Best article on Tesla stock in a while

Best article on Tesla stock in a while

BYT | 12 mars 2012

Thanks for sharing, I bet Elon would love to keep the shorts from being able to fill their orders... :)

discoducky | 12 mars 2012

@ThomasN, you beat me to it. I couldn't agree more. This article by Eric Rosenbaum is very authentic as it doesn't take a side one way or the other but diagnoses why the stock is moving as it does.

He seems very level headed per his other postings:

And to be honest I've been moving on these triggers to maximize my realized gains during this run up to production.

After reading the article I'll be very interested to hear what Wunderlich Securities analyst Theodore O'Neill thinks after his visit to Freemont next week as the basis for their current position:

If Tesla pulls it off, the 52-week high would be easily understandable. O'Neill said that if Tesla were to sell 4,000 Model S cars at the fully loaded price point of $86,000, it implies revenue of $345 million and a run rate of $1.2 billion in revenue annually.

"Who has gone from zero to $345 million in revenue in six months? Has anyone ever done it, or go from zero to a run rate of $1.2 billion. It doesn't make sense, but maybe they have some secret sauce," O'Neill said, which will allow Tesla to avoid the pitfalls of all the other early efforts in the electric car production market.

ThomasN | 12 mars 2012

Which will have more chills and thrills- riding the market or driving the Model S!

O'Neill's opinion will be interesting, although I sense a bias in his tone.

discoducky | 12 mars 2012

Well, if O'Neill has any sense of TM not being able to make thousands of Model S high quality cars in 2012 I'm sure we'll hear about it.

After visiting in Oct, I'd love to go back now, with my Engineering and Manufacturing Process Excellence hat on, so see the progress of their facility. But will need to be content to view it through the eyes of a seasoned, albeit biased, analyst.

The thing that continues to amaze me is this: TM should have already encountered/realized several, if not hundreds, of E-2-E (End to End) risks *AND* looks to be blowing through each of them.

Teoatawki | 12 mars 2012

Finally, someone has explained recent Tesla stock performance with all these short positions.

I have confidence that Elon and TM are on a positive well-planned trajectory. Sooner or later the day of reckoning will arrive, and if I'm right, the short positions will be crying.

Brian H | 12 mars 2012

Interesting (edited) excerpt: "the only growth tech stock worth owning, and ...the only alternative energy stock worth owning."
I've always thought exactly that, though wasn't too definite on the tech stock side.

That was an excellent, informative, article.

But imagine the consequences if Tesla delivers on that agent's promise to have P78xx(?) out the door by Dec. 31!! Secret sauce from the dark far side of the moon, indeed!

[The far side gets just as much sunlight as the near side. But no Earthshine. ;) ]

Brian H | 12 mars 2012

Blew the tags: dark far side of the moon

Peak Oil bruin | 12 mars 2012

OK, closed at $36, hopefully macro market news is pos/neutral tomorrow so we can see further conviction/new highs to unhitch more of the shorts!

olanmills | 12 mars 2012

I'm curious about the percentage of stock held by people intending to purchase a Model S. It seems that a significant amount of reservation holders intend to sell TSLA stock to fund at least part of the downpayment on an S. I wonder if the percentage of stock these folks are holding is significant enough for this behavior to affect the stock price, and I wonder what percentage of these folks, if any, are hinging the purchase of their Model S on the stock price. That is, are there at least some people who can't or won't buy the car if the stock price is not high enough at the time that they have to place an order?

I have to admit, I hold a thousands of dollars of TSLA, and if the stock goes high enough and the timing is right, I might sell all my shares and use the money to boost my downpayment, BUT I am not banking on that alone. I am saving enough money to make a 20% downpayment on the car regardless. I might sell TSLA to help me save even more money on loan costs, but can't yet decide what I will do. I probably won't make the decision on wether to use TSLA to fund the car purchase until the last minute.

The reason is mainly because if you believe that 10 or 15 years from now, Tesla will ultimate be a successful company, whether that's by becoming a popular and common car on the roads, or by selling out favorably to another company, etc, then selling TSLA to fund a Model S purchase will cause you to miss out on a huge potential to profit, because even if TSLA is doing well at the time you need to order your Model S, it will still be too early for the rest of the world to recognize that Tesla has "made it". Of course, if you're unsure of Tesla, even though you think your Model S will be fine, but still worry that Tesla is still a large risk for the next few years, well then selling mildly profitable TSLA shares to buy your S is not a bad idea. It also, of course, makes sense if you planned your budget on a certain minimum price of TSLA.

However, I think a lot of the early adopters here also tend to believe in Tesla long term, and by selling TSLA to buy the car, you're essentially ignoring your own belief. The exception, of course, is if that's the only way you can afford the car.

David M. | 13 mars 2012

Dang it. I didn't buy enough shares!

Timo | 13 mars 2012

If the TSLA price goes down at the event of Model S delivers starting I'll buy some. It's just sign that reservation holders are using their shares to finance the purchase. :-)

I wonder how much I can afford to risk in that...

Robert.Boston | 13 mars 2012

I'm a reservation holder with TSLA holdings, but my TSLA holdings are in my 401(k)--so, obviously, it's not funding my purchase. My two decisions are related, but not linked.
I reserved the car because I think it's a compelling vehicle on many fronts.
I bought the stock because I think there are many consumers who will come to share my opinion about the car once they see it.

David70 | 13 mars 2012

I will probably sell about 25-35% of my TSLA at time of purchase (if it's high enough then). I may have to defer my purchase until Spring '13 anyway, if there aren't sufficient superchargers and/or TSLA price isn't high enough for my purposes.

BruceR | 13 mars 2012

I'm a reservation holder with small TESLA holdings. My TESLA holdings are in both my brokerage account and my 401(k). Plan to sell the brokerage account holdings to help fund #1842 (Fall?). Will hold the 401(k) shares until a future re-evaluation says it no longer makes sense.

BYT | 13 mars 2012

I also am both a reservation holder and an own interest in TSLA. My plan isn't set in stone, my story sounds a lot like yours "olanmills" and when I purchased TSLA with the cash I sold my car for (the one to be replaced by my Model S), it was a little under $10k. TSLA stock is now up over 54% from where I purchased it and although my original intention was to sell the stock to buy TSLA, I wouldn't necessarily pull the trigger on it when my Model S sales representative calls me to make the purchase.

At P1,837 I still have a few months to go. Maybe I sell the shares, maybe I sell half the shares or maybe I let them all sit for a while longer. The market is unpredictable and with 52% of it with short sellers currently, I'm not going to force my hand. I would rather take the additional out in my loan to cover the Model S and pay the loan down later for the opportunity to ride the stock to what I believe will be much greater potential.

Sudre_ | 13 mars 2012

I will wait for the shares to hit a point that I can sell X% of my shares and make back the money I spent in the first place to buy the shares (plus tax). Then I will keep the leftover Tesla shares since for all purposes they were free.

I will get a loan for my Tesla if the interest rates are high.... if I'm not making more in gerenal investments than I'd be paying in car loan interest. If the interest rate is to high I will sell an assorted amount of several investments and pay cash.

Mycroft | 13 mars 2012

Anybody who sells their shares, to reduce the amount of loan they take out on the car, will quite likely regret the decision.

CU car loans are running about 2%. If Tesla comes through with the Model S and X production and word-of-mouth spreads from owners, as I fully expect, then IMHO, we have an excellent possibility of a doubling, tripling, or more with TSLA!

rdgreene | 13 mars 2012

I'm both a signature reservation holder and a shareholder. I don't plan to finance my purchase from TSLA shares specifically, and I'm not a die-hard long either. I've been in and out of TSLA many times since IPO when I felt the price was either too high or too low. (I've never shorted TSLA though!)

BYT | 13 mars 2012

Mycroft, where did you find 2%? My Credit Union offered me 3% but I like 2 better! :)

Teoatawki | 13 mars 2012

I originally purchased TSLA with the intent that stock gains might lessen the pain of purchase. Partially, because it's been over 20 years since I bought a car when I didn't have cash on hand to pay for it. Sometimes I still financed it when they had a 0-0.9% finance deal, but could have paid cash.

As time has gone on, I've come to the conclusion that the stock investment is better where it is, and I'm probably going to finance the entire remaining balance. Sadly, that 'remaining balance' will still be more than I paid for my first house. Ouch!!

I should definitely join Mycroft's CU.

ckessel | 13 mars 2012

I'll almost certainly dump my stock to purchase the Model S, though I may rebuy later. My hope is there will be a squeeze on those with short positions and I'll sell somewhere in that squeeze up swing, then rebuy later when the squeeze has brought prices back down for the long slow upward march of a more established Tesla.

My delivery is near the end of the year, so I certainly have time for good Tesla events to rocket the stock up before I have to sell.

discoducky | 13 mars 2012

I'm with Teoatawki currently. The stock seems a better investment at the moment. Very excited how much I've made so far.

Brian H | 14 mars 2012

ckessel | March 13, 2012

So you plan on de facto helping to manipulate the stock price by dumping your holdings on delivery, then rebuying when it dives, huh? The SEC has special terminology to describe people like you ...


gagliardilou | 14 mars 2012

I too have changed my mind and will just hold the stock long term. Tesla is a disruptive technology. When those type of stocks succeed, the return can be very,very, lucrative. To be in on the bottom floor of something like this does not happen everyday.

I too feel there are sooo many people who still do not know about Tesla (no one I personally know:)) Once word gets out and cars are on the street, look out!

Personally, my advice is you will gain more holding the stock than the interest you will be paying for the loan. If Tesla continues to operate long term, I feel a 10 bagger is very possible.

Vawlkus | 14 mars 2012

I bought stock for one reason: I see Tesla becoming the next big car company, and I want in on that. If things go well enough, those Tesla stocks are my retirement package. I figure planning that in my 30s ought to be enough time to put together something comfortable ;)

prash.saka | 14 mars 2012

I have a few (just 104) TSLA stocks. I plan to keep them for a long time and will not sell them to find Model S purchase. So far, I have about 25% increase in my stock value. So, no complaints here :)

Moreover, similar to Robert and Bruce, I have them in my retirement account (IRA). This means that even if I want to use the money for the car purchase, I will not be able to do so.

@Mycroft, which credit union is offering you 2% interest rate? And talking about interest rate, Tesla's website mentions BofA Does anyone know what the terms are? By the way, I have absolutely no plans to use BofA, even if it is 0% interest).

~ Prash.

Klaus | 14 mars 2012

I am planning on paying the balance on my Sig with my HELOC. The money is immediately available (@ 3.25%) and the interest is deductible on my federal tax return. I can then cash in any shares at my convenience and not have to worry about huge capital gains in any one tax year.

I too have some of my shares in IRAs as well as a brokerage account. I'll stay heavily invested (>4000 shares total) during this meteoric ride of Tesla stock and later trim it down to better reflect a more conservative portfolio.

Keep in mind, the stock is susceptible to the whims of short sellers, speculators, and investors in general. The ride can be a real nail biter at times.

kent | 14 mars 2012

I've been day trading Tesla all year. Currently, I have 3/4 of the Sig model paid for with the profits. It's a wild ride, but I couldn't be happier to have the stock increase pay for the Model S Sig.

BYT | 14 mars 2012

@kent, I'm jealous... :) 3/4 of the Sig paid off in profits from TSLA stock, that is most impressive.

Brian H | 14 mars 2012

Wups! Down ~$1.10 this morning, mostly at around 11 EDT. Any news/reason for that? Hovering around $35.

BYT | 14 mars 2012

A drop after it hits a new high, I'm chalking that up to profit taking.

David70 | 14 mars 2012

$35.80 right about now (12:28 EDT).

prash.saka | 14 mars 2012

@kent, man! I am so jealous. But, it sure is worth the risk. Well done.

Mycroft | 14 mars 2012

My CU is Navy Federal Credit Union. The current Auto rate is 1.79% for up to 60 months and 1.99% for 72 months. I plan on financing around $50k for 60 months and then paying it off with cash flow in about a year or so.

You can join NFCU if you or a parent, spouse, sibling, or child who works for the Dept of Defense and joins the CU.

BYT | 14 mars 2012

Thanks Mycroft, my dad was employed by the DoD, hoping I can get in on that! Thanks for sharing it!