
The crowd-sourced, social media swarm that is betting Tesla will crash and burn - paradygm
https://www.latimes.com/business/autos/la-fi-hy-tesla-short-sellers-musk-20190408-story.html
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NathanKP
From the NYT article linked in this:

> In 2018, Tesla said, it delivered 245,000 cars, mostly in the United States.
> The research firm IHS Markit, which tracks state motor-vehicle data, counted
> registrations of 164,000 new Teslas nationwide.

That's a pretty interesting and potentially damning finding. I don't see why
anyone would buy an expensive car from Tesla and then fail to register it.
It's possible that IHS is just missing legitimately registered cars, but given
the long list of exaggerated or just plain false claims made by Musk and Tesla
it doesn't seem impossible that they are exaggerating their metric for number
of cars delivered.

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dragontamer
Hmmm... I don't see any reason why Tesla would lie about their delivery
numbers though. Halon's Razor would argue that Tesla's grossly accelerated
deliveries in Q4 (end-of-the-year) is leading to errors in IHS Markit's
numbers.

Overall, Tesla clearly has a demand-problem demonstrated by Q1 numbers (30%
drop in deliveries, even as the company cut prices worldwide and expanded to
China + Europe deliveries). But I don't see any reason to distrust the numbers
Tesla is giving out.

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justtopost
Delivering to resellers or dealers lots may count. Their accounting is known
to be... creative.

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oooshha
I know short sellers claim they improve price discovery and market efficiency
by seeking out negativity, but in the case of Tesla where Elon has pushed
electric vehicles forward 5-10 years, having millionaires like Josh Wolfe
sitting on Twitter day and night nitpicking seems really Petty and pointless.

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AndrewBissell
If the worst of what short sellers believe about Elon Musk & Tesla turns out
to be true, the resulting backlash may set electric vehicles _back_ many years
instead.

At any rate, large individual EVs with zippy 0-60 times are a piss-poor
solution to the problem of climate change.

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ryzvonusef
> The man says he works for a short seller who goes by the Twitter handle
> Latrilife. In return for scouting out and monitoring Tesla delivery centers
> and storage sites around L.A., he gets $20 an hour.

20 bucks an hour is not bad money for just a few photos

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alimw
> Of its 173 million shares, about 17% are held by short sellers.

Can someone explain to me what this means? that a share is held by a short
seller?

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dragontamer
A short seller borrows their shares from someone, and sells them to someone
else. In effect, a short-seller inverts the process: they SELL... THEN they
Buy at a later date.

In essence: a short-seller is betting that the price will drop in the future.
The practice is controversial with TSLA shareholders because Elon Musk
constantly hates on the practice, but its not really considered a bad thing by
the greater investing community.

Short-sellers lose if the stock price goes up, or if dividends are
distributed. In effect: short-sellers can ONLY make money if the company money
in the long run.

\--------

Long-holders (typical shareholders) win from short-sellers, because short-
sellers provide more shares for the company without actually diluting the
overall stock.

Lets say 1-million shares exist, but 17% of them are held by short sellers.
That means the company has 1,170,000 shares in circulation (+17%), allowing
more long-holders to benefit in case the share price goes up.

Furthermore, the long-holder that is loaning their shares to the short-seller
benefits: because when you loan your shares out, the short-seller pays you an
interest rate.

This is the classic "bulls vs bears" situation. If the stock price drops in
the long term, short-sellers win. If the price increases in the long term,
then long-holders win.

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SilasX
I'm familiar with short-selling, but not the phrasing there. As you note, the
point of short selling is that you borrow the stock ... then sell it. So
short-sellers shouldn't ever be "holding" the shares to begin with, except
very briefly.

What I think it means is that the value of the short positions is 17% of
Tesla's market cap?

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dragontamer
Ah, I see.

The article's wording is definitely imprecise. I agree with you there. Here's
my interpretation: The share is held by a lender, who has sold the share to a
short-seller. In effect, 17% of the shares are "double-counted".

If there are 1,000,000 total shares, but 17% short-interest, then there would
be 1,170,000 shares in circulation. It seems clear to me that the article is
talking about short-interest (but is using somewhat imprecise words at that).

So its not so much that the share is being "held by a short-seller", but the
share is "double-counted because of a short seller". It probably would have
been better if the article more precisely said "17% short interest", which is
probably the precise and technical wording for this situation.

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SilasX
Ah, okay. Or "17% of shares are out on loan to some short-seller".

