2017 Investor Roundtable: TSLA Market Action

[jhm]

I'll bet the house that this is not our new trading range.

Literally, I'm betting the house. I'm selling two of my condos, each with substantial equity, to buy more stock if SP stays here for another month or so.

Not an advice. Long only no margin no option with this cash.

Not an advice.

Not an advice.

The new trading range will be wider than we've seen, particularly on the upper side. Perhaps $306 will hold on the low side. The middle should expand to about $424 over the next 12 months. So the upper side must be north of that. I still would not trust $440 in the very near term. It's just too easily for shorts to slap it down, as they've demonstrated this week.

BTW had the price stayed at $370 instead of poking up to $387, I think it would have been harder for bears to have knocked so far down. The stock attracts far too many flaky longs at such heights chasing hype. These snowflakes melt at first sight of trouble. So it is very easy for a bear attack to scare them away. But not to worry the intrepid who are buying at $311 will be much stronger hands.

 

[MitchJi]

Recent Elon interview:
The Art (& Science) of Leadership: Inside The Mind of Elon Musk

The Art (& Science) of Leadership: Inside The Mind of Elon Musk

June 20, 2017 Posted by Amy Elisa Jackson
<snip>
Despite a jam-packed to-do list that includes building a self-sustaining city on Mars, Musk has a 98% CEO approval rating on Glassdoor. Employees rave: “Insanely intense magic,” “challenging but highly rewarding,” and “a family like relationship.”

One composite technician at SpaceX HQ sums up the hype by saying, “I absolutely love working at SpaceX. I am living the dream of building Space Rockets. The free perks, full benefits, SpaceX clothing, drinks, food, stocks and everything else that Uncle Elon gives us is truly amazing, astonishing, unbelievable, mesmerizing and no words can truly explain what’s it like to be part of the SpaceX and what we do. Thank you very much from the bottom of my Heart, Mr. Elon Musk.”

Employee reviews — those both glowing and critical — reveal that Musk and his leadership team have managed to build a remarkable company culture as impressive as their Dragon spacecraft...
<snip>
For answers, we turned to the man himself. Who better to give insight to how he leads, what inspires him and what he looks for in a new hire, than Elon Musk himself. In an exclusive interview with Glassdoor, Musk reveals the science and strategy behind SpaceX.
<snip>

 

[1kEE]

They are, they are. Despite being a bit more extended than I like to be, I couldn't resist selling a $320 strike put (Jan 2018 expiration) for $41. I mean, seriously, if it goes through it's like buying TSLA for $279 ! And it probably won't go through.

I like your thinking! I suggest raising that to $43, I just sold a couple at that.

 

[MitchJi]

It's becoming more and more obvious how outdated the franchised dealership model has become. If the only local connection is a service center, state laws disallowing Tesla stores may be circumvented. I wouldn't be surprised if eventually all automakers attempt to follow the Tesla model for online sales and local service. Bye bye franchised dealerships. Welcome to the 21st century!

Except that in the US that's virtually impossible (they are screwed). That's going to be exacerbated by GM trying to use those laws against Tesla.

 

[vgrinshpun]

To add to the conversation of stores and service centers (sort of), I was very surprised when after calling the Devon Service Center about scheduling a service appointment this Wednesday, I was offered to bring my car the next day. This is a first during my 4-year long ownership. The appointment was usually scheduled two-three weeks in advance. It appears that there indeed was a remarkable increase in quality of MX and MS lately, with the corresponding decrease in the service backlog.

There is also a change in policy. While previously there were two ways to schedule a service visit: one if you want to make sure to get a Tesla loaner, and another if you do not need a loaner or will accept a rental. The second way obviously resulted in a shorter wait. Now the service appointment is booked without any differentiation, and if there is no Tesla loaner available at a time of the drop-off, a rental is arranged.

According to an unofficial info, dropping a car in the beginning of the week most likely yields a Tesla loaner, with a possibility for a rental loaner increasing in the second half of the week.

 

[Hogfighter]

Hog Negativity Index rose to a 7 this week. Bought more shares as a result.

 

[Doit]

Interesting.

SP so far held above the weekly ATH $304.88 after the Q1 delivery (week of Apr. 3rd) and very likely closes higher than the weekly close $308.35 after Q1 earning (Week of May 1st), which was only week SP going below $300 since it first coming on top of $300.

Can we call it a bottom already?

 

[Jayjs20]

I'm officially back in. Well, I'm back in for the second time today.

Out at 364.2, in at 310. Then, out again at 314.60 because there's no reason for it to jump like it did earlier today, and back in at 312 because I didn't want to push my luck. Brought my average share price down down almost 60 dollars, to 203, which is pretty awesome. Though, all it really did was cancel out my disastrous attempt at day trading late last year. Brought my margin down to 200%, which is much more comfortable.

Also bought some Jan2019 call options with a strike price of 330 at the price of 54.90. Sure am hoping that wasn't a mistake; don't think it was.

 

[Paracelsus]

Ugh.. I have a feeling this week's plunge could have been largely avoided if they had included the 3500 in transit vehicles in the Sunday press release, and, if they hadn't mentioned any shortage of battery packs during the last quarter (as the issue has been resolved already).

Any excuse will be taken as a negative. Why bring it up?

I absolutely agree the 3,500 transit vehicles should have been included in Sunday's press release, but I am thinking the answer to the significant price drop over the past week of trading was not somewhere down in the weeds with topics like a few stores closing or a shortage of packs that has since been resolved. This was a very coordinated Big FUD, GS price gutting rating, and algo attack timed to move the stock down just prior to the Very Big Picture Tesla announcement of the South Australia battery storage news. Imagine for one moment what the share price would be today if TSLA had only traded flat over the last week in the 370 range and still had upward enthusiasm and momentum behind it. Without that baseless attack we would easily be knocking on 400 now and the Big Money Shorts that have kept a fairly constant $11 Billion bet short against TSLA would be getting their lunch eaten and their margins called. I feel certain that the results of the Australia contract award were known among too many people for a sufficient time period prior to its public announcement and that it resulted in the full-court press to tank the stock before it went public. $11 Billion repeat customers on the short side just might have some influence over the FUD as many on this board have routinely commented on over the past few months.

The upside is that TE appears to be very well positioned for repeat contracts of this scale around the globe after the successful completion of this first South Australia contract with it's new partner. Those keeping the short-side pressure high on TSLA may have won the first battle over crossing the 400 mark, but they must also have learned from this that they won't win the war, and that they will likely not be able to slow the transition to sustainable renewable energy with storage as much as they had hoped. The buying volume at today's level is tremendous and it is all being done at levels ABOVE the point at which Tencent had aquired it's 5% (+) stake in TSLA. On each volley down and back up the float will continue to shrink, thus accelerating the moves in either direction until the long upward squeeze is sustained.

 

[Richgoogol]

Seems like the thunderstorm is over? Actually it was more like a tornado...

 

[LoveTSLA]

What's going on with the post market jump?

 

[T3slaTulips]

313 and rising feels kinda ok today especially since we didn't get our tweet yet.

 

[LoveTSLA]

Never saw this on Friday.

What's going on with the post market jump?

 

[zdriver]

What's going on with the post market jump?

No idea, can't find any reason, but huge volume for AH, and no amount of sell orders seems to affect it. Saw one order for 22,052 hit the tape... Price dropped from $315.01 to $315.00. It's all just getting absorbed.

According to Tesla, Inc. (TSLA) After Hours Trading - AH volume of 367k so far...

Edit (4:34pm ET) - 528k, still holding $315...

 

[jhm]

So the big battery down under sounds like a big sale, but it is only about $33M in revenue (129MWh @ $250/kWh). Yet it is a big deal because it primes a large international market. I'm sure utilities around the world are taking note that this system will get installed in about 100 days at a cost of $0.33/W. That is an incredibly low cost for backup and peak power. And the fuel is cheap too, excess power when wholesale prices are depressed.

How cheap is this? Consider that some gas peakers have cost more than $1B for 900MW. That is $1.11/W. That's not too bad, until you consider that some of these facilities have sat idle for year, sometimes never used. So even if this 100MW battery system only discharged 100MWh in a year, it would be a far better ROI than a 100MW gas peaker that only generates 100MWh in a year.

My point here is not that such limited stand-by use is the best use for this system, but simply that $0.33/W is really cheap and immediately makes sense as stand-by power. Maybe more energy capacity will be added over time. But it may be that some fraction of stack capacity will always be reserved for stand-by.

 

[bdy0627]

The 100 SMA provided strong support yesterday and again today. Hopefully we are done with red candles now. I'm still a little concerned this was all we could get today with the SA battery news. The stock bounced down hard off of 316 twice today. 15 trading days until Model 3 reveal. I bought quite a few LEAPs today as I think this is a good overall price point to pick up some more. TSLA probably remains vulnerable over the next week but I would also think that any further drops would be much smaller than what we saw this week.

I expect the week leading up to the M3 reveal to be very strong. But, Q2 ER is expected to be weak. That will be around Aug 1st, just 2 trading days after the M3 reveal. Given the market disappointment over the Q2 delivery numbers, perhaps a poor Q2 ER is already priced in and won't cause much of a drop. If there is strong positive momentum building into and beyond the M3 reveal then I would think the effect would be pretty muted. We'll see. There are lots of investors and traders ready to get back in once this stock CLEARLY stabilizes. Most likely there won't be any real news until the 7/28 reveal, so macros may play a heavy role in the share price for now.

 

[1kEE]

Brought my margin down to 200%, which is much more comfortable.

Also bought some Jan2019 call options with a strike price of 330 at the price of 54.90. Sure am hoping that wasn't a mistake; don't think it was.

The premium on that Jan 2019 330 is a bit high, but if you're betting on a strong bounce, it's a trade that may pay off well.

If you feel that we will bounce around between 305 and 315 until the 28th, then you would be better off waiting. The premiums will drop off as it grinds sideways.

Good work on exiting at 360 and re-entering now. Calling "margin down to 200%" as "much more comfortable" is a bit scary, hopefully thats just 200% account value, not net worth!

If you enjoy ridiculous levels of exposure, here's a fun options combo known as "synthetic stock". Sell a 330 put, to pair with your 330 call. What that will do is hedge out the time value decay and volatility decay of the long call. Also the sum of the deltas will always be 1. So it's like having 100 shares of stock without having to pay $31300. And there is no margin interest to pay. There is a price (no free lunch)! This will remove the long call's downside risk protection. Instead of the call slowly going to 0 in a worst case scenario, the call will go to zero, and the short put will go very negative. Please use with caution!

I sold 2018 puts today, and plan on buying LEAPs calls later on after the sillyness dies down.

 

[RobStark]

OK, so first of all, they absolutely do have to add hundreds of service centers and mobile units.

Secondly, they do need stores in some places they don't have them. Geographic coverage, remember? It's probably worth having one in Alaska. Definitely need one in Perth. And one in Tasmania. One in Maritime Canada. And then there are the new markets which were allowed to make reservations, like Brazil, and India...

At the same time, having 11 stores/galleries in the NYC metro area (which they do now) is frankly silly, and probably wasteful. So I would absolutely believe a "rationalization" of stores involving closure of redundant stores which aren't causing much turnover.

The 11th store in greater NYC will produce more sales than the first in Alaska or Tasmania.

Greater Perth has a population of 2M and from my understanding is kinda like the Portland,OR of Australia. That should generate some significant sales.

 

[elasalle]

Wild Wild week. Certainly something worth experiencing once in a while.
As advised by my colleagues today morning I did buy more Jan 19/18 Calendar spreads @ 450 strike when SP was 310

 

[Richgoogol]

Not sure why it just got picked up now since it was released around noon, but CNBC believes this is the reason SP is up aftermarket.
Tesla shares rise after company releases key stat it didn't include in quarterly report
Tesla shares rise after company releases key stat it didn't include in quarterly report