Short-Term TSLA Price Movements - 2013

[blakegallagher]

Regarding Elon's comment at Teslive about battery production capacity... My takeaway was that Elon was referring to battery production constraints with respect to Gen III ONLY. Love to hear if someone thought differently.

This being said, there have been plenty of statements from TM about current supplier issues but I don't think Panasonic was one of the ones TM was referring to...

I agree it was for Gen III. I do think battery makers will be ramping up well before it gets here just due to the demand from the Model S and Model X.

I have seen more than a few articles mistake him (or misquote) as saying they were currently having battery supplier issues.

 

[Palpatine]

Elon Musk, "How do we stop being so stupid"

This audio is hilarious to listen to.

http://media56.podbean.com/pb/b45ee...gs1/628106/uploads/TeslaSucksatmakingcars.m4a

 

[blakegallagher]

I have not heard this. Any link/further info. I know he is not afraid to short stocks. Would be interested in how he is investing as I have a few $ in CGM Focus.

Heebner Buys Ford, Tesla; Sells BlackRock, Toll Brothers (1) - Businessweek

 

[DaveT]

You said the market found the bottom at 135 and quickly bounced out of the 130s. What were the mechanics behind this? I understand that there were probably a lot of limit orders set for 135 which would stop it from falling below 135 but what caused it to bounce out of the 130s? How did the 135 floor affect the overall mood/sentiment? How do we know that 135 is the bottom?

Here's what I'm thinking. The 138 level has been key the past couple days (previously the stock has broken down all previous resistance levels in the 140s on it's way down). Yesterday it kept trying to break under 138 but couldn't. There was too much resistance/buyers at that level. The resistance/demand at 138 was strong but not strong enough to push the stock above 140 and keep it there. So, this morning the stock tried to break under $138 again and was momentarily successfully (previously it could get only to 137.5 or so but could really break under). I would imagine there were stop loss orders at 137 because since resistance was strong at 138, a lot of people are thinking when/if it breaks that it has a good chance of tanking a lot more. As it crosses 137.5 traders short the stock because it's about to break the resistance level and tank. Then, it hits the 137 stop loss orders and drops fast. Then, it hits 135 and there are a ton of buyers (likely buy limit orders set at 135.00 probably by big buyers) at that point and reverses the direction. As direction gets reversed traders reverse positions and go long and push stock past 138 (since below that has been successfully tested) and tests 140. Since below 138 has been tested by the definitive and decisive 135 strong demand, the stock doesn't have much motivation to test 138 again. So this gives it more momentum to go through 140. It breaks through 140 and should end up closing the day 142-145 and from there start an uptrend (since the limits of the downtrend has been tested and reversed). This is how I viewed things as it was unfolding today (short version). But for some reason things broke down and it couldn't keep above 142. So, in other words there was what looked like a trend reversal (moving from downtrend to uptrend) but it just couldn't keep the momentum. This shows weakness in the stock (likely from the overall market turning into correction mode).

So tomorrow, if the stock is weak (especially if there's a large market sell-off) the stock will re-test the 138 level. If it breaks through again, I'm not sure what happens. There could be big buyers at 135 again, or they could let it fall through to 133 where there's proven strong resistance from pre-Q2 ER. If the stock is really weak (pushed by fear/paranoia from the overall market correction) it will test the 133 level and there's a chance it could break under that resistance level if buyers keep away. But if the stock is strong tomorrow morning (ie., mood is positive) then we could be trading most of the day in the low 140s or higher. There's always the chance the stock trades sideways tomorrow, switching from strong to weak to strong to weak based on the overall market sentiment. This would see us trading in mostly high 130s likely. I've got my own odds on how I see each scenario but they will change hour to hour tomorrow as the market progresses.

 

[Citizen-T]

I'm sure that the supplier issues have factored into the sell-off, but I've seen very little discussion of that. I saw one piece on market watch and a handful (maybe 5?) tweets on the subject. On the other hand, talk of the non-GAAP vs GAAP profit has been everywhere. And everyone is talking about being overvalued based on expectations.

Based on the lack of discussion anywhere, I have a hard time attributing the whole move to the supply issues mentioned.

 

[gene]

HVCC Global to Supply 40,000 Units of Air-conditioning Systems to Tesla Motors | Korea IT Times

Tesla orders 40,000 air conditioning units

 

[gym7rjm]

HVCC Global to Supply 40,000 Units of Air-conditioning Systems to Tesla Motors | Korea IT Times

Tesla orders 40,000 air conditioning units

Nice! Maybe another good news piece will come out before market opens tomorrow and we'll have some positive sentiment. I'd also take a tweet from Elon about an upcoming event or something?!

 

[mitch672]

HVCC Global to Supply 40,000 Units of Air-conditioning Systems to Tesla Motors | Korea IT Times

Tesla orders 40,000 air conditioning units

It shows they intend to produce 40,000 Model S's in 2014, the contract is for next year, which will mostly be just Model S's.
That's positive guidance..

 

[DaveT]

It shows they intend to produce 40,000 Model S's in 2014, the contract is for next year, which will mostly be just Model S's.
That's positive guidance..

It seems like the article states the AC units will be supplied "from next year". I take that as not necessarily all 40k units will be delivered by the end of next year but will start next year and could go into 2015.

 

[Johan]

I am hopeful for tomorrow. I rolled the dice and bought some Aug $140s near the close for $1.22.

BTW, yes, this is gambling, not investing. I basically just put a few dollars on black and spun the wheel. I didn't post about this move before hand because I didn't want anyone following me. Don't try to take away any lesson from this if I end up winning big. Now, if I lose it all (very likely) then maybe there is a lesson for us both to learn in that. =P

I was thinking yesterday, while the stock was trading in the 136-138 range, that I'd buy either Aug 140 calls or Sept 150 calls. Instead, I decided to withdraw 90% of the cash from my account. Right now I agree with you it kind of would feel like gambling in a casino (with the odds really being so-so) as opposed to before Q1 and Q2 where it more felt like gambling in the form of for example sports betting where you know everything about the teams playing, the weather on game-day, the umpires, which player had a fight with his girlfriend last night, what the quarterback had for dinner, etc. etc. (in effect way better odds than gambling in a casino).

 

[deonb]

I'm sure that the supplier issues have factored into the sell-off, but I've seen very little discussion of that. I saw one piece on market watch and a handful (maybe 5?) tweets on the subject. On the other hand, talk of the non-GAAP vs GAAP profit has been everywhere. And everyone is talking about being overvalued based on expectations.

Based on the lack of discussion anywhere, I have a hard time attributing the whole move to the supply issues mentioned.

I think the non-GAAP vs. GAAP profit noise just has to do with retail traders.

I can't imagine that the fund managers at Fidelity Contrafund sit around and look what people at Stocktwits and Seeking Alpha has to say about Tesla. For that matter, I don't think they care about what Tesla has to say about Tesla and how it breaks down GAAP and non-GAAP. They're going to look at the raw numbers and come up with their own conclusions.

But, if I were a fund manager, the fact that Tesla can't get their production rate up would be of grave concern for me. Tesla now has the ultimate first mover advantage, and that's priced in. But they need to execute on it for it to be helpful. If Tesla can't get their production rate up in a year, they're going to start losing sales. The i3 may not be great, but it sure beats driving a Jetta around Europe while waiting years for your Tesla to arrive.

I cringed when I saw that Tesla HK phonecall earlier today.

If they can't get fix this in the next year, they'll start being ridiculed. All those people who said that you can't make enough batteries to support EV's will start writing "I told you so" articles.

So yes, I do think that by not increasing the guidance, and by saying it won't be fixed for at least 6 months, impacted the stock price. The stocktwitters may be off in la-la land, but the institutional money is going to see the bigger picture, and a 6 month delay to a first mover is a huge deal.

Saying "We don't have a demand problem, we have a production problem", isn't far off from saying: "We have millions of people lining up with $20 each to use the Hyperloop - we just don't know how to build it."

 

[nursebee]

Trading around option expiry Friday strikes me as slow, not about momentum but reversion. Many times I have expected a bang and observed a whimper.

 

[Norse]

The crisis in Egypt is getting out of hand and oilprices will go up. I think this is good news for Tesla. Even if there is not a full war, people will allways see the risk. This goes both short and longterm IMO. And no Im not hoping for a war, but I think the whole region is bound for disaster.

The bottleneck was the reason why I didnt like Q2 earnings. Like we saw with the solar companies. Even if some of them had good ER, the stock still went down. Solar companies will aso benefit from higher oilprices, and most of them are down alot after ER.

The big question is. What can be the bottleneck(s)?

 

[marvinat0rz]

The big question is. What can be the bottleneck(s)?

Batteries. Guaranteed. This is the #1 issue from here on out. I agree with deonb, this supply bottleneck is what I'm worried about both right now and for the future. Will they really be able to secure enough batteries to make 500,000 cars a year in a few years?

 

[Jonathan Hewitt]

Batteries. Guaranteed. This is the #1 issue from here on out. I agree with deonb, this supply bottleneck is what I'm worried about both right now and for the future. Will they really be able to secure enough batteries to make 500,000 cars a year in a few years?

While the point many people expect them to be making 500,000 cars a year isn't really that far away I think that they will figure something out by then. It's not a ton of time, but enough that I think they will figure it out. If you look at their growing pains over just the last year they've come a LONG way. Almost nobody thought they would be where they are now if you had asked 1 year ago. I'm more concerned about if everyone else thinks they can do it. If not, short term price is going to be depressed.

 

[marvinat0rz]

It's a big scaling problem. I am not a subject matter expert, but they probably need on the order of a billion dollars investment in pure battery cell production. Maybe more. So it's easy to be anxious about this. Tesla will become the world's biggest consumer of battery cells, hands down.

 

[twinklejet]

And in related news... Premarket volume is now over 4,000 and trading above $142.

 

[justthateasy]

And in related news... Premarket volume is now over 4,000 and trading above $142.

Yup, the last trade I saw was at 142.35. It looks like today might be a decent day and we can hopefully see TSLA move north of 145 early next week.

 

[twinklejet]

Another big news is that Firmware 5.0 is out in the wild! Why is it big? Because once all those "review" cars (Edmunds, MotorTrend, etc.) start getting updated, articles will be generated reviewing the new features and fixes which will subsequently be picked up and rehashed by other outlets and websites and the Tesla name spreads...

 

[JRP3]

Batteries. Guaranteed. This is the #1 issue from here on out. I agree with deonb, this supply bottleneck is what I'm worried about both right now and for the future. Will they really be able to secure enough batteries to make 500,000 cars a year in a few years?

I don't think it's an issue till Gen3, as others have mentioned, it's the holdup from other current parts suppliers.

One thing that surprised me is I haven't seen much hype about the crash test ratings. Maybe that was a forgone conclusion.