This is why Tesla had a weak relief rally after Musk got his $47bn comp package re-ratified by shareholders last week. There are too many negatives facing Tesla.
Options have been stacking puts again. We saw this in Q1. So if there's a lot of put delta adding downward pressure going into Q2 earnings, I'd be careful. Of course, an equity raise or some big event that can trigger a selloff would cause a huge gamma squeeze downward.
Sorry, this is utter bullshit. Buttigieg is sharp as a razor. Rhodes scholar, high-school valedictorian before that, double-majored in history and lit at Harvard, where he graduated summa cum laude (highest honors). Likewise high honors at Oxford in for studies in philosophy, politics, and economics. His dad was an English prof at Duke, where his mother also lectured for three decades. He served in the Navy with honor and worked in sensitive areas involving terrorist intelligence. You never watched him eviscerate his propped-up interlocutors multiple times over on Fox? (It's the only, and I do mean only, thing to watch Fox to see.) Buttigieg is, in short, the quintessential overachiever, and you would be hard-pressed to find a finer one.
My fault for clicking too wildly. That was supposed to be a reply to Glorfindel up above, of course, not you. I think you figured that out, though. My take on why Pete hasn't taken down Musk is that his hands must be tied by more powerful interests. It's a dirty game.
I agree with you regarding blackmailing shareholders before the vote.
Blackmail is a criminal offence in the USA, including for CEOs, and may be defined as follows:
‘When someone makes unwarranted demands, with menaces, in order to attain personal gain or project loss on another.
It does not matter whether the demands are possible or in what fashion the demands are made.’
Phony Stark appears to fulfil this definition, in prima facie terms, why has no action been taken against him? I welcome comments from experts in the American criminal justice system, as I am no expert.
Perhaps the anticipated share rally didn't materialize because Musk's $47 billion bonus and inevitable share sales are a negative for Tesla, not the positive claimed by some Tesla bulls.
There are enough shareholders with knowledge and common sense to appreciate that dilution is not positive for the stock, and those shareholders were waiting for a post-vote rally to dump their holdings.
I think that it'll be a long time before Musk will get his $47bn bonus if he does at all (it's somewhat doubtful to see Judge McCormick changing her ruling, as most bulls expect).
Also, I believe that the dilution from those stock options is already counted in the fully diluted share count.
Everything you say is true, but Musk has banned short selling. Earnings will look great if he doesn’t lower prices and keeps inventory at high prices but just does 0% APR and also recognizes more FSD revenue and also sells bitcoin. Then there’s masterplan 4 pump. And 8/8 reveal. Better to short at $200 on 8/8
Tesla will have to sell their BTC to cover the huge restructuring charges in Q2. They'll still have weak results, though. 0% APR has the same effect as price cuts. It impacts profits at the point of sale. Both Masterplan 4 and 8/8 are not positive catalysts. They're selling events. Masterplan 3 last March got sold off & most events like Battery Day or AI Day lead to stock declines as well.
The difference with 0% APR is that inventory can be held at high prices. On top of bitcoin there is FSD deferred revenue. Elon knows what it takes to have an earnings pop and will pull the necessary levers hard enough to get one. Particularly so to reward the cult for the $55B in compensation. Tesla is a stock promotion grift and a cult that will eventually go down but not yet. Or at least it's still too risky to short.
I think TSLA is a great short here, especially as both the S&P 500 and Nasdaq 100 look poised to see a bit of a correction.
Q2 production & delivery numbers out by July 3rd should show further inventory build as well as double-digit declines YoY. Further inventory build is almost certain.
And FYI, the inventory held by TSLA isn't impacted by the listed prices on their website. It's booked as COGS.
Also I agree that if the Nasdaq 100 sees a correction then Tesla will be part of that. However the momentum has been so positive that just yesterday and today are not enough. I want to see selling all week next week to confirm. I don't think we will see that. July seasonality, 4th of July retail enthusiasm, and OpEx flows may be too supportive.
I think we possibly see a sell-off if Q2 deliveries are weak on July 2nd/3rd and most likely with worse than expected Q2 earnings results. Seasonality has very little to do with Tesla's recent price action. It's down 25% YTD while the $NDX is +17% & the Magnificent 7 index is +36% YTD.
That's surprising. You're 100% sure? If so I'll agree that does remove 1 rabbit from Elon's hat. Although he has 2 others from an accounting perspective (bitcoin and FSD) and 3 more from a hype perspective (8/8, MP4, optimus)
Options have been stacking puts again. We saw this in Q1. So if there's a lot of put delta adding downward pressure going into Q2 earnings, I'd be careful. Of course, an equity raise or some big event that can trigger a selloff would cause a huge gamma squeeze downward.
Rumors that our boy has some kompromat on Buttigieg.
Most countries do not put their best & brightest as Transportation Secretary...no exception here.
Sorry, this is utter bullshit. Buttigieg is sharp as a razor. Rhodes scholar, high-school valedictorian before that, double-majored in history and lit at Harvard, where he graduated summa cum laude (highest honors). Likewise high honors at Oxford in for studies in philosophy, politics, and economics. His dad was an English prof at Duke, where his mother also lectured for three decades. He served in the Navy with honor and worked in sensitive areas involving terrorist intelligence. You never watched him eviscerate his propped-up interlocutors multiple times over on Fox? (It's the only, and I do mean only, thing to watch Fox to see.) Buttigieg is, in short, the quintessential overachiever, and you would be hard-pressed to find a finer one.
I know all about Pete's spectacular background. My only question is why he hasn't taken Musk down?
My fault for clicking too wildly. That was supposed to be a reply to Glorfindel up above, of course, not you. I think you figured that out, though. My take on why Pete hasn't taken down Musk is that his hands must be tied by more powerful interests. It's a dirty game.
Simple. He has presidential ambitions and doesn’t want to burn the votes from Musk’s cult.
What could Musk have on Buttigieg? It’s no contest, isn’t it?
Without going into detail, the rumors involve his personal life.
Buttigieg hates Musk, so it is amazing that he hasn't unleashed NHTSA to reck Tesla.
I meant to reply to you when I clicked in the wrong space a bit ago. Here is my reply to you.
https://bradmunchen.substack.com/p/tesla-a-list-of-near-term-negative/comment/59587832
I agree with you regarding blackmailing shareholders before the vote.
Blackmail is a criminal offence in the USA, including for CEOs, and may be defined as follows:
‘When someone makes unwarranted demands, with menaces, in order to attain personal gain or project loss on another.
It does not matter whether the demands are possible or in what fashion the demands are made.’
Phony Stark appears to fulfil this definition, in prima facie terms, why has no action been taken against him? I welcome comments from experts in the American criminal justice system, as I am no expert.
He is too powerful to challenge. Our bureaucracy is full of spineless paycheck collectors. Easier to pick on the little guy.
Perhaps the anticipated share rally didn't materialize because Musk's $47 billion bonus and inevitable share sales are a negative for Tesla, not the positive claimed by some Tesla bulls.
There are enough shareholders with knowledge and common sense to appreciate that dilution is not positive for the stock, and those shareholders were waiting for a post-vote rally to dump their holdings.
I think that it'll be a long time before Musk will get his $47bn bonus if he does at all (it's somewhat doubtful to see Judge McCormick changing her ruling, as most bulls expect).
Also, I believe that the dilution from those stock options is already counted in the fully diluted share count.
Musk can just rename “Not Autopilot” and “Not Full Self Driving” and the cult will absolutely love it.
Thanks for your summary! It's getting interesting ...
Thanks so much for reading the report.
Everything you say is true, but Musk has banned short selling. Earnings will look great if he doesn’t lower prices and keeps inventory at high prices but just does 0% APR and also recognizes more FSD revenue and also sells bitcoin. Then there’s masterplan 4 pump. And 8/8 reveal. Better to short at $200 on 8/8
Tesla will have to sell their BTC to cover the huge restructuring charges in Q2. They'll still have weak results, though. 0% APR has the same effect as price cuts. It impacts profits at the point of sale. Both Masterplan 4 and 8/8 are not positive catalysts. They're selling events. Masterplan 3 last March got sold off & most events like Battery Day or AI Day lead to stock declines as well.
The difference with 0% APR is that inventory can be held at high prices. On top of bitcoin there is FSD deferred revenue. Elon knows what it takes to have an earnings pop and will pull the necessary levers hard enough to get one. Particularly so to reward the cult for the $55B in compensation. Tesla is a stock promotion grift and a cult that will eventually go down but not yet. Or at least it's still too risky to short.
I think TSLA is a great short here, especially as both the S&P 500 and Nasdaq 100 look poised to see a bit of a correction.
Q2 production & delivery numbers out by July 3rd should show further inventory build as well as double-digit declines YoY. Further inventory build is almost certain.
And FYI, the inventory held by TSLA isn't impacted by the listed prices on their website. It's booked as COGS.
Also I agree that if the Nasdaq 100 sees a correction then Tesla will be part of that. However the momentum has been so positive that just yesterday and today are not enough. I want to see selling all week next week to confirm. I don't think we will see that. July seasonality, 4th of July retail enthusiasm, and OpEx flows may be too supportive.
I think we possibly see a sell-off if Q2 deliveries are weak on July 2nd/3rd and most likely with worse than expected Q2 earnings results. Seasonality has very little to do with Tesla's recent price action. It's down 25% YTD while the $NDX is +17% & the Magnificent 7 index is +36% YTD.
On the balance sheet what inventory value is used?
Same. COGS.
That's surprising. You're 100% sure? If so I'll agree that does remove 1 rabbit from Elon's hat. Although he has 2 others from an accounting perspective (bitcoin and FSD) and 3 more from a hype perspective (8/8, MP4, optimus)