Short-Term TSLA Price Movements - 2014

[Curt Renz]

In the words of my wife (today): "Today a fake uber-bull was revealed."

And perhaps a form of contrition to Mary Barra and Mark Fields. General Motors and Ford may have threatened to cut off Adam Jonas from information or complained to executives at Morgan Stanley, after the poor ratings and price targets Jonas gave them last week while stating that he sees “Tesla Motors as the only US auto manufacturer stock offering any upside to fair value.”

 

[drinkerofkoolaid]

From what I recall, Jonas's revised report included a chart that made a case for Tesla being worth around in excess of $1000 per share if Tesla can sell 1 million vehicles in 2020.


Still waiting for Tesla to say something about the Gen 3 SUV.

Tesla Motors Inc (TSLA) Envisions Selling Around 500K Units: Long Term

 

[Curt Renz]

...So much so that he says, “Moore's Law can help liberate BTUs too.”...

Indeed, incredible. Internal combustion engines have been around since the nineteenth century. Improvements over the last eighty years have been relatively modest considering the time frame. If Moore's Law had applied, today we could hop in our car and shift to warp drive for a quick visit to Alpha Centauri.

 

[anticitizen13.7]

I'm mildly amused that a report from just one analyst caused the stock to plummet 9% in the space of one trading session. Even Elon's comments on the news, quoted out of context repeatedly, did not have this effect.

I'd recommend that investors ignore today's action. This was probably a Bot Bash. Nothing has changed substantively where the company is concerned.

 

[Jack6591]

The corporate mission of Tesla Motors is a "Solar Electric Economy".

In the Models S Tesla has arguably built the best car in the world. Evident in the media mania which envelopes Tesla and Elon Musk, they are disrupting the automotive industry.

The utilization of renewable energy to fuel the electrification of transportation, will disrupt the fossil fuel industry.

As Tesla works out the initial kinks in the maintenance of the Model S it is becoming increasing apparent they will disrupt the automotive repair industry.

Stationary storage will certainly drop in price. The dovetailing of "Stationary Storage" and renewable energy will disrupt the electric utility industry.

Building a "Net Zero Energy" Gigafactory will shift the worldwide paradigm of manufacturing. Add to this, Tesla demonstrated robotic experience and the Gigafactory will become the gold standard for manufacturing.

Overvalued? That's obtuse. While some of my observations have yet to come to fruition, Tesla has a demonstrated record of achievement.

Elon says tsla's share price is kind of high. I flatly disagree.

 

[ggies07]

What does Tesla do to naysayers? Crushes them with execution. Execute, execute, execute. It makes me want to drop everything I'm doing and go build cars for them to show that it can and will be done. If I didn't work and it was allowed, I'd do some "community service" at the factory every month.

 

[anticitizen13.7]

*slaps forehead* That's NOT what Elon Musk said. Why do people insist on quoting him out of context? And he wasn't 'commenting' on the stock price per sa, he was 'answering a question' that was asked of him about the stock price. On the surface that may seem like semantics, but in the context you're using, it's not.

We all know at this point in time that when asked a question he's going to answer with something other than 'no comment'. Indeed, I don't think he's ever used that phrase even when he didn't want to comment on a specific topic. We're not always going to like what comes out of his mouth, but we should all be able to agree on the honesty of it. He's done nothing to date to suggest he's being shady (inappropriate) in any way.

I don't think Elon would, or had any reason to, make "shady" comments, but I have to agree with those who are of the opinion that he should not comment on share price.

The results of comments are unpredictable. There is also the appearance of attempted price manipulation even though it is probably not intended.

 

[Chrisr400cc]

I was kinda bummed Elon said the stock price was a little high. But he also said long term it is a good deal. All the momentum stocks were down today ( SCTY-8%, MBLY-6%, YELP-6%, NFLX-5% TWTR-5%...) so maybe it had nothing to do with Elons comments. Or maybe a little but not the main reason for 25 point decline

 

[DaveT]

DaveT, Do you think the market will react similarly to the Goldman Sach downgrade last year? I wasn't the shareholder at that time, probably you can shed better light.

Not sure. I think before the GS dip/downgrade TSLA was in a strong uptrend and the GS report was very weak in content and the market/investors were able to shake it off relatively quickly. In today's case, Adam Jonas' note was weak in content but he is a top-rated TSLA analyst so his words/notes carry weight. Also, the past couple weeks TSLA has been in an undecided/vulnerable state. On the positive side, I think the $248 level provides some decent support but if that's broken then I don't know... it could go lower. But how low it goes is balanced by the bigger context of Tesla being in the process of ramping production/revenue in Q4 2014 and into 2015.

(There's also a broader risk of a sell-off w/high-growth stocks if Yellen announces more aggressive plans to raise interest rates than expected.)

 

[ckessel]

Second, my post was started with IMO. IMO = in my opinion. Of course he did not violate laws by commenting as he did. Hope that clears things up.

If you want to express your view on his comments that's fine and I understand, but you said "inherent right". We have rights or we don't. They aren't subject to "IMO".

 

[Lump]

I'm mildly amused that a report from just one analyst caused the stock to plummet 9% in the space of one trading session. Even Elon's comments on the news, quoted out of context repeatedly, did not have this effect.

I'd recommend that investors ignore today's action. This was probably a Bot Bash. Nothing has changed substantively where the company is concerned.

When that "one" analysts caused the opposite reaction after his widely optimist report in February, Tesla was able to raise pretty much all they needed to build GF1 & Morgan Stanley was compensated I assume a fair amount & Adam Jonas up until today was a rock star. Nevada gave tax incentives & Morgan Stanley gave Adam Jones to land Tesla business, its just the way thing are done.

 

[AlMc]

I think it's so much simpler than what's been conjectured:

Here is what I read into it: "all of our large clients have massive profits in TSLA, we phoned them up last week and told them to dump it and go short, we have a new stock to pump this Friday, Alibaba". A simple "pump and dump", happens ALL of the time on Wall Street, nothing new going on here, move along you Looky Lou's. When I say "major" clients, I am talking about clients with millions invested, in other words, not retail investors.

This has been my worry for the last few days (week) and I believe this is what caused all the momos to sell off today. TSLA sold off a higher percentage than most of the rest because of the Jonas report/comments. Hopefully Yellen won't add to the drop in the entire market (but most hit will again be the momos) in two days.

I do not belive the fundamentals of TM have changed a bit. Another 'shiny ball' has Wall Street's attention at the moment.

 

[NigelM]

IMO, any comment made by the CEO or other insider regarding the current stock price (semantics aside, that was the question asked), positive or negative, fairly priced or not, is inherently unprofessional given inside knowledge, outside of a formal declaration. Just as the "Tsunami of pain" comment, he should keep it to himself, or release it through appropriate channels. Elon imay be great, Elon may be honest, but I agree that commenting on the stock price just because he feels like it is not his inherent right, regardless of his motivations.

I've been a senior company officer and I've been a CEO and you're quote correct, but there's also some pretty strict rules on what an insider can say publicly at any given point in time. The litmus test is whether everyone gets the information publicly, at the same time; seeing as Elon was quoted on TV he'll get away without a slap on the wrist but I will certainly bet that his IR folk were wringing their hands and pointing out to Elon afterwards how close to the wind he was sailing. As long as he was legally safe the bigger issue is one of shareholder trust - e.g. how do you know he won't say something like that again? Yep, the guy is a genius in many respects but he doesn't make the rollercoaster ride any smoother and that's what a lot of investors look for.

 

[ckessel]

As long as he was legally safe the bigger issue is one of shareholder trust - e.g. how do you know he won't say something like that again? Yep, the guy is a genius in many respects but he doesn't make the rollercoaster ride any smoother and that's what a lot of investors look for.

As a shareholder, I care if I can trust the CEO to execute on his company. I care if I can trust he's that when asked a question that he's giving an honest answer and not some double-speak non-answer BS.

 

[NigelM]

As a shareholder, I care if I can trust the CEO to execute on his company. I care if I can trust he's that when asked a question that he's giving an honest answer and not some double-speak non-answer BS.

And I'm obviously fine with that also as are most people on this forum I guess; I do still think that a CEO who can, without warning, say something which causes the stock to sink understandably scares many people.

 

[ckessel]

And I'm obviously fine with that also as are most people on this forum I guess; I do still think that a CEO who can, without warning, say something which causes the stock to sink understandably scares many people.

The stock sank for 1 day and recovered the next. If someone is a shareholder that's scared of 1-day blips...well...

Should these same shareholders get upset and wring their hands if Elon said something like "I think we've got great upside and we're undervalued right now" ?

 

[chickensevil]

As a shareholder, I care if I can trust the CEO to execute on his company. I care if I can trust he's that when asked a question that he's giving an honest answer and not some double-speak non-answer BS.

But wasn't that exactly the kind of answer he gave in this situation? Long term it has value, short term it is unclear... that sounds like a pretty non-answer to me... Or was that your point? #confused

What I do know is that your first statement is certainly spot on. I don't doubt Elon's (and well pretty much any leadership or key personnel) ability to execute. And he said it best in Japan, something along the lines of "I only own 23% or so of the company, so if the shareholders don't like me, then they can totally vote with their shares and fire me". Clearly the vast majority of the shareholders love our CEO or we wouldn't allow him to continue running the company

 

[anticitizen13.7]

When that "one" analysts caused the opposite reaction after his widely optimist report in February, Tesla was able to raise pretty much all they needed to build GF1 & Morgan Stanley was compensated I assume a fair amount & Adam Jonas up until today was a rock star. Nevada gave tax incentives & Morgan Stanley gave Adam Jones to land Tesla business, its just the way thing are done.

Today's research note from Adam Jonas is indeed very peculiar in its wording and conclusions, both of which are all over the place. It is poorly written and in several place nonsensical and with contradictions even within the same paragraph. One thing though is that in a way he actually did lower his price target today by leaving the $320 figure unchanged. How so you ask? Well, in February 2014 his price target was $320 meaning that a year from that, in February 2015, he expected the stock to trade at $320. Now in September 2014 he believes that a year from now, September 2015, the stock will trade at $320. Wouldn't that in a way count as if not lowering your PT then at least delaying the believed timing of the stock hitting a given price point?

Also 100% agreed on the pump and dump. And I do believe the theory that Morgan Stanley's investment branch may have had a strong interest of getting the stock lower, either due to options expiry or wanting to get in at a better price point. Yes I know completely illegal and there are supposed to be air-tight seals between the analyst departments and the investment department but come on - who are we kidding here?

Who knows if we'll ever find out the truth. If this is true, and it's plausible, it's just further proof that short-term trading is usually a losing game for those of us at the retail level.

People with loud megaphones and organizations with tons of chips to play can push the small players around, so I just choose not to play the short term game.

 

[Jack6591]

I Expect Elon To Speak With The Voice Of A Lion

Elon has advocated a "Solar Electric Economy" as a solution to global warming.

What is believed becomes a "moral imperative" if it is reasonable and plausible.

In building the Model S, the electrification of transportation has proven both practical and reasonable.

In building the Supercharging Network, a "Solar Electric Economy" has proven to make great sense.

Elon cannot pontificate a "Solar Electric Economy" and at the same time state that the stock price is "a little high".

 

[ckessel]

But wasn't that exactly the kind of answer he gave in this situation? Long term it has value, short term it is unclear... that sounds like a pretty non-answer to me... Or was that your point? #confused

No, Elon was bluntly honest as usual. Both statements long and short are true. Long term, TSLA is going to be higher. Short term, the stock price was being a bit generous given what's left to get done.

There's no confusion at all. Folks here in TSLA's camp would almost universally say TSLA has long term upside, just as Elon did. You'll also find a number of folks (yourself included at times) that think it was high for right now.

- - - Updated - - -

Elon cannot pontificate a "Solar Electric Economy" and at the same time state that the stock price is "a little high".

Why not? One can espouse an ideal while acknowledging it's not achieved yet.