If you don’t believe that Tesla isn’t a two year stock bubble which is eventually going to burst then you need to catch the latest episode of the Quoth the Raven podcast. He discusses something which a lot of people have been whispering about recently. Was the sudden meteoric rise in Tesla’s stock price all artificially manipulated?
If you’ve never heard of the “gamma squeeze” before. You need to pay attention to the just announced SEC investigation of Archegos Capital Management. It is the Bill Hwang managed outfit that is being investigated for market manipulation. The manipulation in question is the practice of buying cheap out-of-the-money call options in order to force counter hedge purchases in the target stock. It’s a way of gaming the system and artificially forcing a stock price up. And if there is a large short interest, you could light the fuse on a big fire.
It so happens that Bill Hwang of Archegos and Cathie Wood of ARKK fame were close counterparts. Bill Hwang helped Cathie Wood get started. There are also rumors of mirrored trading between their funds. Meaning that if ARKK purchased Tesla stock, so did Archegos or vice versa.
Why is this relevant to Tesla? Tesla was relatively flat for years until 2019. And guess what started to happen? Huge purchases of mysterious out-of-the-money call options were starting to get made. Nobody knew who it was or why. But it was a big part of the move upwards.
Will the SEC uncover that Archegos, a firm tied closely to ARKK, was one of those mysterious purchasers of the OTM call options? Will ARKK get dragged into this investigation? Will this be the beginning of the end for the Tesla story? Time will tell.
Nothing has changed for Tesla since 2019 and yet their valuation remains well above their profit potential. They remain the least profitable automaker in the world with the lowest quality cars and worst customer service. The storyline of full self driving is running out of fumes and about to collapse. This is a stock that will eventually be double or single digits again.
Check out the podcast here:
Gamma Squeezes, Mainstream Media Morons, and the Case for Uranium
It so happens that Bill Hwang of Archegos and Cathie Wood of ARKK fame were close counterparts. Bill Hwang helped Cathie Wood get started. There are also rumors of mirrored trading between their funds. Meaning that if ARKK purchased Tesla stock, so did Archegos or vice versa.
Why is this relevant to Tesla? Tesla was relatively flat for years until 2019. And guess what started to happen? Huge purchases of mysterious out-of-the-money call options were starting to get made. Nobody knew who it was or why. But it was a big part of the move upwards.
Will the SEC uncover that Archegos, a firm tied closely to ARKK, was one of those mysterious purchasers of the OTM call options? Will ARKK get dragged into this investigation? Will this be the beginning of the end for the Tesla story? Time will tell.
Nothing has changed for Tesla since 2019 and yet their valuation remains well above their profit potential. They remain the least profitable automaker in the world with the lowest quality cars and worst customer service. The storyline of full self driving is running out of fumes and about to collapse. This is a stock that will eventually be double or single digits again.
Check out the podcast here:
Gamma Squeezes, Mainstream Media Morons, and the Case for Uranium
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