TSLA corporate outlook

EatsShootsandLeafs said:

But support levels and all this technical analysis are total garbage anyway.

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LOL! That's the main thing I care about when it comes to stocks, ETFs and indices. Support and resistance are very real. Often, stocks fall to support and bounce off them. They often top out at resistance, until they break thru. Often, a former support level can become resistance, etc.

I don't know candlestick patterns at all (too much to memorize) and I'm not real good at recognizing stuff like head and shoulders, inverted head and shoulders, cup and handle, etc.

Fibonacci retracements seem like TOTAL voodoo, until you use some tools and draw them on charts to see how scarily well it works.

Channels often make sense.

If you use good enough tools (e.g. Thinkorswim https://www.tdameritrade.com/tools-and-platforms/thinkorswim/features.page) and learn some basic technical analysis, draw some lines to reflect what you've learned (and it saves them on a per symbol basis), you'll see what I mean. I wish I knew all this 20 years ago.

But yeah, part of the joke is that technical analysis works, until it doesn't.

EatsShootsandLeafs said:

Tesla is clearly overvalued.

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I care very little about fundamentals or as CBW (technician on CNBC) calls them "funnymentals". One can do a lot of research and calculation and it can mean squat. Someone opens their mouth and it can move a stock, big time or cause a long-term trend. Clearly, TSLA and MANY other stocks trade at prices and on a basis that have NOTHING to do w/fundamentals (e.g. P/E ratio, PEG, free cash flow, etc.), esp. momentum stocks like TSLA.

It's getting ugly. Credit ratings are one of the great self-perpetuating ironies of life, the more someone is perceived as being a risk to not repay the higher their borrowing costs, further contributing to the likelihood they will be unable to repay.

That oughta make some shorts happy...

I don't have a clue how this is going to end. If I did, I would either buy or short. Other than some tiny amount through index fund, don't have a real stake.

Remember the Model S ramp? Tesla got down to less than a month's worth a cash before the production was worked out.

Musk has bet the company, and the dice are bouncing. Snake eyes or natural?

RegGuheert said:

That oughta make some shorts happy...

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You didn't need to be a short seller to be happy today. If you like to gamble a little and last week you bought an April $300 TSLA PUT for
approximately $20 when TSLA was around $300, today you could sell the PUT for about $45+. Shorting 100 shares of TSLA with 50%
margin would cost about $15K. That $15K could buy 750 PUTs. Buying back the 100 shares of the short would develop a profit of
about $4K. The selling the PUTs today would yield a net profit of about $19K. When considering the commissions on the trades,
obviously a little less profit would result.

Not a good omen for a company like TSLA, weighed down with a huge debt position it needs to refinance:

A Terrible Tuesday for Tesla's Stock, But Watch the Bonds

Fixed-income investors are suddenly less sanguine about the risks.

Tesla had a pretty terrible Tuesday, all things considered.

News emerged that the National Transportation Safety Board is investigating a fire involving a Model X that crashed in California last week. Meanwhile, rival Jaguar Land Rover announced it was teaming up with Alphabet Inc.'s Waymo unit to get the drop on autonomous electric vehicles.

This may have contributed to an 8 percent drop in Tesla Inc.'s stock, its worst decline since ... last month, when it reported underwhelming fourth-quarter results.

But the most interesting aspect of Tuesday's selloff was what happened with Tesla's bonds. Because while burning vehicles and rival robo-cars are problems, the real issue with Tesla is always the same: How to fund it.

Tesla's benchmark issue maturing in 2025 slumped by 3.6 percent -- which sounds small, but everything's a bigger deal in bond-land. It was easily the biggest one-day drop since the bonds were issued last August, taking the yield to 7.18 percent. That's a very important number for two reasons.

First, it's a spread of more than 440 basis points to the benchmark Treasury bond -- the highest yet for Tesla's issue:

Second, but more importantly, that spread pushes Tesla past its peers -- and not in a good way...

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https://www.bloomberg.com/gadfly/articles/2018-03-28/tesla-stock-sells-off-but-watch-the-bonds

Time for Apple to buy Tesla?

iPlug said:

Time for Apple to buy Tesla?

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I would rather see it fold. I'm sure there would be better contenders. I would never drive a Tesla if it were owned by Apple.

EVDRIVER said:

iPlug said:

Time for Apple to buy Tesla?

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I would rather see it fold. I'm sure there would be better contenders. I would never drive a Tesla if it were owned by Apple.

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If it does fold expect another decade at least to go by before seeing any significant growth in EVs. Other mfrs half-hearted offerings will quietly fall by the wayside because of "lack of consumer interest".

BTW shouldn't that be "was owned by Apple"? I thought the subjunctive mood only applied to things that really are impossible (If I were a werewolf, If lorenfb were a Tesla shareholder)

EVDRIVER said:

iPlug said:

Time for Apple to buy Tesla?

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I would rather see it fold. I'm sure there would be better contenders. I would never drive a Tesla if it were owned by Apple.

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If Apple bought Tesla at least the screen would work https://seekingalpha.com/article/4159304-touchscreen-problems-persist-teslas-model-3

^ Yeah but the car would slow down as the battery ages.

Meanwhile, down to $257.78 at close, and $254.50 after hours.

iPlug said:

Time for Apple to buy Tesla?

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LOL! Not cheap enough yet. I also can't see why Apple would want to take on such a money losing business (over $4.5 billion in net losses, so far which includes the few profitable quarters they've had). They've yet to have a single profitable full year.

IIRC, they've also racked up over $10 billion in debt.

Tesla had about $11.7 billion in revenue for 2017 vs. Apple's $229 billion. To generate that $11.7 billion in revenue, they lost between $1.9 and $2.2 billion (depending on whether you look at net loss or net loss attributable to common stockholders). Meaning, they had expenses $1.9 to $2.2 billion greater than the incoming revenue. This doesn't include the cash they burned on capital expenditures like Supercharger expansion and equipment for factories.

During Apple's $229 billion in revenue 2017, they generated $48 billion in profit.

Apple stopped making hardware AGES ago. They used to have plants that built Macs and Apple II's. They outsourced all manufacturing to the likes of Foxconn and Pegatron. Why would they want to take on an enormous capital intensive and complex burden of manufacturing cars, dealing that supply chain and manufacturing in the high cost of living part of the US? Virtually all Apple hardware sold in the US is assembled/made in China with CHEAP labor vs. the US.

Apple makes massive and impressive profits for a company that sells hardware.

Maybe if Tesla went bankrupt and all/most of the debt was written off and Apple (or whatever suitor it is) could see a path to profitability... yeah, they might bite, if it's cheap enough.

LTLFTcomposite said:

^ Yeah but the car would slow down as the battery ages.

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And have reduced acceleration.

A white knight isn't going to ride in at $250/share. I'd expect to see that more in the teens or single digits, or when they really are in distress not just headed that way. I'm not rooting for them to fail but at the same time have difficulty seeing how the current course is sustainable. There are many more chapters to be written in this story, that's what makes it so interesting. The idea that Tesla ceases to exist and everyone who has one of their cars just scraps it because parts aren't available strikes me as highly unlikely.

One article noted taking on debt was a mistake. As long as you raise capital through equity you can benefit from shareholder sentiment if you can keep them in the pews believing the future is so bright you need shades. The bond market otoh is unforgiving, even if they believe the story they still want their money.

Anyone old enough to recall soviet-era propaganda may find TSLA's exhortations, reported below, amusingly familiar.

More to the point, it sounds like TSLA will declare an incredible victory, even if production falls far short of the 2,500 per week by now that it promised investors only a couple of months ago.

Tesla Asks for Model 3 Factory Volunteers to Prove ‘Haters’ Wrong

Tesla Inc. exhorted its factory workers to disprove the “haters” betting against the company wrong and asked for volunteers to join the effort to ramp up output of the crucial Model 3 line.

In a pair of internal memos last week, the heads of engineering and production spelled out measures to free up workers for the Model 3 line and challenged them to reach production goals. Doug Field, the engineering chief, told staff that if they can exceed 300 Model 3s a day, it would be an “incredible victory” at a time when short-sellers and critics are increasingly doubting the company’s ability to fulfill CEO Elon Musk’s vision of building a mass-production electric-vehicle manufacturer...

“We set high goals at Tesla, but I know we can do this,” Field wrote. “If we keep climbing from 300 through the end of the week, it will be an incredible victory. Your friends and family will hear about it in the news.”...

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https://www.bloomberg.com/news/articles/2018-03-29/tesla-urges-workers-to-prove-haters-wrong-ramp-up-production

So can we conclude they are short of 2000/week?

EVDRIVER said:

iPlug said:

Time for Apple to buy Tesla?

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I would rather see it fold. I'm sure there would be better contenders. I would never drive a Tesla if it were owned by Apple.

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If it were owned by Apple, I'd have bought 2 by now.

Nubo said:

EVDRIVER said:

iPlug said:

Time for Apple to buy Tesla?

Click to expand...

I would rather see it fold. I'm sure there would be better contenders. I would never drive a Tesla if it were owned by Apple.

Click to expand...

If it were owned by Apple, I'd have bought 2 by now.

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I currently have an iPhone 6. It works well for my needs. I re,member Steve Jobs pushing the sealed Mac. I will never again own an Apple computer. I had an Apple II many years ago.

The cult of Apple or the cult of Elon are not for me.

GlennD said:

I currently have an iPhone 6. It works well for my needs. I re,member Steve Jobs pushing the sealed Mac. I will never again own an Apple computer. I had an Apple II many years ago.

The cult of Apple or the cult of Elon are not for me.

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Having been a lifelong resident of the Bay Area, cults are not for me, period. The mass grave holding the 412 unclaimed members of the People's Temple who died at Jonestown is in Oakland's Evergreen cemetery. Fortunately, business cults generally only cost people money rather than their lives.

GlennD said:

Nubo said:

EVDRIVER said:

I would rather see it fold. I'm sure there would be better contenders. I would never drive a Tesla if it were owned by Apple.

Click to expand...

If it were owned by Apple, I'd have bought 2 by now.

Click to expand...

I currently have an iPhone 6. It works well for my needs. I re,member Steve Jobs pushing the sealed Mac. I will never again own an Apple computer. I had an Apple II many years ago.

The cult of Apple or the cult of Elon are not for me.

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More of a meme than reality. I have opened every Mac I’ve owned over the years as well as iPods and iphones.