2017 Investor Roundtable: TSLA Market Action

[larmor]

German market doesn't mean anything. I knows how to follow USA, but has no predictive power what USA will do.

However the impact of tesla on German companies and eco system is far more important to German companies, since MS/MX are really targeting high end German cars, such as s-class, 7 series, A8, and panamera as well as MB GLE, X6, Cayenne, etc. Furthermore, i think Germany is far more advanced in implementing solar for residential, pls correct me if i'm wrong. While US markets react on their own, i think knowing what tesla does in the german exchanges would be interesting...

 

[mutle]

However the impact of tesla on German companies and eco system is far more important to German companies, since MS/MX are really targeting high end German cars, such as s-class, 7 series, A8, and panamera as well as MB GLE, X6, Cayenne, etc. Furthermore, i think Germany is far more advanced in implementing solar for residential, pls correct me if i'm wrong. While US markets react on their own, i think knowing what tesla does in the german exchanges would be interesting...

The main reason that they don't matter is the low trading volume of stocks like TSLA so all swings that happen there are usually negated once the US markets open.

 

[MitchJi]

My impression was that they would get to 5000/week at the end of 2017, and the original plan was to build the new line similar in timing to this year, maybe start it in July, and s curve it up to full speed to hit 10,000 at the end of 2018. With a possible option to bump it all forward a few months if everything

They are not planning to build a new line!

The way I'm reading it, line will not be operational until September, which aligns with number of astute observations from factory visit.

So 30 and 100 July/Aug will be manually built units, while using production tooling

I think that they are going to build them on the,production line very slowly.

So for me if I see TSLA down I see it as a buying opportunity. Yes some here are dangerous bulls who take the risk of buying on margin, but I hope they understand the risk they are taking on. My long term trading may not work for you and maybe TSLA or the Market in general is about to fall off a cliff but I'm not bright enough to play that dynamic. Everyone has to make their own decision on what they can risk. I don't do margin and I never bet anything I can't afford to lose. It has worked out well for me but everyone's situation is different and no one should blindly do what I do. But if TSLA is still in the low 350's on Wednesday I'm thinking I'm going to pickup another 100 shares.

The problem I have with calling this a "buying opportunity " is that nobody here knows what is going to happen over the next two to eight weeks. The SP could drop by $5-10 per day over the next week or three, or rise the same way.

Last November when the SP hit $180 I was one hundred percent confident that that was a buying opportunity, because I felt one hundred percent confident that it was very close to the bottom. I went all-in on leaps (now a seven bagger, down from a nine bagger a short while ago) with zero doubts.

Does anyone have the same confidence now?

 

[Willuknight]

Stock market is not rational,it is an intersection of countless rational but only partially informed plots.
You could understand why it did why it did only by know ALL the data that influenced the move.
Without that, you are left guessing.

And by asking what everyone's best guess is I can better ascertain how far off my guess is from other people's perspective, and the more perspectives I have, the more informed I'll be.

 

[Starno]

Can people share their thoughts on why the share price dropped? I'm looking to understand why it's dropped and also possibly theories on whether it's going to go up or down

Here are what I've heard so far :

Buy the rumor, sell the news
/which seems dumb if news is good

Deliveries are down from what was predicted
/but still in range and if you consider total produced they nailed the target

Stock market in general is down
/ I guess, but seems $20 drop seems more wild than that

Short the trading day on July 3rd resulted in more of a swing

So, that's only my thought :

The M3 announcement was predictable, and so there was no surprises.

So basically there is no effect of the tweets.

And so what happens is that the SP just follows the market, it follows the NASDAQ.

And what is the NASDAQ doing ? Well since about a month, the NASDAQ is getting a correction. And what's the major cause of this correction ? Well it's the tech companies that are basically victims of their own success, they performed so well this past year that a lot of investors are selling to take profits.

 

[JRP3]

The 30 should be a "bring people together" 30.

I think the optics of the "Model 3 30" are a bit over blown. The car is sold out till 2019, how the first handful of cars are delivered simply won't matter. The car needs to perform and be reliable, and owners, whoever they may be, need to be enthusiastic about it.

 

[GoTslaGo]

Can people share their thoughts on why the share price dropped? I'm looking to understand why it's dropped and also possibly theories on whether it's going to go up or down

Here are what I've heard so far :

Buy the rumor, sell the news
/which seems dumb if news is good

Deliveries are down from what was predicted
/but still in range and if you consider total produced they nailed the target

Stock market in general is down
/ I guess, but seems $20 drop seems more wild than that

Short the trading day on July 3rd resulted in more of a swing

Summer vacation.

Historically NASDAQ is weak during the summer (based on data from Hirsch, Almanac). Low volumes allows greater price manipulation. I am expecting (planning) for greater price drops throughout the summer. Hard to predict the bottom, so "laddering" my future buy limits.

 

[uselesslogin]

The problem I have with calling this a "buying opportunity " is that nobody here knows what is going to happen over the next two to eight weeks. The SP could drop by $5-10 per day over the next week or three, or rise the same way.

Yes, the "buying opportunity" bothers me as well. We've had an unusually long run. But when things start moving down they almost always do so for a few months at least. Maybe this will turn around quickly again but Tesla is getting ready to burn lots of cash and 22,000 deliveries means EPS will be very negative this quarter. Then just add in the factors like shorts not being forced to cover, longs getting margin calls, and stop loss orders getting triggered. I don't see why $270 by September isn't a strong possibility. At this point once again many are convinced Tesla won't be profitable. I would think the most likely time for a squeeze is when they show profitability or at least positive cash flow from Model 3 sales. That won't happen until Q1 2018 at the earliest. I do think a good Q3 delivery report in October with 1,000+ Model 3 deliveries will stop any downwards movement.

Edit: As an extra musing I think Q3 deliveries will be really strong with the Model X getting past early production issues and also folding second row seats. I honestly expect Model X to outsell Model S in Q3 at least in the US.

 

[Starno]

Yes, the "buying opportunity" bothers me as well. We've had an unusually long run. But when things start moving down they almost always do so for a few months at least. Maybe this will turn around quickly again but Tesla is getting ready to burn lots of cash and 22,000 deliveries means EPS will be very negative this quarter. Then just add in the factors like shorts not being forced to cover, longs getting margin calls, and stop loss orders getting triggered. I don't see why $270 by September isn't a strong possibility. At this point once again many are convinced Tesla won't be profitable. I would think the most likely time for a squeeze is when they show profitability or at least positive cash flow from Model 3 sales. That won't happen until Q1 2018 at the earliest. I do think a good Q3 delivery report in October with 1,000+ Model 3 deliveries will stop any downwards movement.

Edit: As an extra musing I think Q3 deliveries will be really strong with the Model X getting past early production issues and also folding second row seats. I honestly expect Model X to outsell Model S in Q3 at least in the US.

I think it will depend a lot of the NASDAQ. Don't think Tesla will perform well behind or well beyond it.

 

[ggr]

Short the trading day on July 3rd resulted in more of a swing

Short trading days are always associated with holiday weekends or events, and the institutional traders all take the day off. The surprise yesterday, to me, was the very high volume given the lack of big trades. I think the broader NASDAQ sell off moved TSLA, then people who'd bet on a big swing up ran away. But the news was good (ranging OK to Great), so I expect recovery for TSLA tomorrow.

 

[sunhelm]

I think SP can go down from here, and is likely to go down. Not ready to bet on it though, I'm comfortably unleveraged, 100% TSLA, no action either way. I'm leaning towards theory that we've seen local top for the next couple months.
If SP goes through $350, there is an air pocket in terms of shares traded volume until $325.
Though, 50 days and lower Bollinger band are in the air pocket, this may slow down fall or even bounce of off it.

Consider this is disappointment compared to crazy optimists with 80-90K predictions - I don't remember who they are, I've blocked most of ppl. with that kind of numbers

Ok, so this is from a TA standpoint. Fundamentally however, uncertainty about the Model 3 has been lifted. The thing is, we've been so saturated by pictures and videos of RC's out in the wild on an almost daily basis that our minds just logically concluded that Model 3 is going to happen in July. It's like watching a badly edited movie trailer over and over again and you see the movie. How did that feel? Probably felt unimpressed, having had an idea of the outcome earlier. But what if after reserving your Model 3, you swore off going to social media or lived under a rock, then came out today and learned Model 3 is on schedule? Holy *sugar* storm Batman! would probably be my reaction.

Remember last year? EM said it was an impossible date but they were going to try their damnedest.

So it seems the impossible will happen in 24 days . I, as a reservation holder and investor , am super excited. I would think I am not alone in this and I'm naively thinking fellow investors will come around and realize this is the company's raison d'être coming to fruition - the main reason the stock went as high as 383 barely over a week ago. To abandon/trim the stock now seems a foolish thing to do.

So I would keep hanging to the idea that this company keeps doing the impossible, however late or slow that may be.

 

[Willuknight]

Short trading days are always associated with holiday weekends or events, and the institutional traders all take the day off. The surprise yesterday, to me, was the very high volume given the lack of big trades. I think the broader NASDAQ sell off moved TSLA, then people who'd bet on a big swing up ran away. But the news was good (ranging OK to Great), so I expect recovery for TSLA tomorrow.

That is very close to my analysis, I can't see why one people stop panic selling / being affected by an influenced market, they would look at the fundamentals and see that they are the same or stronger than ever.

 

[Willuknight]

Ok, so this is from a TA standpoint. Fundamentally however, uncertainty about the Model 3 has been lifted. The thing is, we've been so saturated by pictures and videos of RC's out in the wild on an almost daily basis that our minds just logically concluded that Model 3 is going to happen in July. It's like watching a badly edited movie trailer over and over again and you see the movie. How did that feel? Probably felt unimpressed, having had an idea of the outcome earlier. But what if after reserving your Model 3, you swore off going to social media or lived under a rock, then came out today and learned Model 3 is on schedule? Holy *sugar* storm Batman! would probably be my reaction.

Remember last year? EM said it was an impossible date but they were going to try their damnedest.

So it seems the impossible will happen in 24 days . I, as a reservation holder and investor , am super excited. I would think I am not alone in this and I'm naively thinking fellow investors will come around and realize this is the company's raison d'être coming to fruition - the main reason the stock went as high as 383 barely over a week ago. To abandon/trim the stock now seems a foolish thing to do.

So I would keep hanging to the idea that this company keeps doing the impossible, however late or slow that may be.

Agree as well. The model 3 is the actual realization of the 10yr master plan, found off from what looks like without a hitch, in time, to massive demand.

 

[jhm]

I think the optics of the "Model 3 30" are a bit over blown. The car is sold out till 2019, how the first handful of cars are delivered simply won't matter. The car needs to perform and be reliable, and owners, whoever they may be, need to be enthusiastic about it.

There's more to sell here than just the Model 3. We want to build a brand and elecate consumer expections about the future of mobility. They should never want to buy an ICE car ever again.

 

[MitchJi]

Actually, I was told last week by a source that there were Model X's equipped with LIDAR driving in Pittsburgh.

It was an unproven source so I did not share the info here, but this seconds it.

How does that tweet which says absolutely nothing about Lidar second that source?

 

[ValueAnalyst]

How does that tweet which says absolutely nothing about Lidar second that source?

You make a good point. I'm still very skeptical of what I was told, but it's not out of the realm of possibility either.

 

[D-egg-O]

Let's not forget this isn't the first time we've flittered with the lower BB range during this bull run.

 

[ValueAnalyst]

Indeed. Transitioning from 2000-2400 cars/week to 7000-7400 seems like quite the feat to me. Only to be closer to a run rate of 13,000/week end of 2018.

Agreed, but could you please explain/provide support for 13,000 per week?

My understanding is 1,000 per week for Model s and x each and 10,000 per week for Model 3 by end-2018.

 

[dw4ngg]

Don't abandon ship for those contemplating and/or being driven by fear. This stock is setting up to be one of the most historic short squeeze stories of all time. The shorts are clinging to their positions based on emotion/hope (we've all been there, albeit with less than billions$), and the company is just intangible and subjective enough that an argument can be made either way. It's the perfect storm for negative Nancy's. Because if you look at it high-level, the revolution is real - slow, steady, and definitely very real!

 

[GoTslaGo]

Don't abandon ship for those contemplating and/or being driven by fear. This stock is setting up to be the most historic short squeezes of all time. The shorts are clinging to their positions based on emotion/hope (we've all been there, albeit with less than billions$), and the company is just intangible and subjective enough that an argument can be made either way. It's the perfect storm for negative Nancy's. Because if you look at it high-level, the revolution is real - slow, steady, and definitely very real!

Yes, as my wife pointed out, all the car dealership are having sales right now (July 4th sales...). We just happen to see a TSLA sale going on!