EarlyAdopter
Active Member
Let's keep things in perspective. ICE cars hit road debris and catch fire all the time, including things as simple as a cardboard box.
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Short-Term TSLA Price Movements - 2013
- Thread starter Robert.Boston
- Start date
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Let's keep things in perspective. ICE cars hit road debris and catch fire all the time, including things as simple as a cardboard box.
kevin99
Member
Greetings to all,
This is my first post although I have been a silent reader since June. I guess I know most regulars here by their usernames. Haha! Thanks a lot for your honest inputs! Much appreciated.
My turn to share some thoughts.
Good news:
1) This was NOT a major accident. It would have been catastrophic for TSLA if there were a loss of human life. In this case the driver was not hurt and managed to safely exit from the highway and get out of the vehicle before the fire broke out. There would be no legal ramifications for the manufacturer. So it's a good news.
2) Yes, the video was dramatic. Add the multiplying power of social media and online videos, that causes a bad press. That's not a welcome publicity but I really don't think it will be a major distraction for the management. In fact, Elon can actually turn this incident around in his favor. He would just come out as humble as he usually does and admits that watching that video was not a pleasant feeling. He would then say that at TSLA they have learned a lesson from this accident and fixed the problem (at least some of it). How many carmakers can truly make such claims?..
Value investors (even with short-term stock price implications) will stick to the fundamentals and bottom line. The main variable that people have been tracking lately is weekly unit production, which have been under-promised and over-delivered. Those expectations are still there.
3) The structure of the vehicle was not compromised. The source of the problem has been narrowed down to the battery specifically. -- Did people stop buying laptops after some caught fire? No! -- Most likely, there is no need to make major changes to the vehicle's design and hence the production line. Again, that's a good news because it means there is no major cost of business and current profit margins can be maintained.
4) The engineers will take this incident seriously. Nobody wants to see "Model S Fire" videos spiraling around the web. In fact, as a quick solution, it may be even possible to add some built-in dry chemical extinguisher within the battery pack or battery encasement. Since battery packs are assembled at one factory entirely, then addressing this problem is quite manageable. -- I am sure TSLA would find a much better solution than my simplistic suggestions. -- Therefore, next time there is a similar accident, there would be no dramatic videos... That's a good news in terms of PR risk management. So, as an investor, I shrug this particular incident as a non-event.
Bad news:
a) People don't listen and markets are irrational (or insanely rational).
b) Algorithmic trading is another form of leverage. Most of daily volume is handled by algorithms. In aggregate, all of these algorithms feed on each other and act as one big algorithm. Should there be one real trade, then the whole herd follows swinging from one extreme into another especially on individual stocks.
My trade:
* I was heavily long Dec. OTM Calls betting on Q3 earnings up till last week. Following SleepyHead's lead, I have cut the position by half last Friday (profitably). -- Thank you, SleepyHead! -- I am planning to maintain the remaining positions as originally designed (house money at this point). I am not planning to trade in/out of those calls since the bid-ask spread is too costly and it's very hard to establish positions at desired prices.
* With the freed up funds from the calls and (profitable) exits from YHOO, I bought more TSLA stock at ... $185. -- Yes, I have caught the falling knife and it will hurt me more in the near term. However, I will stick with this trade because I am not a day trader (rather a weekly/monthly trader). Also, the T+3 settlement on stocks is prohibitive for more active trading on my part. I am switching to equity because it will be more difficult to time the market in the near term. Options have limited life. With stock I can wait it out.
* My book is full now. So I will definitely loose on great entry points but I am not too worried. Should there be a negative price action in the days ahead, I will just turn away from the computer screen. I guess that would be the best decision. Haha!
Again, thanks a lot to all for meaningful discussions!
This is my first post although I have been a silent reader since June. I guess I know most regulars here by their usernames. Haha! Thanks a lot for your honest inputs! Much appreciated.
My turn to share some thoughts.
Good news:
1) This was NOT a major accident. It would have been catastrophic for TSLA if there were a loss of human life. In this case the driver was not hurt and managed to safely exit from the highway and get out of the vehicle before the fire broke out. There would be no legal ramifications for the manufacturer. So it's a good news.
2) Yes, the video was dramatic. Add the multiplying power of social media and online videos, that causes a bad press. That's not a welcome publicity but I really don't think it will be a major distraction for the management. In fact, Elon can actually turn this incident around in his favor. He would just come out as humble as he usually does and admits that watching that video was not a pleasant feeling. He would then say that at TSLA they have learned a lesson from this accident and fixed the problem (at least some of it). How many carmakers can truly make such claims?..
Value investors (even with short-term stock price implications) will stick to the fundamentals and bottom line. The main variable that people have been tracking lately is weekly unit production, which have been under-promised and over-delivered. Those expectations are still there.
3) The structure of the vehicle was not compromised. The source of the problem has been narrowed down to the battery specifically. -- Did people stop buying laptops after some caught fire? No! -- Most likely, there is no need to make major changes to the vehicle's design and hence the production line. Again, that's a good news because it means there is no major cost of business and current profit margins can be maintained.
4) The engineers will take this incident seriously. Nobody wants to see "Model S Fire" videos spiraling around the web. In fact, as a quick solution, it may be even possible to add some built-in dry chemical extinguisher within the battery pack or battery encasement. Since battery packs are assembled at one factory entirely, then addressing this problem is quite manageable. -- I am sure TSLA would find a much better solution than my simplistic suggestions. -- Therefore, next time there is a similar accident, there would be no dramatic videos... That's a good news in terms of PR risk management. So, as an investor, I shrug this particular incident as a non-event.
Bad news:
a) People don't listen and markets are irrational (or insanely rational).
b) Algorithmic trading is another form of leverage. Most of daily volume is handled by algorithms. In aggregate, all of these algorithms feed on each other and act as one big algorithm. Should there be one real trade, then the whole herd follows swinging from one extreme into another especially on individual stocks.
My trade:
* I was heavily long Dec. OTM Calls betting on Q3 earnings up till last week. Following SleepyHead's lead, I have cut the position by half last Friday (profitably). -- Thank you, SleepyHead! -- I am planning to maintain the remaining positions as originally designed (house money at this point). I am not planning to trade in/out of those calls since the bid-ask spread is too costly and it's very hard to establish positions at desired prices.
* With the freed up funds from the calls and (profitable) exits from YHOO, I bought more TSLA stock at ... $185. -- Yes, I have caught the falling knife and it will hurt me more in the near term. However, I will stick with this trade because I am not a day trader (rather a weekly/monthly trader). Also, the T+3 settlement on stocks is prohibitive for more active trading on my part. I am switching to equity because it will be more difficult to time the market in the near term. Options have limited life. With stock I can wait it out.
* My book is full now. So I will definitely loose on great entry points but I am not too worried. Should there be a negative price action in the days ahead, I will just turn away from the computer screen. I guess that would be the best decision. Haha!
Again, thanks a lot to all for meaningful discussions!
... although I don't have any statisics, I think ICE vehicles are more prone to catch fire than a Tesla vehicle...
Exactly, game, set, match. And the general public WILL understand this fact regarding the dangers of driving a vehicle sitting on gallons of highly flamable liquid sooner or later and TSLA will roar up to new heights. So, as always, we have a huge first mover advantage knowing this :biggrin:. Although this is the short term thread, who knows what will happen the coming days or week. I'm not selling my stock, but rather, I am going to keep adding if it keeps going down.
So to recap for today's later trade, this is my understanding:
The bad:
1. More selling is predicted due to fire related to the Lithium battery here: http://www.ibtimes.com/tesla-model-...nt-washington-car-smokes-catches-fire-lithium
2. Goldman Sachs analysis is pending, but we're still in the dark when it's going to be released.
3. After market dropped the stock to around $178.
4. Pre-market dropped the stock to $174 as of 4:10 AM EST with 1538 shares traded.
The good:
1. Tesla Motors/Elon would respond to this fire event with greater attention because it is evident that it contributed to the tanking of TSLA stock and it's passed around the Internet like wild fire (pun, lol). This would probably make the stock jump up just like how TSLA bounced from $175.40 to around $181.
2. Re-iterating of stock worthy of its price by Andrea James, analyst at Dougherty & Co.
I can definitely see more bad than good for the stock in the near term. I think we may see $160s soon enough. I can see this make TSLA jump up and down and make options very volatile within the next couple weeks. Lots of downward spiral for TSLA for sure.
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I think no one answered this, so I'll answer it for you. You're dismissing the physics: NHTSA tests are rated at 35 MPH for full frontal, according to this article here: http://www.consumerreports.org/cro/2011/08/crash-test-101/index.htm
One of the tests is based on full front contact, starting with the front bumper and then absorbed. But the debris accident isn't going to fall within the suites of tests conducted by NHTSA, especially when the accident involved a metal object that most likely directly damaged the lithium battery compartment. You also have to take into consideration that this Model S is going at highway speed in a HOV lane. Most likely, this car is going 55+ MPH in that HOV lane. But we don't know how fast the car was going at the time, but it's a good assumption based on worse case scenario that the car wasn't going 35 MPH and the metallic object didn't impact the front bumper fully.
So in conclusion, tests done by NHTSA doesn't cover a scenario such as a metal debris impacting the battery compartment going at high speed to the Model S.
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This is because your post at the time was the latest for this thread. So anybody who posts recently to this thread would have the Yahoo Finance box with TSLA headlines.
The bad:
1. More selling is predicted due to fire related to the Lithium battery here: http://www.ibtimes.com/tesla-model-...nt-washington-car-smokes-catches-fire-lithium
2. Goldman Sachs analysis is pending, but we're still in the dark when it's going to be released.
3. After market dropped the stock to around $178.
4. Pre-market dropped the stock to $174 as of 4:10 AM EST with 1538 shares traded.
The good:
1. Tesla Motors/Elon would respond to this fire event with greater attention because it is evident that it contributed to the tanking of TSLA stock and it's passed around the Internet like wild fire (pun, lol). This would probably make the stock jump up just like how TSLA bounced from $175.40 to around $181.
2. Re-iterating of stock worthy of its price by Andrea James, analyst at Dougherty & Co.
I can definitely see more bad than good for the stock in the near term. I think we may see $160s soon enough. I can see this make TSLA jump up and down and make options very volatile within the next couple weeks. Lots of downward spiral for TSLA for sure.
- - - Updated - - -
I think no one answered this, so I'll answer it for you. You're dismissing the physics: NHTSA tests are rated at 35 MPH for full frontal, according to this article here: http://www.consumerreports.org/cro/2011/08/crash-test-101/index.htm
One of the tests is based on full front contact, starting with the front bumper and then absorbed. But the debris accident isn't going to fall within the suites of tests conducted by NHTSA, especially when the accident involved a metal object that most likely directly damaged the lithium battery compartment. You also have to take into consideration that this Model S is going at highway speed in a HOV lane. Most likely, this car is going 55+ MPH in that HOV lane. But we don't know how fast the car was going at the time, but it's a good assumption based on worse case scenario that the car wasn't going 35 MPH and the metallic object didn't impact the front bumper fully.
So in conclusion, tests done by NHTSA doesn't cover a scenario such as a metal debris impacting the battery compartment going at high speed to the Model S.
- - - Updated - - -
This is because your post at the time was the latest for this thread. So anybody who posts recently to this thread would have the Yahoo Finance box with TSLA headlines.
This is what I feared after yesterday's market close. FUD is being fuelled and magnified 100 x more negative publicity than this small yet-to-be-investigated-fully incident warrant. TESLA as the company and TSLA as the stock have over the past few months garnered a lot of media interest and attracted various major parties with conflicting interest and desire as to how they want TESLA to fare.
If, as posted by @justthatseasy, we open at $174.00 (pre-market price) which is below 20MA, I am afraid we may be dragged all the way down to $164-166 level....before Deutsche Bank upgrade before any hope of a bounce.
Depending on the pre-market trading 1hr before 9:30AM, I will probably unload half of my stake even at $170-174 level and use the proceed plus some more dry powder I have to buy more when it his the magic support level of around $164-166 everyone here and on Twitter has been talking about.
It is shaping to be a memorable trading day in TSLA.
If, as posted by @justthatseasy, we open at $174.00 (pre-market price) which is below 20MA, I am afraid we may be dragged all the way down to $164-166 level....before Deutsche Bank upgrade before any hope of a bounce.
Depending on the pre-market trading 1hr before 9:30AM, I will probably unload half of my stake even at $170-174 level and use the proceed plus some more dry powder I have to buy more when it his the magic support level of around $164-166 everyone here and on Twitter has been talking about.
It is shaping to be a memorable trading day in TSLA.
Truth is, things like that are bound to happen. The more S are on the road, the more incidents are going to happen, it's simple math. I think that tanking down to $100 is not out of the question at all. This success story so far is, frankly, too good to be true, so incidents like that bring the stock price to a lot more realistic level IMHO. I can also see TSLA in the range of $500 to $1k in a couple years. But that's gonna be a long road full of incidents and volatility, which is not necessarily a bad thing :biggrin: .
Mario Kadastik
Active Member
So I'm extremely long on Tesla right now with some short 195 december puts that I'm fairly certain will expire worthless after the Q3 earnings and some calls and spreads in Nov, Dec, March timeframes that have been partially set up as no risk ones or are new ones that I took on yesterday at the bottom. However I'm somewhat worried in short term about the 195 puts causing me to hit a margin call if indeed TSLA short term makes a strong break below the channel. So I'm looking to hedge them. My break even is $168 so I'm contemplating on buying some $165 puts, but the further back I go from today the higher their cost of course. Any clues as to what time frame would probably be the best. I'm contemplating getting firstly this weeks in case there's a fast move down (they closed at $0.48 so easy protection) or taking some for 2-3 weeks out if this plays out for longer. They are only insurance for short term move and avoiding the margin call, but I'd rather not spend an awful lot on them either. November 15th 160 put seems to be ~$9.5 as of close, probably over $10 today.
So recommendation and ideas for the hedge are welcome
So recommendation and ideas for the hedge are welcome
Good morning (in parts of Europe, good afternoon) everyone. Will be keeping one eye on these forums, the other on the stock price today despite having to work. Good luck to all who participate on this forum. Al
And: Thanks Dave T for your insights/opinions last evening
And: Thanks Dave T for your insights/opinions last evening
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Norse
Active Member
I sold almost all my stock instantly when it happened, because I was pretty sure the stock was gonna get hammared. When Tesla responded and the stock went up to 180 I bought back, and even som more. Maybe I should have waited until today, but I thought it was on the way up. Also it worried me more that Tesla has blackout then a car catched fire after it crashes. Come on, we have all seen bunch of crashes before with gas-cars exploding. When have also all seen crashed Teslas with no injuries on the passangers. Sceptics will remain sceptic, and stupid people will remain stupid. But alot of people will still buy the car. And the short, they may try to use this, but Tesla is still the safest var around, and it is proven. Im a buyer today, as I do not see that this is any danger to demands at all, and the short will be proven wrong by Elon if they try to use this against Tesla. People are still flying the dreamliner even tho thats an airplane, and it wouldnt be good to be on a burning plane. I right now have 30% of my portofolio in TSLA. If it reaches 160, I will probably have 60%. This is a chance to get in before Q3 imo. Lets hope it goes down to 168 so both us and the shorts could load up bigtime!
What DB wrote:
Read more: http://www.businessinsider.com/deut...to-happen-at-some-point-2013-10#ixzz2gepLW5Gg
I completely agree. It was a matter of when not if (as with all cars and brands). Obviously the details will have to be looked at, eg. what would happen if the car drove at higher speeds and exactly what kind of object/shape hit the car and battery compartment at what angle. In the worst case, the floor portion facing the road or the entire battery pack enclosure will have to be enhanced/modified going forward.
In my opinion, the reaction in the stock price (also the heavy volume) shows how much irrational euphoria there was at close to $200. Rationally, the stock shouldn't have moved a lot considering all the safe miles driven by other Model S (and Roadster before that) owners around the world and government safety testing versus the amount of serious incidents - it's not like the car self-ignited or similar bad incidents striking Fisker and other EVs previously. Imho, simply a sign how much euphoria and bullish build-up there was in the stock price (above its intrinsic value) in the months prior to the incident. (PS: I continue to see the value at around $75-80).
Read more: http://www.businessinsider.com/deut...to-happen-at-some-point-2013-10#ixzz2gepLW5Gg
I completely agree. It was a matter of when not if (as with all cars and brands). Obviously the details will have to be looked at, eg. what would happen if the car drove at higher speeds and exactly what kind of object/shape hit the car and battery compartment at what angle. In the worst case, the floor portion facing the road or the entire battery pack enclosure will have to be enhanced/modified going forward.
In my opinion, the reaction in the stock price (also the heavy volume) shows how much irrational euphoria there was at close to $200. Rationally, the stock shouldn't have moved a lot considering all the safe miles driven by other Model S (and Roadster before that) owners around the world and government safety testing versus the amount of serious incidents - it's not like the car self-ignited or similar bad incidents striking Fisker and other EVs previously. Imho, simply a sign how much euphoria and bullish build-up there was in the stock price (above its intrinsic value) in the months prior to the incident. (PS: I continue to see the value at around $75-80).
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Chickenlittle
Banned
1.27 fatality from every 10,000 cars registered in 2011. Tesla 0 deaths and per musk no serious injuries I believe this needs to be stressed
Norse
Active Member
I very balanced and sober article about the fire and Tesla. I was expecting worse needless to say...
http://www.forbes.com/sites/markrog...ut-keeping-cool-is-in-order/?partner=yahootix
http://www.forbes.com/sites/markrog...ut-keeping-cool-is-in-order/?partner=yahootix
I have loaded up on Nov 17 options with 190-205 strike prices....... I have a small position of cash left in case we break through the 174-175 range.
While I think the reaction to the downgrade/Fire was an overreaction I have known for awhile that the next "bad news incident" would cause a large pull back. I hope GS waits a day or two for their upgrade/downgrade but if it comes soon I plan on dipping into margin to increase my delta.
A side note I noticed that on the Europe site it now says 5-6 months wait time. Someone correct me if I am wrong (as if that needs to be said on this board) but I think that it said about 5 months before. I would really like to see the US wait time increase as well.
While I think the reaction to the downgrade/Fire was an overreaction I have known for awhile that the next "bad news incident" would cause a large pull back. I hope GS waits a day or two for their upgrade/downgrade but if it comes soon I plan on dipping into margin to increase my delta.
A side note I noticed that on the Europe site it now says 5-6 months wait time. Someone correct me if I am wrong (as if that needs to be said on this board) but I think that it said about 5 months before. I would really like to see the US wait time increase as well.
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