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that does it - I'm naming my just ordered tesla "p-fox" when it comes in march.
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wow! this is the most cogent and thoughtful analysis i have ever seen on this entire forum. amazing job Papafox!Short-to-mid-term prospects for TSLA
The more I think about analyst Ben Kallo's words, the more a picture emerges of the coming year and the short-to-mid-term. This is only a theory, so take it with a grain of salt. Kallo is bullish on Tesla and has a $338 price target for the stock. He believes that between Model 3 and Tesla Energy products, Tesla has a great year in store.
As the New Years weekend approached, however, his words indicated a hint of concern for the Q4 delivery numbers because he claimed these numbers would not bring an overhang (negative influence) into TSLA's 2017 trading. He specifically mentioned the Jan. 4 gigafactory event as something that would provide a positive influence. Let's combine these words with observations of other forum members and see what we come up with.
For Q4 delivery numbers to be a relatively-neutral force on 2017, the stock price cannot begin a sizable descent and derail the uptrend. One way to neutralize any negatives from the deliveries miss is to offset that information the next day at the gigafactory event. Elon Musk and company have an abundance of positive news to share if they want to. The question is when do you let each cat out of the bag? My guess is enough positive cats will be let out of the bag on Wednesday to encourage a resumption of the uptrend. If you look at Q4, it wasn't a bad quarter. It was a short quarter with a big holiday and with an unfortunate production interruption to get the Autopilot 2.0 hardware installation right, but in terms of demand and production per week, it was pretty good. So, Elon needs to balance the lowish delivery number of Q4 with good news at the gigafactory event.
Why didn't Tesla make more of an effort to increase deliveries in Q4, when it got off to a slow start because of the autopilot hardware? My theory is that Elon knew that Q4 would never be the knockout quarter: it was too short, had a big holiday, and it got off to a slow start with hardware changes. I think he and Jason looked to make Q4 adequate, but not a knockout quarter. TMC members report that no December orders for S or X by California buyers were moved up for end of month deliveries, as they were in Q3. Another member reports relatively high levels of deliveries in the first day(s) of 2017. Both these observations suggest that Tesla wasn't trying very hard to generate deliveries in December at the expense of January. Why? My theory is that by mid-October, when the January 4 gigafactory event was announced to certain members of the media, the timing of the event was two-fold: to announce the production of cells at the gigafactory and to provide encouragement about a great 2017 coming along so that the stock price will at least stabilize in the short term. Why specifically place an event the day after delivery numbers are released? At first I thought it was for the 1-2 punch, but now I suspect it is for the Jan 4 event to be a balancing for the Jan 3 numbers. The best news that can come out of the gigafactory event is that Tesla is on track with demand, production, Model 3 timetable, and Tesla Energy so that 2017 is going to be a great year and that Q1 is going to be the knockout quarter.
Look at Q1 this way: It is longer than Q4, has no big holiday, desn't start with a hardware delay, and almost all the production for the quarter is already sold out! Without interruptions, and with a production rate already better than 2200 vehicles per week, how is Q1 going to be anything less than stellar? There's no need to replenish the inventory in stores, as was necessary in Q4, and nearly 6,500 vehicles are being brought into the quarter from Q4. But why does Tesla need a stellar quarter, isn't the equity raise unnecessary? Yes, Tesla could manage to get to the Model 3 finish line without the raise, but it makes the whole enterprise less risky and the task easier and a bit quicker. Therefore, I suggest that Q1 will be stellar, and it will raise the SP high enough to allow Tesla to do an equity raise if it desires.
So, maybe the biggest message coming out of Q4 is that demand is strong, production is strong, and Q1 is going to be stellar. At some point, that realization has to positively influence investors. How well momentum of the uptrend is preserved depends upon the cats let out of the bag on Jan. 4. Hoping to see a tiger or two.
that does it - I'm naming my just ordered tesla "p-fox" when it comes in march.
wow! this is the most cogent and thoughtful analysis i have ever seen on this entire forum. amazing job Papafox!
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One question right now is why are shares to short so difficult to find and if they're so scarce, why did the interest rate just drop? We haven't seen enough covering to deplete the supply and one explanation to the availability question might be that some longs are starting to retrieve their shares from shorts, which of course puts pressure on the shorts. Further, the shorts showing more covering than shorting this morning indicates that losses by shorts last week are taking a toll.
How do you think the inauguration on the 20th is gonna affect the share price?
But puts are still cheap. I've been avoiding selling puts because the price hasn't been bid up high enough for my taste. So that scenario doesn't work.
I still think there are more bulls buying TSLA on margin and providing a larger supply of shares to lend out.
This... is nonsense. The market maker doesn't want to get caught with a huge unhedged position in options. Ideally the market maker would have retail sellers for all the puts they sell and be left with a zero balance at the end of the day. If they don't, they raise the price to account for the risk of being left "holding the bag". If they're already holding a lot of open positions, they raise the price further to account for the risk of being left "holidng the bag".MMs don't see puts as cheap or expensive.