Wednesday, March 14th.
Market sentiment suddenly reversed.
At three in the morning, a new analyst report appeared on Bloomberg Terminal.
The publisher is Citron Research who has been short Tesla for a long time.
The title of the report is very direct, "Tesla: Production hell is not over yet, the target price is lowered to 200 US Dollar".
The report lists detailed data:
"After a month of on-site investigation, we confirmed that the Model 3 production capacity problem is more serious than expected.
Fremont Factory's weekly production capacity is still less than 1,000 vehicles, far lower than the company's promised 2,500 vehicles.
The battery pack supply bottleneck has not yet been resolved, and Gigafactory's 2170 Battery Capacity Ramp-Up speed is not as fast as expected.
More importantly, internal documents obtained by us show that the rework rate of Model 3 exceeds 40%, which means that a large number of vehicles require secondary rework before delivery."
The last page of the report gives a new target price: 200 US Dollar.
"We believe that Tesla's cash flow will be exhausted in the second quarter of 2018.
By then, the company will have to raise capital at extremely low valuations.
We reiterate our sell rating on Tesla with a target price of 200 US Dollar."
This report was released in the early morning with an obvious purpose - to create panic during the trading hours of Asia and Europe, and to pave the way for selling after the opening of North America.
During the Asia period, the OTC Derivatives of Tesla began to plummet.
The Tesla related warrants in the Tokyo market fell by more than 10%.
During the Europe period, the Tesla Short Position of the London market expanded sharply.
Zhao Chen When I woke up at six in the morning, this message was already on my phone.
He took a look at the pre-market quotation of Tesla - 270 US Dollar, which was 12 US Dollar lower than yesterday's closing price.
Citron's lethality is greater than he thought.
When he went downstairs to have breakfast, Zhang Qingxue was already in the restaurant. The laptop in front of him was open, and the pre-market data of Tesla was displayed on the screen.
Her expression was solemn.
"Xiao Chen, it has dropped to 270 before the opening. Selling orders are still increasing."
Zhao Chen sat down and poured a cup of tea.
"Buy today. But don't be in a hurry. Wait until they have spent enough before buying."
At 9:30 in the morning, US Stocks opened.
Tesla opened at 270 US Dollar, which jumped directly lower than yesterday's closing price and opened at 12 US Dollar.
After the market opened, selling orders swarmed out and the stock price instantly fell to 268.
CNBC's live broadcast cut to the trading floor of New York Stock Exchange.
The reporter spoke very quickly during the live connection:
"What did we see? Tesla plunged 4% at the opening and fell directly below 270 US Dollar.
Citron's report once again severely damaged market confidence.
Where is the mystery buyer? Where is he? Will he make a move today?"
The guest in the studio answered:
"If he doesn't make a move today, Tesla may fall below 250.
But if he takes action - he needs to take out a lot of money to support the market.
Short Sellers There is plenty of ammunition today."
Zhao Chen stood in front of the screen with his hands in his pockets and did not rush to give orders.
He is waiting.
Wait for the first wave of Short Sellers to pass, wait for the momentum of Panic Selling to weaken, and wait for the frightened retail investors to throw out their chips.
At 9:45, the stock price dropped to 265.
Selling orders are still pouring in, but the intensity is weaker than at the opening.
Zhao Chen said to Zhang Qingxue, "Start buying. Below 268, place orders in batches. Don't be anxious, eat slowly."
Zhang Qingxue entered the first instruction:
200,000 shares, price limit 268 US Dollar.
Transaction, average price 266.5 US Dollar.
The stock price was pushed from 265 to 267, but selling orders immediately came out and pushed the price back to 265.
The second tranche: 200,000 shares, price limit 267 US Dollar.
Transaction, average price 265.8 US Dollar.
The stock price briefly rebounded to 266, then fell again.
Zhao Chen continued the arrangement, "No rush. If they smash it, we will take over. Let them smash it."
Before the market closed in the morning, Zhang Qingxue placed a third order:
200,000 shares, price limit 265 US Dollar.
Transaction, average price 263.5 US Dollar.
A total of 600,000 shares were purchased in the morning, with an average price of 265 US Dollar.
The stock price dropped from the opening price of 270 to 263, a decrease of 7 US Dollar.
At noon, CNBC's program once again focused on Tesla.
The host's tone was much more excited than the day before:
"The mysterious buyer made another move this morning!
Judging from the market quotation, he bought at least 600,000 shares of Tesla, but the stock price still fell.
Short Sellers's power is too strong, he alone cannot support the entire market."
The guest's answer was very cautious:
"Judging from the strength of the handicap, this buyer has indeed a large amount of funds.
But the question is - how long can he last? Short Sellers also has plenty of ammunition.
If more selling orders come out in the afternoon, can he continue to take them?"
Another guest offered a different perspective:
"Maybe he doesn't need to prop up the whole market. He just needs to let the market know - someone is buying.
When Short Sellers runs out of ammunition, the market will naturally rebound."
Zhao Chen was eating a sandwich in the hotel room and watching the CNBC live broadcast.
Zhang Qingxue and Su Wantang sat next to each other, neither of them speaking.
After the market opened in the afternoon, Tesla opened at 263 US Dollar.
Selling orders came out again, and the stock price fell to 260. Zhao Chen asked Zhang Qingxue to continue buying.
The fourth transaction: 200,000 shares, price limit 262 US Dollar. Transaction, average price 260.5 US Dollar.
The fifth transaction: 200,000 shares, price limit 260 US Dollar. Transaction, average price 258.5 US Dollar.
The sixth transaction: 200,000 shares, price limit 258 US Dollar. Transaction, average price 256.8 US Dollar.
A total of 600,000 shares were purchased in the afternoon, with an average price of 258.6 US Dollar.
A total of 1.2 million shares were purchased throughout the day, with an average price of 261.8 US Dollar.
The total shareholding reached 14.6 million shares, accounting for 8.69%.
At the close, Tesla closed at 258 US Dollar, which was 24 US Dollar lower than yesterday's closing price, a drop of more than 8%.
Zhao Chen looked at the number on the screen and was silent for a long time.
Today he bought 1.2 million shares, using more than 300 million US Dollar.
But the stock price still fell.
Short Sellers's power is greater than he expected.
Citron's report is just an introduction. The real ones who hit the market are those institutions that Panic Selling saw the report.
They don't care about Fundamentals, they only care about what others are doing.
When others are selling, they follow suit.
But one thing made Zhao Chen feel a little more at ease - after the market closed, a CNBC reporter posted a message on Twitter:
"In today's Tesla market, there is a buyer whose buying orders are very concentrated.
Over 1 million shares were bought throughout the day, all from the same broker channel.
This buyer continued to take orders below 265 US Dollar without stopping.
He's not buying the bottom, he's building a position."
The tweet was retweeted thousands of times within half an hour.
In the comment area, some people said it was "Era Vanguard", some people said it was the Saudi Fund, and some people said it was Elon Musk who was supporting the market.
But there is one thing everyone agrees on - this buyer is a ruthless person.
Few people dare to buck the trend Add Position under the bearish butcher knife of Citron.
This is Short Sellers which is the biggest rival to Wall Street.