with the first S's and X's. Given the problems that all of these major manufacturers have had with their ICE cars, which have made their dealers a lot of money, can you imagine the challenges they're going to have with their first BEV's?

Many people expect these new BEV's are going to be great right out of the box because of who is making them, but I think they will be in for a surprise. All of their service people will need training. It's going to be some tough going for them in the first few years.

All of which adds to the competitive advantage that Tesla already has.

I don't even know why I'm responding, but...

Yeah, it's a learning curve with ANY new model let alone a new power plant. But, having done this many years for many manufacturers, they do have plans for this from not only manufacturing, QA, service, support and dealer support but also from R&D and testing going in. MOST of these companies already have a full EV in their FAMILY of vehicles, internationally at least. They have been doing it long enough to know where many of the knowable problems can be. So, it's not the same learning curve as a TESLA had with their prior objectives. Most OEM's are also not putting it all out there with these vehicles either. Tesla has been pushing the envelope on both the product AND the company and more recently certainly from the manufacturing standpoint. I said from the beginning, ramping manufacturing is HARD regardless - and we saw just that. We're STILL seeing it.

I'm less concerned with the legacy OEM's ramping much more modest BEV vehicle numbers into their pipeline than I am about Teslas balance sheet and cash flow situation.

 

[NikeWings]

Investors should buy shares of Tesla, Molina Healthcare and Agilent Technologies because they will get a boost from their upcoming earnings reports, analysts at Morgan Stanley said in a note.

Morgan Stanley named these stocks among their "Theme Picks" with a "positive catalyst" heading into their earnings releases. Here are Morgan Stanley's top picks for this earnings season


The street must feel so chumped after Citron's 180, will be interesting to watch all the tactics used against each other. Some have more ammo than others.

 

[Foghat]

Who was it?

I avoid Twitter.

I want to avoid any political hot buttons. Check out “his” interview opposite Ross gerber on CNBC for starters.

 

[MarcusMaximus]

Short-seller Andrew Left is now long Tesla — but he's making a potentially disastrous mistake

Aww Business Insider, at least we can rely on you to throw water on a parade. Mm-mmmm!! that's some good fossil fuel money!

Ha, I love how much he focuses on EV's and ignores that the Model 3, with its $49k+ price tag, was the #5 selling car *of any kind* in the US in Q3. And #4 in the last month of that quarter.

 

[AWDtsla]

I believe some of the biggest shorts might be "trapped" - weirdly enough short interest never dipped to below ~30m shares this year, despite two dips to below $250.

These might not be the loudest shorts, but the ones pulling the strings of the FUD machine.

We might find out in the coming days, weeks and months.

Are they trapped? Is a 50B bet to try and kill the competition that bad when your industry is so big it earns 5T in revenue?

 

[NikeWings]

I couldn't get past the multiple grammatical errors in the first freakin' line.

Nothing new. War drums beating. Here's the thesis:
"Everyone knows -- or should know -- that Tesla's Q3 saw the most favorable of product mix circumstances that the company can expect to obtain until at least the Model Y makes it to production in volume, which is at least two to three years from now. As a result, whatever "peak" earnings (if any) and free cash flow the company manages to print for Q3, it will be as good as it gets for a long time."

 

[Unpilot]

The network that VWAG are talking about is 125KW.

Key word...Talking

edit/ dammit wipster you beat me to it.

 

[Thekiwi]

The small and clubby world of professional d-bags on Wall Street that is short sellers has only a few prophets. Left, the infamous Chanos, the widely hated Daniel Loeb, and a few other smaller names are the best known. In general, the stock market goes up in the long run. Shorts make a living doing one of the hardest things possible on Wall Street, trying to influence things to go down when the general trend opposes them. So this is actually a significant betrayal in the tiny world of these professional parasites.

[puts tinfoil hat on]
Unless of course they are all in on it - if the shorts had decided it was time to reverse and ride a long position - it would make sense that they would all stagger their announcements to maximise share price impact, and they would do it alonside a company earnings announcement that will undoubtedly show positive Cashflow generation that is easy to spin as a reason for the change in attitude. Would it be that surprising if Chanos announces on Friday that he had also flipped to being a long?

Just imagine if the long desired “short burn of the century” was in fact partly triggered by the most notorious Short sellers who end up profiting handsomely from having reversed their positioning to being long.
[removes tinfoil hat]

 

[wipster]

Yes. He just tweeted. Very vocal short that said on tv Elon would not be CEO by year end. Very nasty online attack presence as well. Left now this guy on the exact same day... I think it was the early reporting that has them shook.

But what's his name? Or are you under an NDA?

 

[Johan]

But what's his name? Or are you under an NDA?

His name is That Which Must Not Be Spoken Of

(it's Gabe Hoffmann, he's a pos)

 

[Fact Checking]

unless the change can be purely attributed to cell supply constraints but I doubt that.

These are all well known numbers: both Panasonic and Tesla are saying that Panasonic cell output is the limit.

Tesla disclosed that their current supply is 20 GWh/year. With 80kWh in a LR pack that's 685 packs/day, 4,795 LR packs/week.

That's a hard limit, to be increased to 35 GWh later this year but not fast enough to capture full tax credit customers.

That's the main reason for MR: they want to go beyond production of ~65k in Q4, and given the 80%+ take-rate of EAP they want to sell more units.

 

[Cobos]

The shorts are turning on their own: Why Citron Is Wrong on Tesla

Wahlman's claiming that Left is just being an opportunist and that he's jumping ship due to the threat of a profitable Q3. He think's it's just a temporary blip and all part of the show. wahlman and spiegel are still in denial. I'd love to see the looks on pablo santos and montana skeptic's faces as they realize their potemkin village is collapsing!

That means, the retail shorts haven't capitulated yet. Tomorrow will probably be a holding pattern or a slow SP rise until earnings.

I love it when people quote stuff from Norwegian market and has NO clue on what happens in that market. The main issue for Jaguar now seems to be the I-Pace doesn't charge as fast as it should, it uses A LOT more power then it should and the range seems to be severely compromised. Not to mention Jaguar is working through their backlog, so the question is how many will they sell after this winter when the range is way too short. It's a good car if you like Jaguar, but it seems it's ability to catch many outside Jaguars market is not that good. And Jaguar usually sells about 500 cars a year, so they are tiny in Norway. Though they very well might sell more than Tesla in Q4 in Norway, but I'd gladly see a full year of sales before I'd say anything.

TL;DR Wahlmann is talking out his hindside again.

 

[Cherry Wine]

I've got a very simplistic plan... aim for 2%/month premium through selling weeklies. Example being @300 I would sell whatever nets me $1.50/share in premium. It used to be on average 10-15% out of the money. In general I sit out on weeks that I expect announcements or reasons for growth. It served me relatively well all year aside from this week and a week back in May when we took off from 276 to 330 and I was off the grid in Namibia. That moved my cost basis up $30 (20 weeks of premiums) so ive been slowly recovering form it.. and now im hit again!

I don't know if it was an anomaly given impending ER (this was over the weekend, so prior to release indicating ER CC was on Wednesday), but when I was analyzing options prices I noticed that there was significantly higher return two weeks out as opposed to weeklies. Have you given thought to selling at that interval instead of on a weekly basis?

Apologies for all the questions, but this strategy is very appealing to me -- gives me an opportunity to generate cash flow and/or increase my stake. I'm grateful for the opportunity to talk to someone who's actually done it!

 

[Fact Checking]

What would happen to the Japanese production capacity for those old cells when they switch to the new Gigafactory cells for Model S and X? In this battery constrained world it would be a pity for Tesla to give up on that capacity. It’s still very useful for storage.

Yeah, I'm pretty sure they'll make good use of that supply of cells - and clearly Panasonic doesn't seem overly concerned.