The TSLA Tug o’ WarJune 21st, 2019
In Q1 2019, Tesla did a capital raise. Wall St was talking and talking about how a capital raise was necessary. Elon Musk had previously stated that he had no intention on doing capital raises in the future. But he did. And this was ... good? When Wall St for years points at you and says "You need to do a capital raise!" and they don't. And they don't. And nope, not yet. But finally they do.
Now Wall St. is caught between arguments to try to take the stock down. Their FUD stories would surely conclude "Tesla in financial trouble" "See we were right about the capital raise."
But what happens in a capital raise? Why did Wall St want it so bad? You see, in a Capital Raise, bonds and shares of the company are made available. So shares went up for grabs. And it was at a really sweet price.
But now more shares are available. Shares that can be margin-ed out.
And so the FUD begins. TSLA going bankrupt.
But as people buy Tesla Model S3X's, more of these tiny shareholders emerge little by little gobbling up the shares 1 by 1.
What happens when a car company 5 years ahead starts selling cars so amazing it is stupid to buy anything else?
Well... that last part is far too biased. But Tesla Model 3 was the first car I ever wanted. The first car I ever bought new. New! I am proof that not only is Tesla selling to Camry and Corolla owners, but selling new full MSRP to people who were offered $150 for their trade in vehicle by Tesla. LOL! That actually happened to me!
I sold on Kijiji for 12x that but still. Obviously Tesla isn't in the used Honda Odessy business.
So we gobble up the shares until Wall St has no more. And then some shares flood the market in a capital raise. The capital raise swiftly ends and comes out higher than expected.
Boom, the FUD starts pouring it on as hard as possible. Leveraging the new found shares?
Problem is, Wall St has been so focused on negatives, they seem to be blind to all the positives.
Put it this way. Have you ever said, I am going to make 1000 cars/day and then done it? Or landed rockets, dug tunnels, yada yada?
And no matter what Elon says, how do you doubt the guy who makes 1000 cars/day over yourself who thinks he can't do stuff?
It was some stupid shit these shorts got themselves in. Elon tried to warn them. He gives up information about how things are going. He holds shareholder events so people can see things are awesome. He delays. Yes he delays. But when you say you are going to get cars driving around perfectly all by themselves, do you really want that guy to be ahead of schedule?
So doubt. Go on and doubt. Don't drive the car. How good could it be? Focus on the things he hasn't done yet and ignore the records he is setting over and over again. Records can't hurt you right? You know better than Elon. And your buddies on Wall St affirm everything for you. They support your short position, they are short too!
And the media helps affirm your believes. Tesla going bankrupt. That has to be a thing if they say it enough right? And the more you hears it the more fuzzy feelings you get inside. The more this latest jump in stock price appeals to you as and even better shorting opportunity. So go short. Short away Shorty! Short your ball Sachs off.
Short short short short short short short.
Truth doesn't matter right? Records don't. Happy customers don't. Clean air doesn't. Safety doesn't. Security doesn't. Fuel expense doesn't. Awesomeness doesn't. Speed doesn't. Range doesn't. Self driving... pffff. Better batteries... pffff. Super charging network? Ranger Service? I'd rather have gas pumps and mechanics! Tesla wont succeed. China will mess everything up. The records they set over there building that factory are a bad sign. It will only screw over Tesla faster.
China will be the death of Tesla. They will steal all their stuff and sell it and nobody will buy from Tesla anymore.
But what does that say about GM? Or Toyota. People only buy the Tesla knock-off, or gas cars right? Tesla is cut out completely. That is the only thing that makes sense.
Some day... you will drive in a Tesla and everything will change. Your short position will end that day. On this day, Elon Musk will have no less than 5 outstanding promises he has not yet made good on. Maybe even as many as 12. It wont matter to you anymore. Even if Elon promises 100 more things, it doesn't matter. What he has so far is 5 years ahead.
And people think that is over estimated. Maybe. But I mean, nobody has produced anything yet as good as the 2012 Model S. 7 years.
The scary thing for shorts is... is this lead growing or shrinking?
Maybe that doesn't matter. What matters is the demand for TSLA growing or shrinking? Well... without advertising it seems to be supported to the point where they make & sell 1000 cars/day. No advertising. Just some social media accounts and some shareholder meetings.
Well... maybe we can shrink it with some FUD. Convince people the stock is heading in the down direction to make some money.
Tesla is doing a capital raise when the stock goes lower? They change the bid on acquiring Maxwell to give them more shares? Can we use those shares to short against? Hmmm, those guys seem pretty loyal. I guess we will use the new found shares from the capital raise.
It worked. The stock went down. But it stopped. People don't want you leveraging our shares. Buy them back. Longs will squeeze if you don't.
I am long TSLA and TSLA options. I am not a financial advisor. Investing in anything comes with inherent risk. This is not financial advice.
- The Limiting Factor
- Tesla Daily
- EV Stock Channel
- Tom Nash
- Sam Alexander
- Now You Know
- Warren Redlich
The following YouTubers help support my TSLA long bias through stock price volatility. +Great insights.
- Tesla Daily Podcast
- The Limiting Factor
- Now You Know
- Dave Lee on Investing
- EV Stock Channel
- Set Climate & Heat Seats from App
- Top Safety
- Lower Fuel Costs
- Mobile Service
- Security Monitoring System (Sentry Mode)
- Dog Mode
- Great Handling
- Great looking cars
- Video Games
- Full Self Driving Beta
- Super Charger Network