Short-Term TSLA Price Movements - 2013

[Sunnyday]

Hello Sunnyday.
I'm tempted to follow your lead. Do you see no downside to the govt. shutdown / debt ceiling volatility, or at least to the degree that it affects TSLA?

I'm not viewing the government shutdown as a strong negative against Tesla. I think Elon's response will go a long way toward undoing some of the harm that the event and their slow response caused. The harm was both short term and long term. The fire shook the confidence of investors, owners and prospective owners. For any high growth company like Tesla that grows on word-of-mouth, anything that could cause near-term sales to decelerate would dramatically undermine the long term outcome, because the installed base of owners today are the word-of-mouth engine for the next wave of owners. Stocks trade on future expectations. For the safest car in the world to light up in a fireball ran counter to the perception investors, owners and prospective owners want to have about their favorite car company. Elon's letter deftly put the fire concern to rest, eliminated the prospect of any necessary design change or recall, inoculated itself against any NHTSA investigation as was rumored in the media, and then skillfully turned the story around against gasoline cars, but doing so in a way that was grounded in fact-based evidence and science, and in a way that didn't come across as arrogant or boastful. Without specifically saying it, he set the expectation that this will probably happen again, but the odds of it happening are less than with a gasoline car, and if it does happen, the occupants of a Tesla EV are likely to enjoy the safest possible outcome. After his response, Tesla will now be perceived as safer than ever, and the new implied but unspoken message can now be, "do you really want to drive your kids around with a tank of combustible liquid under your back seat?"

So whether you're a short term trader or a long term holder, I think the letter this afternoon will have a fundamental and positive impact on where this company will be five years from now, and for that reason alone, I think Monday will be an up day.

 

[ZenMan]

I'm not viewing the government shutdown as a strong negative against Tesla. I think Elon's response will go a long way toward undoing some of the harm that the event and their slow response caused. The harm was both short term and long term. The fire shook the confidence of investors, owners and prospective owners. For any high growth company like Tesla that grows on word-of-mouth, anything that could cause near-term sales to decelerate would dramatically undermine the long term outcome, because the installed base of owners today are the word-of-mouth engine for the next wave of owners. Stocks trade on future expectations. For the safest car in the world to light up in a fireball ran counter to the perception investors, owners and prospective owners want to have about their favorite car company. Elon's letter deftly put the fire concern to rest, eliminated the prospect of any necessary design change or recall, inoculated itself against any NHTSA investigation as was rumored in the media, and then skillfully turned the story around against gasoline cars, but doing so in a way that was grounded in fact-based evidence and science, and in a way that didn't come across as arrogant or boastful. Without specifically saying it, he set the expectation that this will probably happen again, but the odds of it happening are less than with a gasoline car, and if it does happen, the occupants of a Tesla EV are likely to enjoy the safest possible outcome. After his response, Tesla will now be perceived as safer than ever, and the new implied but unspoken message can now be, "do you really want to drive your kids around with a tank of combustible liquid under your back seat?"

+1.

I just put down my deposit for a Model X signature today. Only 204 signature reservations left, I'm 796. I'm already an S85 owner. Reading Elon's response "Only a force of this magnitude would be strong enough to punch a 3 inch diameter hole through the quarter inch armor plate protecting the base of the vehicle." gave me goose bumps.

 

[arashlzy]

I had been waiting for Mr. Musk's reply, see my previous post, and I think a lot of people were shorting the stock this week because of the fire thinking that Tesla would flounder with its response. Looks they are wrong once again, and I am looking forward to a short squeeze next week.

 

[Cameron]

Well that was definitely an eventful week! Unfortunately my account is not quite were it was on Monday, but I'm still fairly new to trading so this was still a great learning experience. The phrase, "Be greedy when others are fearful, and fearful when others are greedy" is what keeps ringing in me head. It's fun to read about the different trades everyone is making and sort of get a look into everyones thought process as the stock goes through these phases. My guess is we will see another positive day on Monday, I think Elon did a great job handling the fire situation, and showing the email correspondence was a neat idea. Im thinking we will see mid to high 180s (which is were it would have been with just the downgrade from Wednesday). After that I'm thinking we will get another string of negative news from the naysayers that will set us up for perfectly for earnings.
As always, the TSLA saga continues..

 

[kevin99]

+1.

I just put down my deposit for a Model X signature today. Only 204 signature reservations left, I'm 796. I'm already an S85 owner. Reading Elon's response "Only a force of this magnitude would be strong enough to punch a 3 inch diameter hole through the quarter inch armor plate protecting the base of the vehicle." gave me goose bumps.

That is going pretty fast. Only one week ago I upgraded to Signature X and I was #762. By this rate, it will be sold out by end of Nov. I would expect an accelerated bookings toward the end.

 

[KYCurry]

Well, somebody jumped in big time after hours. This is a screen shot I took of NASDAQ after hours this afternoon.

View attachment 32179

Well, I picked up 20 shares yesterday!
Hi Gary!

 

[Norse]

Shares that I sold at $194.50 after viewing the fire video were just repurchased at $180.10 after reading the blog, (crossing fingers)

I was number 37 in the world to see that video, sold my shares instantly at 185. After what I recall it wasnt above 191.5 that day, so thats really impressive.

 

[bobinfla]

I have nothing of real value to add to all the financial geniuses here, just congrats everyone, good to see the rebound. To quote Randolph Duke.... "Mortimer, We're back in business!":biggrin:

 

[brianman]

Well, in the U.S. many states have "right to work" laws. That can best be described as right to exploit workers.

Um, no. And here we go with yet another political tangent.

 

[BornToFly]

I'm very happy. I bought around 260 additional shares yesterday before closing when it looked like the drop had ended. I thought there would be gains today since the stock was in the 190s just a few days ago. With the good news from Elon, I think Monday is going to be great. I'm sure a lot of people were still shorting the stock yesterday hoping for more of a decline. They are so screwed! I have more shares of this one stock than I am comfortable with long term, but I had to buy after such a large 2 days drop. I plan on selling these new shares after I see a 15-20% growth, unless things just keep looking better and better....

 

[hershey101]

To the options experts.
So as I mentioned previously, I didn't really play this as well as I should have, and made no money on the down side with puts etc.
But right now I'm holding a bunch of extra calls I bought while we were at $175-$180, and I wanted to know what would be a good time to sell them...
I have Oct '13 180s, Oct '13 190s, and Nov '13 200s... I feel like holding on to the $200s until after earnings, but selling the 180s and 190s obviously.. just not sure what would be a good time

 

[borat99]

I feel that we'll hit ATH 200 the week before earnings. That's when I'll sell my NOV 200 calls. I also think we may hit another minor road bump in October with a GS upgrade plus a combo of the debt ceiling issue.

 

[Norse]

It all the depends on the analyst obv. If they raise their targets by following this forum it could be another "sell on the news" after earnings. The important thing is to find out many cars were in transit. It would also be interesting to find out how many car got totaled in the train accident.

Also, I just want to say that I am a guy that wants to buy a Tesla, tho I really cant afford it atm. I make 80k$ a year, and I drive an Audi A3 2007.
The Tesla will cost 5 times the value of what I would pay for a car but its 50 times better. And as a guy considering buying the car, I want it more now after the fire incident, as I consider safety
first when buying a car. Now im pretty sure Im gonna take some money off the market to pay for my model S. You only live once.

Obv as a tesla fan and an investor I read the full story, but I do belive that after the post from Elon, Tesla is actually stronger as a brand. The ignorant will remain ignorant and they will not buy Tesla, but the smart people will understand that this is really the best car in the world. And when the rest of the industry follows along after Tesla, Tesla will be the brand people remember as the car that are number 1. Just like with Apple and Samsung, tho I really belive that Tesla will have an advantage longer then Apple had.

My risks for TSLA as a stock was that they might have found a weakness and would do a recall just to make it bulletproof, or that we would have a downgrade, because of injury to the brand.
There will be no recall, and if someone downgrade after this, they will look really stupid. And will not be taken seriously at all!

IMO this fire will cause discussion, intereset and awareness around Tesla. And when that happens, who wins?

 

[Acmykguy]

Well, somebody jumped in big time after hours. This is a screen shot I took of NASDAQ after hours this afternoon.

View attachment 32179

I find that number hard to believe. As far as I know there is a 25,000 share limit per trade in after hours.

 

[Norse]

I find that number hard to believe. As far as I know there is a 25,000 share limit per trade in after hours.

This happenes every day at 16.00.04

 

[BornToFly]

Sorry for the stupid question, but there was probably a large increase in the number of "shorts" Thursday and Friday by investors who though the panic selling was going to drive the stock price much lower than 168. At what point do those investors have to cover and buy stock?

 

[brg2290]

This happenes every day at 16.00.04

Please explain.

 

[blakegallagher]

Sorry for the stupid question, but there was probably a large increase in the number of "shorts" Thursday and Friday by investors who though the panic selling was going to drive the stock price much lower than 168. At what point do those investors have to cover and buy stock?

I bet some of them covered friday and some of them have received margin calls this weekend. Due to all of the stronger longs loading up on stock and the new people that just got in on this dip and all the shorts that jumped on that will have to cover I think this fire might cause the pre q3 run up to bigger than it ever would have been without it.

 

[Norse]

Sorry for the stupid question, but there was probably a large increase in the number of "shorts" Thursday and Friday by investors who though the panic selling was going to drive the stock price much lower than 168. At what point do those investors have to cover and buy stock?

I think some people misunderstand the shorters. Alot of the shorters are daytraders and they cover all day long. Some short over longer time and wont be needing to cover since they often have alot of money. But I do belive monday is a good time to cover.

 

[brg2290]

Hello all.
I've got a question - actually several. I'm trying to review the past week and use it as a learning opportunity.

Background info.:
I followed the news of the Baird revision, then the video of the incident (not going to write f***!). Recently, I had been trying to protect on the downside, but don't have options trading approval (or knowledge basis) yet. I previously had a trailing stop limit set with a wide margin - 19%, to protect downside when I was out of commission for awhile from a medical procedure, but removed it with the more recent opportunity for real time monitoring.

This past week: I did not sell on Wednesday 10/2, but monitored the board for sentiment and waited for Tesla response. Closing price on 10/2 was pretty decent @ ~ $180.95, and had actually come up from a daytime low around $175. It became clear the "issue" would take several days to sort out before an official release. I monitored after hours trading on 10/2, and my recollection (I can't find historical charting for after or pre-market trading?) is that after hours ended somewhere ~ $175? Sometime before lights out, I read sleepy's post where he correctly suggested one scenario as - set a limit buy at $171.33 and that we could test $170 several times. I've generally found sleepy's takes to be golden (perhaps username "sleepyhead" should consider change to "soothsayer" or some such), so I tried to formulate a plan of action based on this assumption.

I didn't sleep well Wed. night / Thurs. morning, and ended up getting up at 3 a.m. Pacific time to check pre-market. Again, my recollection is that TSLA continued to head south, so I sold in pre-market @ $174.80 (admittedly, not great). In line with the pre-market decline, Thursday opening started out about $173.28. I'm sitting there with my cup of coffee with the expectation that the trendline would continue down. Instead, over the next few minutes, the price ticked up to $179.26 @ 9:48 a.m. I've been sitting there waiting for a buy opportunity ~ 170, and instead it's running the other direction!

Bolstered by sleepy's track record, and still with Goldman Sachs / Govt. Shutdown / debt ceiling uncertainty, I resisted the temptation to succumb my fearful "buy in before it's too late" mentality. As you all know, the decline from there was steady, bottoming out at where - $168.20 or so? I wasn't sure this was the bottom, so I made three buys over the next hour or so to rebuild my position, with the low buy at $169.97 and the high at $171.18. I felt pleased about protecting some of the value of my position given the limited (no option privileges) tools at my disposal, but obviously in hindsight things could have gone better (like reacting cat quick like Bonnie and other longs to sell on the news of the incident, then buying back in near the low).

So, to my basic questions for the forum:

1. What are some general thoughts about how to use pre and after market trading? Are there some less than obvious pluses or negatives?

2. Given the lower end of pre-market on Thurs. 10/3 with a downward trend, why did the price go up to near $180 in the first 48 minutes of trading? Were these pre-set buys that did not factor in the previous days "inflammatory" news? If so, is this phenomenon a common occurrence?

Lastly, thanks to all for all the forward looking information provided here, as well as the opportunity to look back and learn from the historical context. I appreciate it greatly!