2017 Investor Roundtable: TSLA Market Action

[geneclean55]

Yeah I remember that lower BB is around $348? so $350 makes sense. But OTOH this week Tesla seems to be tracking exactly with NASDAQ with 2-3X scaling, so does any technical levels in TSLA matter? or should we be looking at the technical levels of the entire NASDAQ?

TSLA has been following NASDAQ very closely recently. I would kinda like that to change, starting next month

 

[Waiting4M3]

I have a feeling this is partly why the stock was pulled back to 360ish.
Judge says dealers can sue over Tesla's second Virginia store

3-day old news?

 

[SteveG3]

I think it might be worth looking up the price history of Tesla's "release the D" tweet from Elon and the days after the announcement. This time, I have no idea whether the market thinks it already has more than priced in the 3 or not. Maybe with the reality of the event happening, it goes up sharply, maybe it drops considerably. I'm holding all my core shares, because whichever unpredictable way the market sees it in the next month, I'm very confident the stock is undervalued for what the next decade will bring.

Again, a couple of unedited and complete rerun comments from two weeks ago,

#10811

"I don't think anyone can have very much confidence as to just what mix of the following has led to this run into the $380s, most of these items running for months now,

- "market" bidding the stock up on anticipation of the Model 3 launch and some gems in the past few months (i.e. 3 or 4 more GFs to be announced, probably this year)
- "market" as a whole rallying for tech/growth stocks
- a fundamental reassessment of Tesla's value over the last 6+ months by the market as a whole
- traders exaggerating the move. by traders, I don't mean Tesla lovers or haters, but lovers of the opportunity to trade the momentum in either direction that super high volatility like TSLA currently offers
- some amount of short-covering rally
- "market" absorbing Elon's comments last week that were quite suggestive of a much much more bullish aspiration for vehicle sales business (think Toyota volumes, or possibly far more, with Porsche margins) despite a near media blackout in mentioning, let alone thinking through the implications of the ~ultimately 10 to 12 maybe 20 GFs~ comment
- other I'm sure you all can remind me of

My confidence in teasing out what is driving this is so minimal I think of the stock price with a +/-$50 next to it. Only, I'm not so sure if it is currently a $383 +/-$50, $433 +/-$50, or $333 +/-$50 (and that's not even including the range that a potential market selloff would bring, though, not a lasting impact on TSLA).

So what do I do? Same as I did when it galloped from $40 to $90 in days, and then on up to $180 a few months later in 2013. I've sold my trading shares $70 ago, but, as to my core shares, have not let go of a single one as the stock is still below the valuation on future earnings I have modeled... that is precisely I why I held all core shares through 2013 with stock prices that made me a little hyper, and is keeping me holding every one of them now, a bit hyper again, but less so than 4 years ago."

And #10989

"I've seen some discussion of "buying the dip" here,

I think it's worth remembering that our low 3 weeks ago today was $307.81.

As I said yesterday, I have little idea whether the stock price currently is $383 +/-$50, $433 +/-$50 or $333 +/-$50. The bit in those figures I have by far the most confidence in is the +/-$50, and by price, I mean what we will see quoted, not my valuation of the company.

To be clear, I think the shares are currently undervalued for a long term investment (hang onto any core shares!), but, I have seen repeatedly with Tesla and my previous individual stock investment, Celgene, that what seems like a bargain sale/dip, weeks later, sometimes only days later, actually comes to look like the upper realms of the high riding days."

went ahead and pulled up the stock price with these events,

10/1/2014 TSLA closes at $235.65 and after market closes, Elon tweets "About time to unveil the D and something else" with a photo that announces the event will be 10/9

10/92014 high of day $265.54 (up 12.7% from 10/1 close)

10/15/2014 low of day $217.32 (down 18.2% from 10/9 high of the day)

having lived through this in real time, 1) there were not other substantial catalysts for these stock price movements, 2) Elon made us wait a long time that night... but, what he showed us, dual motor and autopilot was a very very positive presentation. For me what Tesla showed the world that night was the second most moving moment telling me this company has a tremendous future. Emotions were saying, "we're going up tomorrow."

Again, I write this not to say the Model 3 reveal, ramp, etc. will lead to a selloff... maybe it goes up strongly with these. My point is, I think we have a far far more meaningful opportunity to evaluate whether Tesla is undervalued for where it is headed long-term, than figuring out whether the market already ran past what it will bid TSLA to based on the 3 reveal event, or has just gotten started bidding the price up on it.

 

[MitchJi]

I agree!

I'm still adding the J18 $600's on the current dip. I'm not planning on them being ITM. An SP of $425-$500 would be excellent. I'm planning to add March 2018 $600's when they become available in July. Might roll the J18's to the March calls too.

Barring a major macro issue I'm extremely confident in our portfolio. Seventy one J19 $380's, and ten (as of now) J18 $600's. Plus one share purchased at $160.

Making hay while the sun is shining.

Not an advice.

Clarification: I believe that the J19's are extremely safe. I was originally planning to wait for the large rise to start, but I decided to buy a few cheap lottery tickets instead.

Well everything's in free-fall, but the great news for us is that TSLA has a M3 reveal just around the corner along with a ramping production. I expect any losses now to be very short-lived indeed.

Depends on the M3 production ramp. One key supplier being late by two to three months would provide be enough,to sink my lottery tickets.

I just started wondering if a lot of the reason for the drop is due to insider trading. If there is a problem with suppliers the information would probably leak.

 

[D-egg-O]

3-day old news?

I feel like a total fool. It came up in my Google finance feed and lined up perfectly with the reversal back to 360. My bad.

 

[Ryo]

Hopefully it can stay above 360 into the close. Lots of sellers here

Yes, it was nice to see TSLA do a 180 and end at 360.

 

[Waiting4M3]

Clarification: I believe that the J19's are extremely safe. I was originally planning to wait for the large rise to start, but I decided to buy a few cheap lottery tickets instead.

Depends on the M3 production ramp. One key supplier being late by two to three months might be enough,to sink my lottery tickets.
I just started wondering if a lot of the reason for the drop is due to insider trading. If there is a problem with suppliers the information would probably leak.

Are you saying there is currently such a leak going around the insiders? How does that explain TSLA following NASDAQ?

or maybe NASDAQ is following TSLA?

 

[Crowded Mind]

went ahead and pulled up the stock price with these events,

10/1/2014 TSLA closes at $235.65 and after market closes, Elon tweets "About time to unveil the D and something else" with a photo that announces the event will be 10/9

10/92014 high of day $265.54 (up 12.7% from 10/1 close)

10/15/2014 low of day $217.32 (down 18.2% from 10/9 high of the day)

having lived through this in real time, 1) there were not other substantial catalysts for these stock price movements, 2) Elon made us wait a long time that night... but, what he showed us, dual motor and autopilot was a very very positive presentation. For me what Tesla showed the world that night was the second most moving moment telling me this company has a tremendous future. Emotions were saying, "we're going up tomorrow."

Again, I write this not to say the Model 3 reveal, ramp, etc. will lead to a selloff... maybe it goes up strongly with these. My point is, I think we have a far far more meaningful opportunity to evaluate whether Tesla is undervalued for where it is headed long-term, than figuring out whether the market already ran past what it will bid TSLA to based on the 3 reveal event, or has just gotten started bidding the price up on it.

Having lived through the event as well, I think the uncertainty (and accompanying hype) is what caused the post-reveal reaction in this case. A lot of people, for some stupid reason, were expecting Model 3 to be revealed. I know the forums pretty much had it pegged, but the market did not. M3 reveal is different to me. I think we, and the market, have a pretty good idea of what will be revealed. I also believe the market is underforecasting production, which is why I am aggressively positioned. Unfortunately, macro will do what it will.

 

[MikeC]

went ahead and pulled up the stock price with these events,

10/1/2014 TSLA closes at $235.65 and after market closes, Elon tweets "About time to unveil the D and something else" with a photo that announces the event will be 10/9

10/92014 high of day $265.54 (up 12.7% from 10/1 close)

10/15/2014 low of day $217.32 (down 18.2% from 10/9 high of the day)

having lived through this in real time, 1) there were not other substantial catalysts for these stock price movements, 2) Elon made us wait a long time that night... but, what he showed us, dual motor and autopilot was a very very positive presentation. For me what Tesla showed the world that night was the second most moving moment telling me this company has a tremendous future. Emotions were saying, "we're going up tomorrow."

Again, I write this not to say the Model 3 reveal, ramp, etc. will lead to a selloff... maybe it goes up strongly with these. My point is, I think we have a far far more meaningful opportunity to evaluate whether Tesla is undervalued for where it is headed long-term, than figuring out whether the market already ran past what it will bid TSLA to based on the 3 reveal event, or has just gotten started bidding the price up on it.

Just to add to this, at the time, there was speculation the D event would be the Model X unveil, and I believe Trip Chaudhry even put out a note predicting a Model 3 reveal. So that hype -> disappointment might account for some of that price action.

Edit: Crowded Mind beat me to it.

 

[bdy0627]

went ahead and pulled up the stock price with these events,

10/1/2014 TSLA closes at $235.65 and after market closes, Elon tweets "About time to unveil the D and something else" with a photo that announces the event will be 10/9

10/92014 high of day $265.54 (up 12.7% from 10/1 close)

10/15/2014 low of day $217.32 (down 18.2% from 10/9 high of the day)

having lived through this in real time, 1) there were not other substantial catalysts for these stock price movements, 2) Elon made us wait a long time that night... but, what he showed us, dual motor and autopilot was a very very positive presentation. For me what Tesla showed the world that night was the second most moving moment telling me this company has a tremendous future. Emotions were saying, "we're going up tomorrow."

Again, I write this not to say the Model 3 reveal, ramp, etc. will lead to a selloff... maybe it goes up strongly with these. My point is, I think we have a far far more meaningful opportunity to evaluate whether Tesla is undervalued for where it is headed long-term, than figuring out whether the market already ran past what it will bid TSLA to based on the 3 reveal event, or has just gotten started bidding the price up on it.

Great info. Thanks for digging that up.

 

[madodel]

Well said. To add to that, even though TSLA is a high growth company with new promising products coming out, remember Apple in 2008, fresh after the iPhone release and ATH in late 2007, dropped from $28 to $17 in early 2008, recovered by mid 2008, and dropped from $25 to $12 in late 2008. The happy ending is that by mid 2009, none of that mattered.

I just stopped looking at the market for about 6 months. Luckily my wife doesn't look at the statements and I just kept reassuring her it will all come back. And it did. It's just money, no one was dying so ignoring it seemed like the only solution. I will never sell in a downmarket unless forced.

 

[Jayjs20]

Then when should you sell? You shouldn't sell when it drops, I've already made the mistake of selling as it's still climbing. At what point are you comfortable with selling your shares? In a perfect world, you'd sell at its peak, but that's practically impossible to predict.

 

[DragonWatch]

3-day old news?

Order online ~ summons car to address ~ self driving

 

[SteveG3]

Just to add to this, at the time, there was speculation the D event would be the Model X unveil, and I believe Trip Chaudhry even put out a note predicting a Model 3 reveal. So that hype -> disappointment might account for some of that price action.

Edit: Crowded Mind beat me to it.

Yes, you and Crowded Mind are remembering well. It's hard to know how much the silly suggestions were part of the rise and fall. I think it was more traders playing on momentum than the market collectively believing the silliness, but, neither take is provable as far as I can tell.

Here's another example,

March 2012 TSLA peaks at $39.95, not to be surpassed until February 2013. Stock hit a low in August 2012 of $25.52. Model S first delivery event was in June 2012 (fwiw, did a quick check using QQQ as a proxy, TSLA was not moving in tandem with the markets)

Again, not saying we will go down with M3 reveal, but, rather, that it is unpredictable to me.

 

[Starno]

Then when should you sell? You shouldn't sell when it drops, I've already made the mistake of selling as it's still climbing. At what point are you comfortable with selling your shares? In a perfect world, you'd sell at its peak, but that's practically impossible to predict.

You should look at stock shares as part of a business. So instead of looking if goes up or down, look at the company itself, its growth potential, its asset value, its earning power value etc. then estimate how much is it worth, and how much is it going to be worth in 10-20-30 years.

Then, once the market cap of the company achieve the valuation you previously set, you sell.

For me Tesla is going to be worth minimum 1.5T, but wouldn't be surprised if it goes until 3T.

Won't sell before.

 

[SteveG3]

You should look at stock shares as part of a business. So instead of looking if goes up or down, look at the company itself, its growth potential, its asset value, its earning power value etc. then estimate how much is it worth, and how much is it going to be worth in 10-20-30 years.

Then, once the market cap of the company achieve the valuation you previously set, you sell.

For me Tesla is going to be worth minimum 1.5T, but wouldn't be surprised if it goes until 3T.

Won't sell before.

Very much agree (well, no comment re specifics of your valuation ; ), but like yourself very confident re very substantially outperforming the market).

I try to remember to consciously choose between typing TSLA and Tesla. A friend texted me today, that "we're having a bad day." I basically wrote back, ~huh? As far as I know things are going really well at Tesla today~ (I did also remind him that we had him well positioned if we get a silly "buying opportunity").

 

[Waiting4M3]

...M3 reveal is different to me. I think we, and the market, have a pretty good idea of what will be revealed. I also believe the market is underforecasting production, ....

If I remember correctly, before the M3 reveal there was still some uncertainty if Tesla will actually have car(s) to show, or maybe just PPT slides and sketches. I think Elon even joked about it at the beginning of the event. I think that added to the stock PPS rise in April 2016. But then the reservation # came out and people speculated that Tesla will have to raise more money to accelerate the production ramp, and it will look bad for the short term balance sheet, and the PPS dropped again.

I'd like to think what the market is under-forecasting for M3 production, it's also possible that the market is expecting a moderate # of a few hundred cars, and it is what Tesla delivers. I think the extremes are well known, if Tesla delivers ~10 cars at the end of July, people will say "oh MX all over again", and the PPS will tank. If Tesla rolls out 1000 cars from a warehouse, of course the PPS will shoot through the roof. Anyone can predict those outcome. What's likely is a middle of the road rollout. What happens if Tesla rolls out 200 cars, but doesn't give more details on when/how many will come after that. I really have no idea how the market will react.

 

[Waiting4M3]

Order online ~ summons car to address ~ self driving

If Tesla can be summoned without driver, then why sell the cars at all, just lend the cars out on Tesla networks. No need for dealership, 3rd party or not.

 

[D-egg-O]

I also believe the market is underforecasting production, which is why I am aggressively positioned. Unfortunately, macro will do what it will.

I couldn't agree more with this.

 

[geneclean55]

Max-pain should be favorable for tmrw if that website is up to date. Could be low volume trading in the afternoon with the long weekend ahead.

Quarterlies as well... so decent money at stake.