Short-Term TSLA Price Movements - 2013

[Maknyuzz]

Telsa has support at:
- 132 (previous lows after big tank)
- 130 (150 DMA)
- 129 (50% Fibo Retracement)
- 125 (Round numbers)
Pretty solid support at 130s. but if that's breached, next support is at:
- 107 (200 DMA)
- 106 (Lows after GS Analyst comment)
- 104 (GS target price)
- 100 (round number)

Elon Musk mentioned that they will know about the Gross Margin 1 month before the quarter ends, in this case after thanksgiving or Dec 1. Maybe the clouds will be a bit cleared and lifted around that timeframe. So if by Dec 1 they know they have reached GM% target, perhaps they can ramp up Production, and push it a bit above 6,000 for Q4, raising guidance to 22,000 cars perhaps?

 

[redharel]

After reading a bit of this argument in recent comments, I decided I wanted to go back and look at the details a bit further upstream to try and understand where redharel is coming from. I must say that I'm still confused about how the bank account went up and they are still losing money. In one quote redharel indicates that the money could have come from a non-core part of the business, but that would have to be a lot of income would it not? I'm still trying to learn how to read financial reports and I'd be very interested in hearing how this works. Perhaps this topic is too hot, and I'll have to learn elsewhere, but I hope this discussion could remain civil even if we cannot agree on the numbers.

The quote below I'm most interested in hearing discussed is the one that includes "at the end of the day 15,935 - 18,422 = losing money"

After writing this, I realized that this is probably not the best place to have this discussion since it is the short term price movement thread, so it the moderators want to move it to the thread about the q3 report that is fine by me...it just happens that this discussion was here and it is where I found all the quotes...and I don't mean to pick on redharel by quoting all his posts, but others seem do disagree with his view and I really wanted to get a handle on what his view is compared to the others which on the surface seem to make the most sense to me.

i have no problem at all that you guys questioning my posts as long as it is in a polite way(and no, i never bought or sold NFLX @FANGO), i'm here as you to get more data and knowledge and to have the best possible trades, after all we're here to make money.

it's impossible to have a discussion about numbers when you can't distinguish between positive cash flow and earnings.

 

[InTheShadows]

I think it would be fine if the stock hung out in this range for a few months. Look at the Microsoft and Apple charts in the early days, they all had pull backs like this, sometimes they lasted weeks, sometimes months or even years.

I just remember Sleepy saying that "you need to be able to stay solvent longer than it takes the market to realize the value." I keep repeating this saying to myself so it's at the forefront of my thoughts when I'm making options decisions.

I say this because in just over an hour my get rich quick TSLA ER options play goes poof into nothing more than a tax write off.

 

[xhawk101]

I will disagree on one thing though, I do not necessarily think this media narrative is a conspiracy from big oil or anything of the sort. I think the media is just doing their normal thing, exploiting an easily-spooked public to keep them glued to the TV so their sponsors will be happy. They see a prominent world-changing venture, they see something they can call a "problem," so they put it in front of people's eyes because they know the combination of those two things will drive clicks, and clicks equals money. They don't care what the narrative is, they just care that there is a narrative, and that the narrative an be framed as exciting.

The flipside of all this is that "there is no such thing as bad publicity." Remember there are vast swaths of the world who have no idea what Tesla is. It is unfortunate that their first introduction to it is through a media narrative that this car "isn't safe," but remember they are still being introduced to it nonetheless, and best of all, it's not costing Tesla any money. As long as Tesla can't afford or doesn't make it a priority to advertise, free media advertising is great, although unfortunately you need to take the good with the bad. Thankfully, those who already know about the car, and anyone who does any amount of research into it, will know that this is not an issue, and this goes for many of the people who are just being introduced to the brand. This is probably why sales went up after the first incident - it was publicity. That said, I don't know that I fully believe there's no such thing as bad publicity, but as long as we're not talking about a Toyota-like situation, I think this will all be fine and possibly even positive.

And in a little while, the media will move on to something else, and so will the public. The public will know that an electric car exists, that a lot of people are buying them, and thus a couple barriers to entry are taken down. Unfortunately they'll associate the car with something they shouldn't, but for a long time that was the only thing anyone knew about the Volt, and their sales are doing just fine. Of course this is the short-term thread, so maybe I should be saying all of this somewhere else.

Excellent point!

 

[FANGO]

I think it would be fine if the stock hung out in this range for a few months. Look at the Microsoft and Apple charts in the early days, they all had pull backs like this, sometimes they lasted weeks, sometimes months or even years.

I just remember Sleepy saying that "you need to be able to stay solvent longer than it takes the market to realize the value." I keep repeating this saying to myself so it's at the forefront of my thoughts when I'm making options decisions.

I say this because in just over an hour my get rich quick TSLA ER options play goes poof into nothing more than a tax write off.

This article is from months ago, but speaking of a stock hanging out in a region for a while and taking a breather before taking off: Tesla Stock Today Looking A Lot Like General Motors In 1915 - Forbes

Then there's also the recent behavior of NFLX, which is similar. Or AAPL, where the doldrums lasted for a decade or two until the eventual payoff.

Of course, there's also the behavior of any number of other stocks which fell and never came back. But I do not think that is the case with TSLA. This company is truly disruptive, I think we can all see that. Just as NFLX is, just as GM was at the time, and so on. I hope I don't have to wait as long as AAPL, but if it means another 1,000% in 10 years, then I guess that's not so bad.

 

[Maknyuzz]

Of course, there's also the behavior of any number of other stocks which fell and never came back. But I do not think that is the case with TSLA. This company is truly disruptive, I think we can all see that. Just as NFLX is, just as GM was at the time, and so on. I hope I don't have to wait as long as AAPL, but if it means another 1,000% in 10 years, then I guess that's not so bad.

1000% is kinda pushing it imo.. 1000% will make TSLA at $165B valuation, bigger than VW, 2nd biggest car manufacturer. Though a bit unrealistic, I hope that would come through though. I think targeting 300%, or TSLA as big as GM at ~$50B, is a realistic target with Gen III in the next 5 years.

 

[ckessel]

My biggest concern, both short and long term, is that TSLA feels fragile right now. I've always trusted Elon when he spoke. I liked that he came from an engineer's viewpoint and talked about using first principles in analysis. His stats on the fires really put a damper on that trust, it felt more like the adage that there's lies, damn lies, and statistics.

Given the current miles/fire, there should be a fire every couple of months (1 per 50M miles), so it's not that far out of the question for randomness to cause those to occur sooner rather than later. If a couple fires happen in the next few weeks and the perception (even if wrong) becomes that Tesla is a fire hazard then demand could evaporate and we've got a serious concern for Tesla's survival at that point.

 

[Tommy Boy]

I will disagree on one thing though, I do not necessarily think this media narrative is a conspiracy from big oil or anything of the sort. I think the media is just doing their normal thing, exploiting an easily-spooked public to keep them glued to the TV so their sponsors will be happy. They see a prominent world-changing venture, they see something they can call a "problem," so they put it in front of people's eyes because they know the combination of those two things will drive clicks, and clicks equals money. They don't care what the narrative is, they just care that there is a narrative, and that the narrative an be framed as exciting.

The flipside of all this is that "there is no such thing as bad publicity." Remember there are vast swaths of the world who have no idea what Tesla is. It is unfortunate that their first introduction to it is through a media narrative that this car "isn't safe," but remember they are still being introduced to it nonetheless, and best of all, it's not costing Tesla any money. As long as Tesla can't afford or doesn't make it a priority to advertise, free media advertising is great, although unfortunately you need to take the good with the bad. Thankfully, those who already know about the car, and anyone who does any amount of research into it, will know that this is not an issue, and this goes for many of the people who are just being introduced to the brand. This is probably why sales went up after the first incident - it was publicity. That said, I don't know that I fully believe there's no such thing as bad publicity, but as long as we're not talking about a Toyota-like situation, I think this will all be fine and possibly even positive.

And in a little while, the media will move on to something else, and so will the public. The public will know that an electric car exists, that a lot of people are buying them, and thus a couple barriers to entry are taken down. Unfortunately they'll associate the car with something they shouldn't, but for a long time that was the only thing anyone knew about the Volt, and their sales are doing just fine. Of course this is the short-term thread, so maybe I should be saying all of this somewhere else.

Completely agree. I think the general public opinion of Tesla is what ever the media/analysts paints. I am starting to think that a lot of investors have that same opinion as well. I couldn't fathom moving my money around on factually unproven gossip/claims.

My folks are anti-Tesla... Why... Because the media told them that they took a loan from the government, their cars are dangerous, celebs/high profile people hate the cars, and the STOCK is overvalued and going to pop thus ruining peoples retirements/lives.....
All of these claims are in fairness true.
However all these claim have all been remedied or unjustly taken out of context. Everyone here for the most part knows this as well.

I was watching TV 2 days ago, and one of the major news outlets was talking about government loans and GM. They mention Tesla. They show a quick stock clip of the Model S driving and then put the loan amount in big letters on the screen. They then proceed to immediately references the failure that was Solyndra...They make no reference/mention of the fact that Tesla paid back the loan in full and early...they group success with total failure. Shock and awe. Pretty bias and unfair reporting in my opinion.

Tragedy, kittens and pain gets views/attention. Its that simple.

That was it. You just gotta bang your head on the desk with that crap.

The company is doing just fine. Its the investors in red and media who are slinging the mud.

I think I read back in August about someone who a while back asked Elon if Space X would go public. Elon told them that Space X is doing just fine financially and would most likely not go public do to the headaches and unreal expectation that investors demand. I couldnt agree more.
This point at every fault Tesla makes will end when something else takes the spot light. It was only a matter of time before TMZ reporting made it to national news.

 

[aznt1217]

My biggest concern, both short and long term, is that TSLA feels fragile right now. I've always trusted Elon when he spoke. I liked that he came from an engineer's viewpoint and talked about using first principles in analysis. His stats on the fires really put a damper on that trust, it felt more like the adage that there's lies, damn lies, and statistics.

Given the current miles/fire, there should be a fire every couple of months (1 per 50M miles), so it's not that far out of the question for randomness to cause those to occur sooner rather than later. If a couple fires happen in the next few weeks and the perception (even if wrong) becomes that Tesla is a fire hazard then demand could evaporate and we've got a serious concern for Tesla's survival at that point.

I thought the statistics were fine. This kind of goes back to the whole Total Cost of Ownership arguments that people are having. I think the point of him citing statistics was to get people to THINK and not GROUPTHINK based on the media. If you really stop and think... why haven't we heard more about Ferrari fires which happen A LOT... Tesla's in the spotlight... kind of like a celebrity and tabloids. The media needs to make money and write about trending topics. It is what it is.

 

[FANGO]

My biggest concern, both short and long term, is that TSLA feels fragile right now. I've always trusted Elon when he spoke. I liked that he came from an engineer's viewpoint and talked about using first principles in analysis. His stats on the fires really put a damper on that trust, it felt more like the adage that there's lies, damn lies, and statistics.

Given the current miles/fire, there should be a fire every couple of months (1 per 50M miles), so it's not that far out of the question for randomness to cause those to occur sooner rather than later. If a couple fires happen in the next few weeks and the perception (even if wrong) becomes that Tesla is a fire hazard then demand could evaporate and we've got a serious concern for Tesla's survival at that point.

There will be more, and they'll come sooner than we want. The media will report them as if they matter, even though they don't, even though the car is safer, which it will continue to be. There will still be demand from people who've done enough research to want the car because it's the best car there is, and I don't think this will cause any long term risk. It was inevitable that this would eventually happen, everyone knew it would eventually happen, and everyone knew it would be blown out of proportion when it did.

I have not heard anything untrustworthy in this situation yet. Except for the sort of media hysteria which has caused people to fall all over themselves to turn a worker getting burns from metal into "the entire factory just burned down!"

 

[ckessel]

Tesla's in the spotlight... kind of like a celebrity and tabloids. The media needs to make money and write about trending topics. It is what it is.

That's basically my point. Tesla has very little margin for, well, I was going to say error, but in this case maybe "bad luck" is more appropriate. If there are a couple more fires in the near term, the media and public perception could be a huge issue for Tesla's survival. It wouldn't be the first time a better product died due to bad PR. After the first fire we had one of our posters here say his wife nixed the Tesla because it "could kill their children". That was just from one fire.

I'm really hoping things go well, but that's why I said it feels fragile. There will be fires over time, that's inescapable, but we need them to be far enough removed in time that it's not reported on and/or the public won't see a pattern where none exists.

 

[FANGO]

There will be fires over time, that's inescapable, but we need them to be far enough removed in time that it's not reported on and/or the public won't see a pattern where none exists.

But there will be more of them, and overall, discounting random chance, they'll get closer and closer in time. That's what happens when you have more and more cars out in the world, driving an increasing number of miles per day. The only reason the public is perceiving this at all is because the media is irresponsibly and selectively reporting them. There have been probably 20,000 similar incidents for ICE cars in the US since the first one in Seattle. Have we seen those reported? I've seen a few, but only because I've been looking for them, as counterexamples to show how truly irrelevant this is in the scheme of things. I certainly haven't seen national news programs talking about relatively minor factory injuries for any other manufacturers, almost ever, in the rush to justify their ridiculous hysteria.

The public will continue to see a pattern as long as a pattern is reported, but anyone who examines the reality of the situation will not. This means safety and insurance investigators, automotive press, engineers, etc. Anyone who knows the actual story of the situation knows that these incidents show the strength of the Model S, not the weakness of it. I would presume that prospective buyers, those who are actually about to pony up the cash to buy the car, will seek real information rather than hysteria, and thus, when armed with real information, will not be swayed by said hysteria. And even if they are, Tesla has more than enough demand right now, it's not like a 2% or even 10-20% decrease is going to affect them, because there are far more buyers than there are cars which exist at the moment. And this is without any advertising. If Tesla wants to create demand, they can. They have spent no money in doing so yet.

As for escaping this "perception", the only way I can see Tesla getting around this "public perception" (read: media narrative which they'll forget about soon enough because that's the kind of thing they do), which is inevitable even though it's irrational, is if Tesla can somehow prepare the population, in a careful way, for this to happen again, because it is inevitable in any situation where you are moving thousands of pounds of metal down an unsecured surface at high speed with lots of other metal doing the same nearby. I believe the statistics are a good way of doing this, but the only reason I think this is because I understand statistics and where these particular ones are coming from, whereas the public is sometimes fearful of statistics because they have been abused by too many people who misuse them. But there is no misuse happening here. But even if the "public perception" remains, I don't see how this can affect sales. There are more than enough people who want this car. All Tesla has to do is find 40k people worldwide next year who want this car and they'll have a great year. Do you really think there aren't 40k people who want the car? And 70k or so in the next year after that (including Model X, which might be even more popular)? Those are tiny numbers in the scheme of things. Everything will be fine.

 

[ckessel]

I would presume that prospective buyers, those who are actually about to pony up the cash to buy the car, will seek real information rather than hysteria, and thus, when armed with real information, will not be swayed by said hysteria.

This is where I think you're presuming incorrectly and thus where I see risk. People, on average, suck at making rational decisions.

Demand can evaporate overnight. Tesla may have enough demand now, but if they weren't concerned about future demand, they wouldn't say anything about fires, or the NYT "brodering" article, or opening more stores, or anything other such activity. They wouldn't need to. But they are doing these things, so demand is not a forgone conclusion.

 

[FANGO]

This is where I think you're presuming incorrectly and thus where I see risk. People, on average, suck at making rational decisions.

Demand can evaporate overnight. Tesla may have enough demand now, but if they weren't concerned about future demand, they wouldn't say anything about fires, or the NYT "brodering" article, or opening more stores, or anything other such activity. They wouldn't need to. But they are doing these things, so demand is not a forgone conclusion.

Opening more stores isn't about creating demand, it's about responding to demand which exists in places which are not currently served by stores (China), or which have more demand than can be handled by the stores which exist (Mission Viejo), and about fulfilling the promise of becoming a worldwide company and letting people finally drive the car they've been waiting for for so long (Europe). And I think the responses to Broder et al are because the company, and the fans, and the people in the company, and particularly the CEO of the company, are truly passionate about EVs and about changing the world of transportation. Those responses aren't about protecting against a lack of demand, they're about trying to set the record straight on the benefits of EVs. That's the purpose of Tesla's existence, so Tesla knows that what it does and how it responds to misreporting is important for the world's adoption of EVs, not just demand for their own cars or their stock price or anything. I don't think any of the moves you've mentioned have anything to do with demand. If Tesla were truly worried about demand, they would start spending money on demand - which means advertising. They have almost 800m cash, that's plenty of money for advertising. So far, they haven't seen it fit to start doing so, because it hasn't been necessary. Analysts also don't see an issue with this going forward, the consensus is still that the stock is worth more than the current price, and by and large I think the analysis of the high estimates is superior to that of the low estimates.

This is not to say that demand can't ever dry up in the future, but I just don't see demand going anywhere, short or long term, and even if it does, there are responses to be had (ads). Besides, here in this world where everyone thinks there's two sides to every story, this means people will seek out the correct side after being fed the wrong side by the media. And the sorts of people who are buying Teslas are still often early adopter types, the type who do a lot of research, or who will forego "perceived" "downsides" because they understand the upsides and want to get something new anyway. Maybe go to your local Tesla store and try to listen in to some conversations, see if the customers are giving much pushback. I've heard there's not much.

And ckessel, I did similar moves as you, I switched to options leverage at exactly the wrong time and have lost a whole lot (of unrealized gains) in a very short amount of time. I hope that you are not letting your losses color your opinion disproportionately. Do what you need to do to protect your gains if you are finding yourself suddenly risk averse, of course, but I think we're in a NFLX situation here.

 

[Grendal]

Completely agree. I think the general public opinion of Tesla is what ever the media/analysts paints. I am starting to think that a lot of investors have that same opinion as well. I couldn't fathom moving my money around on factually unproven gossip/claims.

My folks are anti-Tesla... Why... Because the media told them that they took a loan from the government, their cars are dangerous, celebs/high profile people hate the cars, and the STOCK is overvalued and going to pop thus ruining peoples retirements/lives.....
All of these claims are in fairness true.
However all these claim have all been remedied or unjustly taken out of context. Everyone here for the most part knows this as well.

I was watching TV 2 days ago, and one of the major news outlets was talking about government loans and GM. They mention Tesla. They show a quick stock clip of the Model S driving and then put the loan amount in big letters on the screen. They then proceed to immediately references the failure that was Solyndra...They make no reference/mention of the fact that Tesla paid back the loan in full and early...they group success with total failure. Shock and awe. Pretty bias and unfair reporting in my opinion.

Tragedy, kittens and pain gets views/attention. Its that simple.

That was it. You just gotta bang your head on the desk with that crap.

The company is doing just fine. Its the investors in red and media who are slinging the mud.

I think I read back in August about someone who a while back asked Elon if Space X would go public. Elon told them that Space X is doing just fine financially and would most likely not go public do to the headaches and unreal expectation that investors demand. I couldnt agree more.
This point at every fault Tesla makes will end when something else takes the spot light. It was only a matter of time before TMZ reporting made it to national news.

Very well said. Couldn't agree more. Nothing beats showing a flaming car then screaming FIRE! Facts and reality comes very far down the list of priorities when it comes to the media.

 

[NigelM]

Mod Note: some posts went to snippiness. C'mon people, I already asked for civility today - take on the idea, not the messenger!

 

[hobbes]

On a positive note, I did my first Model S test drive today at the opening of the Düsseldorf (Germany) Service center and it gave me a real good feeling about owning Tesla stock again. Getting back into a ICE car to go home really felt like taking a time machine back into the age of horse coaches. The Tesla smile was all around the place. The whole sales/tech team was all young people who had just been recruited, but there was already a good team spirit among them.

Looking back at how fast things have moved with Tesla, both the stock and the Model S sales all over the world, I think we need to be a bit more patient when there is a set back like now. A year ago noone I talked to knew about the MS here, now I hear people in the street talk about it, friends send me pictures of a bunch of MS in transit on the Autobahn, it gets second place by a few points behind the S-Class in the "Golden Steering Wheel" contest by a German car magazine - obviously mostly driven by ex racing pilots on the jury and design people. Points for Model S/Mercedes S class in the technical categories: Engine 59/51, steering 56/45, brakes: 46/51, gear box 56/49, acceleration 63/54, handling: 52/41

What a humiliation: In the verdict of the race drivers a computer billionaire who wants to save the world with EVs and only has been building cars for five years, dwarfs the oldest car manufacturer of the world.

(Preisverleihung : Die Beinahe-Sensation beim Goldenen Lenkrad - Nachrichten Motor - DIE WELT)

I think lets wait for a year and the dip now will look like any dip in the up and down of stocks. The revolution is just starting.

 

[lorih]

Nigel, it seems like all across the forum these days civility is becoming less apparent. I'm worried that people are seeing this trend of disrespect and thinking that's 'just the nature of TMC'.

I'm guessing lots of people are losing money and tempers are short. Do we have statistics on 'snippiness vs. time', or 'snippiness vs stock price'? My guess is that the forum has gotten less friendly in the last two months as media coverage has increased (mostly negative) and stock price has decreased.

Please people, this is a community, and for a long time everyone played nicely in the same sandbox. Let's be respectful, and use reason for appropriate debates. Please do not lash out in anger or attack individual people.

 

[ckessel]

And ckessel, I did similar moves as you, I switched to options leverage at exactly the wrong time and have lost a whole lot (of unrealized gains) in a very short amount of time. I hope that you are not letting your losses color your opinion disproportionately. Do what you need to do to protect your gains if you are finding yourself suddenly risk averse, of course, but I think we're in a NFLX situation here.

This has nothing to do with options or being risk adverse. I haven't felt TSLA was as at-risk of a negative problem since before the first delivery and the main reasons are factors are outside of Tesla's control. Fire instances are completely uncontrollable and public perception is only marginally so.

I got asked by few people whether I felt safe in my Tesla after the first fire, then more after the 3rd. One quote was "Yea, I was thinking about it, but I'll wait until they work out the fire issues." These are pretty balanced, smart peers in my software field, guys who would be in Tesla's potential market. If that's the perception of those folks at this point, I can only imagine how negative it would be in the public at large if we see another couple fires in the next month.

If Tesla can get through a couple months without fires, public short term memory will fade and it'll be hard for negative media to restoke the fear engine. Right now, at this time, a string of bad luck could be devastating.

 

[anticitizen13.7]

I must say that I'm still confused about how the bank account went up and they are still losing money

A person or business entity can incur liabilities and simultaneously have positive cash flow.

For example: I borrow 100k and spent it on services, but I don't have to pay it back for 90 days. I receive 50k in cash from sales which goes into my bank account. My operating capital increased, but because of the new liability, my net value has decreased. That's probably an oversimplification but it's all I can think of when I'm tired.

I am not concerned that Tesla is losing money right now. The company has plenty of money to continue operating, and looking at the financial statement, the reason they are losing $ on their balance sheet is because of R&D (54M I believe) and other expansion efforts. Demanding GAAP profitability at this stage of the company's development is unreasonable because the company MUST expend funds in order to achieve its goal: profitability from mass market and relatively affordable BEVs, with volume in the hundreds of thousands. It makes zero sense to win small money now, and lose the long game by failing to expand over the next 5-10 years.