Tesla stock (NASDAQ:TSLA) is on a rebound after falling more than 5% on Tuesday over news of the US Justice Department’s probe on Elon Musk’s now-infamous “funding secured” tweet last month. On Thursday, TSLA stock blazed past the $300 barrier once more, trading at $303.79 per share after the opening bell.
The recovery of the electric car maker’s stock did not happen overnight. Over the course of Wednesday’s trading, Tesla stock battled an initial drop before beginning a steady 4.93% climb back up to $299.02 per share. Quite surprisingly, Tesla’s strong recovery on Wednesday came amidst the release of negative stories about the company. Former GM Vice Chairman Bob Lutz, for one, was featured on a CNBC Closing Bell segment, where he stated that Tesla was “headed for the graveyard” since it has “no tech advantage, no software advantage, (and) no battery advantage” over rival electric car makers.
AutoNation CEO Mike Jackson also aired his criticism of Elon Musk over his alleged “bait-and-switch” tactic for the $35,000 Standard range RWD Model 3, which is yet to be released. A study in the UK from the country’s Department for Transport further warned motorists that the increasing number of electric vehicles on roads would likely increase congestion and extend travel time.
Amidst the release of these criticisms were a vote of confidence for the electric car maker. In a note to Bernstein’s clients, analyst Toni Sacconaghi pointed out that Tesla’s vehicles, particularly the Model 3, would probably be unrivaled in the premium electric car segment for a while. Debunking a Tesla bear thesis which suggests that superior vehicles from more experienced manufacturers could easily eat into the upstart company’s market share, the Bernstein analyst stated that “there is no actual flood of competition coming,” and that the Model 3 “faces no credible competition whatsoever until 2020.”
Behind the criticism and the votes of confidence from Wall Street, Tesla also showed signs that it was addressing Elon Musk’s self-dubbed “delivery logistics hell.” Reports from the Tesla community suggest that across the United States and even in Canada, the company is now expediting the delivery process of the Model 3 to as many reservation holders as possible. Tesla is reportedly pushing deliveries so much that handovers are being conducted up to 10 p.m.
Frenetic delivery activity at Tesla’s south lot. Adjacent streets in the Fremont Industrial Complex are full of loaded carrier trucks, mostly clustered around motels. (Preparing for the next day long haul?) pic.twitter.com/TclbEvuohn
— Andrei B (@AndreiBulu) September 19, 2018
As the third quarter approaches its final days, Tesla seems to be focusing on its fundamentals, particularly Model 3 production and deliveries. It remains to be seen how many vehicles the company would manufacture and deliver this Q3, but both CEO Elon Musk and board member Kimbal Musk have teased that Tesla’s numbers this quarter would be quite surprising.
Elon Musk, for one, noted in a letter to employees that Tesla would likely build and deliver “more than twice as many cars as (it) did last quarter.” In a segment of CNBC‘s Closing Bell, Kimbal Musk further stated that “it’s really gonna blow people’s minds how many Model 3s are gonna appear in America in just the next couple of weeks.”
As of writing, Tesla shares are up 1.24% at $302.74 per share.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
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I saw the headline and was surprised - I own several shares through Robinhood. They pop a notification if TSLA moves 5% - I figured they must be pushing that and up 4.9% to $314.
Anyways, Tesla is now down to $297, down 0.6%.
I feel like the stock stories on Teslarati are regularly like this - way too excited about a small price movement that doesn't really indicate any sort of trend (I'm not short Tesla. 29% of my investments are in TSLA. I'm expecting/hoping to see TSLA around $400 within 2 weeks, and $500 within 7 weeks... not seeing the stock staying so low once we get some official numbers about how huge the Model 3 surge is get released.)
If the stock goes to $400 and there is no need to raise more capital, how will shorters justify not covering?
I find it interesting that a former executive for an ICE manufacturer is commenting on the advancement of an EV manufacturer. That's like a "B movie" actor saying that a Oscar winning actor is a unentertaining. Bob Lutz is a has-been and he should keep his expertise focused on cars from the past.
Lutz is a Putz. Under tutelage like his GM had to sell assets like ElectroMotive, Allison, Detroit Diesel, Direct TV etc. and farm out their AC Delco Product manufacturing, stop producing Heavy Trucks & Semi Tractors, drop four car lines and go from the largest corporation in the world to a shell of it's former glory. He has no right or business critiquing any company.
If the stock goes to $400 and there is no need to raise more capital, how will shorters justify not covering?
I think you aught to be able to think like a short - anticipate what they're going to say - if you're going to be trading a stock. Doesn't mean you have to agree with them - just know what they're going to say.
This quarter is easy, because we've already heard them say it before: "Tesla did a lot of one-off stuff! They pushed deliveries back from Q2 and forward from Q4 to push up deliveries! They're still unprofitable for the year!"
We might also hear a little bit of: "Elon Musk is going to jail! Tesla is going to be fined out of existence!"
There might even be some straight up denial: "They're lying about their delivery numbers! They're cooking the books and double - no, quadruple - counting orders!"
At the end of Q4, we'll probably hear a lot of the same stuff. We'll also likely hear about how the US incentive ending will be the end of Tesla.
I think the volume of shorts will really start to go down after we have the Q4 financials, but we may not hear the last of them until we've seen three solid quarters after the US incentives have gone to zero (so it'll be around Halloween 2020, over two years from now, when we finally hear the last of them. They'll still exist - there's still a lot of people who short Amazon - but few will take them seriously anymore at that point.)
Actually it has blazed past $300 quite a few times in the past ... and is not out of short selling hell yet. Investors should expect this stock to be volatile for a while yet.
