I went and checked the delivery data spreadsheet to find that you are correct. Didn't notice them being reported. I guess I should have done my research before posting.
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TSLA Investor Discussions
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I went and checked the delivery data spreadsheet to find that you are correct. Didn't notice them being reported. I guess I should have done my research before posting.
The real issue is whether the short interest in the stock is large enough that the extra buying that happens when short sellers unwind can be absorbed by "normal" trading. If the percentage of short-driven buying gets too large, that results in a noticeable increase in demand relative to available supply which causes supply/demand pressure which increases the price.
This is where stats like the short % of float matters. The larger the number, the harder it is for all the short sellers to unwind their positions without creating supply/demand pressures that will increase the price. You have to unwind the position slowly and gradually otherwise the unwind will drive the price up. Easy to do if it's coordinated and you have the time. Hard to do otherwise.
The short interest relative to the float is really really high: higher than the 10-15 most highly shorted stocks in the S&P 500. More than 1/2 of the shares that have been sold on the open market are "borrowed" shares: shares sold by short-sellers who didn't own the stock they sold.
Similarly the daily trading volume is interesting because it gives you an idea of how much stock changes hands on a normal day. Days with much higher than normal trading volumes tend to result in a non-trivial change in price -- the higher volume is usually due to a lot of people interested in getting in or bailing out of the stock. Which results in a supply/demand pressures which moves the stock price.
If you've got a few minutes, go to Yahoo Finance and get quotes on some of your favorite companies that you think are in real trouble. They click on key statistics and look at the float % and average daily (trading) volume. Unless your losers are a lot worse than my losers
, TSLA's short situation is worse than those.Just my opinion but if Tesla continues to execute, the shorts are going to have to bail and they'll move the stock price some non-trivial amount in the process.
Yes. It will get to 4004.
Bought 50 of the Jan 38 Calls today for .40 each. Stock's been holding up well since the last pullback and is again testing its uptrend. Going to sell 37 Calls into Strength for >1.00.
https://dl.dropbox.com/u/27431/Screen%20Shot%202012-12-19%20at%209.08.37%20PM.png
I'm a over exposed now but I think that there is enough strength for one more run-up pre-earnings. Then it's all on Elon.
Sold out my solar city at 11.50 too.
Norbert
TSLA will win
Well, yes, however this also applies when shorts are simply covering in a normal way.
My understanding of a "short squeeze" is that this expression refers to what happens when the first, normal, shorts covering causes the price to go up sufficiently to force other shorts to cover as well. This causes the price to go even higher, which forces even more shorts to cover. This spiral leads to a situation where lots of shorts have to cover at the same time.
So what you describe is a pre-condition, but then additionally it is necessary that modest price increases do not cause immediate profit taking by lots of day traders. The number of those, who will sell when the price increases only modestly, has to be small, as only then will the price increase sufficiently to force the other shorts to cover as well.
I'd agree that the high percentage of short interest is what makes TSLA a candidate for a short squeeze, in the first place. My understanding is that TSLA is one of the stocks with the highest short interest. But then, for the squeeze to actually happen, there must be an absence of people selling at modest increases already.
Without the fiscal cliff drag (plus jan option expire before earnings call) I'd agree. More money, but march might be worth the price to clear both of those events. Plus market downdraft pressure over next days might provide a lower cost cost for these. That's my watch plan currently
FalconNinetyD
Active Member
Do you men in the 2000-2999 range? Or the 2000-2099 range?
I'm 2301 and will be picking up at the factory on Sunday.
Also some negative market-watch press this morning.
Tesla will need more loans to stay afloat in 2013 - John Shinals Tech Investor - MarketWatch
possibly the most one sided thing i've read.
Tesla will need more loans to stay afloat in 2013 - John Shinals Tech Investor - MarketWatch
possibly the most one sided thing i've read.
three negative press releases. question coordinated attack? sounds paranoid but amazing that they all decided today was the day to release this information without new news. i hope tesla released production number and cars produced per week rate at the new year. it will end speculation that helps no one. it will not end negative bashing, too much at stake for that
Citizen-T
Active Member
I was just telling my Dad yesterday to brace for bad press today since we hit a new short-term high. These bears are predictably ruthless.
Just read through the articles by JP and Marketwatch. It's really a shame how people get swayed by these articles. These guys seem hellbent on hating the company. I would've commented but there's no point.
1. First thing that irks me is, they proceed to tell people not to invest but don't hold any positions. Well... Put your money where your mouth is. One can argue that it would present conflict of interest, but I see it as proof of conviction.
2. Although some of the financials JP pulls are true, they are extremely outdated or are based on ESTIMATES from research reports. The inaccuracies speak for themselves.
3. A lot of commentators continue to hammer at the point that EV's proposition as clean energy is a smokescreen. It really isn't. Once netted out, it's still cheaper and releases less emissions than your standard ICE.
4. Many continue to point out that Tesla is the next Fisker or Solyndra. It is not. It has the product and it has the customer. From what I read on threads, the customer service is also there. This is basically where apple was when Steve jobs returned.
5. They also say that they failed to deliver cars to customers. Last I checked we are on VIN3000? The S curve got delayed by two weeks.
6. Historically, has the company defied all the naysayers? Yes. I think George B put it best: everything Tesla is doing was at one point impossible. That's why it's so hard.
1. First thing that irks me is, they proceed to tell people not to invest but don't hold any positions. Well... Put your money where your mouth is. One can argue that it would present conflict of interest, but I see it as proof of conviction.
2. Although some of the financials JP pulls are true, they are extremely outdated or are based on ESTIMATES from research reports. The inaccuracies speak for themselves.
3. A lot of commentators continue to hammer at the point that EV's proposition as clean energy is a smokescreen. It really isn't. Once netted out, it's still cheaper and releases less emissions than your standard ICE.
4. Many continue to point out that Tesla is the next Fisker or Solyndra. It is not. It has the product and it has the customer. From what I read on threads, the customer service is also there. This is basically where apple was when Steve jobs returned.
5. They also say that they failed to deliver cars to customers. Last I checked we are on VIN3000? The S curve got delayed by two weeks.
6. Historically, has the company defied all the naysayers? Yes. I think George B put it best: everything Tesla is doing was at one point impossible. That's why it's so hard.
Citizen-T
Active Member
I'd like to hear from our resident accountants.
I know the numbers that Peterson ended up with don't make sense, but I'm sure I'm not thinking about everything I need to think about to get to the right numbers. Mostly I'm interested in disproving his comment (yet again) that they are going to have to qualify their quarterly report with the "going concern" statement.
I know the numbers that Peterson ended up with don't make sense, but I'm sure I'm not thinking about everything I need to think about to get to the right numbers. Mostly I'm interested in disproving his comment (yet again) that they are going to have to qualify their quarterly report with the "going concern" statement.
This might sound crass, but while I actually agree with John on a number of issues related to Tesla (particularly that they were very close to a liquidity problem---previous to the follow-on), at this point I think it is safe to say that he either has a direct or indirect short position, or that he has just latched on and won't let go. This is not to say that TSLA is not hugely overvalued, it's hard to say if they will come close to their current market cap in a year or five years (the important thing is that they prove profits are possible), just that at least in the foreseeable future that things look quite good. I was planning to short Tesla before they did the cap raise, but now that they have cash, demand is strong and growing, and production is moving as planned, the only real concern left on the table that could arise is a debacle of some kind (spontaneously combusting cars etc.). Using the reservation cash as capital is not a great business or accounting practice, but in this situation I think it was probably appropriate and not quite as risky as John argues. Moreover, in terms of the accounting, John seemed to be suggesting that because the reservations are already on the books that revenues will be lower. To clarify, revenues will reflect the full sales prices of the cars including the deposits. So in effect, the deposits will transfer from assets to revenues as the cars are delivered (debit assets credit revenues). Now somebody buy me a drink, all bean counting and no fun makes me a dull boy.
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there is a total disconnect here. running out of cash etc... this company is sure not acting like it. if short of cash and large backlog here in usa, why open up european facility in hopes of selling more there, does that make sense to anyone? have to hire staff etc. they didnt need facility to sell roadsters there, they could have just shipped there while building up cash. i believe situation as stated from outsider without inside information makes no sense. he has understated production number (including the 3rd qtr production number) in the 4th qtr cars production and still understated it. i do not believe the execs are suicidal. they are now bringing in receipts and taking advantage of the situation. have considered why they dont silence people by announcing production number but then they will just pick up and run with other misrepresentations. i believe the numbers will be there, just hope we dont have to wait till feb to hear the production rate.
Is it reasonable to believe that JP is correct in that they have already burned through the last offering of $200+ million and will need another in 2013? Where is his error? Can someone make sense of this? Can we say with confidence that, with any sort of major event or issue withstanding, they wont need to raise more capital?
Norbert
TSLA will win
While Tesla did decide to make another capital raise, they did so under much better conditions, in the context of much better numbers, and later, than JP predicted some time ago as inevitable.
In so far as I remember from NigelM's posts, JP's comments about reservation payments don't correctly reflect that they are accounted for as "liabilities", before delivery. Perhaps you understand better than me what this actually means.
The reservation payments are handled according or each state's laws/regulations (which means, I think, differently in some states). His talk about himself having to go to jail seems smear level.
He has no more information than you do. Don't believe everything people speculate about. His credential and bias well known. He has disputed the value of lithium batteries (self serving then given his affiliation at the time). If its in his interest now why would you believe he won't distort to his advantage
I'm especially confused by how he can say they will have an operating loss of 85 million for Q4, but they will have "burned through" over 200 million. You will notice in the article he just states that the 2.9 million number comes from the JP Morgen report, but this is the same report that gave a price target of $37, so something (as usual with Peterson) is fishy.
adiggs
Well-Known Member
One thing I find interesting reading the extreme bear articles is the inability to recognize the concept of rate of change, or how today's state at Tesla is precisely what every startup transitioning into a going concern goes through. It's as if the analysis amounts to "the state on <date> is <x>; extended for a very short time, and assuming nothing changes, Tesla is out of business any second now". Of course, Tesla is changing at an astounding rate right now.
When you look at the rate of manufacturing, that began accelerating early this quarter in a major way, and to a level that will produce profitability when extended into the future (though of course, manufacturing level was at a very unprofitable level until recently, so there's still risk around maintaining the rate).
Similar observation about deliveries (and revenue recognition!). It's been accelerating right along with the manufacturing (maybe a week or 3 lag). Can Tesla successfully deliver 20k+ cars a year, to go along with the manufacturing rate? Clearly they will need to prove they can, but really - if that's the only problem (they make 'em, but can't deliver?) - they'll figure that out.
Reservation rate - same kind of story, though here, the reservation rate in the US has been outstanding all on its own for more than a month. I use the reservation rate as a leading indicator, and a month or more at this 60's / 70's daily rate for the US is outstanding. That suggests to me that manufacturing 20k/year won't do it, and its not hard to see a need for more like 30-40k/year in the next 1-2 quarters (effectively immediately) as Europe gets seriously opened. It will also be an early indicator that a particular Tesla model is achieving saturation or otherwise losing its appeal.
The business today is effectively unrecognizable from the business of 3 or 6 months ago. Three or 6 months ago, Tesla was an R&D concern. Today, Tesla is a manufacturer. Will they be profitable in Q4? Of course not, and nobody in or out of the company has suggested that they will.
Will they have ~50M of net revenue to report in Q4 (taking the past, and extending it into the future as if nothing has changed)? So clearly NO, it's silly. Admittedly a high estimate, but 2,000 cars at $75,000 per car is $150,000,000 of revenue. That's a tripling in QoQ revenue. That won't happen again in Q1, but zowie - triple QoQ revenue is different at least!
When you look at the rate of manufacturing, that began accelerating early this quarter in a major way, and to a level that will produce profitability when extended into the future (though of course, manufacturing level was at a very unprofitable level until recently, so there's still risk around maintaining the rate).
Similar observation about deliveries (and revenue recognition!). It's been accelerating right along with the manufacturing (maybe a week or 3 lag). Can Tesla successfully deliver 20k+ cars a year, to go along with the manufacturing rate? Clearly they will need to prove they can, but really - if that's the only problem (they make 'em, but can't deliver?) - they'll figure that out.
Reservation rate - same kind of story, though here, the reservation rate in the US has been outstanding all on its own for more than a month. I use the reservation rate as a leading indicator, and a month or more at this 60's / 70's daily rate for the US is outstanding. That suggests to me that manufacturing 20k/year won't do it, and its not hard to see a need for more like 30-40k/year in the next 1-2 quarters (effectively immediately) as Europe gets seriously opened. It will also be an early indicator that a particular Tesla model is achieving saturation or otherwise losing its appeal.
The business today is effectively unrecognizable from the business of 3 or 6 months ago. Three or 6 months ago, Tesla was an R&D concern. Today, Tesla is a manufacturer. Will they be profitable in Q4? Of course not, and nobody in or out of the company has suggested that they will.
Will they have ~50M of net revenue to report in Q4 (taking the past, and extending it into the future as if nothing has changed)? So clearly NO, it's silly. Admittedly a high estimate, but 2,000 cars at $75,000 per car is $150,000,000 of revenue. That's a tripling in QoQ revenue. That won't happen again in Q1, but zowie - triple QoQ revenue is different at least!
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