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Tesla Short-Sellers Lose $1 Billion (cnbc.com)
An anonymous reader quotes CNBC:
A bullish call from a Wall Street analyst capped off a rough week for Tesla short sellers, with Nomura Instinet advising clients that the electric car maker's shares could rally 42 percent over the next year. The stock rose 1.7 percent Friday and is now up 10 percent on the week. One of the most shorted stocks in the United States, Tesla shares cost investors betting against the company more than $1 billion in losses on Wednesday alone after the stock rallied 9.7 percent. Adding to the short woes, the stock is up 13.5 percent in June and up 21 percent since April. More than 30 percent of Tesla's floating stock is currently sold short, according to FactSet.
Last week long-time Open Source advocate Bruce Perens (Slashdot reader #3,872) argued this is fueling Musk's anger at the press: [A] great many investors are desperate to see Tesla's stock reach a much lower price soon, or they'll be forced to buy it at its present price in order to fulfill their short positions, potentially bankrupting many of them and sending some out of the windows of Wall Street skyscrapers. These investors are desperately seeding, feeding, and writing negative stories about Tesla in the hope of depressing the stock price. Musk recently taunted them by buying another 10 million dollars in stock, making it even more likely that there won't be enough stock in the market to cover short positions. If that's the case, short-sellers could end up in debt for thousands of dollars per shorted share -- as the price balloons until enough stockholders are persuaded to sell. Will short-sellers do anything to give Tesla bad press? You bet.... Musk is stuck with a press that feeds negative stories about Tesla seeded by short-sellers, business competitors and the petroleum industry, and even the U.S. Government...
Musk is far from the only one who suffers from this abuse. I was personally involved while the Linux developers were hounded by bad press for years from Forbes and lesser entities, backed by a large software company we all know (and who is, surprisingly, funding more Open Source these days), based on SCO's unfounded lawsuit. Time proves them wrong, but don't expect them to admit it, nor should you hold your breath for an "I'm sorry".
And on Musk's plan to rate the credibility of news sites, Perens writes that "The world would be a better place if this was done honestly, with integrity, and well. Musk is one who has improved the world by going where conventional wisdom said he'd fail..."
Last week long-time Open Source advocate Bruce Perens (Slashdot reader #3,872) argued this is fueling Musk's anger at the press: [A] great many investors are desperate to see Tesla's stock reach a much lower price soon, or they'll be forced to buy it at its present price in order to fulfill their short positions, potentially bankrupting many of them and sending some out of the windows of Wall Street skyscrapers. These investors are desperately seeding, feeding, and writing negative stories about Tesla in the hope of depressing the stock price. Musk recently taunted them by buying another 10 million dollars in stock, making it even more likely that there won't be enough stock in the market to cover short positions. If that's the case, short-sellers could end up in debt for thousands of dollars per shorted share -- as the price balloons until enough stockholders are persuaded to sell. Will short-sellers do anything to give Tesla bad press? You bet.... Musk is stuck with a press that feeds negative stories about Tesla seeded by short-sellers, business competitors and the petroleum industry, and even the U.S. Government...
Musk is far from the only one who suffers from this abuse. I was personally involved while the Linux developers were hounded by bad press for years from Forbes and lesser entities, backed by a large software company we all know (and who is, surprisingly, funding more Open Source these days), based on SCO's unfounded lawsuit. Time proves them wrong, but don't expect them to admit it, nor should you hold your breath for an "I'm sorry".
And on Musk's plan to rate the credibility of news sites, Perens writes that "The world would be a better place if this was done honestly, with integrity, and well. Musk is one who has improved the world by going where conventional wisdom said he'd fail..."
I wish you well Mr. Musk. You have inspired many people, and you surely have integrity in this world of Wall Street defeatists.
great headline guys..
How is the stock market different from the betting/gambling market.
http://archive.is/WdAq6
FEMALE JOURNALISTS: Have you been harassed by Elon Musk fans? Please DM me your most horrific tweets and messages. AND PLEASE SHARE THIS
Completely ignoring the ethical concerns to run off and manufacture a narrative of mysoginy and harrassment . . . the same Gamergate-style behavior all over again.
Or they could just buy protective calls
Have they really given any thought to how this works?
Borrowing economic surplus from the future to create pollution today seems like it would cause global warming, not fix it.
If they could do this stuff without borrowing all that money, it may work.
Tesla is a junk bond, because they have to borrow lots of money at pretty crappy rates, which is one of the reasons they have such strong short interest. Until they can answer some fundamental questions about the long term viability of this stuff, they will continue to be a junk bond.
Donnie is that you?
Since it's a direct quotation, you have neither means nor reason to identify that person.
Ezekiel 23:20
It does not matter what the stock price was a 12 months ago, short stocks have to buy the stock back when there is demand. It is like gambling, you borrow someones else's shares and hope the price will go down enough that you can buy it back. If the price does not go down, eventually they are going to have to buy it for something they did not want to pay.
The gambling part is when and how much you will have to buy it back for. They could just buy it back early, but they they wait until the market determines that they have to buy it back and it is usually when the price is much higher than they expected and puts them into a hole.
They really should outlaw short positions, it is just another way to gamble for financial institutions .
There are plenty of options, pun intended, for shorts to protect themselves. They can buy calls to protevt against a further upseing or close some of their position so they dont eat the whole enchilada if theyre wrong
If they chose to hold to the botter end then they will reap what they have sown
I'm not particularly bullish on Tesla, but even I don't think you can call it until it actually goes belly up. Even at current loss rates and assuming they can't get more investments, Tesla still has a couple of quarters to turn the ship around. Anyone longing Telsa is taking a big risk, but they stand to gain a lot too.
At the very least, they're smarter than the people who put in preorders, those are just futures contracts with no delivery date.
People bid on short sales just like stocks... so if you got in early you made some money. A lot of of people overpaid though.
love is just extroverted narcissism
Tesla will for sure get more investment (meaning more debt on top of the $10 billion they already have). The problem is that the stockholders are assuming a lot of risk, for a relatively small gain. There are much better real investments that don't have the risk Tesla does, and actually provide dividends. Even if TSLA went up 50% that isn't enough return to assume the risk you are taking.
Tesla's stock is down 12% in the last 12 months in a strongly up market.
confirmed
Seems like a clear case of cherry picking.
Plus, Musk is a whiny little snowflake. He can't get enough of uncritical media praise, of which there is has been tons, but anything remotely critical and he shits the floor. Its nice he's doing the electric car thing, but lets not buy into a cult of personality here because there is tons of evidence he's got a shit personality (he fired his 12 year PA when she asked for a raise he used underpaid illegal foreign labor to build his factory he uses illegal union-busting tactics and he was emotionally abusive to his first wife, treating her like an employee.
Billionaires have their place, but they aren't special geniuses, they are just 99.9% lottery winner and 0.1% skill. If there was no Elon Musk, there would just be some other billionaire doing the same work. Do not put your faith in princes.
I've been looking at the stock market reporting for the last couple of years, and to make it interesting I bought some Tesla stock awhile ago.
My take is that all of the "important insightful" news reports we see about companies boil down to the following:
1) Reporter picks some stock to report on
2) Plugs the numbers into an algorithm that spits out a recommendation
3) Writes an article justifying that recommendation
Notably, reporters don't write about a stock because something happens or because it's a particularly good investment, and they don't muse any personal skill at analysis for the article - they basically take whatever is happening at the moment and use it to justify whatever is going on with the stock.
Daily market reports are always "Dow is down x% due to *this* thing happening in the world", as if the world incident is driving stocks. (As I write this, one of the top stories is "Dow posts best week since March as traders shake off G-7 trade jitters". The two linked points of information are unrelated.)
In the case of Tesla, the company is taking all their profit and borrowing extra to invest in manufacturing facilities. From the viewpoint of the algorithms, Tesla is burning through cash with no hope of recovery, as the chart on this page shows.
Any other company with Tesla's numbers would be a lousy investment. We see this all the time in other companies - burn through VC cash over a couple of years and then go bankrupt (or get bought out). (GitHub anyone?.)
Looking more closely at the chart shows a different story. Tesla takes several quarters to tool up, then releases a model and goes profitable for a while. They've done this twice now and are on the verge of a 3rd round. Once the Model 3 production is fully ramped up they will be positioned to *own* the car manufacturing industry in the US.
Tesla is a great opportunity to "go against the groupthink with reason", and Bruce has it exactly correct: Tesla stock will be closely held, making it ever more expensive to cover the short positions. Expect a temporary meteoric rise in value as the short holders fight each other trying to get out of their short positions.
Oh, and Tesla isn't one of the most shorted stocks in the US. It's the *most* shorted stock *ever*.
potentially bankrupting many of them and sending some out of the windows of Wall Street skyscrapers
And nothing of value was lost.
No sig today...
Never bet against change.
#DeleteFacebook
Shorts are considered far more dangerous than longs, there is potential to lose vastly more money from shorts. So don't think the two are the same. Shorts are very dangerous.
You don't have to buy the stock when you buy a put, somebody does it for you you just bid on the contract. That's the whole point of the damn thing.
love is just extroverted narcissism
Wow! Now, that’s W.C. Vanderbilt-level shenanigans there!
All the fundamentals of TSLA are screaming "we're going under." You guys are effectively running a pump and dump campaign at this point.
How do the fundamentals of TSLA compare to the fundamentals of Amazon from a few years back?
I'm not particularly bullish on Tesla, but even I don't think you can call it until it actually goes belly up.
He has, like 500,000 Model 3 cars on back-order. That's $2.5 billion+ in orders. Production is ramping up.
Meanwhile he's still selling as many Model S and Model X as he can possibly build (remember those?).
Only a complete idiot would be shorting Tesla right now.
No sig today...
He has, like 500,000 Model 3 cars on back-order.
Or not:
Tesla Faces Accelerating Rate of Model 3 Refunds
Jumping out windows? Bankrupt? Seriously? This is just hyperbole clickbait. Obviously there's a lot of people who shorted Tesla, but where's the evidence they're all crazy gambler types that invested money they couldn't afford to lose?
I don't short stock because I don't really understand how to know WHEN the stock is going to fall. I often have suspicions of a stock is going to take a big tumble (I used to work for a Fortune 100 company that I knew was really, really screwed up and and other fundamental problems), but I after I quit I resisted shorting them because I had no idea when it was going to fall. It did take a big hit of about half its value over the past 2 years, but there's no way I could have timed it properly. If you can't do that with some degree of accuracy, you're likely to lose money. You can't really predict the fall of irrational exuberance. Tesla has a LOT of that, and that's primarily why people are shorting it.
Bruce sounds like someone with a financial position in Tesla, or at least some kind of Musk fanboi. Tesla has some distinct problems, and it's not "fake news" as Bruce seems to indicate. Get off your fanboi or $$ motivated posts Bruce, and start posting objective analysis rather than just some odd form of schadenfreude.
potentially bankrupting many of them and sending some out of the windows of Wall Street skyscrapers
And nothing of value was lost.
I couldn't agree more. Nothing lost, I hope the skyscrapers are high enough.
Not as closely as they do to PSINET, which you may not be old enough to remember.
It is quite possible to be critical of the wealthy and powerful while envying neither their wealth nor their power.
I mean, it's kind of obvious that you do, but that's by no means true of everyone, or even of most people.
Il n'y a pas de Planet B.
Interesting that the summary devoted ¾ of its space to comments from Bruce Perens. Is this really about Tesla short sellers or is it pushing a narrative?
Shorts are very dangerous.
Which is why short sellers are generally a lot better informed than long buyers, they are taking a much higher risk so they have much more incentive to really know what they are taking on. That's not to say shorts are always right because the future is not deterministic, just that they have a much greater incentive to get it right than the average investor.
I'm kind of an outsider to this conversation, but you are kind of reminding me how media companies count every pirated song as a lost sale.
Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
They really should outlaw short positions, it is just another way to gamble for financial institutions .
Why? Shorting offers the only direct market based information that a stock is over-valued. I suspect you don't like shorting simply because people are profiting on other peoples losses. People have irrational emotional reactions to that.
It's no more gambling than any other investment.
It's no wonder , there is such a problem getting our economic system to actually distribute funds fairly. It's gambling with our country's well-being, find people I have no need for additional money for power simply an unhealthy desire for it, worst case they still be able to afford a a home to live in and food to eat, just not the luxurious shit that the prefer. Billions of dollars being gambled. Making it legal to allow people to stack the deck? The economy is the casino then this is the equivalent of people cheating. This is gambling addiction at its worst. The entire country is paying to cover the losses of the Shameless gambling addicts
I feel sorry for anybody on the street below when these "shorties" take their "swan-dive"...
THANK YOU, Edward Snowden!! Americans owe you a debt of gratitude (whether they know it or not..)
Found the short seller!
Which is why short sellers are generally a lot better informed than long buyers
You misspelled "degenerate gamblers" there.
Being risk-prone does NOT guarantee nor even imply risk-awareness.
In fact, it generally correlates with various mind-debilitating addictions - from adrenaline to cocaine.
Mit der Dummheit kämpfen Götter selbst vergebens
Right, because literally NONE of those could sign up again if the waiting list drops to six months.
Not.
No sig today...
Also, anyone can hold short positions, not just institutions.
Shorts are dangerous and usually foolish for anyone without both deep pockets and non-public information.
I"m not the GP, but in my opinion, the problem with short selling is this: you're selling something you do not own, akin to selling the Eiffel Tower or the Brooklyn Bridge. Yes, I know it's a bit more complicated than that when you bring things like futures into it, but for stocks, it's straight up fraudulent. Legal, sure, but fraudulent nonetheless. (So is fractional or no reserve lending, by the way. Lending money you do not possess is no better and that is the cornerstone of fractional reserve.)
If it works in theory, try something else in practice.
Tesla may very well become profitable. Maybe not, maybe so.
The current stock price has Tesla valued as already being the world's biggest car company. They aren't even in the top ten. Buying Tesla stock isn't a bet that the company will survive. To make money long time Tesla has to become bigger and more profitable than any car company ever has.
Shorting Tesla will (eventually) make money if Tesla becomes as large and successful as General Motors or Toyota, because the current price is justified only for a company much bigger than Toyota.
I would definitely short Tesla if I didn't have my funds tied up in another investment, because even if Tesla does remarkably well, shorts will still make money. Long term, shorts can only lose if Tesla is among the most successful companies ever. While Musk is great at publicity, the evidence suggests operations management at Tesla isn't even good, much less record-breaking incredible.
Clue: It's not because they don't want the cars, it's because the waiting list is so long at the moment.
Bottom line: Tesla can guarantee to sell every car he produces for at least the next five years, more like ten years in reality.
At the end of it he'll have the biggest/best battery factory and the coolest car technology. Any bets on how many pre-orders he'll get for the generation after this one?
No sig today...
Shorts, as demonstrated over the past couple decades, rely on spreading lies to realize their profits.
If any company is really over-valued, then competitors should be able to compete with them directly by bringing better products to market, and realize profits that way.
Anything sown from a sea of lie should be avoided, watching the ax fall on those of prefer lies is immensely satisfying
When you short a stock, you have to post the money into a margin account to buy it back (slightly more as you will have to have enough to cover any expected movement in the short term before your position can be closed)
As the price rises, you have to add more and more money to your margin account. Eventually you run out of money and if you cannot post the new margin for the next day, your broker will use the money in your margin account to close your short position.
If the shares move too rapidly and unexpectedly, your broker might not be able to close out your position using the margin account and you're fucked. If it's a big enough movement, your broker is fucked too as they're on the hook if you go bankrupt.
God said, "div D = rho, div B = 0, curl E = -@B/@t, curl H = J + @D/@t," and there was light.
What is it with you fanbois always moving the goalposts? Original claim was there were a bunch of guaranteed sales therefore everything is rosey, citation proves that the premise isn't quite so true, and you come back with something completely unrelated to guaranteed sales.
Those people could also go buy a bolt or a redesigned leaf (which is also selling faster than factory capacity, but they are turning out way more of them than tesla is). 6-12 months down the road the competition landscape is going to be even worse for tesla and that backlog is still going to be in the hundreds of thousands.
They really should outlaw short positions
No they shouldn't. Shorties provide a valuable check on inflated prices and help to root out corruption and fraud. Muddy Waters is a well known shorty. They investigate public companies, looking for inflated stock prices based on accounting fraud or other corrupt practices. If they uncover malfeasance, they take a short position, and then publicize their findings, driving down the price and reaping a profit. This prevents a much bigger crash that would occur if the fraud was able to continue.
Muddy Waters has been especially successful shorting Chinese companies listed in America on the NYSE and NASDAQ.
Go see the movie "The Big Short". Front Point Partners and others made a lot of money shorting the housing market, but the bubble, and ensuing crash, would have been much smaller if more people shorted it, and did so earlier.
Let's remove the gilded veneer from this. There's a bunch of degenerate gamblers who now find themselves in to their bookie for more than they got. They're desperate enough that some of them are trying to demoralize the players to tank their chance at the playoffs.
No they didn't. There is a reason TSLA is the most shorted stock in history. It is because people are making money doing it. That is the proof itself.
It's almost as if you have absolutely no idea what stock shorting is.
No sig today...
The smart move is out of the money put options.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
The market can stay irrational longer than you can stay liquid.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
Not how options work. Also while put options are a lot like a short, they aren't the same thing.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
When you see a company who's valuation already has '100% perfect future execution' rolled into its price, that's an opportunity.
But you are right, out of the money put options are a much safer way to make the same bet. But for those to work, you have to predict when the bubble will pop.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
It really depends on how many of those orders are for the cheap version of the model 3 (which he won't be building until some time next year) and whether Tesla can make a profit on each $35k model 3 that they sell. If they can't, then those orders become a millstone and, personally, I suspect they can't because Musk has already announced a super duper fast model 3 at $75k even though they can't cope with the demand for the "existing" versions (I put "existing" in scare quotes because the $35k version really doesn't exist yet).
All I want is a secure system where it's easy to do anything I want. Is that too much to ask ~~ Randall Munroe
The reasoning behind the belief that Tesla is going to crash and burn is pretty solid: the company has been dependent on political favors for its success, it keeps generating losses, it has no significant technology advantage, Tesla's CEO is distracted by all sorts of other crap, it keeps generating bad press, and it's a luxury fashion statement for progressive wealthy elites.
Tesla's most likely fate seems to be to be as a luxury division of one of the big auto makers, the only question is whether it will be acquired at a premium or at a going-out-of-business sale. Having said that, short selling Tesla is still a bad strategy because it can take another decade for Tesla's fate to be decided. Short term, buying Tesla may still be a good investment, even if you don't believe in its product or long term corporate strategy.
Yes. But that's true with all gambling.
No it isn't. If I bet $10 at the blackjack table, the most I can lose is $10. So no deep pockets are needed.
With a short, there is no loss limit. The 2008 VW short squeeze resulted in ten of billions in losses, and bankrupted many investors.
Investors shorting Alibaba have lost over $16B.
Actually, there are many ppl here that back musk. In fact, I would guess that the majority of us that worked Linux and had to deal with the fud from ppl like you , back him. So it could be rei or any number of none trolls.
I prefer the "u" in honour as it seems to be missing these days.
pets.com, 2018-style
Tesla isn't a car company though; it's an energy company that also sells cars.
Tesla's stock is down 12% in the last 12 months in a strongly up market.
Ah, yes. Let's take an arbitrary time period and build an argument around that. Let me try:
Tesla's stock is up 10% in the last 2 months...
Tesla's stock is up 48% in the last 24 months...
I'm a leaf on the wind. Watch how I soar.
Since when do I submit news anonymously?
Anyway, if anyone here is short TSLA and is trying to understand what the market is thinking, this summary explains everything.
Jesus: "Son of a
The smart money who sorted Tesla have decided to cut their loses and have already bought enough stock to cover their short positions, only the pathological-gambler-in-denial type of investor will wait to break even 'till the end. Also, how do you plan to codify in law a ban on short selling that cannot be circumvented trivially and can be enforced? Many lawmakers have tried and failed.
You're making one huge assumption here, namely that stock price is directly linked to how big or successful a company is.
It isn't. There is no such connection at all. The only thing determining a stock price is how much people are prepared to pay. That's *it*.
So unless Tesla goes under, the stocks will be worth what people are prepared to pay for them. And unless you have a set of mind-control orbital satellites which can make people sane and rational when determining what they will pay for stocks, there is absolutely no guarantee a short on Tesla will pay off, even if they remain a tiny company.
Again, anyone who shorts a stock can cut his losses any moment he wants by re-buying the stock he sold at whatever the current price is that moment. He doesn't have to wait to buy back the stock a day before the stock lease agreement ends.
Short interest was comparably low 12 months ago. The short spike started at the end of February; most was bought at a stock value between 250 and 310.
It's worth a reminder that short interest drives the price of a stock down. The stock price would be higher if not for the surge in short interest then.
Jesus: "Son of a
how much is a $10 short position going to have to go up overnight to bankrupt you?
every share sold actually exists, brokers are lending them from customer accounts for a fee
Well, Falcon 9 runs on Linux, but it's a stretch to pull it into this.
Ezekiel 23:20
Longer than you can stay solvent....
5 out of 6 people enjoy Russian Roulette & 6 out of 7 Dwarfs are not Happy
So disappointed it wasn't a goatse link. Still, next best thing I guess.
Socialism: a lie told by totalitarians and believed by fools.
Short sellers have always had a relationship with financial news media that worked well for both sides, but not so much for people who actually counted on those media for objective information. Short sellers plant a story about how Company X is experiencing some kind of problem. The media dutifully reproduce it with a minimum of fact checking...basically just ensuring that they aren't publishing outright lies. Company X's stock declines in value. Short sellers are happy. The financial news media write stories about how the "troubled company" is now struggling to survive, so they're happy because they get two stories for the price of one. The cycle is complete when those same short sellers vaccuum up the company's stock at a much-reduced price and suddenly it's once again a great place to invest.
Everybody wins...well, everybody except honest investors.
But this long-time tactic starts to fail when average investors become aware that they're being manipulated, and begin to question the timing of those planted stories. And maybe they start to doubt whether Company X's troubles are really bad enough to justify a stampede to sell. Add in an insanely rich company owner who delights in shoving a barbecue brush up the bum of short sellers and their news media enablers, and we have this situation. Finally, those of us who have watched helplessly as time after time Wall Street insiders profited by manipulating the system in a manner that is dishonest, if not illegal, can sit back and enjoy a good laugh.
Yeah, if one or two of these guys decided to take the fastest route to street level, I'd be more than willing to award a score for the quality of their last, long dive.
I've calculated my velocity with such exquisite precision that I have no idea where I am.
Fraud requires someone to misrepresent, well, something. Short selling doesn't misrepresent anything (unless the borrower doesn't have enough to cover the short, but then they go into debt which is a problem with any case of borrowing/lending in any situations).
"None can love freedom heartily, but good men; the rest love not freedom, but license." --John Milton
Again, anyone who shorts a stock can cut his losses any moment he wants by re-buying the stock he sold at whatever the current price is that moment.
The current price is nothing but the value of the *last* sale that was done. There is absolutely no guarantee that you can buy back your shares for that price. It all depends on the order book and the amount of shares you wish to buy.
you're selling something you do not own,
To be precise, you borrow shares, and then you sell them.
Legal, sure, but fraudulent nonetheless
That makes no sense. Fraud is illegal. You can't have legal fraud, and you can't just redefine well established worse.
And there's no problem with short selling. It provides liquidity, and it can be very helpful in a panic sell, because short sellers may be the only ones buying at such at time, and they can stabilize the stock prize.
Nice theory, now look up 'naked short'.
Market makers assume risk, but they choose to assume risk, they can cover as easily as anyone.
Out of the money put options. Limited risk, unlimited upside. Market knowledge can be extracted from the option premiums (the price paid upfront) if thickly traded.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
Yes, I assume that EVENTUALLY people will tire of handing money to Musk for him to lose, that eventually the hype will wear off. The difficult part is determining WHEN that will happen. It may be a long time. More likely, I think, Tesla will make a major mistake or release very bad news in the next couple of years, and the hype will have begun to want, so a measure of sanity will return.
I would get a put option on Tesla, but an option typically expires in a month. Tesla stock could very well go up in the next 30 days. In the next ten years, it's almost certain to go down.
Again I'm not saying that Tesla can't possibly be successful. I'm pointing out that the current stock price assumes they'll be more successful than Toyota, Honda, GM, or Ford. If Tesla becomes as successful as Toyota, today's investors will have overpaid.
That's literally Chewy.com (IIRC).
Bags of dry dog food. Over the net. Advertising on TV.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
He'll only have the best battery factory if Goodenough licenses his new battery tech to him.
While it is a mistake to outlaw shorts, I would have no problem with limiting shorts to institutional players, or anybody with the money to cover up to say 10x or even 100x, what you bet. I'm guessing that many shorts here can not cover what is coming shortly.
I prefer the "u" in honour as it seems to be missing these days.
The difference is that SpaceX isn't standing next to GM holding them up.
Again, anyone who shorts a stock can cut his losses any moment he wants by re-buying the stock
Do you understand how stock markets work? Do you think a high frequency trader is going to give you a courtesy call before placing a buy order that will push the price beyond your ability to pay?
In 2008 20% of VW shares were owned by the government of Lower Saxony. 74% were owned by the Porsche family and corporation. 13% of shares were shorted. When Porsche publicized their position, the shorties needed to buy more than 80% of the other shares to cover their position, which is completely implausible, especially since these other stockholders had NO reason to sell since the share price was obviously going to skyrocket (it subsequently quintupled).
According to a German teardown, the cost to build the premium long range Model 3 is 18,000 in parts and 10,000 in production costs.
It does if that's when they shorted the stock. If you want to say they lost a billion dollars, the change in price of shares times the number of shares shorted has to be a billion dollars If the stock moved down between when they sold and bought the stock back, they've made money.
*Fees and interest complicate things
Your ad here. Ask me how!
and isn't even the largest manufacturer of EVs
RC cars don't count. ;)
Lol. The only thing somewhat true was that he was not nice to his wife. The PA thing is 100% false. Tesla did not hire the illegals. Sub contractors did. And the ex says he was harsh at first, but changed for the better until towards the end.
I prefer the "u" in honour as it seems to be missing these days.
Not really. Lets say you short Acme (trading at $10) today. Right now, you have no idea how much you stand to lose. Their stock probably won't double tomorrow, but unlike a fixed wager, you can't say so with absolute certainty.
Now, tomorrow, sure enough, it doesn't double. But it does go up to $15. Can you get out before the bleeding gets worse? Maybe. But now you're buying when everyone is buying. If you have shorted 1 share, sure, you can get out. Now try buying a signifivcant number of shares. That's right, your attempt to buy sends the price higher. How much higher? Who knows.
Now the kicker. If a lot of people shorted Acme, you may not actually be able to find enough willing sellers. Sure, you will eventually, but how much will you have to pay? Who knows!
In contrast, if I bet $10 in Blackjack, I can tell you to the penny exactly how much I might potentially lose. There is nothing that can make that amount any higher than that expectation.
They aren't even in the top ten.
In terms of being entrenched, obsolete behemoths, indeed they aren't. But they're #1 in terms of delta-v and the dumbass shorts should've paid a lot more attention not to what Tesla's competition have said but rather what they've done, which is announce the automotive equivalent of non-existent 5GHz processors.
How many ppl are actually doing the shorting?
I prefer the "u" in honour as it seems to be missing these days.
Many. It is not a conspiracy. The reason people are shorting TSLA is because the stock is overpriced. It isn't rocket science.
I think the register pretty much nailed his psychology.
The dude is OCD, 'some other billionaire' _wouldn't_ be doing it. It's a strength and a weakness at the same time. Dictatorships sort of work, when the dictator gets things right, but nobody can count on that. When they get things wrong, they get them disastrously wrong.
Examples:
When pushing electric cars, why would you want to tie your success to the success of automated driving? More than doubling down on risk. Electric cars aren't an 'if' question, a 'when' question. Completely automated driving, not so much.
Redesign the 'door handle'? Not a broken design, new design is just bad. Breaks, expensive to fix, sucks for getting doors open in accident.
2 Gull wings of 4? Worst of both worlds. Did he even consider why gull wings are so niche? Hint: Rollover accidents.
Aluminum suspension links? Great for race cars, where constant inspection can be assured. Not so good for street cars, which will someday be rolling around with 200k miles, 'maintained' by a 16 year old. Aluminum has pretty shitty fatigue characteristics, all stressed Al will eventually crack.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
He's right. When you buy stock, the worst that can happen is that it goes to zero. But when the market moves against your short position, there is no limit to how much you can lose.
That's between them and their brokers, isn't it?
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
No it wasn't. 12 months ago it was 29M the same as in end of Feb and beginning of March. The stock price isn't "higher" because it is already too damn high. It has a negative 25 P/E ratio and 10 billion in debt!
File that next to "Just following orders".
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
But when you are buying put options, you are paying for something more than just a short position. Yes, it limits your potential losses (unlike a straightforward short position), but it also limits two things: (1) your investment horizon (those options come with due dates), and (2) ability to trade at volume (somebody has to write those options).
This is perhaps the most insightful comment ever posted on Slashdot.
Nothing posted to
A short position means that you agree to hand over to an agreed upon date a certain number of shares in exchange for a defined sum of money. Your hope for a profit depends on your ability to get the shares for less money, than you will be paid when the position is due. But there is no effective limit for the price of the shares, and if they skyrocket, it can bankrupt you to get all the shares you have to hand over. This is completely independent from the price you paid to get that short contract. It's even possible that you got money to agree into the shorting.
Yeah. At least when I had brokerage account, you couldn't take short positions unless you had a margin account. Short positions were limited by margin limits; anybody trading with a fear of margin call is not, well, playing a game they are going to be playing for long.
Hey, be nice. He can't afford an axe.
#DeleteFacebook
Perhaps he misread "Powertrain" as "Poettering"?
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
Especially when worn by blonde girls with huge racks, right?
#DeleteFacebook
Here's a better plan: let's rob banks! (After all, we are brainstorming illegal ideas for making money.)
The Nissan Leaf is the best selling EV on the market today and starts at $29k and is actually available. THAT is a real EV for the masses. Tesla is just promising a $38k car while delivering cars for the 1%. The truth is exactly opposite of what you have said.
You also have to consider that the very act of closing their position will push the price up.
It does get a bit hinky when a broker loans you one of his client's shares without their knowledge in order to set up your short position.
It cuts as close to fraud as you can get without actually breaking the law.
It's not irrational. People who profit from other's misfortunes tend to eventually start CAUSING other's misfortunes so they can profit from them.
Apparently you don't know what the word "started" means. "Started at the end of February".
Short interest had been around 29M for the previous year. But starting at the end of February, it surged, up to around 39M.
Which would be relevant if we were talking about a steady-state, dividend-paying company, rather than a company growing by orders of magnitude. You want earnings on a growing company to be as low as it can bear, because you want every cent they can get their hands on going into expansion. Check out Amazon in 2015.
Further reading: How can the price-to-earnings (P/E) ratio mislead investors? (article has nothing to do with Tesla, just discusses P/E in general, and how it's commonly misused - in exactly the way you're doing it).
Jesus: "Son of a
I never judge a company by its bank account and the profits it makes anyway.
If that were the case, that would mean that Apple makes no bad decisions and all its products are the best on the market.
(*cough* bad butterfly keyboard design, removal of headphone socket, touch bar, no Mac Pro updates, no Mac mini updates, no MacBook Air updates, buying beats, useless iMac Pro *cough*)
#DeleteFacebook
We still remember the electric cars in the 1990's and GM's refusal of selling the cars, crushing them up to shut up everyone, etc.
Tesla is also a big part of the revival of the electric cars movement.
And isn't the Model 3 the same price as the Chevy Bolt? How can one $36k car be for the rich and another $36k car be for the common folks? We need sub-$15k electric cars for the common folks.
#DeleteFacebook
Short selling creates a whole host of perverse motivations. It tempts people to do nasty and illegal things.
I have a similarly dim view of high frequency trading, but that's a whole different can o' worms.
"The agriculture ministry is not in charge of Gundam" - Japanese ministry official.
Nope. I would never short TSLA. People are too irrational. Most people who own TSLA don't even know who the largest EV manufacturers are.
And most of the people short on TSLA don't even know who the largest battery manufacturers are (for the types of batteries in EVs and large storage its Tesla). Oh, and the world's largest EV manufacturer is Tesla followed by GM and BMW (plus a couple of Chinese companies). But thanks for playing.
"Those that start by burning books, will end by burning men."
Nice theory, now look up 'naked short'.
Market makers assume risk, but they choose to assume risk, they can cover as easily as anyone.
Out of the money put options. Limited risk, unlimited upside. Market knowledge can be extracted from the option premiums (the price paid upfront) if thickly traded.
That's true but also you need to pay a much higher premium to keep the position open. When shorting, you pay a small amount of interest to keep the position open. When buying PUT options, you must rebuy the PUT options the next period to keep the "bet" open which is far more expensive than the interest on the short. So short vs PUT is about the time horizon on the "bet" you are placing and options are NOT automatically better.
"Those that start by burning books, will end by burning men."
It does get a bit hinky when a broker loans you one of his client's shares without their knowledge in order to set up your short position.
It cuts as close to fraud as you can get without actually breaking the law.
Its a common practice which everyone expects. Also, if you want to prevent your shares from being loaned out to shorts, just place a LMT order at a huge profit and they can't be loaned out to shorts when those LMT orders are open. This does require you to replace the order every 6 months but that can be automated.
"Those that start by burning books, will end by burning men."
As I said in my comment above, $36k is not affordable for most people. All EVs from Tesla, Nissan and Chevy are for the rich.
#DeleteFacebook
you're selling something you do not own,
To be precise, you borrow shares, and then you sell them.
Legal, sure, but fraudulent nonetheless
That makes no sense. Fraud is illegal. You can't have legal fraud, and you can't just redefine well established worse.
And there's no problem with short selling. It provides liquidity, and it can be very helpful in a panic sell, because short sellers may be the only ones buying at such at time, and they can stabilize the stock prize.
True, the line between shorting and fraud is the spreading of false rumors about the underlying company and that's almost never prosecuted. And this drives most folks crazy. If this was enforced and prosecuted more often (its already illegal), there would probably be a lot less complaints about shorting.
"Those that start by burning books, will end by burning men."
Leveraged people attach credit lines to their margin accounts.
And when that credit is maxed out???
"Those that start by burning books, will end by burning men."
If they had shorted Tesla, they'd probably have lost even more.
The smart money who sorted Tesla have decided to cut their loses and have already bought enough stock to cover their short positions, only the pathological-gambler-in-denial type of investor will wait to break even 'till the end. Also, how do you plan to codify in law a ban on short selling that cannot be circumvented trivially and can be enforced? Many lawmakers have tried and failed.
No they didn't. There were more than 40 million shares shorted. At average daily volume (7M a day for TSLA) that's over a week of nothing but buying from short sellers to exit. So in reality it will take more than a month to unwind those positions and to do so at that rate would cause the price to spike by a very large amount (by increasing the buying interest over that period). The shorts are still very far in and very much in a bad position. In fact, to defend the $325 price on Thursday, its likely they had to get in even deeper in new positions (to replace short positions that were stopped out between $315 and $325) as the price was spiking at that point and a large volume of (apparently institutional) sales pushed the price lower before close on Thursday. While we won't know if those were new shorts or longs getting out for two weeks (till the block trade reports for this week are released), its a reasonable assumption to think they were new shorts as they looked to be large, institutional trades (and not many smaller trades which would indicate profit taking by long, retail investors).
"Those that start by burning books, will end by burning men."
Again, how many are shorting?
I prefer the "u" in honour as it seems to be missing these days.
All that you're saying is ways to limit the damage, but none of it suggests a way to KNOW what the worst case might be. It's still non-deterministic, kinda like you can avoid going on a picnic when the forecast is for rain, and you can pack up quickly and run for the car if conditions suggest that the forecast is wrong, but you can't be 100% certain you won't get rained on. Such is the nature of the beast.
I did check the numbers. The surge in short interest, up to ~39M, started at the end of February, mainly picking up in March. It was relatively constant (27-29m) before that.
Your premise is false.
Sorry that your cries of doom and gloom didn't pan out. Better luck next time.
Jesus: "Son of a
It does if that's when they shorted the stock. If you want to say they lost a billion dollars, the change in price of shares times the number of shares shorted has to be a billion dollars If the stock moved down between when they sold and bought the stock back, they've made money.
*Fees and interest complicate things
But they didn't. Most of the current set of short positions were opened about 3 months ago when the idea was floated by hedge fund managers at an investment conference in NYC. At that point, TSLA was trading between $275 and $305 most of the time. So those are the price ranges in which most of those positions were opened. Its trading over $315 now in a range that likely is between $305 and $325 or $330.
"Those that start by burning books, will end by burning men."
That said, I am sure that there will be several investors of the types I mentioned in the previous comment who will scramble to buy Tesla stock the day before their stock lease ends and suffer losses not bounded upper by any amount, but this is because they are dumb and don't know when to cut their loses or how to calculate exposure, it's not an inherent risk of short selling (despicable the act of short selling itself may be, which is). My point is that many of those $1 billion worth of stocks that have been shorted have been covered by stock purchases by short sellers that have already decided to cut their losses.
Sure, and I can get a locking gas cap for my car, but it doesn't make "borrowing" a couple gallons of gas from my tank at 3AM right, even if you do put it back tomorrow.
Somebody has to sell you a short too.
Option market makers are just bookies. They adjust premiums until their position is close to balanced, like bookies change odds and point spreads. If there is enough interest in a stock, they make money, no matter who wins or how volatile the price is.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
There are several technology transformations under way, which collectively represent trillions of dollars of economic activity:
1. ICE cars & semi-trucks transitioning to EVs
2. Carbon-based fuels transitioning to renewable energy (solar/wind)
3. Self-driving cars & self-driving semi-trucks
Guess who is at the forefront of all 3?
And both #1 & #2 create a gigantic demand for batteries (portable & utility). Guess who has a gigantic battery factory and is aggressively building more? If you own a Tesla car, who are you going to buy your solar roof & home battery setup from?
This is the problem with Tesla skeptics. You think of Tesla as a scrappy little car company for tree-huggers, when in fact it is the best-positioned company in the world. Tesla is Apple in 2007, the Model 3 is the first iPhone.
Enjoy your Zune.
What is it with you fanbois always moving the goalposts? Original claim was there were a bunch of guaranteed sales therefore everything is rosey, citation proves that the premise isn't quite so true, and you come back with something completely unrelated to guaranteed sales.
Those people could also go buy a bolt or a redesigned leaf (which is also selling faster than factory capacity, but they are turning out way more of them than tesla is). 6-12 months down the road the competition landscape is going to be even worse for tesla and that backlog is still going to be in the hundreds of thousands.
Tesla themselves said they will exhaust the current model 3 backlog over the next 12 months. The real question is how quickly does that backlog fill back up afterwards. Also, Tesla sells 3 models of car with higher sales than the Bolt or Volt and that's before they increase their sales by a factor of 4 to consume the current backlog.
The real fantasy here is that GM could make 100,000 EVs in a year...that's the thing that's not possible right now. Where would they get that many batteries? None of the other auto makers has their own a large scale battery factory. Also, GM looses $9,000 on each Volt and Bolt they sell while Tesla can make better types of EVs for about $17,000 less per car (compared to GM).
"Those that start by burning books, will end by burning men."
The Nissan Leaf is the best selling EV on the market today and starts at $29k and is actually available. THAT is a real EV for the masses. Tesla is just promising a $38k car while delivering cars for the 1%. The truth is exactly opposite of what you have said.
No it isn't. Here are the best selling EVs on the market today.
Here is the list
"Those that start by burning books, will end by burning men."
then the term has no meaning.
Denying that he's a visionary doesn't make you look like a wise commentator, bravely resisting groupthink & hero worship; it makes you look like a delusional idiot.
This requires that you believe that SpaceX selling rocket launches to the government for half of what they would have otherwise paid is somehow a "government handout". Learn how to read, and then learn how to read critically. Care about the the truth, it really does matter.
Not even close to being a Tesla customer but it's still a good feeling to watch vultures getting a good kicking!
Surely there is a middle ground between China's electric cars and the expensive offerings from the usual car manufacturers.
#DeleteFacebook
Bingo.
You can't have legal fraud
Of course you can; just off the top of my head, I can think of several including politics and religion.
Dude, get outside or something; can't you see you're fighting a battle that's already lost?
Option pricing models vary. In practice 'bookie methods' are used.
But in general, the more volatile the stock, the longer the option date and the closer to in the money the strike price is the higher the premium. Which will correspond to much higher likelihood of a margin call on shorts corresponding to higher priced options.
There is no one best financial instrument for all purposes. Far out of the money options could be really cheap, but not payoff until the stock moved a lot.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
When trying to close the position, the broker finds that the credit line isn't as open as it was when he last verified it. Things get ugly in bankruptcy court.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
This is the most insightful comment in the whole thread.
Everyone Elon competes with is scared shitless at this point; you know you're doing well in America when the legion of trolls descends on you.
Well done, Elon!
Truth isn't Truth - Guliani
This is the precise sort of foolishness that lead to short sellers losing $1 billion in this article. In the long term, Tesla could be a guaranteed loser headed to liquidation and still you could go completely broke shorting Tesla stock, because in between the price could jump way higher before plummeting to zero. You go on margin and put yourself on hook for the upswings, and if you don't have enough money and there isn't enough stock available for sale at a price you can afford to cover then you go bust.
See the concept of a short squeeze. This is probably why the stock price is so high and even overvalued, the short sellers are attracted like moths to a flame and then get incinerated by a squeeze pushing the price even higher.
You can look at Tesla's financials and see for yourself that yes, they are lousy. But I still wouldn't short the stock if I had a million dollars and a firm conviction that the price will eventually go down.
"Shorties" may have a use but I can only see bad coming from it as they dig up the dirt (the spot on the clean page) to look full page. We see this all the time with graphs cropped to give the negative view that suits. At the end of the day the shorties are in the business of making money and will do (as we all see) anything to turn that profit. I would go so far as to say that shorts are anti-capitalist; working to damage a potentially profitable company.
If you need "Stock market police" then get the government to do it rather than a business as the business is in the business of profit.
It's like privatised prisons being pushed here in NZ; it profit them not to reduce the number of residents rather grow the population. More prisons = more profit. Rehabilitation? Silly idea from a profit perspective. Long term incarceration? Great! Inmates train other inmates on tricks to do when they get out increases the odds of returning customers.
... or theres some company-specific event causing serious pressure, its not going to move that fast.
There are "company specific events" EVERYDAY. If Tesla releases a statement that their sales bumped up, or their costs fell, or that they just brought a fully automated assembly line online, the HFTers will respond and push up the price in milliseconds. They don't even wait for a human to read the report. They have text analysis programs (written in compiled languages, not interpreted) scan the report for key words and phrases, and then automatically trigger trades.
Your claim that stock prices only move slowly and smoothly is absurd.
Show us the PA who claims that. There is none
I prefer the "u" in honour as it seems to be missing these days.
It is not always possible to cover the short by buying shares of the shorted stock. Historically, there have been cases of short interest several times the number of issued shares, and not all issued shares can be shorted.
Brokers should have some liability here; they should not allow shorting of stocks in excess of the number of stocks available for purchase.
Contribute to civilization: ari.aynrand.org/donate
... or if it happened overnight he bought into overly volatile stock
"Volatile" is a description of a stock's HISTORY, not its future. You have no way of knowing the future.
Can you guess what was one of the least volatile stocks back in 2008? Volkswagen. Rock stable industrial firm, with hard assets and steady predictable profts. Then out of the blue it skyrocketed in price in a few SECONDS, bankrupting several financial institutions holding short positions.
"Monitoring a spreadsheet" would have done nothing for them.
I could imagine it working today.
Shipping has gotten a lot cheaper in the last couple of decades.
Wow, sent an e-mail as suggested when clicking on "use classic" banner, and got a fast response that addressed my msg
The spot price is almost always close to the last price for securities with a healthy daily volume.
An investor who is afraid of a sharp spike in TSLA could by a call in sep for 28.57 at the current spot price so that if TSLA moved unfavorably their loss would be capped.
I'm really surprised the civit plug in isn't on that list (sice it appears to include plug-in hybrids)
Wow, sent an e-mail as suggested when clicking on "use classic" banner, and got a fast response that addressed my msg
That is the amusing this: you are wrong and you don't even know it. Tesla is NOT the largest battery manufacturer for EVs (by far) and is not the largest EV manufacturer (Nissan is). You Musk fanboys are so delusional! You believe the marketing.
Nissan's Leaf is the 7th best selling EV in the US. You are entitled to your own opinions, but not your own facts. Also, Tesla has manufactured and deployed a Gwh of batteries from the gigafactory which is about half of the worlds deployed batteries (which includes categories of batteries that Tesla doesn't make). Enjoy your losses sucker.
"Those that start by burning books, will end by burning men."
No. Not by much.
You can't ship individual low cost 40 pound bags and be competitive with truckloads. Pets.com couldn't do it, chewy.com can't do it.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
I also control the British crown and keep the metric system down.
Jesus: "Son of a
The spot price is almost always close to the last price for securities with a healthy daily volume.
Unless something happens in the real world.
An investor who is afraid of a sharp spike in TSLA could by a call
Which, after transaction fees, would more than wipe out any expected profit from the short. That is like placing a bet that a horse will win, and another bet that it will lose. The only one making money is the bookie.
Brokers should have some liability here
No, they should not. Brokers are not babysitters. Before an individual investor is allowed to short (or buy on margin) they must read and sign pages and pages of warnings. There is no way that any of these people can claim "but I didn't understand the risk".
Basicly, -MAX_INT.
32 or 64 bit? 32 is not enough. There have been short squeezes that have cost investors more than 2^32 USD.
I'm informed by the awesome cayenne8 that any form of government intervention will lead to compulsory gay marriage and death panels like they have in Venezuela.
Are you telling me it ain't so?
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
Does the poster of the article not understand how short selling works? or are they just Shills for Tesla? Tesla is down over the last 12 months while the market is up. Short sellers have made an absolute fortune on Tesla shorting (No I am not one of them though I wish I had been). The current stock movements may have a lost a few some money, but only a fraction of what they have made on this underperforming stock.
All risky investments went down this week, before the G7 summit. Investors are pulling their money out.
I would bet that outis the short sellers who are pulling out, and pushing the stock up thereby.
That's because it's an unattributed quote
https://quoteinvestigator.com/...
Enigma
But... don’t you also hold back the electric car?
https://www.youtube.com/watch?...
#DeleteChrome
So unless Tesla goes under, the stocks will be worth what people are prepared to pay for them. And unless you have a set of mind-control orbital satellites which can make people sane and rational when determining what they will pay for stocks, there is absolutely no guarantee a short on Tesla will pay off, even if they remain a tiny company.
While that is true market opportunities don't last forever. Tesla is flying high right now on the assumption that EVs are the future and that Tesla will be leading the revolution. But there's only so long you can sell the idea of a flying car before people want results and start questioning if flying cars will ever be a mass market thing. The other alternative is that the demand arrives, but Tesla isn't on the ball with regard to quantity or quality and some other company takes the bulk of the market. Sure, in theory they could make people think they've found the next big thing without delivering on the first big thing but I don't think it's very likely they can pull it off in practice. But if you're waiting to see if a growth stock will turn into a good value stock you'd better have a really long perspective, like 10 year minimum. A lot of people get emotionally invested and hold on to hope far beyond any rational behavior. They won't acknowledge that their investment was a flop until the profit and loss statement is blood red, that it just looks bad is not enough.
Live today, because you never know what tomorrow brings
You do realize that Tesla loses money on each unit they make, don't you? The cost of the product minus the cost of administration and sales ends up as a loss. This is BEFORE any R&D spending or capital expenditures. Tesla could completely eliminate 100% of all engineering, and completely halt all spending on capital equipment and they still lose money on each car. It's why they are losing over $4500 per MINUTE, 60 minutes an hour, 24 hours a day, 7 days a week.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
Tesla has yet to show it can deliver 3500 cars a week (although many are extrapolating Musk's recent claim that each step of the production chain could support that level). If they could, it would take nearly 3 years to clear the current backlog, not 12 months (I would love to see your quote supporting that).
And I guess you don't realize that the Nissan Leaf outsells all Tesla models combined, worldwide? And it is in second place - BAIC outsells Nissan (and thus also Tesla).
Lastly, GM could buy batteries from Panasonic - just like Tesla. In fact, Panasonic and most other manufacturers would probably vastly prefer to sell to GM, Ford, Nissan, and others because of the financial stability (profitability) of those companies. They would be a much more likely stable, long-term client than Tesla who is losing over $2 billion a year (and loses money on every vehicle produced - before R&D and capex spending). Most companies like to bet on long-term, stable clients - not risky, money-losing ventures.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
Bottom line: Tesla can guarantee to sell every car he produces for at least the next five years, more like ten years in reality.
Only if someone else decides to keep financing Tesla. Tesla currently loses money on every car they sell. At a burn rate of $2 billion a year, someone would have to be willing to finance Tesla with $10 to $20 billion, minimum, to keep them going. In fact, Tesla lost $17,000 per vehicle sold in Q1, 2018. That means that vaunted backlog of 500K cars represents $8.5 billion in losses at today's rates...
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
You are wrong. BAIC (26K), Nissan (22K), then Tesla model S (11K).
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
Then why do they lose money making the cars? Tesla loses money before you consider R&D and capex spending... I bet the teardown MAY be accurate for a big company like VW or Mercedes who makes millions of cars a year, but for Tesla - those estimates are probably way too low (understand that Mercedes makes in 1 month the same number of cars as Tesla has ever built since 2003). In other words, the teardown cost estimates were assuming volumes orders of magnitude above what Tesla does today, and thus the costs are artificially low.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
Panasonic makes all of Tesla's batteries. The gigafactory is Panasonic-Tesla joint venture.
FCA (Fiat Chrysler) is up 250% in the last 24 months... If you wanted to make money on an automotive stock, FCA would have been a much better investment. If you wanted a stock that paid you to keep it - and hasn't really changed in the last year - you would buy Ford, with its 5.4% dividend. Tesla is like many high-tech hopefuls - flies high before profitability with a hope that it can eventually turn around. It's a big gamble, with stockholders taking the role of the VC firm.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
Sorry, thought everybody knew it as a quote.
Like: 'All political power comes from the barrel of a gun.' and 'Fuck em if they can't take a joke' Just an assumed part of educated peoples knowledge.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
"Market opportunities" mean nothing.
The price of the stock is only tied to the results of Tesla in one way; if Tesla goes under, the stock will vanish from the market.
In all other ways, the price of the stock is connected ONLY to what people are prepared to pay for it.
Not to "market opportunities". Not to being a "good value stock". To NOTHING but what people are prepared to pay for it.
You say "beyond any rational behaviour". Yes, that is where it STARTS. Not where it ends. The behaviour of the stock market is NEVER rational. At all.
Thus, your prediction is meaningless.
Nissan's Leaf is the 7th best selling EV in the US. You are entitled to your own opinions, but not your own facts.
You do know there's these things called 'other countries' yeah? A quick google tells me that there's over 300k Nissan Leafs and Tesla produced their 300k'th car this year. Based on this I wouldn't say Telsa is the biggest, although they probably will be very soon.
Investors shorting Alibaba have lost over $16B.
Haha probably all the stupid people that watched that documentary the China Hustle and didn't realise that it was part of a hustle in itself.
I would go so far as to say that shorts are anti-capitalist; working to damage a potentially profitable company.
If your profits are legitimate then there isn't anything to fear. Any investor that bases their investment decision on 'cropped graphs' isn't likey to last long.
It's like privatised prisons being pushed here in NZ; it profit them not to reduce the number of residents...
Privately operated prisons are different from a privately run judicial system You might confused with the US where the legal/political system is a lot more corrupt. There's no reason why outsourcing can't be effective is proper governance is enforced.
I'm informed by the awesome cayenne8 that any form of government intervention will lead to compulsory gay marriage and death panels like they have in Venezuela.
Are you telling me it ain't so?
When they allowed the gays to marry the govt forced us all to wear dresses to school. And if a tranny came into your bathroom and requested a blowjob you had to give them one. And you weren't allowed to spit it out either. Don't let this happen to you folks....
I never said it guarantees anything, in fact I specifically said the opposite. The thing about making stupid big bets is that its self-limiting, you lose a couple of those stupid bets and you can't afford to make any more of them.
You declared them "generally a lot better informed" BECAUSE of "a much greater incentive to get it right".
I.e. You gave reasoning for WHY they are "better informed" - which is a case of arguing for an unproven assumption, on the premise that said assumption is actually true.
And in general... based on your own argument of "the future... not [being] deterministic" - it is also a false assumption.
Mit der Dummheit kämpfen Götter selbst vergebens
If you are 'predicting' the past for investment advice, I suggest lottery numbers as a faster easier way to wealth. How about predicting the future?
Exactly. And the MOST DISGUSTING THING is that Tesla builds plaything cars for the rich 1%. If you want affordable EVs you should be investing in the companies that actually produce them today.
Everything affordable today started out as a plaything for the rich. Houses, cars, travel, TV, computers, mobile phones etc etc.
This is how things become affordable. Rich people subsidise R&D and the rest of us eventually benefit too.
The articles that make it to Slashdot aren't about fender benders. Tesla accelerates into a lane divider. Lithium fire in Tesla in Indianapolis roasts passengers alive. That sorta thing.
There is very little investigative reporting today. What happens here is that a bunch of amateur short sellers write articles for sites where virtually anybody can post an article like seekingalpha performing napkin-quality "analyses" (trash talk) based largely on conjecture to trash the stock. Some of these analyses become popular and get repeated until they become "common knowledge". Then, so-called "reporters" (where did the real investigative reporters with understandings of statistical analyses go?) who are often also either short sellers or in the pocket of short sellers pick up the "facts" from these articles and echo the same analyses in plainer language. Voila, you have a story - the more shocking the better because our society loves to bash those who are making people look bad by actually accomplishing things.
On the other side of the game, I'm actually happy that these people exist. When a good company gets bashed in the market for bad reasons, it usually bounces back. Investing in these and selling when they return to near normal is a lucrative strategy in this environment. Playing these cycles in Tesla has performed much better than buying Tesla a couple of years ago and holding it to today.
You're correct "that's not how stocks work", yet incorrect in concluding "nobody has been handing Musk money".
If Tesla were like most companies, they would have used the money from their IPO in 2010 to invest in building a profitable, stable company, and they wouldn't issue any more stock. Many years later, they might buy back their stock, and then sell again later.
Tesla is not an ordinary company, and certainly not an ordinary stock. Tesla has been making new issues, averaging $2 billion per year. Mostly stock, though recently they've started issuing junk bonds.
Yes, ordinarily a stock represents a partial ownership of a business. Once the business "goes big" with the IPO, stock transactions don't involve the company directly, at least not until they mature enough over several decades that they have bought some back. Tesla stock value doesn't represent the value of the business, the business isn't worth 10% of the stock price; and they do continue to issue stock. Tesla depends on a steady flow of new investor cash to keep things afloat. Most companies depend on revenue from SALES.
You know what kind of financial scheme DOES depend on continually getting more and more investors, there is a name for that arrangement.
Re giving money to Musk, while Tesla has been losing money, investors' money, Musk's personal fortune has been increasing by $1 billion each year. Where do you think that money is coming from?
Shorting did not prevent the housing bubble.
It made it less severe.
And there is no mechanism stops lending in the housing market related to if more people had shorted, and done so earlier.
If more people had shorted, housing prices would have fallen months or even years earlier, when the bubble was smaller.
Like many other forms of greed, shorting is good.
If you need "Stock market police" then get the government to do it
Because the SEC did such a superb job regulating CDOs back in 2007?
... rather than a business as the business is in the business of profit.
That means they have skin in the game, and a strong incentive to get it right.
Just don't do it. Really. It's a terrible idea. It's gambling, not investing, but it's even worse than gambling because there's no limit on how much money you can lose.
"I'm too busy to research this and form an educated opinion, but I do have time to tell everyone my uninformed opinion."
What a strange outlook. When a stock price goes up its because money was take from one place and moved to another. When it goes down its because money was taken from once place and moved to another.
Your statement belies a complete lack of understanding about how he market works.
Internal use does not require any modifications to be released.
Ezekiel 23:20
Looks like those shorts took it... *puts on sunglasses* - in the shorts.
Because if they go up, you go bankrupt. You lose everything you have as a financial asset. And you don't have the same bankruptcy protections you did twenty years ago.
There is no America. There is no democracy. There is only IBM and AT&T and DuPont, Dow, General Electric, and Exxon
And this event is so notable because of its rarity. Every sufficiently big financial institution should be able to absorb the loss. Shorting is for big players only that can absorb such rare events.
Yeah but everybody is responsible for tending to the snowball effects of their actions on others, and mitigating then that's just part of being a person who's not an enemy to those they do business with
Yeah but in this day and age if you have anything in your own name you are sorely naive and lacking in doing your due diligence to cover your own liability. If you layer your shit right then legality should be irrelevant
I don't have $10000000 but am seriously considering buying $10000 or so in TSLA.
A good short squeeze might leave me smiling a big smile as I drive my Model S.
GM are doing OK now. But the word "stability" is a bit of a stretch for a company that had to be bailed out by the government a few years ago.
sustainable living
Only if someone else decides to keep financing Tesla. Tesla currently loses money on every car they sell. At a burn rate of $2 billion a year, someone would have to be willing to finance Tesla with $10 to $20 billion, minimum, to keep them going. In fact, Tesla lost $17,000 per vehicle sold in Q1, 2018. That means that vaunted backlog of 500K cars represents $8.5 billion in losses at today's rates...
Ramp up of a company in a capital intensive industry really has become completely foreign to 90% of spectators. It's been so long since it last happened in the auto industry, Generation X can't remember it because they were toddlers, if they were even born yet.
You fail at accounting. It does not cost $20 billion to make half a million cars. They do not lose $17,000 "per vehicle", and the rules of accounting make that quite clear. Per vehicle, after parts and labor and amortized design labor, they make a 25% profit. They then plow that profit, plus even more money, into capital equipment, which is a completely different part of the balance sheet that's expected to be negative. A third Model 3 production line was finished and brought online just a couple of weeks ago. Do you think all that equipment is free? I'll give you a hint. It's not. In fact, surprise surprise, it costs billions of dollars. And after they use it to make half a million cars, they will still have it, to use to make another half a million cars. It's not like they're going to just stop, and it's not like a car production line mysteriously evaporates once the backorders are filled.
Oddly enough, spending those billions on new equipment is the fiscally responsible thing to do. They have 500,000 preorders for a car, something that has never happened in the history of the world. Those preorders actually had to put money down, so they're not trolls or fakes. There really is that much demand. Meeting that demand is exactly what Tesla's board and Tesla's shareholders expect Tesla to do. The fact that costs money is a shock only to people who never buy anything but blue chip stocks.
Tesla will be profitable the moment they stop buying new production equipment. That's expected to happen in the third or fourth quarter of this year, according to Elon Musk at the most recent shareholders meeting. Knowing Elon, that means more likely fourth than third, but it's a forward looking statement by a company executive at a regulated financial meeting, so they're required by law to make their best effort to make it true. I expect them to succeed—for about 9-12 months, at which point they will once again start buying equipment, this time to spin up production lines for semis and 2020 Roadsters.
Me, I think Tesla is going profitable for the sole purpose of smashing the short sellers. There are institutional investors waiting for Tesla's next profitable period to buy even more shares, which will push the price to new heights.
Musk is a union-busting cunt, just another Rand-worshipping shithead, so Tesla deserves to be boycotted and fail.
OTOH short-sellers and other stock-market gamblers are destructive parasites that cause far more harm than Musk ever could. Even the idea of them losing a billion is fucking hilarious.
so, "HA HA", I guess.
OK, you have two clients bidding to buy 30% of your next 3 years' of production. One has been turning a profit for the last 10 years. One has never turned a profit. The first is one of the top 5 manufacturers in the world. The second doesn't even rank in the top 50. So who do you make the commitment to? The one with a profit and a large, established market share? Or the one who loses money on every item they sell, is a niche player, and doesn't even rank in the top 3 of their own niche?
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
Unlimited downside makes it quite different from most other investments from a gambling perspective.
That doesn't mean it should be outlawed - shorting serves a useful function in a market.
>> These investors are desperately seeding, feeding, and writing negative stories about Tesla
"investors" ?
Those are not investors. They are gamblers with schadenfreude. Or worse.
aaaaaaa
Whatever your bookkeeping system uses. I've seen database systems which used 15 or 18 digits long decimal fields to work on (e.g. SAP R/3).
You write a check and get more money. At a certain point the people will pick up the loss as you are top big to fail.
If you owe 1.000 it is you that has a problem.
If you owe 1.000.000 it is the bank that has a problem
If you owe 1.000.000.000 it is the state that has a problem
Don't fight for your country, if your country does not fight for you.
Which, after transaction fees, would more than wipe out any expected profit from the short. That is like placing a bet that a horse will win, and another bet that it will lose. The only one making money is the bookie.
What you are describing is actually a Long Straddle - as long as the price moves in one way or another more than the combined premium you pay to enter the position, you profit.
Another option is a Bear Put Spread which bets on a declining price but caps the loss.
People choosing to just "sell and hold" their short positions get exactly what they signed up for, unlimited upside potential and unlimited downside risk.
Global sales is what matters given that Tesla competes in a global market. US sales are only useful if you want to make Tesla look like it has more market share than it actually does.
Well, with margin accounts (which is what you need to be able to sell short), there are interest rates that you agree to. The biggest downside of options is just how much you are not explicitly aware of. Every option you purchase (put or call) has an implied leverage factor, and with implied leverage comes an implied financing cost (i.e. interest rate).
The derivatives brokers that write the options know what all these are and have written the options for them to make money under most circumstances. Most retail speculators don't have the technical know-how to be able to calculate these underlying costs and are bound to overpay for the leverage they get with options.
P.S. Options market is always more volatile than taking a short position. Every option is fragmented by the expiration date and price level, ensuring limited trading volume and limited liquidity, which leads to more volatility (again, something that derivatives brokers make their living on). This is especially true for out-of-the-money options.
Or....cause it as not only do they have a profit motive in seeing prices fall, but be threatened by their own bankruptcy if their bets backfire. This is a job for auditors and regulators, not someone with a financial interest in your company's failure.