Founder & CEO Bond Angle, LLC, Bond Angle, LLC

Vicki Bryan

Founder & CEO Bond Angle, LLC

Bond Angle, LLC

Insightful commentary and analysis on bond markets and market movers, including financial, economic, and industry catalysts and management shenanigans. 

High yield market investment research

Credit

For years now, <a href="https://www.smartkarma.com/entities/tesla-motors-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla Motors (TSLA US)</a> and its ardent fans haven’t worried that none of its businesses are profitable because it has sold billions of dollars in energy emissions credits to offset its rivers of red ink (see my latest report on this, <a href="https://www.smartkarma.com/insights/tesla-goes-to-record-extremes-to-create-q1-profits" target="_blank" data-smartkarma-citation="insights:50821" rel="noopener">Tesla Goes to Record Extremes To Create Q1 "Profits"</a> on 4/28/21).They dismissed concerns that every penny of cash it has ever banked came from selling said energy credits on top of selling billions in stock to said fans and borrowing even more in debt.Pull these pesky threads and everything can unravel quickly, as I long have warned (for example, in <a href="https://www.smartkarma.com/insights/tesla-the-sky-s-the-limit-until" target="_blank" data-smartkarma-citation="insights:47414" rel="noopener">Tesla: The Sky's The Limit...Until</a> on 1/28/21).Sure enough, <a href="https://www.smartkarma.com/entities/stellantis-nv" target="_blank" data-smartkarma-citation="entities:798:1" rel="noopener">Stellantis NV (STLA US)</a> told reporters this week that it <a href="https://europe.autonews.com/environmentemissions/stellantis-hit-emissions-target-without-teslas-help-ceo-tavares-says?utm_source=dlvr.it&amp;utm_medium=twitter" target="_blank" rel="noopener">expects to meet European emissions standards on its own</a> this year without buying any more credits from Tesla.That creates a big problem for Tesla because lucrative energy credit sales to Stellantis have been the primary source of all of Tesla’s manufactured “profits” since Q2 2019, which created:<ul>
<li>the basis for Tesla’s recent addition to the S&amp;P 500 Index</li>
<li>and its mythological equity valuation</li>
<li>and its ability to sell stock at grossly inflated prices</li>
<li>and its artificially inflated credit rating which lets it borrow with impunity at cheap rates.</li>
</ul>

For years now, Tesla Motors (TSLA US) and its ardent fans haven’t worried that none of its businesses are profitable because it has sold billions of dollars in energy emissions credits to offset its rivers of red ink (see my latest report on this, Tesla Goes to Record Extremes To Create Q1 "Profits" on 4/28/21).They dismissed concerns that every penny of cash it has ever banked came from selling said energy credits on top of selling billions in stock to said fans and borrowing even more in debt.Pull these pesky threads and everything can unravel quickly, as I long have warned (for example, in Tesla: The Sky's The Limit...Until on 1/28/21).Sure enough, Stellantis NV (STLA US) told reporters this week that it expects to meet European emissions standards on its own this year without buying any more credits from Tesla.That creates a big problem for Tesla because lucrative energy credit sales to Stellantis have been the primary source of all of Tesla’s manufactured “profits” since Q2 2019, which created:
the basis for Tesla’s recent addition to the S&amp;P 500 Index
and its mythological equity valuation
and its ability to sell stock at grossly inflated prices
and its artificially inflated credit rating which lets it borrow with impunity at cheap rates.


Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

The S&amp;P DJI Global Indices team <a href="https://www.spglobal.com/spdji/en/documents/indexnews/announcements/20201211-1277389/1277389_tes15aircaivspindnkn4.pdf?force_download=true" target="_blank" rel="noopener">confirmed</a> Friday night that <a href="https://www.smartkarma.com/entities/tesla-motors-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla Motors (TSLA US)</a> would join the S&amp;P500 and the S&amp;P100 at the close of trading on 18 December, with <a href="https://www.smartkarma.com/entities/apartment-invt-mgmt-co-a" target="_blank" data-smartkarma-citation="entities:2193:1" rel="noopener">Apartment Invt &amp; Mgmt Co A (AIV US)</a> coming out of S&amp;P500 and its 14 December spin-out Apartment Income REIT replacing <a href="https://www.smartkarma.com/entities/dunkin-brands-group-inc" target="_blank" data-smartkarma-citation="entities:15866:1" rel="noopener">Dunkin' Brands Group (DNKN US)</a> in the S&amp;P Midcap 400, and <a href="https://www.smartkarma.com/entities/occidental-petroleum-corp" target="_blank" data-smartkarma-citation="entities:17075:1" rel="noopener">Occidental Petroleum (OXY US)</a> coming out of the S&amp;P100 but staying in the S&amp;P500. When the S&amp;P announced on the 16th of November that Tesla would be joining the S&amp;P500 in December, it said the pro-forma inclusion weight would be ~1.01% (without measuring what would come out). S&amp;P also said that it would update the pro-forma inclusion weight and trading value impact when the Deletion was announced, but they did not. My calc suggests it is 1.47% as of Friday's close. And the two-way trading value based on the S&amp;P's original US$51bn number is, as of today, ~US$152bn.Which is a lot.The arithmetic, and an explanation of why it matters, follow.

The S&amp;P DJI Global Indices team confirmed Friday night that Tesla Motors (TSLA US) would join the S&amp;P500 and the S&amp;P100 at the close of trading on 18 December, with Apartment Invt &amp; Mgmt Co A (AIV US) coming out of S&amp;P500 and its 14 December spin-out Apartment Income REIT replacing Dunkin' Brands Group (DNKN US) in the S&amp;P Midcap 400, and Occidental Petroleum (OXY US) coming out of the S&amp;P100 but staying in the S&amp;P500. When the S&amp;P announced on the 16th of November that Tesla would be joining the S&amp;P500 in December, it said the pro-forma inclusion weight would be ~1.01% (without measuring what would come out). S&amp;P also said that it would update the pro-forma inclusion weight and trading value impact when the Deletion was announced, but they did not. My calc suggests it is 1.47% as of Friday's close. And the two-way trading value based on the S&amp;P's original US$51bn number is, as of today, ~US$152bn.Which is a lot.The arithmetic, and an explanation of why it matters, follow.

Tesla Into S&P - Rebal Details, and Implications for Vol and Active Portfolio Reconstruction

Equity Analyst, LightStream Research

Aqila Ali

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

Hon Hai Precision Industry / Equity Bottom-Up

On its Hon Hai Tech Day 2020, Foxconn presented its MIH platform, an open-source platform that it hopes will streamline the process of developing EVs. According to Hon Hai’s presentation, the platform is developed to replicate features of Tesla’s EVs but also allows third-party contribution to further develop the design and system. Foxconn wants to be the “Android of EVs” while allowing Tesla to remain the “iPhone of EVs”. In this insight, we look at Foxconn’s efforts in the development of EVs, and what this means for related players.We like Foxconn’s platform for being open source, and it looks like an interesting move that would help accelerate EV adoption globally. Though we cannot say with certainty whether the platform will be successful or not until it is tested and tried, we note that if Foxconn’s MIH platform becomes successful, then Tesla’s EV leadership status might be threatened. Overall, we consider this to be a good move by Foxconn, given the declining smartphone market and growing positive EV momentum. We go through the details below.

On its Hon Hai Tech Day 2020, Foxconn presented its MIH platform, an open-source platform that it hopes will streamline the process of developing EVs. According to Hon Hai’s presentation, the platform is developed to replicate features of Tesla’s EVs but also allows third-party contribution to further develop the design and system. Foxconn wants to be the “Android of EVs” while allowing Tesla to remain the “iPhone of EVs”. In this insight, we look at Foxconn’s efforts in the development of EVs, and what this means for related players.We like Foxconn’s platform for being open source, and it looks like an interesting move that would help accelerate EV adoption globally. Though we cannot say with certainty whether the platform will be successful or not until it is tested and tried, we note that if Foxconn’s MIH platform becomes successful, then Tesla’s EV leadership status might be threatened. Overall, we consider this to be a good move by Foxconn, given the declining smartphone market and growing positive EV momentum. We go through the details below.

A Look at Foxconn’s EV Platform – Should Tesla Be Worried?

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

On 22 July, <a href="https://www.smartkarma.com/entities/tesla-motors-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla Motors (TSLA US)</a> reported a profit for Q2 2020 making it the fourth consecutive quarterly profit. Hitting that milestone makes the company eligible for inclusion in the <a href="https://www.smartkarma.com/entities/s-p-500" target="_blank" data-smartkarma-citation="entities:22886:1" rel="noopener">S&amp;P 500 (SPX INDEX)</a> though it remains to be seen if and when the S&amp;P Dow Jones Index Committee add the company to the index.While we wouldn't go so far as to say <s>funding</s> inclusion secured, we think it is neither insane nor ludicrous to believe that <a href="https://www.smartkarma.com/entities/tesla-motors-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla Motors (TSLA US)</a> would be added to the <a href="https://www.smartkarma.com/entities/s-p-500" target="_blank" data-smartkarma-citation="entities:22886:1" rel="noopener">S&amp;P 500 (SPX INDEX)</a>, either at an adhoc rebalance (with a couple of current constituents being acquired in the near future), or at the next scheduled quarterly rebalance in September.As the largest company ever to be potentially eligible for inclusion in the <a href="https://www.smartkarma.com/entities/s-p-500" target="_blank" data-smartkarma-citation="entities:22886:1" rel="noopener">S&amp;P 500 (SPX INDEX)</a>, there is a fair bit of noise around the event. In this Insight, we look at some of the details around the possible inclusion and the impact it would have on <a href="https://www.smartkarma.com/entities/tesla-motors-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla Motors (TSLA US)</a> and other stocks currently in the index.

On 22 July, Tesla Motors (TSLA US) reported a profit for Q2 2020 making it the fourth consecutive quarterly profit. Hitting that milestone makes the company eligible for inclusion in the S&amp;P 500 (SPX INDEX) though it remains to be seen if and when the S&amp;P Dow Jones Index Committee add the company to the index.While we wouldn't go so far as to say funding inclusion secured, we think it is neither insane nor ludicrous to believe that Tesla Motors (TSLA US) would be added to the S&amp;P 500 (SPX INDEX), either at an adhoc rebalance (with a couple of current constituents being acquired in the near future), or at the next scheduled quarterly rebalance in September.As the largest company ever to be potentially eligible for inclusion in the S&amp;P 500 (SPX INDEX), there is a fair bit of noise around the event. In this Insight, we look at some of the details around the possible inclusion and the impact it would have on Tesla Motors (TSLA US) and other stocks currently in the index.

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

<div>Toyota (just after the lunch break) and Honda (after the close) both reported FY03/20 results today. Toyota reported strong revenue 1.5% above guidance and 0.9% above consensus at ¥29.9trn and OP of ¥2.44trn fell 2.3% below guidance but beat consensus by 2.1%. FY03/21 guidance looked conservative as usual with Toyota guiding for ¥24.0 trn in revenue and just ¥500bn in OP vs. consensus at ¥27.3trn in revenue (¥25.3trn over the last 28 days) and ¥1.77trn in OP (¥1.33trn over the last 28 days).</div>Honda’s ¥14.9trn in revenue was 1.4% below guidance but beat consensus by 0.2% while OP of ¥634bn was 13.2% below guidance and even fell 7.3% below consensus. Honda declined to issue guidance for the FY and we consider consensus forecasts for revenue of ¥13.9trn (¥13.0trn over the last 28 days) and OP of ¥402bn (¥220bn over the last 28 days) to be extremely difficult to achieve.The underlying fortunes of the two companies are diverging and we consider Toyota’s competitive position to be far superior.

Toyota (just after the lunch break) and Honda (after the close) both reported FY03/20 results today. Toyota reported strong revenue 1.5% above guidance and 0.9% above consensus at ¥29.9trn and OP of ¥2.44trn fell 2.3% below guidance but beat consensus by 2.1%. FY03/21 guidance looked conservative as usual with Toyota guiding for ¥24.0 trn in revenue and just ¥500bn in OP vs. consensus at ¥27.3trn in revenue (¥25.3trn over the last 28 days) and ¥1.77trn in OP (¥1.33trn over the last 28 days).Honda’s ¥14.9trn in revenue was 1.4% below guidance but beat consensus by 0.2% while OP of ¥634bn was 13.2% below guidance and even fell 7.3% below consensus. Honda declined to issue guidance for the FY and we consider consensus forecasts for revenue of ¥13.9trn (¥13.0trn over the last 28 days) and OP of ¥402bn (¥220bn over the last 28 days) to be extremely difficult to achieve.The underlying fortunes of the two companies are diverging and we consider Toyota’s competitive position to be far superior. 

Toyota – Based on Results, Long Toyota Short Honda Should Continue to Work

United Kingdom

Fiat Chrysler Automobiles NV manufactures and markets automobiles and commercial vehicles. The Company also produces metallurgical products and production systems for the automobile industry, and owns publishing and insurance companies.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Fiat Chrysler Automobiles NV (FCAM BQ)

Tesla: So Long, Free Money

Stellantis says it will stop buying billions of dollars in energy credits from Tesla, leaving a giant hole in Tesla's "profit" potential and...

Vicki Bryan

Tesla Into S&P - Rebal Details, and Implications for Vol and Active Portfolio Reconstruction

The TSLA S&P500 inclusion involves $150bn of direct flows and perhaps another $200-300bn indirect flows. It really is a MAMMOTH trade. And index...

Travis Lundy

A Look at Foxconn’s EV Platform – Should Tesla Be Worried?

Foxconn presented an open-source platform that it hopes will streamline the process of developing EVs. This Insight looks at Foxconn’s efforts in...

Aqila Ali

Tesla: S&P500 Inclusion Secured?

On 22 July, Tesla Motors (TSLA US) reported a profit for Q2 2020 making it the fourth consecutive quarterly profit. Hitting that milestone makes...

Brian Freitas

Toyota – Based on Results, Long Toyota Short Honda Should Continue to Work

Toyota (just after the lunch break) and Honda (after the close) both reported FY03/20 results today. Toyota reported strong revenue 1.5% above...

Mio Kato

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)