I don't think this was ever a rumor. The rumor was that they are in talks to acquire 10%. Would explain where the funding for the 3rd gen will come from? Maybe Buffet changed his mind about BYD and decided to go with an all American company that actually makes/develops their vehicles instead of stealing designs?
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Are you also investing in Tesla?
- Thread starter Fr23shjive
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Only holdings worth more than $1 billion were listed on those reports. According to the report, Berkshire's BYD shares were barely over $1B last year. Since then, the stock has dropped about 20%. That may be simply why BYD is not in this year's report.
Incorrect in one detail -- there is no date certain.
The way this actually works, you borrow from a broker for an indefinite period, and the broker borrows from their other clients. If there's a "net short" position at that broker, the broker will borrow from another broker, and that might have a date certain return time, I don't know about such things.
The critical point is that brokers require that you put up collateral when you borrow the shares. And the collateral has to be equal to the value of the shares (or to some fixed fraction of it or multiple of it, which is totally irrelevant for purposes of this explanation) -- and the required collateral changes whenever the market price changes.
So a short-seller may have enough collateral to support borrowing 100 shares of Tesla at $30 a share. (Which he promptly sells.) But when Tesla goes up to $60 a share, suddenly the short-seller needs $3000 more in collateral. If the short-seller doesn't have enough collateral, eventually the broker can force the short-seller to sell everything else he owns in order to buy back the shares and return them, and the short-seller ends up bankrupt and in debt to the broker.
(This is why it is extremely unsafe to short-sell; you have unlimited downside risk. Professionals always purchase a call option to limit their downside risk, but they have to purchase a new one every three months, because options *do* have a date certain, so even with that strategy you can't stay "short" forever. So short strategies are rarely longer-term than a few years. I know Microsoft will go bankrupt within 20-30 years, but there is no easy way to bet on that; I don't have enough collateral.)
Notice that the short squeeze is exacerbated by the collateral requirements ("margin calls"). The people who are in short positions may want to stay in short positions, but if they don't have great gobs of collateral, they won't be *able* to. The only entities with unlimited collateral are, effectively, central banks, and they don't do short-selling.
In experimental "mock markets" run by experimental economists, early on, people who knew what they were doing tried to sell short. Even though they were right in the long run, they all went bust because whatever they tried to short, would have bubbles large enough to blow through their collateral. "The market can stay crazy longer than you can stay solvent" is the resulting warning about short selling.
The very high short percentage of Tesla does indicate a coming short squeeze sooner or later, but I wouldn't be able to guess when the shorts will be squeezed; it depends on their level of collateral, partly. Deep-pocketed shorts take a long time before they get squeezed.
To invest in individual stocks long-term you *HAVE* to be willing to ignore short-term fluctuations.
I place limit orders which are "good until cancelled" and then don't look at the stock price for months. When I do notice it, I don't pay attention. I know what the stock is worth.
You *have* to have this attitude in order to do long-term investing in common stocks, otherwise you'll make yourself ill.
To do short-term day-trader style speculatin, you do something totally different, you watch the fluctuations and keep jumping in and out -- and you *still* can't let yourself get upset by them.
If you do get upset by the fluctuations, and can't change that, individual stocks are Not For You.
Johan
Ex got M3 in the divorce, waiting for EU Model Y!
neroden - thanks for your post, in which you have explained very eloquently what I tried to argue a few posts earlier (that short positions can in theory be indefinite, but most of the time in reality are more short-term than long positions).
Since I got into the TSLA stock about a year ago I have jumped in and out on numerous occasions, never playing a short position but rather repeated "short term" long positions, and with every gain I make I slowly build a true long-term long position which I intend to keep for years, with the exeception of an exaggerated short-squeeze situation where it would just be silly not to take all the profit possible. For example, I sold out 1000 shares that I had gotten at 30.05 for 34.75, bought back in today at the dip at 33.25 and expecting the stock to touch close to 35 again within a short period of time. Between many of these smallers gains the big gain made from the big dip back in january I've been able to build quite a good long position which is funded only by short-term gains. The way I see it is the company is a winner long-term but still in it's early phase where there will most certainly be a lot of up-and-down which I haven't found difficult to spin to my advantage so far, and this situation will continue at least in to 2013 and the way I see it is as long as the short interest is high the stock will keep jumping up and down the way it has been since the IPO, and even though the exact timings of the ups and downs are impossible to predict the thing is all you gotta do is buy cheaper than what you're selling for, which has so far been fairly easy.
Since I got into the TSLA stock about a year ago I have jumped in and out on numerous occasions, never playing a short position but rather repeated "short term" long positions, and with every gain I make I slowly build a true long-term long position which I intend to keep for years, with the exeception of an exaggerated short-squeeze situation where it would just be silly not to take all the profit possible. For example, I sold out 1000 shares that I had gotten at 30.05 for 34.75, bought back in today at the dip at 33.25 and expecting the stock to touch close to 35 again within a short period of time. Between many of these smallers gains the big gain made from the big dip back in january I've been able to build quite a good long position which is funded only by short-term gains. The way I see it is the company is a winner long-term but still in it's early phase where there will most certainly be a lot of up-and-down which I haven't found difficult to spin to my advantage so far, and this situation will continue at least in to 2013 and the way I see it is as long as the short interest is high the stock will keep jumping up and down the way it has been since the IPO, and even though the exact timings of the ups and downs are impossible to predict the thing is all you gotta do is buy cheaper than what you're selling for, which has so far been fairly easy.
You speak the truth...something I know in my heart, but I don't have the guts (or collateral) to short them either. It's possible they'll stumble (or most likely buy) their way into being relevant again somehow. The day they start shipping Word for Linux will be the day I'll consider not hating them...well, maybe. Way too much water over that bridge.
Seems the short volume has decreased slightly in the past few weeks. This could prove interesting.
Tesla Motors, Inc. (TSLA) Short Interest - NASDAQ.com
Tesla Motors, Inc. (TSLA) Short Interest - NASDAQ.com
Not based on the link you shared. It's been pegged above 24mil for several weeks
for what this is worth, has anyone else noticed that volume on TSLA appears to have been dead for the last week? I find it particurlarly interesting that Morgan Stanley just released a statement holding that they don't believe Tesla will deliver more than 2k Model S in 2012. This smells of a short squeeze in the making. Does anyone honestly believe 80% of reservation holders will drop out, or that Tesla won't be able to deliver on its 6k deliveries in 2012? For this to happen, 40% of reservation holders as of this moment need to cancel. For MS to be right 80% need to drop off the map.
If anyone is interested, if you bought at 10am and sold at 3pm everyday since Valentines day you would be +22%
Right...hardly noteworthy. You could have said the same thing between 12/15 to 12/30. The fact is there are going to be fluctuations, and it's not at all surprising given that the drop occurred after the uncertain earnings announcement.
Steph
Member
Looks like the squeeze is comming. Low volume, wild upswings with any significant buy.
All the ingredients are there.
We only need a great news and shorts will try to find an exit. Only problem is there is not enought life vests to jump ship.
All the ingredients are there.
We only need a great news and shorts will try to find an exit. Only problem is there is not enought life vests to jump ship.
siry
Member
Im confused by the short interest numbers. If there was any time where a "squeeze" would have happened it would have been in the last month as the company solidified its footing. I am very surprised that the short interest is still in the 24M range as most of those folks are heavily underwater and feeling pain. They must be banking on Tesla struggling during the launch/ramp up in the latter half of the year.
Given that most analysts etc. are already banking on the launch in July and a successful ramp up, Im not sure that there are many catalysts left that would really jolt the stock upwards from here aside from a very large third party deal. Everything else is already priced in and small powertrain deals just don't move the dial much relative to the model S revenue and profit numbers already priced into the stock.
Given that most analysts etc. are already banking on the launch in July and a successful ramp up, Im not sure that there are many catalysts left that would really jolt the stock upwards from here aside from a very large third party deal. Everything else is already priced in and small powertrain deals just don't move the dial much relative to the model S revenue and profit numbers already priced into the stock.
siry
Member
An out and out delay (like the Roadster in 2007) would certainly be very bad but that isn't as likely as a slower than planned ramp up, which would only really be obvious after 3Q earnings (although it will be evident on these boards before then!)
Nothing is priced in, since no-one knows what new things Tesla has in store. Elon seems very confident, and is holding quite a bit of the company. Top people have been buying shares. They obviously know something that has not come into being yet, that has not been made even a little public. My guess is additional deals, and maybe Buffet? Honestly, I think this has potential to double by years end. If anything unexpectedly positive comes out, the short squeeze, combined with deals potentially worth 500million-5billion in revenue long term could cause this baby to explode upward. The analysts are betting very conservatively. I am really curious what could cause a squeeze. My guess is it will happen in the second half of this year, after it becomes obvious that Tesla won't fail. Almost all shorts are currently underwater. I think if TSLA reaches 40, shorts will get margin calls, forcing them to sell. My guess is most shorts piled in around 20-25. Many are likely down almost 30-50%. If this goes to 40-50 they are down 100% and have to sell. Right?
