Short-Term TSLA Price Movements - 2014

[All Your Bases]

On e-mail from SA: http://seekingalpha.com/news/206161...s-in-september?app=1&uprof=45&dr=1#email_link

 

[AlMc]

Unfortunately I don't have anything other than memory to serve me, and admittedly I hadn't checked leasing rates on the car recently. I just know that Tesla has never offered any really attractive leases, which is the sort of thing you see a lot of companies doing, particularly in this segment, because so many cars in the segment are leased. I do know that almost nobody ever leases a Tesla, both as a reflection of Tesla never having attractive leases (until now, perhaps) and as a reason for why Tesla doesn't bother to work on leasing because they haven't needed it to sell cars until now. I'm sure that's a reason that people are reading this as a bad thing, they think that leasing + the BS report combine to show that Tesla is having trouble selling cars, but personally I think they're just bringing leasing rates more in line with the competition, to offer more choice for customers, and that the new leasing thing isn't really very big news overall.

Also until recently Tesla only leased to "businesses." Which is more evidence to me that they're still figuring out leasing.

The leasing upgrade is a huge benefit to future sales of the S and X for both the consumer and TM. For the consumer, as mentioned, it was originally business only and restricted to certain states. Now, as I understand it, there is enough history on resale values to get USBank (one of the largest, if not the largest 'banks' that leases vehicles...I have leased three business vehicles thru them) to provide leasing to consumers and businesses in all 50 states (I am making that assumption). For TM, they can declare the income up front (as most car companies do) and they do not have to have personnel working on the leasing details.

 

[stoebs]

Curt, yes, the price of the car is not being reduced, and US Bank's access to lower cost funds is no doubt a part of the reduction in the lease payment.

For me, however, a 25% decrease in lease payments sounds quite large, and I wonder whether the lower cost of funds US Bank benefits from is sufficient to reduce lease payments that significantly. I suspect, part of the improved payment terms for the consumer reflects a higher residual value assigned to the vehicle. In that case, I do think it is possible that there may be some form of agreement between Tesla and US Bank where some of the risk associated from the higher residual value has been taken on by Tesla (i.e. some floor at which they've agreed to buy back vehicles from the bank). I may well not be using the right terms here as the original lease was not really a lease, and I don't know if the current lease is a traditional lease or not.

I think a question about the mechanics behind the 25% reduction in lease payments would be of value on the conference call.

Don't forget the $7,500 federal tax credit. When Tesla themselves leased the car to you, this credit couldn't be utilized by anyone, since no one actually 'purchased' the car. Now, US Bank can claim the tax credit for themselves, and apply that to the residual value, thereby reducing the monthly lease payments.

EDIT
...should have read further in the thread...already commented on by others...sorry 'bout that.

 

[FANGO]

The leasing upgrade is a huge benefit to future sales of the S and X for both the consumer and TM. For the consumer, as mentioned, it was originally business only and restricted to certain states. Now, as I understand it, there is enough history on resale values to get USBank (one of the largest, if not the largest 'banks' that leases vehicles...I have leased three business vehicles thru them) to provide leasing to consumers and businesses in all 50 states (I am making that assumption). For TM, they can declare the income up front (as most car companies do) and they do not have to have personnel working on the leasing details.

Right, for future sales it's a big thing for sure. But for current sales it means not a lot, unless we assume that Tesla is having trouble with demand, which they aren't.

There *is* a possibility this will shore up non-D sales going into December before it's ready, since Tesla expects/wants to deliver a lot of cars this quarter, and if some are delaying their orders for the D then they might need a gap-fill in there. That's the only way that I can see this as being a "negative" in the short term. Still I have no doubt that Tesla will sell every car they make through the end of this year.

 

[anticitizen13.7]

So bears are resorting to broken telephone rumors now? Seems like a good buying opportunity.

It's all rumors, re-tweeted endlessly.

Isn't this sort of thing illegal? I remember 15 ago or so, a child was caught manipulating Intel stock through postings on a Yahoo! message board. The child was punished by the SEC. I don't remember the exact dollar amount.

Edit: "short and distort" scam is what I am thinking of. Short the shares of a company and then spread unfavorable rumors. The fact that there is no article from Ward's is evidence that these tweets are fabricated "information".

 

[mitch672]

Well, I'm all in in now, nice price of $221.75, of course this brings up my average share price quite a bit, but you either believe, or you don't

 

[xhawk101]

The good thing is that it re-affirms that the broader market still doesn't understand Tesla, so there's still tons of opportunity in the stock longer term as TM executes their plan.

Agree adding to my position at 222

 

[chickensevil]

So what happens if we actually close below 224? Because it is increasingly looking like that might happen! I really hate that the 200SMA has moved up that far already!

 

[AlMc]

Well, I'm all in in now, nice price of $221.75, of course this brings up my average share price quite a bit, but you either believe, or you don't

Mitch. Like your attitude. While I am not 'all in' I hope for all, and TM, that TSLA goes nothing buy higher.

- - - Updated - - -

So what happens if we actually close below 224? Because it is increasingly looking like that might happen! I really hate that the 200SMA has moved up that far already!

That is the million dollar question!

 

[mitch672]

Mitch. Like your attitude. While I am not 'all in' I hope for all, and TM, that TSLA goes nothing buy higher.

- - - Updated - - -



That is the million dollar question!

thanks. I don't think anything earth shattering will happen, the entire drop was a bear attack on an unconfirmed rumor, can't even call it FUD, and a huge over reaction, we've seen these before, and we'll see them again, no doubt.

 

[FluxCap]

So what happens if we actually close below 224? Because it is increasingly looking like that might happen! I really hate that the 200SMA has moved up that far already!

If we knew that we'd all be rich. No one ever *knows* what's going to happen! Just theories, some tradeable some not.

My theory is that Phil LeBeau tweets about the un-sourced, unsubstantiated Ward's auto fabricated numbers tonight, then tomorrow it's disproven, then forgotten in the run-up to an FOMC meeting "buy the whole market" party on Wednesday.

 

[ongba]

So what happens if we actually close below 224? Because it is increasingly looking like that might happen! I really hate that the 200SMA has moved up that far already!

It depends. Either it continues lower, or there will be a retest of the SMA 200. If tsla can get back above the SMA 200 in a relatively quick manner (1-3 days), then it should be ok (at least until earnings next week). If tsla tests the SMA 200 (could be several attempts to get back over it) and the test fails, then it will indicate that support has now turned into resistance (again, this may not hold true with earnings so close.)

 

[Renaud]

So what happens if we actually close below 224? Because it is increasingly looking like that might happen! I really hate that the 200SMA has moved up that far already!

Asking myself exactly the same question...seems like it likes to settle around 222...
And tomorrow is tuesday

 

[drinkerofkoolaid]

If present demand supposedly "peaked" Tesla wouldn't have a 2-3 month wait time for new orders. True present demand, is likely capped by the 2-3 month wait and a desire for clarity about the Model X.

 

[FluxCap]

Tesla CEO Elon Musk's Next Big Disruption Isn't a New Car, It's a New Battery – Feature – Car and Driver | Car and Driver Blog

Also a new car, but whatever Car and Driver.

 

[chickensevil]

If we knew that we'd all be rich. No one ever *knows* what's going to happen! Just theories, some tradeable some not.

My theory is that Phil LeBeau tweets about the un-sourced, unsubstantiated Ward's auto fabricated numbers tonight, then tomorrow it's disproven, then forgotten in the run-up to an FOMC meeting "buy the whole market" party on Wednesday.

Yeah, hopefully

It depends. Either it continues lower, or there will be a retest of the SMA 200. If tsla can get back above the SMA 200 in a relatively quick manner (1-3 days), then it should be ok (at least until earnings next week). If tsla tests the SMA 200 (could be several attempts to get back over it) and the test fails, then it will indicate that support has now turned into resistance (again, this may not hold true with earnings so close.)

Thanks this is more or less what I was asking for, from a TA standpoint. I realize that TA doesn't always work correctly with these things anyway, but it gives an idea of the way we should expect the stock to move.

 

[SteveG3]

Don't forget the $7,500 federal tax credit. When Tesla themselves leased the car to you, this credit couldn't be utilized by anyone, since no one actually 'purchased' the car. Now, US Bank can claim the tax credit for themselves, and apply that to the residual value, thereby reducing the monthly lease payments.

EDIT
...should have read further in the thread...already commented on by others...sorry 'bout that.

Does anyone know offhand how the previous non-lease lease that was offered to consumers handled the $7,500 tax credit? if not I'll see if I can pull it out of discussions here on TMC.

 

[ongba]

Thanks this is more or less what I was asking for, from a TA standpoint. I realize that TA doesn't always work correctly with these things anyway, but it gives an idea of the way we should expect the stock to move.

Your welcome. Closing and staying below the 200 day SMA for any long period of time, IMHO, is a big deal b/c it has been so long since TSLA has been below it (I believe mid Nov 2012 was the last time according to the chart I am looking at). Also, it signals weakness in the stock when it occurs, esp if it is prolonged, allowing the 50 day SMA to cross below the 200 day SMA, which in my experience, is the time to stay away.

 

[SteveG3]

plot thickens... this report from street.com (of Jim Cramer questionable credibility) says they got the word on "sales drop" confirmed in conversation with Ward's.

"The electric car company is struggling with slowing demand for its flagship Model S vehicles, tabulating a 26.3% year-to-year drop in unit sales for Tesla during September, David E. Zoia, editorial director of Ward's Auto, told TheStreet.com."

​http://www.thestreet.com/story/1292...slowing-us-demand.html?puc=yahoo&cm_ven=YAHOO

Cramer has famously talked about having spread false information in the past, but I don't know that his street.com would write such a specific and easily disproved statement if it were false.

Of course, this is all apart from the bogusness of declaring "drops" in sales for a company rationing out limited supply among three continents.

 

[AlMc]

plot thickens... this report from street.com (of Jim Cramer questionable credibility) says they got the word on "sales drop" confirmed in conversation with Ward's.

"The electric car company is struggling with slowing demand for its flagship Model S vehicles, tabulating a 26.3% year-to-year drop in unit sales for Tesla during September, David E. Zoia, editorial director of Ward's Auto, told TheStreet.com."

​http://www.thestreet.com/story/1292...slowing-us-demand.html?puc=yahoo&cm_ven=YAHOO

Cramer has famously talked about having spread false information in the past, but I don't know that his street.com would write such a specific and easily disproved statement if it were false.

Of course, this is all apart from the bogusness of declaring "drops" in sales for a company rationing out limited supply among three continents.

If this type of FUD continues I will be changing my strategy for ER to buying calls. While I do not suspect ER to be great I do expect that the CC will dispel lots of the FUD around demand now and in the future.