Short-Term TSLA Price Movements - 2015

[dha]

Hi. Serious question. Can you please explain to a noob why this is a good opportunity now? I mean, less than a week ago on a Wednesday, it hit about the same price point. I get that the macro change today is the VW emissions gate and the Apple car rumor. But are those two events convincing enough to make that price look like a bargain now? Would it not have been a bargain a week ago as well? Not trying to troll or anything, just want some perspective among you experienced traders. Thanks!

I don't mean to speak for others on this board, but to me, the sudden release of the WSJ piece during a strong rally and the subsequent drop in share price absolutely REEKED of price manipulation / a coordinated bear attack. I've seen enough of these in the past to make a pretty good guess at how it would play out, and I turned out to be right. Once the initial panic subsided (around $256 - $258) volume began to dry up and there wasn't much more movement in the stock. I saw this as a signal that the bears had run out of ammo and that the price would most likely rebound once the market realized that the selloff was unwarranted.

Around that time I scooped up $270, $265 and $260 calls for $2.50, $2.40 and $4.00 respectively. As soon as we bounced back to the low $260's I sold the $265's and the $260's for $3.50 and $6.00, respectively. I sold the $270's right before close for a slight loss, and wound up booking a net profit of just over $3,000 today.

 

[MartinAustin]

Vaporware du jour, apple will never manufacture a car, just my opinion.

I think they are manufacturing a "car computer system," much more extensive than CarPlay, that they will then try to sell to other manufacturers. Anyone who has looked at iDrive or My Ford Sync or whatever... will know that there is a lot of effort being duplicated across the industry, mostly very messily, and nobody is trying to revolutionise the car apart from Tesla or Google at this point.

As for the "no dealers" angle, well, that would help Tesla, and confound critics who are aligned with dealer franchises and used to being able to take pot shots at Tesla by supporting their rivals: along comes another rival that also doesn't want to sell through for-profit middlemen, and you will see the smoke coming out of their ears while they figure out what to do.

In fact if the automobile business is going to be truly disrupted, as we all expect, it will mean the end of the standard dealership model. I would guess that no completelynew entrant into the business will want to sell through for-profit middlemen. It's only existing manufacturers who are tied to them.

It'll be great watching the Murdoch-owned Wall Street Journal squirm as they try to figure out ways to support Apple and car dealers.

 

[austinEV]

Hi. Serious question. Can you please explain to a noob why this is a good opportunity now? I mean, less than a week ago on a Wednesday, it hit about the same price point. I get that the macro change today is the VW emissions gate and the Apple car rumor. But are those two events convincing enough to make that price look like a bargain now? Would it not have been a bargain a week ago as well? Not trying to troll or anything, just want some perspective among you experienced traders. Thanks!

Usually you would be right to be skeptical about a run of a few days being erased. We might say "buy this dip!" with a million exclamation marks and not really know if it will continue down. But in this case it feels like it will quickly resume going up because the X reveal is on Friday so there could be runup the rest of the week or honest to goodness good news related to the release event. But more importantly with VW's scandal, the pure EV play SHOULD surge up. As others have guessed, it is a sure thing that every automaker will get a second look on emissions testing. Tesla stands to gain from this scandal one way or another.

 

[cgiGuy]

... because the X reveal is on Friday ...

Next Tues, 29 Sep.

 

[FluxCap]

Usually you would be right to be skeptical about a run of a few days being erased. We might say "buy this dip!" with a million exclamation marks and not really know if it will continue down. But in this case it feels like it will quickly resume going up because the X reveal is on Friday so there could be runup the rest of the week or honest to goodness good news related to the release event. But more importantly with VW's scandal, the pure EV play SHOULD surge up. As others have guessed, it is a sure thing that every automaker will get a second look on emissions testing. Tesla stands to gain from this scandal one way or another.

I bought a few weeklies today on the free "Apple Vaporware ETA 2019" dip, couldn't resist. Should be an interesting week.

I'm less confident about overall market, but TSLA should show strength this week.

 

[doggusfluffy]

Usually you would be right to be skeptical about a run of a few days being erased. We might say "buy this dip!" with a million exclamation marks and not really know if it will continue down. But in this case it feels like it will quickly resume going up because the X reveal is on Friday so there could be runup the rest of the week or honest to goodness good news related to the release event. But more importantly with VW's scandal, the pure EV play SHOULD surge up. As others have guessed, it is a sure thing that every automaker will get a second look on emissions testing. Tesla stands to gain from this scandal one way or another.

We're also getting some sort of preview as to whatever Tesla has planned for the old Solyndra factory which the event on the 29th is being held at.

 

[CyberDutchie]

Tesla drone concept. Is Tesla now getting into consumer toys? :wink:

More here: Flying Hobby Sharing The Tesla Drone

 

[MikeC]

Tesla drone concept. Is Tesla now getting into consumer toys? :wink:

View attachment 95069

More here: Flying Hobby Sharing The Tesla Drone

This is not created by TM is it? Seems like a major trademark violation.

 

[sunhelm]

... wound up booking a net profit of just over $3,000 today.

Thanks for your perspective. This hearkens to a similar but reverse situation when the stock price was artificially pumped up due to a well timed MS article and the secondary offering. Ahh, it is what it is so I might as well learn to play the game and surf the rise and fall caused by news induced tides.

 

[EarlyAdopter]

This is not created by TM is it? Seems like a major trademark violation.

No. Just a hobbyist with some good CAD/CAM skills.

 

[FredTMC]

Bob Lutz shooting his mouth off again on CNBC today. Claims that tesla is widely unprofitable.

 

[sunhelm]

Usually you would be right to be skeptical about a run of a few days being erased. We might say "buy this dip!" with a million exclamation marks and not really know if it will continue down. But in this case it feels like it will quickly resume going up because the X reveal is on Friday so there could be runup the rest of the week or honest to goodness good news related to the release event. But more importantly with VW's scandal, the pure EV play SHOULD surge up. As others have guessed, it is a sure thing that every automaker will get a second look on emissions testing. Tesla stands to gain from this scandal one way or another.

Thanks. Opportunities like these I guess requires some attention and great timing. I agree it seems we're on our way (this week at least) to a nice runup, with a nice boost from the emissions scare.

 

[MikeC]

Bob Lutz shooting his mouth off again on CNBC today. Claims that tesla is widely unprofitable.

Sad to see a dinosaur struggle to remain relevant.

 

[speedracer]

I don't mean to speak for others on this board, but to me, the sudden release of the WSJ piece during a strong rally and the subsequent drop in share price absolutely REEKED of price manipulation / a coordinated bear attack. I've seen enough of these in the past to make a pretty good guess at how it would play out, and I turned out to be right. Once the initial panic subsided (around $256 - $258) volume began to dry up and there wasn't much more movement in the stock. I saw this as a signal that the bears had run out of ammo and that the price would most likely rebound once the market realized that the selloff was unwarranted.

Around that time I scooped up $270, $265 and $260 calls for $2.50, $2.40 and $4.00 respectively. As soon as we bounced back to the low $260's I sold the $265's and the $260's for $3.50 and $6.00, respectively. I sold the $270's right before close for a slight loss, and wound up booking a net profit of just over $3,000 today.

Great work! Were those weeklies?

 

[dha]

Great work! Were those weeklies?

Yessir. Could've made some more $$ if I'd held all of them until just before close, but I was very happy to close them and book a tidy profit for 30 minutes' work.

 

[MitchJi]

I know there are some short-term bulls here, but is there a particular reason to think TSLA will be going up in October - December? There won't be any big news, and there will be uncertainty about the Model X ramp and when Tesla will be cash flow positive again. I've been gradually unloading my call options and after the X excitement dies down I'll be sticking to holding stock and selling covered calls for a while.

The reveal could have a negative impact if bad news about the ramp comes out (IMO 20% chance). I think we can count on someone asking. OTOH if the reservation list starts shrinking quickly in October, November and even in December that will have a positive impact IMO.

Sensible interview:
http://finance.yahoo.com/video/could-apple-buy-tesla-214000355.html

Could Apple buy Tesla?
CNBC Videos by CNBC Videos
2:49 mins
Should Apple buy Tesla? Andrea James, Dougherty & Co., weighs in on Apple entering the automobile space.

 

[adiggs]

I think they are manufacturing a "car computer system," much more extensive than CarPlay, that they will then try to sell to other manufacturers. Anyone who has looked at iDrive or My Ford Sync or whatever... will know that there is a lot of effort being duplicated across the industry, mostly very messily, and nobody is trying to revolutionise the car apart from Tesla or Google at this point.

As for the "no dealers" angle, well, that would help Tesla, and confound critics who are aligned with dealer franchises and used to being able to take pot shots at Tesla by supporting their rivals: along comes another rival that also doesn't want to sell through for-profit middlemen, and you will see the smoke coming out of their ears while they figure out what to do.

In fact if the automobile business is going to be truly disrupted, as we all expect, it will mean the end of the standard dealership model. I would guess that no completelynew entrant into the business will want to sell through for-profit middlemen. It's only existing manufacturers who are tied to them.

It'll be great watching the Murdoch-owned Wall Street Journal squirm as they try to figure out ways to support Apple and car dealers.

This insight about the dealer middlemen is important. I would put things more strongly - the next piece of the auto industry to be disrupted won't be the manufacturers - it will be the dealers (with a high likelihood that the dealers will take down 1 or more manufacturers with them). Outside of Tesla, the manufacturers and the dealers exist in a value network. The important element that I see in that value network is that you and I aren't the customers of the manufacturers - we're the consumers of their product, but their customer are the dealers.

And thus the dealers must be satisfied customers of what the manufacturers are selling, or they won't sell it on to us, the consumers. That provides, in a sense, a mixed message for the manufacturers. Consumers tell them they want to be electric and their customers tell them that electric cars don't sell. Without Tesla around, there would be nobody to naysay the dealers.

I encourage everybody interested in this dynamic to be reading Innovator's Dilemma and Innovator's Solution. I've promised previously and will reiterate that promise now to more fully develop the idea really soon now(tm).

 

[MartinAustin]

Sensible interview:
http://finance.yahoo.com/video/could-apple-buy-tesla-214000355.html

Yes, thank goodness they got someone on there who talked sense, rather than repeating that "Apple Car coming in 2019 !!! We tell you why this has Tesla investors running for the hills after these commercials" nonsense all day.

I think a conciliatory tweet from Elon, something like "Looking forward to seeing the Apple Car. The more BEVs, the sooner we get to zero emissions globally" - would help to indicate to the investment community that Tesla is comfortable being in a crowd of BEV makers, not going it alone and worrying about competition.

Two companies producing half a million EVs per year each will represent 1.25% of all auto production worldwide. Plenty of room, neither one will be threatening the other.

 

[dakh]

Two companies producing half a million EVs per year each will represent 1.25% of all auto production worldwide. Plenty of room, neither one will be threatening the other.

This might be correct long-term if we assume eventually 100% new vehicles will be electric. Short to medium term it's a big question what the size of the addressable market really is given the technical limitations of electric vehicles. Chances are technology will progress at a rate that will even in short term allow enough addressable market expansion without saturation. But that's not a given.

 

[vankie]

To his credit, Lutz was one of the more progressive old timers when he was at GM. But still... It is amazing that so many seasoned executives fail to see the obvious substitution ICE by EV in the next couple of decades. Especially stunning was his comments on profitability, which is really a simple function of competitive landscape. When an entire industry collectively suffers from diminishing margins, it is usually because you have a crowded field and there is no differentiation so everyone just compete on price and drive down margins. That applies to ICE, but it won't apply to EV anytime soon, at least not for the first couple of decades. There will be plenty of margin that Tesla (maybe Apple, too) get to enjoy before EVs become a commodity, as there will be plenty of performance metrics, features and subtle user experience treats that only Tesla can delivery at an affordable price. Apple would never choose to enter EV if they don't see an opportunity to harvest iPhone-like operating margins from that business. It shouldn't be this hard to figure out -- it's just economics.

Sad to see a dinosaur struggle to remain relevant.