TSLA - Tesla Motors

[SmallCap]

This is a strange investment for me.

1. this is the first time I have ever shorted anything.

2. I want Tesla to succeed and appreciate what they have done to the car making landscape.

3. I have NEVER found so much confirmation and company on my investment thesis, most of my companies I can count the number of people that I know who agree with me on one hand. After buying puts I found so many other people thinking the same way, my google news feed figured out I was interested in Tesla and gave me a steady stream of both pro and anti Tesla stuff, then I found a bunch of people talking about this on Twitter and so many people had the same thesis that I did. You'r freaking me out Y'all. I have never had this much help in confirmation bias.

4.my greatest fear in holding puts is that they are able to pull off a capital raise which would most likely cause a serious hit to the share price but stave off bankruptcy and the share price it settles at might be around or higher than my puts (around $200).

5. I found it interesting that when I bought some puts the share price was 330 and after dropping dramatically (should have sold) three months later it was back to 330 but my puts with 3 months less of contract were worth 40% more than when I bought them. People really really want some puts.

 

So today I sold about 2/3 of my tesla puts for 2020 at a profit of about 70% over 3 months.

 

I still think my thesis is good but I was getting a little freaked out at all the people who agreed with me and were getting on board.

 

I am still holding the higher strike puts where I have nearly 100% price increase, I could really regret this but we will see.

[oddballstocks]

This is a strange investment for me.

1. this is the first time I have ever shorted anything.

2. I want Tesla to succeed and appreciate what they have done to the car making landscape.

3. I have NEVER found so much confirmation and company on my investment thesis, most of my companies I can count the number of people that I know who agree with me on one hand. After buying puts I found so many other people thinking the same way, my google news feed figured out I was interested in Tesla and gave me a steady stream of both pro and anti Tesla stuff, then I found a bunch of people talking about this on Twitter and so many people had the same thesis that I did. You'r freaking me out Y'all. I have never had this much help in confirmation bias.

4.my greatest fear in holding puts is that they are able to pull off a capital raise which would most likely cause a serious hit to the share price but stave off bankruptcy and the share price it settles at might be around or higher than my puts (around $200).

5. I found it interesting that when I bought some puts the share price was 330 and after dropping dramatically (should have sold) three months later it was back to 330 but my puts with 3 months less of contract were worth 40% more than when I bought them. People really really want some puts.

 

So today I sold about 2/3 of my tesla puts for 2020 at a profit of about 70% over 3 months.

 

I still think my thesis is good but I was getting a little freaked out at all the people who agreed with me and were getting on board.

 

I am still holding the higher strike puts where I have nearly 100% price increase, I could really regret this but we will see.

 

 

This isn't my first rodeo, sometimes you win, sometimes you lose, just like when you're long.  I have been "right" and lost money on longs, and I've been "wrong" and had gains.  So being right or wrong on the name doesn't automatically translate into profit or loss.

 

 

The echo chamber is big on this one.  I follow some of the short sellers on Twitter, it's good entertainment.  The people videoing trucks leaving parking lots.  I imagine some 17 year olds telling their friends "These investment professionals on Twitter think we're adults!"

 

I have never driven in a Tesla, but I've taken a look at them at the mall here (where they're sold). They appear to be nice. They are expensive. But this isn't about the cars for me. Maybe there are quality issues, maybe not. It's that financially the company has issues.  They are debt laden, and each additional car they sell creates a bigger loss.  Their best course of action is to stop making and selling cars, it would stem the bleeding.  If they ramp up losses pile up.

 

This is a niche car company that bit off more than it could chew.  People seem to love the brand.  I wouldn't be surprised if they just file a pre-packaged BK, reorg the debt and keep chugging.  They need some adult supervision on their manufacturing process, if they want to automate.  There is no shame in building cars by hand, if you stay small and niche.  They need to decide what they want to do.  A small set of luxury performance cars is a good market.

 

 

Ultimately I think the equity will be worthless, but the company will probably just keep charging forward creating cars.  These aren't mutually exclusive things.

 

One other random thought on the cars. I think the $35k car was a great idea. But the idea that they're going to take over the world with a $70k car is crazy. I don't live in SV where everyone blows their nose with $100's, in 'normal' America you can buy a working class house for $70k.  Spending that much on a car is viewed as wasteful and insane.  Unless they can lower their price they're going to be selling into CA and wealthy areas, but I don't know how much actual demand there is beyond that.

 

Regarding options.  I buy things with options for two reasons, the first is the leverage, and the second is you can make different sorts of trades cheaper.  I've used options to hedge positions.  But in this case it's all about the leverage.  A loss is a percentage point or two of the overall portfolio, but the gain (if equity slides dramatically) would be enormous.  That leverage is valuable, if I'm wrong I lose a little, if I'm right I win a lot.

 

You have to look at what your gains are from.  My guess is your 70% gain is almost entirely from implied volatility.  If you're interested in trading vol on Tesla you can do it safer by isolating the volatility and trading specifically against that depending on what you think will happen.  If you want to pay the smallest premium buy deep in the money puts.  The deeper in the money the more the put closely approximates a true short position.  The same is obviously true for calls too.

 

[walt373]

3. I have NEVER found so much confirmation and company on my investment thesis, most of my companies I can count the number of people that I know who agree with me on one hand. After buying puts I found so many other people thinking the same way, my google news feed figured out I was interested in Tesla and gave me a steady stream of both pro and anti Tesla stuff, then I found a bunch of people talking about this on Twitter and so many people had the same thesis that I did. You'r freaking me out Y'all. I have never had this much help in confirmation bias.

 

This is probably the most consensus short I've ever seen, but it doesn't mean they are wrong. There is a ton of money on the other side given the valuation. But I suspect part of it is that finance/value guys are a lot more likely to focus on the ugly financials while the tech/growth/retail traders are putting their trust in the visionary leader, so the sentiment will seem very one-sided if the people you talk to are mostly in one group or the other.

[CorpRaider]

All of QQQ is kinda' (justly, imop) getting slaughtered of late.  Einhorn might post a big number this month.

 

Seems like TSLA should issue a shitton of stock at this valuation and get like 2-5 years runway.  Seems like maybe they think they can get some funding from China and Europe if they build production there.

 

The executive turnover is a HUGE red flag/concern to me. 

[Spekulatius]

There is also key man risk. I interpret some of Elon’s erratic behavior recently as an indication of “ burnout”, which given the scope and intensity of Elon’s work style almost seems inevitable sooner or later.

[rb]

All of QQQ is kinda' (justly, imop) getting slaughtered of late.  Einhorn might post a big number this month.

 

Seems like TSLA should issue a shitton of stock at this valuation and get like 2-5 years runway.  Seems like maybe they think they can get some funding from China and Europe if they build production there.

 

The executive turnover is a HUGE red flag/concern to me.

Well who's gonna buy such a huge issue? They're gonna have to sell at a big discount? Their best bet is probably a rights issue. But what do they do if the rights issue fails? They're positively stuffed at that point.

 

But they're gonna have to do something to raise capital. I don't think there's a lot goodwill towards them in the debt markets. So my guess is that they'll have to issue equity in drips along the way.

 

[Lakesider]

Maybe they wont need to a new issue, demand for their new transportation product is through the roof. Design has been simplified some what so the megafactory can cope and the product has a smaller price tag.

 

 

https://www.cnet.com/news/teslas-new-1500-surfboard-is-already-sold-out/

 

 

 

 

[Liberty]

Q2 letter is out:

 

http://ir.tesla.com/static-files/7235e525-db16-470c-8dce-9ecac0ad7712

[alpha]

 

The earnings call was insane again, it sounded like a bunch of hungover college kids or something. Questions from reporters at reputable media like Bloomberg etc were skipped over to go to blogger/youtuber at the end.

 

 

 

 

 

 

 

[Spekulatius]

 

The earnings call was insane again, it sounded like a bunch of hungover college kids or something. Questions from reporters at reputable media like Bloomberg etc were skipped over to go to blogger/youtuber at the end.

 

Stock is up 10% so I if it’s working don’t break it.

[SmallCap]

This is a strange investment for me.

1. this is the first time I have ever shorted anything.

2. I want Tesla to succeed and appreciate what they have done to the car making landscape.

3. I have NEVER found so much confirmation and company on my investment thesis, most of my companies I can count the number of people that I know who agree with me on one hand. After buying puts I found so many other people thinking the same way, my google news feed figured out I was interested in Tesla and gave me a steady stream of both pro and anti Tesla stuff, then I found a bunch of people talking about this on Twitter and so many people had the same thesis that I did. You'r freaking me out Y'all. I have never had this much help in confirmation bias.

4.my greatest fear in holding puts is that they are able to pull off a capital raise which would most likely cause a serious hit to the share price but stave off bankruptcy and the share price it settles at might be around or higher than my puts (around $200).

5. I found it interesting that when I bought some puts the share price was 330 and after dropping dramatically (should have sold) three months later it was back to 330 but my puts with 3 months less of contract were worth 40% more than when I bought them. People really really want some puts.

 

So today I sold about 2/3 of my tesla puts for 2020 at a profit of about 70% over 3 months.

 

I still think my thesis is good but I was getting a little freaked out at all the people who agreed with me and were getting on board.

 

I am still holding the higher strike puts where I have nearly 100% price increase, I could really regret this but we will see.

 

Well, I'm back.

So much optimism over this company and my original thesis still hasn't changed at all.

I had sold my Jan 2020 $190 puts for $33

Today I bought some Aug 2019 $210 puts for $25

 

Greater profit potential but shorter time frame. in my original thinking I had no clear idea when problems would come up so I took the longest options but now I see that the company will either make it or break it in the next 12 months.

 

What do you all think about that timeframe?

[Sharad]

Musk just tweeted that he has financing secured to take the company private at $420/share. He's considering doing so.

[rb]

Stock popped. There's no press release. If this another one of his stunts it'll be an expensive one.

[SmallCap]

Musk just tweeted that he has financing secured to take the company private at $420/share. He's considering doing so.

 

and he is tweeting this out, Why exactly?

 

I am getting visions of the tweeter in chief handling foreign policy via tweets.

[Spekulatius]

Musk just tweeted that he has financing secured to take the company private at $420/share. He's considering doing so.

 

That’s great. Now the shorts need to find out who provides the financing and short those entities or the bonds.

[bobozou]

I'm not a lawyer, but management tweeting about a potential management buyout isn't a violation of (any) securities laws?  I thought that's what 8k's were for...

[Spekulatius]

I'm not a lawyer, but management tweeting about a potential management buyout isn't a violation of (any) securities laws?  I thought that's what 8k's were for...

 

Minor detail. Elon is a Twitter junky who just can’t leave it alone.

[rb]

I'm not a lawyer, but management tweeting about a potential management buyout isn't a violation of (any) securities laws?  I thought that's what 8k's were for...

You can almost hear Musk's lawyers' screams

[LanceSanity]

This is some next level trolling, turning a joke about weed into billions

[Spekulatius]

This is some next level trolling, turning a joke about weed into billions

 

Not sure about trolling but trading in TSLA stock is halted now. Did Elon hit the bong or bottle early today?

[Liberty]

If you read Musk's twitter feed, sounds like he's got a consortium to fund it. Can't be that many people with deep pockets... Tencent already owns a bunch, Softbank, Google, Saudi Arabia, etc..

 

What a crazy day. Legendary

[Zorrofan]

Is the CEO tweeting that he is "considering" taking the company private an SEC violation? Doesn't trading have to be halted before any such announcement is made, rather than after?

[SmallCap]

over two hours later and while the stock has stopped trading, Elon is still tweeting about it.

 

What is is that I don't know about SEC regs, Twitter and the legal profession that would allow him to continue on tweeting about this?

 

What are his lawyers saying about this?

[Hielko]

I'm not a lawyer, but management tweeting about a potential management buyout isn't a violation of (any) securities laws?  I thought that's what 8k's were for...

I think you can make a pretty good case that putting something on twitter, especially if you are followed by millions, is a valid way to disseminate information in a broad and non-exclusive way. But perhaps doing it during market hours not the smartest move...

[rkbabang]

Is the CEO tweeting that he is "considering" taking the company private an SEC violation? Doesn't trading have to be halted before any such announcement is made, rather than after?

 

What announcement? He's not announcing anything just "considering" it. LOL  He's definitely on something.  He should hide his phone from himself before dropping acid.