Tesla Battery Day And FOMO
Tesla held its long awaited battery day. It was slated for earlier in the year but was delayed due to COVID-19. Elon Musk called it the most important day in Tesla history.
This, of course, set things up for massive disappointment.
After watching the entire presentation, the company delivered. However, the key here is the fact that is a long-term project with impact starting, according to Musk, almost 2 years from now.
Here is what the stock looks like after hours.
This sell off is happening after the stock got hit during the regular session.
Here we see an example of how two different time frames can operate together, yet the view is in different directions.
It also can explain the age old concept of "buy the rumor, sell the news".
Tesla had a huge run up of late. The company is one of the best performers of 2020. Musk, along with others, have touted this event as part of the ongoing march of the company. Obviously, buying over the week preceding agreed with this.
So where does Tesla stand with the battery day?
To make it short, there are huge impacts coming from their own in-house production. It will help to increase their overall numbers a great deal. The company is on pace to keep growing at a significant pace in the future. Their breakthroughs will reduce battery costs by more than 50%, while increasing range as well as smaller production footprints.
If this is the case, why is there the sell-off?
Quite frankly, because the market does not care about things two or three years down the road. We live in a market mindset where the only focus is the next 90 to, maybe, 180 days.
Thus, if the presentation today had an announcement that things would be going into mass production over the next couple quarters, the market might be excited. Since Elon said it will take a minimum of 18 months before they start to see, the sell buttons are being pushed.
It is why the temptation to jump in heavily must be resisted in situations like this. While there can be major announcements, the tendency is for these projects to have longer term implications. This is especially true the bigger the product, like a car. It is difficult enough to get something ready for the production of the next cell phone runs.
Ultimately, today's announcement could be good for the long-term potential of Tesla's stock. That said, it is not good for the short-to-medium term. For this reason, those who are seeking to get involved with TSLA could find a better entry point down the road.
This will be true, at least tomorrow at the open unless something changes.
Many will likely be selling the news.
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Posted Using LeoFinance Beta
