Short-Term TSLA Price Movements - 2013

[drinkerofkoolaid]

Tesla is going to be (speaking?) at the Tokyo Motors Investors conference at Midnight today, EST. Anyone have any information about this? Would seem like an ideal moment for Elon to release the blog post, and say something positive to clarify the facts, and calm people down.

 

[SteveG3]

In these cases it would not surprise me of Elon stands firm, demands court trials, and files countersuits. Proving his case in court would provide press coverage for a company and product that are still not that well known due to nothing being spent on advertising.

Agree prospects of Elon standing firm. Paraphrasing, but Elon said in one interview "You can't fight the NY Times. To hell with that!" :biggrin:

hadn't thought about free press coverage... some silver lining to what time they might spend on this.

 

[GenIIIBuyer]

You’re welcome. Fortunately my position is almost fully hedged with options, so current price movements have little net effect on my overall TSLA position. I option hedge rather than sell shares bought in February, in order to avoid the high taxes on my huge gains if realized after less than a year. So I sleep easily and have not been contributing to the downward pressure on the share price. A bounce above the current level may cause me to reduce some of my hedging.

Inclusion in the S&P 500 could come after the end of the year, if the company reports positive non-GAAP earnings for the fourth consecutive quarter. That seems to be the only criterion that has not yet been met. Nevertheless, the index committee has full discretion in determining which companies to add or delete from the 500.

Another piece of potential good news not being considered lately would be a positive response from the White House regarding the petition asking the federal government to invoke the interstate commerce clause of the Constitution against states requiring Tesla Motors to sell and service through local middlemen.

Thanks again. Positive non-GAAP results should definitely be hit for 4th quarter. I don't see how an announcement that Tesla will be added to the S&P 500 would not trigger a short squeeze. I think they'll want to avoid another NFLX, where they added it to the S&P 500 near the top before its large correction. The committee probably wishes they could add TSLA right now, but they'll have to wait until February 2014.

I'm in the same boat in regards to TSLA position. Counting the days until its a long-term holding...

 

[RobotGrease]

Hm, Tesla Motors bankrupt by February? Color me skeptical.

Who said anything about that? Trends and channels are not to be followed indefinitely, only until they are broken. I think most people understand this when looking at a chart with trend lines drawn. I would look for our first chance to break out of the channel when we hit the 200d ma, assuming we do actually hit it.

 

[anticitizen13.7]

I got into TSLA for the long term potential, and to support the move to EV. However, I've found myself disillusioned by their repeated poor performance on the public relations front. My background is PR. Anyone can get great press coverage when the news is good. But it's when companies face adversity that you see their true corporate communications chops. The bloodletting we've seen has been completely unnecessary, and any attempts by Tesla to blame the media completely misses the point. Tesla failed to take ownership over their message with the first fire. In those critical first 24 and then 48 hours they were silent. They let others speak for them, and they allowed the void of information to be filled by naysayers, negativity and the ill-informed. The ensuing panic harmed the company, not just the stock price. You'd think they would have learned from the first fire, yet they didn't. They failed again with #2, and then yet again with #3. With the accident, their PR team was unavailable for comment for nearly an hour after the story exploded online. At a time when news cycles are measured in minutes and seconds, Tesla has shown itself as a deer in the headlights. They need show themselves as more responsive, more transparent and more prepared.

What could Tesla have said in a very short time frame though? Without an investigation by the company into each incident, I don't think they could have made any credible statement on such short notice. Better IMO to get the facts correct than to start talking and saying things that might not be supported by evidence.

How does a company defend product reputation in an age where any person with a mobile phone can take photos of a burning car and post them to Twitter in an instant? It takes time to come up with the right statement to calm things down. Panic by photo without context can happen in seconds.

 

[Causalien]

Zerohedge came out with a hit piece about the non gaap magic.

Looks like we are targeting a suuport at the 200sma intersecting the 50%fib retracement... if the hit piece proves to be influencial. I didn't think it is the case until this hit piece, but it is the exact same playbook for nflx and amzn. I remember similar hit pieces during their first runup. Straddle.

 

[drinkerofkoolaid]

Is it possible that Panasonic, Daimler, or Toyota own a larger chunk of Tesla than people realize? Are they required to disclose if they do?

 

[skandy]

You’re welcome. Fortunately my position is almost fully hedged with options, so current price movements have little net effect on my overall TSLA position. I option hedge rather than sell shares bought in February, in order to avoid the high taxes on my huge gains if realized after less than a year. So I sleep easily and have not been contributing to the downward pressure on the share price. A bounce above the current level may cause me to reduce some of my hedging.

This is exactly what I am planning on doing (I wish I had done it after the first fire), any suggestions on what the best strategy for hedging TSLA gains would be? I had very little exposure to options, usually I'm the "buy and hold" guy, but Tesla's unwillingness to help its stock price makes me nervous...

I bought at 30 last year, then in the moment of weakness sold and almost immediately re-bought the stock around 85 in May, so a significant portion of my paper profits is still considered a short term gain.

 

[GravityPull]

I suspect demand for the Model S has not changed much since all the negative events. Has anyone seen any concrete proof of a drop in demand? Perhaps demand is still increasing!
This could explain Elon's and the Corporations lack of communication with investors and Wall Street......they aren't panicking because they know in the LONG RUN the stock price will go up much, much more.

 

[sub]

Hopefully this wasn't directed at me . But to answer your question: I generally don't advocate jumping in and out of a stock because it's difficult for most people to time the move correctly. In my experience, chasing is generally a losing proposition. If you can do it and understand the risk, then more power to you.

My concern is that some people may have purchased shares when they did not understand the volatility or the risk involved. This is not an investment that one should stake critical money on, or go "all in". Based on what I'm reading ("sky is falling" type stuff), there are clearly many people that have overestimated their risk tolerance.

This wasn't directed at you or anyone in particular, just a general feel I have had on the forums this past 2 weeks. Everyone's financial position is different, that is my only point. We are all here hopefully for the same reason, not only to make money but to support a great company that we all want to succeed. I'm fairly new to investing, and invested in Tesla because my gut told me to do so. Well, My gut started telling me otherwise a couple weeks before earnings and I had a plan in place to hedge and diversify but I went off track and got a bit greedy in order to buy my model S. I ended up paying for that a little bit but I'm not disappointed with my TSLA earnings. I agree it's impossible to time the market, My plan is to not catch the bottom (though that would be great), it's to wait until my gut says it's time to get back in. That may be at a price lower than today's closing, or something higher than what I sold all my shares at. I can still support the company 100% while never investing in it again. Heck, I would love to work for Tesla except I'm completely unqualified (educated in Health Care) and I live too far away from any of their locations.

 

[Curt Renz]

This is exactly what I am planning on doing (I wish I had done it after the first fire), any suggestions on what the best strategy for hedging TSLA gains would be? I had very little exposure to options, usually I'm the "buy and hold" guy, but Tesla's unwillingness to help its stock price makes me nervous...

I bought at 30 last year, then in the moment of weakness sold and almost immediately re-bought the stock around 85 in May, so a significant portion of my paper profits is still considered a short term gain.

You can write (sell) calls or buy puts to hedge a stock position. I’m currently doing both. I’ll likely sell the puts when the stock price appears to stabilize. That could be rather soon. When a new uptrend looks sustainable, I may even buy back the calls.

If you’re not really familiar with options, I’d suggest consulting with your broker/adviser and doing some research. During the nineties as part of my TV job I went to the floor or visitors gallery of the Chicago Board Options Exchange to interview floor traders almost every market day. Twice I attended day-long CBOE classes for financial journalists that ended with mock trading sessions in a pit on the exchange floor. Jon Najarian (one of my regular TV guests and now a CNBC commentator) was our mentor who announced breaking news regarding the fake underlying stock. What seems simple to me may not be for some other investors. I wish you well.

 

[skandy]

Thanks for the advice! I guess I will be doing research on this, although I had other plans for the night

 

[Sunnyday]

What could Tesla have said in a very short time frame though? Without an investigation by the company into each incident, I don't think they could have made any credible statement on such short notice. Better IMO to get the facts correct than to start talking and saying things that might not be supported by evidence.

How does a company defend product reputation in an age where any person with a mobile phone can take photos of a burning car and post them to Twitter in an instant? It takes time to come up with the right statement to calm things down. Panic by photo without context can happen in seconds.

There's a nuance to smart PR, and it requires that you have smart spokespeople at the front line empowered to comment without running everything up and down the flagpole. Tesla knew about fire #1 before it was posted to Youtube or made the news at Jalopnic. They could have announced proactively that they had their first fire, and that they were sending a team to Washington State to investigate. At that time they could have stated that there were no injuries. While that disclosure would have startled investors, it would have also let investors know that they were in charge and were taking proactive steps to learn what happened. It would have given the media the meat they needed to tell the first round of stories. It would have neutered 90% of the panic and speculation that set in. Instead, Tesla was quiet. While I agree it's great to get your facts collected, in this day and age of hyper-rapid news cycles, it's better to tell people what you know, what you don't yet know, your plan to learn what you don't know, and your plan to share what you learn. Tesla could have done this with each fire.

With the industrial accident last week, stories were getting picked up that spread the rumor that there was a fire at the Tesla factory. It took nearly an hour before spokespeople set the record straight. Don't you think they would have known within two minutes if their factory was on fire? Within minutes of the accident, the PR team should have known that it wasn't a fire, and the could have proactively shared that with Reuters or Bloomberg. They also could have confirmed there was an accident, and that their primary focus now was on the well-being and care for their employees, and that they'd have further comment later following a thorough investigation.

For any company, it's always a tough decision about what you disclose and when. When you're the first to tell people of your mistakes, it sucks the negativity out of the mistake. It puts people at ease that you're not hiding anything. If you stay honest and always keep the best interests of your customers in mind, you'll almost always make the right decision.

 

[aznt1217]

This crazy idea just occurred to me. At this valuation... Tesla is kind of looking like a takeover target. I hate to throw these kinds of theories around but Elon did say a few weeks ago no one would consider them at the valuation a few weeks back at around the same time Daimlers CFO said to partner with Tesla. For all we know something huge could be in the works. The team works pretty quickly, just think about the secondary and paying off the DOE loan. Never seen a company work so fast. Truthfully, I would love to see a Tesla powered Toyota Supra... I'd go bonkers over that.

 

[skandy]

Thanks for the advice! I guess I will be doing research on this, although I had other plans for the night

Done with the theory, but I need to get a better feel for the prices. If anyone can disclose what their hedging positions are (ideally with the reasoning behind it), that would be great! I'm thinking of getting a protective $100 put Dec 17th for $1.70, as I'm most worried about the continuation of the sharp decline in the following few weeks. Makes sense?

 

[Raffy.Roma]

@aznt1217

I would rather prefer the Model S Wagon as takeover target. Actually IMO Tesla is now suffering from a lack of Models and options. I think that things would get much better for Tesla with a new Model, like the Model S Wagon and the Model X of course, and also new options like ACC, pedestrians and obstacles detection, blind spot detection and AWD.
On the contrary I think that things for Tesla would get worse by joining with historical ICE automakers like Toyota, Mercedes and so on.
Just my opinion.

 

[aznt1217]

@aznt1217

I would rather prefer the Model S Wagon as takeover target. Actually IMO Tesla is now suffering from a lack of Models and options. I think that things would get much better for Tesla with a new Model, like the Model S Wagon and the Model X of course, and also new options like ACC, pedestrians and obstacles detection, blind spot detection and AWD.
On the contrary I think that things for Tesla would get worse by joining with historical ICE automakers like Toyota, Mercedes and so on.
Just my opinion.

I do agree with your sentiment, just throwing ideas around. I do think Toyota is getting things right because of Akio (who hooked Tesla up btw). You also need to realize a lot of the top guys are from Toyota Motors...

 

[GravityPull]

From Reuters:

Tesla defends Model S safety as stocks plunge
1:18am ET, 11/19/2013 - Reuters
TOKYO, Nov 19 (Reuters) - Tesla Motors Inc on Tuesday stood by the safety of its electric cars as the U.S. company's shares continue to sink after reporting a third fire in its Model S luxury sedan.
Speaking to reporters ahead of this week's Tokyo Motor Show, Tesla's Asia-Pacific Director Kevin Yu repeated the company's stance that it had no plans to recall the Model S, which has been involved in three accidents that ended in fires in a span of six weeks.
"I think the most important thing to remember when we talk about the accidents is that they were accidents," he said. "They were not a result of a spontaneous fire."
He sidestepped questions over whether the car's structure, which houses the pack of small batteries across the base of the vehicle, could be the culprit. General Motors Co, by comparison, uses large-format battery cells in a T-shape in the centre of the Chevrolet Volt plug-in hybrid car.
In the most recent fire, in Tennessee, the Model S had run over a tow hitch that punctured the armour plating protecting the pack of lithium-ion battery cells, according to police reports.
Tesla's shares have plunged 37 percent since the first fire occurred near Seattle on Oct. 1.
Still, the company's shares have surged about four-fold this year, boosting its value above that of Italian automaker Fiat , parent of Chrysler Group LLC.
Tesla launched its Model S electric car last year. It is preparing to introduce the Model X crossover late in 2014, with high-volume production aimed for the second quarter of 2015.
The Model S starts at $70,000 before a federal tax credit, although most are sold at $100,000 or more.
Next year, the automaker will begin design work on its third-generation electric car, which is intended for the mass market and will have a roughly $35,000 price tag.

 

[mershaw2001]

Well at first glance it looks like nothing new.

 

[touda78]

boring news, nothing new, next !