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

KarenRei

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#61
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
This short selling market is getting absurd. The company beats the whisper number and the stock goes down 10%? I mean, give me a break!

Wish I could use RobinHood here. I've not found an affordable option for trading US stocks; I have to go to the bank and they take a 1% cut :Þ Still worth it, of course.
 

Joaquin

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#62
After a couple days with my Model 3, I decided to buy some Tesla stocks. I used robinhood to put the order yesterday afternoon, it was around 295. But the market was closed and they got bought this morning at around 276. Even better :)

The product (model 3) is amazing. They need to really screw up the production for the company to go bad.
 

Bokonon

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#65
Man, buying into this bloodbath on principle alone is very tempting. And apart from principle, there is usually no faster way to get my attention as an investor than widespread hysteria among the financial elite -- exacerbated by news-cycle-du-jour media coverage* -- that has become decoupled from the underlying reality. (Remember when that one U.S. President was going to nationalize all of the banks, despite his repeated assurances that this option wasn't even under consideration? :rolleyes:)

* Visualization courtesy of your friendly neighborhood Ouroboros:


Alas, enter good ole boring risk management! :sleeping: I've had a position in TSLA since 2013, one which I've slowly trimmed as the stock has risen, to the point where I essentially own what's left for free. I've just been letting that position run, despite it becoming significantly larger than I am typically comfortable with for an individual stock. My conviction in Tesla as a transformative company with tremendous growth potential reduces my perceived risk of TSLA as an investment, so I've allowed it to bend the rules somewhat. Whether I will bend them further is still under debate. :)

One other thought: as Karen and others have pointed out above, a stock with this much short interest is structurally difficult to push down and keep down, in the absence of a major exodus in institutional ownership, because short-sellers have to buy back the stock they've borrowed in order to realize a profit. Let's think for a moment about the psychology of the short trade on a heavily-shorted name like TSLA that has just experienced a major drop. If you'd shorted the stock above its current level, you might be inclined to book some profit to reduce the risk of the position turning against you, but you also might want to watch the price action for a bit to see if this drop is merely the beginning of a new downward trend (and more profit for you). Similarly, if you'd shorted the stock below its current level, you might want to wait and see whether the price continues to trend downward, but given that you're already in the red, you also view this drop as an opportunity to mitigate your losses and save face (and possibly your job). In both cases, a rising stock price increases the pressure to act (whether to book the profit or limit the loss), which in turn increases the likelihood that the multitudes of other short-sellers will act as well, so it can quickly become a vicious cycle (for shorts ;)).

Barring a continued stream of bad news for Tesla, or a mass exodus of institutional investment, all the hubbub over yesterday's earnings call will fade from the news cycle over the coming days and weeks, and I think we'll see that game of short-seller chicken get underway.
 

Dan Detweiler

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#71
Man, buying into this bloodbath on principle alone is very tempting. And apart from principle, there is usually no faster way to get my attention as an investor than widespread hysteria among the financial elite -- exacerbated by news-cycle-du-jour media coverage* -- that has become decoupled from the underlying reality. (Remember when that one U.S. President was going to nationalize all of the banks, despite his repeated assurances that this option wasn't even under consideration? :rolleyes:)

* Visualization courtesy of your friendly neighborhood Ouroboros:


Alas, enter good ole boring risk management! :sleeping: I've had a position in TSLA since 2013, one which I've slowly trimmed as the stock has risen, to the point where I essentially own what's left for free. I've just been letting that position run, despite it becoming significantly larger than I am typically comfortable with for an individual stock. My conviction in Tesla as a transformative company with tremendous growth potential reduces my perceived risk of TSLA as an investment, so I've allowed it to bend the rules somewhat. Whether I will bend them further is still under debate. :)

One other thought: as Karen and others have pointed out above, a stock with this much short interest is structurally difficult to push down and keep down, in the absence of a major exodus in institutional ownership, because short-sellers have to buy back the stock they've borrowed in order to realize a profit. Let's think for a moment about the psychology of the short trade on a heavily-shorted name like TSLA that has just experienced a major drop. If you'd shorted the stock above its current level, you might be inclined to book some profit to reduce the risk of the position turning against you, but you also might want to watch the price action for a bit to see if this drop is merely the beginning of a new downward trend (and more profit for you). Similarly, if you'd shorted the stock below its current level, you might want to wait and see whether the price continues to trend downward, but given that you're already in the red, you also view this drop as an opportunity to mitigate your losses and save face (and possibly your job). In both cases, a rising stock price increases the pressure to act (whether to book the profit or limit the loss), which in turn increases the likelihood that the multitudes of other short-sellers will act as well, so it can quickly become a vicious cycle (for shorts ;)).

Barring a continued stream of bad news for Tesla, or a mass exodus of institutional investment, all the hubbub over yesterday's earnings call will fade from the news cycle over the coming days and weeks, and I think we'll see that game of short-seller chicken get underway.
Here is my issue with the process of short selling as a whole. I wrote this on TMC and copy it here because I think it is relevant. I really find the practice repulsive. I understand its use and the reason it is done so much, but to me, it is fundamentally counterproductive to long term economic health (except for the bank accounts of those that profit from the practice).

I really do believe that the Bull vs.Bear argument fundamentally comes down to one simple fact. The bears are looking at a given company as a means to an end at the expense of what the company stands for. (Looking for the company to fail, and often doing whatever they can to ensure that). The bulls are looking at what the company has to offer in the future. How it is going to influence its business sector down the line. In other words, investing in its growth, (and also often doing things to help ensure that outcome as well.) One builds up, the other tears down.

Dan
 

tivoboy

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#73
Here is my issue with the process of short selling as a whole. I wrote this on TMC and copy it here because I think it is relevant. I really find the practice repulsive. I understand its use and the reason it is done so much, but to me, it is fundamentally counterproductive to long term economic health (except for the bank accounts of those that profit from the practice).

I really do believe that the Bull vs.Bear argument fundamentally comes down to one simple fact. The bears are looking at a given company as a means to an end at the expense of what the company stands for. (Looking for the company to fail, and often doing whatever they can to ensure that). The bulls are looking at what the company has to offer in the future. How it is going to influence its business sector down the line. In other words, investing in its growth, (and also often doing things to help ensure that outcome as well.) One builds up, the other tears down.

Dan
While I can understand the impression, that's not really how short selling works. Granted, someone has a negative expectation on the direction of the stock and possibly the company as a whole (hence the negative stock expectation) but there is always someone on the other side of that trade who believes the opposite.

It's a borrow with an obligation to return. Technically, one has borrowed (and often only put up a small amount plus margin expense) and not paid in full or committed to deliver shares, and they are hoping that they can get them at some future date cheaper.

Can it be sometime self fulfilling, sure. But, that should be considered informative. If SO many people are interested in giving me shares at a later date, and I buy them or loan them today - shouldn't this be informative?

Take some solace in the fact that of most companies, Tesla and their leader take FULL advantage of the regular uncertainly that the company faces on a quarterly basis to really put the screws into "short sellers" regularly and extract significant pain out of them regularly.

Personally, I think all this turmoil about manufacturing, production targets, federal tax incentives falling off, running out of cash, etc., the company is fine with it in the press.. it serves to pull the stock down and them boom the veil is lifted and we're back at 20K a month production M3 and to stock rally's back hard to 350$. Rinse and repeat.
 

Brokedoc

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#74
I expect TSLA Q2 numbers to be strong but still have missed Model 3 production targets due to delayed ramp and production down time. I expect the 5k/wk production threshold to be hit this week, possibly full week production but more likely extrapolated burst rate. There may be a slight pullback on stock price which may be one of the last buying opportunities for a long time.

The shorts are getting desperate and industrial espionage and FUD are in full swing. Rumors about TSLA's impending bankruptcy are in full effect.

Just picture this example, Model 3 line only:

5k/wk=20k/month.
Assuming sale price of $50k/car
Monthly gross sales of $1 Billion.
Gross Margin of 25%=Gross Profit of $250 Million PER MONTH for Model 3 only.

This is the quarter where economies of scale kick in and the ramp continues with even more profit margin.
Why in the world does Tesla need to raise more cash from investors when the ramp is going as planned and customers are throwing money at them?
 

Kbm3

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#75
I expect TSLA Q2 numbers to be strong but still have missed Model 3 production targets due to delayed ramp and production down time. I expect the 5k/wk production threshold to be hit this week, possibly full week production but more likely extrapolated burst rate. There may be a slight pullback on stock price which may be one of the last buying opportunities for a long time.

The shorts are getting desperate and industrial espionage and FUD are in full swing. Rumors about TSLA's impending bankruptcy are in full effect.

Just picture this example, Model 3 line only:

5k/wk=20k/month.
Assuming sale price of $50k/car
Monthly gross sales of $1 Billion.
Gross Margin of 25%=Gross Profit of $250 Million PER MONTH for Model 3 only.

This is the quarter where economies of scale kick in and the ramp continues with even more profit margin.
Why in the world does Tesla need to raise more cash from investors when the ramp is going as planned and customers are throwing money at them?
I agree that it s a good time to buy, but 25% gross margin may take awhile.
They have to optimize production lines and they’ve had to improvise more than they planned.

On the plus side, Q3 sales will have very high average selling price because of pent up demand for AWD and Performance!

I’m really hoping Elon has an unexpected positive surprise in 2 weeks to trigger the “short burn of the century “.

I don’t believe he thinks hitting 5k/week would be sufficient to trigger a short squeeze.
 

Brokedoc

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#76
I agree that it s a good time to buy, but 25% gross margin may take awhile.
They have to optimize production lines and they’ve had to improvise more than they planned.

On the plus side, Q3 sales will have very high average selling price because of pent up demand for AWD and Performance!

I’m really hoping Elon has an unexpected positive surprise in 2 weeks to trigger the “short burn of the century “.

I don’t believe he thinks hitting 5k/week would be sufficient to trigger a short squeeze.
I think 25% average gross margin for the current Frist Production/P/D trim vehicles is probably achievable at 5k/wk volume. As the volume increases and SR/non-PUP trim line is introduced, the 25% gross margin stat should be achievable at 7.5-10k/wk from economies of scale.

Q3 sales average price will still be limited since the main GA3 line seems to be dedicated to First Production config. We will see how quickly GA4 ramps but the recent rumor that GA4 is completely manual with robotics phased in later may slow down the ramp for these vehicles.

If Tesla releases a substantial AP upgrade this summer as Elon has tweeted, that may increase the number of those choosing to buy AP (which is almost pure profit aside from development costs)
 

tivoboy

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#77
I don’t think we’re going to see near 25% at this point. Getting to 18-20% would be a significant achievement. They might try to play games with EAP and FSD revenues at this point but that will be obvious.

The real question will be about foreign sales and import tariffs to those countries.
 

garsh

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#79
Stock price is back below $300 again.
I think I'm going to buy another big (well, for me) block of stock soon.
I'm trying to decide if I want to do so right before or right after Tesla announces Q2 earnings.
 

Lovesword

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#80
Stock price is back below $300 again.
I think I'm going to buy another big (well, for me) block of stock soon.
I'm trying to decide if I want to do so right before or right after Tesla announces Q2 earnings.
The million dollar question.... when to POUNCE!!!