Short-Term TSLA Price Movements - 2014

[Hogfighter]

Even if they did not announce it they are sure to be asked during the conference call. Let's hope we get some good questions about the GFs (where/how many/time frame); MX ( final version ready date/amp date/reveal date/equipment it might have that S does not, battery size/range/tow capacity)); China demand (as well as some questions about demand in general); Batteries (any sign of increase in capacity). Analysts: Are you reading/listening? Analysts: PM DaveT if you need advice on questions!:wink:

I'm primarily interested in the GF. Demand isn't an issue whatsoever. The Model S is supply-constrained due to batteries, and will be for the foreseeable future. The Model X will suffer from the same constraints. We need the GF on line, like yesterday. Any serious delays in the GF will put downward pressure on the stock.

 

[jhm]

Finally, some news we can use! http://mobile.bloomberg.com/news/2014-07-29/elon-musk-battles-montgomery-burns-in-simpsons-episode.html

 

[pz1975]

Quick piece with bullish statements on Tesla by Adam Jonas. No price targets and more general on auto industry. This likely shouldn't have any effect on stock price but figured I would share.

Morgan Stanley's Jonas On Tesla, July 29 - Business Insider

 

[Lump]

Adam Jones...

Morgan Stanley: s Q2 Earnings | Benzinga
Jones expects the following for the company:

• Weak third quarter volume guide - Jones noted, extensive work being done to the Fremont plant to prepare for higher volume and the Model X could cause short-term constraints.
• Significant decline in N. American Model S volume - Jones is looking for a 20 percent year-over-year decline in N. American revenues. However, he believes that with the release of the Model X by the middle of next year, concerns of market saturation should be put to rest.
• Strong order backlog in China, limited ability to meet volume - Jones estimates China will account for 22 percent of Tesla volume by 2020. However, he suggests investors adjust their expectations from "systematic, uninterrupted growth" to a "slower ramp".
• Little detail on Gigafactory - Jones does not expect much detail on Tesla's Gigafactory until the company receives a "firm confirmation" from Panasonic.

 

[Lump]

Tesla Seen Reporting Record Deliveries on China Expansion - Bloomberg

The growth in overseas sales may have raised the average transaction price for the Model S to $108,000 in the quarter, up from $106,000 in the first quarter, said James Albertine, an equity analyst with Stifel, Nicolaus & Co.

 

[FredTMC]

Adam Jones...

Morgan Stanley: s Q2 Earnings | Benzinga
Jones expects the following for the company:

• Weak third quarter volume guide - Jones noted, extensive work being done to the Fremont plant to prepare for higher volume and the Model X could cause short-term constraints.
• Significant decline in N. American Model S volume - Jones is looking for a 20 percent year-over-year decline in N. American revenues. However, he believes that with the release of the Model X by the middle of next year, concerns of market saturation should be put to rest.
• Strong order backlog in China, limited ability to meet volume - Jones estimates China will account for 22 percent of Tesla volume by 2020. However, he suggests investors adjust their expectations from "systematic, uninterrupted growth" to a "slower ramp".
• Little detail on Gigafactory - Jones does not expect much detail on Tesla's Gigafactory until the company receives a "firm confirmation" from Panasonic.

I am disappointed in the AJ wording "Significant decline in N. American Model S volume..."
Maybe I need to read the full MS note from AJ. The only reason NA sales are down YoY is because Tesla is production constrained. This was addressed already on TM Earnings call last qtr.

 

[TSLA Siempre]

Hard to know how much of the synopsis was wording of the author vs that of Adam Jonas. Anyone else notice, the repeated use of "Jones" rather than "Jonas"?

Regardless, it seems like AJ might be expecting a less than blockbuster Q2 ER.

 

[ItsNotAboutTheMoney]

I am disappointed in the AJ wording "Significant decline in N. American Model S volume..."
Maybe I need to read the full MS note from AJ. The only reason NA sales are down YoY is because Tesla is production constrained. This was addressed already on TM Earnings call last qtr.

That's your opinion. He said that he doesn't believe there's a demand issue and that the Model X release will show it, but he's recognizing that it's an issue for investors.

 

[CyberDutchie]

Hard to know how much of the synopsis was wording of the author vs that of Adam Jonas. Anyone else notice, the repeated use of "Jones" rather than "Jonas"?

Regardless, it seems like AJ might be expecting a less than blockbuster Q2 ER.

Jones misspelling entirely Benzinga's doing. Cheap cut-and-paste job directly from this morning's original Morgan Stanley alert to clients. All Benzinga did was replace "We are looking for..." with "Jones is looking for...", etc.

What I'd like to know: who here agrees with Jonas' buy-on-the-dip advice?

I'm in doubt myself. I'm positioned for taking advantage of a post-ER run-up with Sept 20 $220 calls, but now I'm wondering if there will be a dip, how long will the dip take to recover? Maybe I'll sell half of the calls to have some money on the side, just in case Jonas is right...

 

[vgrinshpun]

I am disappointed in the AJ wording "Significant decline in N. American Model S volume..."
Maybe I need to read the full MS note from AJ. The only reason NA sales are down YoY is because Tesla is production constrained. This was addressed already on TM Earnings call last qtr.

We should not be disappointed: he is pointing out an opportunity, and telling Tesla bulls to be prepared to buy on a dip. This caution is also echoed by another very thoughtfull Tesla bull - Andrea James (note that she is modeling non-GAAP loss of $0.05 - imagine how this, and uncertainty over the GF will weigh on those looking through the "nearsighted lens") :

http://www.streetinsider.com/Moment...rty+Comments+Ahead+of+Q2+Results/9687150.html

I personally rolled my September 20th calls to December, and am planning to trim my significant margin position, so I can re-enter at a lower price after the earnings.

- - - Updated - - -

Jones misspelling entirely Benzinga's doing. Cheap cut-and-paste job directly from this morning's original Morgan Stanley alert to clients. All Benzinga did was replace "We are looking for..." with "Jones is looking for...", etc.

What I'd like to know: who here agrees with Jonas' buy-on-the-dip advice?

I'm in doubt myself. I'm positioned for taking advantage of a post-ER run-up with Sept 20 $220 calls, but now I'm wondering if there will be a dip, how long will the dip take to recover? Maybe I'll sell half of the calls to have some money on the side, just in case Jonas is right...

I did, even before he issued the note. I was uneasy for a while, and my trigger for action was last weeks note by Andrea James. These are the two notable and very thoughtfull Tesla bulls - I think that it will be wise to heed the Jonas's advice...

 

[ckessel]

If Q2 ER really does go that badly, my TSLA investment is basically dead as it's all in Jan 2015 options at this point that I bought right around ~$225 months ago, but that are worth about 30% of what I bought them for due to decay and the low IV that exists right now. I'd intended to roll them forward, but TSLA's not performed well enough to even break even on them.

 

[c041v]

If Q2 ER really does go that badly, my TSLA investment is basically dead as it's all in Jan 2015 options at this point that I bought right around ~$225 months ago, but that are worth about 30% of what I bought them for due to decay and the low IV that exists right now. I'd intended to roll them forward, but TSLA's not performed well enough to even break even on them.

I'm in a similar boat, really unsure what to do at the moment. I may just just the losses on my lower strike Jan 15's and pull out pre-ER and leave some of the higher strike ones as they aren't worht much anyways. If there is a dip, I can re-enter and add some Jan 16's to my exisiting position.

I hate going into an ER feeling like it needs to be stellar in order to recover a loss.

 

[FredTMC]

Hard to know how much of the synopsis was wording of the author vs that of Adam Jonas. Anyone else notice, the repeated use of "Jones" rather than "Jonas"?

Regardless, it seems like AJ might be expecting a less than blockbuster Q2 ER.

Yep, Benzinga butchered the MS AJ note issued today. I read the FULL MS AJ report just now.

Regarding NA sales, AJ went on to say "the company has highlighted supply prioritization for the international roll-out..."

Now THAT is consistent with language I expect to see from AJ

 

[RobotGrease]

Daily:

Hourly:

 

[Chickenlittle]

If Q2 ER really does go that badly, my TSLA investment is basically dead as it's all in Jan 2015 options at this point that I bought right around ~$225 months ago, but that are worth about 30% of what I bought them for due to decay and the low IV that exists right now. I'd intended to roll them forward, but TSLA's not performed well enough to even break even on them.

Not going back to review your previous posts so forgive me if I am wrong but I seem to remember your complaining of large option losses in the past. Perhaps you should avoid the options and stick with stock?

 

[Joel]

Yep, Benzinga butchered the MS AJ note issued today. I read the FULL MS AJ report just now.

Regarding NA sales, AJ went on to say "the company has highlighted supply prioritization for the international roll-out..."

Now THAT is consistent with language I expect to see from AJ

Can you post the link?

 

[Chickenlittle]

Yep, Benzinga butchered the MS AJ note issued today. I read the FULL MS AJ report just now.

Regarding NA sales, AJ went on to say "the company has highlighted supply prioritization for the international roll-out..."

Now THAT is consistent with language I expect to see from AJ

that is why I enjoy the earning report and conference. We can throw out all the analyst reports and see what is going on

 

[MikeC]

If Q2 ER really does go that badly, my TSLA investment is basically dead as it's all in Jan 2015 options at this point that I bought right around ~$225 months ago, but that are worth about 30% of what I bought them for due to decay and the low IV that exists right now. I'd intended to roll them forward, but TSLA's not performed well enough to even break even on them.

You don't have to be at break even to roll them. Sure, they're down 30% but the J16s are also down from where they were if you had bought them back then. Rolling them now buys you another year so you're not risking the 70% value that you have remaining...

 

[FredTMC]

Can you post the link?

i can't. MS doesn't publish it to the public. You may be able to obtain thru your broker.

 

[ckessel]

Not going back to review your previous posts so forgive me if I am wrong but I seem to remember your complaining of large option losses in the past. Perhaps you should avoid the options and stick with stock?

They were LEAPS when I bought them, following the LEAPS as stock replacement strategy that has been noted here before. I haven't played short term options since aside from very small amounts.

The previous high-to-high was about 5 months after the Q3 drop last year to the recovery that peaked at the end of February. I had the misfortune of losing the 50% of my portfolio that was far to short range options in that. Afterwards, mid-march, I converted my remaining stock to Jan 2015 LEAPS.

We're at 5 months from the last peak to now without having recovered. I should have bought 2016 LEAPS, but 2015 was a long way off then and seemed so unlikely TSLA would spend even longer off it's peak than it did last time.

- - - Updated - - -

You don't have to be at break even to roll them. Sure, they're down 30% but the J16s are also down from where they were if you had bought them back then. Rolling them now buys you another year so you're not risking the 70% value that you have remaining...

They're at 30% value, not down 30%. So 70% loss.