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Anyone looking at a buy opportunity tomorrow morning? Nasdaq futures are not looking pretty, but TSLA seems generally resilient after early hour shocks.
I have turned short term bearish since they missed delivery numbers and slowly gone all cash since. The model X delay might have a large impact at earning, i am doubting the current ramp speed with delays reported in the X forum recently. if i remember correctly last huge painful drop was in part due to X delay. TE may save the day, or it may not. GF is making progress but not significant yet. Kinda along the line of DTU thinking so i am Waiting for entry point after ER unless there are other developments. I am Also watching out for sympathy move in case Linked In or Amazon crashes after ER.Anyone looking at a buy opportunity tomorrow morning? Nasdaq futures are not looking pretty, but TSLA seems generally resilient after early hour shocks.
I might, but don't know if it'll be for TSLA. Apple tanking is going to affect tomorrow's trade. Also, the Federal Reserve meeting might make traders cautious too. TSLA is holding up well with the sideways trading around $250.
AAPL lost more than TSLA's entire market cap in after hours today. "Hello TSLA" is right.
There's one thing I think may prevent some of the smart money to invest in today's TSLA. Negative EPS and FCF. I don't know for sure but I imagine some funds may have rules about banning investment in negative eps/fcf companies. So even if some fund managers would like to, they might be bound by rules.Thanks Mike. A boy can dream. A boy is an optimist. The main thing with the stock market is everyone (at least smart people) always keep saying "cash is a position too" but in reality you're in the stock market in the first place because you love to be invested. And the thing the market loves most in this day and age are growth stocks. Especially the ones with a story and with visionary CEOs. That's why TSLA is so often brushed off by bears as a "fanboy" stock. But having fans is usually a good thing. So - a boy will keep dreaming.
To be clear, I did not specify that they were technical shorts either. Some surely were, but technical traders are the minority in the market, and they have long covered by now if they are good enough to be trading any size.
I merely said that as such a polarizing stock, there is a contingent of bears waiting on the sidelines to enter at any sign of weakness, and the Jan macro turmoil provided that entry.
It is unclear whether a break of 200 or 180 provided them with this go ahead signal, or if the perceived tightening of credit markets thus lack of funding sources was what caused the break in the first place. In truth it was a combination of both feeding into eachother.
What is very clear is that whether you shorted on a technical breakdown or on the fundamental basis of a credit freeze, neither of those thesis is still valid today. Technically we are in a heavy uptrend after that false breakdown. And the general capital environment has loosened back up, not to mention the 400k reservations providing a backdrop for any capital raise. Instead of distressed, it is the easiest environment in the world right now for Tesla to raise money.
There is no valid reason left to hang on to for a short who entered during the Jan crash. This is why they are vulnerable here. And would be let off easy on any decline from here as they surely would scramble to cover and cut their losses. A decline from here would decrease short interest, not increase.
Now, I agree that there is about a 20 million share core fundamental short contingent that have been around in one form or another for the past 4 years now, who aren't going anywhere unless there is a major fundamental catalyst. These are not who I was referring to.
Edit:
See above.
IMO this is very wrong. A cap raise which leads to a raise in production goals will be transformational for share price/valuation.
The undeniable fact is that current valuation in large part is due to Tesla's own projected 500k future target. Otherwise it would be valued by similar metrics to GM, F like the bears mistakenly already do. You are correct that the market only believes this to one degree or another. In fact the believability and perceived likelihood of achieving this goal is what contributes to the ebbs and flows to the stock price. Every analyst's DCF model is based on this projection. Some like MS and GS believe only a base case of 250k in 2020. Some like Andrea James are more optimistic.
No matter the case, future production level is a key variable that is factored in by the cumulative market participants. (In addition to profitability(margins), future earnings multiple(function of growth level) etc)
By raising capital for the express purpose of ramping up said future production level, every market participant will have to re-evaluate their own projections - and thus their price expectations. Even for those who do not believe, like MS and GS, they would still have to adjust their 250k 2020 number, unless they think Tesla is raising cash just to sit on it. So even if they do not believe a 1 million 2020 number, it would still have to be higher than their current model suggests. This means that overnight Tesla's valuation would need to be recalibrated(accounting for some dilution of course). In truth it probably will not be over night but over the course of a few weeks or however long rolling margin calls logistically take.
I follow your logic 100% here. What if it's this simple then: Elon says on conference call "Oh, by the way, due to unexpectedly high interest in Model 3 we have adjusted our growth plans, we want to aim for 1 million cars built in 2020 so we will need to get started on Gigafactory 2, Vehicle plant 2 and in order to do this we will need to raise cash, approximately 2 billion dollars, and we plan to do this before the third quarter of 2016. We are working closely with our banking partners in GS and MS to make this an attractive deal to the credit markets". Boom - short squeeze, stock price goes up, the capital raise happens after the stock price has gone up.
The point is it's not that the actual capital raise takes place and then this causes the squeeze, but rather that it's the news that a capital raise is needed and is going to take place that can cause the squeeze.
I doubt any TSLA shareholder is complaining that the company found out that they can charge a lot more money for their products and make more margin.
Jesse and Julian: THANK YOU!
For me, Tesla Energy is still in "show me the money" mode. The Model 3 did 10 times as much revenue as Tesla Energy in one day on reservation fees alone for a product that is not going to be available for another 2 years. Powerpacks/walls on the other hand, supposedly so popular that they can double the price before shipping, I want to see a quarterly report first where they actually move, let's say, a 100 million in product before I am jumping on the hype train.
For me, Tesla Energy is still in "show me the money" mode. The Model 3 did 10 times as much revenue as Tesla Energy in one day on reservation fees alone for a product that is not going to be available for another 2 years. Powerpacks/walls on the other hand, supposedly so popular that they can double the price before shipping, I want to see a quarterly report first where they actually move, let's say, a 100 million in product before I am jumping on the hype train.
What happened? I absolutely agree! You just put it better that I have been saying it for half a year.
This 500K per year raised to some significantly higher number with credibility reflected in the capital structure - especially if the business turns more than a cent of operating profits in back to back quarters, GAAP so much the better - is the ultimate baseball bat to the heads of the shorts and Musk can swing it whenever he wants.
Jesse you shared some insights about the capital markets. Do you by chance have a view of how that looks as a function of election season or any other macro thing from here out to November or how the Apple thing might color the tech sector as a whole in coming months in terms of tightening or loosening in % terms.
Would be very helpful to have this a calibration factor for security of price targeting. This is an area where I assume a circa 30-40% overlay on Tesla specific price action and it would be great to get that down to 15-20% with a clearer view than I have in this regard.
Just a footnote to that - Tesla has a number of possible white swan options when it comes to M3 CapEx. IMO it is only 95% likely that they will look to the capital markets at all.