Short-Term TSLA Price Movements - 2016

[austinEV]

Really brilliant comment.

I think the elephant in the room here is that people think they know what the news is and are assuming a sell on the news but on average I think people really don't know what the news is and that assumption is going to get punished. This isn't a case of hype about a known or well-guessed outcome - like AWD or the Model X - and as a matter of fact TSLA did go up on the Feb 2012 news of the 2012 Model X unveil and Model S reservations spiked to go with it - and the unveiling of the PowerWall and PowerPack seeded the main 2015 rally that peaked at $279.xx with another top at $282.xx

Cars are such emotive things that have been subjected to $billions upon $billions of incessant public brainwashing - such that it is for example common knowledge and received wisdom that you can't have a car that looks like a Ferrari or a Maserati without paying Maserati or Ferrari prices for it - but there is no such inherent cost-penalty linked to pretty shapes to bend metal into unless you have to design a mid-sized car around an ugly lump of an engine block in the front assuming you still want seats in the back or when your main design objective is to stop the cheap models in your lineup appealing to wealthy buyers that would pay more if it wasn't so damned ugly. Look at the BMW i3 and the GM Bolt. Did they need to look like that? Yes they did - or else they would attack sales of better looking ICE vehicles instead of confining all possible interest to a tiny niche of hardened tree-huggers. Tesla does not have either of those problems - neither the engine block (and ugly radiator grills or exhaust ports) to work around in the design nor the desire to protect sales of more expensive ICE vehicles. Tesla actively wants to compete with ICE vehicle sales to the max and there is nothing and no incentive to stop them. Most likely the Model 3 is nominally $50K - $100K more beautiful than anything on the road at its price point because there is every advantage for Tesla in doing that and no downside - elegance and aerodynamics tend to go hand in hand and if you're going to bend metal anyway you might as well bend it pretty. That is just item number one on the list of unimaginable shock and awe.

Anyone that says that a $35K car can't look like a Maserati is only saying that because it has never happened before - i.e. the very definition of an expert trap. Seriously, auto industry experts will howl and declare that Tesla is inexperienced and stupid to threaten the cannibalization of its $100K cars with such a beautiful machine but in the eyes of the mainstream consumer - here is a $100K car for $35K. A total no-brainer compared to a $35K ICE machine while Tesla's $100K machines take on a whole new mantle of brand prestige by association for those that can afford it.

Next up, performance you can't buy for the money anywhere else. Unmatched running costs without settling for a tiny-engined econobox or a slow as a snail hybrid. Interior space, cabin technology, OTA network integration, autonomy options, safety and handling, no dealers, no emissions, no pay at the pump....

I have absolutely no idea how Toyota hopes to maintain customer loyalty to its Prius division (already 11% down in 2015) that and half of its Lexus division two weeks from now and Toyota and Lexus and all of the shorts that swear by them have absolutely no clue what is about to hit them. As for Toyota's hydrogen FCV push and shunning of EV technology, that I expect will hurt the entire Toyota brand and descend rapidly into a business-school textbook example of corporate mismanagement for the ages.

I would maintain that the way to play this is to buy any pre-annoucment dip and go long and strong through this particular event.

Disclaimer. This is my private opinion that is only as good as the reasons given for it and the reasons given are subject to error and omission unknown to me as well as omissions known to me and excluded for brevity any of which could prove material and render my opinion materially wrong. Not investment advice.

Geez I hope the model 3 isn't as good as a 100k car or no one will buy the model S! As I posted above I think TM knows this and will have an answer for differentiation on the 31st. The evidence is the known 100kWh version, and the "changes" being communicated about pricing and such. So at a minimum we should see on "3 day"

1) crushed velvet jacket
2) unveiling the car, looks nice.
3) specs for car, probably exactly what we expect (200 mile range at bottom end, something else probably 260 top end)
4) some new feature comparable to the big air filter. Nothing FWD fancy, but some feature to chew on no one expected.
5) comment on reservation numbers, maybe. If there is it will be like "OMG it's 40k" (audience sort of woo hoos, everyone expected higher) (I think partial day reservations, from live stores will be less than impressive--just has to be)
6) one more thing.... the model S is getting it's own changes! New front end revealed, new feature or two, better console, another cupholder, and 100kWh ("By the way, they have been shipping for n months! All 90's were really 100"). Base price of S is now 7k higher since they know the top end 3 will be 65k and they need to make sure they don't overlap.


This doesn't even include any zany theories. I really think model S differentiation is baked into the 3's existence. Otherwise S buyers would start to wait-and-see for 1-2 years.

Tin foil theory:
7) "By the way, Q1 shipments were 17k since we did so many X's". After all, that announcement is due soon anyway, maybe it makes sense to do it here. This signals that they DO care about the stock price since they could have just waited. If the news was good, they would know it now, and this would be the way to do it I think.

 

[chickensevil]

comment on reservation numbers, maybe. If there is it will be like "OMG it's 40k" (audience sort of woo hoos, everyone expected higher) (I think partial day reservations, from live stores will be less than impressive--just has to be)

Have we really worked ourselves up so much that 40k would be a disappointment? That is 2x the amount of roughly the peak deposits of the Model X after 4 years... and like 2.5x the Model S.... Why would that be a disappointment for day one in store numbers without Online taken into account? That would be really fantastic! I would be over the moon on just 10k in store before the event. This a car people are putting money down on site unseen. No matter what the number is, that is a good thing and not a bad thing. The important thing to watch for is what the numbers are *after* people see the product because that would be either really great reception of the product, or really sad reception of the product.

 

[JRP3]

"By the way, they have been shipping for n months! All 90's were really 100")

This doesn't even include any zany theories.

Um...

 

[Papafox]

Today's battle is whether TSLA closes above the 200day, going into the 3-day weekend. Shorts will do their best to keep us below the 200 day (I hear it is about 228 today) and longs hope to jump that hurdle.The 200 day is important because many traders consider the technicals, and it would be good to have people pondering such a positive development over the three-day weekend.

Working in our favor is max-pain, which stands at 230 today. If volume is light in the final hour of trading, we could see some lift from max-pain. The tug-of-war is on!

Edit:
Looking closer at the max-pain chart, 227.5 looks almost even with 230, and thus I don't think there's much reason for max-pain to be a factor today.

 

[sub]

I might play with exactly that idea, going high risk, to do this:

1. Go in 100% of my cash price into TSLA right after the downturn after the announcement.
2. Wait for a month to make sure that it doesn't plummet, tanking my stock.
3. After confirmation that it won't just completely reset to 155 within a few weeks, use the margin in my brokerage account to withdraw cash at my expected federal income tax for 2016 (since I have a $232K capital gain and a little income with no deductions at all beyond standard deduction) -- about $81K, or 37% of my brokerage account.
4. Install solar panels costing $81K (including as much solar panels and storage as I can get), to cover my federal tax bill.
4. Stay long in TSLA, riding every single up and down, all the way out to February - March, 2017.
5. Try to work employment as much as possible, at a net income of around $1,200 per week that I do work -- I can usually pull in a gross of $50K-$70K a year, so a net of around $25K-$35K after taxes.
5. SELL ENOUGH TO PAY MY CALIFORNIA TAX BILL WHEN I'M UP OR EVEN. Hopefully when I'm up. I might sell right on April 5th to turn it into "long term capital gains" for a lower federal tax rate.
6. Pay my California tax for this year right then.

This is a way to get in trouble with two places at once, right? The California tax man AND the brokerage. It's super high risk. Will the brokerage even let me do this? I could always try to take out a loan on my solar panels if I have to cover a margin loss. The upside is that I could end the year with minimized taxes AND money to invest in my future. The downside is I could end up with less money than I started, if it loses more than about a third of its value. The solar ITC makes a big deal -- I could lose up to rough-off-the-top-of-my-head 20% and still come out ahead due to the ITC 30%, if I don't get jabbed filling in the blanks.

This would mean letting this play out for a WHOLE YEAR, during which time I could not cash out and buy property to build a home on. It would also mean squeezing relatives for space to put solar panels, a tall order since right now I'm being quoted a maximum of $30K-$50K for the biggest solar system that will fit on nearby relatives' homes. California gets lots of sun, but Oregon in the trees? Not so much ... I'll have to ask my brother a bit. Alternative is getting a cheap desert lot to put up my solar panels and just selling low cost electricity to PG&E, but actually, unless my family benefits from the energy directly, selling it at cost to PG&E is a losing game. But, I could have the panels WORKING for me at least, and then when I do buy property, physically reinstall them myself in the new property (hopefully not ticking off the ITC paperwork). That seems like a pretty safe bet from a lot of perspectives, since I would own the land, but it would require some seriously cheap desert land next to PG&E, and that's actually very very very hard to do.

So my question here is: do brokerage accounts let me draw down 40% cash out of a margin account and wire it to my bank? That would cause serious questions, and for good reason. The way I see it is I'm spending it on assets AND tax credits.

I'm being incentivized to create clean energy against my own will. Actually, it's with my agreement mostly, but the timing is tying my hands.

Check the rules on solar, I'm pretty sure you can not just install a massive system and expect the 30% rebate. The system can only produce a certain percentage above what you consume. I have an 8kw system we installed 3 years ago, it produces extra so we use electric heaters in the winter as much as possible to consume our excess rather than using propane and getting a low sell back rate to PG&E. The added advantage to the electric heaters is I can heat one room like my home office during the day rather than the entire 3000 sqft house using our central heat.

 

[replicant]

Geez I hope the model 3 isn't as good as a 100k car or no one will buy the model S! As I posted above I think TM knows this and will have an answer for differentiation on the 31st. The evidence is the known 100kWh version, and the "changes" being communicated about pricing and such. So at a minimum we should see on "3 day"

1) crushed velvet jacket
2) unveiling the car, looks nice.
3) specs for car, probably exactly what we expect (200 mile range at bottom end, something else probably 260 top end)
4) some new feature comparable to the big air filter. Nothing FWD fancy, but some feature to chew on no one expected.
5) comment on reservation numbers, maybe. If there is it will be like "OMG it's 40k" (audience sort of woo hoos, everyone expected higher) (I think partial day reservations, from live stores will be less than impressive--just has to be)
6) one more thing.... the model S is getting it's own changes! New front end revealed, new feature or two, better console, another cupholder, and 100kWh ("By the way, they have been shipping for n months! All 90's were really 100"). Base price of S is now 7k higher since they know the top end 3 will be 65k and they need to make sure they don't overlap.


This doesn't even include any zany theories. I really think model S differentiation is baked into the 3's existence. Otherwise S buyers would start to wait-and-see for 1-2 years.

Tin foil theory:
7) "By the way, Q1 shipments were 17k since we did so many X's". After all, that announcement is due soon anyway, maybe it makes sense to do it here. This signals that they DO care about the stock price since they could have just waited. If the news was good, they would know it now, and this would be the way to do it I think.

8) Announcement of the first partner for the supercharger network. Since Model S/X owners might fear saturation, this would reassure everyone and prove that Tesla is having a large impact on the industry.

 

[Yonki]

I don't think all the 90s actually being 100s is a zany theory at all. It would take some of the sting away from recent customers who "just missed" some of the new features we're going to hear about. 90 is less than 6% higher than 85: after 4-5 years in battery improvements, 6% is the best they can do? And less than a year after a 6% increase they're going to introduce a new pack with an 11% increase?

The more I think about it, the more I think the zany theory is that 90s aren't secretly 100s...

 

[Ulmo]

omg. I could have saved my entire winnings two days ago and had NO penalty. Ugh. I am such a sucker when it comes to being afraid of rules.

And now that you showed me that video, I watched the whole thing, and am even more confused. Adding insult to injury, there's no place in OptionHouse's balances system that tells you the unsettled funds amount, the expected dates of settlement, etc.. Ameritrade seems to have at least the Unsettled Funds balance, unlike OptionHouse. I looked for accounting software two days ago to handle this, but didn't find any.

All this still puts into question whether I would have kept up my gambling don't-sell mentality if I knew the rules didn't matter as much, but now watching this video, it's as if they do matter more than nothing.

I like my strategy now of holding off until after March 31st until getting back in the market. It puts off some of this unsettled potential. OptionsHouse must have made about $1,500 in fees off of my account this month so far, so I think they're in the black for now. They're doing quite well with my learning process, apparently.

 

[larmor]

In other news, VW gets another month to explain why they defrauded their customers. But hey, bears should keep at TSLA, since there is honey in the pot...

 

[Lessmog]

Geez I hope the model 3 isn't as good as a 100k car or no one will buy the model S! As I posted above I think TM knows this and will have an answer for differentiation on the 31st. The evidence is the known 100kWh version, and the "changes" being communicated about pricing and such. So at a minimum we should see on "3 day"

1) crushed velvet jacket

OMG quick, anybody know Elon's haberdasher? Crucial secret stock moving info to be found there!

 

[AlMc]

You ... call it few??

However we each define a 'few '.....I had to work (say it ain't so) and could not follow the stock price early AM...so my 'few' became none.

I am sorry to hear the stories of recent losses for some. I have been there (too often) and feel your pain. Today has been good so far for longs and call holders.

Crazy price action with TSLA. Lots of Pepcid/Beer and Wine needed (not taken all together though)

 

[SBenson]

Geez I hope the model 3 isn't as good as a 100k car or no one will buy the model S! As I posted above I think TM knows this and will have an answer for differentiation on the 31st. The evidence is the known 100kWh version, and the "changes" being communicated about pricing and such. So at a minimum we should see on "3 day"

1) crushed velvet jacket
2) unveiling the car, looks nice.
3) specs for car, probably exactly what we expect (200 mile range at bottom end, something else probably 260 top end)
4) some new feature comparable to the big air filter. Nothing FWD fancy, but some feature to chew on no one expected.
5) comment on reservation numbers, maybe. If there is it will be like "OMG it's 40k" (audience sort of woo hoos, everyone expected higher) (I think partial day reservations, from live stores will be less than impressive--just has to be)
6) one more thing.... the model S is getting it's own changes! New front end revealed, new feature or two, better console, another cupholder, and 100kWh ("By the way, they have been shipping for n months! All 90's were really 100"). Base price of S is now 7k higher since they know the top end 3 will be 65k and they need to make sure they don't overlap.


This doesn't even include any zany theories. I really think model S differentiation is baked into the 3's existence. Otherwise S buyers would start to wait-and-see for 1-2 years.

Tin foil theory:
7) "By the way, Q1 shipments were 17k since we did so many X's". After all, that announcement is due soon anyway, maybe it makes sense to do it here. This signals that they DO care about the stock price since they could have just waited. If the news was good, they would know it now, and this would be the way to do it I think.

Can we dare predict autopilot 2.0 hardware for full autonomous driving?

(software will come later in increments of course)

If that comes through, this event can become the beginning of a strong uptrend.

 

[Ukland Wombat]

on topic

The share price steadily increased for 3 months after the PowerWall/PowerPack reveal a year ago. Maybe theres no post-reveal drop for all-new products as opposed to upgrades (D event) or launches (Model X)?

I don't give much weight simply to the fact of 'new' or 'upgrade'.
I think it is primarily a question of 'is it better or worse than what the market has already priced in?'.

In the case of the M3 reveal, there will also be a huge multiplier effect based around reservation numbers and the implications on the whole trajectory of the company when it has added a mass market product to its luxury offerings.

If a great looking M3 is revealed and then soon after ludicrous reservation numbers are announced, it will beg the question... how can the company ever hope to supply ludicrous demand?

It will need ludicrous growth of course, lest it waste the opportunity it has worked so hard to create. But we don't have a road map for ludicrous growth, that is the elephant behind the curtain. I can see its bulge... "Gigafactories are a product"...

I really want that curtain pulled back...the sooner the better, IMO.
I think SP action will depend on it.

 

[replicant]

Can we dare predict autopilot 2.0 hardware for full autonomous driving?

(software will come later in increments of course)

If that comes through, this event can become the beginning of a strong uptrend.

Can Tesla put the latest sensors in a $35K base model with more than 220+ miles of range? I doubt Tesla can reach full autonomy without LIDAR, contrary to Elon's initial guess... but what do I know.

If they succeed, how will their competitors explain the price of their shitty ICE cars?

 

[Johan]

Great discussion today guys.

When we talk about wether to exit long positions before the announcement or whether to hold through it always helps to mention if were talking about stock or options, and if options are we talking LEAPs, medium term options or short due-date options?

My point is that trying (money wise successfully) to trade a number of these supposedly stock-moving events since 2013 has taught me that we need a BIG pop in stock price for there to be any point in holding shorter term calls through an announcement.

For example let's say you're holding a June16 somewhat OTM call (for a good amount of leverage). Let's pick the $260 strike. Right now with TSLA at $227.65 it has a bid price of 8.45. If TSLA is at exactly this price come end of trading on the 31st I expect the bid to be a tad higher, maybe $10, due to heated expectations (i.e. higher implied volatility). Now if TSLA doesn't trade up at least $20-25 on Apr 1st that call is going to be worth less than the day before. All IMHO.

 

[supratachophobia]

wk057 most definitely forced their hand. I think they wanted to hang onto the P100D nugget until a time of their choosing. Preferably at a time when the stock was low and needed a bit of the usual PR Twitter boost.

 

[SBenson]

Can Tesla put the latest sensors in a $35K base model with more than 220+ miles of range? I doubt Tesla can reach full autonomy without LIDAR, contrary to Elon's initial guess... but what do I know.

If they succeed, how will their competitors explain the price of their shitty ICE cars?

I was referring to the hardware suit on S (and maybe X) actually.

 

[Julian Cox]

Geez I hope the model 3 isn't as good as a 100k car or no one will buy the model S!

Not quite as brilliant as your comment I praised.

I had sought to point out that there is no cost barrier nor incentive upon the Tesla business to make a Model 3 that does not LOOK as good as a $100K + car from Ferrari and Maserati, because bending metal into pretty vs ugly shapes does not make much of any cost difference and there is no engine block in the front to force a squat and ugly 4/5 seater design.

I.E. (not saying it will) but they have the design freedom to make it look like a mid-engined Ferrari 458 with 5 seats in it and deliver it for $35K - i.e a mind-blowing difference from anything the market has ever been presented with before.

- oh and for $10~$20K of upgrades have it perform better too.

 

[BriansTesla]

Can Tesla put the latest sensors in a $35K base model with more than 220+ miles of range? I doubt Tesla can reach full autonomy without LIDAR, contrary to Elon's initial guess... but what do I know.

If they succeed, how will their competitors explain the price of their shitty ICE cars?

I think this is a very important question and It might future proof a Model 3 reserved now. Can we be sure that all 3's have all the hardware for full autonomy?

 

[geneclean55]

Was thinking of picking up a couple June calls. If the market felt like TSLA should be lower surely this morning would have been the time to make that happen. Instead it is heading to it 200 day average. We are pretty close to reveal now, if a pull-back was to occur then why not today?