The Great Tesla Rotation: From Institutions To Retail Bag-Holders

Tyler Durden's picture

Two months ago we were the first to highlight the 'real' great rotation in US equity markets as so-called "professionals" were selling in size as "retail" was the big buyer. Since then, market breadth has been weaker and the new highs are made on the back of fewer and fewer supposed "cult" stocks (as Cramer so aptly put it before Lumber Liquidators started to crumble). Perhaps the most infamous of the "cult" stocks is TSLA. At twice the market cap of Fiat, needing to sell 537,815 cars to meet expectations, and the gap in GAAP, Tesla closed at all-time highs on Friday. So who is buying?


As BofAML notes,

Institutional ownership of Tesla stock has faded throughout 2013, from approximately 84% of shares held in January to about 66% today.


As a result, it now appears that retail investors are playing an increasing role in driving the stock price higher and could be at risk when a correction, which we believe is long overdue, ultimately occurs.


Wondering what the catalyst for any pull back could be?

Here's a possibility:

...the $660 million convertible bonds issued in May become freely convertible (at $124) into common shares on October 1st 2013...

with a 67% profit on the notes since issuance, we suspect more than a few will choose early exit and take some profits.

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Call me Ishmael's picture

This would be a great short if they weren't printing so much free money for morons to leverage with.

nugjuice's picture

Exactly. No way the market crashes with Benny boy still throwing 1's and 0's at the system.

This will come down. Hard.

But not yet.

LongBallsShortBrains's picture

A website that keeps up with battery innovation.
It is a site for electric powered aviation and related topics like batteries and solar. Very good blog for those interested in the subject.

patb's picture

The improvement curve si such that by 2020 the average electric car will be better then the average gas car.

Battery cost/KWH is declining about 20%/year, that's making what was "A joke" into lighting.


The fastest bike at Pikes Peak was electric and electrics are starting to dominate drag racing.

Give it another couple of years, and i suspect electrics will own all short racing and sprint competitions.



DeadFred's picture

I'm always happy to to point out the silver lining.

Freddie's picture

I am not very fond of front engine Ferraris.  The neighbor has a 458 which is quite nice. Old bastard but he loathes Obama so he is not too bad.

Tesla, as someone mentioned, is an O company and Musk is another Stasi buddy.   The fed/govt/bankster money is buy all the O companies.  Anyone see FB and YHOO lately?

Looks like BMW is doubling down on hybrid technology:

They said they will eventually offer plug-in hybrid of all their vehicles.

If Tesla really broke into a downtrend - I would not mind shorting and using the proceeds to by a BMW i8.

BMW says it is planning to make plug-in hybrid electric versions of every car they build, following the BMW i3 and BMW i8 with a plug-in hybrid version of the newly revamped BMW X5 SUV - See more at: BMW says it is planning to make plug-in hybrid electric versions of every car they build, following the BMW i3 and BMW i8 with a plug-in hybrid version of the newly revamped BMW X5 SUV - See more at:
Mi Naem's picture

Nope. Nope. That's a "new car" smell.  The salesman said so. 

Curiously_Crazy's picture

My friend " Tony Abbott" of the conservative party just changed that!


Unfortunately he also massively increased payments to those that decide to pump out kids. Fuck that. If one chooses to have kids they should bloody well be prepared for it - but no the gov teet is so much sweeter apparently.

As Carlin so elegantly put it "I don't vote" as both main parties had nothing and yes it really is just an illusion of choice; The alternates in my electorate were useless too. If I was in QLD at least I'd have the likes of Palmer or Katter in which case I'd consider it.

swedish etrade baby's picture

There is some EU law that requieres car companies to produce cars that when you look at the entire lineup on average dont emmit co2 over a certain level. . The easiest way for the car companies to comply is to produce electrical cars. Electrical cars are considered zero emission cars. The electrical engine is more efficient. In cold weather the heat generated by the gasoline car can by used to heat the passenger compartment then the electric car loses some of that advantage.

Freddie's picture

Well there was going to be a carbon credits market exchange set up in guess where - Chicago.  Where all crime exchanges are set up like Comex aka Crimex, CBOE and others. 

The AGW and carbon credit BS is just another way the elites tax the little people and some corporations.

McRocket's picture

The base price for a Tesla S is over $63G (after gov't. tax credit). Sure it's a great EV and sure there are plenty of buyers thanks to the Fed-propped up DOW. But when the correction comes, whose going to buy them? I doubt a sound business model during a big recession is to sell cars that start at $60,000. 

Singelguy's picture

Tesla is already working on a smaller mass market model. They are planning on bringing it to market in the next 5 years. It should do very well in Europe where gas prices are much higher than in the USA. I wouldn't count them out just yet.

adr's picture

Why would you buy a Tesla over a:

Leaf, Volt, Spark EV, Golf EV, VW UP EV, Prius, Civic EV, i3, iMIEV, etc

You think Tesla will really be competitive in the $20-30k segment? Tesla's mass market car is expected to sell in the $45-50 range, still out of reach for the mass market.

There is a reason there aren't many companies producing $100k electric cars. The market is extremely small.

Watch Tesla's sales when the new Porsche 918 Spyder and BMW i8 hit the market. People who buy in the luxury market get new cars every year, sometimes multiple cars during the year.

In three years a $100k Tesla will be worth $50k, maybe less. You can buy a ten year old Bentley with a $30k audio system and $20k worth of leather and wood for $35k.

rosiescenario's picture

These "0 emissions" claims by electric car companies are bs....unless your electricity comes from hydro or solar.


So the public utilities burn coal or natural gas to generate power which is then subject to large line losses before it reaches your electric vehicle...then you lose more energy in charging and discharging the battery pack and finally the electric motor is not 100% efficient.


What makes far more sense in the long run is to have a high efficiency diesel (or nat gas) electric vehicle that uses a capatterry (ultra capacitor)to store the juice called for during heavy acceleration or hill climbing, for example. The engine runs at it optimum level and spins a generator which provides the power.

The worst trader's picture

What is the carbon footprint to build a tesla versus a VW diesel? I bet over a 5 year span the VW will be 1/10 of the tesla for a quarter of the price. If battery power is the future I believe only the rich will be driving.

Sovereign Economist's picture

Here's what I say almost guarantees that TSLA will go to the moon.  Elon Musk was partners with Peter Thiel in the founding of PayPal.  Well Peter Thiel was, and I think, still IS, the head of the STEERING COMMITTEE for BILDERBERG!!!  So, Musk is about as well connected to the elites as one can be.  So, I would imagine that TSLA is well-protected from any surprises to the downside... if ya know what I mean...

Diogenes's picture

So Musk is protected - what about his customers, shareholders and employees?