Short-Term TSLA Price Movements - 2016

[Jayjs20]

I wish i had funds to buy some shares today. Unfortunately, I thought 210 was going to be the bottom and went all in at that price yesterday.

I don't know about everyone else, but I still have faith that Tesla will have a successful M3 rollout. It's just a matter of time. Even if it was 230 and the decline over the last month didn't happen, it's not like many people are going to sell anyways. The endgame exists well beyond the M3 rollout.

 

[Curt Renz]

I think the big thing was the article that has been circulating around about cash burn

Tesla bears like to freely use the term "cash burn". They've been doing it nonstop for years. The media regularly pick up on it. It's communicated in a manner that paints a picture making it appear that Tesla turns the money it earns or raises into smoke.

In actuality, the money is invested in the development of massive future growth, as is the case with Amazon.com. The term "cash burn" is only appropriate for companies raising money to stave off bankruptcy. That's not the case with Tesla or Amazon. If Tesla were not investing heavily in becoming a dominant auto manufacturer and energy supplier, and were content with showing quarterly profits while paying dividends, its share price would be substantially lower than it is today.

Nevertheless, widely disseminated FUD terms like "cash burn" temporarily keep the share price lower than justified if the the master plans continue to be played out. That may be creating more opportunity for those with long term vision, and potential pain for those who remain shortsighted.

 

[larmor]

RSI Alert: Tesla Motors Now Oversold

A three-day weekend is just what we need for:
* SpaceX to draw some preliminary conclusions and allow the launch failure to take reasonable perspective in light of the company's otherwise brilliant accomplishments
* Word to get into the broader media regarding the favorable InsideEV numbers for August and the increased likelihood of a good Q3
* Investors to digest the fact that Lazard made a math error and called Solar City's debt as being $400 million greater than it was
* Investors to understand that Tesla is now oversold.

If Tesla was an athletic team and I were the coach, I would definitely have called a time out by now. Fortunately, the 3-day weekend is the needed timeout for the emotions to dissipate and the facts to sink in.

Edit: Elon's decision to delay the Autopilot 8.0 posting until later this weekend makes perfect sense, since the effects on SP of that posting will have a more positive effect if offered closer to trading days.

So for non finance people like me: Lazard over stated solar city debt, and it actually has less debt?

 

[drinkerofkoolaid]

Tomorrow will be the bottom. I wouldn't be surprised if Elon buys more SolarCity and/or Tesla stock tomorrow. The drop in SolarCity's stock was driven entirely by the $400 million figure, and investors believing that the drop in he stock was a signal from big investors that the deal was a bad idea and guaranteed to fall through.

The incident with SpaceX definitely didn't help, but in my view is unrelated. Depending on what caused the problem, it's possible SpaceX might not be responsible for the cost of the payload. I think it's a bit unreasonable and presumptuous for anyone to suggest this incident is a big problem for SpaceX and plans for future missions, especially before SpaceX releases a complete account of what happened. Also remember, SpaceX has a proven record of successful launches. One incident does not equal a trend. Also, it's always possible it was sabotage.

Does SpaceX have insurance for these types of missions? Is SpaceX responsible for reimbursing FB?
_____________

All of the articles claiming the $400 million error wasn't taken into account during negotiations for the merger, and cherry picking sections from the SEC filing are 100% wrong. One article claimed 14 institutional investors rejected buying any of SolarCity's bond offering, and implied all of those institutional investors didn't support the merger. I'd love to see where the author got that figure and comment. I'll try to post a link to the article later.

If Elon and JB, and Lyndon increase their position in SolarCity by 10-20% tomorrow, they would control an overwhelming majority. Heck, they might already.

Would there be a prescient for SolarCity and Tesla to declare the merger complete, and to allow for all other parties to vote in support of or against the approval at a later time as a formality?

Is there a precident where Elon, JB, Lyndon, and other board members/major shareholders, with the help of Fidelity take SolarCity private, hand over control to Elon, and allow Tesla investors to vote at some point in the near future to make SolarCity a de facto piece of Tesla by placing both in a holding company?

At $18.60 (the bottom of the estimated fair value range) this would seem like a reasonable thing to do if Elon, JB, and the Tesla board support a merger, which the SEC filings states they do.
Is this possible?

 

[trils0n]

Why did it take "journalists" one day to write about the document and to ignore the most important information it contains? Also, almost every article published today made it sound like it was released yesterday after the close, to make it appear like new information. What gives?

It's truly amazing how more than 80% of the articles published today that mention the $400 million error, didn't mention the fact that the same document spells out in very simple English that the error was discovered and corrected and that both the Independent Group representing Tesla and the Independent Group representing SolarCity took this into account when engaging in negotiations and concluding discussions, and agreeing on the conversion ratio that both parties aggreed on.

I'm going to post a list of every article I can find tonight that included very incorrect and/or very selective information and/or BS extrapolations.

Vaguely reminiscent of a GS (I think it was GS) report a few years ago (2013) that caused a rapid crash (followed by a next day recovery) where nearly every article reported a downgrade when the actual report was an upgrade (cannot quite remember exactly what happened, but 80% of articles were blatantly wrong is the point). Pile-on/no-fact-check nature of the modern media. Someone runs a story, most everyone else copies it without actually bothering to look at what they are saying.

 

[Cosmacelf]

So, interesting timing on Elon's postponement of his blog post. Yesterday morning the filing goes out, Elon tweets out that a blog post is coming out later that day - then nothing. I suspect, but don't know, obviously, that some institutional shareholders got concerned about the filing and started calling. Elon was probably busy reassuring shareholders yesterday to make sure the SCTY deal closed...

 

[drinkerofkoolaid]

Vaguely reminiscent of a GS (I think it was GS) report a few years ago (2013) that caused a rapid crash (followed by a next day recovery) where nearly every article reported a downgrade when the actual report was an upgrade (cannot quite remember exactly what happened, but 80% of articles were blatantly wrong is the point). Pile-on/no-fact-check nature of the modern media. Someone runs a story, most everyone else copies it without actually bothering to look at what they are saying.

I'd triple like your post if I could! Great post!


Thought for the mods:
It should be a requirement for anyone who dislikes a post to fill in a box to provide a brief (5-10 word) explanation about why they disliked it. Maybe even have a box that allows people to give a 5-10 word explanation of they like a post.

Something similar to what we used to have with reputation points? I think this would strengthen the reputation system, help strengthen the community, and make it easier for mods to handle sock puppets, troublemakers, and lurkers who post nonsense for lols.

It bothers me a lot when people dislike posts for lols. If I dislike a post, I will sometimes message the person who wrote it to explain why I disliked their post as a courtesy, especially if they are a long standing member, and were expressing a legitimate point of view, no matter how biased.

I'll sometimes undo a dislike if the person messages me about a dislike, and is polite and sincere in their message.

Case and point: Drivin, Srini. Really?

 

[esk8mw]

For all you VIN counters out there, 19,6XX was just assigned for an X. That's a pretty high number. I think X deliveries could approach 10k for Q3.

 

[srini]

Spectacular!!! Or spectacle?

 

[brian45011]

Thank you! What do you think are the minimum delivery numbers for both non-GAAP and GAAP break even assuming direct leases at 15% in Q3?

IMO, volume deliveries of the Model 3 are needed for GAAP profitability. My WAG for non-GAAP profitability is above ~25k deliveries.

 

[stealthology]

...I think the big thing was the article that has been circulating around about cash burn. We're in the whole "the sky is falling" phase...

Would you mind linking the article?

Does the article bring up valid points, or is it a more typical FUD dominating peice? Thanks.

 

[Wenche]

I sold my baba shares and got another 1k tesla shares today. let's see what happens tomorrow.

Did you buy $1k value of shares/ 5 shares, or 1k shares/$200k value?

 

[maoing]

Well RSI is at 25.43. Plus seems to be panic selling = time to buy?

If it were 2014/2015 and no SCTY merger proposal, I'll definitely jump in. But now, I'll still remain on the sideline. With so much stock dilution happened or to be happened and sink hole of SCTY financials. I have no ideas where TSLA will be going. I'll raise my bar of safe entry zone between 150-180.

 

[maoing]

Did you buy $1k value of shares/ 5 shares, or 1k shares/$200k value?

Obviously the latter. I see $200 is a fair value for TSLA as of today. Not bargin price though.

 

[anticitizen13.7]

L-/\\\\\\\\.\//.

Yes, I am a shareholder. I own a very large number of shares. What should I do? I think Tesla has made some mistakes but I don't see any other company with even a fraction of its potential. So I'm holding on and hoping I'm wrong. If you ask my wife, I'm often wrong.

In most humans, fear of loss is felt 2x as much as happiness from gain. This is why most retail investors tend to buy stocks high and sell low (the most recent example being the outrageous run up in China stock market prices in 2015, followed by a crash earlier this year).

My advice over the years has been the same:
(1) Never sell a stock based on feelings from short term price drops. Only bail if the company's long-term prospects are endangered to a point beyond one's comfort level.
(2) Never invest money in an individual stock that you cannot afford to lose, or money that you may need soon for expenses like a house down payment or college tuition.
(3) If one cannot sleep at night because a particular asset is fluctuating in value, one's portfolio allocation in that asset is probably too high.

Absent some extenuating situation where one needs liquid capital quickly, my advice for TSLA shareholders is to do nothing. For some context, TSLA plummeted to the 150's earlier this year, based on no fundamental reason.

TSLA is highly volatile. For this reason, I actually discourage the vast majority of people from buying any stock in Tesla Motors. Most people cannot stomach the swings in value. Most retail investors will not have the discipline to buy and hold.

For the vast majority of retail investors, index-based mutual funds are the most appropriate investment. All of my assets that are critical to securing my retirement are in index mutual funds.

 

[TMSE]

For all you VIN counters out there, 19,6XX was just assigned for an X. That's a pretty high number. I think X deliveries could approach 10k for Q3.

10K deliveries of X is great! What do VIN counter tea-leaves say about S deliveries?

 

[Sparky]

Absolutely agree with anticitizen... Don't risk more than you easily afford to lose here. All my serious $ is in safe boring stuff.

I guess I'm a "weak long" or "capitulator" because I always set stops. For short term trading (few days to weeks) I decide on a thesis to go with and trade that for weeks to months. So most recently I decided TSLA was range-bound between 220-230 and played around with buying below 224 and selling above 227. I did ok for a couple of weeks and made about 2-3%. With TSLA lately, really it's just playing roulette. But I enjoy roulette sometimes (hint: always bet red). So, when the stock hit 220-ish I bought big at 221 but set a stop-loss at 218 figuring if the price sunk that low my 220-230 range thesis was out the window and something was wrong.
I'd rather the stop-loss didn't happen and I wish we weren't at $201 but the "capitulation" is part of my trading habit. Now I'm sitting with enough cash to buy more TSLA shares and improve my position. Dipped my toe in the water today at $201.20. Holding off to see what tomorrow brings. Liking the delivery numbers so far and thinking a return to $220 is more likely than $180 unless the SCTY process uncovers something very negative. We'll see.

 

[Dennis Cargill]

I love Tesla the company and what Elon is trying to do. But their valuation is huge folks, not low. At $200 per share * 155 diluted shares (pre-SCTY), Tesla has an equity market valuation of $31 billion. Compares that to expected 2016 non-GAAP revenue of $7.1 billion and you have a company trading at 4.36x revenue. That is about 5-10x higher than most automobile companies.

Agreed, Tesla has a much higher growth profile than any other automobile company, and it could potentially disrupt the entire industry if it becomes dominant in electric vehicles. But there is a lot of wood to chop between having sold 58K cares (last 12 months) and 500K or 1 million cars. It is very far from a slam dunk.

Combine all this with a company that to date has been losing money (partially for legitimate reasons like investing ahead of demand, partially because of missteps). I am planning to get a Tesla when I have saved up enough. But lets not delude ourselves into thinking this is a cheap stock. We are in nosebleed territory folks. Let's be real.

Having said that, the S is a nice looking car.

 

[Krugerrand]

So, interesting timing on Elon's postponement of his blog post. Yesterday morning the filing goes out, Elon tweets out that a blog post is coming out later that day - then nothing. I suspect, but don't know, obviously, that some institutional shareholders got concerned about the filing and started calling. Elon was probably busy reassuring shareholders yesterday to make sure the SCTY deal closed...

Or...one of his rockets just blew up and that (determining the cause, speaking to the customer et al...) takes priority over a blog post.

 

[Drax7]

Give me a minimum of 24,000 vehicles deliveries per quarter from here onwards until model 3 is released
And all the mistakes will be covered . That Includes writing off the whole solarcity junk .