TSLA +8% on S&P 500, Musk COVID-19 Update, China Production, EU Emissions (11.17.20)


Everybody robin our here and today. We're gonna talk a little bit about tesla stock the day. After the p five hundred inclusion announcement we have an update on yuan musk's covid nineteen status the production rate out of gigafactory shanghai mass hiring by tesla and a couple of topics as well all right so tesla's stock on the day to day finishing up eight point two percent to close at four hundred and forty one dollars. Sixty one cents compared to the nasdaq down zero point two percent so obviously a strong day for tesla on the back of the s. and p. five hundred inclusion news but probably not as strong as many people were hoping for considering after hours trading yesterday in the four hundred and sixty dollar range and the open today at four hundred sixty dollars per share so it fell about five percent over the course of the debt. Probably not the outcome. That i would have guessed but i think when you have a lot of people expecting a sudden increase well. The market has a way of disappointing. You that eight percent gain is nice but really it's just back to where the stock was trading a couple of weeks ago. This is right around the level. That tesla did their most recent capital raise of around five billion dollars at but what i think is also interesting here is not just the share price but also the volume there were only about sixty million shares of stock traded today and over the last year. That's only be one hundred and twenty sixth highest volume day. That's out of two hundred and fifty three trading days so basically today just fell right in the middle of the pack from a volume perspective although volume has been relatively low. Recently over the last month the average volume has only been about thirty million shares. So this is about twice what we've seen over the last month on average and we do have to go all the way back to october. Second which was actually the day that tesla released the q. Three delivery numbers to get a higher volume day. But if we keep looking back we see a lot of other high volume days as well and if we look at the three month average. It's basically right there at fifty nine million and the twelve month average is actually even higher than today at sixty six million shares. The point here being that as we talked about yesterday we know the s. and p. tracking funds need to buy a little over one hundred and fifteen million shares and the process is gonna take a while to play out. I mean even if all sixty million of those shares today had been purchased by attracting funds and no one else did any sort of trading at all which is obviously completely not even close to being the case it would take at least a couple of days for all these funds to buy me required amount of shares and that's just for the tracking funds before considering the other know hundred and seventy million or so that may need to be purchased by benchmarked funds so basically my perspective is. We kinda just need to wait and see what happens. There's going to be a lot of weird stuff that happens. Over the next five weeks there's going to be people positioning themselves with stock or options to help satisfy the demand for those shares on december fourteenth and december twenty first for these tracking funds. Some people may have already been doing that from youtube. There's going to be speculators jumping in traders jumping in. It's all going to be weird and no one's gonna know exactly how this is gonna go down including the s&p committee as evidenced by them soliciting feedback from investors on how to best handle process my understanding from further conversations today with people that know a little bit more on the process than i do. Is that the committee seeking feedback is not necessarily unusual but it does sound like the transfer process. It's so anyway on the volume relatively low. And i wouldn't expect the funds to actually start buying yet. They are starting to line up how they're going to buy and as i've talked about in the past. They have flexibility on when they can do it. It doesn't need to be the exact day of inclusion that they're doing the spying. But i do still expect most of that to occur around the inclusion date or dates and then i think the big question is okay. How much of that trade has been front run already with people holding stock just to trade it off to the institutions of the funds. That need to but the other question that i want to quickly follow up on here is short interest. So we haven't really talked a whole lot about that and the reason for that is because becomes small enough where. I don't think it's all that important anymore. I mean there were times in the past where short interest was twenty five percent of the outstanding share count and a higher percentage of the float. But these days it's much lower. Our most recent report was from october. Thirtieth short interest was around forty eight million shares. That's only about five percent of the outstanding share. Count six percent of afloat. So maybe that comes down a little bit with s and p five hundred inclusion may be to four percent or three percent. But i don't think it's high enough where we're gonna see some huge short squeeze in addition to the pressure from the snp inclusion. Some of that short interest is just never going to go away. It's there as a hedge for other positions on the stock rats. I think that's everything. I have to say for right now on the snp stuff. Let's move on to a quick update here from yuan on his co. Vince status remember last week. He received both positive and negative results from the rapid antigen test.

Coming up next