The weak longs who were listening to advice given last week from pompous CNBC pretend-to-know-somethings to “sell on the news” may nearly be done. Now we await Tesla delivery numbers that should be released by Monday, perhaps Sunday evening.
After that the analysts may be expected to chime in with revised recommendations and price targets. They are generally conservative and tend to wait for proof that justifies their positions to their bosses. Many of them sense that they are more likely to lose their jobs for picking losers rather than for missing winners. Now they have proof of significant Model 3 demand, and it’s the potential for the Model 3 that that should justify higher share price targets. The Model 3 appears to be the auto industry game changer that some analysts and money managers may be severely berated for overlooking.
Meanwhile, those who reserved a Model 3 now have a vested interest in Tesla Motors. Don’t be surprised if many of them soon decide to become strong long term shareholders.
+1 That and this:
tl;dr version: Get positioned for analysts beats inbound after a brief delay.
Here is the Wall Street & Musk two step (or ten step or whatever) cynical secret master plan as far as I understand it:
1. Musk gives a date he's going to do something really radical (like launch Model 3).
2. Analysts say it's all going to go to crap for the stock, watch out below.
3. Musk does the radical thing he said he would
4. Bulls go wow that ought to be cool for the stock, big analyst beat.
5. Shorts snigger at the idiots because the analysts warned everyone but due to confirmation bias only the shorts really understood it - and they snigger that Musk will be in a state of desperation in a trap between raising a lot of money for something Musk has promised the idiots that he cant afford to deliver without the idiots paying for it and surely just the act of raising the money dawn on the longs that he is taking their money instead of making any for them in terms of profits and the stock should tank the way the market is supposed to function according to some text book from 1977.
6. Analysts check out the potential of the cool thing to be a reason for Musk to want to raise a lot of money - and they think it is.
7. Analysts firms knock on Tesla's door and badger Musk for an appointment to be book runners for a fundraiser - but he says get lost! I don't actually need any money and regardless I can prove to you that I can trade through this without your help because I have a $billion loan facility at circa 2% interest and I'm getting a shade more than a $100 million a day average at 0% interest free from my customers and all my product lines are making money to so my worst case outcome is I get where I want to go on a bit smaller scale than the maximum possible - but if the deal was really really good then I guess we can accelerate our plans and all get rich together. So go away until the stock is at least sitting at $XXX - let's say $350, bit if it was at $350 I guess we should do something.
8. Analysts go back to their banks, tell their favorite clients to start buying, maybe buy a bit themselves then to a man the admit that they were completely gobsmaked how radical that thing was, totally U-turn about calling it a load of crap before the event due to some paradigm shift and the stock deserves to rocket to $350 + another $100 for good measure. Upgrades to $450 and champagne all round - All except for the sniggering shorts who are not invited. They get the smile wiped off their faces and end up paying for the whole deal on margin calls.
9. Number 8 is usually 2, 3 or 4 trading days after the radical thing - fast enough to just look like a delayed reaction and plausible time enough to write something that looks like research.
10. If Musk gets his target price for a raise then the analyst's banks get a book runner job and they get rich. If they miss by a bit and Musk doesn't bite on the book-runner job then they slowly commence demurring all over again until the next opportunity.
If you agree it makes sense then being positioned ready for the thing to go north in 2, 3 or 4 trading days is probably wise.
I Guess the demand is way more than he was expecting
