Short-Term TSLA Price Movements - 2013

[InTheShadows]

... There will be pull backs, there will be sharp pull backs bc technically there has to be for every stock. those are buying opportunities and if you do not seize them you will be back to horse and buggy days I am afraid.

Or back to the ICE days

 

[Acmykguy]

being a chartist at heart, if you look at the 6 mo chart of TSLA and apply the bollinger bands, and a few other statistical tools, To me it looks like we can easily see 160-170 within 2 months. after that my we would have a sharp pull back to at least where we are now if not close to 110 but then slowly trudging back up to 200 by Q4 or Q1 14 Just what I see...

 

[EarlyAdopter]

The demand for the Model S is not sustainable at that level and warranty expenses will destroy any proft margin.

Tesla already accounts for a warranty reserve hold back with each car sold. It's accounted for as part of the cost of goods sold, so it already has impacted profit margin. Warranty expenses can therefor only affect profit margins further if the actual expenses realized exceed the warranty reserve.

 

[johnnydop]

Anything above 150 would be too much pain for me. I will take the loss than.

From a fundamental perspective I don't see a real change to my opinion. The valuation is insane, even in the very very best scenario.

Making Money in the car business is difficult. Tesla has massive challenges ahead. They are producing cars at an extreme pace, but the car has obvious design and concept flaws. Just look at the various threads in this forum. The car has a long list of problems and so far no one has owned this car for more than a year.

If you have 2 or 3 warranty issues on each car you destroy your profit margins. The key is to get the quality sustainable. Tesla is far away from that. If there is a serious issue with the car they could get wiped out in weeks without capital injection.

The valuation is insane but this is a growth stock in its infancy. Take a look at AMZN. It's still delivering losses with profit margins at 0.5% yet the stock continues to defy gravity. Why, because investors are betting that once they stop spending on fulfillment centers their numbers will quickly flip positive. The stock yields confidence in the CEO and his grand long term plan.

Those who are long TSLA all believe in Elon's grand plan but his plan doesn't involve selling diapers and books online but a product that could change the world for the better good of man kind. This is why there is so much passion behind the stock and more importantly, the product itself. I understand if you don't believe in the plan but I don't think you can question the valuation when all we have seen is the tip of the iceberg.

 

[DaveT]

being a chartist at heart, if you look at the 6 mo chart of TSLA and apply the bollinger bands, and a few other statistical tools, To me it looks like we can easily see 160-170 within 2 months. after that my we would have a sharp pull back to at least where we are now if not close to 110 but then slowly trudging back up to 200 by Q4 or Q1 14 Just what I see...

I've wanted to ask someone really good in technical analysis what they see if they start their analysis from when the stock was at $90 (and completely ignore data before the recent secondary offering).

Acmykguy, if you do that do you still get 200 by Q4/Q1-14?

 

[Acmykguy]

The valuation is insane but this is a growth stock in its infancy. Take a look at AMZN. It's still delivering losses with profit margins at 0.5% yet the stock continues to defy gravity. Why, because investors are betting that once they stop spending on fulfillment centers their numbers will quickly flip positive. The stock yields confidence in the CEO and his grand long term plan.

Those who are long TSLA all believe in Elon's grand plan but his plan doesn't involve selling diapers and books online but a product that could change the world for the better good of man kind. This is why there is so much passion behind the stock and more importantly, the product itself. I understand if you don't believe in the plan but I don't think you can question the valuation when all we have seen is the tip of the iceberg.

Also remember amzn has bezos. They are continuing to grow and expand. Jeff is unstoppable and aside from any major misstep amza will continue at current valuations. That is why they dropped $15 in after hrs after release on,y to close up the next day my 3 or whatever it was. Tsla is in the same ballpark. They (we) have Elon. Jeff and Elin were cut from the same cloth.

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I've wanted to ask someone really good in technical analysis what they see if they start their analysis from when the stock was at $90 (and completely ignore data before the recent secondary offering).

Acmykguy, if you do that do you still get 200 by Q4/Q1-14?

I don't think it is out of the question however that said ere is some increase constraint on bollinger bands. Which means the stock is in near term going to spike up or down. By following trend line and money flows in addition to some other tools I still think a lot is riding on Q2 results and subsequently Q3. Those numbers need to preform and if they do yes 200 is possible. The stock would likely in q4 ride up but there would be a tremendous amount of short interest coming in as well which would help in the case of a short squeeze.

Now in q2 let's say we have great report ....stock spikes. 1 month later you get Ackman or some other goof ball report some stupid comment about tsla or a news comp does , stock will be punish huge like in gs report

does this help any?

Disclosure : I am long sept calls 135,140,150,160 and jan 15 150 strike. AND long puts aug 60 strike ( cheap cheap ins in case there is sell on news and we get hammered)

 

[Johan]

Also remember amzn has bezos. They are continuing to grow and expand. Jeff is unstoppable and aside from any major misstep amza will continue at current valuations. That is why they dropped $15 in after hrs after release on,y to close up the next day my 3 or whatever it was. Tsla is in the same ballpark. They (we) have Elon. Jeff and Elin were cut from the same cloth.

- - - Updated - - -


I don't think it is out of the question however that said ere is some increase constraint on bollinger bands. Which means the stock is in near term going to spike up or down. By following trend line and money flows in addition to some other tools I still think a lot is riding on Q2 results and subsequently Q3. Those numbers need to preform and if they do yes 200 is possible. The stock would likely in q4 ride up but there would be a tremendous amount of short interest coming in as well which would help in the case of a short squeeze.

Now in q2 let's say we have great report ....stock spikes. 1 month later you get Ackman or some other goof ball report some stupid comment about tsla or a news comp does , stock will be punish huge like in gs report

does this help any?

Disclosure : I am long sept calls 135,140,150,160 and jan 15 150 strike. AND long puts aug 60 strike ( cheap cheap ins in case there is sell on news and we get hammered)

I have a similar bullish short term outlook and many different potential high-yield calls in play, but will definitely buy some puts too as insurance. Will se what the 90 puts are selling for, both Aug and Sept. Even if we get really hammered after Q2 do you really think an Aug 60 put will get you anything? I'd think that lower than the 80's would be highly unlikely... In that case you'd have to time your put sell and sell before price levels out. There will be only two trading days to do this...

 

[Vger]

Tesla already accounts for a warranty reserve hold back with each car sold. It's accounted for as part of the cost of goods sold, so it already has impacted profit margin. Warranty expenses can therefor only affect profit margins further if the actual expenses realized exceed the warranty reserve.

Exactly. Our car had three fairly big issues, but was built during the heat of the ramp-up in November (Delivered among first in Canada Dec. 19). Such cars are now largely fixed and the underlying issues resolved (like the stress-fracturing windshields, presumably caused by an out-of-calibration robot). So these will be the things that, added to the production line itself, held down margins in Q4 and Q1. If we see a big margin improvement in Q2 (ex. ZEV), that will signal that the issues are diminishing, overall. If we do not see these issues disappear in another one to two Qs, then I would worry.

Remember though, Tesla went through this with the Roadster, and Elon learned his lessons. They are charging a premium price up front to accommodate these issues (and the SC build-out and ops, etc.). I think the base COGS of the car is a lot lower than people think. That is why DB thinks Tesla can get Model S up to 35% gross margin eventually.

 

[fjm9898]

Vger, i totally agree. Its one of the many Reasons the GM is increasing quarter to quarter. They are finding and weeding out the issues which helps production and saves warranty costs. And as you said DB pointed out 35% GM. Well that is because there are alot of efficiencies left to be found and a higher production rate would bring down outsourcing costs on many parts due to volume as well.

 

[Jack6591]

Vger, Fjm9898, I am in complete agreement. A gross margin guidance of greater than 25% will lead to a blow-out Q2.

 

[fjm9898]

Jackl, we arent saying the 25% is going to happen this quarter. We were pointing out the flows In Realist's statement as well as pointing out that 25% is more then possible, if not better. If they hit 25% by Q3 then we are going to see another good report then too since their guidance is for 25% by end of year. They might revise their guidance for when they hit 25% in this Q2 report, and if they do then that is just another bonus for us.

 

[Jack6591]

Jackl, we arent saying the 25% is going to happen this quarter. We were pointing out the flows In Realist's statement as well as pointing out that 25% is more then possible, if not better. If they hit 25% by Q3 then we are going to see another good report then too since their guidance is for 25% by end of year. They might revise their guidance for when they hit 25% in this Q2 report, and if they do then that is just another bonus for us.

Nor did I. Just guidance.

 

[fjm9898]

Ahh my fault i just mis-read it the first time.

 

[Acmykguy]

Ok everyone ..... On the chance that Q2 is bad many if us are going to look a horses ass....self included. So it better be good!

 

[deonb]

Ok everyone ..... On the chance that Q2 is bad many if us are going to look a horses ass....self included. So it better be good!

If Q2 is bad we'll all stand to make a lot more money long term due to the buy-in opportunity it will present. One of my best trades ever came as a result of last Tuesday's dip - I know this goes for some other people on here as well.

Just play this smart and make sure you're in a position to make use of a dip should one present itself.

 

[ongba]

Disclosure : I am long sept calls 135,140,150,160 and jan 15 150 strike. AND long puts aug 60 strike ( cheap cheap ins in case there is sell on news and we get hammered)

Acmykguy,

I am bullish for the upcoming earnings as well but would like to hedge with some puts similar to what you are holding. What % of your position is made up of puts? I am thinking along the lines of 80% calls and 20% puts. Is that reasonable? Many thanks!

 

[Jack6591]

In terms of Q2 I am much more concerned with the progress on gross margin. One of the overriding reasons I have invested in Tesla Motors is Elon Musk's work ethic. First, I do not see him burning unnecessary calories. Second, he has an incredible work ethic. Third, the man works smart. I am expecting significant progress on gross margin. I believe that is evident in the DB analysis. Q2 will succeed or fail on GM.

 

[StapleGun]

In terms of Q2 I am much more concerned with the progress on gross margin. One of the overriding reasons I have invested in Tesla Motors is Elon Musk's work ethic. First, I do not see him burning unnecessary calories. Second, he has an incredible work ethic. Third, the man works smart. I am expecting significant progress on gross margin. I believe that is evident in the DB analysis. Q2 will succeed or fail on GM.

I agree that will be the single most important metric in the report. I think it's a good sign that Elon said getting to 25% by Q4 is their main goal. When Elon has a goal he will do whatever it takes to make it happen. Also, since we've been hearing about 550+/week production I think it's a sign that they are in a good place with margins, and have been able to spend some time concentrating on volume already even though it was not their main focus.

 

[Convert2013]

Like Elon I am long on Tesla, will not play the market based on a potential bad quarter or two, other than accumulate more shares whenever possible. I am focused on Gen 3. But good luck to all you guys who're playing the market. Hope it works out for you all.

 

[fjm9898]

Convert, I believe we are all Long as well, just using earning to grab up a few more bucks on the way up.