Time to start buying TSLA? Or get out before the crash?

KarenRei

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#41
I should also note, that baked into almost every short thesis are two casual assumptions:

1. Tesla loses money on each car it produces
2. Tesla will soon run out of cash


So you can imagine how devastating it would be if Tesla was to show that Model 3 production looks to have good gross margin, and if Tesla turns from cash consumption to cash generation.

One of the interesting characteristics of a short bet is that the downside is not limited. In other words, if TSLA were to suddenly shoot up to $1000 (not likely, but play along), someone betting on a value of $100 as of a certain date would owe $900 per share. The only way to limit that loss is to decide at some point on the way up to actually buy a matching share of stock to "cover" the loss their borrowed share is incurring. For every dollar their borrowed share loses, their purchased share gains a dollar.

So if we start to see evidence of healthy gross margins and cash generation we would not only see a direct influence on the stock price, but also the compounding effect of shorts rushing to buy shares to cover their bets. With 25-30% of the stock shorted, that's a huge surge in demand.

It will get UGLY. There are billions of dollars on the line for short sellers. i kind of shudder to think what they might do to make Tesla look bad as Model 3 production takes off. Expect to see a lot of FUD in the press.
This.

I don't know, I kind of feel bad to the people who heeded the advice on Seeking Alpha to not "go wobbly" on Tesla, and instead short the stock when it was in the 250s. They're going to lose their bloody shirts. I kind of feel bad.

Only kind of. ;)
 

Michael Russo

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#42
It always makes me laugh thinking of T≡SLA shorts losing their shirts... yet I keep wondering... it will be a lot worse when they lose their shorts!! :D
 

John

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#43
This.

I don't know, I kind of feel bad to the people who heeded the advice on Seeking Alpha to not "go wobbly" on Tesla, and instead short the stock when it was in the 250s. They're going to lose their bloody shirts. I kind of feel bad.

Only kind of. ;)
You're right, they have a click-bait trash-talking echo chamber set up at Seeking Alpha that is sure to wreck some casual investors.

I have noticed from my extended family and friend set that the prevailing story about Tesla is consistently negative.
Here is the "conventional wisdom" on Tesla that is most likely to get agreement at a cocktail party (outside of California or Norway). It's depressing when you hear it from a chortling family member:
  1. Tesla can't produce new cars, and the old ones have all been recalled
  2. Don't buy a Tesla—they are going out of business soon (I heard it on TV)
  3. While they try to figure out how to get self-driving cars to work—which they won't—they will kill a lot of people
  4. Teslas are owned by rich people, so screw 'em
  5. Elon Musk says crazy stuff all the time that serious people don't take seriously
 

Audrey

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#48
Google alert told me Tesla is up like 7% today. If you guys wanna buy more, I'd be grateful. :cool:

Edit: I think delivering my model 3 was the golden ticket that turned the stock around. Elon can send me a thank you in the form of a Roadster 2.0 or cold hard cash.
 
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KarenRei

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#50
It's hitting against 300 now. We'll see if it breaks back above that point today. :)
Broke 300 ;)

I expect there to be some profit taking at periodic intervals. But there's no question where this stock is going overall as Tesla continues to up Model 3 production.

Man, I can't believe how much money I've made in such a short period of time... can't wait to see how the stock is doing once the line is up and running at full and Tesla has positive cash flow :) I can see how people get addicted to trading stocks. Thankfully I have the needs of my house to keep me in check ;)
 

Dan Detweiler

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#53
So I just did something I have never done in my life...I am now a Tesla stock holder. Bought in at $294 this morning. I know, I know, I should have bought in last week when it was $250 but hindsight is always 20/20 in the market, right? We'll see where it goes in the next few months before I get to configure. Maybe if I'm really lucky I can get dual motor off the dividends! (Well, a guy can hope can't he?)

Dan
 

KarenRei

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#54
If I had more money to put in right now, I would be doing so too :) (bought at $268, but $294 is still a very good deal).

Just wait until Tesla's first profitable quarter (aka, Model 3 production is up to design specs); the stock is going to go through the roof.
 

KarenRei

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#58
The funny part is that TSLA only needs to hop up due to improved production rates to start a short squeeze, and all of those short positions will collapse like a house of cards. That's an amazingly dangerous game they're playing, having so much of the company's stock shorted. They'll literally have to buy up a third of the company's entire stock to cover their positions, at whatever price it happens to be.

Dang how I wish I had more cash on hand right now to buy more TSLA...
 

Dan Detweiler

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#60
Just strengthened my position with a few more shares at $277.82 after the financial call yesterday. I guess the market doesn't like it when a CEO basically tells a long time short seller that he is done with their BS. Oh well, get over it I guess. Gotta stop checking Robinhood every 10 minutes! I'll empty out my savings at this rate! LOL!

Dan