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What caused TSLA stock to go up/down today?

Hoping this thread might pick up steam as TSLA stock goes through some amazing intra-day and open/closing swings due to the large short interest (I'm assuming).

For instance: Yesterday the stock dipped really low at closing so I bought. Today it jumped back up and I sold for a healthy profit.

Why did the stock dip yesterday and then rise so much today? I didn't see any news that would justify it.

Tesla got nearly all the tech pieces he needs for mass deployment of Model S, X and GenIII. Model S manufacturing, supply chain is being optimized to improve the quality and precision of the car as well as reduce the cost of production. This an issue that Wall Street is ignoring: economies of scale in mass production. Extra shifts and increased capital utilization will bring those costs down as it may be already happening. I suspect Tesla is close to a production rate of 800/week or 40,000/year. It could hit a rate of 1,000/week this year.

Model X will benefit from the economies of scale of shared platform with Model S. The demand for the SUV is being underestimated. May the Falcon Wing doors and limited range turns a few customers away, for now. However, that can change. A larger battery in the 100-150 KW-hr range would make the SUV practical. Porsche sells more Cayennes than Panamera or 911s.

GenIII will use the similar design, components as Model S, X. Ultimately, there is no impediment for Tesla to scale production for Model S, X, and GenIII to 500,000 cars or even 1,000,000 auto/year. Just about every 3rd world country is able to scale production of ICE autos to millions and those are much more complicated to build. Elon certainly has access to capital. He could raise $2B to scale Model S, X and GenIII big time. 10% dilution would be no big deal at these prices, especially if 25% operating gross margins are achieved with a production rate of 40-50,000 Model S/year.

Do the math and the company could easily have a market cap of $50-100B.

I agree mX demand is undervalued. Most of the mS buyers are men, and now that our wives have seen how clean and easy this car is, I think they'll drive demand for the mX. And really this technology is ideal for the soccer mom gig, given range anxiety etc...

There's gonna be a lot less demand for iCE SUVs down the line.

Oh, noes! The stock didn't rise today. Wassamattah?

some big boy analyst at a big name firm gave the stock a "sell" rating

The sky is clearly falling. Sell sell sell!...

oh wait, Wedbush increased their price target to $240. Buy buy buy!

Don't know what it is going to do for the rest of the day, but it just hit a record high 194.53 in early trading.

196!

I smell Shorts burning !

Oh man, I'm starting to lose my nerve again at these heights... I have stock agoraphobia!

Almost at $200/share now.

(Crap, acrophobia)

Or is it stock vertigo?

Is it wrong of me to sell the covered $215 call options for next week?

What happens to the Class action law suit that was filed when the stock dropped after its last high? Does it get dropped too? Or do they still have a case because for a while the stock price dropped?

Vertigoraphobia.

@Mathew98, could you live with it if they get called away? Is that risk worth $7.50 per share? For me the answer is NO.

@Mathew98, on the other hand, that is a pretty outrageous premium for an option that far out of the money that expires so soon.

What does your crystal ball say?

@flyjeffva - Actually that is my price target anyway. So I don't mind getting called away at 215 + 7 and change.

Even if you bought today at a high of 199 and sell it for 222 next Friday, that is a great 11% return in two weeks.

@Mathew98, Next Friday is 3 days after the earnings call. Good news could spike the stock. I would not want to risk loosing my ownership in Tesla.

I believe their success to date is the tip of the iceberg. Model S is the best car in the world with no competition on the horizon. Model S will only be trumped by Model X. I want to stay with them for the long run.

True, but I still have a core holding for the long haul. It is all about locking in a portion of huge gain in a short span. One never goes broke realizing a profit...

Mathew - I'm struggling with that very same thought again. I always become simultaneously giddy and nervous when TSLA shoots up like this. I intend to stay in for the long-haul (at least until 2017-18) when the ME has a chance to show its stuff, but this keeps turning into some serious money relative to my risk tolerance. If this were Vegas, I'd have left the table at $190!

It made nice gains today because of the excellent news out of China regarding government subsidies for EVs. $200/share is nothing compared to where TSLA is going to be in 5 years. Buy and Hold baby, Buy and Hold! :)

Sadly TM may not be eligible for the Chinese EV subsidies. What's worse is that MS is not exempt from the license plate lottery process intended for ICE cars. MS should be exempt from it like the rest of the domestic EV's.

I think lots of shorts covered based on this news even though it has no impact on MS sales in China.

If it gets called away, you can always get back in by (1) buying outright, or (2) selling a put against it and hope to be called and keep the premium collected, or (3) buy a call and exercise it.

@dimabear, If you buy a call and exercise it, you pay more than if you just buy the stock.

I believe much of the positive catalysts (NHTSA, 6900 Q4 production and associated profit) are probably built into the stock. I would NOT be selling now as I think the shorts will keep the price going up or not dropping much as they will buy up stock under 190 and give price support if that happens.

Guidance at the ER will be the key to blasting (and more importantly staying) above $200. If we get great info on production ramp/China demand we will get a nice boost.

Good luck. If you hold onto your shares you can deny the shorts sales to buy and drive up the price.

What effect, if any would you expect for an announcement of RHD production/ delivery next week?

@ flyjeffva, yep i totally agree you end up paying more. I was just trying to present possible ways for mathew98 to get back into position.

if that were me, and i absolutely had to get back into a long position, i'd be selling a weekly put just under existing price and keep collecting premium until assigned

@dimabear, That is a good strategy! Wish I had sold Feb 22 195 Puts yesterday :)

"Buy and Hold baby, Buy and Hold! :)"

Couldn't agree more.

"If you buy a call and exercise it, you pay more than if you just buy the stock."

On the other hand you leverage you capital and will be able to buy more shares this way. It also limits your loss without having to use stop order. Buy Leap call (long expiration) and you have the choice of either sell the call or excercise when stock goes up.


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