TSLA Market Action: 2018 Investor Roundtable

[EV forever]

Need some advice on call options-
I am convinced Tesla will have a breakout quarter, but don’t want to add more stock and don’t have enough liquidity in my account anyways. So I was thinking of buying a few call options with the cash available in the account approved for options trading.

What strike date would be best? I expect stock to run up when firm numbers for production and delivery are available. Does it have to be after earnings call? I was thinking October 12, as most numbers would be unofficially out by then, and the upside would baked into the stock price well before earnings call.

This is strictly speculative trading, and I understand I could lose all the money. I am new at options, so consider this learning as well.

 

[Bet TSLA]

I’ve said this before, but I don’t think the negativity actually has much to do with the shorts(outside of being allies of convenience). I see it as having started with the UAW push to unionize Fremont...

You must be new here.

 

[bdy0627]

It's really pretty surprising to me just how tough this battle to stay over $300 is.

 

[bdy0627]

Here's the morning dip. Let's see how far they can take it down.

 

[humbaba]

It's really pretty surprising to me just how tough this battle to stay over $300 is.

The steady stock price seems unprecedented to me. Even at a 1 year view the current plateau stands out as an anomaly.

 

[Fact Checking]

I only brought it up because Elon said they could do a cross-country trip if it was hard-coded now. So I took that to mean they have the capability if they wanted to hard-code specific major highways for access to maybe the bigger service centers.

While I'm pretty sure they have that capability too, I think what Elon meant by 'hard-coding' is the following process:

• pick a test route
• let AutoPilot drive it, record all the video and the results
  
• look at the disengagement events and work them around one by one, not necessarily by hard-coding them in a GPS signature based 'hint' sense, but nevertheless taking shortcuts to get to a result quickly - and maybe even train the network for that route.

Instead the way I understood it is that Elon wants to develop AutoPilot organically, to upgrade the hardware to the Tesla AI chip, to install the much larger, much smarter neural network layers this new hardware allows, and then just check whether it can do a cross-country trip, and fix any problems it may encounter the natural way.

I.e. the moment a SF->NY cross-country trip becomes possible without disengagements, AutoPilot would be largely self-driving on the vast majority of similar routes as well.

 

[Ellec]

Need some advice on call options-
I am convinced Tesla will have a breakout quarter, but don’t want to add more stock and don’t have enough liquidity in my account anyways. So I was thinking of buying a few call options with the cash available in the account approved for options trading.

What strike date would be best? I expect stock to run up when firm numbers for production and delivery are available. Does it have to be after earnings call? I was thinking October 12, as most numbers would be unofficially out by then, and the upside would baked into the stock price well before earnings call.

This is strictly speculative trading, and I understand I could lose all the money. I am new at options, so consider this learning as well.

I would go with March 2019 calls, you get 2 Q results in.

 

[Todd Burch]

The steady stock price seems unprecedented to me. Even at a 1 year view the current plateau stands out as an anomaly.

I think it's because it feels a bit like the last stand for a lot of the shorts. Their long-held thesis is about to die, so they're laying everything they can on the line to fight it now.

 

[KarenRei]

Looking back at stock behavior at the end of Q2:

Week leading up to the end of the quarter: reports swirl about high production numbers. Some doubt is cast on them.
Friday, 29 june: Stock closes at $342,71
Sunday, 1 july: Musk tweetes " 7000 cars, 7 days Tesla Team ".
Monday, 2 july: Stock surges in the premarket and quickly hits a peak of $364,70 in the first hour. This then rapidly plunges as FUD is spread about the "factory gated" cars, attack articles promote claims of bad quality, etc, etc. A daily low of $329,88 is hit, with a close of $335,14
Tuesday, 3 july: The attacks continue. Stock hits a midday low of $299,86.

Stock trends slightly up in the next week, then even further down, hitting a low of $287,32 on 29 august. The stock then trends slightly up, closing at $301,47 on 1 august, the day before the Q2 report.

Thursday, 2 august: The report is released and the stock surges to a peak of $349,97 and a close of $349,38. This level more or less holds for a week before the PIF and then taking private news breaks, causing a surge on top of it up into the $380s.

My take: production / delivery numbers are easy to cast aspersions on and in general FUD. If deliveries beat expectations, and you want to sell the peak to try to buy low, you need to do so immediately. Quarterly reports are hard to FUD. It may or may not be wise to sell immediately.

Of course, this is based on limited data....

 

[bdy0627]

Just speculation, but it looks to me like we are getting quite a bit of short covering around the open, probably to load up for shorting later in the day. This creates a mild jump, which traders are buying. After the stock goes up a bit, it is then getting shorted with traders selling to get out as the stock drops back down. Shorts jump in even more, undoubtedly many of them traders, amplifying the dip. I think it will take some significant volume to defeat this short term pattern, but I'm not sure when we are going to see increased volume. It's possible that it may not happen until next week when the delivery numbers are released, but my guess is that it happens a day or two before as the more risk-averse shorts close their positions heading into such a risky situation for them.

 

[Fact Checking]

They clearly are producing at least within guidance this quarter, and deliveries have clearly been very strong as of late. The only way they could disappoint is with low margins and not close to profitable. We’ll know in just over a month!

Actually, we'll possibly have a pretty good idea in 4-5 trading days, on the 2nd or 3rd of October when the Q3 production & deliveries letter is released.

Firstly the delivery numbers are going to define a much more narrow Q3 financials range. Tesla might also drop a hint or two as additional guidance, as they did in past quarters - either positive or negative guidance, to manage expectations for the Q3 financials.

I.e. only 4-5 trading days left to get into position (or out of position, depending on your direction and risk tolerance).

 

[Wooloomooloo]

The steady stock price seems unprecedented to me. Even at a 1 year view the current plateau stands out as an anomaly.

Well it's above the 20 day average but still below the 50 and 200 day averages - regardless, given all the noise and chaos of the last 2 months, it has proven extremely resilient. I think it's looking good TBH, but I still think Q2 2019 is the quarter to watch.

 

[Singuy]

People keep talking about Audi, Mercedes, and BMWs. How come no one compares Tesla to companies with similar ASPs?

These are U.S Sales

Maserati is very similar to Tesla when it comes to 2017 ASP. Tesla outsold Maserati by 4x in 2017. This is without the need for all this "pent up demand" from reservations since 2017 was mostly just S and X sales.

Tesla's ASP is now very similar to Porsche for 2018. Porsche have sold a total of 55k in 2017. Tesla will be able to sell more cars in a quarter than Porsche in a year in the U.S

In every ASP category Tesla is in, Tesla has been just dominating by huge margins in # of sales! This is with only 3 models of cars! Porsche has sedans, large SUVs, small SUVs and sport cars with super high reliability ratings and yet they will be at only 1/2 or 1/3 of Tesla sales for 2018? Every auto maker needs to be scared.

Porsche US car sales figures

Maserati US car sales figures

 

[humbaba]

Looking back at stock behavior at the end of Q2:

Week leading up to the end of the quarter: reports swirl about high production numbers. Some doubt is cast on them.
Friday, 29 june: Stock closes at $342,71
Sunday, 1 july: Musk tweetes " 7000 cars, 7 days Tesla Team ".
Monday, 2 july: Stock surges in the premarket and quickly hits a peak of $364,70 in the first hour. This then rapidly plunges as FUD is spread about the "factory gated" cars, attack articles promote claims of bad quality, etc, etc. A daily low of $329,88 is hit, with a close of $335,14
Tuesday, 3 july: The attacks continue. Stock hits a midday low of $299,86.

Stock trends slightly up in the next week, then even further down, hitting a low of $287,32 on 29 august. The stock then trends slightly up, closing at $301,47 on 1 august, the day before the Q2 report.

Thursday, 2 august: The report is released and the stock surges to a peak of $349,97 and a close of $349,38. This level more or less holds for a week before the PIF and then taking private news breaks, causing a surge on top of it up into the $380s.

My take: production / delivery numbers are easy to cast aspersions on and in general FUD. If deliveries beat expectations, and you want to sell the peak to try to buy low, you need to do so immediately. Quarterly reports are hard to FUD. It may or may not be wise to sell immediately.

Of course, this is based on limited data....

I'm more inclined to wait for the drop and buy on a serious low. The problem with selling now is that, if you are long $TSLA, you are counting on the drop for buying back. We've had one seriously good drop (Sep 7), with two more attempts (11th and 18th) but since then the price has held steady. A sixth month or one year view makes the current plateau stick out like a sore thumb. I'm not really a betting kinda guy which may be why I wouldn't want to bet on there being another drop before results. I *expect* there to be one, but this current plateau is uncanny.

 

[Chickenlittle]

I am amazed by how far shorts will go to attempt to keep below 300. They are sinking a lot of capital into this. Why is a close at 299.5 versus 300.5 so meaningful? What gets triggered with a close at 300.5 that could justify millions. If shorts believe in their thesis than why not short sell it all rather than wait for minimal rise above a magic number? If looking for maximal profit yjan let it run up more to short sell rather than 300.5

 

[Wooloomooloo]

People keep talking about Audi, Mercedes, and BMWs. How come no one compares Tesla to companies with similar ASPs?

These are U.S Sales

Maserati is very similar to Tesla when it comes to 2017 ASP. Tesla outsold Maserati by 4x in 2017. This is without the need for all this "pent up demand" from reservations since 2017 was mostly just S and X sales.

Tesla's ASP is now very similar to Porsche for 2018. Porsche have sold a total of 55k in 2017. Tesla will be able to sell more cars in a quarter than Porsche in a year in the U.S

In every ASP category Tesla is in, Tesla has been just dominating by huge margins in # of sales! This is with only 3 models of cars! Porsche has sedans, large SUVs, small SUVs and sport cars with super high reliability ratings and yet they will be at only 1/2 or 1/3 of Tesla sales for 2018? Every auto maker needs to be scared.

Porsche US car sales figures

Maserati US car sales figures

Nice post - I think people forget what the sales numbers are for cars of similar ASP.

It is worth remembering though that Porsche and Maserati are owned by VW and Chrysler/Fiat respectively and those niche markets they participate in don't need to scale, because the lower end of the market is full of Golfs and Jettas - whereas Tesla is relying on their market share scaling to eventually compete with those cars.

 

[Singuy]

Nice post - I think people forget what the sales numbers are for cars of similar ASP.

It is worth remembering though that Porsche and Maserati are owned by VW and Chrysler/Fiat respectively and those niche markets they participate in don't need to scale, because the lower end of the market is full of Golfs and Jettas - whereas Tesla is relying on their market share scaling to eventually compete with those cars.

I argue that being expensive is a niche market, but being electric, expensive, and from a brand new start up is the ultimate niche vehicle. The only transportation device more niche than Teslas on paper are giant sun powered hamster balls for human use.

 

[Wooloomooloo]

I argue that being expensive is a niche market, but being electric, expensive, and from a brand new start up is the ultimate niche vehicle. The only transportation device more niche than Teslas on paper are giant sun powered hamster balls for human use.

True, but in 10 years EV's won't be niche. The whole debate about Tesla's success isn't really about how well they can do selling 50,000 cars at an ASP of north of $60k, it's about whether then can sell 1 million cars at an ASP of $35k 3 or 4 years from now. We know Toyota, VW and Ford etc can.

I'm on Tesla's side, I want them to do it, but there's a long way to go before they're competing with Wolfsburg.

 

[humbaba]

I argue that being expensive is a niche market, but being electric, expensive, and from a brand new start up is the ultimate niche vehicle. The only transportation device more niche than Teslas on paper are giant sun powered hamster balls for human use.

Interesting niche that outsells not only niche vehicles like Maserati (all models) or Porsche (all models), but also all luxury sedans. Seems like such a large niche that it might not really be accurately called a niche?

 

[shlokavica22]

Need some advice on call options-
I am convinced Tesla will have a breakout quarter, but don’t want to add more stock and don’t have enough liquidity in my account anyways. So I was thinking of buying a few call options with the cash available in the account approved for options trading.

What strike date would be best? I expect stock to run up when firm numbers for production and delivery are available. Does it have to be after earnings call? I was thinking October 12, as most numbers would be unofficially out by then, and the upside would baked into the stock price well before earnings call.

This is strictly speculative trading, and I understand I could lose all the money. I am new at options, so consider this learning as well.

The stakes for the shorts are extremely high. They have the MSM on their side and they will do everything in their power to downplay any positive news from the Q3 call.
In my opinion it's better to look for Jan'19 calls on.