Tesla Bubble will Cause the 2021 Stock Market Crash

My Theory:

Elon Musk has been manipulating the market to get his tranche payout bonuses.

Positions and NOT FINANCIAL ADVICE.  Tons of puts different dates and strikes and debit call spreads.  See below.  Oh, and I know Never short the Musk…

Every stock market crash needs a catalyst and I just figured out which one what kicks off this one.

For reference the 2 other bubbles that I have experienced in my lifetime were kicked off by the following:

  • Dot com bubble March 2001- AOL Time warner merger, and eyeball valuations for companies with no revenue like pets.com. Result 78% drop
  • Great Financial Crisis 2008-2009- Housing bubble deflation/foreclosures/speculation fueled. Busted by CDOs

Current bubble situation: S&P PE ratio near 40 (dot com and housing 45-50).  Shiller PE ratio around 35 (dotcom top was 41 or so).

S and P 500 PE ratio
Shiller PE Ratio Feb 2021

My thesis and my $100,000 of so YOLO on TSLA puts is that Tesla gets wrapped up in a market manipulation scheme and the price crumbles.  Additional support, TSLA PE ratio (yes boomer number) somewhere between 1,300 and 1,700 depending on how you look at it.  Regulatory credits are the only thing keeping the company profitable.  They are not the top EV company in Europe anymore.  The Cyber truck still doesn’t exist…

Elon Musk TSLA Bonus Chart
Elon Musk Bonus from 10Q 2018

As we are all aware by now our government (Sec, senators, etc.) wants to hold hearings and pull in deepfuckinvalue and others on this great sub to talk about market manipulation.  It all relates to GME, but it has larger implications for the market itself.  GME, AMC, BB and others at inflated values get to only about $75 to $100 Billion of marketcap.  Out of an estimated $50 trillion in US stocks, it won’t be much of a blip to the market if every meme stock goes to zero.  However, if TSLA goes to $0 then we are talking about $800 Billion being wiped out.  That is enough to force margin calls and get people to head for the exits.

 

Elon Musk Quits Twitter

So, what does the GME fallout have to do with Tesla?  Elon just notified the world that he was stepping away from Twitter.  Why?  My guess, and it takes a bit of a tin foil hat…  He is going to get wrapped up in the GME hearings as they discover that his stock is also manipulated.  Here is how and why he is directly involved in manipulating his shares.

First, the incentive.  Humans require incentive and his is much larger than any of us could ever dream.  His bonus structure that was approved in 2018 has already paid him what I estimate to be $8,728,596,500 if he sold the stock options he was awarded on that day of the options grant.  I’m willing to bet he didn’t sell and the stock has been a rocket so he clearly has much more than that from just the first 4 of his 12 tranche bonus goals.  If the stock price stays at $800 for the remaining tranches, I estimate he is looking at $58,076,596,500 in total bonuses.  I have a chart below that shows this at $139 billion if the price is a not TOO CRAZY $2,000. 

CEO Elon Musk Bonus Calculation

To get the bonuses Tesla needs to make some modest operational goals, but the main thing is the stock needs to stay elevated.  Which leads us to..

How do you push up a stock constantly?  This is going to be highlighted with the GME fallout that is coming in the next few weeks.  Market makers are forced to buy stock when the sell far out of the money options.  He, or some of his friends (shell companies??), buys millions or even BILLIONS of dollars worth of out of the money short term call options and keeps doing this every week.  Market makers keep buying to hedge their bets and it doesn’t really matter if they expire worthless, that’s not the game he is playing.  He simply needs the price to go up so that he can get the huge paydays. 

Elon is far too smart to get caught doing this by himself, so he has to find a way to move money into the accounts of these people who are going to lose the money for him on these crazy out of the money options.  How does he do that?  Welcome to stock money laundering 101 (surely the SEC knows how this works). 

To pull off stock laundering one needs to coordinate with a partner to transfer money to them.  The way this works is:

  • Rich person buys deep out of the money put options (on a different stock to not raise suspicion)
  • The one who receives the money sells these deep out of the money put options.

Now that money has gone from the rich person to the trader, they can then place these short term deep out of the money call options to force the money makers to buy.  Thus, driving up the price of the target company, in this case TSLA.

So the TLDR: (Tin foil hat conspiracy) Elon Musk is driving up the price of his stock TSLA so that he can collect his bonus tranches, he is fueling the price increases in his stock using the money that he is getting from his bonus to keep the pump going.

 

mvinc

mvinc

Ross Landreth is an Accredited Senior Appraiser with a MBA in Finance.
Share on facebook
Facebook
Share on google
Google+
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on pinterest
Pinterest