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Short-Term TSLA Price Movements - 2016

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Normally I might sign on to a viewpoint like this. To state your point another way, pessimism on TSLA makes it so a beat is shrugged off, because it is under a dark cloud.

BUT, I don't think that is what is going on. The TSLA story is completely, mind-blowingly positive if you believe the story Musk is telling. It is getting harder and harder to do so the more he promises. The sizzle/steak ratio is at an all time high, and the stock is suffering due to it. THAT is what caused the selloff last week, the sizzle/steak ratio got out of hand. I believe the stock price will recover with any substantial improvement to the denominator in that ratio. If the Q2 deliveries are a stout beat, that is steak. That is saying "look guys, we talk a lot but we also deliver." ANY for-sure, in-fact, present-case accomplishment in TSLA fundemental financials will be a force multiplier. Reducing that S/S ratio is key now.

This is why I have been annoyed with Musk and Co in the last 6 months for launching each new promise campaign. That sends the ratio out of whack. They can fix the ratio by accomplishing great, concrete things or by being quiet, the latter is way easier. The market is in no mood for sci-fi sounding plans.

Plus (12:30) TSLA is damn near recovered. Go team.

Edit: up 0.5%... any specific news item? Looks isolated to TSLA. some TMC member go buy a million shares?

I like the steak analogy. I think part of the big promises thing is that they still don't really do advertising. They rely on sound bites and free media coverage, which bold statements lend themselves kindly to. I'm a big fan of under promising and over delivering most of the time, but if you're going for free advertising big promises get press.
 
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As @Gerardf pointed out in another thread, SA permabear Paulo Santos changed his position from "short" to "neutral."

http://seekingalpha.com/article/3984582-tesla-likely-see-margin-improvement

Absent a better explanation, I'm going with ripples of fear (if not outright terror) spreading like wildfire through shortlandia from this shift. ;)

Quotes (shamelessly lifted from @Gerardf's post):

"There are reasons to believe Tesla is going to see visible gross margin improvement."

and

"The short thesis is now entirely based on coming competition, but true competition will only arrive during late 2017/2018. That's too far away for it to influence most investors. A better timing will probably be had closer to that event."

There are some good SA contributors that provide insight among the many, Santos seems like more of a pundit, it would be surprising if he could move markets but who knows.
 
Was it triggered by this:
Tesla Model 3 build plan is ambitious, but not impossible since Chinese automakers already did it [Report]

<Snip>
Managing Director at Cairn ERA, describes his conclusion based on the report in an email to Electrek:

Based on our analysis, three of the top ten car companies in China reached or exceeded the growth rate that Tesla will need to reach over the next three years. We think the most likely scenario is for Tesla to produce 450,000 cars in 2018.

While some of China’s automakers have outpaced the growth rate required for Tesla to achieve 500,000 units in 2018, Jaffe remains more conservative since the average growth of the ten domestic and non-joint-venture companies is 85.9% and if applied to Tesla, it would result in the production of 340,000 cars in 2018. He states that 500,000 vehicles in 2018 is still “plausible, if aggressive”.

Jaffe explains why outpacing the average Chinese automaker growth rate is feasible:

“It is not the most likely scenario, however. The reason is the nature of the product. The Tesla Model 3, which will comprise the majority of Tesla vehicles manufactured in the year 2018, is a significantly cheaper car to assemble than any of the Chinese cars made by the ten automakers surveyed in this study. Tesla has revealed that there are approximately 8,000 discrete parts in a Model 3. Any internal combustion vehicle, even the cheapest sub-economy model, will have at least 20,000 discrete parts. An internal combustion engine (ICE)-based drivetrain is and always will be dramatically more sophisticated and complex than any electric drivetrain vehicle.”
<Snip>
 
As @Gerardf pointed out in another thread, SA permabear Paulo Santos changed his position from "short" to "neutral."

http://seekingalpha.com/article/3984582-tesla-likely-see-margin-improvement

Absent a better explanation, I'm going with ripples of fear (if not outright terror) spreading like wildfire through shortlandia from this shift. ;)

Quotes (shamelessly lifted from @Gerardf's post):

"There are reasons to believe Tesla is going to see visible gross margin improvement."

and

"The short thesis is now entirely based on coming competition, but true competition will only arrive during late 2017/2018. That's too far away for it to influence most investors. A better timing will probably be had closer to that event."
article-2535709-1A7D371000000578-703_964x531.jpg
 
Brexit is not going to be a big influencer. #Regrexit

the third option is instead of leaving completely, they can make an arrangement that is similar to Norway Norway–European Union relations - Wikipedia, the free encyclopedia

In that Norway isnt part of the EU but has very strong ties and basically acts as tho they were. UK could basically do the same if they are smart enough not to make the same mistake twice.

While that's how things may settle in the log run, there is one big problem with that idea in the short run. The rest of the EU has every incentive to make the UK suffer, because if they just let them leave while keeping all the benefits, this will embolden all sorts of xenophobic far-right fractions in other countries to seek to leave the EU.

Regarding the TSLA move today, no idea what caused it, but imagine where we'd be without macro headwinds?
 
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Interestingly, since Thursday three long time Tesla bears have changed their opinions from SELL to HOLD/NEUTRAL. This is the usual necessary step before recommending BUY.

June 23: Ephraim Levy of S&P Global Market Intelligence
June 24: Ronnie Moas of Standpoint Research
June 27: Paulo Santos who frequently contributes Tesla articles to Seeking Alpha

This could have begun the shakeout of short sellers. Smart ones may have been taking advantage of recent low prices to cover their short positions.
 
Interestingly, since Thursday three long time Tesla bears have changed their opinions from SELL to HOLD/NEUTRAL. This is the usual necessary step before recommending BUY.

June 23: Ephraim Levy of S&P Global Market Intelligence
June 24: Ronnie Moas of Standpoint Research
June 27: Paulo Santos who frequently contributes Tesla articles to Seeking Alpha

This could have begun the shakeout of short sellers. Smart ones may have been taking advantage of recent low prices to cover their short positions.
UK is in the box seat. The EU huffs and puffs but the fact is the UK has a massive trade deficit with France and Germany, so the UK is a hugely important market for the Germans and the French (The UK buys close to 900,000 German cars a year alone).

The Germans and the French need the UK market more than the UK needs their markets. So the EU will accommodate the UK any way they can.
 
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