So given the pretty dismal price action that we saw today, how does everyone feel about whether a secondary has sort of been priced in? Of course there is always the magnitude of the offering as a variable, but we would have likely stayed above $220 if not for this concern, no?
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Hey Derek, welcome to the site. Congrats on surviving.
Can you a share brief summary of what's going on in the swiss market? How many cars are on the road? Are people interested?
I think without the secondary, we would have been $230-240. I think it comes down mostly to the amount and how much of it will be equity vs debt. The stock is constrained by the uncertainty. If the secondary isn't that big and we see a bigger mix of debt rather than purely equity, the stock could rally another 10%. But with the stock price where it is, I think they'll do mostly equity financing. That doesn't necessarily mean it's bad, though. And once the offering is done, I don't expect it to have any lingering effects on the stock price...
chickensevil
Active Member
It's the borrowing on a margin that makes no sense... You can't do that "after hours" that is... You can't options trade... Because they are shutdown... Right?
Yes, options are closed at 4 PM EST, but margin is available after-hours. This can vary from broker-to-broker, but many brokers have higher margin requirements for after-hours (or "overnight") positions than intra-day. That just means the amount you can borrow after-hours is smaller, not that it's not available.
You are "borrowing" the shares from your broker, so sure, it can be bought and sold after hours, it doesn't involve options at all.
The broker charges you the interest. Options only trade during standard session...
chickensevil
Active Member
"We believe we are witnessing the most disruptive intersection of manufacturing, innovation and capital experienced by the auto industry in more than a century," Morgan Stanley analyst Adam Jonas wrote in a Thursday morning note.
Wow.. what a statement from Adam Jonas..
- Volume today is awfully low considering it's an after-earning trading day..
- TSLA typically trades horribly the day after earnings.. recall Q2, and Q3.. same exact pattern, open at high, declining since..
- Good thing today is we might fill the gap from 206 high.. except we're at 206.3.. I don't know if that's considered gap filled or not..
- Doug Kass shorting doesn't help either.. On the other side, though, Dr. J is Long TSLA.. That guy has pretty good record from what I observe
- Option Expiration doesn't help either..
- I think tomorrow will give us better picture. big green candle tomorrow perhaps will give shorties painful weekend, and short covering continues next week monday..
Wow.. what a statement from Adam Jonas..
- Volume today is awfully low considering it's an after-earning trading day..
- TSLA typically trades horribly the day after earnings.. recall Q2, and Q3.. same exact pattern, open at high, declining since..
- Good thing today is we might fill the gap from 206 high.. except we're at 206.3.. I don't know if that's considered gap filled or not..
- Doug Kass shorting doesn't help either.. On the other side, though, Dr. J is Long TSLA.. That guy has pretty good record from what I observe
- Option Expiration doesn't help either..
- I think tomorrow will give us better picture. big green candle tomorrow perhaps will give shorties painful weekend, and short covering continues next week monday..
Causalien
Prime 8 ball Oracle
The 2 events that kept the price down. Kass and secondary. Though they are one and the same. At this point I believethematket hasn't priced in nhtsa yet. Also Kass is still short from the sound of his tweets. Sometimes I hate these celbrity shorts because they getthese follow on effect from their fans and make money no matter what. But if Kass is shorting until giga factory, I am readying my popcorn.
You seem to get it. Unfortunately, in the very short run, many may not. At least that seems to be Kass's gambit.
Concern about dilution from a subsequent offering is nonsense. Kass must know this, but is throwing it out to persuade the less knowledgeable to join him in shorting the stock and pushing down its price. Musk told Bloomberg that if it takes at least three years to start the giga-factory, retained earnings may be sufficient. If begun in less time, then fresh funds may need to be raised.
If new shares of equity are created, indeed each one would be a smaller fraction of the company than previously. But the dollars put into the treasury by the new shareholders increases the value of the company. By just looking at those numbers, it’s a wash. But if the money is put to good use, it should be a far greater boon than a savings account. At the May offering, new shares were sold at the day’s closing price. That price continued to soar.
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completely agree- I used to follow Kass with Apple and he played exactly these same games- it was impossible to filter the real from the fabricated with him. Not a fan...
I hope they do an offering and accelerate the factory to under 3 years. As I think Elon would buy a chunk, it would also help put a new floor in
Probably correct to say that a secondary to fund a gigafactory will stand to push Tesla's competitive advantage out another 3 years at a minimum and makes the assault on the mass market very real. It answers the two key bug-bear questions, battery supply and batter cost for a mass market EV. Little teaser about the Gen III towards the end of this sound track of a Tesla presentation to the Florida Senate yesterday (minute 14:30). Tesla Motors At Florida Senate Committee on Transportation 20140220 by John Gardi on SoundCloud - Hear the world’s sounds
"Gen III will in our opinion just as compelling as the Model S, it will be comparable in terms of performance and the interior will be just as technologically rich, we get there through economies of scale" - words to that effect. Complete overkill when it comes to competitive advantage in a $35K base price range. I'd gladly buy a bit of giggafactory to have a bit of that action, I suspect that institutions presented with that understanding will agree wholeheartedly.
Tesla will be raising funds having demonstrated repeated quarters of solid cash flow positive growth and funding is required for a specific and very attractive purpose. This is nothing like the same thing as a secondary to replace working capital burnt due to cash flow negative expansion.
I expect the market appetite for growth going into the gigafactory funding announcement exceeds the concern about an offering related dip and I expect the bookmakers for the offering will be very helpful with analysis (compliments to Adam Jonas) and will again make a book of committed longs to deny short covering as they did following Q1. I am incredibly suspicious that Musk blundered his lines on the Q3 call and even told journalists that "it was not so stupid to short TSLA" prior to Q3 in order to full up the stock with shorts to pay for this gigafactory.
Unlike the shorts (Kass I hope you are listening) longs have nothing to fear.
Would not be surprised to see the $220 back on the table tomorrow.
"Gen III will in our opinion just as compelling as the Model S, it will be comparable in terms of performance and the interior will be just as technologically rich, we get there through economies of scale" - words to that effect. Complete overkill when it comes to competitive advantage in a $35K base price range. I'd gladly buy a bit of giggafactory to have a bit of that action, I suspect that institutions presented with that understanding will agree wholeheartedly.
Tesla will be raising funds having demonstrated repeated quarters of solid cash flow positive growth and funding is required for a specific and very attractive purpose. This is nothing like the same thing as a secondary to replace working capital burnt due to cash flow negative expansion.
I expect the market appetite for growth going into the gigafactory funding announcement exceeds the concern about an offering related dip and I expect the bookmakers for the offering will be very helpful with analysis (compliments to Adam Jonas) and will again make a book of committed longs to deny short covering as they did following Q1. I am incredibly suspicious that Musk blundered his lines on the Q3 call and even told journalists that "it was not so stupid to short TSLA" prior to Q3 in order to full up the stock with shorts to pay for this gigafactory.
Unlike the shorts (Kass I hope you are listening) longs have nothing to fear.
Would not be surprised to see the $220 back on the table tomorrow.
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I agree with EM gaming the stock price. He did it first (and warned the shorts) to pay off the government loan and put some cash in the bank. Now he has effectively done it again to fund the Gigafactory. His timing has been near perfect. I can not believe this good fortune for Tesla is random. I do feel there will be some pull back on the stock price, but it will be temporary. I suspect he is also holding onto some nice ZEV credits to apply, if needed, in Q1 and/or Q2 as the company moves from 'gaming' deliveries numbers with rushing out loaners and higher priced P85s at the end of the quarter to one where we accept that there will be 1000+ cars in transit each quarter in 2014.
mershaw2001
I'm short the short sellers
Short analytics reports that the number of shares sold short today was 55%, vs 50% yesterday, vs 45% the day before, and yet vs 40 the day before that. In other words, shorts see the higher price of tesla as a more and more attractive target, AND YET THE PRICE GOES UP. I'm absolutely amazed. I used the 206/207 dip to add to my common shares. If there is a fall tomorrow, i am absolutely convinced it will be temporary to the 202 range, and I'll be buying options dated 1 month out because the reversal will be hard. However, i don't think we'll see a fall, I think tomorrow is an open at 212 and a march higher. This is ridiculous and reminds me of the 60-80 march the stock made, before people realized it wasn't stopping at 70 and everyone had to flip their positions to upward.
Honestly the healthiest thing that the short side could have done today was to let it run to 225 during the day and cover 10 million shares on heavy volume. We would have seen a fall in the subsequent days. Instead we're now loading that rocket ship. People thought that earnings call was going to be the rocket, instead it will be 5 days after earnings. wow. just wow.
I also have to add that if tesla adds a giga battery factory, i will switch from believing that tesla at 200 is at the high end of the spectrum to believing that tesla completed its monopoly of the EV industry, and now 200 stands as the low end of the spectrum. I've been bearish, but if that factory emerges they will have a lead that cannot be beat.
Honestly the healthiest thing that the short side could have done today was to let it run to 225 during the day and cover 10 million shares on heavy volume. We would have seen a fall in the subsequent days. Instead we're now loading that rocket ship. People thought that earnings call was going to be the rocket, instead it will be 5 days after earnings. wow. just wow.
I also have to add that if tesla adds a giga battery factory, i will switch from believing that tesla at 200 is at the high end of the spectrum to believing that tesla completed its monopoly of the EV industry, and now 200 stands as the low end of the spectrum. I've been bearish, but if that factory emerges they will have a lead that cannot be beat.
I actually think that the shorts are coining the definition of a short bubble, the higher it goes the more they pile in. It is actually pretty ludicrous. I would actually say definitely they are shorting into a strengthening stock. This Kass guy on Twitter might actually have a lot to answer for by adding to his losing short overnight and declaring a gain on his overall position in the morning. I expect many of these dunder heads have followed like sheep. Looking at the sentiment out there for the Gigafactory I would not be surprised at all if we revisit $220 tomorrow.
Causalien
Prime 8 ball Oracle
Well, I long suspect that Elon is checking the forum and getting the free stock analysis and sentiment analysis from members of this forum on top of his own investor relations team. You are talking about ~100s of successful savvy people spending at least an hour a day on TSLA related debates. Heck, he might even be disguised as a member and use that to debate us. If not active participation, at least an aid to skim all the posts and compiles sentiment analysis and important discussions.
Hey Derek, welcome to the site. Congrats on surviving.
Can you a share brief summary of what's going on in the swiss market? How many cars are on the road? Are people interested?
despite the fact that Switzerland is a small country (population 8.5m) but highly concentraded, the interest in Tesla cars is huge. You can not directly compare CH with Norway, but the comaprison is not that far away. One aspect is certainly a high standard of living and a plenty of rich people who can afford a Model S like buying a swiss chocalate.
At the moment I do not possess exact figures of cars being sold so far neither I can offer numbers of pre-orders but what I know is that the overall number of MS is high.
The Roadster for exapmple, of which only 2'500 were built, has it's fan base here and according the Swiss Tesla forum, there are more than 110 cars on the road.
Model S had it's launch in CH in August last year. 42 were sold. In the following month, 66 were sold. And this is just the beginning. Having in mind that CH was among the three european countries where the deliveries started first (Norway, Netherlands, CH) everyone can assume that the demand in those regions were that biggest by far.
However, going forward, I will sporadically jump into the Tesla store here in Zurich (by the way, one of the best locations they could have chose - near the famous Bahnhofstrasse - used to be a Harley Davidson store few years ago) and have a chat with the smart sales guys over there to find out everything possible about the Model S' demand etc. in CH.
In October last year, if I recall correctly, I talked to a sales person and he told me, that they are selling 2 cars per week on average.
And now back to the upcoming Geneva auto show which should start in march. There's a well known swiss car tuner (or rather visionary) named RINSPEED. This company has built a self-driving car (I know, Elon would prefer "auto pilot) based on...guess what ?
Have a look what they will be presenting at the auto show. Enjoy.
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Johan
Ex got M3 in the divorce, waiting for EU Model Y!
I would love it if this was true, but I truly believe that Elon cares little about the stock price (short term wise) except from when he's planning an offering (like now).
Hey Derek, welcome to the site. Congrats on surviving.
Can you a share brief summary of what's going on in the swiss market? How many cars are on the road? Are people interested?
Yes, let's say, I left a nice gain on the table but now, after exactly 3 months and doubling up the size of my initial investment, I'm back again and even higher than I was before.
Ok, in brief, Model S had it's launch in CH in August 2013. CH was among the three countries in Europe where deliveries started first. Next to Norway and Netherlands.
In August 42, in September 66 cars were sold. Don't possess any further figures but as I will, going forward, sporadically jump into the Zurich store I will find out from the sales guys everything possible related to CH demand etc and will share the details here with you all.
CH is a small country but with a population of 8.5mln highly concentraded (50% alre only alpes). Similar like Norway, the standard of living is high and there a lot of rich people who can afford a Model S like buying a swiss chocolate.
If you know that Tesla built 2'500 Roadster and more then 100 of them are driving in CH, then you can assume that the EV market here in CH is huge.
Back to the upcoming Geneva auto show which should start in March. The well known swiss car tuner (or rather a visionary) RINSPEED has built a car with self-driving features (I know, Elon prefers the word 'auto-pilot' which is correct!). Well this car will be shown in Geneva. Guess what is the basis...? Enjoy.
Hope Elon is reading here or aware of this and maybe he can be inspired by one or another high-tech feature...
http://www.youtube.com/watch?v=8e1HZCGs6yE
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