With TSLA going in the past few days from 130 to 110 and now back up to 120, it seems the market is a bit on edge about this stock. They report earnings on the 23rd, and with the incredible run up it's had in the past 3 months (40-->120) I get the feeling that if they don't blow people away this stock has the potential to crack pretty violently.

With articles coming every day for and against TSLA, I generally believe it to be vastly overblown stock. They are never going to be able to sell enough cars at $80k to be extremely profitable, and 5 years is a long time to wait with no profits for the time they supposedly have a $40k model that will ready for mainstream.

Thoughts?

If you were around during the late 1990's, you'd know that you will be right eventually.

You'd be poor by the time you were right if you were shorting story stocks.

Might be different this time. Might not be. Hard to tell. I have no helpful advice here other than one side of the trade will likely do very well. Do your best to guess which side that will be if you want to but be prepared to lose you shirt if you are wrong.

My feeling is that Musk is going to pull something out of his hat like he always does. He's very good at driving the conversation and keeping investors happy. It also looks like a good business environment for everyone and everyone's earnings reports are coming out rosy, so I'm expecting Teslas report to be pretty decent as well.

Shorting stocks is a lot harder than just saying that the stock is going to go down. You have to be decently accurate on timing as well. It's not cheap to short.

I will short Tesla when/IF some negative press starts to appear about Musk. (which may be never.)

There's no way I'd short Tesla at the moment, because there's no evidence that there's anything to break the story apart right now. Production seems to be fine with no hick ups and probably upside. Competitors have come out with nothing comparable (other EVs are a joke). People were willing to pay $40-$50 for this, consistently, when it was in debt with no sign of ever turning a profit. Now we have profit, loans paid back, improved sales targets and a not implausible story of Tesla as the 21st century's Ford, taking the lead in a new industry and with an amazingly successful innovator CEO. When you have a plausible 10 year 1000% profit story, and nothing to contradict it except common sense, you need something fairly major to prick the optimism so people shift to common sense.

If you want to ride this down, it needs something to pop the bubble. You should be able to get in on bad news after the fact due to the optimism in this stock. When Tesla was down 5% on the Goldman Sachs price target, it was obviously it would go lower, because so much recent profit was in the stock and the fear from the news was a temporary circuit breaker. Now it's back to being a happy stock. I strongly suspect (but don't know) that earnings on Monday will make it happier. If it runs about another $20 or $30, then maybe look at a short. Otherwise I think you're just gambling.

This is a brilliant stock to pick direction in at times due to the wide gulf between plausible optimism and common sense, and the fact that retail investors can grasp both sides without special knowledge, unlike say CRM. It's definitely on my watchlist.

They release earnings on 7th of August, if I am not mistaken.

My play on Tesla is long. Why? Because the trend is up and I see few ways the share falls. When it is back to $130 or $135 I might sell, and I expect this soon.

Stock is insanely over-valued. This company has shown zero ability to turn a profit without direct and indirect government subsidies. There is no reason to think they can create a non-niche electric car better than the majors and their distribution situation (they have no distribution) is a massive problem.

They have no dealers != they have no distribution

The thousands of people all across the country driving Teslas are proof positive of that statement.

Does TSLA hold any interesting IP that gives them an edge in electric cars?

Last I checked, they were basically buying Lotus Elise shells to put their drive trains and batteries in them and restyle the car. Are TSLA batteries or drive trains anything interesting that GM/FORD/etc can't produce given the current price point? Any car techies here that can address this?

My initial feeling is that TSLA is going after a tiny market that GM/Ford/etc can't be bothered to go after. When you sell millions of cars each year, you're not going to bother trying to make some Tesla competitor that only sells a few thousand. BUT... if TSLA ever shows any strength, GM/Ford will probably under cut them in a major way without much trouble. Yay, or nay?

It is Elan being Elan. The long-term plan (apparently) is for him to screw around selling high-end cars to finance development of cheaper cars. I expect at the first hint of trouble, they offer a crap load of debt at 1% interest and he buys it all to save his baby.*

GM/Ford aren't in good enough financial shape to smother TSLA in the crib.

*not really, but he tends to act like he doesn't care about his money as much as he cares about his babies.

The company only works if they have an engineering advantage the others can't replicate that also allows them to sell electric cars to the masses (i.e. under $30k). There is absolutely no indication that they possess such an advantage, and even if they do it is going to be very, very hard for them to grow faster than the majors can copy/mass manufacture something similar. This is why the distribution thing is so important.

Selling direct to the public is not a bad business model.

They basically link together 6-7k lithium ion laptop batteries. The problem is that alone costs $30-40k, so relying on that for their next generation car seems unlikely to be a cost effective solution. (and laptop batteries are already mass produced and I would assume aren't going to drop in price precipitously).

However the car apparently is ridiculously nice and great quality. 99/100 on consumer reports and labeled the best car they have ever driven. Would love to test drive one.

Agreed. Tesla are doing an Apple when it comes to cars. No innovation, little R&D, borrowing/copying the tech of others, higher price, hamstrung, but it's cool and everything is well designed, slick and fits together very tightly, in the way commoditized or other high end items don't. They're bringing next gen consumer items to market before the tech is ready by making intelligent unusual design decisions and packaging it in way that's appealing.

They have made some fantastic design decisions to get where they are. Hot swappable batteries is a great idea. Solar charging stations is a great idea too. Their in-car computer system is fantastic. Going after the high end luxury market was very smart too.

Musk is not a guy I'd bet against in the commercial space. He's shown through several companies that he gets it. He's not an innovator but he is an exceptionally good designer.

Why do they have to be under $30k?

http://www.motortrend.com/new_cars/07/bmw/pricing/

Slide 21 from 2012 Investors Presentation
http://files.shareholder.com/downloa...ing%202012.pdf

50 patents awarded + 230 pending on the powertrain (in 2012, so a number of those have probably been awarded at this point).

Anyone look into the nissan leaf? It seems like they be competitive with tsla and make them look far less cutting edge.

For me the Leaf feels like a Tesla's powertrain but without all of the the goodies that the Model S brings to the table.


vs

a quick google shows ford awarded 500 patents for fusion hybrid

http://media.ford.com/article_displa...ticle_id=35995

Mercedes has that ad where they boast having 80,000 patents.

http://www.youtube.com/watch?v=bx1LHioz6Zc

Think you have to read more into it than simply numbers of patents.

50 patents awarded means nothing to me. With all the patent trolling going on, an Iphone case can have 50 patents. The question is: are any of these patents worth a damn? I'm hoping this was already answered by car guys that are into this stuff.

I don't know if they can't replicate it themselves or don't exactly want to but Mercedes is using Tesla tech http://money.cnn.com/2013/03/27/auto...ric/index.html

Every time i watch or read stories about tesla in the financial media, i cant help but think how markets must be rigged

Brought here from another thread:
No need to defend it, it's a fine trade if you know what you're doing. I think it was a terrible short at 95 though and said so, as did all the other guys here. Now at 120/130 I'm more interested, but there's a solid case that production is well above projections based on VINs and if so I don't see how it goes down.

Well sure. If you can short for nothing then any highly inflated company is a good short simply based on historical data. It's my understanding that TSLA is very expensive to borrow though; 20-80% a year type expensive depending on when you picked up stocks during the run. If you're talking a typical few percent then that's different.

And yet, all through June, while the market took quite a correction, TSLA went up and up. No sign of fear at all, it was behaving like a growing dividend stock. How do you explain that?

A short squeeze isn't what drove this so high or kept it there. It certainly helped though.

Just the guys here, I don't know anything special.

It's a great short up if you're not paying less than 10% yearly. Over 20% I'd be starting to think you're on the wrong side.

How do you see this playing out? Or is it simply a case of "it's way to high, therefore short"?

You had me scared for a moment there saying the borrowing cost is >10%. Just checked, it is at 0.6% and I don't think it rose above 2% during the past 2 months.

I mostly based my trades on sentiment and know close to nothing about fundamentals/technicals except for the fact that TSLA has no real profits and it is a story stock.

In retrospect, I probably acted too soon and should have waited for a spike before initiating the short, especially spikes caused by stock pumping type research reports which reveal absolutely no new information to the public except to get the retail investors excited.

My original plan was to hold till $40 and since TSLA is only 2% of my account, I have no problem sustaining losses in TSLA. However with the SPX making new highs, I am having doubts about holding through the August earnings since there will be tons of hot fresh capital looking to chase any momentum stocks on any signs of positive news. Not sure what to do..

Btw thank you everyone for the TSLA fundamental analysis, they are very informative.

I would seriously not recommend being short Tesla right now. We will see $130 before you can even blink this week.

I think there was a short attack after the GS price target, but this short attack has been stopped cold. Now we are looking at 5% gain days ahead, in my opinion.