There was a ton of short-selling interest on TSLA (due to expectations of a big earnings miss). Almost 27% of the 115mm shares outstanding are currently being borrowed by short sellers. TSLA has more short interest by percentage than 98% of US stocks. Everyone was really expecting the price to go down.
Tesla reported earnings today at $.12/share, and upped their forward guidance. The consensus earnings estimates were $.04/share, so TSLA greatly surpassed expectations.
To short a stock, you have to borrow a share from someone else, and then return that stock to them at a later date. Returning the stock is called 'Covering a short'. All those people who were betting against TSLA are now forced to pile back into the market to cover, but since so many shares were short to begin with, the number of people who have stock to sell is much lower than typical.
This results in a 'short covering rally' where there is a lot of demand to buy shares and a small supply. Econ. 101 takes over and you see a big spike in the price.
EDIT: My mistake, this was said much longer ago (September 2012). I just read it recently. Thanks to batbomb for pointing this out. My apologies.
“It’s doing pretty well actually given that we’re such a huge short position. In fact I think the short position may be as high as one can actually go. They literally hit the ceiling on the short position. The shorts are in it to the hills. I think it is very unwise to be shorting Tesla, it’s very unwise. There is a tsunami of hurt coming for the short."
This quote makes me very happy :) There's nothing better than proving naysayers wrong. As if it isn't hard enough making something useful as it is without people betting actual money that you're not going to succeed...
Shorting is great because it helps minimize how out of control bubbles get. Yet, it isn't free money, because you actually have to be right about a stock being overvalued, as the case seems not to have been here.
Being an underinformed naysayer isn't any worse than being an underinformed cheerleader. The only difference is that the naysayers appear to have been wrong in this case for this earnings period. I wouldn't be surprised if many were over influenced by skepticism about a company run by a large personality. It is easy to err in the other direction, too.
I'm not thrilled to bring politics into it, but I have to. A ton of the naysaying on Tesla is influenced by the conservative media's hate affair with anything viewed as environmentally friendly. There are a lot of older Americans with tons of money in the market who watch nothing but Fox News, combined with the relatively politically conservative CNBC (not saying they are partisan, but they are hostile to "green" companies, and take a look at their Keystone XL coverage....). These older Americans who probably never would have bought Tesla stock when ahead and shorted it, waiting for the next Solyndra to unfold.
Solyndra sold a highly fungible commodity in a saturated market. Tesla is selling a machine that, when any skeptic sees it in a showroom, starts to impress in a way that is visceral. My conservative, rural father got in one at a showroom I took him to. He was blown away by the build quality. He knows cars, he knows metal, and he knows engineering. He told me that, mechanically, it is the best built car he has ever seen. He is a car guy, and used to drag me to car shows constantly as a kid.
His only objection was that he couldn't use one where he lives because of the two miles of dirt road he has to traverse to get to his home. I told him they were coming out with an SUV. He now owns stock.
Up 26% after-hours almost certainly qualifies as a 'Tsunami of Hurt.'
Some quick math for fun's sake:
If the TechCrunch[1] article is still accurate, Musk owns 28.4% of TSLA. His paper-worth on this ownership this morning was $1.8B. If things stabilize at $70/share, his paper-worth tomorrow morning will be $2.3B.
A notional profit of $500 million in 24 hours isn't too shabby.
> A notional profit of $500 million in 24 hours isn't too shabby.
It's not a 24 hours profit. He didn't buy that stock yesterday, nor could he have without making the price go a lot higher than 70$. You can't judge his profit on the short term.
I can't find a news story about the incident I'm thinking of, but there are SEC regulations about the release of information to investors. You basically have to try to ensure that they all get the same data at the same time.
There was a case where material news was released on Twitter. It lead to SEC adjusting their regulation to allow for social media to be an official news outlet for material information so long as the company discloses that it is a source of information ahead of time.
One other point is that what you were referring to is not related to what OP was suggesting. You're talking about how the information is distributed. oP was referring to when it is distributed (too close to earnings).
I believe OP was wrong with regards to a restriction on when information can be released relative to earnings. Elon could have tweeted it a few days ago and it wouldn't have made a difference to the SEC in regards to the timing of the release.
But OP isn't referring to insider trading. The comment was in regards to the timing of the information. The only time that I believe executives are restricted is during/after an IPO.
Another issue is making sure that material information is disclosed properly. Elon was essentially hinting that they were going to have a really good quarter. That kind of information is material and would likely need to be disclosed properly to all investors at once. However, I believe disclosing that information has nothing to do with the timing of earnings release. A company can disclose any information it would like at anytime, so long as it does so properly.
If I'm wrong, please let me know in reply. I'm very curious about whether I am making a mistake.
I didn't know that, how does it work with interviews then? Do they like disclose all info that will be said in the interview beforehand?
I don't know much about this either, I'm also incredibly curious...
As I understand it, the key phrase is "material information". Changing CEO, closing a plant, laying people off, better/worse earnings news, and sales figures are all examples of material information.
What likely happens is the company releases the material information through proper channels and then company representatives use that information as talking points during an interview. Some new information could be given during the interview but it's likely to be minor stuff like specifics on features for a product.
I purchased a fair number of TSLA when they IPO'd, for a bit lower than the actual IPO price of $17. A little over a year ago, my brokerage offered to borrow my shares at 4% annual interest (paid on a monthly basis). I was told that I would retain the ability to trade the stock at any time, but I gave up my shareholder voting rights while the stock was "loaned" out.
I had never heard of that happening to small individual investors like me, and at that time I looked into it and learned that this was typically done because there was a lot of interest in short sales for the stock and there wasn't enough borrowable stock to cover demands.
I renew the loan agreement on a monthly basis and in March 2013 I was offered an increase from 4% to 6% interest for the loan of my shares, indicating that short-sellers were very eager to get their hands on TSLA stock.
I'm curious to see if today's activities cause my June offer to drop my interest rate or if the offer just expires altogether. I would guess that at minimum I'll see a lower interest rate.
What?!!! Just so I get this straight. In order to short the stock you have to pay an annual interest rate of 46% of the stock value? I realize most shorts are probably only in it for short term, but that is still pretty insane.
Not sure if you're joking or not, but I'll offer a quick explanation. Interest in this context does not mean interest on a loan, but rather how many people are interested in shorting the stock. The 46% short interest meant that almost half of Tesla's stock was shorted. To put it another way, 46% of Tesla's stock was loaned out from various parties to sell to other various parties. This is a bad thing for the short sellers because they now have to pay more for their borrowed stock than they got for selling it in the first place. It's like owing more for your car than the car itself is worth.
olympus actually misunderstood me, and you were spot on :)
Brokers do charge interest rates and the rates for TESLA really were 45% (current) and 85% (once upon a time) annualized, mostly because of a deficiency in available shares. At that point it was costing 60c per share a week just to keep your short position.
Oh, wow. With numbers that high it never crossed my mind that you were talking about loan interest. Normally the interest you pay to short a stock is single digits, and if you have enough money it can be <1%.
If you sell puts against a short position from May 8 to May 17 (strike: 55.00, price: ~3.40), you can make >5 percent in 9 days. I'm guessing that most of the people borrowing shares at that rate are selling straddles to retail that make the overall position look less crazy.
So you are saying that a lot of the short interest is coming from people hedging their long bets?
I can somewhat relate to why one would take this strategy, as Tesla is getting a lot of hype, implying that the stock might break out (or already did, currently at $71), but they are also in a fairly precarious financial situation, with a ton of debt. Elon himself warned that if the company didn't get to positive cash flow it was likely they would go under. Still it seems like a high price to pay for a hedge, wouldn't it be simpler (and possibly cheaper) just to reduce your long position?
Do you have a recommendation for a good reference to learn all this lingo? I understand what a short is, but WTF is a 'put'? 'Straddles'??? 'Unhedged longs'?
A put is an option that gives you the right to sell a stock to someone by a specified date at a specified price. If you buy a put, you are betting the stock price will go down.
A straddle involves buying both a call and a put. If a stock is trading at 10, and you buy a PUT at 8 and a call at 12, you make money if the stock goes above 12 or below 8, between that, you eat the option price. Basically a straddle is betting on volatility.
You can also sell a straddle, sell a put and sell a call, and bet that stock will remain at the same price.
Short levels have been that high for much of the existence of TSLA. Noone was expecting the price to go down with this announcement specifically.
What you are describing is a short squeeze, and it's still unclear if that is indeed what we are seeing. Many shorts have been unwilling to cover, even when having to pay up to 85% lending rates for stock. A proper short squeeze would not only spike the price, it will make it explode; Volkswagen became the most valuable company in the world at a share price of 1k$ through a short squeeze (even if only for a short time).
Remember also that a short squeeze depends on long investors not taking profit. It only worked in VW because the majority of shares were held by institutions unwilling to reduce their stake and of course Porsche, who manufactured the squeeze.
This might be a stupid question, but as a Tesla stock owner, and (becoming more apparent ever day) naive investor, how do you find out this information and/or digest it so well? I'm mainly a google finance guy and had no idea so much of the stock was being shorted.
I own ~95% index funds, which makes most of my research pretty easy. For the individual stocks I do own, I like to follow the analysis on Reuters. Even just spending an hour/week reading the latest news does wonders.
Investing around a short squeeze is out of your control, and I would argue, not worth worrying about. The price will bounce around like crazy and some people will make 30% in a day while others lose much more than that, but in the end, Tesla's price will reflect their ability to turn a profit in the future.
If you feel like the future market cap of Tesla is larger than it is today (with all the usual time-value-of-money caveats), keep your money invested and don't waste your time fretting over the mayhem on Wall St.
Forgive the unsolicited advice, but I think that's the wrong question. First ask yourself what you'd do with that information. Then think long and hard about indexing your money.
Read up on portfolio theory and you will see that it's incredibly difficult (some say impossible) to beat the risk adjusted return of the market (at least not on purpose). It turns out if you are not in many stocks - 40+ (the exact number depends on who you ask), then you are taking more risk than you are being compensated for.
FWIW I do have a strong majority of portfolio dedicated to index funds, and have automatic investing set up for those funds biweekly. But there do come times where I see a company, and after some due diligence I do see as a company I believe in and see prospering in the long. Tesla is one of those companies so I bought a fair amount 2 months ago.
Regardless of solicited or not, I do agree with your advice and if nothing else, hopefully readers who fear to ask such questions gain from friendly advice such as yours
I do the same thing in my IRA. Right now TSLA is the only individual stock I own, and it is a bit less than 10% of my account value. I bought it at $29 per share 9 months ago or so, knowing I might take a bath, but I believed in the company's long term business model then and I still do. I feel that this kind of investing minimizes the risk factor.
Usually data from there is just parsed from the variety of forms that a public company has to file with the SEC, all/most of which are available to the public via a tool they have called EDGAR. Here's Tesla's filings: http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany...
EDIT: also, congratulations :) ask a real professional, but if you're tempted to sell be aware your holding period and of the tax difference between long and short term capital gains. Also, if you want to sell tomorrow and re-buy, be aware of wash sale rules.
I completely agree in most cases, however the Reuters article I linked was written earlier this week. Some market conditions necessitate a big swing in prices -- though guessing which direction prices will swing can be tricky.
If you wanted de-risk your position, you could set up an option straddle or just sell your shares before the announcement and then buy them again next week.
Also don't forget - by the time you read the news about a company, the news has already affected the stock price (in the short term).
So in other words if you read big news the minute it comes out about a company, automated systems and institutional traders have already made their moves based on the news before retail investors have a chance.
TSLA options are also super weird and sketchy; around the expiration of the long-dated calls in January each year, there seems to be some magical push to drive the stock price lower for 1-2 days; then after the expiration, when I've been pushed out of the money, the price rebounds substantially. I gave up on TSLA options and am sticking to being long the stock.
You don't need to wait until expiry to sell. There is a lot to be said for options if you use them carefully.
Yes, risk is higher with high leverage and a narrow portfolio. But returns can be also. I think the line about risk adjusted returns being higher in index funds is 3 parts inexperienced investors trying to pick stocks without doing their homework and 7 parts experienced investors trying to convince inexperienced investors to provide mindless liquidity for them to work against. I prefer to make my own buy/sell decisions, and so far it's given me a FAR higher average return than any index fund.
Without quantifying the risks involved with your trading strategies, it is impossible to say whether you are beating the risk-adjusted returns of an index fund. Additionally, I am pretty sure index funds, even without risk adjustments, have been proven to be better investments in the long term than any actively managed strategy. And this holds regardless of the experience of the investors. There are always going to be a few exceptions to the rule, but most of the people getting rich in wall street are doing so because they are taking a cut of other peoples money (management fees), not because they are genius investors.
Also, with actively managed strategies, it only takes one or two bad bets to wipe out years of gains, and due to natural biases, individual investors tend to under-report/weight losses and over-report/weight the gains. As such, we always tend to hear how other investors are making a killing on a certain stock or trade, but we rarely hear from the losers, which distorts our perceptions of risk and returns (so far, I have seen a handful of people talk about their Tesla stock holdings on this thread, but I have yet to see a single person talk about haw bad they are getting cleaned out because they shorted the stock).
There are always going to be a few exceptions to the rule...
Back when I lived in NY and worked in bond markets, an interesting study came out evaluating active mutual fund managers. A chance distribution was able to account for all but 2 at a 95% confidence level. Those two exceptions were named Peter Lynch and Warren Buffett.
Peter Lynch unfortunately retired from active investing, and his advice is that people should invest in indexed mutual funds. He also is not unexplainable by chance - the chance of someone having done that well by chance was under 5%, but it was still possible.
At a 99% confidence level, only Warren Buffett was left.
Warren Buffett is unquestionably knowledgeable. But his returns have been boosted over the long term by a couple of major investing advantages. The first is that he likes to buy whole companies, and is reportedly a stellar manager. His management expertise then turns into improved returns for that company, which becomes a good investment. Thus the cause/effect relationship is not clear. The second advantage is that when a company has problems (eg Goldman Sachs in 2008) they tend to call Warren, because they know that if they get him on board then they will restore confidence. But the deal that he gets is significantly better than what anyone else can get from that company.
The study did not include hedge funds like the one George Soros ran because their complex trading strategies can't readily be compared.
Anyways, the professionals can't run funds which beat chance returns. Why do you think will be able to?
(Technical detail. It is possible to beat the averages, and my understanding is that the professionals do on average tend to do so. The problem is that their cost of beating the average is sufficiently high that their funds don't come out ahead. And the results of their research get reflected in the stock price, which is available for everyone to look at.)
And another. His performance was measured over a very long time period, including a period where the market was likely much less competitive than it is now.
Great explanation - I (sheepishly) have invested a lot of money in $TSLA and have heard about the short squeeze but don't necessarily understand it, and this explains the movement - thanks!
I can't imagine this not squeezing. The short interest would take 7 days at 4 million shares a day to cover [1], and is about 45% of the float, assuming people haven't been covering for the last couple of weeks. Many of the shorts were opened when Tesla was trading around $40. I am really interested in seeing the updated short interest data from Nasdaq, which will be released tomorrow. If those numbers still show big short interests, expect big banks to hammer the stock up. I sold some shares for a little over $70 after-hours.
A couple of interesting statistics about stocks that are easily available are related to how many people are shorting it (ie, someone borrows a share, sells it, and makes a profit if they can re-buy it at a later date to close the short position).
In the case of TSLA the stock, as of Apr 15, almost 31 million shares were lent out to short sellers ("sold short"). That is out of 72 million shares on the market ("float"). At an average volume of 3 million shares traded per day (trailing 3 month average) it would take more that 10 trading days of nothing but short sellers buying shares on the open market to return to the people they borrowed them from ("cover").
Short trading unhedged is regarded as dangerous for this reason. If you buy a stock in the traditional way, if it goes to zero you only lose your investment. If you sell a share short, your losses (amount you have to re-buy it for minus the price you sold it for) is unbounded. Typically, this isn't collateralized by cash, but in money that brokers loan to traders ("margin"). If a broker sees that I have a really, really big loss on a short position, they might make me repay that money ("issue a margin call")... and depending on the situation, that might force a trader to cover their short position.
Anyway, point is that this can lead to a bunch of short sellers driving up the price of a heavily short stock all at once because they've either decided to cut their losses or because of margin calls, called a "short squeeze". This usually isn't sustainable because it's a temporary supply/demand imbalance. Could be an tough day for a lot of people investing against Tesla tomorrow, but I wouldn't bet on the gains in TSLA the stock tomorrow/in after-hours trading lasting for a long time.
The most amazing thing about your post is that 95% of your post went right over my head. And I consider myself a fairly intelligent person. :P
(There's probably some interesting commentary in there somewhere about the complexity of financial markets and how it is probably bad for society to have a vast portion of our economic growth riding on something most people don't get.)
Here's the gist, in simplified terms. I assume you understand what stock and stock brokers are...
You can 'short' a stock that you think is going to lose value (e.g. you expect a major earnings miss to be reported).
Shorting a stock means you borrow a share from (generally) your broker at todays price. You then sell that share to someone else for market price. At a determined date, you have to buy another share at market rate and give it back to your broker (this is called 'covering' your short).
If you bet right, you borrowed a share, and sold it for $N. Then, at a future date, when the price fell, you bought for $N-X, and gave the share back to your broker. You just made $X, the price difference from the value of the stock falling.
If you bet incorrectly, you borrowed a share, and sold it for $N. Then, at the future date, the price is actually higher, and you have to buy a share at $N+X, AND give the share back to your broker. You just lost $X, the price difference from the value of the stock rising.
If you bet REALLY wrong, the $+X factor can get really high - your broker may 'call' and force you to give them cash, pending your future purchase of the share to return (your 'cover').
Now, to MOST people, shares are effectively unlimited - with tens of millions or more shares on the market for most traded firms, liquidity isn't an issue. If you want a share or a few shares in a company, it's pretty easy to get them.
What may or may not be happening here, is that a TON of folks are currently 'short' on Tesla's stock, meaning millions of folks are going to HAVE to buy shares of the stock to 'return to their broker' and cover their short. The problem is that Tesla DIDNT go down.
Normally, lots of folks are short on lots of stocks, and the market just moves. Occasionally, you get a confluence of events which leads to there being a high demand for a stock that a large number of shares are shorted on, which has a self-feeding pain cycle:
the stock price is based mostly on demand and liquidity - as more and more folks HAVE to buy the shares to cover their shorts, the demand for the stock is going to go up, and thus the price is going to go up as well. This increase in price increases the pain, and triggers many brokers to 'call' those margins, requiring MORE people to buy the stock to cover, driving the demand up even higher. The end result is a big spike in the price of the stock, and a TON of people losing money on their bad bets.
>There's probably some interesting commentary in there somewhere about the complexity of financial markets and how it is probably bad for society to have a vast portion of our economic growth riding on something most people don't get.
Not really. Financial markets day-to-day operations don't really affect peoples real-lives. Every industry is full of terminology and jargon that describes the inner workings but that isn't necessary to understand for the outsider.
The average person with a retirement fund just wants to see it keep and increase in value over time. They don't particularly care if the traders of that fund were losers/beneficiaries of a short squeeze on a segment of their portfolio, as long as the overall value keeps going up.
Kind of like how the average web visitor doesn't care what OS and database a site runs as long as it is fast and bug-free.
I'd be happy to try to explain anything. This doesn't even get into the little "unhedged" word's complexity :)
That's when you start getting into options and derivatives, which are (theoretically) priced on a 5 variable differential equation called "Black-Scholes" (intuitively, you are just buying the right to buy or sell a stock for a particular amount at or by a certain date in the future).
You could construct a trade using those where you would make a smaller amount of money if the price fell, but your losses would be capped above a certain amount. In investing terms, you could buy out of the money calls to hedge your short position, and then your loss would be capped at (price you sold - max(price you have to re-buy at, price you can call your options at plus the option premium). I'll stop there before I get too far out of my league :)
This is the first of many profitable quarters for Tesla. The Model S is a better car in every single regard (except for range), than any other car on the market. It is safer, faster, roomier, more fun to drive, has more storage, quieter, more convenient, and less polluting.
Electric vehicles will displace combustion vehicles. Everything that makes a car, the electric car does better.
Right now the electric vehicle market is small, but soon (one decade?) it will eclipse the combustion market. Tesla is ahead of ALL other vehicle manufacturers, and that lead will translate into significant market share. As the electric vehicle market grows, so will Tesla's value.
No it's not. The lower range, low number of charging stations, and long charging times make it quite inconvenient for long trips.
I bought a used car 3 years ago for less than the cost Tesla charges for replacing the batteries on its car (which you are estimated to need to do after about 8 years). This car is a station wagon, so has much more storage space than a Tesla. I go camping every year, about 550 miles from where I live. I can make that trip in about 10 hours including food and gas stops. For the same trip, I would need to make at least two hour long charging stops at Supercharger stations along the way (if I had the highest-end battery option). But there are no Supercharger stations along my route; so I would need to find places to charge with ordinary power sources. If I used ordinary 10 kW 240 V sources, it would charge at a rate of about 30 miles of range per hour, effectively tripling the length of the trip; now what was a long 10 hour drive has turned into a 30 hour trip, which means finding places to stop and sleep overnight (which hopefully can give you a charge).
Furthermore, I live in an apartment, without a dedicated parking space. I need to park on street. So there's nowhere I could charge my car at home; I can't exactly run a power cord down and across the sidewalk to my car. Neither is there anywhere to charge my car at work. There's no way I could even use a Tesla for commuting right now, let alone longer trips.
With a gasoline powered car, I just fill up at any gas station, my car holds the gasoline overnight so it doesn't matter where I park, and for the above describe trip, I need to stop for gas once before leaving and once on the trip, each a 5 minute stop.
The Tesla Model S is an amazing car. But claiming that it's more convenient, or is a better car in every way but range, is a vast overstatement. It would be absolutely awful for me, and many other people with similar needs.
Some of these problems are solvable; there will be more Superchargers installed, the price will probably come down, there will probably be more electric vehicle infrastructure. But it's still a gamble to say that they will completely eliminate all of these advantages that a gas powered car has over an electric car, at least unless the price of gas spikes dramatically.
> The Tesla Model S is an amazing car. But claiming that it's more convenient, or is a better car in every way but range, is a vast overstatement. It would be absolutely awful for me, and many other people with similar needs.
Obviously convenience is different for different people. The OP is probably someone who finds car maintenance very inconvenient and as the owner of a used station wagon I am guessing you are not. If you don't take frequent road trips and have the ability to charge at home, the Model S is indeed very convenient--never have to worry about fuel and hardly ever have to worry about maintenance.
I too find maintenance inconvenient; but my used station wagon doesn't require much of that either. In the past three years, I've only ever had to have it inspected, tires replaced, and oil changes. Now, the Tesla doesn't have oil changes, so that one aspect is removed, but it does have annual maintenance. So, I'm looking at maybe two oil changes per year, vs. one annual servicing; a small improvement in maintenance hassle, but not amazing.
But anyhow, I'm not claiming that there are no convenience advantages of a Tesla; just that there are also a lot of things that are quite inconvenient, especially if you don't have a driveway or need to take long trips. Claiming that the Tesla is better in every regard but range is vast hyperbole. For some use cases, it may be more convenient; for mine, far less.
Beyond that, the price is a major disadvantage; at 4 times the price of a new economy car for the entry level model, and twice the price of lower-end luxury brands, it's well outside many people's price range; and you don't even save that much because you're not buying gasoline, as the combined cost of electricity plus replacement batteries winds up being pretty close to the cost of gas you would pay for the same number of miles (depending on exactly how long the batteries last, and assuming that the relative costs of gasoline vs. electricity don't diverge too much; of course you could say that gas prices are likely to go up faster than electricity, but they may go down too).
The Model S may not be the best at everything, but it appears to be the best overall car you can buy right now. It just scored an almost unheard of 99/100 from Consumer Reports (I believe the Civic got in the high 70s to mid 80s this year)
>If you don't take frequent road trips and have the ability to charge at home, the Model S is indeed very convenient--never have to worry about fuel and hardly ever have to worry about maintenance.
Doesn't the maintenance bit kind of remain to be seen? It seems to me there are two factors working against each other there: the high failure rates in new product categories, and the low failure rates associated with a simpler engine. I don't know that you can say which will win out yet.
The Model S is much, much, much simpler than a gasoline car.
- No engine.
- No fuel system.
- No alternator, starter, or belts.
- No oil.
- Single speed transmission! No shifting,
no transmission fluid.
- No fuel system.
- Lower brake wear, thanks to regen braking.
The downside is that the battery costs ~$10,000 and has to be replaced every 8 years.
I suppose, but its not needing oil changes alone is a big win for convenience. Tesla also will come to you for all service (and leave a loaner), so if it turns out to need some time in the shop you should not have to waste more time than it takes to make a phone call.
If you have to go five minutes out of your way then spend five minutes filling up, that's fifteen minutes. That's not uncommon, not everyone has a gas station on their route to and from every place they go.
Look if you are comparing a station wagon to a Tesla, you are just not even close to their target market. A BMW M5 sucks for camping too, and it has nothing to do with the range.
Woah, stop that zero-emissions hyperbole engine before it runs away from you.
Seriously, it's "safer, faster, roomier, more fun to drive, more convenient, etc," than "any other car on the market?" Really?
Some of that is true. But there's also a lot of opinion there and a few total inventions. The Model S is the safest car on the market? My Mercedes stops itself if I don't see traffic in front of me hit its brakes. It gives me night vision. It will nudge me back into my lane if I drift. There's about 100 more cool safety features I can talk about, and all this in a car that costs less than the 80kwh Model S. And there's even more safety tech on the S Class which is just another 10-15k on the top Model S price tag. And of course BMW and other manufacturers have similar.
Hyperbole much?
The model S is a great car. It has a great combination of features. But aside from maybe its dashboard -- I can't think of a single attribute where there isn't a car that specialises in that to beat it. An M5 is faster, a 911 is better looking, a Hilux has more towing capability, a Tarago has more passenger space, a ft86 is more tuneable, a Camry is cheaper, etc, etc.
As the comment response goes -- the GP was a great troll. "a better car in every single regard (except for range)" is pure nerd bait.
I'm not denying the Model S is a great package. It clearly is. It scores high on a number of features. But like in any complex market with lots of variables -- there are other choices. Even to go through GP's list:
safer (Not sure what it has that is safer particularly?), faster (Not compared to M5, etc), roomier (My Navara carries more equipment, there are bigger sedans, tarrago, etc), more fun to drive (compared to a 911? Ferrari? ft86? LF-A? Lotus Elise?), has more storage (My Navara + Canopy wins here. Also Station Wagons etc), quieter (Nissan Leaf probably wins), more convenient (TO do what? Camping? Road Trip? Park overnight?), and less polluting (Nissan Leaf probably takes the cake here. Also - my Electricity comes from Brown Coal. It's about as polluting as Petrol/Diesel).
It's a bit like claiming the iPhone is better than every other phone in every way (except battery life). It's clearly not true. The Model S and the iPhone are great products - but "better in every single regard" is just pure nerd-bait.
He did that on purpose. To break it down, he was pointing out how there are cars out there that "specialize," as a selling point for that car. And, for the areas of specialization of those cars, almost by definition, they are better than anything tesla makes for these things.
He's not saying that these cars are better than the tesla at all things, but only in the things they make it a point to be beter at. Which should be immediately obvious if the OP wasn't resulting to hyperbole and a rather thin attempt at covering his bias towards this company.
>The Model S is a better car in every single regard (except for range), than any other car on the market. It is safer, faster, roomier, more fun to drive, has more storage, quieter, more convenient, and less polluting.
It is not the safest, it is not the fastest, it is not the roomiest, it is not the most fun to drive, it does not have the biggest storage, I am sure some evs match its noise levels, it isn't the most convenient, it isn't the least polluting (I am sure the manufacturing process is more polluting than many cars even when considering the entire lifetime of the vehicle).
If you mean that it is the best overall, then that is very subjective and there are plenty of other candidates.
>Tesla is ahead of ALL other vehicle manufacturers...
If you mean with regards to electric cars specifically then perhaps, but with cars like the SLS Electric Drive[1] in production, I am not sure this is accurate either. If you mean in general, then that is ridiculous.
I love electric vehicles and I am looking forward to when they, hopefully, replace ICE vehicles but your comment is ridiculous. It is better to be realistic about the state of the technology.
In the future, I suspect we'll see aftermarket outfitters touting externally facing audio equipment to imitate the sounds produced by high-powered combustion engines.
I also suspect the majority of them will be sold to teenagers with fairly under-powered vehicles ;)
The BMW M5 (an example of exactly what the Model S is competing against) already does this, because the interior cabin is so well insulated that you can't hear the turbocharged V-8, and owners want to: http://reviews.cnet.com/8301-13746_7-20111031-48/bmw-m5-gene...
Actually this exists, but not for cosmetic reasons. Hybrid cars on their motors are just so silent that they're worried that someone (probably someone blind) will be hit by them.
This already exists. The Nissan Leaf emits some cool sci-fi sounds by default, and I heard a dealer mention it can be replaced with a large selection of sounds by specialized auto shops.
Closest you'll get is turning on the AC. Because the car's so quiet, I can hear (and feel) the rumble of the compressor running when I turn down the temp in the car.
Motor Trend didn't, so I don't see why he would. There are specific non-EVs which beat the Tesla on specific things, but nothing which beats the whole package, regardless of drivetrain.
(Well, Tesla towing capacity is kind of crap I think, and it would be a poor choice if you street parked, drove to a far away location without superchargers enroute, etc.)
The commenter said it is the "best in every single regard" which is different than the "best whole package." Setting aside subjectives like whether it is the most fun to drive or the most convenient, it definitely isn't the fastest car, or even the fastest four door sedan (Audi S8 is one example of a faster similar 4 door). It isn't the roomiest, the Altima, for example, has more front/rear leg room (42.7/35.4" for the Tesla, 45/36.1" for the Altima) and more head room (38.8/35.3" vs 40/37"). It definitely isn't the best car for driving between distant cities in the winter either.
Tesla S is a great car, worthy of car of the year, great for many kinds of uses, and I really want one. But let's keep it real.
If you've been in Silicon Valley for the past 6 months, this was obviously going to happen -- virtually everyone I know who could afford virtually any production supercar, and cares about cars, has or wants a Tesla. Not an R8, not a GTR, not a California, not a Panamera, not an M3, but a Tesla. As they ramp up their production (I think it's down to a few months wait),
The only rich people (who own cars) not getting Teslas seem to be either totally non-car people (or just cheap on capital costs vs. cost-efficient on total costs), or those who live in the City without a garage parking spot. Solving the Tesla street parking charging issue would be the next big win -- you could probably get away with 480v supercharging at work for 2-6h/day and street parking at home, although weekends might be tough.
Most of the people who can afford 100k cars (and/or who would be willing to buy 100k cars) live in SF, LA, NY, Boston, DC, etc. now. A better argument is that the total number of cars sold in those markets is like 1-2mm out of the 10mm US market, but even if Tesla just becomes Audi, that's pretty successful.
Another thing about high cost of living in places like that is maybe you're willing to spend 10% as much on a car as on a house. In Palo Alto that means you can buy two new loaded Teslas to go with your 2BR/1BA cottage; in the midwest, one used Toyota to go with a 4BR/3BA house on 5 acres.
(and Elon Musk's counterargument to all of this is that he's working on a 30-50k car next. I'm sure he'll deliver. The segment they're neglecting is the truck/commercial market -- there probably is an opportunity for someone (Textron? they make the new EV UPS/Fedex trucks) to make an awesome commercial EV platform, maybe with a CNG or LNG generator onboard. Whoever replaces with pickup truck and light commercial truck will have a next-Ford sized business, too)
I'm in NY and I've seen very few Teslas. I'm guessing the three biggest reasons why are the small amount of fueling stations compared to California, the controversial NYT review and just simply trusting what you're used to instead of living off the bleeding edge.
I think the bigger problem is that most people don't own cars in NY since they don't really need them and they're a pain to park unless you're paying for a parking spot. Even then that parking spot may not provide the ability to charge your car.
I suspect that if more people in NYC had garages in their owns we'd be seeing more Teslas.
I've seen far more Ferraris out on the road than Teslas and they cost, at least, twice as much. This is not including vehicles that are similarly priced to even the Tesla Roadster which only increases that ratio.
I'd include Long Island (which do have traditional homes and garages) in this as well where I've never seen one on the road.
I think there are issues that exist beyond what you mentioned.
So you think it's just cultural differences between the West and East Coast? That's possible. I'm in the tech scene in NYC so I may have a lot more in common with the West Coast culture than the one here.
I have spoken with a few of my non-tech friends about Tesla and they're all pretty bearish on it so maybe you're right. What do non-tech people on the West Coast thing about it?
I think girls are more interested in "green" issues in SF than on the east coast, so if you are a rich guy buying a car to help with the mating game, a Tesla might be a better choice out here. It is also a $100k car you can buy to claim to be forward thinking on tech and the environment, rather than just flaunting wealth (which is discouraged here).
New York (City) is, quite simply, a very different market than California. Most people who park on the street want a car they are comfortable taking a lot of damage on (and can't charge the car), and most garages in NYC are very old, very tightly packed (by valets that move the cars around often), and unlikely to have electrical charging stations.
Moreover, many cars are mostly used for weekend road trips, when range is a paramount concern.
Echo chamber, indeed. There are over 200 million cars in the USA vs fewer than 20 thousand Teslas. The Teslas are newer, so less likely to be kept in garages, but because of their range they also are less likely to be on the road for 10 hours a day.
So, I would expect that, on average, on the order of 1:10,000 cars on the road would be a Tesla.
If people say way more of them in California, there must be spots where people see fewer.
I'm a huge Tesla fan, but you are definitely in an echo chamber out in SV. Tesla has a huge tech/geek appeal. I know plenty of non-tech rich people from other places who would still much rather have their Mercedes or Bentley.
I'm a huge Apple fan, but you are definitely in an echo chamber out in SV. Apple has huge tech/geek appeal. I know plenty of non-tech rich people from other places who would still much rather have Windows and Blackberries.
I suspect some of this has to do with the newness and perceived scarcity. Once everyone who can afford a production supercar owns a Tesla, demand will fall back a bit.
I live in San Francisco, I rent a small apartment in a fairly nice neighborhood. Without fail, every night parked on the street are 2 Audi S5s[1], a Tesla Model S[2], an E63 AMG Wagon[3], and a smattering of Porsches (new Boxters to oldish 911's).
Surprisingly it usually works out fine to park a totally empty $100k car on the street in SF, but if you leave $0.25 on the seat of a $500 toyota, some crackhead homeless fucker will break your window ($100-300 to fix it) to steal it.
Back when YC had demo days at YC's office, rather than at a nearby museum with a parking lot, there were a lot of amazing cars street parked for blocks. And at least one highly lulzy incident involving an SL65 and an asshole machinist dragging it with a forklift into the middle of a street.
GAAP profit was $11 million. Zero emission vehicle (ZEV) credits sold to other automakers amounted to approximately $68 million. In other words, taxpayers gave $68 million to Tesla this quarter. Without this taxpayer gift, which will be drastically reduced going forward, they would have posted a loss of $57 million this quarter. Not fantastic.
It seems that their business model is entirely dependent on government subsidies. So now that wealth is being transferred from general US taxpayers to the shareholders of Tesla.
Considering the $17.4Bn bailout of the conventional US car industry a few years ago it's small change.
Personally I'd be a little more concerned about the $20Bn per year paid in farm subsidies, to an industry with median household incomes 17% higher than the national average, if I were a US citizen. At least the money going into Tesla is buying the US a lead in the future of automotive technology, instead of going towards further impoverishing third world farmers.
Yes, I think the parent may be confusing the ZEV credits with tax credits. Car manufacturers (in California at least) have to make a certain number of cars with low and zero-emissions. For 2012, I think it's 13%. Tesla makes 100% of their cards as ZEV, so they take 87% of their credits and sell them to other manufacturers who don't sell enough low emissions vehicle, or who sell no ZEV.
The important point is that these credits were created out of thin air, and don't cost the taxpayers anything. And their goal is to do exactly what they are doing... to get a certain amount of ZEVs vehicles out there, and to give manufacturers a financial reason to sell more, since they don't want to be buying those credits from Tesla.
I guess it's a California thing. You have to believe in global warming (In the mid-west we have had 20 degrees below normal now for 3 months and snow of 14 inches in May). My practical side says the Tesla is nice but if fighting CO2 is your aim you could buy a $20K Honda accord and convert it to run on ammonia ( nearest practical gas to hydrogen). Ammonia is already piped all over the midwest and in contrast to grid power is almost all made from domestic natural gas. And with a loan of $450 million like Musk got I could build a home ammonia generator that takes in grid power to generate hydrogen and using nitrogen from the air. The small ammonia reactor is the only thing that needs to be developed (the hydrogen generator and nitrogen from air products are already off the shelf).
I think we'll start seeing very high mpg gasoline cars soon. Supercar makers are already demoing electronically controlled pneumatic valves and direct injection and doubly clutch gear boxes are now showing up on family sedans. Direct injection + independently variably valve timing + double clutch close ratio gear boxes + regenerative braking and plug-in hybrids should equate to extremely high mpg for gasoline based vehicles.
I agree with the few here that have stated that tesla is in a SV bubble right now. It's the just hip thing to do, similar to the prius situation 8 or so years ago, but with much less volume due to the price point.
I've never seen the fairness of after hours trading. The majority of people don't have access to it (that I've spoken to), yet that is when you see some major moves (up or down) in a stock.
Trading outside these regular hours is not a new phenomenon but previously was limited to high net-worth investors and institutional investors like mutual funds.[2] The emergence of private trading systems, known as electronic communication networks or ECNs, has allowed individual investors to participate in after-hours trading.
The majority of investors can easily get access to after hours trading these days. A simple Scottrade account comes with the ability to trade after hours.
That's only because companies tend to release market sensitive information outside of trading hours. If you do it within trading hours, a trading halt must be in place. In which case, the major moves up or down of a stock is still outside of trading hours. Price changes are discrete, not continuous.
If you re-wrote company profits with all the subsidies, tax breaks, etc, factored in, you would see a much different profit landscape across the board.
Without the cash from selling California ZEV credits gross margin on the Model S would have actually decreased quarter over quarter. It will be interesting to see how it gets to 25% without ZEV, and whether Tesla needs to sell more stock to finance development of the Model X.
The last several months in Silicon Valley I do not remember the last time I went outside for more than 5 minutes and not seen a Tesla. I noticed about a week ago I stopped caring, much as I do not especially remark on noticing a Honda or a Ford. That's a good sign, though likely very geographically localized.
I've seen a grand total of one of them in the Boston area (Somerville, to be precise), but Boston has never really been a big place for supercars... this is for two reasons:
1) General New England frugality.
2a) New England winters eat cars due to the salt and potholes.
2b) ...which means that you must garage your supercar for 3-4 months of the year because it's just not practical to use.
2c) ...which means that you have:
2c1) ...two cars (no big deal)
2c2) ...and the ability to garage one of them full-time for 3-4 months, which is a problem anywhere in the 617 area code because...
I'm in Atlanta and get gawked at pretty much every time I go out. While we've got a very active group of local folks on Facebook, they're still relatively rare to see around here, even in the heart of upscale Buckhead.
Wait for profit takers to bring it down a little but yes, if you're willing to hold for the long term -- 5+ years at least -- I believe in it. I think a $100 price target is not absurd. Of coruse, Tesla is so comically far from becoming a mainstream car company that it's not for the feint of heart. It's not their products that will challenge them I don't think. It's the difficult of scaling a car company. No easy task.
I'd add it's also probably a good idea to wait for some bad news since the market is probably likely to over-react and anybody still skeptical will see that as an exit point to take profits.
I've driven one. They're fun, they tilt to the curve. And they're more practical for a single city-dweller.
Also, whoever downvoted me... can we keep this civil please?
That HACKER news is becoming a place where people downvote mentions of upstart disruptive competitors in an attempt to curry the favor of well funded established companies. Is just kind of, sad.
You think it's that you mentioned a competitor? Most people have never heard of Arcimoto. I haven't. Had you written something informative and showed some honest enthusiasm for the company, nobody would've downvoted you.
Instead, you started it by taking a crap on Tesla which is 1) Not in the spirit of "HACKER news" that you just evoked in your defense and 2) a dumb thing to do if you care about down-votes when we all know there's a lot of Tesla fans here.
I suppose maybe you don't truly care about down-votes, which would make me wonder then why you're complaining about them.
Well, at least you have the stones to own your pettiness.
And in so far as they are aiming at different market segments, the two companies aren't direct competitors.
If you're looking for an in town runabout that's all electric and that you can eel in and out of the parking lot at Whole Foods on your way home from work... you probably don't want a Tesla.
Tesla's are for people who want to signal their wealth and power, for whom the transportation is a secondary consideration. They're cool, better than a Boxster; but they aren't exactly practical. They're for movie stars and banksters not people who build things.
Here's the thing though, I could see fabbing up a custom skin for an Arcimoto as weekend(s) project. Whereas with a Tesla, you'd feel like a jerk for touching Elon Musk's Work Of ART™ and that means the Arcimoto wins on hackability.
Sorry, but that's crap. What makes them bad for people who build things?
Consumer Reports is not known for their affinity for status and bling so much as their affinity for boring practicality, and they rated the Model S a 99/100. I believe that ties it for their highest rated car ever.
It's because you compared a niche product from a company with no track record and no production timeline to a mass market product, from a company with a CEO that has a history of goal completion, and that is in full production.
High-Level Summary:
There was a ton of short-selling interest on TSLA (due to expectations of a big earnings miss). Almost 27% of the 115mm shares outstanding are currently being borrowed by short sellers. TSLA has more short interest by percentage than 98% of US stocks. Everyone was really expecting the price to go down.
Tesla reported earnings today at $.12/share, and upped their forward guidance. The consensus earnings estimates were $.04/share, so TSLA greatly surpassed expectations.
To short a stock, you have to borrow a share from someone else, and then return that stock to them at a later date. Returning the stock is called 'Covering a short'. All those people who were betting against TSLA are now forced to pile back into the market to cover, but since so many shares were short to begin with, the number of people who have stock to sell is much lower than typical.
This results in a 'short covering rally' where there is a lot of demand to buy shares and a small supply. Econ. 101 takes over and you see a big spike in the price.