walt373

Tanker rates peaked at the beginning of the year coinciding with IMO2020, and have fallen ~80% in the span of a month... Seems that "sell the news" works in this market too.

This is essentially a covered call strategy, which has the same risk profile as selling puts.

"Rooting" has nothing to do with it. This isn't like sports where you must always support your team through thick and thin. Good investors dispassionately and objectively assess the facts first, and then make a conclusion and invest accordingly - whether that is bearish or bullish, regardless of what you hope the outcome will be. My conclusion is that this company is very likely going to fail, that's all. On a separate topic, it looks like service is taking a turn for the worse. Service infrastructure has not kept up with deliveries, especially now that capex is being cut to the bone. https://www.thedrive.com/tech/29162/tesla-execs-claim-service-problems-are-over-as-owner-frustration-boils-over

The federal tax incentive was halved again in July, which pulled ahead orders from Q3 into Q2, similar to how orders were pulled from Q1 into Q4 of last year, resulting in abnormally low Q1 deliveries. The dollar amount of the reduction was only half as much, but I don't expect the impact to be muted, because the SR+ did not exist back in Q4. So buyers of this variant did not already take advantage of the tax credit and these customers are the most price-sensitive. If you thought margins were lacking in a "good" quarter with record deliveries, wait until you see them in a quarter in which deliveries disappoint. TSLAQ twitter is already tracking Q3 activity to be at or below Q1 levels. I fully expect more price cuts to move metal.

These comments that TSLA has been and remains a bad short are puzzling. The stock is flat after 5 years and down significantly from the peak 2 years ago. It is down a lot YTD, one of the worst performing stocks in the Nasdaq composite, and was literally the single worst until the stock bounced recently. This is during a roaring bull market and a very strong market YTD. And during a time when the growth factor has performed exceptionally well. This is about as well as you could have hoped shorting a large cap glamour stock that has continued to have massive revenue growth. Also, the borrow cost is under 1%, less than the interest you earn on cash received, meaning you are being paid to short it. I feel like I'm taking crazy pills. Have you guys looked at the stock chart? Yes it's a very crowded short, but it has worked on almost any timeframe and is really picking up steam this year.

As much as people complain about easy money keeping the company alive, markets still do not like to fund money losers that aren't growing their topline. That's the difference now. Revenue growth is about to go negative. We already had a big QoQ decline in Q1, and Q3 will bring the first YoY decline. Subsequent quarters should settle the bull-bear debate. Will be interesting to see how much of the story can be boiled down to revenue growth after all is said and done.

ASP has fallen significantly over the past couple quarters due to price cuts and mix shift. The price of a high end Model 3 or S/X from a couple quarters ago was maybe twice or more of the price of a SR+ today, which now make up a large % of sales. So unit growth is not an apples-to-apples comparison. As some have mentioned, profits are going to suffer, but even revenues would make more sense to focus on. Here's a nice post that goes into more detail: https://rapercapital.com/2019/07/03/teslas-unit-growth-and-the-art-of-spurious-comparisons/

The thing is, these companies have revenue growth. I think it boils down to that. As revenue growth goes negative, TSLA should reprice from a growth story to a distressed turnaround, imo. QoQ growth already went negative in Q1 and bulls are hoping it's a one-time hiccup. Q2 should hammer the point home and Q3 will show a negative YoY comp to make it obvious to all. When there is massive revenue growth, losses can be more easily ignored, as there's always the hope that growth will lead to profits at some point in the future. But without growth, losses must be solved now.

@HedgeyeIndstrls with an interesting data point (https://twitter.com/HedgeyeIndstrls/status/1132001657888358400) @CoverDrive12 follows up (https://twitter.com/CoverDrive12/status/1132318949922824195) TSLA is currently the single worst performing stock in the Nasdaq 100 YTD. Car shoppers may see the plummeting stock price and fear "bankwuptcy" is more than just an April Fool's joke. There's much more reflexivity here than people realize, imo.

Here are a couple things I've learned over the past year. 1. CRCL ("can't raise can't leave") theory was debunked. We might never know why they didn't raise at $350 but I think they could have if they really wanted to. I'm guessing Tesla overestimated their TAM and Q1 sales falling off a cliff really caught them by surprise. My theory is that Musk thought they had more time and was trying to get the converts in the money by squeezing shorts, and a raise would have put that at risk. The mistake was making a conclusion (can't raise) based on the assumption that Musk wouldn't put the company at risk by not raising if he could. He had already demonstrated the extent of his hubris and irrationality before, so in hindsight this was an unsafe assumption. Short stock and high strike puts worked well. OTM bankruptcy puts got killed. 2. If you have 70% q/q revenue growth and negative working capital, your FCF will look amazing. And vice versa when your sales drop. Bears saw the big spike in sales coming but didn't make the connection to FCF, still projecting high cash burn in Q3. Knowing this, shorts could have spared a few months of pain and pressed the short in Q1.

If the stock gets delisted to OTC, options become closing trades only and get very illiquid. You may need to buy stock and exercise puts to get out. If the stock is cancelled completely, puts pay out full value in cash.

And Panasonic...

It seems like Elon has once again bet the business, this time on an online-only sales model. At the very least, they should have tested online-only in select locations to see how much it would affect sales. Elon said 78% of buyers ordered online - ok, by that simple logic, why are they willing to risk the other 22%? How much can they save on stores compared to that chunk of sales, especially considering sales are expected to explode from here? The timing is also very curious - they're doing this AS they roll out their mass market model. It's the worst possible time for a hugely risky experiment that is impossible to undo. Once you close all your stores and fire everyone, there's no going back. The way I see it, the decision is either incredibly dumb or it's because they are in a cash crunch. And if they are in a cash crunch, that suggests they can't raise.

It's a good question and I think this Credit Bubble Stocks blog post brings up a good point. For a supposed competitive advantage, why does Tesla outsource the battery production, instead of licensing it to other auto companies?

From a 2017 article, quoting Druck: So to his credit, he avoided a painful short with "have you driven one bro?"