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Tesla Share Price Appears To Have Bottomed Last Week

Tesla Share Price Appears To Have Bottomed Last Week

Last week the weaker (short-term) Tesla Motors shareholders sold in panic as they feared the worst case scenarios. Institutional money managers were expecting that all too human reaction and now appear to be accumulating shares.

The conference call last Tuesday appeared low keyed and not really bad. The need for batteries was misinterpreted as a near-term Model S problem, but Musk later clarified that his concern was for enough batteries for eventual mass production of Gen III. A new battery factory should solve that.

Fires to cars from an upstart company draw media attention, but upon closer look it becomes obvious that the occupants were kept amazingly safe and that the fires are statistically rare. Nevertheless, I expect the company to come up with a cost effective solution that further satisfies consumers and the NHTSA. In the long run this past week will essentially be forgotten, as Tesla Motors continues to execute its plan to dominate the automobile industry.

Brian H | November 11, 2013

If the NHTSA has any cohones and integrity, I expect it to report that the fires were slow, controlled after-effects of drastic damage which, in most cars deemed "safe", would likely have resulted in casualties, even fatalities.

Iowa92x | November 11, 2013

Brian, hitting a metal ball would not likely result in casualties or fatalities in most cars. And ICE likely would not burn hitting a hitch.

The Tesla busting through a concrete wall like Kool-Aid Man was impressive though, an ICE would torch under that scenario.

wipster | November 11, 2013

Iowa92x, honestly, we have no idea what would have happened if say an E350 Mercedes would have hit the three pronged hitch going 70 MPH. Mercedes have several plastic shields on the front on the cars (mainly for aerodynamics), but if the hitch was sitting up high enough, it could (and probably would) have torn them severely (as I own one myself and have hit a metal object at freeway speed, I speak from experience). After that, it would have been spinning and could have impacted the pan on the transmission, or far worse, impacted the driveline, which could truly pole-vault the car. And if that occurred, it easily could have punctured the fuel tank and/or ripped out the differential. Remember just how many pieces an ICE, even a front wheel drive, have exposed on their undercarriage as compared to a Model S.

IMHO, the S ((in both occasions in the US) showed how safe that 1/4" flat panel of aluminum makes it, as the driver's assistant stated he could see where the hitch was driven into the pavement and probably stopped, as opposed to what might have happened under an E350 (BTW, was the hitch ever recovered?). Yeah, a battery pack eventually caught fire, but long after the car warned the driver twice to get to the side of the road and stop the car... perhaps if he had done it the first time, the fire may not have occurred.

The point is there are way too many variables involved to indicate this is a product defect for the Model S. They've been on the road for almost a year and all of a sudden this happens twice in a six week period? IMHO, the NHTSA should include running over large metallic objects as a test for ALL vehicles, EV or ICE, before coming to a conclusion that this is only a problem that requires a recall for all Model S Teslas. Maybe they would require all cars to put a cover below their undercarriages... let's see how far that idea flys!

Suturecabre | November 11, 2013

Maybe not an ICE fire (although if it took out fuel lines in the right spot, who knows?), but a heavy, rigid piece of metal like a tow hitch could have caused major damage, enough to cause an accident or kill. Pipes, tires, and pieces of scrap metal also have all been kicked up by other cars and flung through windshields resulting in death. I think the NHTSA won't fault the car's design in light of that and how well it managed the fires, and the stock price and reputation will rebound....Brian H, just wanted to point out that word should be "cojones."

Iowa92x | November 11, 2013

Tesla needs to fire a 10 lb. sharp metal object at 100 MPH at the pack (or whatever it takes to bring the flames), then work backwards on a solution. A Kevlar blanket might do the trick, although $$.

NHTSA will be updating their tests to include violent underbody strike if electro fires persist.

wipster | November 11, 2013

I'm sure Elon and the boys and girls will be going over this with several fine tooth combs, as well as doing as much testing as humanly possible. It will be very interesting to hear and potentially see the results of their investigation. And Iowa, here's hoping that electro fires do NOT persist...

Timo | November 11, 2013

There's another thread with link to ICE car that burned because it hit cardboard box. This is a tempest in a teacup.

Brian H | November 11, 2013

Pierced underbody, penetration of cabin or damaged fuel lines
Electrofire minutes after pulling over

Pick one.

Brian H | November 11, 2013

KOP;
yeah, my Mexican is pretty much phonetic. ;)

L8MDL | November 12, 2013

Seems the bump was rather short-lived. $138.47 as I type...

elephant in a bottle | November 12, 2013

@Brian , how much more stronger is MS underbody protected from metal piercing compared to an ICE car? Per Elon MS can sustain up to 25 tons of force. Any thoughts for an ICE car?

Timo | November 12, 2013

A lot less.

elephant in a bottle | November 18, 2013

Here we go again.. enjoy the ride longs ... sometimes in a roller coaster ride , closing your eyes is the best part ..

L8MDL | November 18, 2013

I think its more like an elevator shaft than a roller coaster. $121.12...

Kaboom | November 18, 2013

I know it sucks for current longs........but i think this correction is long overdue and maybe even healthy.

Tesla getting hammered in press because of stocks overvaluation....but once its in line with true value they wont have much else to complain about.

Curt Renz | November 18, 2013

Obviously my OP regarding fundamental considerations was incorrect regarding the appearance of a bottom. So now I'll switch to my market technicians hat.

A Golden Ratio (Fibonacci) retracement to a price that is near 61.8034% of the record high often marks the bottom of a retracement, as noted in the book I wrote on technical analysis for McGraw-Hill. Of course I am far from alone in realizing that. The intra-day TSLA high price on September 30 was $194.50 and the close was $193.37. The theoretical Golden Ratio lows based on those prices would be $120.21 and $119.51. The intra-day low today was $119.61 and the close was $121.58.

So the TSLA price is currently near the level of an ideal Golden Ratio retracement. This may seem like numerology quite unrelated to fundamental valuations, but mass psychology is a big factor in share prices. The Golden Ratio is one that people find pleasing in many ways and is often found in artistic and architectural design. It has often proven to be the point where investors say “enough is enough” in a market decline. The bot trading algorithms used by hedge funds incorporate technical analysis. The Golden Ratio may be one of the indicators they are programmed to consider. It will be interesting to see how this plays out.

OrindaTesla | November 18, 2013

@ Kaboom Once Tesla shares go down to an expected level they will just rise right back up again because investors want to be apart of any disruptive technology at a low price....then the media will pile the stock right back down again.

PapaSmurf | November 18, 2013

I have never owned Tesla stock. But if it drops back down to $90 to $100 region, I would likely be a buyer.

When it went way up to $190 I was jealous that I missed the ride, but I knew better than to chase it. At $90 to $100 then I think it would still have a healthy growth premium, but I could also justify the price of the stock at that point based on the Model X and Gen III sales in the next few years.

So I think there will be some real support for the stock around that price level.

L8MDL | November 18, 2013

I personally feel that $90 is fair value for a long term investor at this point in the company history. It would also be nice if Elon would stop saying the stock is overvalued at every opportunitynhe gets. It's an old song now.

Brian H | November 18, 2013

L8;
His latest statement in the last day or two (at 139, I believe) was that it was a "good deal" right now.

Curt;
If you like GR calcs, check out http://tallbloke.wordpress.com/ for orbital solar system fun. Various GR stages on the way to Tidal Locking (Earth-Moon, Sun-Mercury).

elephant in a bottle | December 3, 2013

Tesla swagger is back! weee.. up 15%!