Theory on a perfect storm....

[NigelM]

I think the current dip has been a combination of several factors and figured it's worth laying them out to get some idea of where TSLA goes from here:

1. Tesla's Q3 earnings were really pretty good, but they were off guidance. Differences between actuals and guidance make analysts and financial advisors look like they're not in touch and there's nothing worse for them than to look stupid in front of clients. Stocks tend to get punished when companies don't meet guidance and IMO the old adage of "once bitten, twice shy" certainly holds true with analysts.
2. Supply constraints are real. Li-Ion battery factories don't get built overnight and getting battery supply online with correct timing is going to take some special execution, never mind persuading somebody to put up the capex.
3. This is the time of year for profit-taking. I talked to a few folks this morning and it seems like the annual clean-up of portfolios is already taking place.
4. Something else that I had confirmed this morning is a recent rotation out of hot growth stocks. There is some nervousness about overheating in specific areas and TSLA has almost been too good to be true this year. I stated in other threads that I felt Tesla was currently overvalued in the $170-190 range given supply constraints.
5. As many bulls chased Tesla upwards, so many bears chased it downwards. No criticism intended towards anyone here but, just as an example, quite a few folks here have been selling.
6. Some of the hedgefunds and shorts have likely been punishing TSLA for the money they lost on the way up. They're looking to recoup some of that on the way down. When prices are moving there's always money to be made.
7. EVs and fires. It's a myth but if enough people believe it, it becomes real. the latest one came at just the wrong moment. (Model S weighs in at 4,647lbs and it's worth noting that when that mass hits something at high speed, something spectacular is going to happen.)
8. The constant good news wore off. This year Tesla/Elon had a string of "Wow!" announcements that seemed never ending. Well, quite simply they used up all their new ideas (for now!).

Lastly, i sense there was some frustration in the earnings call and the vagueness on future guidance might be because they want/need to get it right but I have a gut feel there is news to come on something and it's almost certainly something concrete on battery supply. Just my feeling and guesses....time will tell.

In the meantime, like most storms this one will blow over; the car doesn't need a redesign, it's a very heavy performance car that'll hit things with a force of >26tons if it's doing 80mph. The bad luck will fade away and Tesla will move on. A good annual result will turn round sentiment, profit takers will start looking at next year and TSLA will come back. Oh, and while the price is down....I'm buying!

 

[sp4rk]

Well said, sir!

 

[DaveT]

I look at this storm in three waves:

1st wave: 1st fire and correction of exaggerated delivery expectations pre-Q3 (from 194 to 150s back to 160s/170s)

2nd wave: post-Q3 reaction from unclear guidance and emphasis on production constraints (from mid-170s to 150)

3rd wave: 3rd fire reaction (from 150 to 130s)

 

[NigelM]

@DaveT: I agree, but there's also outside influencers right now; profit taking and portfolio balancing towards year-end being just examples. I doubt my list is exhaustive and you look at much more detail than I do, TSLA has always been volatile but IMO there's overall a confluence of factors unlike that we've seen for TSLA previously.

 

[rolosrevenge]

I just wish there'd be something else that's trivial to hammer the stock back into the 80's so I can pick some up at less than where I sold.

 

[NigelM]

@rolo: I think you're going to find limited company wishing the stock back to $80.... ;-)

 

[mershaw2001]

@rolo: I think you're going to find limited company wishing the stock back to $80.... ;-)

I think the thing that most people wishing for a fall miss is that there would have to be drastic news out of tesla that would change the perception of the company for it to fall to 80. For instance, if a meteor hit the factory, and the stock fell to 80, would these people be so keen to invest then? I think we are fortunate that right now it appears that a bit of fear has driven the price down without actually affecting the fundamentals of tesla from 3 weeks ago.

 

[JakeP]

Rolo, for goodness sake, please be careful what you ask for!

NigelM, I think your points make a great deal of sense explaining the recent situation. People are going to take profit while they can, and this is a scenario that will trigger it, for all the reason you cite.

Despite all this, let us not forget that people are still buying these amazing cars, and will continue to do so. Tesla has done two test drive events up here in Pittsburgh in the past month, and I have been fielding questions for folks on actual ownership, how the car handles in Winter weather, etc. Of course I point them to TMC as an incredible wealth of data. But just as a single data point, quite a few people are ordering these cars here in Western PA, which is still out of reach of a single Supercharger, and a far Ranger trip from a Service Center. I can only imagine how many orders of magnitude larger sales are in CA and elsewhere, where infrastructure is more prevalent. Not a single person I talked to has expressed concern about their car catching on fire after hitting an object at highway speed! This too shall pass...

 

[bonaire]

If batteries are an issue build more of the MS 60s on order and try to sell customers on that model.