I'm in the "more natural" interpretation of the present share move down to the 600s. I don't have intense technical interpretations to support this. Just my following of the company for nearly 10 years plus seeing a similar run previously and what happened after.
Back in 2013-2014 the shares went on an amazing run, eventually landing at ~$250 (from $30; pre-split!). For the next 5 years the shares were roughly flat, first in a 180/280 range, and then later a 280/380 range.
Somewhere in there - 2017? - Model 3 had been launched and was either late or after 'production hell' and the share price was about $250. I remember somebody commenting at the time that multiple years later, add in two new products including the one that Elon identified as essential to achieving profitability, ramped production even higher on the original product, and the company (by share price) hadn't change in value in 3 years.
My interpretation then and in hindsight - the shares went too far, too fast in 2013/14. And it took another 3ish years for the company value to catch up with its share price valuation. Then once it caught up, it didn't budge for another 2 years (spring being wound) before finally breaking out more recently ($400 to $3000 in pre-split $, with a high of $4500 in Jan/Feb).
I see the current situation as completely analogous and expect a very similar sequence. I don't know if its 6 months or 6 years or something in the middle. The core belief on my part is that the financials and existing execution doesn't (short term) support a significant move upwards.
I don't know what the new trading range will be. I think there's some evidence for 560/620, but its going to need a lot more than a couple of months to figure out what it will be.
I have worked for an engineering company that lots its engineering roots (MHO) and made the transition at least temporarily to financial management. Completely agree that the cultural DNA will keep the engineering culture going for awhile (which could easily be a decade or more); the company is not immune though to losing that engineering culture.
I find that I wear two hats these days. My long term investing hat with the 10+ year investing horizon is expecting pretty much exactly what you've described. Great delivery and production results, great future demand, etc.. My interpretation being that the long term execution is right on track. Great news!
But the short term hat doesn't see any news in the last 3 months, and is not expecting any news in the next 3 months that will move the needle in the short term. There could be a buy the rumor, sell the news type of reaction, but I don't see any new source of buyers that keep buying as the shares go up through 650, 700, 750, .. -- I don't see that.
Effectively the company needs to grow into its current valuation. I don't see a spring being wound (at least not in preparation for another explosive move up). I see an already released spring that is being reset for the next release.
For a big move up in the shares we need a big supply of new buyers that will keep buying as the shares go up. The sources for this supply of new buyers I see are:
- FSD / automated driving progress. Big progress, partly measured by broad distribution of the software to the fleet (and lots of youtube videos showing people being wowed). It needs to be big enough news, with evidence, that new buyers of the stock have line-of-sight to the autonomous business model coming into existence.
My current view on this - we're slipping from previous prognostications about when we'd see this progress. Announcements like them dropping radar from 3/Y and rewrites of the software for new functionality - wonderful for the long term view, but shorter term - I think that the FSD / autonomous functionality is in the middle of a 1 year slip. Thus I expect nothing this year that will move the needle (while hoping to be wrong).
- Financial metrics driven buyers - people that put the financial results / metrics at the center of their investing decisions. For many of these buyers the financial don't yet support an investment.
Improving financials covers a big range of stuff for me. CT, Semi, battery chemistry / form factor / cost to manufacture, quarterly production, evidence that production is approximately 100% sold each quarter, new site builds, etc.. All of this stuff contributes directly to volume, which contributes to revenue, which builds into profits. The big financials evidence we need (MHO):
-- evidence that there is significant leverage. Revenue going up fast, while SG&A goes up slowly. Profit leverage.
-- big absolute and P/E profitability results. Eventually growing so large that, like Apple and their gargantuan quarterly profits, will arrive for Tesla. Somewhere in there the P/E and growth rates will become so large that we won't need a story driven investment hypothesis to find buyers of the shares.
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