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    • Consumer Reports has taken back its recommendation of the Tesla Model 3 following multiple reports of reliability issues with the car’s bodywork, paint finish, trim fitment and that giant touchscreen inside.

      A small company with a few million subscribers changed its opinion of recommending the Model 3 for known issues, and the Tesla market cap falls by billions in minutes. That decision had more effect than unexpected quarterly earnings reports for a lot fortune 500's. I think it's absurd that Consumer Reports can have that much power. It just feels wrong. Consumer Reports employees better not be trading Tesla stock...

    • It's so strange. This was published 17 hours ago:

      Just this morning I listened to an analyst who follows Tesla closely say their bull case for Tesla is $4,000 stock in 5 years, the bear case is $750. Reason #1 is there's a one-in-a-billion entrepreneur running it. Reason #2 is their cars are so admired they're growing 50% a year while other car manufacturers are shrinking.

      She said the case is the same as Amazon's was: while everyone was afraid Amazon would go bankrupt, they had a great product, great growth, and a great entrepreneur.

      The only thing I really know about this stock is there are fierce bears & bulls, like Amazon had.

    • What I find weird about this is that none of the reliability issues Consumer Reports cited are news. Model 3 owners have been talking about those things for well over a year. And over that time Model 3 reliability has been steadily improving. Far more people own Model 3s now, but I'm seeing a lot less discussion online about quality and reliability problems than I did a year ago.

      My Model 3 (built and delivered in May of 2018) has been rock solid except for one small issue: a small LED strip in one of my headlights (Tesla calls it the "signature strip") became misaligned, so it appeared dimmer than it should have. I called Tesla and they dispatched a mobile service tech, who came to my house and replaced the headlight free of charge. Haven't had any problems since.

      Full disclosure: In addition to owning a Model 3, I also owned Tesla stock until earlier this week (I sold it at a profit to reduce my risk exposure since it's been so volatile). I may buy more though now that it's at a nice discount. 🤔

    • Someone please help me understand what exactly was lost. It's not that @yaypie 's car is worth less or he cares about that, as long as he isn't planning to sell it. I wonder, did alot of people suddenly cancel their orders? If not, what does that drop in the graph actually mean, to whom?

    • Someone please help me understand what exactly was lost.

      There is an investing theory that some stocks react more than “normal” to good or bad news.

      The stock of a company that isn’t a household name and that has an average volume of trading per day is more likely to be “normally” discounted or increased as a result of good or bad news.

      A company that is well-known by the public, such as Amazon, McDonalds, or Tesla, tends to react greater than “normal” to any news. So if a “normal” response to bad news is a four percent drop, an Amazon could drop nine percent or more.

      A lot of it has to do with trading volume. These stocks are traded more frequently and therefore more investors are going to want to sell during bad news so the price keeps going down because there aren’t enough buyers at the “normal” price.

      This is over-simplified, and the above trading can occur in minutes/seconds with all of the algorithm-based program trading. A good book on how hedge funds tried to take advantage of micro-second differences in speed, even fighting over how close their server was to the trading floor’s server, is Flash Boys by Michael Lewis.

      Some people believe in investing in the “dogs of the Dow” for this reason: when bad news occurs, the stock is discounted more than a “normal” stock; so if you buy it when it’s discounted your return should be greater than a “normal” stock if you subsequently sell it when good news is announced.

      Of course, that assumes good news will occur: bankrupt companies like Sears and Toys ‘R Us were once Blue Chip stocks.

    • Fascinating, @apm! I wonder if that's what I've been seeing with Tesla.

      As I've watched the stock over the past year, I've seen a pattern emerge. There are periods of relative quiet during which the stock climbs slowly and steadily toward the mid-$300s. Then there will be a negative news story (production problems, labor issues, Elon said something dumb, etc.) and the stock will panic-dive down to the $270-$290 range, at which point it will begin another slow and steady climb.

      What's interesting to me is that it doesn't really seem to matter much how accurate the story is or even necessarily how important it is. It could be as trivial as a Tesla catching fire after an accident. All that seems to matter is that if it's at least a little bit negative, national press and social media will latch onto it and run with it and the stock will take a dive.

      I think two things are happening here:

      1. Tesla and Elon are clickbait brands. If you write a news story or social media post about either, it will get clicks, because people are super interested. And negativity is easier to write and drives more clicks than positivity.

      2. Tesla is a massively shorted stock. Billions of dollars are riding on Tesla failing, so there's a huge incentive for certain investors and institutions to push negative stories. Combined with the clickbait factor already inherent in Tesla's brand, this leads to national coverage of relatively minor or boring things that we'd never hear about if the company in question were GM or BMW.

      The thing is, I think it's not just short sellers who are contributing to this problem. It's also a great arrangement for pump-and-dumpers because the pattern is so consistent and so easy to influence. If you can afford to pump a few million bucks into TSLA at $290 and then dump at $315 and repeat, you've basically got a money machine. But if you dump at $315 and TSLA keeps rising you're missing out, so you're gonna do whatever you can to reboot the cycle and get the stock back down under $300 so you can pump it again.

      At some point the cycle will stop — either because Tesla finally fails or because it finally manages to achieve enough success that it's able to override the panic response — but until then, I think TSLA is a weird and illogical stock and watching it gives me heartburn.

    • Personally, I like short sellers.  They are the ones who will pay massive amounts of money to investigate companies and keep them honest.  

      I wish there were short sellers who had been able to poke a hole in Enron’s scheme before it destroyed pensioners and employees.

      But we are psychologically disposed to view short sellers negatively.  “They’re betting on the company to lose!”

      This is a pretty well-balanced article on what some call “activist investors.”

      But yeah, it definitely sucks if a stock you own takes a dive because of short sellers.