I think the Tesla stock bubble is bursting

"JayZAyEighty thinks C4+3=C7" (jayzayeighty) 10/03/2013 at 20:31 • Filed to: None

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It may seem like it's poised for a rebound, but I'm not going to run the risk of catching a falling knife...
Your guys' thoughts?

twinturbobmw > JayZAyEighty thinks C4+3=C7 10/03/2013 at 20:33

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Well, I think with the launch of the AWD Model S and the Model X in the future, it still has potential.

Decay buys too many beaters > JayZAyEighty thinks C4+3=C7 10/03/2013 at 20:34

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Bought in at $30/share, I'm gonna let it ride

Bandit > JayZAyEighty thinks C4+3=C7 10/03/2013 at 20:34

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I still have confidence in the company, I'm going to bet it will rebound.

JayZAyEighty thinks C4+3=C7 > Decay buys too many beaters 10/03/2013 at 20:38

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Damn, might as well. I wish I had some more money when I was trying to talk myself into buying at $85 a share.

Saracen > Decay buys too many beaters 10/03/2013 at 20:39

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I bought at $80, not quite as low as you, but I'm still pleased.

Saracen > JayZAyEighty thinks C4+3=C7 10/03/2013 at 20:40

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It's not bursting. The drop today was an overreaction to the battery issue. Heck it already starting rebounding. Plenty of potential in the stock.

Decay buys too many beaters > JayZAyEighty thinks C4+3=C7 10/03/2013 at 20:42

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Only bought 2 shares though :(

Its the second time I've bought in to an automotive stock at the right time and wished I'd put up a hell of a lot more. The first was $170 in ford stock when it was ~$1.50/share

Mr. Ontop, No Strokes, No Smokes...Goes Fast. > JayZAyEighty thinks C4+3=C7 10/03/2013 at 20:43

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I'm going to wait for the stock to hit double digits and then maybe buy a little. I missed the boat the first time around.

JayZAyEighty thinks C4+3=C7 > Saracen 10/03/2013 at 20:43

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It seems that it was overvalued and this is, while being a small reason, one powerful enough to decrease the value by a significant margin. Sort of like the case of $700 Apple and Apple Maps. The price was simply unjustified.

Saracen > JayZAyEighty thinks C4+3=C7 10/03/2013 at 20:50

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Apple's stock only started tumbling after Steve Jobs died. Were he still alive its value would have continued climbing.

LinkedIn is overvalued, Google is overvalued (hell, pundits said it was overvalued at $150!) , Facebook is overvalued, etc etc...but you know, they continue climbing.

Tesla is not an internet stock of course, but it has similarities to those companies.

JayZAyEighty thinks C4+3=C7 > Decay buys too many beaters 10/03/2013 at 20:50

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I've done the same, and even though a gain is a gain, it's really frustrating to wish you'd bought more. I wish I'd bought Ford and some bank stocks during the worst of the recession; it was practically a freebie.

Saracen > Mr. Ontop, No Strokes, No Smokes...Goes Fast. 10/03/2013 at 20:51

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you will be waiting a very long time.

JayZAyEighty thinks C4+3=C7 > Saracen 10/03/2013 at 20:57

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Saying things with certainty about volatile stocks has often resulted in ending up lower than where I bought. Allow me to paste an excerpt from a Value Walk article from today:

"Those who thought yesterday’s drop in value would inevitably lead to a huge loss of value in Tesla Motors Inc ( NASDAQ:TSLA ) stock as the bubble burst have been wrong today. The company’s stock is down, but it has by no means collapsed in value. The running of the bears did not happen today. It might tomorrow, or it might in a month’s time, but it did not happen today."

"Investors will have to decide for themselves what a fair price for Tesla Motors Inc ( NASDAQ:TSLA ) is. The company is still overvalued by any reasonable metric, but some investors are willing to bet on vision and hope. If it pays off the company could return huge value. If it doesn’t, investors will lose out."

That pretty much sums up the issue for me.

JayZAyEighty thinks C4+3=C7 > twinturbobmw 10/03/2013 at 21:10

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It's possible, but your average Tesla buyer is buying for the badge and the status rather than the underpinnings, it would seem.

JayZAyEighty thinks C4+3=C7 > Bandit 10/03/2013 at 21:12

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I see your direction, but it seems that with stocks like Facebook and Tesla perception and fanaticism are as important factors of the stock price as the health and management of the company itself.

Decay buys too many beaters > JayZAyEighty thinks C4+3=C7 10/03/2013 at 21:45

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Yeah, unfortunately I was in college at the time so $170 on ford was pretty much putting it ALL on the line.

JayZAyEighty thinks C4+3=C7 > Decay buys too many beaters 10/03/2013 at 22:18

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Ah, I see. I was limited to lawn-mowing profits and grandparents money for the most part at the time of the crash, but I had a bit more to invest later on as I was a frugal kid who didn't spend any earnings. All the same, I came out with some $15 Prudential, $90 Apple, $30 (15 accounting for the split) Coca-Cola, and $35 Caterpillar. All told, I spent most of my money and came out well in the black as a middle schooler, so I should consider myself very fortunate. Now I understand how the market works to a much fuller extent, and I am able to continue investing the money I made (mostly making nothing to small profits with too few shares of an individual stock).

Curiousplay > Saracen 10/03/2013 at 23:18

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A small portion of it was the battery issue but the large majority was due to economic concerns because of the govt shutdown. TSLA was not the only stock impacted and dropping today.

Saracen > Curiousplay 10/04/2013 at 01:10

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Yeah, I'm fully aware of that. The dow dropped 140ish points. Most of my portfolio dipped a bit.

Like I said, people are overreacting to the drop.

Curiousplay > Saracen 10/04/2013 at 01:22

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Precisely.

PatBateman > Saracen 11/06/2013 at 11:19

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The stock's drop isn't due to battery issues. It's due to larger firm's expected EPS targets for the company not being met. Call up UBS, Merrill Lynch, or Morgan Stanley and ask for their latest report on it.

They released their quarterly earnings last night. Disappointed quite a few people.

PatBateman > JayZAyEighty thinks C4+3=C7 11/06/2013 at 11:21

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See my post from yesterday late afternoon.

JayZAyEighty thinks C4+3=C7 > PatBateman 11/06/2013 at 16:58

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I saw it. I was just alluding to the fact that everyone here was so bullish about the stock because the company is cool—I wasn't giving any real advice, but discussing an inflated and risky stock in this post after its first semi-crash.

PatBateman > JayZAyEighty thinks C4+3=C7 11/06/2013 at 19:58

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Oh, I understand.