I had some time to do a little research this morning that I wanted to share with the group. I also want to share my plan for the week and results from last week, but I'll do that in another post.
Last week Gary Black had a tweet that really piqued my interest:
If institutions BMed to the SP500 are underweight TSLA, that could cause a ton more institutions to increase their positions if it looks like TSLA will be sustainably over the latest balancing price and consistently growing. Could there be a ton of institutions entering TSLA soon? I remembered some old Tesla Daily videos that covered the amount of the TSLA float that needed to be purchased as part of the inclusion being about 36%:
Here's a link to that part of the video, although there were several that covered this:
As I'm sure we all remember, this was a major driver of the stock price back in January. And I assume that BMed institutions getting out of TSLA was a major part of the subsequent fall, but I have no evidence for that. If retail has been buying all this time, but institutions are down or flat, then this might be a catalyst for the SP.
So according to the NASDAQ, here are the figures for institutional ownership for TSLA as well as other megacaps:
(see
https://www.nasdaq.com/market-activity/stocks/tsla/institutional-holdings)
TSLA: 40.98%
AAPL: 57.85%
MSFT: 70.88%
GOOG: 66.15%
GOOGL: 78.72%
NFLX: 80.90%
FB: 79.58%
NVDA: 65.46%
V: 95.04%!
JPM: 71.02%
And NIO is 34.77%, just for an EV comparison.
40.98% is pretty low compared to other megacaps, so there looks like there's a ton of room to grow. Interesting that AAPL is the next lowest %; I assume this is from extreme retail interest in the stock? I'm a PC guy, so I have no clue.
But what's TSLA done this year for institutional holdings? Have they gone up or down since the huge run earlier this year?
According to this pretty cool website I found, they've pretty much stayed the same:
Tesla (TSLA) institutional ownership from 13F data. See current and past ownership by hedge funds and others.
docoh.com
I also redid Rob's math from the spreadsheet above based on current values to check and see how far off we are.
Current S&P500 Market Cap: 40,300B
Friday's TSLA MC:
834.61B
Friday's TSLA Float MC (Rob's Float value is the "real" float; float - shares Elon and other insiders own and are unlikely to sell. I did not update this figure and have no idea how accurate it currently is.):
640.3B
TSLA Weight:
2.07%
TSLA Float Weight:
1.59%
According to Google, total value indexed and BMed to S&P500 was 13,500B as of 12/31/20. Multiply this by YTD 19.04% return (I'm not confident of this, because BM funds could under or over perform, but this is the data I've got):
16,070B
TSLA Weight:
332.65B
TSLA Float Weight:
255.51B
Current institutional ownership:
342B
Given that there are lots of institutions that own TSLA for reasons other than benchmarking, I think Gary's theory holds water, but it's not a really huge effect like back in the middle of 2020 (see graph above). Also, Gary mentioned in another tweet that growth funds who are benchmarked to the R1000G may also be underweighted:
No clue how many assets are under management BMed to that, but it may be significant.
Anyway, I found this interesting. Maybe someone who's more knowledgeable can pick this thread up and figure out how much institutional buying is likely in the next few months as TSLA starts looking less risky.