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Tesla in ‘Code Red Situation’ as Sell-Off Exceeds 20%

Uglytruth

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Pigs get fat.................. hogs get slaughtered.
 

Voodoo

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When the last little guy feels that emotion the last buyer has bought and there is nowhere to go but DOWN.

He really needs to l@@k at the economic situation, no car manufacture is going to come up smelling of roses here. For the automakers this will be a phase change in technology over a decade plus of a structurally weak globally economy. It will be a brutal, knock'em down, drag them out affair until we have a small handful of survivors. They will all be battered and bruised by the end of this and that is when you want to buy in, when you know who will live and who will die. TSLA has an equal chance of being $0 before this is done. $1400 TSLA is robbery and today's price action (candle) was a fucking air raid siren! If he doesn't make out like a bandit here he is a greedy fuck that will die like every other market pig before him. Tell him that, with love. :p

PS> TSLA today just may the the bell ringing @ the top of the market. Don't hold me to it but TSLA has been a poster child for this insanity and that sure as shit looks like a blowoff top in the making.

2c FWIW.

Run Forest RUN!

Can we have a vote or Co-Insanity Poster Boys? I can't tell if this is going to go to Elon Musk or Dave Portnoy. Going to be a nail bitter. I'd say Elon is the Suits DS poster boy while Portnoy will be the poster boy for the new Robinhooders.
 

Voodoo

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Zed

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Pigs get fat.................. hogs get slaughtered.
As they say on Wall St, bulls make money, bears make money, pigs get slaughtered.

Must admit I never thought that I'd see an auto maker with a chart that looked like a rumor ridden gold junior explorer, but TSLA has managed it. Albeit with bigger numbers... but still. This thing is going to teach a big lesson to a generation of investors. IMHO.
 

Zed

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Voodoo

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As they say on Wall St, bulls make money, bears make money, pigs get slaughtered.

Must admit I never thought that I'd see an auto maker with a chart that looked like a rumor ridden gold junior explorer, but TSLA has managed it. Albeit with bigger numbers... but still. This thing is going to teach a big lesson to a generation of investors. IMHO.
You do remember that perhaps most famous short squeeze of all. None other than Volkswagen.

https://moxreports.com/vw-infinity-squeeze/
 

Zed

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You do remember that perhaps most famous short squeeze of all. None other than Volkswagen.

https://moxreports.com/vw-infinity-squeeze/
Yes... amazing chart and WHAT an opportunity to book YEARS worth of profit and go play somewhere else SANE.

VW now trading $100 below the low prior to the squeeze and it went as low as 5% of the squeeze high a couple of years later.

 

gnome

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Welp...



Screen Shot 2020-08-17 at 11.15.24 PM.png
 

solarion

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They make cars...right? lol

Doubtless their forward P/E projections are AMAZING, and thus justify such a ridiculous premium. There's no way the current economic collapse could possibly affect TSLA.

...damn people are dumb. hahaha "It's going up! ...I better mortgage my house and buy MOAR!"
 

Voodoo

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Someone was making a good point the other day. With other car makers starting new EVs not only will they have competition bit they will NOT have to purchase any of the stupid carbon credits from Tesla.
 

MrLucky

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So why is Tesla on a tear? Easy. Announcement of a stock split on Aug 31, 5 to 1.

Now we all know it really means nothing as the price just get divided by 5 and the value remains the same; 1@$1000 vs 5@$200. But psychologically it's the perception of getting more of something when it's not. Robinhood is full of millennials who don't know better. Works for me. Can't wait for the split. They'll buy more thinking they are getting Tsla for 1/5 the price when they will actually be getting 1/5 the share. $1887/sh at time of post.

Now if Amazon would just to the same.....
 

Voodoo

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So why is Tesla on a tear? Easy. Announcement of a stock split on Aug 31, 5 to 1.

Now we all know it really means nothing as the price just get divided by 5 and the value remains the same; 1@$1000 vs 5@$200. But psychologically it's the perception of getting more of something when it's not. Robinhood is full of millennials who don't know better. Works for me. Can't wait for the split. They'll buy more thinking they are getting Tsla for 1/5 the price when they will actually be getting 1/5 the share. $1887/sh at time of post.

Now if Amazon would just to the same.....
It will also make that option scam / price manipulation scheme much less useful. I guess who ever ran that decided it was cheaper to let the young millennial's hold the bag.
 

gnome

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Any analysis that evaluates Tesla purely as a car maker is missing the point.
They are an energy company, car company, software company, chip manufacturer, and public transport company.
Which other car maker has software that sells for $8000 on it's way to $20,000?
Also, which car maker is growing at 50% per year?


Business
Tesla shares rally for no reason
TechCrunch
Kirsten Korosec and Alex Wilhelm
,TechCrunch•August 17, 2020
Tesla shares surpassed $1,800 for the first time today, the latest in an eye-popping run up of the stock that has propelled the company's valuation to more than $341 billion.

Let's put these numbers in perspective. Tesla, an automaker that delivered 367,500 vehicles in 2019 and is aiming to exceed the 500,000-mark in 2020, is worth more than the combined market valuations of America's Big Three automakers: GM, Ford and Fiat Chrysler. Strike that, Tesla is now worth more than those companies combined by a factor of three and a half.

And while Tesla expects to deliver more than a half-million cars in 2020 -- not a number to scoff at, mind, it's material -- Ford managed 2019 sales of 2.41 million in the U.S. alone. Fiat Chrysler sold 2.2 million cars in the U.S. during the same year, and GM managed 2.89 million. And Tesla is worth a multiple of their aggregate.

Why the gains?

There doesn't appear to be any fundamental reason why Tesla's shares rose more than 11.2% today to close at $1,835.64. Wedbush analyst Dan Ives apparently had a positive call today about Tesla, according to MarketWatch, but that's only worth so much. Surely not a few dozen billion dollars.

The story here is valuation momentum at the well-known EV company that started this spring and has accelerated since Tesla recently announced plans for a 5 for 1 stock split.

Like a tiny snowball that has turned into an avalanche, the change is proving stunning. Consider where Tesla was two years ago. CEO Elon Musk had just tweeted that he had “funding secured” and was considering taking Tesla private at $420 a share.

Musk would later backtrack and Tesla would remain public. But the tweets and leaked emails that followed got the attention of the U.S. Securities and Exchange Commission, which later accused Musk of securities fraud. The parties reached a settlement without admitting wrongdoing. Under the settlement, Tesla agreed to add two independent directors and Musk would step down as chairman for three years.

The shares bopped along — spiking and then dropping, as volatile stocks are wont to do. Tesla shares reached a 52-week low of $211 in August 2019. The stock has risen around 770% since.

Valuing Tesla

It's a running finance joke that whenever a company's share price does something odd and inexplicable that the move was certainly based on the changing present value of its future cash flows. Such is the case today, when Tesla shares jumped sharply sans material news.

Surely the move was based on the changing present value of its future cash flows.

Jokes aside, Tesla shares are not comically overbought, measured using any normal financial metric you prefer. On a price/sales basis, for example, Tesla is trading at a multiple of around 13.7x its revenue, according to YCharts data. GM? A 0.38x revenue multiple. Toyota is worth much more than GM in price/sales terms, managing a 0.77x multiple, or about double.

But that's a single-digit percentage of the revenue multiple that Tesla commands. Toyota's price/book ratio of 0.98x. Tesla's is 34.6x, again leaning on YCharts data.

It may be the case that Tesla is set to race past its rivals, secure the top position in the electric car market, run the EV show for a decade and shower its shareholders in dividends and buybacks. That's how its stock priced today, at least. If it falls short of that investor expectation, expect some pullback at some point. And perhaps some more days when it just adds 10% for no reason.

You know, when the present value of its future cash flows appreciate by a tenth, sans news.

For fun, this is what Kirsten and Alex looked like today, trying to uncover why Tesla shares rallied:


Via @latenightsnack on Giphy
 

gnome

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Someone was making a good point the other day. With other car makers starting new EVs not only will they have competition bit they will NOT have to purchase any of the stupid carbon credits from Tesla.
The reason they currently purchase carbon credits from Tesla is because they don't know how to make EV's profitably, and if they did it would absolutely wreck sales in their ICE lines, and all the capital they have invested in ICE manufacturing goes poof.
 

Casey Jones

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That capital has a limited shelf life, anyway.

Ten years is about all an auto manufacturer can get out of an engine line, say. Sometimes less. Occasionally, as with the Chevrolet small-block, much, much more.

Ford already discontinued the production of all passenger cars but the Mustang, to concentrate on SUVs. That meant all the investment in the last version of the Fiesta, and other conventional cars, was gone.

IF there were a serious market for these electric thingies, the auto companies would make them. As they rushed to make SUVs. Before that, minivans. Before that. FWD cars.
 

Voodoo

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The reason they currently purchase carbon credits from Tesla is because they don't know how to make EV's profitably, and if they did it would absolutely wreck sales in their ICE lines, and all the capital they have invested in ICE manufacturing goes poof.
Seriously Elon acolytes. EV's are OLD, no VERY OLD technology. There are tons of manufacturers who have new EV models coming. Perhaps they underestimated demand and are now just making them for the tax credits or being fooled by the fact that Tesla has a bigger market cap than any of them. The market is not that big right now.
 

solarion

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Rivian has a contract with Amazon to make electric cars for them. Much of their work is put off till next year, allegedly due to the coronavirus plandemic. We know that Musk's company IS also affected, because he's been sparring publicly with comrade Newsom in Commiefornia. Point being there are near zero barriers to entry barring others from doing what TSLA does.

How many times have pie in the sky fantasy projected future growth projections turned out to not be realistic? Does anyone remember Enron? Worldcom? Global Crossing? Rambus? ...etc etc etc. Tesla's stock price is based on hopium, ZIRP, and FRBNY loose monetary policy. Reality need not apply...but eventually reality will intrude.
 

Voodoo

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Rivian has a contract with Amazon to make electric cars for them. Much of their work is put off till next year, allegedly due to the coronavirus plandemic. We know that Musk's company IS also affected, because he's been sparring publicly with comrade Newsom in Commiefornia. Point being there are near zero barriers to entry barring others from doing what TSLA does.

How many times have pie in the sky fantasy projected future growth projections turned out to not be realistic? Does anyone remember Enron? Worldcom? Global Crossing? Rambus? ...etc etc etc. Tesla's stock price is based on hopium, ZIRP, and FRBNY loose monetary policy. Reality need not apply...but eventually reality will intrude.
Rambus, now there's one I haven't thought about for a while. Never understood them at all other than they really liked lawyers.
 

Uglytruth

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No unions.
No pensions.
No legacy costs.
Tons of tax breaks.

Tesla Motors pays its employees an average of $20.87 an hour. Hourly pay at Tesla Motors ranges from an average of $15.45 to $30.82 an hour.


UAW History

In the course of labor negotiations with the UAW in September 2007, General Motors produced a media handbook in which it asserted, “The total of both cash compensation and benefits provided to GM hourly workers in 2006 amounted to approximately $73.26 per active hour worked.” Auto industry sources told the Associated Press that the comparable figure at Ford was about $71 and at Chrysler, around $76. This set off a storm of controversy, including accusations that the unions were ruining the auto industry with their excessive pay and counter-accusations that the industry had manipulated the figures and presented them deceptively.
 

gnome

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Seriously Elon acolytes. EV's are OLD, no VERY OLD technology. There are tons of manufacturers who have new EV models coming. Perhaps they underestimated demand and are now just making them for the tax credits or being fooled by the fact that Tesla has a bigger market cap than any of them. The market is not that big right now.
EV's are not new technology anymore than mobile phones were when Apple suddenly became the largest company in the world.
There were and still are other companies making smartphones. But there's only one Apple, which has insane margins because, unlike Samsung, it doesn't just sell hardware. Like Apple, Tesla is a hardware platform and ecosystem of products and services.

Tesla already has some of the better margins in the auto industry, even with their massive R&D budget and factory building spree.
And their margins keep improving. The Model Y sells for a higher price than the Model 3, but costs are lower.
They are relentless about cutting costs and improving performance with each iteration.
How do you catch up to the leader in a rapidly evolving industry without investing in R&D?
29165905-14953732460222085.jpg


Tesla's growth rate is 50% per year, they will sell around a half-million cars in 2020 - and there's a waiting list for every vehicle.
They're doubling every 1.7 years.
At 50% growth rate, how long before the market is "big"?

Tesla-revenue-growth-skeptics.jpeg
 

gnome

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I don't know what the appropriate valuation of the company right now is.
I do know they will crush other automakers over the coming decade, and the long term value is higher than current share price.
 

solarion

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I don't know what the appropriate valuation of the company right now is.
Nobody does. ...clearly. I suspect, however, that the appropriate valuation is roughly 50 - 60% below current valuation. While I'm sure it's fun to compare Tesla's margins to other car builders, their stock is not valued like a car builder at all...it's valued as though they're a high tech Internet company. For decades Microsoft has been the gold standard of huge profit margins...cuz frankly they price gouge on every product. Yet their P/E ratio is 32. Tesla's P/E ratio seemingly has no basis in reality.

Did you know that Volkswagen's current P/E ratio is 5.23? Google says Tesla delivered all of 367,500 cars last year. ...Volkswagen? Just shy of eleven million.
 

Voodoo

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The only tech that Tesla even owns/produces that I can tell is the programming/AI. And I have severe doubts as to that value as we've seen numerous cars slam into all sorts of objects. But they don't own any of the battery tech. They don't own the rights or have any special ability to be the only company that can sell carbon credits. They aren't the only company that can scam tax credits. I may very well short this stock after the split.
 

gnome

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$2164, just another ho-hum code red day at Tesla.
 

Voodoo

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This is why they call it a bubble. How many of these call buyers have no idea the price gets cut to 1/5 of the price when they issue new shares.

I am looking to load up on tech shorts or puts on Thurs and Fri. May even jump in and short Tesla next week. Next week is another turn date according to MA with a possible crash in the typical Sep/Oct time frame.
 

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If you're in, enjoy the ride, just have some stops in place for that inevitable crash everyone keeps talking about.

And although this is a tsla thread, anyone look at amzn lately?
 

hernancortes

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My relative would be a multimillionaire in this, if he would only hit the sell button. Of course, Ive been telling him to sell since last fall.
 

Voodoo

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My relative would be a multimillionaire in this, if he would only hit the sell button. Of course, Ive been telling him to sell since last fall.
He IS a multimillionaire then right now. Buy him a put or two, I wonder if one could transfer those as insurance?
 

chris_is_here

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I'm working through some scenarios now on option strategies, as this is THE one that could be a game changer, if you play it right.
It's not as easy as just buying naked puts and praying that the stock price drops enough to offset the constant erosion of the time premium.

Some combination of option writing and buying is needed, probably along with a long position in the stock, if call writing is involved.
 
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Voodoo

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I'm working through some scenarios now on option strategies, as this is THE one that could be a game changer, if you play it right.
It's not as easy as just buying naked puts and praying that the stock price drops enough to offset the constant erosion of the time premium.

Some combination of option writing and buying is needed, probably along with a long position in the stock, if call writing is involved.
Everytime I looked though it's not easy to do with few shares. I really wish they had the mini-options (10 shares instead of 100) on Tesla. Though that makes their option gaming with the 2,500 and up to 3,500 calls scams possible.
 

Voodoo

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Man I read the "analysts" upgrade note on this today which sure, why not bid it up another 6%. What a joke that thing was. Why does anyone pay these jokers?

"Tesla's competitive edge in cars may soon start to shrink but continues to widen in multiple other dimensions, from brand leverage and software to battery capacity and industrial efficiency,"

:dduck::dduck::blew up:
 

Voodoo

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I bought several QQQ puts today in my IRA. It's comments like these that are helping fuel the insanity. And as a younger investor the stockholder of record dates are confusing with the three days (I guess Investopedia says its T+2 days) it takes to settle. So in reality I think you would have had to buy back on Aug. 18 (perhaps Aug 19 in this case). But certainly no one buying this week is getting any new shares. Going to be some disappointed people come Friday.

1598544063653.png


From their press release... "Each stockholder of record on August 21, 2020 will receive a dividend of four additional shares of common stock for each then-held share, "
 

Voodoo

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This is fun / hilarious. Real or trolling?

1598544992848.png

1598545065188.png
 

Buck

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but the unions, they're ignoring the Unions on Mars, their bargaining is brutal....
 

gnome

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I bought several QQQ puts today in my IRA. It's comments like these that are helping fuel the insanity. And as a younger investor the stockholder of record dates are confusing with the three days (I guess Investopedia says its T+2 days) it takes to settle. So in reality I think you would have had to buy back on Aug. 18 (perhaps Aug 19 in this case). But certainly no one buying this week is getting any new shares. Going to be some disappointed people come Friday.

View attachment 178418

From their press release... "Each stockholder of record on August 21, 2020 will receive a dividend of four additional shares of common stock for each then-held share, "
Good luck, I think market is going to love Powell's pro-inflationary comments. Obviously PM's will run some on that news.
 

Voodoo

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It should only take a few weeks to know if I'm wrong.
 

MrLucky

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I took this screenshot yesterday (for a friend).

1. The trading volume vs average volume is just bonkers, to say the least.
2. The size of the trades is also bonkers. Ask- $2244 x 2200sh = $4,936,800. <-- that's some serious money.

tesla-082720.png
 

gnome

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but the unions, they're ignoring the Unions on Mars, their bargaining is brutal....
Shhh, nobody tell vanguard when my 4 remaining shares became 20 that the value also is divided by 5! lol

Screen Shot 2020-08-29 at 10.12.05 AM.png


I'm sure it'll correct on monday, but I'm putting in a crazy sell order just in case. haha