Thoughts on TESLA

[bobandsherry]

I would think the reason the shorts have so much of Elon's focus is because he has poured everything into Tesla and either consciously or unconsciously believes or fears the shorts are correct.

If the shorts are correct then the failing of Tesla is really Elon Musk's failing and he does not, as an egomaniac with a hyper-inflated opinion of himself cannot abide that being a possibility so he strikes far more than he should at short sellers, who he cannot control and who are pointing out he really is not in control either. Which in the end ironically makes him look out of control.

Saw this in article Friday:

"When CEOs criticize short selling, it's usually because they're looking to deflect blame for their own failings, and obscure the uncomfortable truth that their long holders are losing confidence and are selling," Block said in an email Friday.

Experts — including Warren Buffett — say short selling can be beneficial for markets

 

[NW-Bound]

Maybe it is the possibility of fraud that has Musk steamed? Clearly Tesla is nowhere near Berkshire for comparison.

Of course Tesla is not the same as Berkshire, and Musk's personality is nothing like Buffett's.

Buffett does not aim to rule the world. And I do not know if anyone remembers the last time Berkshire had to borrow money, if ever. Buffett is sitting on tons of cash, and is not worrying about bonds coming due. As of August 2018, Buffett's cash hoard is $111B, almost 3 times Tesla's market cap.

I cannot remember Buffett getting upset. He cracked jokes all the time, and some were very good. I like it when he made the cute TV reporters giggle with his jokes.

 

[bobandsherry]

Getting ready for Monday morning and we'll see where Tesla is. Read this which seems to paint a picture that demand for Tesla cars is waning. Hmmmm....

And this was very surprising based on what Musk said only a few weeks ago about needing to build their own car carriers:

It is then no wonder that Tesla has very little scheduled and is delivering very little in October (see first image in the article). It is also little wonder that there are multitudes of car carriers sitting empty around Tesla Fremont facilities

Massive Layoffs And Reorganization Ahead At Tesla

 

[Hamlet]

Musk talking down the short sellers - why?

Seems to me short sellers would prop up a stock when it takes a dive like this. They would see it as an opportunity to cover their short, and that means an offsetting buy, creating demand for the stock. A cushion against sharp drops. They actually reduce volatility, which should be good for a volatile stock.

Sure, different shorts will want to cover at different points. But the trend should be there for support. Some, rather than waiting to drop to actually profit, might just see a drop as a good place to cover, even if it is just to limit their loss. Holding a short is scary, theoretically an unlimited loss.

-ERD50

Don't forget that Tesla has a large chunk of convertible bonds due early in the year. It would help Tesla a lot if the price is over 360 when those come due.

 

[Fedup]

Down another $11, I think I missed the boat on shorting(or buying puts in my case) TSLA.

 

[ERD50]

Down another $11, I think I missed the boat on shorting(or buying puts in my case) TSLA.

Another 4%, after these previous drops.

But it was up the first few hours of the day. Anyone know what is fueling this drop? Seems the other w/e stuff would have impacted it right at the open.

A couple of suddenly quiet posters sure are getting a lot of 'buying opportunities'. Maybe that's why they are quiet - too busy placing buy orders, getting a 2nd mortgage on their home, pawning their jewelry?

-ERD50

 

[aja8888]

Is oneill225 still buying??

 

[bobandsherry]

Is oneill225 still buying??

And placing sell orders at $314. I just put a buy order in a $214 Which has a better chance of being filled first?

 

[Lakewood90712]

Another 4%, after these previous drops.

But it was up the first few hours of the day. Anyone know what is fueling this drop? ..................



-ERD50

Maybe J.P. Morgan going from $195 target , then up to $300+ on the take private -funding secured tweet , then immediately back to $195 target Price.

https://www.forbes.com/sites/chuckj...-drops-price-target-back-to-195/#546066a4a954

 

[Fedup]

Maybe J.P. Morgan going from $195 target , then up to $300+ on the take private -funding secured tweet , then immediately back to $195 target Price.

They are just reiterating what the market is telling them. If they are firm on the price, they should buy puts first. Then buy call when it gets to $195.

 

[bobandsherry]

Down another $11, I think I missed the boat on shorting(or buying puts in my case) TSLA.

You know, Oneill mentioned that you can't just look at day to day prices. But I guess a week later and 20% drop is worth a look.

 

[bobandsherry]

Agree, but when there's "good news" one expects to see some pop in the price. Instead now down 14.5%. I guess if it wasn't for that "good news" Tesla would be trading at under $250 now. Another tweet or two from Elon and it will be trading at the $195 price that JPM set as their target back in August.

Welp, guess 3 days later even all the "good news" couldn't keep stock above $250. Let's see if it tests the 52 week low of $244, if it passes that then $200 is very possible. Surprisingly Musk has been quiet, and his cheerleader too.

 

[samclem]

While I believe Tesla's stock price is unwarranted, as volatile as the price (and the underlying company, and its CEO) have been, if I were publicly gloating now I'd be prepared to publicly eat some crow later. Not a sure thing, but not impossible. This stock price is driven by hopes and fears, not fundamentals, and human emotions/crowd behavior can be a fickle thing.


Anyone who >knows< it is on a one-way descent and is not actively shorting it is, well, not behaving rationally.

 

[Hamlet]

While I believe Tesla's stock price is unwarranted, as volatile as the price (and the underlying company, and its CEO) have been, if I were publicly gloating now I'd be prepared to publicly eat some crow later. Not a sure thing, but not impossible. This stock price is driven by hopes and fears, not fundamentals, and human emotions/crowd behavior can be a fickle thing.


Anyone who >knows< it is on a one-way descent and is not actively shorting it is, well, not behaving rationally.

Yeah, I'd be very leery of shorting this stock into earnings. I suspect that they will do everything they can to make Q3 look good, with the intent of raising capital in Q4. I could easily see the stock going up 30 points when they release earnings, even though I'm extremely bearish on the company long term.

 

[NW-Bound]

While I believe Tesla's stock price is unwarranted, as volatile as the price (and the underlying company, and its CEO) have been, if I were publicly gloating now I'd be prepared to publicly eat some crow later. Not a sure thing, but not impossible. This stock price is driven by hopes and fears, not fundamentals, and human emotions/crowd behavior can be a fickle thing.

Anyone who >knows< it is on a one-way descent and is not actively shorting it is, well, not behaving rationally.

If you short Tesla, you must have a strong conviction to hold the trade till its end.

“Given the volatility, you’re really rolling the dice. I’m on the sidelines. The market can remain irrational much longer than I can remain solvent.” -- Gary Shilling

This last sentence in the above quote is often attributed to John Maynard Keynes, but this has not been substantiated. What people have located is something similar:

"There is nothing so disastrous as a rational investment policy in an irrational world" - John Keynes

 

[bobandsherry]

While I believe Tesla's stock price is unwarranted, as volatile as the price (and the underlying company, and its CEO) have been, if I were publicly gloating now I'd be prepared to publicly eat some crow later. Not a sure thing, but not impossible. This stock price is driven by hopes and fears, not fundamentals, and human emotions/crowd behavior can be a fickle thing.


Anyone who >knows< it is on a one-way descent and is not actively shorting it is, well, not behaving rationally.

This stock has, despite the crowing of it's CEO as to how much progress it's made, is down from 350 a year ago to 250 today. A 28% drop while overall market is up over 10% is just a bit telling as to the markets impression. This thread originated with question on continuing to purchase the stock. The dialogue has been wrapped around opinions on both sides, so far those contrarians have been right. However it's possible that opinions change IF the company the CEO change it's course. So anything is possible, especially with the irrational nature of traders in this stock.

As for shorting, IMHO that's something I never think is a good option (pun intended). Obviously no one >knows<, but like any stock analysis one looks as past, present and future financials to formulate an opinion.

Willing to eat a plate of crow, it won't be first time I've been wrong. Just fortunately I'm right more often than I've been wrong. But heck, even experts who make a lot of money for their opinions have been wrong such as David Tice, he predicted in April that the market would shed 20-25% (was he wrong or what). Or even David Ackman who took $3 billion loss on Valeant (aka Bausch Health) he bought in at $196 and sold at $11 (that's just really wrong). Just an example of a high flyer stock that sunk quickly.

 

[bobandsherry]

Yeah, I'd be very leery of shorting this stock into earnings. I suspect that they will do everything they can to make Q3 look good, with the intent of raising capital in Q4. I could easily see the stock going up 30 points when they release earnings, even though I'm extremely bearish on the company long term.

If you can easily see this, you betting with your wallet? Here's a chance then to pick up 12%.

 

[Hamlet]

If you can easily see this, you betting with your wallet? Here's a chance then to pick up 12%.

I’m saying it wouldn’t surprise me, not that I’m confident it will happen. I would never buy Tesla stock, as I don’t trust their management and I don’t think it is a good business. I’m just saying that I wouldn’t be willing to hold a short through the earnings report.

 

[Lakewood90712]

Welp, guess 3 days later even all the "good news" couldn't keep stock above $250. Let's see if it tests the 52 week low of $244, if it passes that then $200 is very possible. Surprisingly Musk has been quiet, and his cheerleader too.

Reason that Musk has been quiet today: hangover from smoking weed and drinking champagne after the SpaceX Mission last night.

It was a great light show. Lots of colors.

 

[bobandsherry]

I’m saying it wouldn’t surprise me, not that I’m confident it will happen. I would never buy Tesla stock, as I don’t trust their management and I don’t think it is a good business. I’m just saying that I wouldn’t be willing to hold a short through the earnings report.

So if you wouldn't touch it now then to answer the OP's question (when stock was at $303) your answer would be no. That's all that I've been saying

 

[kcowan]

I don’t think it is a good business. I’m just saying that I wouldn’t be willing to hold a short through the earnings report.

Yes that says a lot! I thought it was a good business until the CEO started to misbehave and his executives bailed. Now I think it is a highly speculative play and will remain so until it gets refinanced (at least 6 months).

 

[ERD50]

Finally seeing some recovery from all these drops. Up ~ 2.5% near the open. Still a long way to go for those that were buying on the first dips.

-ERD50

 

[Fedup]

So if you wouldn't touch it now then to answer the OP's question (when stock was at $303) your answer would be no. That's all that I've been saying

I didn’t think that was enough of a dip. I’m surprised that person was so confident that he would eventually sell at a pop especially there was a big dip a few days before that.

 

[bobandsherry]

Finally seeing some recovery from all these drops. Up ~ 2.5% near the open. Still a long way to go for those that were buying on the first dips.

-ERD50

And still rising now at $263, so looks like $250 was the resistance point on this which was near their 52 week low. And also this may have fueled the irrational investing.

Tesla's stock bounces after bullish call by Macquarie analyst

They have done other upgrades/targets that have done well, but then they also miss the target like they did with Hertz. Hertz rated as outperform back in January with target of $26-30 (stock was trading then at $22, now at $16 and change, never reaching their target price.

Hertz Upgraded By Macquarie Research: Here's Why

Let's see how much leg this has.

 

[Totoro]

“Given the volatility, you’re really rolling the dice. I’m on the sidelines. The market can remain irrational much longer than I can remain solvent.” -- Gary Shilling

+1 Short sellers need two things:

• They need to be right
• There needs to a clear deadline when they are proven right

In case of the housing crisis it was the dates when the grace period of mortgages (no interest/pay-off) started expiring, and even then most shorters underestimated irrationality quite a bit.

It costs money to take up a short position, and time is against you. Takes a special kind of character to pull off.