Short-Term TSLA Price Movements - 2016

[jhm]

Congrats on a well-timed trade! I hope you're not holding that SCO position for too long. It is double-leveraged and extremely volatile, which means even if you are correct on the medium-term direction of oil, you will suffer major losses due to beta slippage.

You'd think that, but it actually backtests quite well as longterm sustained hedge, decreasing volatility and increasing returns against an unhedged Tesla position over a four year test period. Even so, I'm likely to use it more when I view oil as over priced. I'd invite you to the Shorting Oil thread for further discussion.

 

[SBenson]

Just quickly browsed Model X threads after a while. The pace of deliveries indeed picked up quite a bit and the quality of the cars at delivery are getting lot better too. For context, in the early days service centers were keeping the cars for weeks before customer delivery, then it dropped to 7 to 8 days but now apparently they are delivering within hours of receiving the cars.

I'm feeling quite optimistic about Q2. There is a solid chance that guidance will be 25K cars produced or thereabouts. Deliveries depends a bit on pipeline stuffing issues. But there is a good chance that they will play the game for favorable deliveries to have a blowout ER. That will in turn trigger a short squeeze and help raise capital at very good terms. In a nut shell I'm much more confident in Julian's medium term prediction now.

 

[AlMc]

While I agree that this thread gets off the rails, I will also chime in that I was suggesting when we hit the low 230s that you should consider selling off and wait. We hit the 240 line too soon and too fast for it to hold up and was the perfect candidate for shorts to jump in. And then again, when the short attack started I cautioned that people would be wise to get out of their short term plays. I'm sorry if these and other people's posts got lost in the mix, but there were a handful of us suggesting that it would be wise to sell off to lock in some gains as a sort of wait and see game.



Given that this thing could easily go back to the 207-208 level, it would still be worth selling a bit to lock in gains. I would recommend waiting for the signal of where we will actually go once the event happens. Buy some speculation before the event if you like, but I wouldn't get stuck holding the bag if the market doesn't like what it sees from the event for whatever reason. Will you miss the early departure of the train? sure. But as I stated before, the actual short squeeze will *not* happen unless we hit at least a 10% gain in a single day. Even if on April 1, we get that 10% gap up open, You will be fine buying at that point because you will end up being able to ride the wave that happens after.

You have the benefit here of working with foreknowledge of where we have been before. This isn't unknown territory for the stock price as we have been to ~290 twice now. So if we rip up on an open, unless somehow the price just magically jumps to 290 overnight (EXTREMELY UNLIKELY) then you are fine as whatever causes us to go up 10% is going to have implications on us going much... much higher than 10%.

***NOTE*** None of this is a recommendation to sell core... those conversations are for the long term thread. Selling out of your calls or stock is merely a recommendation for those playing the day to day. It might not be a bad idea to buy a few puts as well although I am terrible at betting against the price and always buy puts at the wrong time and sell way too soon or too late...

Spot on Chicken! I have been wrong as often as right but you could see this coming. I have NO idea where we go in the next couple days/ 2-3 weeks so I set up a very Small strangle for April 15 and held onto some now very red lotto tickets with the same expiry.
I sold the remainder of my green short term calls...
I know that the 'trades' should be put in the 'trading thread' but this thread has become the 'catch all' for all things ST.
Good luck everyone

 

[drinkerofkoolaid]

Next resistance point is $217. If market tanks tomorrow, it might fall below this, but technically the stock is not that overbought, if you expand the chart back to 2012. If the stock approaches $200, I'm buying. This is a perfect example of a V shaped cup and handle.

 

[jhm]

So if Tesla stores are going to be full of Model 3 reservationists on March 31, how will Tesla make it quarter end deliveries?

This has become a personal question for me. My wife's Model S is in transit with delivery sometime between 3/30 and 4/6. So it's plausible that we could take delivery on 3/31. This could be interesting.

 

[chickensevil]

So if Tesla stores are going to be full of Model 3 reservationists on March 31, how will Tesla make it quarter end deliveries?

This has become a personal question for me. My wife's Model S is in transit with delivery sometime between 3/30 and 4/6. So it's plausible that we could take delivery on 3/31. This could be interesting.

Sales staff are not delivery staff. I can understand your confusion here as you haven't gotten your car yet but rest assured that deliveries and service will continue on regardless of what the sales staff does.

 

[Bgarret]

From the Model X forum:

Just got a call from my delivery specialist. My 90D (507X) will arrive in Scottsdale this Sunday (3/27) and I will be picking it up the next day (Monday 3/28). Can't believe this day is almost here!!
........
Few of interesting things about is:
1. 507X(wow, by far the highest I've seen)
2. Non-California delivery
3. 90D (unless the P omitted)

Ramping up, indeed.

 

[jhm]

Sales staff are not delivery staff. I can understand your confusion here as you haven't gotten your car yet but rest assured that deliveries and service will continue on regardless of what the sales staff does.

Well, this is a second Tesla for us. So we've been through a normal delivery before. But there is only so much physical space in the store, and we have never seen a Model 3 unveiling event before.

 

[Julian Cox]

@Ukland Wombat

Suggest reading The Innovator's Dilemma and Crossing the Chasm for a grounding in this kind of topic. I'll simply say that this is not just a matter of retooling, not even close. The cost of lay-offs, legal and picketing battles with unions that would ensue for the right to make engines. The costs of the liability hangovers from pensions to warranty and recalls to debts on written-off engine manufacturing equipment previously counted as assets, balance sheet debt in general that would be in default, settling supplier credit lines for exhaust pipes etc etc plus lawsuits for lost business, dealership and customer lawsuits, environmental clean-up and on and on not forgetting the fact that Ford as a going concern is legally obliged for good reason to sell its products through franchised dealers, plus the retooling MINUS the fact that the entire share price of the ICE maker is based on projecting sales to consumers that are now no longer interested would put the cost of the transition of a company like Ford beyond reach - multiples of the value of the company as it stands and many multiples of the value of a company that is no longer a going concern. Just ridiculous compared to letting it go belly-up and buying the useful bits from bankruptcy for pennies on the dollar without any of the hassle including no need to deal with the old management or its culture - probably even get tax breaks for years just for offering to re-hire a quarter of the staff.

It may seem to you that Ford or Toyota is a big powerful thing but without customer interest in what they are set up to make they are absolutely powerless. That is what a tech disruption is. The word "meh" from enough consumers is insanely more powerful than Ford or Toyota. Ask Kodak - the companies representing digital cameras did not attack and kill Kodak, the consumers simply said meh to Kodak's photographic films and Kodak was stuck there with a load of machines for making photographic film. That's what killed Kodak.

 

[dc_h]

From the Model X forum:

Just got a call from my delivery specialist. My 90D (507X) will arrive in Scottsdale this Sunday (3/27) and I will be picking it up the next day (Monday 3/28). Can't believe this day is almost here!!
........
Few of interesting things about is:
1. 507X(wow, by far the highest I've seen)
2. Non-California delivery
3. 90D (unless the P omitted)

Ramping up, indeed.

Awesome for you and great news for Q1. If they deliver over 3000X for Q1, they should be over 16,000. If they hit deliveries and the 3 is the hit it is starting to look like, we are going to have an interesting April.

 

[Bgarret]

Awesome for you and great news for Q1. If they deliver over 3000X for Q1, they should be over 16,000. If they hit deliveries and the 3 is the hit it is starting to look like, we are going to have an interesting April.

Sorry for the confusion....wasn't me. eXcalibur in Arizona.

 

[AudubonB]

ROCKEFELLER:
It appears a number of you are conflating a minuscule organization with a name understandably associated with vast wealth.

The Rockefeller Family Fund holds about $100 million.That is even smaller than the R Brothers F, which as another noted is an earlier divestor of fossil fuel investments.

Neither of them holds a candle to the greatest single repository of John D's heritage, which is the Rockefeller Foundation - my rusty recollection is that the last family member associated with its Board departed some decades ago. The now quite numerous fourth generation of R's do, collectively, control a lot of wealth but there is no single vessel that controls the billions, let alone trillions, that some here have mentioned.

 

[Ukland Wombat]

off topic: long term ICE OEMs (Wombat concedes to Julian)

@Ukland Wombat

Suggest reading The Innovator's Dilemma and Crossing the Chasm for a grounding in this kind of topic. I'll simply say that this is not just a matter of retooling, not even close. The cost of lay-offs, legal and picketing battles with unions that would ensue for the right to make engines. The costs of the liability hangovers from pensions to warranty and recalls to debts on written-off engine manufacturing equipment previously counted as assets, balance sheet debt in general that would be in default, settling supplier credit lines for exhaust pipes etc etc plus lawsuits for lost business, dealership and customer lawsuits, environmental clean-up and on and on not forgetting the fact that Ford as a going concern is legally obliged for good reason to sell its products through franchised dealers, plus the retooling MINUS the fact that the entire share price of the ICE maker is based on projecting sales to consumers that are now no longer interested would put the cost of the transition of a company like Ford beyond reach - multiples of the value of the company as it stands and many multiples of the value of a company that is no longer a going concern. Just ridiculous compared to letting it go belly-up and buying the useful bits from bankruptcy for pennies on the dollar without any of the hassle including no need to deal with the old management or its culture - probably even get tax breaks for years just for offering to re-hire a quarter of the staff.

It may seem to you that Ford or Toyota is a big powerful thing but without customer interest in what they are set up to make they are absolutely powerless. That is what a tech disruption is. The word "meh" from enough consumers is insanely more powerful than Ford or Toyota. Ask Kodak - the companies representing digital cameras did not attack and kill Kodak, the consumers simply said meh to Kodak's photographic films and Kodak was stuck there with a load of machines for making photographic film. That's what killed Kodak.

Thanks for showing patience with me Julian, I concede to you on Tesla Foxcolonizing ICE OEMs. Not gonna happen!

So, the ICE OEMs are going to be just a train wreck in slow motion. More so for those still in denial...so sad because its so unnecessary.

I'm still hanging on to the idea that a roll out of GFs needs to be started. I think you are the only one who took a bite out of that, saying there's a potential (once module 1 is proven) to greatly expand Nevada at low cost and then someone else pointed out that an auto factory in China has been floated without talk of a matching GF there, battery packs likely to be shipped cheaply from Nevada instead. Perhaps expanding Nevada will buy Tesla a little time but not much if reservations are ludicrous.

 

[Papafox]

Will March 31 be a positive Catalyst for TSLA? I think chances are good. Here's why.

Musk is someone who just might choreograph this reveal to bring about the largest number of immediate orders for Model 3, making the reveal a spectacular show of demand for Tesla's new EV. We already have employee orders, and throughout March 31 we will have orders coming in from around the world from people walking into Tesla stores. By the time the reveal event begins, the whole world's walk-in orders will already be counted (since March 31 begins in the mid-Pacific and then hits Australia, Asia, Europe, and eventually North America). At the very least, Tesla will have tens of thousands of orders already placed when the reveal begins.

Have you ever wondered why online orders begin at the same time the event begins? Conincidence? Heavens no! Tesla fans will be following the reveal from their computers and with the excitement of the reveal, Tesla wants to give these remote onlookers a chance to place their orders in the heat of the moment. What about fence-sitters, though? How do you spur someone on who is not 100% ready to put down a deposit? Answer: you show them the penalty for delaying their decision. I really think Tesla might have a real-time graphic of orders placed, viewable by those online watching the reveal. How many orders do you think will come in during that first hour of the reveal event? I wouldn't be surprised if we see 50,000 or even 100,000. Onlookers realize that they could lose 10,000 places in line by simply delaying their purchase decision by 10 minutes! I expect an absolute feeding frenzy of online orders that first hour, and if the online coverage includes a display of the mounting mountain of orders, then there's really no reason to believe that we will see a sell on the news reaction the next day.

Am I confident Tesla will employ this technique? No, because the downside of revealing too early that Tesla already has 100,000 orders is that people may become discouraged and not place an order. Still, I think there's a reasonable chance that order numbers will be revealed at the event, and if they are, I wouldn't want to be caught short on shares of TSLA at that moment. Nor would I want to be caught short if on April 4 Tesla announces a beat on deliveries for Q1. Thus, I see there's a reasonable chance of missing the boat if you sit on the sidelines on March 31.

 

[hoang51]

...

I'm feeling quite optimistic about Q2. There is a solid chance that guidance will be 25K cars produced or thereabouts. Deliveries depends a bit on pipeline stuffing issues. But there is a good chance that they will play the game for favorable deliveries to have a blowout ER. That will in turn trigger a short squeeze and help raise capital at very good terms. In a nut shell I'm much more confident in Julian's medium term prediction now.

Guidance of Q2 deliveries at about 25,000 is wishful thinking and highly unrealistic. Correct me if I'm wrong, but in Tesla's latest Q4FY15 filings/report on Feb. 10, 2016, the shareholders' letter on pg. 4 stated that Q1(FY16) is expected to be about 16,000. For Q2 to be at 25,000 would indicate of flat line production rate from Q2-Q4 of FY16: 16K+25K+25K+25K=91K, which would exceed their top end guidance of 80,000-90,000 cars delivered. Such scenario is not plausible and doesn't properly illustrate a ramping up on production. For an example, a linear ramp up of production such as 16K+20K+24K+28K=88K, which would get them close to their guided high end of deliveries.

 

[hoang51]

Will March 31 be a positive Catalyst for TSLA? I think chances are good. Here's why.

...

I hold a view similar to yours: Tesla will be issuing a one-two punch very soon: reveal of the mysterious Model 3 and its reservations, and Q1 FY16 deliveries. Such reveal, reservations, and disclosure should be favorable for TSLA stock share price to jump significantly in the first week of April and TSLA has a good chance of leaving the stagnant stock range that TSLA has been enduring.

 

[Gerardf]

If true, seems Tesla starting some planned 'leaks' :

Model 3 chassis in the waiting area at the Hawthorne Supercharger?
ednixon on Twitter
Model 3 chassis is sitting on display in the waiting area at the Hawthorne Supercharger? • /r/teslamotors

I am still skeptic until confirmed by someone else.

 

[vgrinshpun]

It looks that accelerating sell-off after 3:00pm is related to S&P Global Market Intelligence's note keeping $155 PT, but cutting recommendation to "sell".

Pretty suspicious timing - why didn't they change the recommendation before - TSLA is way above their $155 target..

Yesterday there was also a morning note on StreetInsider.com about Doug Kaas shorting TSLA at $233. The note is behind pay wall - above info is per the heading.

 

[optimus]

Was in the area so stopped by the San Diego service center yesterday. I drove around the building and counted 34 Model X's.

 

[Gerardf]

Europe lower, not so sure we will move the trend up again today.

If we go any lower today, I consider adding shares EOD. The long weekend might have some news / updates on the Model-3 and the reveal.
Could we then call it an 'Easter egg' ?