Short-Term TSLA Price Movements - 2016

[NOLA_Mike]

What did I miss here?...

What you're missing is that the deal has nothing to do with market caps or valuation - it is a simple share exchange with a conversion ratio of 0.11. You are (purposely?) adding complexity and confusion.

I own 1000 shares of SCTY. I paid $20 per share when I bought them. I paid $20,000 for all the shares.

Upon closing of merger I will own 110 shares of TSLA. TSLA is trading at $188 per share. I can sell the TSLA shares for $20,680.

Therefore SCTY is trading at a discount to TSLA (in this case, a $680 discount).

 

[MrRandyB]

So SCTY is worth $2.4b while Tesla is paying $2.085b

Sounds like a discount to me

 

[myusername]

What you're missing is that the deal has nothing to do with market caps or valuation - it is a simple share exchange with a conversion ratio of 0.11. You are (purposely?) adding complexity and confusion.

I own 1000 shares of SCTY. I paid $20 per share when I bought them. I paid $20,000 for all the shares.

Upon closing of merger I will own 110 shares of TSLA. TSLA is trading at $188 per share. I can sell the TSLA shares for $20,680.

Therefore SCTY is trading at a discount to TSLA (in this case, a $680 discount).

I corrected it... and yes it does have something to do with mkt cap (aka... company value minus debt, etc.)... since all of these attributes are directly proportional to each other.

 

[myusername]

So SCTY is worth $2.4b while Tesla is paying $2.085b

Sounds like a discount to me

No... I screwed up that decimal... SCTY has a current mkt cap of $2.04b -- not $2.4b.

after fixing that... it came out correctly.

 

[GBleck]

One out would be vertical integration with say Dow chemical or some other polymer manufacturer.

 

[wayno]

One thing I haven't seen mentioned here is the Motortrend Awards. I just got an email for their award presentation which is tonight, and Tesla is a finalist for both 2017 Car of the Year with a redesigned S60/75 and 2017 SUV of the year with the Model X. Their initial judge of the X was a bit critical of the lack of utility in the SUV so it may not take the crown. But the writeup on the S was really positive I thought, especially considering their comparison to all other technologically outdated cars.

What do you think will be the positive impact on short term share price if Tesla walks away with both of them this evening. I would expect a nice size pop tomorrow at least.

Thanks,
Wayne

 

[reddy]

For what it's worth, Value Line increased its ranking on TSLA to a 'Timeliness' of 1, its highest ranking.

 

[AudubonB]

I hope ALL system abusers have seen what I've done, to your ever-lasting vexation.


Sneaky little Moderator, amn't I?

 

[racer26]

Holy crap. My internet connection went away for like a minute, and we dropped $3.

Anybody have a theory on today's drop? Seems like most of the news over the weekend was good news. I don't think its arbitrage players, because if it was, we'd see SCTY strength and TSLA weakness, but they're both dropping at roughly the merger ratio.

 

[CALGARYARSENAL]

One thing I haven't seen mentioned here is the Motortrend Awards. I just got an email for their award presentation which is tonight, and Tesla is a finalist for both 2017 Car of the Year with a redesigned S60/75 and 2017 SUV of the year with the Model X. Their initial judge of the X was a bit critical of the lack of utility in the SUV so it may not take the crown. But the writeup on the S was really positive I thought, especially considering their comparison to all other technologically outdated cars.

What do you think will be the positive impact on short term share price if Tesla walks away with both of them this evening. I would expect a nice size pop tomorrow at least.

Thanks,
Wayne

Unlikely

 

[racer26]

Unlikely

I would think that winning both Motor Trend awards should provide at least a small boost.

Then again, I don't understand the logic behind the continued losses. We're now fully 10% below where share price was before announcing the first profit in 3 years, then unveiling a beautiful solar roofing product, and showing how SCTY isn't a financial black hole.

 

[esk8mw]

Any particular catalyst for this massive decline at the open? I'm used to early trading dips but this one is steeper than normal. I can't find any news aside from Samsung buying Harman (who cares?).

 

[Gerardf]

Holy crap. My internet connection went away for like a minute, and we dropped $3.
Anybody have a theory on today's drop? Seems like most of the news over the weekend was good news. I don't think its arbitrage players, because if it was, we'd see SCTY strength and TSLA weakness, but they're both dropping at roughly the merger ratio.

Well, those of us here who DO think the shorts are selling big chunks to push the SP down did in fact predict this spike down at opening.

Excellent example of such prediction here : https://teslamotorsclub.com/tmc/posts/1826506/
"Don't be surprised to see a dip early in trading Monday morning (either within the green or from green to red). It is a short-induced effort, be assured (unless there's news to justify otherwise), and if you plan to do any buying on Monday you might as well take advantage of it if it happens."


I do not have an IB or Fidelity screen, but would not be surprised if it would show there are now 100k - 300k shares less available for shorting than pre-market.

 

[AlMc]

We are testing $182 which, IMO, we need to be at or above by the end of today.
If we do not then I think we see buying opportunity in the low $170s.

These are opinion and my strategy. Do what your strategy tells you to do, not mine

 

[Krugerrand]

One thing I haven't seen mentioned here is the Motortrend Awards. I just got an email for their award presentation which is tonight, and Tesla is a finalist for both 2017 Car of the Year with a redesigned S60/75 and 2017 SUV of the year with the Model X. Their initial judge of the X was a bit critical of the lack of utility in the SUV so it may not take the crown. But the writeup on the S was really positive I thought, especially considering their comparison to all other technologically outdated cars.

What do you think will be the positive impact on short term share price if Tesla walks away with both of them this evening. I would expect a nice size pop tomorrow at least.

Thanks,
Wayne

It has been mentioned here, but got lost in all the other stuffs going on - three times. As well the fact that Model X has already won a very prestigious award that has received very few comments or public accolades or media attention, and certainly no stock reaction whatsoever.

The market view of TSLA right now is pretty much a reflection of what's been going on right in this forum the last little bit. Look, squirrel! We've only got a few days left to go until the merger is officially announced as 'going to happen, so you might as well get used to the idea'. At that point the market may decide to refocus itself and get back on board and price TSLA as it should be (which is a whole lot more than currently in case anyone is confused about that). Or not.

 

[MartinAustin]

Personally, I think that short attack is over for today. Good job shorts. However, it's going to climb back.

 

[MonroeSS]

China threatening to make life hard for American companies doing business in China could explain the drop..

China threatens to cut sales of iPhones and US cars if 'naive' Trump pursues trade war

"When the time comes, large orders for Boeing planes would switch to Europe, U.S. auto sales in China would face setbacks, Apple phones would essentially be crowded out, and U.S. soybeans and corn would be eradicated from China," the paper said in a commentary."

Tesla may not be as affected as the other US auto companies that increasingly rely on China for growth/volume. In October, GM China sold 345,000 vehicles, nearly 100,000 more than their home market. Not sure if the restrictions only apply to imported vehicles though I doubt it considering the negligible number of cars imported to China from the US.

BTW Two issues that Tesla will never face ever, Cheating on Emissions and Frame rust
Toyota to settle U.S. truck rust lawsuit for up to $3.4 billion
And Now, CO2gate: Audi Puts Volkswagen In Even Deeper Trouble

 

[madodel]

Any particular catalyst for this massive decline at the open? I'm used to early trading dips but this one is steeper than normal. I can't find any news aside from Samsung buying Harman (who cares?).

So maybe Samsung's latest exploding device may be a car but it will sound great.

 

[viKtor slamet]

We are testing $182 which, IMO, we need to be at or above by the end of today.
If we do not then I think we see buying opportunity in the low $170s.

These are opinion and my strategy. Do what your strategy tells you to do, not mine

Agreed.. below 180, we might have an opportunity to load the truck in $160-170s. I'm looking forward to that, which means unlikely to happen

 

[aznt1217]

Any particular catalyst for this massive decline at the open? I'm used to early trading dips but this one is steeper than normal. I can't find any news aside from Samsung buying Harman (who cares?).

I have been scratching my head the past month to figure out this share price action. I was targeting TSLA to be $280 by end of year due to the fact that the company has proven it can execute, shorting would come down to normal levels, and valuation inputs would change for adjust the risk factor and pulling forward Model 3 production by a year or two. This unfortunately hasn't come to pass.

At the end of the day, the business case has been proven that electric cars can be profitable which was the biggest knock on Tesla. Time and time again the company has defied conventional "wisdom," but yet we are in a far lower place than last year when there was more uncertainty. As a refresher of the company's history and for those new to the forum:

Roadster days: it's impossible to build and nobody would want it, it's a rich man's toy

Early Model S days (shockingly even till now): there isn't enough demand, you can't build it

Model X : doors are weird, people won't want it. You can't build it. You can't build enough of them.

Where we are now: you can't build it quickly enough (even though Tesla made 400 cars a year to now 2000+ cars a week) or profitably enough (even though it's been proven twice that the company was operating profit + and the only thing keeping it from being + consistently is reinvestment for more growth). People saying that the SCTY merger makes no sense.

The business has evolved significantly from the original days and de-risked itself by creating what I call revenue hedges. It used to just be Powertrains and cars. Now it's:

- Cars
- Battery Packs
- Solar Roofs/Panels
- Powertrains (when and if somebody wants to make a deal)
- Robotics (super fresh)

I can also see Tesla (when it matures) providing consulting services for manufacturing and energy solutions at some point in the long distance future for extra revenue and to get other industries going to transition to sustainable energy faster.

Sorry for the long post, but I had to get it out there.