Short-Term TSLA Price Movements - 2016

[Ulmo]

Bought some weekly $275 calls. Isnt Elon supposed to tweet now?

I got 10 qty April 22 calls strike@270 for $2.99 on the 4th and sold for $8 this morning. I did it after my res calc, which made me under-estimate res's by 10% but oh well. It worked out. Right when I reconsidered it, I decided I was ballpark, no need to re-buy (my plan was sell at announcement because Time Value would diminish due to overexuberance), and then the announcement came out and it dropped.

Looking back at it, I think people saw the lack of excitement was due to the lack of announcement being a sign that no announcement = bad news (compared to SP) and then they used this to predict bad news (compared to SP) and then when the news came just sold automatically after glancing at the tweet and not seeing 450K+ or something.

325K is AWESOME! I'm very happy for Tesla and the world. It makes me fantastically happy. It also made the SP fantastically happy. Lots of people gained. The drop 269.34 -> 257.1 now is OK for now; but what about the always-existing future.

 

[mark]

How is that a credible claim? Doesn't apple routinely sell millions of widgets when they go live?

I assume they mean in dollars not number of products. 50x multiplier for car vs. phone.

 

[mejojo]

Just referring to the current price, no need to get snippy.

Just try to act like you've been here before is all....we've been through massive beatings. A tiny bit of red after a week of big green should be bearable.

 

[Ukland Wombat]

How is that a credible claim? Doesn't apple routinely sell millions of widgets when they go live?

Probably he means in terms of $ value.

 

[sunhelm]

There's the headline right there, in bold:

The Week that Electric Vehicles Went Mainstream

We’ve now received more than 325,000 reservations, which corresponds to about $14 billion in implied future sales, making this the single biggest one-week launch of any product ever.

Hope they stick to product launch terminology. In the other persuasion to reserve email, they said " the highest single-day sales of any product", uh, no not quite. Even the reservation agreement explicitly states this is not an obligation to sell.

 

[Curt Renz]

Last sentence is the most important one

"we need to get back to increasing our Model 3 production plans!"

Indeed, which could imply we may soon be hearing of a favorable financing program from Wall Street bankers to accelerate and enlarge the Model 3 production capabilities, and the willingness of parts suppliers to become fully prepared and to offer volume discounts.

 

[anticitizen13.7]

How is that a credible claim? Doesn't apple routinely sell millions of widgets when they go live?

Apple sold about 13M 6s and 6s Plus devices in the first week after launch last year. Assuming an ASP of $750/unit, that's a little under 10B in sales. The numbers can go up or down depending on one's assumptions, but I think it is probably safe to say that the 6s launch was not "bigger" than Model 3.

This is Apples (lol) and Oranges though. A reservation is different than an actual sale.

 

[Gerasimental]

Looks like most LEAPs are green despite negative stock movement. Can anything be inferred from this?

 

[tanner]

Tesla Motors: Short Sellers, Keep on Shorting?

 

[Ulmo]

Back on topic, I'd like to ask two things.

1) The 1.5% drop in stock price today, is it macro related or just people selling to get back in lower?
2) As discussed here and there, many see the current bullish trend going until at least 285~300$. Could it be wise to (see point 1) get out to buy the dip, or is a dip unlikely before 300$ SP?

Good luck to all

The 1.5% drop in stock price today was from the topic we WERE on, what the reservation numbers were going to be. That wasn't off-topic discussion.

 

[jeewee3000]

Indeed, which could imply we may soon be hearing of a favorable financing program from Wall Street bankers to accelerate and enlarge the Model 3 production capabilities, and the willingness of parts suppliers to become fully prepared and to offer volume discounts.

This. Elon/TSLA dropped many hints since the M3 reveal that they intend to take action to prevent a slow ramp.

Mainly the e-mail TSLA sent out comes to mind. They basically told customers everything that can be done to increase production asap, is being done. I'd imagine the 325K reservations number is a solid foundation to get some extra loans to start up some extra factories.

Imo this won't affect the release date of the M3, but it could hugely help the ramp up let's say one year after release.

 

[tanner]

Does anyone think we can expect some recovery today?

 

[Ulmo]

Holy crap, what an irrational market. Or maybe the hype was too much, market actually disappointed at 325k, aka a potential $14B revenue pretty much in the pipeline.

I actually thought the exuberance was from +~100K-175K more reservations in the minds of stock buyers, so to me I'm pleasantly surprised the resultant downturn isn't so bad --- only off 2%.

 

[JRP3]

New Drop is likely influenced by Negative notes by Barclays analyst Brian Johnson:

2) ASP will be more like $50k not $35k

Um, hello, higher ASP is positive for the company, not negative. What sort of analyst gets that wrong?

 

[techmaven]

Drop is likely influenced by Negative notes by Barclays analyst Brian Johnson:
Analysts Raise Red Flags on Tesla Motors Inc (TSLA) and Twitter Inc (TWTR)

Johnson opined, “Admittedly, the stock may grind higher over the coming weeks post the frenzy of the Model 3 unveil – which we do not see dented by the delivery miss, and an ‘unexpected’ fund raise. Then, we would like investors to take a deep breath and realize that: 1) Model 3 is not likely to be delivered in significant volume until 2019, 2) ASP will be more like $50k not $35k, and federal tax credits are eventually slated to expire, perhaps hurting reservation yield, and 3) as the gigafactory won’t be at scale, battery costs may not be low enough for the 20% gross margin target on the Model 3.”

I don't understand TSLA bear logic some of the time... for example, why would a higher ASP hurt Tesla? Isn't that a good thing that people would be willing to option up and improve profitability? Do they really believe that the first 100,000 Model 3 purchasers have a problem paying a $45k or $50k ASP? Doesn't that help Tesla so that they can achieve additional cost savings before mass quantities of the $35k versions hit?

The chances that Tesla is late with the Model 3 diminishes with each rising reservation. The investments necessary and the nature of this product make foolish to use the Model X timeline as a reference, much less going back to the Model S launch when Tesla had never mass produced anything.

Finally, the first phase of the Gigafactory is all that is necessary to achieve the cost savings. Exchange rate alone has done most of the heavy lifting as it stands before we talk about the operational and supply chain cost savings. Even if the exchange rate advantage slides away, the originally expected cost savings would take root.

When bears write this kind of drivel, it is so easy to bet against them.

I do, however, caution new TSLA investors that TSLA is a very volatile stock. Not one that you might want to watch on a daily basis.

 

[eloder]

The FUD is incredible, here's a news ticker from TD Ameritrade:

BZ NOTE: Pacific Crest on Tesla's Model 3 Reservations (as of Apr. 4, '16): Had Been Expecting Units 350K-400K

Yea, pretty sure no analyst was predicting such a record and unprecedented event

I'm also echoing others--I'm holding and staying put. For such a down day on the index, Tesla is holding up better than it usually does. Just keep in mind Gigafactory official opening is coming very soon and earnings after that!

 

[doggusfluffy]

Um, hello, higher ASP is positive for the company, not negative. What sort of analyst gets that wrong?

No he's just rightfully concerned that higher ASP just means nobody will want to buy one...oh wait.

So 325k reservations vs. hack wall street analyst is today's news?

The Tesla Model 3 Is Still a Rich Person's Car

 

[jeewee3000]

Basically the consensus is: don't get out now.

But is this an opportunity to add/get in? Feels too high still. (*smacks self for relying on feelings to trade*)

 

[Tenable]

Yeah... Too bad I got in right before. Ouch.

Sadly I did as well tanner. I bought premarket at 268.35 and i have about 40 short term puts likely now to expire worthless. I'm sad at the moment.. but thats the game. I gotta stop making bets based on dreams that Elon will tweet spikes into the market,

The price will go back up of that I have no doubt. In time for my options? Well thats on me

 

[hoang51]

Does anyone think we can expect some recovery today?

Only if the broad market can swing back up, would TSLA follow, is my guess. Usually 11 AM and 2 PM are deciding factors going off of previous trading days. It may recover some, but overall stock market looks depressing.