great stuff brad. hoping fortune magazine has a beat writer that reads the greenspan filing
couple comments on option market:
* noon Fri and its clear we're going to see the market pinned at 210 at close, just as option market "max pain' theory would suggest (again, lending credence to the Seeking Alpha article on Option Market Drives Tesla Price i referenced before)
* weekly OI was just 0.5MM--long way from where we saw the gamma squeeze in early July (1.1MM)
* total OI is down to 6.9MM--same as seen in late June before the gamma squeeze (note: i ran some calcs on option OI vs float, and from a ratio standpoint TSLA is ~ 2x its next mag7 (NVDA--the hottest single stock option there is) and 6x what AMZN / AAPL are. ---the closest market for option OI vs float? Gamestop.
* showing total short interest of 2.9 % of float (as of 8/15) vs 3.8% mid-July (which i kinda doubt is right as that was ~ 270 / sh, shorts got squeezed by then)---but 2.9% is bumping up against lows seen since 2023 (ie less squeezy)
could be wishful thinking on my part, but the days of poor mkt liquidity end with the labor day holiday which makes gamma squeezes like early july far less likely with the A-team back on desks. he'll try, he has that interest nut to crack w/ Twitter, but gonna be a lot harder from here on (excl holiday weeks--watch out for those)
I have quickly scanned the article. IMHO, anyone holding TSLA short will be screwed by the option trading, because it is impossible to beat it.
Assuming, that "you know who" money are behind this operation, they got practically unlimited resources to elevate the share price anytime they want. I thought, that they use $5-10 mil anytime they push the share price up, but apparently, they re able to recover this many later of the same day to use it another day. It probably does not matter, if the budget is a billion, 5 million spent means nothing. This article did not make my Sunday better...
index selling will swamp whatever option related boost the musk office can muster. gamma squeezes only work well under certain conditions, we see a bear market, he's SCREWED.
ex: Monday 9/3: 110k of the 9/6 220calls traded. thats a lot. notably, price on those fell $1 each (40%) as indexes (QQQ down 3.5%) crushed the options market
Amazing how they tried to keep the stock up today. Nasdaq 100 is down 3.2% and TSLA only down -1.6%?! Total call volumes were 726K vs put volumes of 485K, both lower than the 20-day moving average of 848K and 610K, respectively.
The highest traded options were the 9/6 C220 (116K in volume, which was +191% higher vs last Friday) and the 9/6 C215 (72K in volume, which was +207% vs Friday).
My guess is that they went out guns ablazing today after Brazil shut down Twitter over the weekend, which led to an embarrassing meltdown by Musk.
I agree that it may seem "hopeless" trying to short TSLA given the options market behind it, but do keep in mind that it dropped by nearly 50% from $276 last September to $140 in April due to deteriorating fundamentals, so the numbers do matter.
If you look at the 3-year chart, you'll also notice that, amid its eroding profitability, it has become increasingly difficult for the stock to recover the $300 level and more recently, even the $250 levels has led to sell offs.
I'll be writing my Q3 preview after the delivery report comes out on October 2nd and as things stand now, it looks likely to be one of the worst quarters to be printed by Tesla.
It is quite depressing indeed. Tuesday is the classic example. I have not closed my position (despite your RSI indicator suggest that I should) in the dip, because I came to a conclusion, that the sell off is going to continue on Wednesday. Pre-market looked in line with my expectation, likely not $5 down, but down. Well, we all know, what has happened. And this morning, the pre-market is up $6 for no obvious reason. Lesson is learned, stick to the rules and do not think about it. Buying the dip still works for Tesla.
Just speculating, but it looks like the FO is getting ready for 3Q, building a "price reserve" to allow a drop of 15-20% after releasing results and not failing below 200.
It's Paypal Mafia accounting. Now that so many books are out about them, it fits their documented shenanigans from the past. Elon's using his buddy Michael Saylor's complete playbook too. Saylor made up revenue figures and only paid a small fine in the millions when caught. Saylor cheated on taxes but only paid a small fine when caught. Saylor's now using Bitcoin to play shenanigans with the balance sheet, which Elon also copied. It's "growth hacking", not lying for them.
This is fascinating reading. Just got few questions, primarily because the US legal system is a mystery for me:
1. How it comes, that a RICO case is led by a private citizen? Based on my reading of Mario Puzzos books, I thought that such law is used by FBI to crack down organized crime. Is this civil or a criminal case?
2. I see a big risk that a jury will decide. An ordinary Californian has likely no clue and will not understand the case. Hopefully Musk is already hated in CA, because should he win this one, it may make it difficult for anyone else to try?
3. Why FBI is not investigating this? Is this case too small for them?
There was an article in WS Journal suggesting, that a Grand Jury was established in NY, but it was more than a year ago and nothing has happened. Prosecutors are sort of political animals, so the election may held them back. On Twitter, a guy called @jamesvictorino2 used to talk about it, his account no longer exists.
Hey, with all the stuff coming out about Tesla's internal practices and possible fraud from the Tesla Files, how do you think this is gonna play out? Do you think it’ll hit their stock or reputation hard, or will the hardcore fans stick by Musk no matter what? Curious to hear your take!
There's been lots of fraud uncovered at Tesla (most famously, its CEO tweeting out his intention to take the company private at $420 per share, "funding secured") and there's never any serious consequences. I believe this is because Musk is protected by the Department of Defense, which relies heavily on SpaceX.
There also might be the fear among government agencies of bringing down such a huge stock, which is owned by many ETFs, pension funds, etc. None of these are good excuses for not enforcing the law with Tesla and its CEO.
Thanks for your work. It*s a drama in slow motion. How would Tesla stock do in a weaker market? Valuations are close to historic record levels right now.
Excellent sleuthing, Brad. Elon Musk is an Enemy of Democracy who fucked around way too much and is about to find out just how pissed off the majority of Americans are with him, his sociopathic PayPal mafia friends, and scads of other billionaires who hallowed out legit businesses with their frauds which never are truly profitable without cooking the books, seeking and applying subsidies, constructing gamma squeezes arranged with offshore accounts, pumps of worthless shitcoins which they trade and control, pumping worthless SPACs (think $DJT) etc. What you've shown here by republishing internal documents from Tesla is knowledgeable fraud in accounting and I hope we finally see some movement to prosecute Musk after this upcoming election. Keep up your important work.
With all these headwinds you beautifully listed, why do you think so many analysts are keeping or even increasing TSLA price targets?
Do they see something you don't see?
Do you see things they don't see?
Are the things not directly related to Auto so strong that they allow for current valuations?
About the accounting fraud: When a company submits their reports to the SEC, I always thought they get reviewed and in a way "approved". Is that wrong? Can a company commit all this fraud you listed and still get that approval?
I look forward to reading how this unfolds going forward
Many analysts have to help their investment bank win potential business from Tesla if Tesla were to issue more shares, debt, or conduct M&As or divestitures. If they wrote what I did in my report, they'd be forced to lower their target prices significantly below the Street's average.
Quarterly numbers are unaudited, so Tesla doesn't have the "scrutiny" from its auditor, PwC, as they do at year-end, when the full-year numbers are audited. PwC is either guilty of gross negligence or complicit in allowing Tesla to publish the numbers they do.
When Enron & WorldCom went bankrupt over financial fraud, their auditor, Arthur Andersen, collapsed. The same will happen to PwC, which has already been sued by the SEC many times.
To me, a single employee sealing a large dataset (which I find shocking as in “how is that even possible”) is probably not providing the comprehensive picture.
You know I am an Elon fanboy and I very much appreciate your position and your writing.
To many of my comrades tune everything they don’t like out as hate or ill-informed, etc.
I have seen many times that they can’t make a rhyme or reason to certain decisions and development while looking at both the optimistic and the pessimistic side has helped me many times to see how steps taken are in support of the overall vision.
I am more optimistic than you probably because I believe that what I call the “7 Musketeers” are all part of a larger vision that start fitting together like a pieces of a puzzle.
It’s probably going to take another 10-15 years for the full picture to emerge but it will probably be exciting - and plenty of opportunity for both of us to write about and discuss.
When I start officially publishing the 7 Musketeers account I would love to have you and your clear mind join the discussions and provide your wonderful counter-balance.
Re WS Analysts. Some of them are “forced” to write very positive Tesla reports, like Adam Jonas from Morgan Stanley, 6th largest institutional holder of Tesla shares. Others like Gene Munster and Gary Black are holding Tesla long. Not sure about that CNBC reporter that is such an Elon fanboi (forgot his name). I mean, the richest man in the world surely has ways to ahem, cough, compensate for favors in safe and untraceable way. Don’t you think? How else are Tesla stock pumpers like Omar Qazi, Farzad, BoomerMama and others being compensated (apart from direct compensation through X for views and other metrics when Elon retweets/answers their posts).
I agree that analyst are biased and in case of large holdings of an asset want to constantly prove that the inclusion in their fund was and remains warranted.
My bit gripe withe most of them is that they don’t really look at business with realistic expectations. That is regardless if it is Tesla or any other company.
The narrative is always to show “the sky is the limit” or “the world is ending” every 90 days.
There is a substantial community of bulls and a similar one of bears.
Both attract enough people to sustain the YouTubers you mentioned.
When interest is going down or an idea is going too far changing camps is also an option - see Ross Gerber currently making a complete fool out of himself.
I don’t think there is bribery by Elon to the content folks and I suspect there isn’t directly for the analysts, except for cushy invitation to tour the factory and things like that.
I have always been fascinated by Elons companies because to me there is a much larger vision behind all of it and it appears like a global experiment to see if such a radical vision can be realized or not.
great stuff brad. hoping fortune magazine has a beat writer that reads the greenspan filing
couple comments on option market:
* noon Fri and its clear we're going to see the market pinned at 210 at close, just as option market "max pain' theory would suggest (again, lending credence to the Seeking Alpha article on Option Market Drives Tesla Price i referenced before)
* weekly OI was just 0.5MM--long way from where we saw the gamma squeeze in early July (1.1MM)
* total OI is down to 6.9MM--same as seen in late June before the gamma squeeze (note: i ran some calcs on option OI vs float, and from a ratio standpoint TSLA is ~ 2x its next mag7 (NVDA--the hottest single stock option there is) and 6x what AMZN / AAPL are. ---the closest market for option OI vs float? Gamestop.
* showing total short interest of 2.9 % of float (as of 8/15) vs 3.8% mid-July (which i kinda doubt is right as that was ~ 270 / sh, shorts got squeezed by then)---but 2.9% is bumping up against lows seen since 2023 (ie less squeezy)
could be wishful thinking on my part, but the days of poor mkt liquidity end with the labor day holiday which makes gamma squeezes like early july far less likely with the A-team back on desks. he'll try, he has that interest nut to crack w/ Twitter, but gonna be a lot harder from here on (excl holiday weeks--watch out for those)
Thanks so much for the options color, Ryan. Very helpful, as usual.
Ryan, can you reference that Seeking Alpha article again here? I haven’t read it. Thanks
https://seekingalpha.com/article/4716518-option-trading-drives-teslas-share-price-technical-analysis
I have quickly scanned the article. IMHO, anyone holding TSLA short will be screwed by the option trading, because it is impossible to beat it.
Assuming, that "you know who" money are behind this operation, they got practically unlimited resources to elevate the share price anytime they want. I thought, that they use $5-10 mil anytime they push the share price up, but apparently, they re able to recover this many later of the same day to use it another day. It probably does not matter, if the budget is a billion, 5 million spent means nothing. This article did not make my Sunday better...
index selling will swamp whatever option related boost the musk office can muster. gamma squeezes only work well under certain conditions, we see a bear market, he's SCREWED.
ex: Monday 9/3: 110k of the 9/6 220calls traded. thats a lot. notably, price on those fell $1 each (40%) as indexes (QQQ down 3.5%) crushed the options market
Amazing how they tried to keep the stock up today. Nasdaq 100 is down 3.2% and TSLA only down -1.6%?! Total call volumes were 726K vs put volumes of 485K, both lower than the 20-day moving average of 848K and 610K, respectively.
The highest traded options were the 9/6 C220 (116K in volume, which was +191% higher vs last Friday) and the 9/6 C215 (72K in volume, which was +207% vs Friday).
My guess is that they went out guns ablazing today after Brazil shut down Twitter over the weekend, which led to an embarrassing meltdown by Musk.
yeah and today (9/4) the MFO bought ~ 50k of the 215c and 220c at the open, massive volume to start the day with an agenda.
why now? this is not a gamma squeeze as its not moving the mkt beyond a few $ (nothing like July 1 week). why's he doing it now?
(i'm thinking his office is burning through $ trying to reach / keep $220 and the broader market seems to have other ideas)
(and yes, i've moved beyond the 'all things are possible' stage to arrive at the 'the MFO is def behind this call buying splurge at the open').
I agree that it may seem "hopeless" trying to short TSLA given the options market behind it, but do keep in mind that it dropped by nearly 50% from $276 last September to $140 in April due to deteriorating fundamentals, so the numbers do matter.
If you look at the 3-year chart, you'll also notice that, amid its eroding profitability, it has become increasingly difficult for the stock to recover the $300 level and more recently, even the $250 levels has led to sell offs.
I'll be writing my Q3 preview after the delivery report comes out on October 2nd and as things stand now, it looks likely to be one of the worst quarters to be printed by Tesla.
It is quite depressing indeed. Tuesday is the classic example. I have not closed my position (despite your RSI indicator suggest that I should) in the dip, because I came to a conclusion, that the sell off is going to continue on Wednesday. Pre-market looked in line with my expectation, likely not $5 down, but down. Well, we all know, what has happened. And this morning, the pre-market is up $6 for no obvious reason. Lesson is learned, stick to the rules and do not think about it. Buying the dip still works for Tesla.
Just speculating, but it looks like the FO is getting ready for 3Q, building a "price reserve" to allow a drop of 15-20% after releasing results and not failing below 200.
Let’s not forget that BMW has taken over the #1 spot in Europe in BEV sales (from Tesla).
This article sums up why people who are desperate enough to let this man put something in their brain have my sympathies.
It's Paypal Mafia accounting. Now that so many books are out about them, it fits their documented shenanigans from the past. Elon's using his buddy Michael Saylor's complete playbook too. Saylor made up revenue figures and only paid a small fine in the millions when caught. Saylor cheated on taxes but only paid a small fine when caught. Saylor's now using Bitcoin to play shenanigans with the balance sheet, which Elon also copied. It's "growth hacking", not lying for them.
This is fascinating reading. Just got few questions, primarily because the US legal system is a mystery for me:
1. How it comes, that a RICO case is led by a private citizen? Based on my reading of Mario Puzzos books, I thought that such law is used by FBI to crack down organized crime. Is this civil or a criminal case?
2. I see a big risk that a jury will decide. An ordinary Californian has likely no clue and will not understand the case. Hopefully Musk is already hated in CA, because should he win this one, it may make it difficult for anyone else to try?
3. Why FBI is not investigating this? Is this case too small for them?
There was an article in WS Journal suggesting, that a Grand Jury was established in NY, but it was more than a year ago and nothing has happened. Prosecutors are sort of political animals, so the election may held them back. On Twitter, a guy called @jamesvictorino2 used to talk about it, his account no longer exists.
*** If anybody here can answer, be my guest :-)
Hey, with all the stuff coming out about Tesla's internal practices and possible fraud from the Tesla Files, how do you think this is gonna play out? Do you think it’ll hit their stock or reputation hard, or will the hardcore fans stick by Musk no matter what? Curious to hear your take!
There's been lots of fraud uncovered at Tesla (most famously, its CEO tweeting out his intention to take the company private at $420 per share, "funding secured") and there's never any serious consequences. I believe this is because Musk is protected by the Department of Defense, which relies heavily on SpaceX.
There also might be the fear among government agencies of bringing down such a huge stock, which is owned by many ETFs, pension funds, etc. None of these are good excuses for not enforcing the law with Tesla and its CEO.
Thanks for your work. It*s a drama in slow motion. How would Tesla stock do in a weaker market? Valuations are close to historic record levels right now.
When the world was going into lockdown over covid in March 2020, Tesla dropped 60% in 3.5 weeks vs the Nasdaq 100's fall of only around 30%.
Brad, do you have an indication about timing of the lawsuit? Is it going in front of the jury anytime soon?
Excellent sleuthing, Brad. Elon Musk is an Enemy of Democracy who fucked around way too much and is about to find out just how pissed off the majority of Americans are with him, his sociopathic PayPal mafia friends, and scads of other billionaires who hallowed out legit businesses with their frauds which never are truly profitable without cooking the books, seeking and applying subsidies, constructing gamma squeezes arranged with offshore accounts, pumps of worthless shitcoins which they trade and control, pumping worthless SPACs (think $DJT) etc. What you've shown here by republishing internal documents from Tesla is knowledgeable fraud in accounting and I hope we finally see some movement to prosecute Musk after this upcoming election. Keep up your important work.
Thanks so much for the kind comments. Tesla branded the term, "fraud creates alpha". I also hope something is done after the elections.
Sorry the financials
With all these headwinds you beautifully listed, why do you think so many analysts are keeping or even increasing TSLA price targets?
Do they see something you don't see?
Do you see things they don't see?
Are the things not directly related to Auto so strong that they allow for current valuations?
About the accounting fraud: When a company submits their reports to the SEC, I always thought they get reviewed and in a way "approved". Is that wrong? Can a company commit all this fraud you listed and still get that approval?
I look forward to reading how this unfolds going forward
Many analysts have to help their investment bank win potential business from Tesla if Tesla were to issue more shares, debt, or conduct M&As or divestitures. If they wrote what I did in my report, they'd be forced to lower their target prices significantly below the Street's average.
Quarterly numbers are unaudited, so Tesla doesn't have the "scrutiny" from its auditor, PwC, as they do at year-end, when the full-year numbers are audited. PwC is either guilty of gross negligence or complicit in allowing Tesla to publish the numbers they do.
When Enron & WorldCom went bankrupt over financial fraud, their auditor, Arthur Andersen, collapsed. The same will happen to PwC, which has already been sued by the SEC many times.
Got it Brad.
I was wondering if you see an Enron scenario.
To me, a single employee sealing a large dataset (which I find shocking as in “how is that even possible”) is probably not providing the comprehensive picture.
You know I am an Elon fanboy and I very much appreciate your position and your writing.
To many of my comrades tune everything they don’t like out as hate or ill-informed, etc.
I have seen many times that they can’t make a rhyme or reason to certain decisions and development while looking at both the optimistic and the pessimistic side has helped me many times to see how steps taken are in support of the overall vision.
I am more optimistic than you probably because I believe that what I call the “7 Musketeers” are all part of a larger vision that start fitting together like a pieces of a puzzle.
It’s probably going to take another 10-15 years for the full picture to emerge but it will probably be exciting - and plenty of opportunity for both of us to write about and discuss.
When I start officially publishing the 7 Musketeers account I would love to have you and your clear mind join the discussions and provide your wonderful counter-balance.
Re WS Analysts. Some of them are “forced” to write very positive Tesla reports, like Adam Jonas from Morgan Stanley, 6th largest institutional holder of Tesla shares. Others like Gene Munster and Gary Black are holding Tesla long. Not sure about that CNBC reporter that is such an Elon fanboi (forgot his name). I mean, the richest man in the world surely has ways to ahem, cough, compensate for favors in safe and untraceable way. Don’t you think? How else are Tesla stock pumpers like Omar Qazi, Farzad, BoomerMama and others being compensated (apart from direct compensation through X for views and other metrics when Elon retweets/answers their posts).
@Andreas West
I agree that analyst are biased and in case of large holdings of an asset want to constantly prove that the inclusion in their fund was and remains warranted.
My bit gripe withe most of them is that they don’t really look at business with realistic expectations. That is regardless if it is Tesla or any other company.
The narrative is always to show “the sky is the limit” or “the world is ending” every 90 days.
There is a substantial community of bulls and a similar one of bears.
Both attract enough people to sustain the YouTubers you mentioned.
When interest is going down or an idea is going too far changing camps is also an option - see Ross Gerber currently making a complete fool out of himself.
I don’t think there is bribery by Elon to the content folks and I suspect there isn’t directly for the analysts, except for cushy invitation to tour the factory and things like that.
I have always been fascinated by Elons companies because to me there is a much larger vision behind all of it and it appears like a global experiment to see if such a radical vision can be realized or not.
Tesla may not be reporting fraudulent delivery numbers but may be defrauding Google. That said it’s worth investigating
Horseshit
Please explain.