Short-Term TSLA Price Movements - 2015

[AlMc]

The last couple days have surprised me, volume wise. Seems that longs and shorts did some push/pull but in the end no capitulation by either. I remember post ER days with 20 million share days IIRC.

 

[FluxCap]

The last couple days have surprised me, volume wise. Seems that longs and shorts did some push/pull but in the end no capitulation by either. I remember post ER days with 20 million share days IIRC.

Indeed. The option premium sellers (put and call writers) seem to have made out like bandits this time. Won't always be that way, especially later this year. I'm more confident than ever after this ER of the rhythm of Tesla's development into one of the most important, and valuable companies the world has ever seen.

 

[FANGO]

Keep in mind many hydropower stations have no use for batteries as they already have pumping storage. They simply use excess power on the grid to pump the water back behind the dam. Norway already have a few dams with pumps and is considering adding more to work as Europe's batteries. Though they are limited by the capacity of the transmission lines to the continent. In essence until Norway goes for wind power for real there will be very little use for Teslas battery storage on the grid. We do have many remote cabins though which might like the Powerpack combined with solar array.

Cobos

So there's a difference here between pumped hydro, which is used for grid storage when there's excess energy available (pumping water up a hill, adding to potential energy, and then letting it run back down the hill and capturing the energy back), and the natural storage that comes from hydro in terms of water sitting behind a dam waiting to be used.

Hydropower stations already have storage built in due to the lake behind the dam. There's some energy loss from evaporation, but this is minor. So hydropower stations would have no need for pumped hydro or batteries, because they can just decrease their throughput when they need to.

The thing about pumped hydro is that it's actually not as efficient as you'd want it to be. It's somewhere on the order of 70-80%. The powerwall is supposedly 92% round-trip efficient, which is pretty remarkable. Pumped hydro is currently used for something like 99% of grid storage applications worldwide. If powerwall is so much more efficient (or, I like to look at it as 3~4x "less inefficient" (8% vs 20-30%)), and can be done with less difficulty or space constraints, or less cost, or whatever, then you can see that just beating that one form of energy storage, pumped hydro, is enough to open up the entire grid storage market to them.

 

[Johan]

So there's a difference here between pumped hydro, which is used for grid storage when there's excess energy available (pumping water up a hill, adding to potential energy, and then letting it run back down the hill and capturing the energy back), and the natural storage that comes from hydro in terms of water sitting behind a dam waiting to be used.

Hydropower stations already have storage built in due to the lake behind the dam. There's some energy loss from evaporation, but this is minor. So hydropower stations would have no need for pumped hydro or batteries, because they can just decrease their throughput when they need to.

The thing about pumped hydro is that it's actually not as efficient as you'd want it to be. It's somewhere on the order of 70-80%. The powerwall is supposedly 92% round-trip efficient, which is pretty remarkable. Pumped hydro is currently used for something like 99% of grid storage applications worldwide. If powerwall is so much more efficient (or, I like to look at it as 3~4x "less inefficient" (8% vs 20-30%)), and can be done with less difficulty or space constraints, or less cost, or whatever, then you can see that just beating that one form of energy storage, pumped hydro, is enough to open up the entire grid storage market to them.

This is absolutely right and actually opens up one more large market for stationary storage batteries. You should post this in the Stationary Storage Investor's thread.

 

[Cobos]

So there's a difference here between pumped hydro, which is used for grid storage when there's excess energy available (pumping water up a hill, adding to potential energy, and then letting it run back down the hill and capturing the energy back), and the natural storage that comes from hydro in terms of water sitting behind a dam waiting to be used.

Hydropower stations already have storage built in due to the lake behind the dam. There's some energy loss from evaporation, but this is minor. So hydropower stations would have no need for pumped hydro or batteries, because they can just decrease their throughput when they need to.

The thing about pumped hydro is that it's actually not as efficient as you'd want it to be. It's somewhere on the order of 70-80%. The powerwall is supposedly 92% round-trip efficient, which is pretty remarkable. Pumped hydro is currently used for something like 99% of grid storage applications worldwide. If powerwall is so much more efficient (or, I like to look at it as 3~4x "less inefficient" (8% vs 20-30%)), and can be done with less difficulty or space constraints, or less cost, or whatever, then you can see that just beating that one form of energy storage, pumped hydro, is enough to open up the entire grid storage market to them.

The advantage of pumped storage is mostly with arbitrage, and the flexibility of hydro. As they ramp in minutes they are one of the few types of power plants that deliver good baseload power but can also function as peaker plants. Though they have to deal with low water levels and in drought years their water storage might be low. If you at night have excess power that is very low cost pumping the water back might make good sense in spite of the middling efficiency as you mentioned. Their main advantage is the storage is "free" as it's part of the basic function of the water dam, while the pump is also pretty cheap, though as you said efficiency is not good.

Cobos

 

[Johan]

The advantage of pumped storage is mostly with arbitrage, and the flexibility of hydro. As they ramp in minutes they are one of the few types of power plants that deliver good baseload power but can also function as peaker plants. Though they have to deal with low water levels and in drought years their water storage might be low. If you at night have excess power that is very low cost pumping the water back might make good sense in spite of the middling efficiency as you mentioned. Their main advantage is the storage is "free" as it's part of the basic function of the water dam, while the pump is also pretty cheap, though as you said efficiency is not good.

Cobos

So really the questions becomes when does the investment in the battery (big cost( pay for it self in an acceptable number of years? That is, if x number of MWhs are saved per year, at y dollars, for z years then after how many years does it pay back? And when this calculation strongly favors batteries they will be installed even next to hydro dams/plants.

 

[Lessmog]

So there's a difference here between pumped hydro, which is used for grid storage when there's excess energy available (pumping water up a hill, adding to potential energy, and then letting it run back down the hill and capturing the energy back), and the natural storage that comes from hydro in terms of water sitting behind a dam waiting to be used.

Hydropower stations already have storage built in due to the lake behind the dam. There's some energy loss from evaporation, but this is minor. So hydropower stations would have no need for pumped hydro or batteries, because they can just decrease their throughput when they need to.

The thing about pumped hydro is that it's actually not as efficient as you'd want it to be. It's somewhere on the order of 70-80%. The powerwall is supposedly 92% round-trip efficient, which is pretty remarkable. Pumped hydro is currently used for something like 99% of grid storage applications worldwide. If powerwall is so much more efficient (or, I like to look at it as 3~4x "less inefficient" (8% vs 20-30%)), and can be done with less difficulty or space constraints, or less cost, or whatever, then you can see that just beating that one form of energy storage, pumped hydro, is enough to open up the entire grid storage market to them.

Yes, that would conceivably open up the dam, so to speak :biggrin:
Let it flow!

 

[FANGO]

The last couple days have surprised me, volume wise. Seems that longs and shorts did some push/pull but in the end no capitulation by either. I remember post ER days with 20 million share days IIRC.

Remember that we already knew about the delivery beat. This is a fact which led me to think that I should sell an iron condor for this earnings. Of course, it led me to that thought at about 1:02PM PDT on Wednesday. D'oh :-/

 

[doggusfluffy]

I think they should seriously consider installing a Break Glass in Case of Emergency box around their ceremonial first dollar earned. :wink:

 

[Papafox]

The big short-term trading question on my mind right now concerns what will be needed to produce an epic short-squeeze? We have the basic setup for it now: high percentage of shares owned by shorts (even after a recent 50 point rise), considerable room for the price to appreciate, and great long-term outlook for Tesla. What will be the short-term event that causes shorts to panic, though? My thoughts in order of likelihood:
1) fabulous response to Model X reveal that includes rapidly rising order backlog and reviews of Model X that rival the previous reviews of Model S
2) a white swan event none of us predicted
3) a Tesla announcement that cash-flow has turned strongly positive, even with the current capex
3) a stellar quarterly ER with higher than predicted deliveries plus 30% GM
4) many analysts making substantial increases to their PTs
5) Causalien going four months without food poisoning
Your thoughts?

 

[Cattledog]

The big short-term trading question on my mind right now concerns what will be needed to produce an epic short-squeeze? We have the basic setup for it now: high percentage of shares owned by shorts (even after a recent 50 point rise), considerable room for the price to appreciate, and great long-term outlook for Tesla. What will be the short-term event that causes shorts to panic, though? My thoughts in order of likelihood:
1) fabulous response to Model X reveal that includes rapidly rising order backlog and reviews of Model X that rival the previous reviews of Model S
2) a white swan event none of us predicted
3) a Tesla announcement that cash-flow has turned strongly positive, even with the current capex
3) a stellar quarterly ER with higher than predicted deliveries plus 30% GM
4) many analysts making substantial increases to their PTs
5) Causalien going four months without food poisoning
Your thoughts?

Basically the X.

I'd like to see Tesla start a constant stream of announcements about:

1. The X, much like Geroge Blankenship's posts leading up to the first Model S' being delivered.
2. A weekly (?) announcement of a significant stationary storage partner and an explanation from them about why they chose Powerpack. For example:
. Utility
. Large Corporation
. Large High Tech
. Large Governmental Agency
Each post would widen the audience and deepen the case for Powerpack, and function to attract like entities. I'm sure we all thought, holy crap, they're doing Amazon!?! Well imagine one week an announced partnership with PG&E, then Citicorp, then Apple, then the state of Texas (ok, kidding). But you get it. After a half dozen of these an inexorable inevitability would set in with the shorts - we're screwed. There'd be a short stampede if they announced a deal with an Apple.

 

[AlMc]

The big short-term trading question on my mind right now concerns what will be needed to produce an epic short-squeeze? We have the basic setup for it now: high percentage of shares owned by shorts (even after a recent 50 point rise), considerable room for the price to appreciate, and great long-term outlook for Tesla. What will be the short-term event that causes shorts to panic, though? My thoughts in order of likelihood:
1) fabulous response to Model X reveal that includes rapidly rising order backlog and reviews of Model X that rival the previous reviews of Model S
2) a white swan event none of us predicted
3) a Tesla announcement that cash-flow has turned strongly positive, even with the current capex
3) a stellar quarterly ER with higher than predicted deliveries plus 30% GM
4) many analysts making substantial increases to their PTs
5) Causalien going four months without food poisoning
Your thoughts?

IMO the short squeeze would be guaranteed if TM announced a partnership on GFactory 2 in US and #3 in Europe. The partner being rich in 'cash'...Think Google or Apple. While i may have to gargle 3-4 times daily to get the bad taste out of my mouth...even BP.

The influx of cash and a big name partner would cause a run for the door by the shorts


Another alternative: Do what many are clamoring for and borrow money from German banks. Another 1-2 billion should do.

 

[surfside]

good discussion re: short term movement. i'll add to the list a significant update at the shareholder meeting, where they could give any number of updates regarding:

i) expected cash needs and the timing and cadence of free cash flow
ii) additional tesla energy customers
iii) update on new gigafactory partners and/or ability to increase production capacity of gigafactory 1
iv) model x reveal timing

i also think it is possible that as folks let tesla energy related information from the conference call sink in over the weekend (and potentially the announcement from the italian company).

given the potential for a short squeeze, i bought some june 12th $237.50 calls today to try to capture upside between now and after the shareholders meeting.

surfside

 

[EnergyMax]

Getting over 12k deliveries/quarter would help. Evidence of 2k deliveries/week would help. Taking orders for the PowerPack on the website would help, with people going into production and having a several month backlog.

 

[mrdoubleb]

IMO the short squeeze would be guaranteed if TM announced a partnership on GFactory 2 in US and #3 in Europe. The partner being rich in 'cash'...Think Google or Apple. While i may have to gargle 3-4 times daily to get the bad taste out of my mouth...even BP.

The influx of cash and a big name partner would cause a run for the door by the shorts


Another alternative: Do what many are clamoring for and borrow money from German banks. Another 1-2 billion should do.

You know I bet that all of the boys with big cloud operations and data centers for search engines like Amazon, Microsoft, Google are very much interested in solar + powerpack. Well we already have Amazon on board.

Any of these are potential partners for GF2. An announcement luke that would shoot TSLA to the moon.

 

[TSLAopt]

The big short-term trading question on my mind right now concerns what will be needed to produce an epic short-squeeze? We have the basic setup for it now: high percentage of shares owned by shorts (even after a recent 50 point rise), considerable room for the price to appreciate, and great long-term outlook for Tesla. What will be the short-term event that causes shorts to panic, though? My thoughts in order of likelihood:
1) fabulous response to Model X reveal that includes rapidly rising order backlog and reviews of Model X that rival the previous reviews of Model S
2) a white swan event none of us predicted
3) a Tesla announcement that cash-flow has turned strongly positive, even with the current capex
3) a stellar quarterly ER with higher than predicted deliveries plus 30% GM
4) many analysts making substantial increases to their PTs
5) Causalien going four months without food poisoning
Your thoughts?

Great discussion...I am also hoping for another epic short squeeze...Monday I believe we get updated numbers from NASDAQ, but the release on May 29th is what I'm even more interested in.

Another stock with a somewhat similar story from a short thesis gone bad is AMZN...always reinvested revenues to maximize growth.
can we learn anything from the last 5-10 years of how AMZN traded? It was highly shorted for a long time and has had a ridiculous return over the past 10 years especially. Were there specific events that caused any short squeezesduring that time frame?

 

[Gtoffo]

Let's remember that for an epic squeeze to happen like good old times we need relatively FEW sellers and a bunch of shorts all deciding to cover at once.

I feel like the "weak longs" are more today than they were in the past....a lot of profit taking every time we see significant movement. And currently there are still a few thousand shares to be sold short.

(It is possible that those shortable shares might be being used to sapiently cool down the stock in the last few days. Some data and ideas needed here The continuous 70 million TSLA short.)

This means that covering shorts can still find sellers to buy their shares back from = no short squeeze.

- We need a white swan event (>5% movement of the stock) with a big influx of new buyers to get a real squeeze. The movement would scare the shorts and the new buyers would compete with them for the shares tipping the demand->supply equation. This might not be enough though. April 27 was such an event but no squeeze. Maybe larger swings are needed (>10%) and decisive movement over more than 1 day.

- OR we need to see the sortable shares go down to 0 like old times. At that point the chances of a short squeeze really go up as the shorts don't have any ammo left to manipulate the stock and control the disproportionate demand (No new shorts can enter reducing the number of sellers).

I think the last scenario might be the real requirement with TSLA to see an "explosive" short squeeze. In any case the large amount of shorts helps the stock....as the short squeeze might be more gradual but still contribute to the price rise as long as the trend and momentum is UP.

 

[Johan]

With regards to further squeezing: remember that TSLA squeezed from 40 to 120 (300%) and then from around 150 to 290 (100%). BUT to squeeze now from 240 to what, 400? Not so sure. In 2013/2014 TSLA was severely underpriced. It still is, IMO, but not as underpriced as it was.

In other words one ingredient needed for an epic squeeze is that the underlying stock is not only heavily shorted but also misunderstood and undervalued. This was more true in 2013/2014 for TSLA than now.

 

[AlMc]

Short squeeze discussion is a good one. I don't see anything in the near term (3-4 months) that will trigger a second tsunami of hurt. We may get many small 'waves' that slowly push the stock price up but nothing in that time frame that could cause it unless we do have a partnership with a cash rich company or another cash raise...either of which combines with GF2 and possibly GF3 announcement. If we still have significant shorts and Q3 or Q4 ER shows significant positive cash flow then we get the tsunami.

edit: I agree with Johan. The price was significantly undervalued in 2013/2014, hence the ability to double. Doubling now would take us to $460....possible but unlikely.

edit#2: The good news is that there is significantly less risk that TM fails. So, we are getting less reward for less risk.

 

[ZachShahan]

source Bloomberg: {NSN NNWDKT6KLVRK<Go>}
an extract.

fail. lol

Bloomberg's been losing points in my book of trust lately.

- - - Updated - - -

And I really want to focus on this, because as a shareholder I think this is the most likely to *really* cause major change in the fundamentals of how the company is evaluated and solidify shareprice as a real number. Yes EPS is important and will come, but cash flows is the first major step in the right direction of stopping all the cash burns (which would ultimately lead to the death of Tesla if they didn't turn it around... that or more rounds of funding... neither is a pleasant thought.) So forget the X, forget the Stationary Storage. Forget the Model 3. Yes, as a customer those are important and are needed to help the company stay in business (because if noone likes your products you are doomed) but the cash flows solidfy that not only do you have amazing products, but they are extremely profitable products.

This will be data that the financial guys (even the shorts) will have to acknowledge and get behind, and will raise everyone's PTs (even BofA)

Agreed. This feels a lot like when the stock was ~$30/share to me. Not saying it's really equivalent, but for those of us who follow Tesla closely, everything looks in order for a good financial turnaround and it just seems obvious the stock is going to fly when that happens. We'll see, but I'm looking to double down rather quickly.