Short-Term TSLA Price Movements - 2016

[Sudre]

And on my previous comment on EM's "vagueness" of $100/kWh, I totally take that back. Appears I missed a lot of context yesterday.

I noticed that he started to answer then the line went silent. IMO (take as a grain of salt) I think he was either muted (button pressed on phone) or someone was waving their arms mouthing "SHUT UP!". I know EM talks that way anyway but this was a longer pause.


As far as shorts.... I see them doubling down right now. This is not a squeeze like others have noted. The price is to low shorts are in the money.... but now.... read the comments. Shorts are doubling down thinking it's over for Tesla and the entire ER and CC was a totally fabrication. Heck we have people here insinuating that. This could be creating a squeeze moment.

The real free commercial is going to be the news showing lines out the doors at Tesla Stores and people that do not know are going to find out pretty quick.

 

[jhm]

Here are my thoughts about the Model 3 reservation plan:

+ $1000 is low. Musk wants to optimize the total number of units reserved, not aggregate dollars deposited.
+ Elimination of Signature series. Tesla may be trying to overcome prior elitism associated with the brand. This is a people's car.
+ Initial new features on the Model 3 will be minimal. This aids in simplifying ramp up.
+ New feature will be added to the Model 3 in subsequent years. This keeps the model line fresh and in ever increasing demand for many years to come.
+ Limited access to placing reservations on March 31. This forces people into stores which should give birth to near term Model S sales. But also this limits cashflow in Q1. The bulk of cash flow will come in Q2.

People's Model 3 Hypothesis: Tesla will begin with the base model at $35k in 2017 and progressively add higher end options.

This hypothesis is a reversal of what we see with the Model X where they have begun with the high end version and will progressively offer more affordable versions. So the Model X roll out is quite elitist. By contrast, the Model 3 can become the People's Tesla. Customers will delight to see how advanced the car can become over time. So there will be large exponential growth in demand, and ASP and GM for the Model 3 will increase over time.

Additionally I think a high number of reservations creates a mandate for rapid scaling of production. Tesla should be able to justify to stock and bond investors sufficient capital expansion as needed to fulfill reservations within 12 months of launch. Certainly there is massive capacity in Fremont and the Gigafactory, but if reservations exceed 400k, they will have a mandate. Conversely if reservations are under 200k, Fremont and Gigafactory 1 will clearly suffice. So I think Musk is rolling the dice for a customer mandate to accelerate capacity expansion. So we'll know in Q2 what the people say.

 

[Fallenone]

I forgot if there were some moments of silence for that question yesterday. The wifi was not very good so I had some disconnections from time to time in the first place. Reading the transcript, the question was very well answered.

I noticed that he started to answer then the line went silent. IMO (take as a grain of salt) I think he was either muted (button pressed on phone) or someone was waving their arms mouthing "SHUT UP!". I know EM talks that way anyway but this was a longer pause.


As far as shorts.... I see them doubling down right now. This is not a squeeze like others have noted. The price is to low shorts are in the money.... but now.... read the comments. Shorts are doubling down thinking it's over for Tesla and the entire ER and CC was a totally fabrication. Heck we have people here insinuating that. This could be creating a squeeze moment.

The real free commercial is going to be the news showing lines out the doors at Tesla Stores and people that do not know are going to find out pretty quick.

 

[dreamingof3]

They are going to do a commercial, except it's going to be free and it's going to be live on every local and national news cast. What percentage of people do you think are unaware there is a Tesla store in their town? Probably less in the towns where Tesla is in a Mall, but still a high number. This is going to create a massive buzz. I've always laughed and mocked the idiots waiting in line for an iphone, I may have to dig out the tent for this one. closest stores to me are 2 hours.[/QUOTE]
I must say I rarely see Tesla's in my area at all. I am near Cincinnati- so I think it largely depends on what area you live in if you have paid much attention to the Tesla story. there are a lot of oblivious people. I hear stories about people getting stopped in Tesla's with people asking "who makes it".

 

[tinm]

Right. By requiring people to line up at Tesla stores before the online ordering begins, they're daring the local media to cover every store with news crews, interview all the people in line, and generate massive buzz. And then announce, if you're not near a store, starting tomorrow you can order online at, etc, etc....

Not a bad guerilla marketing move! Right out of Apple's playbook.

 

[aznt1217]

I don't think they need to do commercials for M3 until a lot closer to 2020 the earliest.

No commercials needed ever. The Model X is a driving commercial everytime those doors open.

- - - Updated - - -

Right. By requiring people to line up at Tesla stores before the online ordering begins, they're daring the local media to cover every store with news crews, interview all the people in line, and generate massive buzz. And then announce, if you're not near a store, starting tomorrow you can order online at, etc, etc....

Not a bad guerilla marketing move! Right out of Apple's playbook.

Basically an apple launch...

 

[Fallenone]

I think the people showing up at stores to reserve the M3 will be quite a lot, but not holding my breath to see huge lines that will be on the headlines all over the media.

They are going to do a commercial, except it's going to be free and it's going to be live on every local and national news cast. What percentage of people do you think are unaware there is a Tesla store in their town? Probably less in the towns where Tesla is in a Mall, but still a high number. This is going to create a massive buzz. I've always laughed and mocked the idiots waiting in line for an iphone, I may have to dig out the tent for this one. closest stores to me are 2 hours.

I must say I rarely see Tesla's in my area at all. I am near Cincinnati- so I think it largely depends on what area you live in if you have paid much attention to the Tesla story. there are a lot of oblivious people. I hear stories about people getting stopped in Tesla's with people asking "who makes it".[/QUOTE]

 

[uselesslogin]

I noticed that he started to answer then the line went silent. IMO (take as a grain of salt) I think he was either muted (button pressed on phone) or someone was waving their arms mouthing "SHUT UP!". I know EM talks that way anyway but this was a longer pause.


As far as shorts.... I see them doubling down right now. This is not a squeeze like others have noted. The price is to low shorts are in the money.... but now.... read the comments. Shorts are doubling down thinking it's over for Tesla and the entire ER and CC was a totally fabrication. Heck we have people here insinuating that. This could be creating a squeeze moment.

The real free commercial is going to be the news showing lines out the doors at Tesla Stores and people that do not know are going to find out pretty quick.

The whole short squeeze dreams require the shorts to stay in it all the way back up to $280 or so. And then Tesla comes out with a good report - like one showing GAAP profitability. I honestly don't think the shorts will stay in it that long this time but who knows. Looks like retail shorts at Interactive Brokers added 20,000 shares today but that doesn't mean anything really other than we aren't seeing heavy covering. The $0.87 loss is perfect for bringing them in and also the whole "core operating cash flow" which sounds like something a dying company would make up. I don't know if they did that intentionally or not - since it makes sense to illustrate it that way since that is real cash coming into their business. $1.5 billion CapEx looks way easier to absorb this year without a capital raise then $2 billion looked like last year.

 

[jesselivenomore]

Gold and bonds up huge. Perhaps there is some capitulation there for the short term, but does not bode well for macros medium term and representative of the fear building up in the markets. With ER taking capital raise off the table, I am hopeful that TSLA will outperform the indices from now on instead of overreacting to the downside at the hint of credit crunch. Still, while back long, I am hedged for macro risks(actually short), the issues there are unresolved.

 

[dreamingof3]

Smoking volume so far 6.7 million at 10:39. We could see a major price move by EOD

 

[FredTMC]

Right. By requiring people to line up at Tesla stores before the online ordering begins, they're daring the local media to cover every store with news crews, interview all the people in line, and generate massive buzz. And then announce, if you're not near a store, starting tomorrow you can order online at, etc, etc....

Not a bad guerilla marketing move! Right out of Apple's playbook.

exactly my thoughts. Lines at the store before the store opens. Just like Apple event. You can't buy this type of advertising

 

[v12 to 12v]

I forgot if there were some moments of silence for that question yesterday. The wifi was not very good so I had some disconnections from time to time in the first place. Reading the transcript, the question was very well answered.

I heard some snickers in the background when they were asked about the Bolt. They did a good job of trying to hide the tittering.

 

[aznt1217]

Smoking volume so far 6.7 million at 10:39. We could see a major price move by EOD

Typically 11:00 AM and 2:00 PM are the times things intensify

 

[sunhelm]

Right. By requiring people to line up at Tesla stores before the online ordering begins, they're daring the local media to cover every store with news crews, interview all the people in line, and generate massive buzz. And then announce, if you're not near a store, starting tomorrow you can order online at, etc, etc....

Not a bad guerilla marketing move! Right out of Apple's playbook.

To add to this, for states that do not allow stores due to current legislation, this just might rile people up as they have to drive to another state just to get the early 3/31 reservation.

When a significant number of people get riled up, they take action and the momentum for changing the status quo just increases, well, exponentially.

 

[Oil4AsphaultOnly]

Gold and bonds up huge. Perhaps there is some capitulation there for the short term, but does not bode well for macros medium term and representative of the fear building up in the markets. With ER taking capital raise off the table, I am hopeful that TSLA will outperform the indices from now on instead of overreacting to the downside at the hint of credit crunch. Still, while back long, I am hedged for macro risks(actually short), the issues there are unresolved.

With the intraday high looking like $163, would you say that the shorts from the past 2 days have already covered and the ones remaining are still in the money so are in no hurry to cover? Does $150 look like a bottom?

 

[Buddyroe]

This is the one time that living in a "non-Tesla" aware area of the country may be an advantage. I just have to figure out which Tesla store in my region (ie, Southeast) would likely have the shortest lines. Fortunately, my kids have spring break that same week so it looks like whichever store we pick is where we will vacation also.

And as an added bonus for my kids, they may get their first camping trip also! :smile:

EDIT: I see that Tesla has 3 stores in Atlanta. They are allowed to have 4 in Georgia (don't get me started on that). I wonder what the chances are that they open a temporary store in some other location (like SAVANNAH!) to help with the orders. I'm not that familiar with the agreement Tesla made with Georgia. I wonder if they have to have a service center within a certain number of miles of the sales center.

 

[SBenson]

Here are my thoughts about the Model 3 reservation plan:

+ $1000 is low. Musk wants to optimize the total number of units reserved, not aggregate dollars deposited.
+ Elimination of Signature series. Tesla may be trying to overcome prior elitism associated with the brand. This is a people's car.
+ Initial new features on the Model 3 will be minimal. This aids in simplifying ramp up.
+ New feature will be added to the Model 3 in subsequent years. This keeps the model line fresh and in ever increasing demand for many years to come.
+ Limited access to placing reservations on March 31. This forces people into stores which should give birth to near term Model S sales. But also this limits cashflow in Q1. The bulk of cash flow will come in Q2.

People's Model 3 Hypothesis: Tesla will begin with the base model at $35k in 2017 and progressively add higher end options.

This hypothesis is a reversal of what we see with the Model X where they have begun with the high end version and will progressively offer more affordable versions. So the Model X roll out is quite elitist. By contrast, the Model 3 can become the People's Tesla. Customers will delight to see how advanced the car can become over time. So there will be large exponential growth in demand, and ASP and GM for the Model 3 will increase over time.

Additionally I think a high number of reservations creates a mandate for rapid scaling of production. Tesla should be able to justify to stock and bond investors sufficient capital expansion as needed to fulfill reservations within 12 months of launch. Certainly there is massive capacity in Fremont and the Gigafactory, but if reservations exceed 400k, they will have a mandate. Conversely if reservations are under 200k, Fremont and Gigafactory 1 will clearly suffice. So I think Musk is rolling the dice for a customer mandate to accelerate capacity expansion. So we'll know in Q2 what the people say.

Insightful analysis. Thanks for sharing.

 

[Spidy]

Here are my thoughts about the Model 3 reservation plan:

+ $1000 is low. Musk wants to optimize the total number of units reserved, not aggregate dollars deposited.
+ Elimination of Signature series. Tesla may be trying to overcome prior elitism associated with the brand. This is a people's car.
+ Initial new features on the Model 3 will be minimal. This aids in simplifying ramp up.
+ New feature will be added to the Model 3 in subsequent years. This keeps the model line fresh and in ever increasing demand for many years to come.
+ Limited access to placing reservations on March 31. This forces people into stores which should give birth to near term Model S sales. But also this limits cashflow in Q1. The bulk of cash flow will come in Q2.

People's Model 3 Hypothesis: Tesla will begin with the base model at $35k in 2017 and progressively add higher end options.

This hypothesis is a reversal of what we see with the Model X where they have begun with the high end version and will progressively offer more affordable versions. So the Model X roll out is quite elitist. By contrast, the Model 3 can become the People's Tesla. Customers will delight to see how advanced the car can become over time. So there will be large exponential growth in demand, and ASP and GM for the Model 3 will increase over time.

Additionally I think a high number of reservations creates a mandate for rapid scaling of production. Tesla should be able to justify to stock and bond investors sufficient capital expansion as needed to fulfill reservations within 12 months of launch. Certainly there is massive capacity in Fremont and the Gigafactory, but if reservations exceed 400k, they will have a mandate. Conversely if reservations are under 200k, Fremont and Gigafactory 1 will clearly suffice. So I think Musk is rolling the dice for a customer mandate to accelerate capacity expansion. So we'll know in Q2 what the people say.

Elon says Model 3 will release first as highly optioned.

 

[dreamingof3]

With the intraday high looking like $163, would you say that the shorts from the past 2 days have already covered and the ones remaining are still in the money so are in no hurry to cover? Does $150 look like a bottom?

Dude seriously???? There are over 30 million shares short and the price action strongly suggests they have not covered

 

[tinm]

To add to this, for states that do not allow stores due to current legislation, this just might rile people up as they have to drive to another state just to get the early 3/31 reservation.

When a significant number of people get riled up, they take action and the momentum for changing the status quo just increases, well, exponentially.

Gives me an idea. I think I'll write some letters to the editors of the two big papers in New Mexico, a few days before the event, to point out that New Mexico residents cannot go to a local store to order this car, because of the stupid laws in place that ban Tesla from doing business here. Stay classy, New Mexico.