The Perils of Shorting: A Real Life Example

James Tiberius Kirk is spot on. Buying or shorting a company like Tesla is analagous to gambling when you don’t have the resources, knowledge, or understanding of such companies. People saying “but look at the P&L...it’s a cult” need to be saved from themselves. It’s almost arrogance or hubris.
 
James Kirk said:
Joe. You just proved Gordon's point. You have either zero knowledge of Tesla or you choose to misrepresented them(again).
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how have I zero knowledge? i have the same knowledge as most people commenting on this thread. I have an opinion based on what I have read about Tesla, it just happens to differ from your opinion. Yes you have more riding on Tesla as you have your money invested in it, I have none and would not short it either or any stock for that matter.
As for Tesla being a cult , I noticed that you never posted anything on askaboutmoney except on this thread to discuss Tesla. Im just wondering do you not have money invested in anything else ?
 
Jeepers Joe,

Imagine someone making an unfounded accusation! Not something that you'd ever do, right?!
:p;)
 
This thread has now reached a natural end and deserves to die in peace. I am sure someone will resurrect it in 12-24 months. Thanks Colm for the original post and being brave enough to post it. It has been intriguing.
 
joe sod said:
producing cars is not like producing smartphones or software, they need big factories, lots of materials and suppliers, the established car companies are in a lot better position to produce those electric cars than tesla because they have the experience in producing and selling big complicated machines like cars at volume
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Ok. Tesla have 3 huge (Not big) factories in the US. Giga Nevada has 10million sq foot floor space now and is about a third done. Fremont has about 5.5 million sq feet (plus the tent) and Giga Buffalo 1.5 million sq foot. Giga Shanghai built in 10 months and Giga Berlin just starting. Texas next.
Materials and suppies. Deals done on Battery raw materials into the future and battery supply chain way beyond any competitor as they sleep at the wheel. Super charger network all over the world growing at 40% year over year. Tesla software miles ahead of the competition and EV brand also way ahead.

joe sod said:
Because Tesla have sold so few cars yet and they are new, nobody knows of potential glitches, like braking, maybe charging problems, fire hazards etc. In other words all the dull boring but very important safety stuff that the big car makers have already mastered.
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Tesla cars have aced all safety tests and once human error is eliminated that advantage will only increase. Like every other car if there is a glitch it will be fixed possible over the air in Tesla's case.

joe sod said:
Producing cars cannot be increased rapidly like producing smartphones
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Compound growth of 60% a year. Any other auto maker

joe sod said:
As for Tesla being a cult , I noticed that you never posted anything on askaboutmoney except on this thread to discuss Tesla. Im just wondering do you not have money invested in anything else ?
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I have other shares, mostly Irish. I buy and hold. In the last few years I have stopped (Tesla excluded) buying and concentrated on the pension contributions. More tax efficient for me at this stage. I also own a small long term forestry investment. I post on other forums but came across this thread and could see how deficient in facts it was. I am no expert on Tesla, just interested and it bug's me the amount of b s people believe about the company and Musk. Any man the can come up with the crazy idea of reusing rockets and then actually making it happy on a small drone ship in the middle of the ocean should not be taken lightly.
 
James Kirk said:
Ok. Tesla have 3 huge (Not big) factories in the US. Giga Nevada has 10million sq foot floor space now and is about a third done. Fremont has about 5.5 million sq feet (plus the tent) and Giga Buffalo 1.5 million sq foot.
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just from a quick google Volkswagon wolfsburg is 70 million squarefoot, or in Tesla jargon Giga Wolfsburg is 70 million square foot, yes its one of the biggest plants in the world but is just one car maker with one factory still dwarfs Tesla total production capacity. Thats the point I have been making the sheer scale of what Tesla and its shareholders are up against.
The word Giga has nothing to do with EVs by the way its just a scientific unit for 1000000000 or a billion.
 
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Last week, I had to apologise to Brendan for being wrong about his investment losses! Upon mature reflection, I need to withdraw this apology. I was actually only being prescient and should not have been apologetic for my visionary flare!

Being serious, what extraordinary stock price movements this week - almost impossible for the casual observer to figure out what's going on.

Regarding this thread, I really like it and hope that it continues but it does seem to me that there are quite a few posters now giving more weight to "who is saying what" rather than "what is being said". That's a pity.

One thing I don't understand is why Tesla is not in the S&P. Can someone explain the background here please?
 
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WhiteCoat said:
One thing I don't understand is why Tesla is not in the S&P. Can someone explain the background here please?
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To be added to the S&P 500, the following criteria must be met:

  • It must be a U.S. company.
  • The market cap must be $5.3 billion or more.
  • The public float must consist of at least 50% of outstanding shares.
  • It must have positive reported earnings in the most recent quarter, as well as over the four most recent quarters.
  • The stock must have an active market and must trade for a reasonable share price.
Meeting these criteria isn't a guarantee that a stock will join the S&P 500 -- these are just the minimum



There are a number of criteria set out above before a company can enter the S&P. Tesla meets all but 1. They need 4 consecutive profitable quartets and the last Q profitable as well. At the moment they have only Q3 and Q42019. Q120 was questionable to start with but the coronavirus has made that next to impossible. They really needed that to fire out and sell a lot of cars this Q.
 
Thanks James,

When do you expect Tesla to meet the profit criteria?

Also, any idea of how many companies satisfy the above criteria who are not in the S&P?
 
WhiteCoat said:
When do you expect Tesla to meet the profit criteria?
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For those who still have short interest in TSLA there is a good chance of a drop in the SP around Q120 results. The China Giga factory had to close for 10 days because of the virus. After it started back again a good % of the workers (non locals) had to be quarantined for 2 weeks before they could go back on the factory floor. They also face supplier issues and probably delivery problems in China as there is no immediate end to the virus in sight.
Model Y production in the US has just started but first deliveries are not due until near the end of Q1. What the people I trust are saying is a Q1 loss of $200 million and a car sales number of 96,000. Production will be higher but as with every Q1 cars produced in the first 4 to 6 weeks head out of the US and may not reach the customer in this Q.

Prediction for Q2 are looking better even with investment in the MY ramp and Giga Berlin. As things stand car sales should be in the region of 135,000 and a profit of $200 million. Every Q will be profitable after that.

So on that basis they will meet the criteria after Q121.
 
www.forbes.com

John DeLorean Reinvented The Dream Car. Then He Totaled It.

At the time, GM was the biggest company in the world and the place to be, but Pontiac struggled with its brand identity and wasn’t connecting with America’s youth—suddenly a huge new consumer driving the country’s emerging car culture.
www.forbes.com www.forbes.com

an interesting article about John Delorean and Delorean cars. There are many similarities between Delorean and Tesla, the DMC brand strikingly similar to Tesla branding and the shape and colour of the cars metallic grey also the same. Im not having a go at Tesla as in fairness Tesla is alot bigger now than Delorean ever was. But Delorean was very charismatic but probably alot more suave than Elon Musk
 
Just out of curiosity, what kind of gains would you have been looking at now if you'd held on? Tesla currently @ 459.
 
This is would have been an example of making a profit without being right. A market sell off rather than a fundamental issue with Tesla. I wonder how the story will be told.....
 
Hi James

Not really.

I closed out of my short so I realised the loss.

My portfolio of shares is a long-term portfolio built up over the years. So my losses so far are lost gains.

Brendan
 
James Kirk said:
in that case, can the rest of us use the same sentiment for the shares we were long. Might help ease the pain... but I doubt it o_O
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Well if its any consolation, the oil stocks were decimated along with the airlines, it turns out that in this sell off nobody was right. The stock market is the great humiliator.
 
joe sod said:
Well if its any consolation, the oil stocks were decimated along with the airlines, it turns out that in this sell off nobody was right. The stock market is the great humiliator.
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I don't know about that. There are plenty of people on r/wallstreetbets that have made an absolute fortune shorting the S&P500 right now.
 
Connard said:
I don't know about that. There are plenty of people on r/wallstreetbets that have made an absolute fortune shorting the S&P500 right now.
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plenty of people!! i doubt it, Id say its like a few people have made huge sums shorting the markets ,professional traders in NY and London, hardly anybody in Dublin. Even on this thread how many people actually benefitted from shorting Tesla, Id say very few, I know a few people were bragging about getting a short on at the momentary peak of Tesla, even though they were actually Tesla bulls and saying it would goto $4,000 a share at the same time.
 
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