Tesla is a volatile stock that sometimes climbs like a Falcon 9 and sometimes dives like a meteor. It will continue to be volatile for quite some time. Here's a graph of the past year and a half of trading, with important events highlighted.
In summer of 2015 TSLA was challenging the All Time Highs of Sept, 2014. Model X deliveries were promised to take place before the end of the 3rd quarter. As the end of Q3 2015 neared, troubles with Model X began to surface and the delivery event included only a half dozen vehicles delivered to trusted individuals a few days before quarter's end. Clearly Model X had its problems and the stock began reflecting these problems.
In January of 2015 Tesla began a nosedive with the rest of the market, fearing a recession. Compounding the problem was continued weakness in Model X production.
* On February 10, 2016, Tesla held its 4Q 2015 ER. The numbers weren't so great, but the guidance was very positive, including better GMs, cash flow positive (with ABL) after March, Non-GAAP profitability for 2016 with GAAP profitability in Q4 16, and Model 3 on schedule with a March 31 reveal scheduled. That's all it took. TSLA reversed the next day and climbed like a Falcon 9 through the Model 3 reveal event and subsequent days of watching the reservation numbers grow higher.
* Alas, Elon announced on May 4 that Tesla would move up its 500,000 vehicles/yr. goal from 2020 to 2018, and investors became worried. Plans for cash-flow positive and likely for profitability went out the window and rapid growth became the focus. TSLA fell to below 210. Tesla recovered some in late May with an equity raise and then recovered into the 230s in June when investor Ron Baron spoke bullishly about Tesla, but then the bottom fell out when Tesla announced intentions to merge with SolarCity on June 21, which led to a $27 plunge in SP after hours.
* In early August TSLA recovered from the SCTY plunge, but prices peaked right around the time of the 2Q ER. Numbers were a miss, but guidance was encouraging and TSLA held its value fairly well for a few weeks.
* In late August a drop in SP began. One side of the story is that the drop was just a delay reaction by investors of the risk involved in expanding at breakneck pace while not understanding the cash requirements that SCTY might require. Another consideration is that during this period, short-sellers were using a particularly effective method of selling into the stock during the low-volume afternoon hours and methodically walking the SP down.
And so we reach the present day. The recession of early 2016 never happened and Model X production woes have been cured. Tesla delivered epic numbers of vehicles in Q3 and has a shot at GAAP profitability this quarter, plus cash flow positive. Even with this outlook, large numbers of shorts continue to be a drag on the stock price and Elon Musk would likely do an equity raise if the stock price was at an attractive level. That raise would help to significantly derisk the coming year and allow Elon to remove money issues from his plate of concerns. It is my belief that the main reason we see so many events scheduled for the next month is to achieve a higher SP, and I believe Musk will succeed. I believe the goal of the Oct 26, 28, and Nov 1 presentations is to not only encourage longs to buy TSLA but also to scare a good many shorts out of their position, which will not only diminish the brashness shorts have shown lately but also send the SP that much higher. It'll all be about showing that the risk of owning Tesla have been overblown. It's about instilling the same kind of optimism that came about from the Feb 10 Earning Report, but this time sticking with the plan and delivering the goods without too many big surprises.
