I have a theory that shorts will have a worsening time "pushing the stock down". Why? They must be out of money. If you are going to play games with a stock, the idea must be to used a big jolt of well timed short selling to cause an outsized cascade of other people selling too. Then quietly buy back to cover at a lower price. Wait for it to get frisky again, and repeat. But if the last attack failed, what, weeks ago? Then they either don't have shares to sell or it would be very expensive to cover and "reload". So net-net they simply have less capital to play with.
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I have a theory that shorts will have a worsening time "pushing the stock down". Why? They must be out of money. If you are going to play games with a stock, the idea must be to used a big jolt of well timed short selling to cause an outsized cascade of other people selling too. Then quietly buy back to cover at a lower price. Wait for it to get frisky again, and repeat. But if the last attack failed, what, weeks ago? Then they either don't have shares to sell or it would be very expensive to cover and "reload". So net-net they simply have less capital to play with.
Weak long thrown a few punch on them self? I do not think I am worry about it. TSLA will continue growing up strong....
My thinking is that short-covering will accelerate the process but covering in itself doesn’t provide support for valuation.
For SpaceX the holy grail was reusability. So where is SpaceX today? It proved that it is capable of reusing rockets. But SpaceX is still working on improving the process to make money (or expand margins) from it. Once reusability becomes really efficient, as in being able to fly the same rocket twice in same day it is truly money making (margin expanding). To further, the plan is to make use of the reusability into other extremely profitable domains like satellite internet. So all SpaceX has today is proof-of-concept.
Coming to Tesla: the holy-grail is affordable, compelling EV - basically Model-3. Initially Model-3 will not be very profitable. Even at good volumes it won’t make overall Tesla very profitable. But as manufacturing efficiency improves in assembly, and cell chemistry improves on battery side, it will be staggeringly profitable. Another holy-grail is autonomy. Here too Musk is promising coast-to-coast level-4 autonomy (maybe just a demo) by the end of the year. By the end of the year Tesla will have proof-of-concepts for two truly ground breaking holy-grails. But won’t be making tons of money just yet. However it will be very much on track to do so. So how much are these proof-of-concepts, milestone achievements worth?
It’s anybody’s guess. My guess is nothing less than $100Bil. So does this VC think (who got FB right).
For instance Jonas thinks Waymo independently is worth as much as 70Bil just today. Let me drill into it a bit.
First and foremost Waymo and Tesla are the only two contenders that are genuinely close to autonomy in my view. However they have very different approaches. Waymo wants to build perfection, through upfront data acquisition, within a perimeter. Then keep linearly expanding the perimeters. Just about every contestant is following this model except Tesla/Mobileye. Tesla’s approach is to gradually improve the capability (over an exponential curve) in ‘any’ perimeter. So Waymo’s approach is perfection first. Tesla’s approach is scalability first. Once Tesla cracks the code, it can run anywhere. While waymo will gradually try to expand the perimeter 1-square-mile at a time.
In any case, by the end of the year if Musk convinces people that Tesla truly achieved level-4 autonomy. That proof-of-concept itself is worth 70Bil!
How much more is everything else worth? Model-3 in itself if a holy grail. With improvements in chemistry (Musk alluded to 12 to 13% improvements an year!) and automated assembly, what kind of prospects does Tesla have on manufacturing side? Isn’t 30Bil too low for this?
A good way to think about valuation is this. Today’s valuation is simply a discount to the ultimate valuation. The discount rate applied becomes lower as more milestones are achieved. So Tesla will keep becoming incrementally more valuable each passing year.
Musk at one point said Tesla will reach 700Bil market-cap in 10 years. Then later he said trillion dollars with solarcity acquisition. To grow into that valuation the company will have to add about 100Bil valuation each year!
Why would first 100 be such a shock. Not really. All it has to do is keep hitting milestones.
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NASDAQ
Tesla
Actually, the NASDAQ did indeed take a secondary dip, and if you compare the NASDAQ with TSLA, the charts are remarkably similar. With TSLA up so high recently, it is much more sensitive to dips in the NASDAQ than usual.
jhm
Well-Known Member
My outlook is $1.2T market cap by 2027, about $3600 per share. Given that outlook, the stock price gets way ahead of itself at $440 in the very near term. So the risk of buying at $440 today is that you may need to wait two or years or more for a substantially higher price to come along. So if you like buying at the top and holding, it could all work out long term. But what you'll miss out on are much lower prices along the way.
So "nothing good happens above $440" means that prices have been pulled ahead and volatility will whip your ass for several years. It's like buying at $280 on Sept 4, 2014.
Please see this for details: Blind Faith Price Targets
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This is a healthy breather. Nothing to worry about. A nice bait for shorts. Lest not forget we are up 25% in the last three weeks. Unrealistic to expect the stock to keep going up.
Remember, we're having a big dip into the low $360 range. I repeat - $360. Imagine saying that at the beginning of the year!!!!!
Remember, we're having a big dip into the low $360 range. I repeat - $360. Imagine saying that at the beginning of the year!!!!!
tinm
2020 Model S LR+ Owner
LoL Rick
Like Buttah
Whoever it was that wanted a pullback so they could buy in, giddyup!
erthquake
Active Member
Since a bill dismantling Dodd-Frank was passed by the House yesterday, perhaps this is a rotation out of tech and into banking stocks. $BAC and $WFC up 2% today.
ValueAnalyst
Closed
Could you please share the major assumptions for $1.2T by 2027? I expect the same by 2021/22 due primarily to the 3 or 4 Gigafactories reaching full production capacity (i.e. 5m cars/year) by then.
Also, you must be assuming very substantial dilution, because $1.2T market cap is 20x of today's $60B, but $3,600 per share is only 10x. In contrast, I expect very minimal dilution, if any, as Model 3 ramp up will allow Tesla to borrow non-dilutive debt.
For these two reasons, I estimate that $440 is still a very good entry point, at least for me, as I have staying power for many years. I would rather take on the 20x upside potential rather than worry about 5-10-20% lower entry price.
T3slaTulips
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