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2017 Investor Roundtable: TSLA Market Action

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Remember that Tencent announced a 5% holding on March 24th. It's an *odd* thing to do to announce an exactly 5% holding -- everyone always goes for 4.99999% holdings to avoid the SEC filing. Many of us believe this means that Tencent is continuing to accumulate shares well beyond 5%.

Speaking of "strong longs".


If they go Warren Buffett style they'd be aiming for the 10%.

I'm pretty sure once Tesla hits profitability with good margins if Warren is still alive, he (Berkshire) will put his foot into hit, and it's gonna hurt a lot.
 
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If they go Warren Buffett style they'd be aiming for the 10%.

I'm pretty sure once Tesla hits profitability with good margins if Warren is still alive, he (Berkshire) will put his foot into hit, and it's gonna hurt a lot.
Warren's in BYD. Which honestly *would* be my second choice electric vehicle company (they're doing very nicely in the bus and truck market).
 
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Warren's in BYD. Which honestly *would* be my second choice electric vehicle company (they're doing very nicely in the bus and truck market).

Yes, but to be honnest it's a pretty small position he has in BYD. Once electric vehicles and sustainable energies will really take off (like really), he'll look for a solid investment in it.
Tesla might be his choice.

He probably invested in BYD because he has smelled that electric vehicles are gonna get there eventually and then looked for a company which was already profitable, with healthy margins. But it was more of a " a foot to test the temperature " kind of investment.
 
So guys, 300 tomorrow or small correction ?
Well, that's an interesting question. I'm looking into the mechanics of margin calls. If -- and this is a big if, because I really don't know what I'm talking about here -- there are a lot of margin calls which will be issued *overnight* against short-sellers, then we're going to have a huge bump tomorrow morning as many of the shorts who were margin-called get out.

OK, here's a start:
Understanding Margin Accounts, Why Brokers Do What They Do | FINRA.org
 
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So, after reading the stated policies at several different firms, basically, when someone falls below the maintenance equity level, the broker has discretion with margin calls. They can close positions immediately without notifying the client, but they usually don't. Usually they notify the client after the close of trading and give them 5 days to restore their equity (by wiring money in or closing positions). But when a stock is moving really fast, the broker *will* start closing positions to protect themselves.

So in other words: we are unlikely to be seeing a short squeeze now, because most brokers won't start closing out the positions of most shorts who are margin-called until tomorrow, or even 5 days from now, depending. The exception would be very large positions where the potential risk of the client defaulting is material to the broker, where they might close it out more aggressively. If this gap up triggered a short squeeze, we'll most likely find out *tomorrow*, not today.
 
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