I believe that there is a justifiable reason why you would expect the market to respond to the TSLA report after the close today in the following manner. The market has a significant number of professional short sellers who are eager to break the stock and make it look bad and to trigger stop loss orders and therefore get sell orders to trip and lead to a contagion-type of decline. This is true of any stock where there is a concentrated short position as a percentage of the float.
So, the lower volumes in after-market trading allow for TSLA to trade much lower than would be possible when every market participant was available to trade. The sister company SolarCity is also reporting after the close today ( SCTY ). There are 150 companies reporting after the close today. It is a busy day.
AFTER whatever action we see in Tesla on the downside, I would look for price recovery because it is my contention that the market is waiting for the Model-X to ramp up production and sales and given that there have been production disruptions and a general lack of Model-S momentum. I think this is a big opportunity for some clarity on the back-orders for the Model-X and a confirmation of manufacturing costs.
So, for me, I am looking for any information on the Model-X to determine how strong TSLA shares will be. If the stock trades down on Model-S sales and inventory numbers, then I will not be concerned and will use that as a buying opportunity.
The street expectations are a bit muted for TSLA this report given lower implied of the straddle (9% for the 230 straddle). In the past, this was 12%-13% in previous releases.
Stay tuned for 4:15PM EST today.
Tim 2:34PM EST