How you shorters feeling now? 40% of float short is now at 29%. Who hung on? once that number gets to about 10%, if its still north of 90, sell.
14bn market cap for that company, lmfao.
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Shorting stocks, especially story companies with a lot of potential is so foolish. The #s are completely irrelevant too.
And even now TSLA is only a $14B company. People shouldn't even consider shorting it unless it explodes to a $50B mkt cap. Only when equities become ridiculously overpriced is it worth even looking at. Plus we're in a strong market where all equity indexes are at the highs.
Also not prudent to bet against Elon Musk
Shorting companies that rely on favors from politicians and gov't subsidies isn't prudent, you mean to say.
ONLY 14B? So it's about 21% the size of Ford? Makes sense.
F is a dog. Add the market cap of Toyota ($200B), Volkswagen, Honda, etc. and then take a %. Tesla Motors offers a different product. If it can take 5% of the marketshare then a $15B mkt cap is still too low.
At the end of the day the market is valuing the company at $14B. You can have your own opinion and believe that you're smarter than the market. Sure it is possible that electric cars will fail again, as they did in the 1990s, but at the moment the company has half a billion in revenues and the risk-reward on the shortside is dismal. Tesla is fundamentally an answer to petrol cars. I also support nat gas technologies, a la Boone Pickens.
If you guys want a joke company, short FB, or wait if AAPL rallies and short around $500. Vodafone, Verizon, Visa, Deutsche Bank, Bristol Myers are also good shorts imo. That said, we're in a bull market. I would wait until end of August to start shorting.
where do you find the short interest of a stock?
I don't buy individual stocks, not even TSLA. But I would love to buy/rent a TESLA vehicle if I ever move to a place where I need to a car to get around on a regular basis.
shortsqueeze.com is free
You can only access a limited # of tickers every daily tho
the market isn't valuing it at $14bn, in the same way the market didnt value volkswagen as the largest company in the world by market cap. This is a slowly drawn out short squeeze, we'll see the market value in another month or 2.
This is not a comparable company to ford. Looking forward to hearing how you bought this when it gets to $70 :) TSLA was unique in offering the only cool electric car around, now ferrari has released a hybrid, it's niche is going to be chipped into, and i dont see it as a company that would compete against the toyotas for the everyday runaround car. It's only real edge is its battery afaik, and thats a heavily funded field in general atm. I agree its not good to bet against Musk, which stops me shorting this (as well as a long only play on my investments at the moment, playing the inflation line),
Short the Musk, better learn to busk.
TSLA was the last purchase my investment class bought last semester. I was one of the few who actually voiced, and subsequently voted, against this purchase. In the end, we purchased a full position at ~$52 a share. Now that it is up nearly 140%, I still don't understand why it is continuing its climb.
The thing with stocks is that you can't short the story, regardless of the fundamentals. As long as it is the perceived leader in its respective technology then it can capture marketshare. It already has formed a partnership with Toyota to build a version of the Rav 4. Even if the company fails its downside is limited as a firm will purchase it for the infrastructure and technology.
Volkswagen was a different case bc its market cap was already something like $200B. And many large AUM HFs were trying to exploit some arbitrage opportunity (i believe between diff classes) that created a massive short squeeze. I can almost reassure you that very few HFs would take a sizable short position in a story stock such as TSLA, and especially because a $10-20B market cap is fairly neutral based on future potential CF expectations.
I really have no conviction about TSLA here... I'm neutral at this level. I just think that shorting stocks like this is extremely risky. If you had a portfolio of ten similar companies you would likely have 8 small winners, and 2 huge losers, and in the end would on net lose $. We're also in a bull market so until the S&P begins to start showing weakness it is not prudent to short stocks that are making all-time highs... they can always go higher and with bad timing you'll lose $ even if you turn out to be right by 2014.
Yea, I agree with mb666. Trying to short a concept stock is suicidal. Imagine trying to short into the tech bubble or shorting solar when it was all the rage back then?
How is this different (story wise) from FB though? I mean, it even has a movie made about it.
Duhhhhh
The point is, what some find overpriced other's don't. From a pure valuation standpoint, it is incredibly overpriced already and was even before its big run.
If you are a growth seeker, it is a good buy.
If you want a study in market insanity look at the history of companies like TSLA. The market caps of these companies rarely tie to any rational levels. TSLA isn't as bad as internet companies of the 90s however it isn't far behind.
Ha, a month or 2 ago I got into several long winded debates here on WSO arguing that an individual investor couldn't necessarily look at Tesla's fundamentals and conclude a certain share price because stocks like these aren't necessarily valued that way by the market at large--it's a concept growth firm and its prices aren't necessarily objective. They were arguing that the stock should be shorted based on the fundamentals. Well, fundamentals aren't always useful with short- and medium term stock picks. Once again I've been proven correct.
lol, don't hurt your shoulder patting yourself on the back
Praise me! Somebody love me...:(
lol srsly
I'm definitely drinking the haterade on this one. Thought about getting in around 6 mos ago when I got a look at their new Model S but thought it was way overpriced, even then.
This run up hurts. Can't really explain it, but I dont see it crashing down anytime soon either.
I think there's a huge disconnect between the people who are in favor of Tesla the stock and the people who are against Tesla the business, and my money is on those two groups actually not being that far apart on Tesla the business. People who think the business is going to crumble and then try to monetize that belief by shorting the company are making the same mistake Bill Ackman made with Herbalife: the market can stay irrational way longer than you can stay solvent, and unless you can somehow get confident in your timing you're probably going to get your ass held to the fire for way longer than you like.
If you think the company is going to die, buy deep-ass puts. I just wouldn't short it for more than a day.
Johnny Keynes!
I thought everyone on WSO was Austrian?
I'm a monetarist.
Need to bring those kinds of guys back.
Market cap is an arbitrary number. Apple was $500bn+ at one point. What does that mean? Is Apple expensive? Cheap? It doesn't really mean anything. People who say "OMG I can't believe this company is $xxxxxx bn" are just pulling reasons out of thin air to short...but it is not a valid reason. You saying, "this company is $14bn, lmao" is not making you seem smart or making you seem like what you are talking about.
That's really not the point these people are trying to say. Not too long ago, TSLA sported a market cap of sub $4bn without any major change in underlying fundamentals. $14bn compared to $4bn does make TSLA more expensive and a valid metric considering typical ratios don't apply well here.
Not really. I get what you are saying (i.e. simply looking at the pure number doesn't tell you anything), but market cap is what ownership of the firm is valued at. The poster used it to compare the equity value of TSLA against peers or other companies in general, indicating that TSLA is now worth roughly 1/4 of Ford's value.
When you consider that and then incorporate other metrics, it certainly can indicate overvaluation. It's no different than looking at EV.
One thing is obvious about this stock: the reason TSLA has a $14B market cap is due to its PVGO. And despite the controversy over this stock, I think one thing both bulls and bears can agree on is the fact that $14B isn't fair value.
If the bulls are right and TSLA gains worldwide marketshare, begins to role out more affordable models, and establishes a significant moat (charging stations, better tech, etc.), then the company is worth far, far more.
If the bears are right and TSLA can't gain traction (established companies begin to dominate EV space), it fails to continue to innovate, or alternative fuels are adopted instead of EV (nat gas, idk what else), then the company is worth far, far less.
I've been long TSLA since ~$40, but, because of the aforementioned dichotomy, I'm considering closing my position and putting on a strangle with LEAPS. I think it's a fair bet to say TSLA won't be trading at $120 in 2 years.
To argue from another perspective, the economy remains flush with liquidity. Institutional investors need to be invested in equities (especially when indexes are close to highs across the board). Now imagine that you're a L/S HF... how will you generate alpha? The easiest way is to continue to bid these concept stocks on momentum.
TSLA can very well soon be a $15 stock but getting the timing right is so difficult. And I would assume that leap puts trade at huge premiums.
Also, forward P/E is 150... you can find a lot worse.
That's a terrible argument
Are you surprised given his posting history?
Just trying to deter ppl from shorting concept stocks in a strong mkt.
At the end of the day, people were bearish on TSLA when it was $40... they said it was too high when $60, $80, $100 and now $120.
This same pattern happened with solar and coffee (Green Mountain) stocks... timing is only apparent in hindsight.
What's up your a$$?
Can't handle differing opinions?
Never typed the word ass before? What are you a Mormon?
Differing opinions does not equate to idiotic statements. Stick to entrepreneurs.
I'm just poking at the theoretical argument here when I say this, because I get what you're saying, but you're implying that the people who were bearish on TSLA at $40 should 1) feel they've been proven wrong, and 2) no longer feel that way.
What I mean is... someone who says it was too high at $40 would actually be retarded to not say it's too high at $60, $80, $100, and now $120. And I think solar and GMCR have gotten their asses handed to them hard enough that those people were effectively correct in their assessments of those two things being overhyped. Given, GMCR is pretty much "back," but the argument being made against it was 100% correct... and don't get me started on FSLR (only solar I ever bought... triple digits of course).
I feel like these are two very different short cases. With GMCR/FSLR, the shorts were way too bearish on the fair value of these companies, although their overall assessment was correct. With TSLA, you still have no idea what the expected value of the company is. Nobody can say with certainty that there's a higher probability of TSLA being a failure than a success, which is why it's been so hard to pin down a valuation.
I'd argue it's easier to know the direction of Tesla as a business than it is to know GMCR and to a lesser extent, FSLR. At least with Tesla you know it's not viable on a standalone, or up to this point hasn't proven to be. Though on second thought you're probably much more right than the argument I just gave because TSLA has so far proven to be a black box... we don't really have any concrete audited understanding of what that market looks like, just numbers and guidances with no comparables to measure then on.
Hey PE, here's another post so you can throw monkey sh!t as you likely did in every of my above posts lolz..
TSLA still holding tight @134 now... making it a $15.5B mkt cap company with 0 earnings. That's the danger with concept stocks. Better off placing leap puts, instead of timing these moves, albeit I imagine hefty premiums considering the high volatility and lack of fundamentals.
penvestor's opinions are wrong on pretty much everything.
Bump :D vroom vroom
Can't short concept stocks. Calling tops on bubbles looks easy only in hindsight.
Sadly I can see TSLA to returning to a $2B mkt cap if the business model fades but to get the timing right on these is so dicey.
Valuation aside...at least you know that very top management is aligned with shareholders. This is my personal opinion, but I believe that Elon Musk will make TSLA work or he will die trying.
Though I want Musk to win....I just don't get the business. You basically are trying to do something revolutionary, I don't even see Teslas around much and IF (unlikely) this becomes a completely household product, big oil and every car company in America (not to mention the world) is going to try to squeeze Tesla out...Besides...Hybrids aren't even that popular.
1) Tesla isn't a hybrid, irrelevant.
2) Toyota has a partnership with Tesla. That's something people don't factor into its valuation, periphery revenue streams like battery partnerships (and how SCTY uses Tesla batteries to store energy).
3) It exceeded on production and didn't even realize European sales this quarter, holding off to Q3.
4) There's no basis for saying this goes to 2 billion. Tesla has executed perfectly. Short of a bomb going off in its factory I don't know what could cuase it to crash like that, especially when its Gen 3 $30,000 model comes out.
5) trying to say something will "fade" when it currently is the innovator in an incredibly laggard market? LOLZ.
6) Teslas are big in different geographies; imagine what happens when it becomes big everywhere.
7) Even when other companies take EV seriously, they won't have the charger infrastructure Tesla has.
In reference to hybrids, I was insinuating that not even quasi-electric cars are selling, what makes you think a completely electric one will? The other thing is infrastructure, as you somewhat pointed out (though perhaps in a different context). I just don't see it happening any time soon..
Tesla has a corporate plan to lay out the electric infrastructure beginning in 2015, so they are aware of the issue. And apparently the infrastructure is a bit more robust already on the west coast where these organizations are located.
Maybe we should get Ford to build its own roads -_-
Doesn't seem feasible.
LOL... you mad you live in the most transient city in America? The Metro is the worst transit system in any major city and you are trying to convince us how great Fannie and Freddie are.
I wasn't wrong about anything except that mr666 doesn't have a clue what he is doing when it comes to finance. His arguments are always incoherent when it comes to valuation or his understanding of it.
That being said, I definitely didn't think TSLA would be at where it is. Good thing I'm not Whitehat!
Who are you?
I'm not sure why you are getting so angry, but it's quite amusing.
Ironically you couldn't name one transferable skill to finance because those jobs are a joke. Anyone can work there.
What position do I have on or in TSLA? Did I ever say I was shorting it (a la Whitehat)? Nope.
I'm sorry you've lived your entire life in D.C. while some of us have lived a little and explored the world.
Not to hijack this thread back to the original topic, but can we please get back to discussing TSLA and you guys take your flame war to PMs or something.
BlackHat has commented but I would love to see other investors like WhiteHat, Kenny Powers, xqtrack give their opinions.
PE, you’ve posted 10 times on this thread and only once did you write something that added value (regarding the legitimacy of the market cap and other metrics such as EV).
All your other responses are essentially troll posts, for example:
“Are you surprised given his posting history?
“What are you a Mormon?”
“you mad you live in the most transient city in America?
“you couldn't name one transferable skill to finance”
You can also bash my “valuation skills” but at the end of the day I warned about shorting TSLA from the start of this thread, and so far, have been correct. Anyways enjoy continuing to clog the forums, must be fun trolling with almost 2,500 posts. Bet that your type of personality makes you quite a popular guy around the office.
Now regarding TSLA, I’m curious where the longs are thinking of selling this thing.
This is case in point. You never asked me to name a transferrable skill. Once again you're setting up false arguments and then destroying them.
How about underwriting skills (single and multifamily), financial modeling, CMBS/MBS pricing and modeling, etc.? There are literally dozens of organizations that hire directly from the GSEs every single day--Wells Fargo Multifamily Capital, Prudential, Centerline, Grandbridge, Berkadia, Beech Street, Berkeley Point, Walker & Dunlop, Cushman & Wakefield, CBRE, CapitalSource, Greystar, Northmarq, Red Capital, Duff & Phelps, CapitalOne, Deloitte, PwC, Ernst & Young, Jones Lang LaSalle, etc. The point is, you are an intellectual joke.
i know nothing about Tesla, but I am certain that this will eventually end in tears just like any other bubble...however my suggestion for bears is to be patient, do not try to short now, and for sure do not buy wickedly over-priced puts. I saw too many people lose their jobs trying to short the housing bubble in 2005-07...never, ever try to pick a top in a situation like this. My guess would be that this story's evaporation will neatly coincide with the end of Fed balance sheet expansion next year and that the initial push-down will be 30-40% quite quickly, so there will be no need to have called the exact high.
We shorted the box at $139 and will sit on it until we feel ready to pull the long piece off the table. Hard to know when that will be for the kind of factors Bondarb listed above.
The price doesn't mean anything to me, so anyone who argues where Tesla is in terms of its success as a business by using the stock price as a data point really has no understanding of anything. We just need to wait for the constant deferral of the "show me" quarter(s) to end, which happens when there's no more levers to pull to demonstrate any added demand, and that's when the questions become unavoidable. Have to remember that this company makes no money, is very unlikely to make money any time soon, and still hasn't been able to show us that it can sell its product anywhere that doesn't heavily subsidize its production. Tesla vehicles are sold in only 8 states, and internationally only in one country, that being Norway which is very, very EV friendly in terms of subsidies and government credits. If things were really that great, you imagine they'd be pushing adoption everywhere... not just the places they can get paid enough by the taxpayer to not immediately drown.
I'd love to see businesses like this succeed some day, but these guys are not conducting themselves the way a successful or promising business ever would. I understand the reason to love them and believe they can be great, but can't find a way to get comfortable with it based on how things have gone so far, especially the fact that every press release reads like it's trying to mislead you.
My favorite part of their conference call:
Q: What metrics did you use to come up with demand of 40,000 units?
A: .....(long pause filled with umms)... It just seemed like a good number...
Tesla gets 5-star crash rating from NHTSA:
http://www.businessinsider.com/video-tesla-model-s-crash-testing-2013-8
Some thoughts off the top of my head; I like Tesla. I like the efforts put by Musk and his team to create this line of cars. 17bn market cap is too high, though. Haven't really read any Financial statements on the company, but from a behavioural point of view, I think the market is pricing it as if it were just another .com startup. It's not. No matter how lean that company is (or will be) it still has to face all the challenges auto manufacturers are facing. Huge capex, potential litigation costs, potential mass recall of vehicles due to disfunctioning part(s) etc etc. and they need to have a standard line of models which needs to be updated every 4-6 years (be it a facelift or a new model). These factors are just not priced in IMO, and they require a big amount of cash.
Tesla Model S received the highest crash rating--ever--in the history of automobiles:
http://allthingsd.com/20130820/teslas-model-s-breaks-roof-testing-machi…
And 2 respected magazines for auto reviews said it was the best car ever driven. There is a reason people like this stock--it's literally got the best product in the 120-year history of automobiles.
stop talking.
This thread reflects what happens when people get focused too much on the numbers and not on the actual product, the item of value that the company brings to society. I think in 4-5 years Tesla will hit 300; it has just been given an accelerated series of situations it leveraged to get a head start on it and a lot of its future success is already priced in.
Dude you deserve a slap in the face. IT IS NOT THE BEST PRODUCT IN THE 120-YEAR HISTORY OF AUTOMOBILES....are you kidding me?
It has the highest crash test rating in the history of NHTSA crash tests and it has the highest reviews in the history of Consumer Reports. That's pretty much objective. If you want to argue that a $1 million sports car is a better product then I don't know what to say--frankly, it probably gets worse crash test ratings.
Dying at this thread right now... hahaha. Guarantee whoever revived thread is NOT a car guy. Citing the NHTSA on auto quality (especially after seeing the presser Tesla put out, which read more like a penny stock release than anything) is like saying JD Power knows what the most commercially successful brand of soap is going to be.
Not sure what you read--didn't cite NHTSA on auto quality. Cited their CRASH testing rating. Is there a better source of data for crash testing ratings? Does Goldman Sachs have an auto group that crash tests cars and gives out ratings that give "car guys" erections?
This banal thread just got really feisty.
All I know is that the S&P dipped a bit last week but TSLA held in at $150. Also don't care about which agency gave it a good safety rating, the more important point is that the market assumes continued resilience... I mean ppl were shorting this thing at the ipo, then at $60, $80, $120, etc.
Blackhat, I understand that "shorting the box" is essentially mkt neutral, perhaps lock-in price is a better phrase, and that you're essentially playing a tax game on the cap gains. Just curious why a fund would do this as it is an opportunity cost for the capital involved? Can you repo this kind of lockin? Additionally, don't you pay a little interest on the short position? And isn't there a threat that the cap gains % can only get higher? I understand your fund can offset during a losing quarter but this still seems strange to me.
If you have any good ideas on where to buy cheap stocks in this environment let me know :) But the box makes sense now and the costs are still minimal, it's not like you can put a box on 5% of the O/S or anything. Selling calls to cover borrowing costs and buying puts is helping to make it a more worthwhile use of capital.
I have a thing against holding stocks in September & October, especially after strong years. Must have read too many financial mts history books. I got lucky making almost 26% ytd on my account solely being in boring industry ETFs... and am now hoping that the mkt gets crushed in the next 12 weeks so I can buy in early December at good prices. That said, I think the market as a whole is overvalued... but when Treasuries trade near historic lows you have to buy equities nonetheless.
Individual stocks are not my strong point. Even in December I prefer to play dividend stocks, so mostly big caps. I like to watch industry P/Es, many oils seem reasonable but crude is already over $100 a barrel so if the're not bid now then that's a bad sign. I'm not into buying story stocks at levels such as TSLA,but am very curious how longs manage the position... as well as where shorts will initiate their entries. ,
Thanks to @BlackHat and @Unforseen for bringing a little sanity back to this thread before I even got a chance to reply
i have a strange feeling that as the fed balance sheet expansion begins to slow and eventually reverse much of this great Tesla story will evaporate into thin air...it is money creation creates fantasies like this.
I will repeat my disclaimer that i would never try to pick a top in something like this but i have my popcorn ready to enjoy the fireworks when it implodes...
Always nice to see a little bit of rationality on this site. Thanks.
You're probably right but this reflects the economy at large. Many profitable companies also trade at absurd multiples.
That said, the money is very real for ppl that shorted too early and lost their shirts. Can't imagine many had the stomach to hold a position that potentially went 300%+ against them.
I don't have anything against calling tops but I believe it was Soros, maybe Druckenmiller, that said you should always wait until the stock falls 20% from it's high to safely put on a short.
I don't know a ton about Tesla personally - but I do know that the Model S cars are pretty fucking solid, and their consumers love them. Anybody who claims otherwise is full of shit (as people seem to be doing above). And by the way, saying that a review is 'not objective' is kind of a worthless exercise - I'm not sure what exactly an 'objective' review would be -- it's an opinion.
But for the hell of it, here are some other reviews I found when googling reviews:
"As one of the most desirable electric cars available today, the 2013 Tesla Model S is also one of the best luxury sedans, too." http://www.edmunds.com/tesla/model-s/2013/
"The Tesla wasn’t just the smoothest, fastest, and most technologically advanced car I’ve ever driven. It was among the most comfortable and practical. And it was—counter to everything you’ve heard—ideally suited to a road trip." http://www.slate.com/articles/technology/technology/2013/06/tesla_model…
"We weren't expecting much from the Tesla other than some interesting dinner conversation as we considered "real" candidates like the Subaru BRZ and the Porsche Boxster. In fact, the Tesla blew them, and us, away. Actually, the Model S can blow away almost anything. "It's the performance that won us over," admits editor-in-chief Jean Jennings. "The crazy speed builds silently and then pulls back the edges of your face. It had all of us endangering our licenses."
Read more: http://www.automobilemag.com/features/awards/1301_2013_automobile_of_th…
"This might not just be the future of the electric car. The Tesla Model S could be the future of the American auto industry." http://www.autoguide.com/manufacturer/tesla/2013-tesla-model-s-review-2…
~~~~
I could go on. None of the above means that TSLA isn't necessarily a good short candidate (or, a good short candidate and then a good long candidate, like AMZN was in the 2000s when it peaked at 80 then crashed, before several years later racing up to 290 where it's parked these days).
My only point though is that if the short thesis is based on 'these cars are pieces of shit', and a whole lot of people other than you who review cars disagree with that point, you may not want to bet money on that.
For what it's worth, I thought the iPad was the most worthless gadget ever and that nobody would ever want one. So did a lot of other smart people I talked to. (I did not short Apple for the record). Enough people who used it thought it kicked ass, and here we are today...
So true. If someone tries to craft a short thesis around valuation or the fact that the stock is priced for perfection, I can respect their opinion (even if I don't necessarily agree with it). But when they begin to call into question the quality of the product, that's when I start to roll my eyes.
To be clear, as a TSLA long I concede there are several valid reasons for why this stock may experience a correction. A subpar product, however, is not one of them.
Wait. Really? So Zynga was a valuation short? Enron was priced to perfection? Perfection in what - record keeping?
Almost all the wild predictions of the internet bubble era ended up actually coming true and in many cases those predictions turned out to be conservative guesses...but that didnt prevent the bubble from popping.
You cannot compare the tech bubble to TSLA. The scale is ridiculously different. One car manufacturer being valued at $18B isn't a bubble. You had dozens of big cap tech companies being valued at hundreds of billions of dollars... CISCO was $600 billion mkt cap!!!!
And you had HUNDREDS of smaller companies that were valued at $1-20B w/o having a single penny in sales or profits.
TSLA isn't in a bubble until it reaches something like a $50B mkt cap. Look at the car industry. If TSLA can control 5% of the market then a $20B mkt cap is more than justified. And trust me, it is not grandma and her retail account buying TSLA, but rather HFs and institutions that want to diversity into a play that can be a ten bagger. When diversified, stocks like these produce alpha. Now I'm not justifying buying it at these levels but ppl that are thinking of shorting or just calling it a bubble need to have more patience.
Tulips in the 16th century bought homes. Now that's a bubble. A mkt valuing a decent product with potential at $18B isn't a bubble just yet.
Right...that's why I gave the example of Amazon. It was a bubble stock in the 2000s, and then it crashed, and then it took over the world and turned out the guesses were conservative, and now the stock is through the roof. If you had bought at the peak of the bubble at 106 in 1999 and just held through you would've earned a 7-8% CAGR through today...not killing it by any means, but could be much worse, especially considering that over that same period the S&P returned 20-30% cumulatively.
Can you handle this...? ^_^ http://www.wallstreetoasis.com/forums/video-hitler-is-short-tsla
This thing touched 173 today lol before reversing a bit... $20B mkt cap
Good time to bring up the Keynes saying that the market can remain irrational longer than you can remain solvent
Have you driven a Tesla before? It's here to stay. And I'm perfectly fine with putting a premium on strong leadership.
Never driven one but I'm sure it is a great car. The problem is that I can't see the economy absorbing a $60,000+, essentially beta version car.
Throughout this thread I've been arguing about the dangers of shorting the company. I also think that the valuation is getting a little extreme but if you look at the history of markets this is a common phenomena. It can be overvalued for 2 more years and you'll never know where the top is. I'm neutral on TSLA... def wouldn't buy at this level but wouldn't short either. If I had a gun to my head I would prefer the latter. A company can have a phenomenal product but there's always a justifiable valuation - but prudent valuation s don't apply well to story stocks. Timing the top is impossible. Someone will do it but we probably won't hear about the losers.
Please tell me about this strong leadership you speak of
Seriously, the founder of the firm and majority shareholder says this, and the stock barely budges? the fuck?
http://news.investors.com/technology/091213-670827-elon-musk-not-as-cra…
LOL. This stock is up 12% since I last posted. Still waiting for those shorts to come through, eh? Hope you all have had the liquidity to hold your positions since you've gotten fucking raped in the last 6 months.
I'm thinking if the Federal Reserve announces this month that it plans to pull back quantitative easing then I think the whole stock market is going to feel it. Maybe you shorters will get some of your losses back then.
In my opinion, the problem with shorting TSLA or any momentum stock (NFLX, GMCR, etc.) is the fact that they tend have a low correlation to the S&P. This makes them a lousy long-short trade candidate if you're holding a long diversified portfolio of more "traditional" stocks.
I never really understood why hedge funds love shorting these names... Seems to me that you would want to target both underperformance and a high correlation to the overall market.
This thing is up 4.5% and looking to break 175 lolz. $21B mkt cap
Gotta agree that some people are now taking crazy pills. Maybe Janet Yellen is thinking about adding this to her portfolio.
Edit: and so TSLA finished up 7% today. $178 lolz
Tesla car on fire:
opps
No update post earnings?
http://www.businessinsider.com/tesla-q3-earnings-2013-11
OK i have no knowledge of the fundamentals around Tesla but if one wanted to be short i think now might be a good time to try it...dropped 40%, had a nice bounce that retraced about half that drop, and now seems to be trading softly again. Also we can at least see the finish line on QE at this point.
i think it goes back up and breaks $200 within this year. the only major bubble stock (above 10 billion market cap) that has burst in the last 2 or 3 years as far as i can recall has been GRPN.
LNKD, CRM, FB, NFLX, AMZN have all been buys when they have had major dips. same goes for the 3D printing shares.
I understand why you would attribute this to monetary expansion, but the overall market does not seem to care about tapering. so I dont know why It would be bearish going forward for TSLA.
Also the overall story has not changed yet.
I am just suggesting that based on having watched previous bubble implosions and profited from some of them in 2008-2009, this technical setup looks awfully familiar. Check the chart of the nasdaq bubble burst for example...rapid 35% drop, flollowed by a nice rally that retraced more then half the original loss but didnt make a new high, then a slow bleed out to oblivion. just an observation...i have no position but figured i'd get this hunch "on the record".
Agreed. You don't short a strong stock, regardless how volatile, in a strong market. #s don't matter because its a story stock. Enough institutions will buy the story b.c. they have to diversify their $. Retail investors probably don't understand the significance of a $20B mkt cap company with negative earnings.
Just too much momentum to be short imo. Regarding QE, stocks still remain near their highs... probably need a retracement in the 10%-20% range, as well as a period of stagnation, before you start shorting thing. May as well be 2015 but you can't short too early because valuations can became far too irrational before they prove you correct. Also an opportunity cost of putting your $ to work elsewhere.
Good time to short? More like a good time to get your ass roasted. :]
Tesla doesn't recall cars, they send software updates.
Tesla cars are the safest cars, the best performing cars in cold weather, among the fastest accelerating cars, and just damn great cars.
Exceeded sales expectations by 20% this quarter, and expecting to sell double the cars in 2014. The moment Tesla isn't battery constrained when they build their own factory, they're going to have everything they need to reach its 700k annual sales target by 2020.
Damn I want to be elon musk.
On a somewhat related note, Governor Jerry Brown just proposed to build the "high-speed" train project with funds from the CA cap and trade program. Elon Musk has long voiced that the high speed train project is too costly, the trip between SF and LA still too long and tickets would cost too much (like Acela express). Instead the state should give the money to him to build the hyperloop instead. Seeing that Tesla essentially makes the entirety of its NOIs from selling carbon credits, it would be pretty amusing if CA indeed goes ahead with that plan. Then Elon would be getting money off the cap and trade from both ends.
I've said it before and I'll say it again, the people advocating for "high speed" rail are going to look like complete jackasses in about 10 years when the autonomous vehicle begins to make most--not all, but most--public transportation obsolete. Rail advocates bitch and moan about how US rail infrastructure is a generation behind Japan and Europe; well, Japan and Europe will be green with envy when Americans, with the world's most prolific interstate highway system, are zipping around in autonomous Teslas and Mercedes that drop passengers off curbside at their offices and park themselves. (Tesla, btw, announced that it is targeting 2017 for release of its autonomous car to consumers--I guess we'll have to see...). High speed rail is 30 years away from being completely anachronistic. Elon Musk knows this--he knows that unless innovation in transportation is truly transformational or transcendent (like the hyperloop) then it will fail against its competitors.
How do self driving cars solve the problem of traffic congestion? Unless they are flying cars too? Plus the real high speed rails like the ones in Asia run much faster than automobiles. Mass transits are developed not just for those who can't drive.
Back to the topic at hand, I don't know how anyone can look at the nearly perfect correlation between interest rates and stock prices and conclude anything other than that tapering will negatively impact stock gains across the board, especially as higher interest rates make all other investments--real estate, bonds, dollars, etc.--more attractive.
Actually i think the market will rally in the face of full tapering. Just nothing more than a hunch though. And not something im betting on.
http://www.businessinsider.com/history-of-federal-reserve-tightening-20…
the average 1 year return in the stock market,after fed tightening has been +4.2%
But regardless of tapering or not, I doubt the shareholders of TSLA will sell because the fed is tapering. Historically the market has not really cared much about rising rates as the empirical evidence shows in the article above.
I think tapering is an interesting topic but has very little relevance if any at all to TSLA's share price. although its interesting to note that the correlation of the changes in the 10 year yield with monthly returns of TSLA shares is an astounding 40%.
I dont think this will hold going forward however, because over the long run the correlation with monthly S&P 500 returns to the monthly changes in the ten year yield, is actually -.01. In other words there is no correlation in the long run.
The average 1-year return in the stock market post tapering is +4.2%--that's compared to ~30% annual returns...so what you're saying is that tapering is going to complete f*ck the stock market.
i'll also point out that since the fed announced $10B of tapering on the 18th last month, we are trading higher, not lower today.
If the market cared about tapering we should be down 3 or 4% by now, but clearly that is not the case.
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