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What caused TSLA stock to go up/down today?

What caused TSLA stock to go up/down today?

Hoping this thread might pick up steam as TSLA stock goes through some amazing intra-day and open/closing swings due to the large short interest (I'm assuming).

For instance: Yesterday the stock dipped really low at closing so I bought. Today it jumped back up and I sold for a healthy profit.

Why did the stock dip yesterday and then rise so much today? I didn't see any news that would justify it.

carlk | September 15, 2014

@C_P Yes this provides a great opportunity to buy since nothing has changed. The analyst's fear of driverless car missed one important point. It will still be EV vs. ICE with or without a driver, not to mention Tesla is leading the industry in computer on wheel technology. When Elon says Tesla will provide driverless car in some five or six years he must have seen advantages Tesla/Tesla cars have.

SamO | September 15, 2014

It's an overall fearfullness for the automotive industry and it is entirely justified.

When 10 people can share a single car through autopilot/autonomous driving, then demand for cars (overall) will drop.

This will be offset with more low income non-drivers getting into the action.

U.S. sales peak in 2018 and then drop incredibly.

This will be partially offset with emerging markets purchasing more vehicles. Those emerging market vehicles won't be MS and MX but could be Model 3 or Model 4.

SamO | September 15, 2014

fearfulness

Kpg81 | September 15, 2014

The stock is overvalued at this point of the company's life and is way ahead of itself. It is a house of cards that needs to reset and be rebuilt from a lower level. That level is mid-$100's IMO.

Mike83 | September 15, 2014

Although the number of shares shorted dropped it is still over 21million; a more important number is the days to cover which has gone up.
Just bought some more shares. I do like it when this happens. You know the stock maybe too high; the operative word is maybe, then maybe not.

Captain_Zap | September 15, 2014

@kpg

I'll be "all in" long before that point.

Bighorn | September 15, 2014

Went all in. Find out what kpg is doing and do the opposite:)

Kpg81 | September 15, 2014

Haha.. yeah, if you were long when I went short you would be down $21 per share. Good advice Bighorn. I am staying short here.. go ahead and buy on the first big down day. Catch the falling knife and get cut.

Kutu | September 15, 2014

@kpg1981 - While you make a good point. AAPL and TSLA are at significantly different points in their maturation (can't think of a better word). When AAPL was at $70O they were at market saturation, and with a lot of competition in the marketplace. AAPL needs new products/markets to grow. TSLA has no real competition and, while their growth potential is surely speculative and risky; innovative companys offer good returns when they succeed. I'm betting that Tesla will succeed!

carlk | September 15, 2014

Good point @SamO. And don't forget the impact of automomous taxi and bus that could one day make owning a personal car unnecessary at least from the transportation point of view. On the other hand this likely will impact high end cars whole lot less than the "basic transportation" cars. People who could afford a chauffeur driven car still want a MB instead of a Mazda and people who like the driving fun will still buy the Ferrari, Lambo and of course Tesla.

Bighorn | September 15, 2014

@kpg
I've only made 8 trades and I'm doing just fine, but if making several hundred trades rocks your boat, go for it! If you went short when I started going long, you'd be long since bankrupt.

Captain_Zap | September 15, 2014

@kpg

You sound like one of those Yahoo Finance message board characters. There is no falling knife if you hold. It is all on paper. Nothing happens until you buy or sell. Trying to time this stock for getting in and out makes for missed opportunities more often than not. Read this thread from the beginning.

mrspaghetti | September 15, 2014

@SamO When 10 people can share a single car through autopilot/autonomous driving, then demand for cars (overall) will drop.

I don't understand how driverless vehicles would allow 10 people to share a car. If you're talking about buses then vehicle demand would be unchanged, since whoever rides the bus now will continue riding it whether there's a person driving or not. I can't see how more people would start riding buses just because a computer is driving. If you're talking about carpooling, same thing - I don't see how it becomes any less inconvenient to carpool just because the car is autonomous. In fact, for any situation where the point of the drive is to move passengers I don't see that autonomous vehicles improve efficiency at all other than probably being safer and letting you do other things with your commute time. If there were enough driverless cars, overall traffic patterns would also improve the commute for everyone (including manual drivers) since you'd have fewer idiots doing asinine things to slow down the flow. Plus people unable to drive due to disabilities would be able to get around, etc. All kinds of cool stuff, but nothing I can think of that would allow the kind of vehicle sharing you're referring to.

The way I could see autonomous vehicles catching on is where transporting things other than people is the objective. Why pay a driver to operate a truck full of watermelons when it can drive itself cheaper, with less chance of a wreck? But if Jimmy needs to go to a meeting, Jimmy still needs to be in the car, and if he didn't want the inconvenience of carpooling or taking the bus before, then he won't want it with a driverless bus/carpool either. He'll want his own car - but with an electronic chauffer.

If I'm missing something about driverless vehicle technology that would allow vehicle sharing, please explain how it would work.

Captain_Zap | September 15, 2014

I had similar thoughts, mrspaghetti.

Jamon | September 15, 2014

My family would only need 1 autonomous vehicle (vs 2 now). It could drop off the kids at school, take me to work, then return home. My wife could have it for errands during the day & kids schedules in the afternoon. It could come pick me up after work. If things get slow during the day we could rent it out to friends and family who need occasional errands, etc.

A car that could be shared among many people rather than spending 75% of its time sitting idle in a parking lot could certainly eliminate the need for lots of other vehicles.

Of course that fully autonomous technology is far beyond Elon's plan for cars that will be 90%(?) autopilot in the next 3 years. But it's coming...

AmpedRealtor | September 15, 2014

These rises and falls coincide with when a particular analyst burps... and those analysts have been spot on this whole time, haven't they? ... rotfl!

mrspaghetti | September 15, 2014

@Jamon - Ok, I understand the concept now. I don't think it is how driverless technology will manifest itself, but at least now I understand what SamO might have been getting at.

The barrier I see to that arrangement is that people want a car at their disposal on demand, and they're willing to pay for their own cars to have that convenience.

drax7 | September 15, 2014

Long term thesis is fundamentally intact, tesla has a disruptive product and keeps executing
Amazingly well . By the end of 2015, the run rate will approach 100,000 cars which translate into
About 1 billion profit. At 30 to 40!times earnings that equates to a mkt cap between 30 and 40 billion.

So far everything is proceeding towards that objective.

SamO | September 15, 2014

@mrspaghetti,

Once you have the Uber or Zipcar app, you'll be able to summon any car in less than 5 minutes. With the advent of just-in-time load balancing and driverless technology, cars will be able to be offered as a commodity at a very low fixed cost. I'd expect that a private ride will cost less than a subway or metro ride in 10 years. So less than $0.25-$1.00/mile.

AmpedRealtor | September 15, 2014

One of the negative points spewed by the analyst credited for today's loss was that the Model 3's potential audience will be more limited than originally expected because it most likely won't qualify for the federal tax credit when it's launched in 2017. The reason cited was that Tesla will sell enough cars by then to no longer qualify for the credit.

In order for that to come true, Tesla would have to sell at least 200,000 Model S and X vehicles domestically by the time Model 3 ships. Is that even possible?

Captain_Zap | September 15, 2014

I think that the Alibaba IPO has a great deal with the stock price move today too. Mobileye was suffering from it too. Nasdaq was down yet the Dow was up. I think that there are some that are still hanging on to Elon's comments at the Gigafactory announcement too. That could have made shaken the confidence of some when they started to see the price drop.

For the record book, today's close was 253.86 with an unusually high volume of 16,351,420 shares.

Captain_Zap | September 15, 2014

Now the news is reporting a general Nasdaq sell off.

JZ13 | September 15, 2014

Today merely creates a great buying opportunity. I bought 10 ATM calls today.

NKYTA | September 15, 2014

It's heading down even further.
It is up in after hours trading.

Mel. | September 15, 2014

Captain_Zap,

You are correct .. The Alibaba effect. Poor 1981 is living in the past.

Bighorn | September 15, 2014

This just in:

Tesla (NASDAQ:TSLA) is initiated at ISI Group with a Buy rating and $320 price target.

Let's see how much clout they have...

Brian H | September 15, 2014

Close enough for government work. 50K by the end of '14, another 50K by end '15 (=100K), another 70K by the end of '16 = 160K. Past 200K in 2017Q1, and the ramp-down begins. Gone in 2018.

Brian H | September 15, 2014

↑↑AR, prev pg.

Captain_Zap | September 15, 2014

I just read that Chinese internet stocks took beating today too as people cash out to try to get in on Alibaba.

mrspaghetti | September 15, 2014

@SamO: Once you have the Uber or Zipcar app, you'll be able to summon any car in less than 5 minutes. With the advent of just-in-time load balancing and driverless technology, cars will be able to be offered as a commodity at a very low fixed cost. I'd expect that a private ride will cost less than a subway or metro ride in 10 years. So less than $0.25-$1.00/mile.

I suppose it's possible, but here's the flaw I see in that plan. There are certain places everyone has to go that are not optional, and non-flexible with regard to timing. For example; work. Thus, demand for cars will be high during morning and evening rush hours.

So that means either:

a) there will have to be enough Zip cars for almost* everyone, or
b) people will need to own private vehicles anyway

[*I think I understand that, under your vision, cars will be able to pick up multiple passengers along the way if their destinations are close to each other. That still puts people at work marginally later than they would get there on their own, and requires that they share a vehicle with a bunch of strangers on a regular basis. Either of these would be enough to torpedo the whole idea.]

If cars are cheap enough to have massive fleets of them on call, then they are also cheap enough for people to buy their own. History has shown that people don't like to share stuff with strangers when they don't have to and I think that will also prove to be the case here.

But it's an interesting idea and it will be exciting to see what the vehicular world looks like in 20 years.

Red Sage ca us | September 16, 2014

kpg1981 insisted, "The stock is overvalued at this point of the company's life and is way ahead of itself. It is a house of cards that needs to reset and be rebuilt from a lower level."

Dude. What do you have against Berkshire Hathaway Inc (BRK/A) anyway? With your attitude, you'd think it was 1981 or something...

SamO | September 16, 2014

@mrspaghetti,

Agree that "flexing" will occur and that incentives will be provided for those that want to save more money by pooling. I'd also expect that rush hour pricing would be higher than afternoon or late night pricing.

I'd also expect small groups of owners can pool their cars that sit unused in order to generate extra $.

Imagine you are going out of town on vacation. You can add your private ride to the share pool and rake in the $ just by making it available for rush hour, private use.

Lots of ways to skin a cat. In this case, making more cars available to more people at a lower cost.

mrspaghetti | September 16, 2014

@SamO: My intuition is still that we won't see what you're describing catch on with a broad customer base, but maybe for a niche or two. But you may be right.

It's still such young technology that it's basically impossible to predict how it will actually fit in with our world in 10 or 20 years. I remember after PCs came out a lot of us asked what the big deal was, and what would you really be able to use them for other than playing games? We couldn't conceive of all the little changes they would enable, which would in turn lead to massive changes and whole new industries, etc. And of course, Moore's Law helped :)

Red Sage ca us | September 16, 2014

AmpedRealtor asked, "In order for that to come true, Tesla would have to sell at least 200,000 Model S and X vehicles domestically by the time Model 3 ships. Is that even possible?"

The thing is... The EPA actually says the IRS counts the number of electric cars a manufacturer 'produces' instead of 'sold', even though they link to a chart for quarterly sales (that doesn't include Tesla Motors), while sneaking in the word 'eligible':

"Federal Tax Credits for Electric Vehicles

"Phaseout

"The credit begins to phase out for vehicles at the beginning of the second calendar quarter after the manufacturer produces 200,000 eligible plug-in electric vehicles (i.e., plug-in hybrids and EVs) as counted from January 1, 2010. IRS will announce when a manufacturer exceeds this production figure and will announce the subsequent phase out schedule (Plug-In Electric Drive Motor Vehicle Credit Quarterly Sales)."

I think that Tesla Motors is presuming there will be a strict definition based on what they produce, rather than what has been sold domestically. If Tesla haven't passed 200,000 units produced by January 2017, something will have to be very, very wrong. In any case, I expect domestic sales to have exceeded 200,000 by about July 2017 anyway, starting the decline in the availability of the Federal Tax Credit. That's why it can't be counted on for use with the Model ≡.

This is my most pessimistic projection for US Sales of Tesla vehicles through 2017:
PROJECTED
DOMESTIC SALES
2013 ~18,000 Model S
2014 ~14,000 Model S
2015 ~28,000 Model S & Model X
2016 ~56,000 Model S & Model X
2017 ~112,000 Model S, Model X, & Model ≡
~228,000 TOTAL
This presumes that each year production is only 70% of capacity, and that 40% of cars produced are sold domestically. I think the reality will be much better than that.

omarsultan.ca.us | September 16, 2014

Fear of driverless cars does not take into account American's love of their cars--seems to me like it would be a long adoption cycle.

O

AmpedRealtor | September 16, 2014

One of Adam Jonas' criticisms was tied to the Model 3 not being eligible for the tax credit, with an expected pre-credit price of $35,000. He says that will be a serious issue for Tesla because not everyone will be able to afford one. The last time I checked, you can still be successful by selling a car that not everyone can afford. Let's look at Mercedes, BMW, Jaguar, Audi and the rest...

Red Sage ca us | September 16, 2014

AmpedRealtor: Correctomundo! I think that various Naysayers aren't communicating their case properly. They are too busy saying what they believe Tesla Motors 'can't do', to pay attention to the example of what everyone else is doing.

  • They believe that it is impossible to build a quality pure electric vehicle with decent range for $35,000.
    ⇒ They expect the Tesla Model ≡ to be a hollow, bare bones, empty, tin can, featureless husk without amenities, and declare that it will be (or should be) a boring, wimpy, slow, and worthless 'typical' EV -- just like all the rest.
  • They believe that because of the expense of batteries and an electric drivetrain 'something has to give'.
    ⇒ They expect that Tesla will sacrifice styling, performance, comfort, and convenience features just to reach the mark on range.
  • They believe that 'if the big boys can't do it' then naturally that means Tesla Motors doesn't have a chance.
    ⇒ They expect that Tesla will fail on every possible standard metric in the market, producing a car that is simply 'not worth it' for the price.

They are, of course, completely wrong on all counts. Tesla Motors will be able to meet all goals simply because they don't have the lodestone of 'independent franchised dealerships' holding back their progress. They'll be able to match the supposed 'industry standard' 6% margin even if it costs $32,806 to build a base vehicle offered at $34,900. They'll achieve a 15% margin at a $29,665 build cost. You can build a lot into a high volume, mass market car with $29,665 to spend on each one, thanks to economies of scale.

AmpedRealtor | September 16, 2014

Jonas seems to believe that Tesla will fail if it can't sell an EV to the cashier at Walmart.

Adam Jonas = **** for brains.

RonaldA | September 16, 2014

I watched as 25 points came off the stock then 27 and asked myself...If I sell now I can buy back lower and get more shares? Realizing that I have always failed at market timing, I changed my thinking. I asked myself instead do I believe in this company and what it stands for? Do I think the leadership can pull it off and how would I feel if I didn't own any Tesla. With that I held fast hoping the fall would be far enough to warrant buying a few hundred more shares.

Red Sage ca us | September 16, 2014

AmpedRealtor wrote, "The last time I checked, you can still be successful by selling a car that not everyone can afford. Let's look at Mercedes, BMW, Jaguar, Audi and the rest..."

Yes, the Naysayers sentiment is echoed once again... They still say that the market for a 'luxury electric vehicle' is 'limited', and that 'if they wanted to' then any automaker could throw a bunch of batteries in a car -- as if they can make it true by repeating the lie over and over again. First off, the Tesla Model S is NOT a luxury car, it is an expensive premium electric car. Second, if 'anybody could do it', then why haven't they? Mercedes-Benz and Toyota have been working with Tesla Motors for around four years each. Why is there no fully electric CLS-Class or Lexus LS with Supercharging enabled? The Quant E-Sport Limousine has been making the rounds for over two years with no production version available. But I digress...

Just as Naysayers dismissed the Model S, and the significance of its market impact, they have chosen to ignore what that deems for the upcoming Model ≡. They will have no explanation for the market migration that will take place. They won't believe it when sales of Mercedes-Benz CLA-Class, AUDI A4, Lexus IS, Acura TLX, and BMW 3-Series cars show a sudden downtrend. They won't understand why people who were shopping for a Ford Fusion, Honda Accord, Toyota Camry, or Nissan Altima suddenly choose to go 'more upscale' and 'take the risk' of buying a Tesla instead.

Confused traditional automobile manufacturers will seek injunctions against Tesla Motors claiming they have engaged in 'technology dumping' and that there is 'no way' they could have possibly offered so much for so little. One peak at the books and the presiding Judge will admonish the plaintiffs while dismissing the case. The FTC will come to the aid of Tesla when a rash of court cases and inappropriate legislation is brought to bear in order to limit Tesla sales. Meanwhile, the EPA and NHTSA will question automobile manufacturers to find out just why it is that they are so far behind Tesla... Are they REALLY trying at all?

This is gonna be FUN!

JZ13 | September 16, 2014

AR - Actually Adam Jonas is a genius. He's the first of the big Wall St. analysts to get that Tesla is the future of the auto industry. In fact, last year he compared Elon and Tesla to Cornelius Vanderbilt and the railroad's impact on the world. His recent comments are pretty innocuous and he has kept his $320 price target. He just thinks it's a little expensive at $280 today but that it will appreciate to $320 in the next 10 months. For the record, I disagree with his assessment of today's price and I think TSLA will be higher than $320 in 10 months.

JZ13 | September 16, 2014

kpg1981 - You are clearly a short troll. My calls I bought yesterday are up 15% today thank you very much. Now, I may end up losing on this bet but it is merely a drop in the bucket compared to my main holding which is to hold TSLA for the long-haul.

Brian H | September 16, 2014

AR;
A lodestone is a magnet, used as a compass.

Bighorn | September 16, 2014

@Brian
I think you meant RS, but he's explained his rationale for using that word with some poetic justice.

Red Sage ca us | September 16, 2014

Bighorn: Yes, I use the term 'lodestone' on purpose, rather than 'millstone'. Thanks!

Red Sage ca us | September 16, 2014

Brian H: I chose 'lodestone' because of the magnetic properties. It seemed more appropriate, since it is the... 'gravity' of 'independent franchised dealerships' that effect the inertial movement of traditional auto manufacturers... Keeping them away from electric vehicles as primary products. Luckily, Tesla Motors does not have that problem. Perhaps it is a bit too eclectic a turn of phrase, but I rather like it. ;-)

Brian H | September 16, 2014

Yeah, used in the sense of a "holdback" though (" Tesla Motors will be able to meet all goals simply because they don't have the lodestone of 'independent franchised dealerships' holding back their progress."), it makes 76.3% more sense, and "millstone" would work better. ;p )

Red Sage ca us | September 16, 2014

I'm pretty sure that magnets work laterally as well as vertically. ;-)

tes-s | October 10, 2014

I don't get it - what more could the market have expected?

Mathew98 | October 10, 2014

Classic buy the rumors, sell the news.

This is a good time to jump back in.

Heck, I'll sell the car to buy the stock...

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