Short-Term TSLA Price Movements - 2013

[DaveT]

Can anyone explain how the share price gapped up 15% in the after hours, not 30 seconds after the q2 report results were published?

Q2 shareholder letter was released exactly at 1:00pm. It took at least several minutes (from what I recall) for it to pass $150+.

 

[aznt1217]

Can anyone explain how the share price gapped up 15% in the after hours, not 30 seconds after the q2 report results were published?

Results are history. It doesn't really matter. What matters is guidance and the Q+A.

 

[DaveT]

While most people on this forum tend to agree the long term direction where TSLA is going, it is a bit harder to predict the short term movement.

I see there are two extreme opinions here and like to contribute my thoughts.

sleepyhead, I think you represent one extreme: TSLA still have a lot more to go up on the daily basis. The basis of that is you take the $145.8 price run-up and states the current price of $153 is only like 5% advancement, not enough to reward a stellar Q2 ER. The weakness of this argument is whether the $145 pre-Q2 price already have part of earning surprise expectation factored in. Remember $145 pre-Q2 is the culmination of an incredible run of two weeks, after an remarkable recovery to $120 of the GS stunt from $108. So taking $145 as the base is definitely a extreme bull treatment. In all fairness, I see the retreat to $134 is much more reasonable pre-Q2, and we were handsomely rewarded by the 15% jump. At $153, it seems market is fair to both sides and did a pretty good job. Nobody can really complain it is unfair one way or the other.

Nevertheless, I am setting up my position for the Tesla Monday play. After that, I am open to hedge. As in my early post, unless some big negative news come out, the Tesla Monday effect has its legitimate reasons. It is not just a Jinx.

The other extreme is those who see no catalyst in sight and only downward pressure from here before Q3. So far, every time I have this view and start hedging, I get burned by the short calls that I wrote. I ended up making less gain overall. But it is not too bad as the time premium balance out better in a longer period of time. This time I will let the market tells me rather than pulling the trigger just because I feel the price is too high.

Hi Kevin, I've been thinking about your post for the past few days. Thanks for contributing your thoughts.

I tend to agree that we've witnessed an amazing run since $100. I think the time spent in the 90s and 100s laid a good foundation for the stock, and has provided a solid bottom, thus contributing to the run-up. I am a bit concerned that the stock didn't spend much time in the 130s and 140s. I'm actually glad it dipped right before earnings to the 130s because it provides some resistance/foundation at that level. It currently looks like $133 is a tough level to break down under (though anything is possible). I'd also like the stock to spend some more time in the 140s, especially since there's a gap between 145-150.

For me, Q2 ER was very good but wasn't breakout. I read over the shareholder letter and 10k again today, and while it was encouraging I noticed some timidity in increasing 2013 guidance. They are currently guiding for 5000+ cars for Q3. So, it looks like Q3 will be similar in numbers (ie., revenue, units, profit, etc) to Q2, which was similar to Q1. I don't think that's necessarily bad, as each profitable quarter is helpful. But there's limited room for Tesla to surprise on breakout revenue or # units sold in the 3rd quarter, and maybe even 4th quarter. In their 10k they make it clear that they have significant challenges with suppliers and being able to scale production. This is somewhat concerning because it means that while the stock price is on an epic run, the next few quarters aren't going to show significant increases in revenues, # units, profit, etc. Though the company should be marching toward 25% gross margin in the fourth quarter, which will be very impressive.

Right now, I can really see it going either way. I can see it consolidate in the 140-160 level for a while (even up to several weeks?). Or I can see it continue it's rise fueled by more buying by funds/institutions, believers, momo investors, and shorts leaving the party. Personally, I think in order for TSLA to consolidate in the 140-160 level, I think we need the sentiment to turn a bit negative. In other words, for people to increasingly doubt the valuation and company/car. That way, it will allow the momentum in the stock to subside a bit, and allow the stock to consolidate. However, if the sentiment doesn't because somewhat negative (or at least less positive), then I'm not sure what can stop the momentum and enthusiasm of buyers from pushing the stock higher (ie., into the 160s and beyond). If I had to pick one... I'd say I'd prefer the stock to consolidate and keep in the 140s/150s, but if the market/economy is decently strong I'm not sure what can stop the stock from going higher.

Now if the stock rises, probably there's going to be volatility and I'd expect dips and bear raids along the way. I've noticed over the past few months that when dips and corrections happen to the point where people start wondering, "how low can this go?" and the mood becomes negative/scared... then that can be a very good buying opportunity (ie., from 97 to 83, 115 to 88, 129 to 105, 145 to 133).

Nevertheless, I think we're in for an interesting next few months. Good luck to everyone.

 

[brianman]

Soon after this picture...

View attachment 28008

My attorney advises me not to answer this question.

- - - Updated - - -

I'm feeling nostalgic...
http://www.bing.com/images/search?q=cauliflower

 

[maekuz]

Let the games begin! The first trades in pre-market are in.

I am expecting a bear raid as soon as today and rolled my sept calls into dec calls, also keeping some cash at hand.

Update: Downgrade from Lazard (to neutral from buy)

 

[Johan]

Bear raid it is. 148 in premarket. When will the hyperloop plans be published? Could well be during trading hours.

 

[justthateasy]

Just saw the Lazard downgrade and the bloodbath in the pre-market. How seriously should we take Lazard considering everyone else either upgraded TSLA or held their opinion last week after earnings? Also, considering overall market conditions look bleak today, could this be the start of a consolidation and time to protect profits? I'm guessing we see a low of $140 today, sadly. :crying:

 

[maekuz]

Bill Alpert of Barron's is at it again: Bubble Trouble at Tesla - Barrons.com

 

[ShortSlaver]

Pretty high volume in pre-market, really. And a lot of negative sentiment in terms of bubble-speak. However, we've had negative PM's that end up in big gains...

It could, or should I say will, be a really wild day to be sure. So far 148 seems to be the support in PM...

 

[justthateasy]

One last thing, how can we see a bear raid play out over the next few days?

 

[StephenM]

Here is my experience with tesla and tsla so far, and I haven't seen anyone point out the 2nd part. We currently own two older cars, one is 13 years old the other is 20. I paid $4500 for my current vehicle. My wife and I have become extremely financially responsible, if its not a need we usually pass (except for her clothes shopping!). We had been considering a new(er) car for a while and I'm a BMW fan and test drove a few. At one point we had plans to test drive the S but the BMW dealer was closer and the price of the Tesla was way more than I thought I would ever spend on a car.

Every time I test drove an ice it was so easy to walk away, no interest. It was no different from my current cars except newer and shinier, couldn't get myself to part with even 25k. We finally got a test drive in the Tesla and that was it, no more ice cars for us. We think the X works best for us so we are waiting. So, from two cars currently valued at an average of $5500 each to a 100k tesla? Yes. Recently mounted 8kw system on our house also, had been planning for it for 2 years.

There have been many stories like this on the forums, but I haven't seen this point made. I told my wife 5 minutes after we left we were buying stock. Yes, others have done that also, but I had only ever bought stock once in my life, $1500 of Nokia in the late 90's and only held it for a couple months and made a small profit. I've been more of a real estate investor.

So, the reason I post this in this thread is I think it affects the stock, how ever little that may be. I'm not only willing to spend 3-5x more on a Tesla than I ever thought I would on a new Ice car, I immediately opened a brokerage account and dropped a significant amount of money (relative of course) on tsla. One family member has already followed me into the stock. I plan to buy as much tsla as I can on any big dips and ride it out. I may play the volatility along the way if I can learn from others here how to do so, but I won't sell my core position for many years, and I can afford it to go to zero.

how many other similar stories are there? I'm guessing many.

My story is somewhat similar. If not counting leases, the most expensive car I purchased before the Tesla was an S2000 at $33k.
I got the P85 so that's 3X the cost. I then rolled my self-directed IRA completely into TSLA when it was $38/share and got my wife's co-worker in on the stock too (my wife hesitated and regrets it big time now).

 

[JRP3]

Regarding Q3 production, assuming the rate does not drop below what they've already achieved, 500-550 cars per week for 12 weeks is 6000-6600 cars built for the Q. I think they have to be sandbagging again.

 

[Clprenz]

Hey guys let's keep the talk about short term movements. Anybody think it will hit 160 this week?

 

[maekuz]

Hey guys let's keep the talk about short term movements. Anybody think it will hit 160 this week?

The only possible catalysts i see are the Jefferies Global Industrials Conference today and JPMorgan Auto Conference tomorrow. But personally i dont think we will see $160 anytime soon.

 

[twinklejet]

I think 160 is likely this week. The pre market is so active and resistance is high at 149. I think most would agree that TSLA below $150 is a steal and may buy more since it is relatively cheap now...

 

[szero]

Not sure if this was mentioned before but...

if we were to look at the liabilities section of the books, currently tesla has $133,716,000 in customer deposits IE x $5,000 per car = rough est. 26,000 orders...

That number has only gone down by $5Mil since 12/31/2012 as well...

 

[twinklejet]

Not sure if this was mentioned before but...

if we were to look at the liabilities section of the books, currently tesla has $133,716,000 in customer deposits IE x $5,000 per car = rough est. 26,000 orders...

That number has only gone down by $5Mil since 12/31/2012 as well...

Likely lower - don't forget to account for the signature deposits in locations still undelivered around the world

 

[imherkimer]

Deposits for Model S reservations are now $2500.

 

[aznt1217]

Deposits for Model S reservations are now $2500.

Exactly what I was going to say.

 

[szero]

still not bad! considering upwards of 10K already delivered ytd.

26K-52K orders will keep them going through for a good 1-1.5? years...so definitely reinforces the production > demand situation.