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Tesla Motors, Inc. Message Board

  • oldtimer2013 oldtimer2013 Apr 5, 2013 3:38 PM Flag

    Shorts must have lost a lot of money, realized or on paper !

    There is doubt on whether Tesla can thrive in the future. Either side has good points and the only certain thing is, the future is uncertain.

    Having said that, looking at the share price history, those visionary shorts (i.e., strong believer that this business model is flawed) must have lost their shirts already.

    I am curious, don't you feel pain?

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    • For someone who shorted six months ago on 10/5/2012 at $28.9, he would have a (43%) loss.

      For someone who shorted there months ago on 1/4/2013 at $34.4, he would have a (20%) loss.

      Meantime, the S&P has moved up about 6% from either of those two dates.

      Visionary shorts are not supposed to be the same as trading shorts. They tend to hold a position for a long time and are in general stubborn. Yet, having experienced such hefty losses, in a fairly consistent manner, even the stubborn guys should ask themselves this basic question: WHAT IS GOING ON? Is it possible that their short thesis is flawed? Time to re-think the situation, IMO.

      • 2 Replies to oldtimer2013
      • oldtimer: you have not calculated ALL the costs of being short Tesla.
        1. What about the cost of having to put up more assets, dollar for dollar, to secure the short accounts to match each one point rise in the price of the stock? Collectively, the shorts recently have had to come up with over $300 million of additional cash or other matching assets in the face of the recent price appreciation in Tesla's stock.

        2. What about the premiums that have to be paid when, like now,
        the stock is very difficult to borrow. In order for shorts to maintain
        their short positions when borrowed stock is called away from them and to avoid being squeezed and forced to cover by open market buying at sharply higher prices, shorts sometimes pay high cash premiums for borrowing shares for what they hope will be be short and temporary time periods?

        We are going through such a period right now! How do I know?
        I am currently receiving 30% per annum on the shares I have loaned out to shorts. I started lending out my shares several months ago when the total short position was approximately 31 million shares, receiving a cash premium of 25% which subsequently rose to 28%. I had the right to call my shares back any time I wanted, as I did when I sold part of my stock. The shorts had the same right, but never did.

        Then the shorts began buying Tesla stock in the open market,
        and the net short position declined ( from memory ) from 31 million
        to 26 million shares shorted. My premiums for lending out my shares declined from 28% to 10%.

        Subsequently, those who are following this will recall, the net overall short position rose again, reaching a new all time high at last report of 32 million shares. My premiums received for lending out my shares rose as well, reaching a new high for me of 30%.

        It's feels good to be a zombie, and has been profitable as well. I don't think the shorts can say the same thing.

      • Oldtimer
        Actually I'm wishing I had gone short on Tuesday. I sold part but not enough, of my long position calls.
        I made a rookie mistake but that's why I keep positions small.
        If I'd had enough time I might have figured it out. but I was busy and that is just an excuse. I need to understand it better. Well live and learn. I did come out way ahead just a third of what I should have.
        Yes I'm kicking myself for not going short Tuesday.

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