
Tesla short sellers $2B in the red for June as shares soar - antman
https://www.reuters.com/article/us-tesla-stocks-shorts/tesla-short-sellers-2-billion-in-the-red-for-june-as-shares-soar-idUSKBN1J82OX
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tejohnso
I shorted (a very small amount) from about $320 down to about $270. That's
when Elon had his very standoffish and defiant earnings call. After that I
exited at a profit because I didn't think the downward reaction was severe
enough.

People were asking legitimate questions about orders and finances and he told
them to shut up, while directly insulting their intelligence. That was an
extremely bad sign to me. When I saw that even after that, there was still
support in the $270s, I declared the market too bullish for my liking and was
no longer comfortable being short.

As far as I'm concerned TSLA has to turn a profit in the next couple of
quarters or they're just not going to be able to be competitive enough with
the additional financing they're going to require. Elon promises they won't
need to raise capital. If he's right, great. But I'm not betting on it one way
or the other.

~~~
kjksf
GM just had their annual meeting for shareholders.

They said they'll increase production of Bolt but refused to say by how much
and by when.

In contrast, Tesla lays out their future plans months, sometimes years in
advance.

Tone aside, it seems to me that Tesla is being measured here by a completely
different stick.

Compared to all other public companies they provide vastly more "legitimate"
information.

Just for a few examples of "legitimate" questions that well known companies
refuse to answer, even if politely:

* GM won't tell you any details about future plans for Bolt and other EVs. Tesla: "we'll make 10k by end of 2018". GM: we'll increase production, don't ask us when or by how much"

* Amazon only recently disclosed number of Prime subscribers, and only total number, not breaking down e.g. US from international

* Netflix won't tell shareholders viewing numbers for any of their shows

I could go on talking about information that companies don't share.

It's just bizarre that people expect Tesla will just disclose anything that's
asked.

~~~
daveguy
Tesla is held to a different standard is precisely because they have been so
forthcoming in the past.

If a company is giving regular updates on production and targets and then gets
weird about it for one meeting then you can expect a drop. It looks like they
are back on track (and are again open about production), but you can bet if
they get cagey about it again their stock is going to take a hit. They might
be able to transition to less openness if they want to (so they only reveal
what they want and don't spook investors), but not one extreme to the other in
just one shareholders meeting.

~~~
njarboe
I think the reason Musk and Tesla are very sensitive about production numbers
right now is that they want to hit their 200k electric car production number
at just the right time. The way the $7500 federal tax credit works (and I am
pretty certain this is right. Happy to follow a link to the actual law) is
that after a company makes 200k qualifying vehicles, for the rest of that
quarter and the quarter after that people still get the tax credit. So
depending on when they hit the 200,000th car, the full tax credit will last
between 3 and 6 months. Tesla would like to get the Model 3 production ramped
up to a high level but not hit the 200k total production until right after the
start of a quarter.

It looks like they are going to do just that. Tesla is very close to 200k this
month and that is probably partly why they shut down to "improve production
rate". Slow down production in June to not hit 200k until after July 1. They
have also been playing with exporting more cars to hit the 200k number at just
the right time.

Having the maximum 6 months instead of the minimum 3 months will be a lot of
extra cars/people getting the tax credit. If they average 6000 cars a week
over that time (12 weeks x 6000 x $7500) that is an extra $540 million.

Then the tax credit goes in half for the next two quarters and in half again
($7500/4) for the next 2 quarters.

Seems a bit strange for the law not just to say the credit extends for 6
months after the 200,000th car is built, but who knows how such laws get
crafted.

~~~
cjhopman
Your whole premise is wrong. The credit's expiration is based on # of cars
sold for use in the US. Not, in any way, on # of cars built.

~~~
toast0
It's not a direct link, but it's pretty close. You can't sell cars that aren't
built, and if they're built, you want to sell them ASAP so you don't have to
deal with inventory. That you can sell them to other countries helps with the
inventory issue though.

~~~
zormino
With the number of preorders, can Tesla claim they are sold as soon as they
are manufactured?

~~~
zwily
They are sold when they are paid for. The preorders are not paid for.

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zeusk
That's not how shorting works. Most short positions are pairs trade to offset
a long position elsewhere, and TSLA is a favorite punch bag for the wall
street (crappy financials).

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lrn
Worth noting that Elon just purchased 72,000 TSLA shares worth $24,000,000
(purchased June 12 & 13).

~~~
SimbaOnSteroids
Preferred or common shares because those are two different signals.

~~~
jeff18
Common: [https://www.reuters.com/article/us-tesla-musk/elon-musk-
buys...](https://www.reuters.com/article/us-tesla-musk/elon-musk-
buys-72500-of-tesla-shares-idUSKBN1J930L)

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csomar
There is no precision if these short positions are offset by other positions
(ie: options). The trader might be arbitraging spot/derivatives and so is not
losing $2bn but rather making money.

It is not even clear if the entity collecting this data can have such depth
and knowledge of individual positions. Also my understanding is that unless
you put capital, your position will margin called. It means the losses are not
just on paper. The players have already engaged money.

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kolbe
That's a lot if they're talking about truly naked shorts. The only way I can
see a number like this and think it's not a complete disaster is that these
aren't really naked shorts. I can certainly see a situation where the natural
longs that TSLA employees have via options and RSUs can get hedged secretly
though a bank, and that shows up as a short in the market.

~~~
CydeWeys
It's a pretty typical provision in employment contracts that you aren't
allowed to bet against the stock of your employer. I'd be surprised if any
meaningful percentage of Tesla employees were shorting their own company.

~~~
kolbe
Hence my use of the word 'secretly'.

Also, it would only take one particular rich/narcissistic employee to make up
all of it if he wanted to secure a few billion dollars of his net worth for
the future.

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noetic_techy
Elon did warn everyone during that conference call where he supposedly went
"nuts" that the biggest short burn of the century was coming.

I listened and man was that overblown. He was simply bored of shitty
questions.

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matte_black
If it goes much higher I’m planning to open a substantial short position, I
don’t see TSLA getting into the 400s.

~~~
maoistinquisitr
This whole current moment rhymes too well with 2000 and 2008. Who are the Ken
Lays, the Bernie Ebbers's, and the Madoffs? I suspect Bezos and Musk are going
to fall hard.

~~~
matte_black
You’re dead wrong about Bezos and Amazon. Expect to see AMZN in the 2000s in
the next years.

~~~
Jyaif
If you are so sure about your prediction then you should invest a substantial
amount of money in AMZN.

~~~
matte_black
I have.

