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Why is the stock getting hammered?

Discussion in 'TSLA Investor Discussions' started by a0128, Oct 13, 2014.

  1. a0128

    a0128 Member

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    New product announcement, new features. You woudl think the investor community would be happy. What is going on?
     
  2. deonb

    deonb Active Member

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    The stock was pricing in a 100kWh Model 3 that will be available by Thanksgiving 2014, and costs < $20'000 with available production capacity of 1 million per week.

    Since that didn't happen, the investor community is disappointed.
     
  3. Raffy.Roma

    Raffy.Roma Active Member

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    Are you serious? :confused:

    IMO the new Model S P85D is too advanced and the investor community is afraid that such a revolutionary car will not be successful.
     
  4. mitch672

    mitch672 Active Member

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    what's really funny is, with the "D" announcement, many early adopters will trade in to Tesla, who then certify the used Model S under the CPO program, they'll likely make decent margins on this, plus they are selling the former owner a new improved Model S, at even better margins than they sold the first one to them... it just shows how wrong wall street got this one.
     
  5. RobStark

    RobStark Active Member

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    Sarcasm.

    Wall Street and their bots do not understand how dual motor electric AWD is superior to conventional AWD.

    Their impression is that Tesla is "catching up" to Mercedes,Audi, and BMW.

    When in fact Tesla is surpassing the legacy automakers by most metrics.

    A year from now when they see the deliveries and Average Selling Prices they will begin to get it.
     
  6. SBenson

    SBenson Active Member

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    It's very easy to makeup reasons for price action after the fact. That's what financial media does best. Having said that, let me throw in my thoughts:

    - Post D price action is a classic "buy the rumor, sell the news"
    - Everyone is getting scared of Q3 report. If I were a short-term trader, I would stay out.
    - There is no upcoming catalyst lined up (maybe X release but that's several months away), so why go in front of a bad ER
    - Overall market is not doing well either. High beta is getting hammered. TSLA trading down along with the rest.
     
  7. Familial Rhino

    Familial Rhino Endangerous Herbivore

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    Yes, and in fact many of those bots are currently employed as analysts on Wall Street. A few also appear regularly on CNBC and Bloomberg TV. These bots are everywhere.
     
  8. uselesslogin

    uselesslogin Enthusiast

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    Yeah I was ready to see the stock at $270+ on Friday. Wow did I call that wrong. If they unveiled the X I would have expected a "sell the news" reaction. So what, we know the X is coming. The D is here and now and contributes to the Q4 financials.
     
  9. adiggs

    adiggs Active Member

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    Somebody at work today asked me about my take on the Thursday reveal. Probably a bit hyperbolic of me, but I told him that was the semiconductor transistor to the auto industry's vacuum tube that was announced Thursday night, and the auto industry mostly doesn't seem to realize it. Certainly the media and analysts based on what they're talking about don't realize it.

    Tesla just dropped a full second of their 0-60 time, making them far far away the fastest luxury sedan, in higher volume than anybody else at that extreme performance level, at lower maintenance levels, and in an easier to use package (no launch control, getting each shift just right, keeping the motor in it's power band; just select Insane, put foot on floor, and hold on tight :)). Oh - while IMPROVING the efficiency of the car. That's the kind of Moore's Law improvement we're accustomed to seeing from a new semiconductor manufacturing node (faster process, cheaper to make, lower power consumption).

    And for the car for most people, the non-performance variant, just $4k option price on a $80k + car? I expect the uptake on AWD to be borderline 100% - it's too much incremental utility in the car for too little money to not take it (IMO).
     
  10. SteveG3

    SteveG3 Active Member

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    It think that's quite a good list of components to what's going on.

    I'd add that traders love to trade this stock, and they do this both ways. This exaggerates movements.

    As to upcoming catalysts, there is uncertainty to when X will be revealed, it may be as much of a wait as 3 months (Detroit Auto Show), but it really could happen any time before then as well. Q3 ER report maybe scaring people... but it could reveal things that the market responds to bullishly. Personally I'm cautious short-term, but that's only because I only buy trading shares when the stock is "stupid obvious cheap" (my long term shares I have held without trading for over two years and that's not changing with this round of volatility).
     
  11. anticitizen13.7

    anticitizen13.7 Enemy of the Status Quo

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    This was my general assessment as well. Elon's tweet about the "D" sent everyone, including myself, into a speculative frenzy about the October 9th event. A lot of people expected a Model X reveal. I saw that at least one analyst said he was sure we'd see Model 3, which was a crazy guess. When neither the X nor the 3 made a showing on October 9th, speculators sold off.

    I don't get the sense that Wall Street understands the implications of Dual Motor. Most people are stuck on the notion that AWD means better traction but lower efficiency. Tesla's Dual Motor means that it's AWD has better traction, better acceleration, and higher efficiency. It's a good value, and I think it'll raise margins on the Model S as many customers will option up.

    The readiness of Dual Motor also means that there's no doubt Model X is ready with respect to the powertrain. So basically, the stock is down because Oct. 9 didn't meet hyped expectations, and because many market participants fail to realize that the Dual Motor upends AWD. The evolving capabilities of the driver assist sensor suite also won't be clear until a few software updates down the road.
     
  12. trils0n

    trils0n 2013 P85

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    Wall Street simply doesn't understand what Tesla unveiled. All of the articles say some variation of "Tesla is playing catch up. All other manufacturers have AWD and autopilot features". In reality, Tesla just showed how far ahead they are. Elon was partially right when he said the internet got the reveal correct, but not the magnitude. It is Wall Street that didn't understand the magnitude. The internet, and Tesla customers seem to understand the magnitude. These cars are so much better that people who just got previous top of the line cars (arguably the best car in the world at the time) are complaining that they didn't receive the (head and shoulders above the rest) best car that Elon and Tesla displayed on Thursday.

    This reveal also shows that the Model X, and Model 3 will be awesome. The rate of improvement is astounding, and we haven't even got into batteries yet!
     
  13. SBenson

    SBenson Active Member

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    Excellent thoughts everyone. I will add one more point to the discussion.

    If I was on the management team (or just as a long term shareholder that I am), I will look at reservations on D to measure the launch success. Price action of the stock is pretty irrelevant. Unfortunately that's not public info yet. But hopefully CC will shed some light on it. Looking at many forum posts, twitter posts, a few news articles, the event generated quite a bit of demand. Leaning on the optimistic side, I consider the launch to be a big success.
     
  14. TEG

    TEG TMC Moderator

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    ^^^ this! ^^^
     
  15. Jackl1956

    Jackl1956 Member

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    The Market’s “Endowment Effect”,Media Bias (who owns the media conglomerates?) and Tesla Motors or “How I learned to stop worrying and love the war between the shorts and the longs


    Disclosure: I am man who grins when he fights. (Tesla grin that is)

    The media will invariably spin positive developments in a negative light. However, they cannot stop people from experiencing Tesla's products. Challenge everyone you know to test a drive a P85D.
     
  16. NigelM

    NigelM Recovering Member

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    Here's a few thoughts:

    • The summer shutdown seemed to take longer than was planned, and certainly seemed more disruptive than anticipated. See the threads/posts on TMC about moving delivery dates and upset customers.
    • By many accounts Tesla were very busy making deliveries in the second half of September. Outward appearance could be interpreted as a rush to make target.
    • Based on those two points anyone feeling a little bearish (stock price too high Elon?) is likely already imagining that Tesla will barely make guidance in Q3.
    • Folks worked themselves into a frenzy expecting more than AWD and sometime future autopilot functions. Aficionados loved it but did the market see it as just some new features.
    • The "glass half-empty view": Is Model S demand stagnating? Why the new additional features now? Is this timing to compensate for a failure to meet Q3 guidance? Is Tesla spending money on a factory and R&D for new models but has to intro additional features to bolster the current one?
    • Market down also. TSLA has always been volatile.

    Personally I don't subscribe to the "glass half-empty view" but I do suspect that Q3 ER might be less than stellar; my guess is that we'll see the stock languish (or even slide a little more) until the ER and it'll bounce afterwards if there's good news then on Model S demand and Model X roll-out. There's undoubtedly a buying opportunity now or in the near future, it's just a question of timing to pick exactly the right moment.
     
  17. evme

    evme Member

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    Just out of curiosity, does anyone know what the situation is with the loaners? Usually at end of the year Tesla likes to get rid of their loaner fleet, and with the AWD update and some people planning on trading in their cars, it would have made sense for Tesla to dump their loaner fleet in Q3. Any info on that front?
     
  18. DriverOne

    DriverOne Member

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    Analysts disappointed as Tesla only unveils world's fastest production car that also can drive itself.

    - - - Updated - - -

    Think of Tesla as a tech company. If Apple announces a new iPhone or new iOS, the stock doesn't jump. Tech companies are expected to refine and improve their products - that's already built into the stock price. Refinements to the Model S won't do jack **** for the stock. Ignoring the technical specifics of what was introduced, it wasn't any sort of surprise. NOT doing improvements would send the stock south however!

    Concrete news on the Model X could induce a move up - that's a new product which could create significant additional sales. The gigafactory is built into the stock now too. Only news of early completion will help there.

    If tech updates really wafted stocks higher, you could buy AAPL every June for WWDC and again every September for iPhone upgrades and make a fortune. Doesn't happen though.
     
  19. Robert.Boston

    Robert.Boston Model S VIN P01536

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    The price plunge is linked (at least temporally) to the D event, so I find it hard to credit theories that the price weakness relates to Q3 delivery worries, etc. Those secondary items might fail to support the price, but the trigger was clearly disappointment by investors collectively in what they saw on Thursday.

    As for me, I was delighted by what I saw on Thursday. It tells me that the Model X's range will be as good as the RWD Model S (or close), closing one concern I had there, and that the (hypothetical) Model PX85D is going to blow away its closest competitor, the Porsche Cayenne Turbo (though probably at a bit higher price point for that model).
     
  20. Chickenlittle

    Chickenlittle Active Member

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    i agree with what you said but i also think several factors have converged
    1. if you look back on previous qtrs, usually drop for a month going into earnings report
    2. general market conditions
    3. perception here on these forums, without any hard evidence, that factory was slow to start up after shut down and question of a miss on guidance. these have been repeated enough to become dogma. i do not believe these. my NDA has expired now and i toured the factory the first week of august. the presses were going and in the distance, i saw robots lifting and appearing to work. we were not allowed to see the line in action. I suspect this was because model x prototypes may have been in production. the factory appeared fully staffed.
    4. people upset over getting their cars prior to the new features. this is something all owners have lived with in the past. some had battery packs that charge at lower rate at superchargers, some lack previous options like winter package and parking assist, older cars heavier (as now made lighter). i suspect they will offer upgrade, they did for parking sensors. only cost 6000 dollars which few bought. i suspect the cost will be prohibitive for upgrade sensors and motors. i still enjoy my antique and would not trade it in. all the reasons i bought it for still exist.
     

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