Devils advocating...from someone who shorted TSLA

[lolachampcar]

They are talking about the GigaFactory because Tesla's reason for existing (G3) requires massive CapEx soon with batteries being a lot of the unknown expenditure. They are talking a lot about Panasonic and "no batteries" because analysts do not get the idea of production constrained. Simply asking about other development deals with MB and the like show that the analysts do not get "we do not have enough batteries".

It's funny but everyone just takes for granted that Tesla can now build 50K S&X next year. That is an incredibly hard task and yet we all know Tesla can do it. Everyone's attention is now shifting to G3. I find that stunning for a company that, up until the middle of last year, had managed to build 2400 "violins". Well done.

 

[Robert.Boston]

Agreed - the frequent statements about GenIII are needed to keep investors focused on the long run in which Tesla is selling 500k+ cars annually. Without this scenario, TSLA ceases to be a growth stock and its value collapses - after all, selling 40k-50k annually of Model S/X simply does not support current market valuation, even after yesterday's stock price adjustment.

 

[Realist]

Either way they need a lot capital for GEN III. Generate that through cash flow will be almost impossible.

I've increased my short today at 150. We still have an out of orbit market cap.

 

[Norse]

Either way they need a lot capital for GEN III. Generate that through cash flow will be almost impossible.

I've increased my short today at 150. We still have an out of orbit market cap.

I hoped you do that.

 

[Mario Kadastik]

Either way they need a lot capital for GEN III. Generate that through cash flow will be almost impossible.

I've increased my short today at 150. We still have an out of orbit market cap.

How? Short selling restriction was in place from market open???

 

[ZenMan]

How? Short selling restriction was in place from market open???

He can still short, but must sell on an uptick.

"The alternative uptick rule (Rule 201) imposes restrictions on short selling only when a stock has triggered a circuit breaker by experiencing a price decline of at least 10 percent in one day. At that point, short selling would be permitted if the price of the security is above the current national best bid."

Copied from: http://www.sec.gov/news/press/2010/2010-26.htm

 

[neroden]

Agreed - the frequent statements about GenIII are needed to keep investors focused on the long run in which Tesla is selling 500k+ cars annually. Without this scenario, TSLA ceases to be a growth stock and its value collapses - after all, selling 40k-50k annually of Model S/X simply does not support current market valuation, even after yesterday's stock price adjustment.

I wouldn't understimate the valuation of a "S/X only" Tesla. First of all, I think the company can support a substantially higher Price/Sales ratio than the typical car company, due to a higher-margin structure. Second, I think the *world* market for Model S/X is more like 100K; Model S alone is easily selling 20K in the US alone. Some have questioned the motivation behind the fast international expansion of Tesla; I believe this is intended to get decent economies of scale prior to Gen3.

That said, the stock's still pretty pricey, and I haven't bought any since it was quite a lot cheaper.

 

[Realist]

The media coverage with further fires could see demand falling.

If this should be the case Tesla will need more external capital injections to keep on going.

I don't think the car is unsafe. But with sentiment turning to the worse we can hit prices below 100 rather sooner than later.

 

[lolachampcar]

Good luck with that one.
Musk is no fool. A simple, verifiable comparison of ICE v. MS fires will do the trick provided it comes before Faux Knows and the Shorts get into high gear.

It amazes me that some people can spend their lives looking for, and enabling, all the bad things. What a waste.

 

[JRP3]

I'm not so sure three fires so closely spaced will be easily dismissed by statistics. Statistically these incidents have been given a much greater amount of attention than any other in recent memory, and that's what will matter, unfortunately.

 

[Realist]

It amazes me that some people can spend their lives looking for, and enabling, all the bad things. What a waste.

It's just a trade, nothing more.

 

[lolachampcar]

It helps in general to have a compass. Without one, the pursuit is naked greed.

 

[Realist]

You see greed turning into fear right now.

 

[NigelM]

You see greed turning into fear right now.

Shorts are not greedy? We all are, it's human nature.

Stay civil please.

 

[bonnie]

You see greed turning into fear right now.

Not everywhere.

Settle.

 

[Realist]

Obviously the price action speaks for itself.

 

[bonaire]

Wall Street (and many individuals) are cannibals. They will turn a momentum stock that they rode from 100-190 and turn into a manipulated momentum short taking it down from 190 to 100 in chunks of 5 and 10. Today, I watched an online forum "pump" like crazy from 132 to 140 with everyone screaming "time to go long". Many screaming are those who were preparing to short again once it reached the top of the downward channel about 140. I suspect it is a traders' stock right now and retail investors either have to trade with them or ride the roller coaster. Realist is simply stating that he is trading without emotion. Using fundamentals and financials to make decisions.

 

[Realist]

Realist is simply stating that he is trading without emotion. Using fundamentals and financials to make decisions.

Well exactly.

All the excuses, the explanations and forecasts. Useless. Stocks act on fear and greed. Trends can be very powerful. You have to create your view and act. But ALWAYS protect your money. Never increase red positions. Don't put good money into bad.

 

[Yggdrasill]

Never increase red positions?

That's the silliest thing I've ever heard. It's exactly when stocks have fallen that there is an opportunity to buy. (Provided it is a solid company that will succeed in the long term.)

 

[Realist]

And of course you know that the company will succeed in the long term.