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jhm
Well-Known Member
dennis
Model S Plaid
Mario Kadastik
Active Member
With regard to shorts covering, in theory a 100 shares could facilitate the squeeze if there is a steady supply of shorters at ever rising price.
Short A covers and returns the shares to the pot, shorter B loans them and sells to shorter C who is buying to cover and returns them to the pot. Repeat as long as you need
shorts cover, but net short interest remains the same.
Now if the recalls force the squeeze, then the float available will just not be there as the shares aren't returned for lending, that would be a major spike, in fact I don't know what the procedure is if there are no shares to be bought because there are no sellers, but the shares are requested back nevertheless and the shorter needs to cover. A price spike that could go in multiples is not impossible if the order book is cleared, no clue what the algos would do...
And a recall of some 20M shares would clear the order book quickly and early... Then again, who wouldn't want to sell TSLA at 600$ today?
Short A covers and returns the shares to the pot, shorter B loans them and sells to shorter C who is buying to cover and returns them to the pot. Repeat as long as you need
shorts cover, but net short interest remains the same.Now if the recalls force the squeeze, then the float available will just not be there as the shares aren't returned for lending, that would be a major spike, in fact I don't know what the procedure is if there are no shares to be bought because there are no sellers, but the shares are requested back nevertheless and the shorter needs to cover. A price spike that could go in multiples is not impossible if the order book is cleared, no clue what the algos would do...
And a recall of some 20M shares would clear the order book quickly and early... Then again, who wouldn't want to sell TSLA at 600$ today?
JRP3
Hyperactive Member
Interesting that Damodaran, who previously valued Tesla first at $67 and then at $118 is now saying something completely different: NYU's Damodaran: Tesla's Value More Justified Than Amazon
http://aswathdamodaran.blogspot.com/2014/03/return-to-firing-line-revisiting-tesla.html
http://aswathdamodaran.blogspot.com/2014/03/return-to-firing-line-revisiting-tesla.html
With regard to shorts covering, in theory a 100 shares could facilitate the squeeze if there is a steady supply of shorters at ever rising price.
Short A covers and returns the shares to the pot, shorter B loans them and sells to shorter C who is buying to cover and returns them to the pot. Repeat as long as you need
Now if the recalls force the squeeze, then the float available will just not be there as the shares aren't returned for lending, that would be a major spike, in fact I don't know what the procedure is if there are no shares to be bought because there are no sellers, but the shares are requested back nevertheless and the shorter needs to cover. A price spike that could go in multiples is not impossible if the order book is cleared, no clue what the algos would do...
And a recall of some 20M shares would clear the order book quickly and early... Then again, who wouldn't want to sell TSLA at 600$ today?
Even before considering the squeeze, this would not work if the shares returned to the "pot" are recalled by the institutional shareholders and are not available for lending because of this.
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Of all the big name companies you could compare Tesla to inside or outside the auto industry, I think Amazon is probably one of the best apples to apples comparisons.
In order to borrow for purposes *other* than shorting, you have to have a personal relationship with the broker. It can't be done through automated systems or by calling your broker at retail. It can basically only be done by institutional investors or fund managers.
It is possible that this is happening, that someone is borrowing huge numbers of shares and paying high interest rates in order to vote the merger down. We might be able to identify this if the number of shares shorted stayed constant or dropped while the borrowing rates went up and up.
Keep an eye on this. If number of shares shorted *drops* while the interest rate to borrow goes way up, that might mean that borrowing is being done for a reason other than shorting. However, it could also just be due to shares being recalled for voting, which has essentially the same effect as shares being borrowed for voting.
[edited with second thoughts]
It could be, but it's equally likely that the Fidelity fund manager who is *ultra-bullish* on the merger is trying to make sure it happens and borrowing shares for that reason!
Sorry I didn't clarify. That's the key point. It's not whether the account has margin enabled, it's whether you're actually using it. If you actually *use* the margin, then they may be able to borrow your shares for free (...up to 1.5x the size of the margin loan, IIRC, though don't quote me on that, I didn't pay attention). I also have a margin account (mostly so I can trade options) and never use the margin.
No, no, look at it the other way. They raised the rates by 10%, so then they raised the rates they're paying to lenders by 10% (keeping the same profit margin), and that attracted more lenders, making more shares available.
The total rechargeable battery automotive unit did 352.8B yen turnover, so the $180B yen turnover from the article is already trimmed down to (what makes the most sense to me but I am wholly unsure of) their lithium ion battery production only. It's really unclear to me so any links to sources you have on what exactly they deliver as part of their automotive battery division would really be appreciated.
mmd
Active Member
Lots of interesting speculation about the shares short I explain my understanding in a diagram below to sort out some confusions many are having. Please tell me if you see any mistake. Thanks in advance.
For Tesla: 147 M outstanding shares, say 28 M sold short. So, there really are 175 M longs. So, if we include all the longs, market cap for Tesla is really $38 B.
Question: Does anyone know if the reported institutional holdings include shares lent out to others? If yes, then adding up all the numbers can be more than 147 M. Is that correct?
I explain my understanding in a diagram below to sort out some confusions many are having. Please tell me if you see any mistake. Thanks in advance.For Tesla: 147 M outstanding shares, say 28 M sold short. So, there really are 175 M longs. So, if we include all the longs, market cap for Tesla is really $38 B.
Question: Does anyone know if the reported institutional holdings include shares lent out to others? If yes, then adding up all the numbers can be more than 147 M. Is that correct?
(Regarding Tesla leases)
Yeah, but they still get the cash upfront and the banks still take the default risk. From a *cash flow* point of view, the residual value risk is an issue for 3-5 years down the road, once Model 3 is selling like hotcakes... so it's not a *financing* risk.
We were estimating EPS, not cash flow, so financing does matter because it impacts when and how Tesla recognizes revenue.
Soooooo, the real question becomes: at what price will the longs start selling? The shorting levels seem wildly unsustainable and there will have to be a short-covering rally. Now, this can only happen if longs sell; otherwise, it's a genuine short squeeze, and every transaction leaves someone holding the hot potato trying to cover their short position. So when do the actual longs sell?
-- if the price rises to the level where they want to take profits -- this seems very likely
-- if the price drops and they bought on margin and get a margin call (this is what the shorts would hope for)
-- if they sold out-of-the-money covered calls which trigger during the rally -- this actually seems fairly likely too
-- if the price goes so high on such low volume that Tesla offers a secondary public offering to meet demand for shares. (In this case, Tesla itself would be the long who was selling.) I wouldn't rule this out though it seems fanciful.
-- if the price rises to the level where they want to take profits -- this seems very likely
-- if the price drops and they bought on margin and get a margin call (this is what the shorts would hope for)
-- if they sold out-of-the-money covered calls which trigger during the rally -- this actually seems fairly likely too
-- if the price goes so high on such low volume that Tesla offers a secondary public offering to meet demand for shares.
(In this case, Tesla itself would be the long who was selling.) I wouldn't rule this out though it seems fanciful.Oh, we were? Right.
I've been obsessing about cash flow financing because it's the main issue with the SCTY merger. The residual value guarantee is a back-end cost, so it didn't figure into my financing thinking.You're right that it should reduce EPS somewhat. Probably not significant in the long run, since I suspect Tesla has solid estimates for the residual value which will be accurate on average.
MitchJi
Trying to learn kindness, patience & forgiveness
Honda and Toyota (Prius) still use mostly NiMH in their Hybrids (believe it or not):
2015 Toyota Prius - Quick-Take Review
3.5 million sold, watch your back, M3 is coming to get you!
From another site starting in 2016 lithium is an option:
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jhm
Well-Known Member
Model 3 is already helping to kill off sales of the Prius.
Toyota Dumps Prius Inventory as Sales Collapse
mmd
Active Member
Toyota has been using lithium batteries in the 7 seater Prius+ sold in UK since 2012. I don't know how many they sold.
Toyota's 7-Seater Prius+ MPV to Launch in the UK in July with Prices Starting from £26,195
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