Thread by @FrankPeelen

1/16

Thread on Berkshire Hathaway and Tesla.

Yesterday, I pointed out in this quoted thread that, based on data I gathered from 13F filings, a large number of TSLA shares seem to have gone missing during Q3, to the tune of 100M shares.

https://twitter.com/FrankPeelen/status/1328517409649508352

2/16

I made a small mistake, so the number is actually a little over 50M shares, but nonetheless this is a large number of shares that can't be explained away by retail buying, delta hedging, and smaller institutional investors increasing their stakes.

3/16

@s17_scott and Thekiwi on TMC pointed out to me that $BRK omitted one company from its 13F, and instead disclosed this newly acquired stake separately in a confidential filing, because it was worried that making the position public would move the market too much.

4/16

According to this BI article, there is a $25B difference between the value of the portfolio $BRK declared in its 13F and its 10-Q ($220B vs $245B). In actuality, they declared $245.5B in their 10-Q and $229B in their 13F, a difference of $16.5B.

markets.businessinsider.com/news/stocks/wa…

5/16

The BI article also mentions a $6B investment into 5 big Japanese trading companies made over a 12 month period, which was made public in early August, and which supposedly explains part of the disparity between the 13F and 10-Q.

markets.businessinsider.com/news/stocks/wa…

6/16

Indeed, there is also a disparity of $5B between $BRK's Q2 13F and 10-Q. In other recent quarters, the differences were:

Q2'20: $202.5B vs $207.5B = $5B
Q1'20: $175.5B vs $180.5B = $5B
Q4'19: $242B vs $248B = $6B

So the current $16.5B difference is not normal.

7/16

The BI article also mentions this has happened once before in Q2'15, when $BRK reported $110.5B in equity holdings in its 10-Q vs $107B in its 13F, a difference of $3.5B, only to file an amendment 3 weeks later, worth $2.5B.

8/16

Assuming that $5-6B of the current $16.5B disparity is due to the investment in the Japanese trading giants, what can the other $11B be attributed to? Could $BRK's currently confidential new investment be $TSLA?

9/16

Another important piece of information is the size of this position, and implications it has on 13D/13G filings. Companies have to disclose an acquisition of a 5%+ stake in a company within 10 days to the SEC. So unless $BRK was also allowed to keep this confidential...

10/16

this means the $11B must be less than 5% of the company in which it was invested. That means the company's market cap must be >$220B, which really limits the options. There are only 25 such companies listed on US exchanges:

dogsofthedow.com/largest-compan…

11/16

Furthermore, $BRK already owns stock in 9 of them, and is 1 of them:

1) $AAPL
2) $AMZN
3) $BRK
4) $V
5) $JNJ
6) $JPM
7) $PG
8) $MA
9) $BAC
10) $KO

There are only 15 other $220B+ companies listed on the NYSE and NASDAQ.

12/16

None of this proves anything, but when combined with the ~50M $TSLA shares that went missing in Q3, there are some strong signs showing $BRK's mystery new investment could be $TSLA.

13/16

If it is $TSLA, this $11B would amount to ~25M shares at the stock price at the end of Q3 ($429), and would go a long way towards explaining the ~50M missing $TSLA shares. 50M shares can't be explained away by retails, small institutions, and delta hedging, but...

14/16

25M can, especially with 25M shares worth of buying pressure pushing up the stock price as much as it did in Q3, because a rising stock price requires a lot of shares to be bought for delta hedging purposes, as I've explained in my blog previously:

teslainvestor.blogspot.com/2020/04/the-me…

15/16

So did $BRK acquire a large stake in $TSLA? There's no proof, but it seems very plausible. We should find out for sure what $BRK's mystery new acquisition is over the next few weeks or months.

16/16

Tweet thread compiled into blog post for people who prefer that format:

teslainvestor.blogspot.com/2020/11/is-tsl…