Tesla down over $21 in aftermarket price.

Tesla down over $21 in aftermarket price.

Anyone have any idea why Tesla stock is down so much tonight in the aftermarket price? Anticipation of a negative quarterly report perhaps? Comments and thought welcomed.

drp | 5 November, 2013

Those who are short the stock get tv time and were able to say a "whisper" number that was not met. Then they makes lots of money when the price drops. This happens even tho Tesla beat all metrics they had forecast for the quarter.

Thomas N. | 5 November, 2013

Actually the whisper number was $0.11 and they came in at $0.12.

ausdma | 5 November, 2013

I've lived this reality before. The stock is bid way up and priced for perfection so any imperfection is punished mercilessly. From my perspective, this report is really good. Mostly good with a little bad which creates a buying opportunity and doesn't create even more pricing for perfection energy. The long term prospects for TSLA are wonderful and anyone who went under water with this report should just hang in there and you will be rewarded long term. At some point in the future the fundamentals will catch up with the price and the shorts will be hung out to dry to the benefit of the longs.

JZ13 | 5 November, 2013

The whisper number was .17 - .20. .11 was the consensus. Missing the whisper number leads to a sell-off.

eAdopter | 5 November, 2013

I anticipate tomorrow (11/6) will be tough for the entire market, not just TSLA.

jbunn | 5 November, 2013

The market buys on rumor and sells on news. The smart money was out by this morning.

There is nothing wrong with Tesla stock. Good time to get in if you have that risk tolerance. Pretty much the run up and crash that most stock does at earnings release.

bradslee | 5 November, 2013

It is not a big surprise that a good result is not good enough when Wall Street had an expectation so high on TSLA. We are talking about 5500 MS actually delivered vs 5700 expected delivered. When TM said at the end of Q2 that Q3 TM would expect to deliver 5000 MS, Wall Street would say absolutely that if the actual number at the end of Q3 could really reach 5500, it would be great. However, with TM is getting better and better, Wall Street's expectation is getting higher and higher to a level where no successful company can manage to meet no matter how good they have executed. IMO, the big drop on TSLA price has nothing to do with TM's fundamentals but expectation adjustment. For longs, our patience will be awarded in years ahead.

jk2014 | 5 November, 2013

Hard to imagine that the stock was in the 30's just eight months ago and were all worried that it will drop to the 150's tomorrow...

shop | 5 November, 2013

Do remember that after market trading is very thin (low volume). The true market price will be revealed tomorrow morning. It may very well be higher than the after market price.

carlk | 5 November, 2013

I buy stocks only for long term. Everything Tesla set out to do are still on track and running full steam. I'm not worred about what the price will be tomorrow at all. | 5 November, 2013

It would not be a bad thing for a bit of a correction right now -- will take some pressure of TM and for longs, it will not make one bit of difference.


Captain_Zap | 5 November, 2013

Tesla took a nose dive after previous earning reports and then the analysts digested the news. Within a day or two the stock launched big time. They'll let the shorts pile on a bit more before they start buying. Sometimes it takes a while to wrap your head around what Elon is REALLY saying.

It isn't a good idea to think short term when dealing with a long term visionary CEO.

carlk | 6 November, 2013

Some people are not satisfied with the profit they made this quarter. They do not realize Tesla has been heavily investing their profits for future growth. They could slow down developing the new models and new technologies, slow down the expansion of Europe and Asia markets (they could still sell all the cars the can make in US alone), or slow down the supercharger expansion to boost the profit significantly to please the short sighted investors. I'm glad they did not do that. Those short sighted people will lose in the long run.

Mathew98 | 6 November, 2013

Go tell them how you really feel Cap Zap!

It really takes a cool head to review all the positive news and not let those "analysts" who demanded 8000 units delivery for Q3 ruin the expectations.

Let's be realistic, the 5500 units delivered in Q3 did beat the TM guidance by 10%. Who are these analysts who wildly expected 7k to 8k deliveries based on Vin# issuance thread?

achilles992000 | 6 November, 2013

i'd wait a few quarters and see how things shake out. no real catalyst right now.

AmpedRealtor | 6 November, 2013

I don't know much about stock investing, but from my understanding a lot of the stock rises and falls are due to future potential rather than current performance. I read that Tesla's guidance for the next quarter is essentially flat, meaning minimal to no growth next quarter combined with Tesla missing analyst expectations. Exceeding Tesla's own forecasts as well as meeting consensus doesn't mean much if expectations are not met. This is what's crazy about the stock market, to me. Expectations rarely have much to do with reality.

Mathew98 | 6 November, 2013

Q3 guidance was 5000 deliveries (during Q2 call).

Q4 guidance last night was 6000 units.

That is a 20% increase in guidance between the two quarterly calls. That doesn't appear to be flat.

AmpedRealtor | 6 November, 2013

@ Mathew98 - I was referring to this from

"However, the fourth-quarter guidance that the company provided in its shareholder letter may have soured the market on the stock -- specifically, the section in which the automaker said: "We expect our non-GAAP profitability to be about consistent with Q3. ... Free cash flow is expected to be close to breakeven." In the third quarter, Tesla generated $26 million in free cash flow.

"Worse still, investors who were looking to 2014 for any significant cash flow will have been disappointed: CEO Elon Musk told investors and analysts on the earnings call that the company expects to generate a bit of positive cash flow next year. Remember, folks, a company's valuation is ultimately tethered to expected future cash flows, and these cash flows may be starting to look a long way off to Tesla shareholders."

Mathew98 | 6 November, 2013

And you believe everything you read from da fools?

AmpedRealtor | 6 November, 2013

I'm not really a stock person, so my knowledge is limited. I figure there must be some truth to it given the market activity today. I've also read the same thing about Q4 guidance being disappointing in more than one place. Where there's smoke there is fire. I also don't believe that every negative comment about the company is part of some short selling stock conspiracy.

Abecedarius | 6 November, 2013

My business is providing investment advice, and the current stock downtrend (which began at the start of October with the first Model S fire), does not surprise me a bit. The fire was the catalyst, but the major factors behind this (normal) downtrend are the stock's price (which at 192 was high), and the stock's perception, which was also very high at the same time. Contrast that with conditions a year ago, when the stock was trading around 30 and skepticism about the company's viability was widespread, AND Tesla did not dominate the automotive news like it does today. The trends to watch now are the stock's 200-day moving average, which is at 103 and climbing, and the level of sentiment among both investors and the general public. Ideally, sentiment cools, the stock's high profile fades, and the 200-day moving average arrives to support the stock, and eventually provide a launching pad for the next uptrend. It will take time, but it's a normal process for once-hot stocks of revolutionary companies.

Kaboom | 6 November, 2013

Anyone 'investing' in tsla stock beyond july 2013 missed the party, since the stock was at that point was so high sue to people buying the stock with their heart and enthusiasm and running the price up higher, without any regard to fundamentals.

I too, was almost guilty of that before my investment manager talked me out of buying since it was just like gambling in his opinion.

Turns out he was right, and thats what i pay him for.

Although in long run i can see the stock still doing well, but nothing like the past year.

carlk | 6 November, 2013

@AmpedRealtor Anyone can write articles on Motley Fool or Seeking Alpha. Yes you could too if you want to.

@Kaboom But you're making the same mistake by making that conclusion. How do you know it's too high or too low without knowing what the stock price will be in 3 to 5 years or even tomorrow? I never trust those so called investment advisers. They would not have to do the work if they are so good in able to grow wealth.

rdalcanto | 6 November, 2013

The stock is crashing because people are short sighted. Tesla has achieved amazing profit margins, which are now over 21% without ZEV credits, and climbing. The cars are so profitable, that they are able to pay for massive, world wide expansion of stores, service centers, and superchargers, and still have money left over. They now have $0.8Billion in cash. GAAP numbers are inaccurate when looking at Tesla because they incorrectly look at leasing. When Tesla "leases" a car, they are still getting 100% of the cash price at the time of delivery. They have just promised to buy the car back in 3 years at 50% if the customer wants to hand the car in. This would provide Tesla with additional revenue as the cars will sell for additional profit on the used car market given the high demand. Model S production will double next year, with 25% profit margins. That is over 100% growth in 2014. The fact that they will spend all profits in Q4 for additional growth is a good thing, not a bad thing. We are not buying this stock right now for dividends. This is the time to buy more stock, not sell.

carlk | 6 November, 2013

You are so right. Tesla could boast the profit SIGNIFICANTLY by not invest in the future. Do we as investors really want the company to go that route?

dtesla | 6 November, 2013

Am I missing something? Didn't Elon say he requires about the entry world production of Li-ion batteries to meet future production for model S & X. Elon may have to build a battery mega-factory just for that.

And that is just for anticipated S & X production. I can't imagine how many batteries are required for 500,000 Gen III cars per year... on top of future S & X production.

If that's not enough to scare the market I don't know what is.

carlk | 6 November, 2013

I think the mega-factory is for future models. S and X requirements are pretty much covered by the latest contract with Panasonic although that's still a lot. It's equivalent to about 80,000 cars a year. They are also exploring other supplier possibilities(Samsung and LG) for S and X.

Sudre_ | 6 November, 2013

That's my concern, dtesla, altho I think the S and X are covered.

I invested in Tesla last month with the long term expectations of GennIII. If Tesla has to sink a huge amount of capital into a battery factory before GenIII is even possible then they will probably need to raise more capital. That doesn't bode well for the current share price.

However last time they made an additional offering the share price actually went up. Tesla is such a strange beast.

Today I just let things settle. Tomorrow I might pick up some more shares if the prices stay this low. I am still confident that Elon will make this happen no matter what. The time period just might be a year or so longer than my original expectations.

carlk | 6 November, 2013

@Sudre_ I don't think that's actually bad. They could very well continue to buy from outside sources if they choose to. I'm sure many producers would be willing to take some risk to build new facilities for such a big new market. The only reason that Tesla want to build their own plant is there are more profits for them by doing so.

Mathew98 | 6 November, 2013

Looks like Mr. Market is gonna twist my arm and force me to pick up a few hundred shares more.

There goes the college funds for the kids. I just can't help myself...

Luclyluciano | 6 November, 2013

Don't want start a thread on this but possible 3rd fire won't be good for the stock.

Captain_Zap | 6 November, 2013

Holy Options, Batman! It looks like the shorts are doubling down.
Am I seeing things? And to think that some thought that this would be their departure opportunity and that they would take it.

gary.greene | 6 November, 2013

Thanks everyone for the interesting discussion and analysis. I've bought my shares of Tesla over various time periods, including relatively early, mid price increase, and price higher than what happened today (though my intent was not dollar cost averaging). I've always intended to be long on Tesla. There is nothing in Elon's 3rd quarter report that discourages me and in fact, much to be excited about with respect to the future. Bottom line, there is plenty of demand for this car, it is a well run company, and it looks like it has substantial upside in the future. So as for me, I look forward to hanging on for the ride (much as I do daily when pressing the accelerator pedal of my Model S)!

rodf | 7 November, 2013

+1 Gary,greene