There is a common bear thesis that Tesla is not production constrained. Ok, stop laughing, I know, I know, but "bear" with me. The European numbers are down. Pretty much any reliable available Model S sales information is down, so we are left with speculating on markets where no reliable information exists. Further, the factory shutdown by several reports took longer than expected and Tesla worked really hard to bring their production numbers back. There is the report that there are two few Model S's registered in China, possibly due to the sales tax rebate issue. They think Musk and Tesla are lying about demand and delivery numbers. They can't understand the overhang of deliveries in various stages of transport between each quarter. With oil down, with the market down, its easy to bring down a high flyer like TSLA. The October 9th event pre-announcement arrested the downslide for a week much to their dismay. The risk for them was that Tesla was going to announce something that would bring unit sales projections up, like a Model X/3 related announcement. We did not get that, and hence the downslide resumed.
So the question becomes, what if Tesla barely makes guidance in deliveries? What if Tesla was not non-GAAP profitable? To me, those are the real short term risks. In that scenario, the bears might even think that the factory shutdown and expansion was all a hoax to cover the lack of demand issue. What would Tesla's stock price be at in the worst case scenario there?
Even if that scenario does not come to pass, I think we are weak going into Q3 ER because of that risk. Of course, I think that Q4 will be terrific with a rising ASP and that Tesla will sell each and every car they make. In my ideal scenario, this is a bear trap with a trading pattern much like Q1, where we hit 180 and then climbed out of it.
As a reminder, I'm talking about short term moves that should not spook a long term investor.
