Short-Term TSLA Price Movements - 2015

[Gtoffo]

Tesla Motors, Inc. (TSLA) Pre-Market Trading - NASDAQ.com

Early Premarket is up.

 

[vgrinshpun]

Tesla Motors, Inc. (TSLA) Pre-Market Trading - NASDAQ.com

Early Premarket is up.

Not as much as one would expect, given the implied financials of the new Tesla Energy business,and volume is not heavy either. I also suspect some short attacks in the opening minutes - after all we do know that the whole thing with this announcement is just a convenient diversion from the struggling automotive sector, right?

And there would be a tremendous opportunity to buy-in at easily 30 to 40% discount...

Good luck for all the bargain hunters!

 

[jhm]

My takeaways:

Tesla Energy is a commodity business. As such it is competitive on price only. Some investors do not consider commodity businesses to be attractive investments. The exception to this is when a commodity producer has a low-cost basis and is likely to hold on to this cost distinction (think Dell). The cost structure is the key to the investment attractiveness. It seems that Tesla has achieved low-cost structure for its storage products and it is likely to hold on to this distinction.

Sometimes commodity products can beat their competition due to high-value brand (think Starbucks and, of course, our favourite brand, Tesla)

Tesla Energy is a great diversification. Two different markets, cars and energy storage, have a low correlation, thus allowing Tesla to manage its revenue far better in case of a market downturn in one of the sectors. This de-risks Tesla business and our investments in TSLA.

I think it's premature to call the PowerWall a commodity product. Really long-term that may be the trajectory, but there lots of subtle performance and design issues for product differentiation for many years to come. And we have not yet seen all the permutations of related products and services to deliver high value application s with PowerWall. For example, it appears that direct charging from PowerWall to Tesla vehicle may be possible, but there is a still a critical missing peice!

That said the key drivers for Tesla in this space are velocity of innovation, scale of production, and cost efficiencies. Musk did note that Tesla patents are all open for this technology as well as the automotive technology. He is still encouraging others to use their patents. The velocity of innovation is the essential IP advantage that Tesla retains. Obviously scaling from Gigafactory 1 to Gigafactory N will be hard for anyone to keep up with. And with this rapid scaling comes experience curve advantages to drive down the cost faster than competitors. I belive the PowerWall is priced low enough to do two things: drive rapid adoption and keep out would-be competitors. The first is important for rapid scaling while the second for long-term market dominance.

I am absolutely excited about this product diversification. We've seen this coming all along, but know the rest of the market will have to put a price on this. Congratulations to all who held their shares in anticipation of this day.

 

[Gtoffo]

Not as much as one would expect, given the implied financials of the new Tesla Energy business,and volume is not heavy either. I also suspect some short attacks in the opening minutes - after all we do know that the whole thing with this announcement is just a convenient diversion from the struggling automotive sector, right?

And there would be a tremendous opportunity to buy-in at easily 30 to 40% discount...

Good luck for all the bargain hunters!

Let's give traders a chance to wake up and absorb the news. That was a late night event for most of the world.

Also worth noting: european markets are closed. Lack of european traders might affect volume.

 

[aznt1217]

Let's give traders a chance to wake up and absorb the news. That was a late night event for most of the world.

Also worth noting: european markets are closed. Lack of european traders might affect volume.

That and people simply don't understand it yet. Like... What it is. Here in NY people pay 15k+ for gas powered generators. My old boss had one that crapped out during hurricane sandy. To put it into layman's terms, there would have been 0 power disruption if there were one of these.

 

[Gtoffo]

Not as much as one would expect, given the implied financials of the new Tesla Energy business,and volume is not heavy either.

Volume picking up. Price isn't.

 

[pGo]

Very impressive event. First time, Tesla talks about battery prices that matches with what CapOp figured out a few years ago.

Panasonic eneloop rechargeable cells in the mean time for consumers has gone down from $3.5 a cell to $2 a cell. Actual prices to Tesla for what it uses from Panasonic must have seen a huge change as well.

This reveal means street will now understand that Model 3 is no longer a pipe dream.

 

[InTheShadows]

Is the premarket gain on amzn from the announcement? SEDG isn't big enough yet to really get any good price action. My guess is that their stock (SEDG) will surge nicely today.

 

[vgrinshpun]

Volume picking up. Price isn't.

That is because of the shorting - look at the huge volume spikes pushing price down. I think the there will be very good buying opportunities after open...

 

[eloder]

Not Really....A simple math: $500 for 3kwh incremental doesn't mean the average unit price /kwh is $167. Otherwise you can get price for 10kwh is $1670.

>
>
$500 for 3kWh (10kWh - 7kWh). That's $167/kWh. #justsayin

I don't think it's an unrealistic assumption given that there's a much lower per kwh cost compared to scaling up the liquid TMS and having the other components in place.

 

[Jonathan Hewitt]

That is because of the shorting - look at the huge volume spikes pushing price down. I think the there will be very good buying opportunities after open...

There are shares still available to short??

 

[jhm]

That and people simply don't understand it yet. Like... What it is. Here in NY people pay 15k+ for gas powered generators. My old boss had one that crapped out during hurricane sandy. To put it into layman's terms, there would have been 0 power disruption if there were one of these.

Yup, there is a ton to digest here. Gas generator businesses stand to lose a ton of business. That's a tradeable opportunity for shorts. And that is just one small tradeable opportunity. So the market will need some time to figure this all out.

I actually hope that we do not see a huge price jump or share squeeze today. I want serious long-term investors to have the opportunity to lock in shares at a good price. Later as the market figures this all out we'll see the price climb.

Moreover there is a ton of product innovation in this PowerWall line yet to come out. The PowerWall units are just building blocks. The really cool apps will come as other devices are paired with this. For example a DC direct charger for your car and PowerWall. With every new product launch like this, we'll get positive catalysts and the market will see more of the latent value in PowerWall.

 

[Lump]

There are shares still available to short??

Yesterday Fidelity was showing ~900k shares available to short, this morning around 760k shares available.

 

[vgrinshpun]

I agree with everybody posting about exercising prudent caution, but scenario that you are outlining seem to be plausible to me. I do not want to bet the farm on it coming true, but it deserves that some funds be used on this bet.

Just as a reminder, in addition to the very high interest rate, institutional ownership went up by 10M shares in Q4 2014 (from 69 to 79M). For those not familiar with this, see this post and the following discussion for more details on significance of this.

Unfortunately, we do not know the results of the Q1 2015 yet - they are due on May 15 - but I doubt that institutional holders were not continuing to load up during the relatively flat Q1. This in combination with high short interest spells real trouble for those holding TSLA short. They are in real and imminent danger.

I do not believe that Tesla will be talking about financial details of their new business during the 30th of April event, as they will most likely concentrate on explaining the product lines (home, commercial, utility grid storage). This will free the necessary time to talk about financial side of the business during the ER call. This, perhaps, will give shorts an opportunity to double down during the lull after the event that I think will be dedicated mostly to the technical side of the stationary storage business.

However, given the fact that two analysts already are throwing numbers that need to be added to the PT to account fro this new stationary storage business, it would be highly unlikely to not have questions about the financials and stationary storage business model during the ER call. This will allow analysts to put out updated models after the ER.

Just to make sure, there is no certainty to the sequence of events outlined above, but they are plausible and can result in explosive stock move post ER. This deserves a carefully and prudently sized bet imo.

I think that we might be witnessing scenario outlined above: Stifel sees $60 to $70 PS opportunity, but does not change their PT yet, because many questions remain unanswered. I bet all those questions will be answered dusing ER, where stationary storage business will take lion's share of attention.

Streetinsider digest (I love analysts love for word color - guess it is what is missing in their everyday life?):

Stifel affirms Tesla Motors (Nasdaq: TSLA) at Buy with a price target of $400 following debut of the company's new Powerwall and Power Pack on Thursday night.

Analyst James Albertine sees an incremental $60 to $70 per share opportunity with the Powerwall and Power Pack. The analyst commented, Admittedly, we are still getting our bearings with regards to many of the obvious, practical questions related to the addressable market opportunity, potential partnerships/competition, and feasibility of storage applications with and without accompanying solar panels affixed to household rooftops. We would also seek to better understand production capacity in light of ramping battery cell production for Model S, and coming soon (hopefully), Model X vehicles in the Fremont, CA facility. That said, TSLA CEO Elon Musk has a way of making even the most daunting undertaking sound achievable.

Albertine believes more color will be shed on the initiative with Tesla's Q1 conference call, which is expected on May 6th.

For an analyst ratings summary and ratings history on Tesla Motors click here. For more ratings news on Tesla Motors click here.

 

[Gerardf]

First news starting to come out, messaging how big this could be :

Tesla's (TSLA) Bet on Home Battery Could Pay Off Big Time - TheStreet

Did Tesla Just Kill Nuclear Power? - Forbes

Is also in the Dutch (financial) media : Tesla lanceert accu van $3000 om thuis stroom op te slaan|Nieuws| Telegraaf.nl


This is getting a lot of attention, very curious what will happen today.

 

[Derek Vinyard]

May 1, 2015 Analyst Recommendations...@ 2.30pm CET

Guys, I set my alarm-clock yesterday evening (to watch the event via internet) for this morning at 5am CET (11pm EST/8pm pST)...well, I can only remember that I turned it off...I kept sleeping. Ok, today is a public holiday in continental Europe but I had to jump to my office to do some stuff and check my emails anyway.

Here we go - only DB, Stifel and Barclays (?!) came up with their targets. All of them reiterated their PTs. I hope early next week we should see some more analysts. The question remains for sure - which analysts have already priced in Tesla's non-automotive (energy) business and if so, how much do they acctually value Tesla Energy's potential as a seperate business?

 

[Gtoffo]

Yesterday Fidelity was showing ~900k shares available to short, this morning around 760k shares available.

Do different brokers have different amounts?

IB is showing 100k here: View Shortable Stocks

Do not have the data from yesterday.

 

[eloder]

Creeping up relatively quickly in pre-market. Now hovering around 229 and definitely some great volatility.

I won't be surprised to see nearing 240 again, at a minimum. Any investor who has a glimpse into the commercial battery business right now is likely going to want a piece of Tesla at these prices.

 

[uselesslogin]

Do different brokers have different amounts?

IB is showing 100k here: View Shortable Stocks

Do not have the data from yesterday.

Yes, and FWIW IB had 450k at 6am. The fee rate is down to 1% thought which probably means some shorts were covering yesterday in general.

 

[Gtoffo]

Yes, and FWIW IB had 450k at 6am. The fee rate is down to 1% thought which probably means some shorts were covering yesterday in general.

If they run out of "ammo" before the open that would be pretty powerful....

I have some respect for them....it takes balls to short premarket today.... or maybe just complete and utter madness/stupidity.