Short-Term TSLA Price Movements - 2016

[GBleck]

Confirmation bias.
I doubt Morgan Freeman's lack of understanding is at all correlated with whether or not institutional investors who drive the stock understand this.

Besides, didn't Joseph Kennedy observe that when everyone is giving you a tip about a stock, it is a sure sign to sell?

Technically I don't think freeman gave any advice to buy or sell just that he is holding. True retail investors not likely to be able to trigger a 10% drop. Confirmation bias is a powerful tool for self dilussion. Almost as good as Argumentum ad nauseum.

 

[stealthology]

When Tesla reports delivery #'s in about a month, would he mention profitability if they were?

 

[EnzoXYZ]

Forgot if it was Brin or Page that said he would rather give his money to Musk than any other charity as Musk is doing something Very Important for humanity. There is really low probability TSLA will fail or getting capital. There are just as many people willing to bail it out as those want to see it fail.

 

[RobStark]

Forgot if it was Brin or Page that said he would rather give his money to Musk than any other charity as Musk is doing something Very Important for humanity. There is really low probability TSLA will fail or getting capital. There are just as many people willing to bail it out as those want to see it fail.

Page.

 

[esk8mw]

When Tesla reports delivery #'s in about a month, would he mention profitability if they were?

I'd say that's highly unlikely. I very much doubt Tesla's accounting team could close the books (or even estimate with any degree of precision) profitability numbers just 2-4 days after quarter end. Even if they could put together an estimate, I doubt they'd be confident enough to make a projection since the result could be right on a knife's edge (i.e., a few dozen cars counting or not counting in the quarter could mean the difference between profitability or not). Getting this wrong (if overestimating) would look really bad so there would be so many caveats that the profitability discussion wouldn't be recognizable.

Notably, even the vehicle sales number reported at quarter end changes by the time earnings are released (just 1% or less, but still could swing the numbers). Clearly, there's plenty of "maybes" floating around at the end of the quarter which would prevent accurate financial projections.

 

[RobStark]

I do not see synergies in the short term with SC. A sales force will still be needed to visit homes for the purposes of quoting the systems. In fact I see the need for an enlarged sales base to justify the new solar panel plant and keep it at capacity.

Tesla will absolutely get rid of the Solar City salespeople making 30% commissions.

The first point of sale contact will be in a Tesla store and a rough estimate can be given using google maps.

By the time an actual person visits a house this will be a very warm sales call on the cusp of consummation. This isn't a 3 hr hard sales pitch starting with giving basic information.

The Tesla brand will keep the Buffalo GF humming not cold calls and hard pitch salespeople.

Living in LA I can't tell you how many friends/family hate getting solar roof cold calls and hard pitches that seem too good to be true. Backed by Tesla warranty and good name among those predisposed to buying rooftop solar the fence sitters will start coming off the fence and start signing on the dotted line for Tesla rooftop solar + possibly other Tesla products. I have asked my family and friends and most tend to agree they would be much more willing to buy solar from Tesla than a mop and pop shop or less well known company. And Tesla has much more brand equity than lead solar installer in the US Solar City.

 

[trentxintong]

As of today, do you people think whether the SCTY deal will go through or not. The spread seems to be increasing ... I would like to see the deal go through as I am a long term TSLA stock holder.

 

[Papafox]

When Tesla reports delivery #'s in about a month, would he mention profitability if they were?

I'd really be surprised if there's any mention of profitability during the Q3 deliveries announcement. That said, if the numbers are large, analysts will be speaking up about their takes on profitability, and the stock will rise quite nicely if warranted.

 

[MitchJi]

When Tesla reports delivery #'s in about a month, would he mention profitability if they were?

I think if it's a slam dunk they will.

 

[drinkerofkoolaid]

I wonder if that also means TSLA SP hasn't fully priced in the merger occurring as well?

I disliked your post because it doesn't make sense, doesn't answer my question or address my points, and is off topic.

MAIN POINTS: SolarCity options will be converted to Tesla options, not the other way around and will be priced to reflect identical Tesla options. There will not be any fractional options. Correct?

It looks like any hedge fund or firm that isn't planning on waiting for the vote, or that supports the merger can maintain an identical position by buying calls, that are trading at a huge discount if you believe the merger will happen at the agreed upon ratio and will benefit Tesla's stock.

Also, if you look at the open interest, SolarCity options, it looks like very few options are being written by MM. The volume and open interest is extremely low.

Any firm that wants to maintain a position going into the merger, is likely sitting on a large number of shares that are in the red. I think they can sell the stock, realize the loss, and maintain an identical position by going long Tesla options. Additionally, any firm that sold at least 30 days ago, can buy SolarCity options, that appear to be trading at a huge discount.

Anyone with knowledge of options and this type of merger have any thoughts on.this matter? Am I missing something?

Note: I'm fairy certain Tesla is subject to a very big penalty if Tesla backs away from the current deal and the agreed upon ratio.

SolarCity has the right to shop around. Tesla doesn't, and would be crazy to call off the merger at this point.

 

[TMSE]

I continue to be surprised by the increasing "spread" between the price of $TSLA and $SCTY.

The market obviously does not believe this deal will go through under its current terms.

EDIT: Based on market and price action, I am nervous about it going through as well. I just wonder what I don't know versus what the big boy traders do know. It'll be interesting to see Elon maneuver through this.

Big boy traders are often wrong and are at each other's throat frequently.

I go with my research and some instincts. FTC approval is a big first step. SEC approval is likely too. Then, the voting. I think the spread would close right after the vote, which is likely in October/November.

 

[CatB]

I always knew God was on our side.

Indeed, we don't need no stinking advertising, we're on a mission from God

 

[Gerardf]

Closing at 203 is a nice start, signalling the bottom and reversal.
Weak shorts might decide to cover, and longs that were waiting for the bottom might step in.

 

[ggies07]

Forgot if it was Brin or Page that said he would rather give his money to Musk than any other charity as Musk is doing something Very Important for humanity. There is really low probability TSLA will fail or getting capital. There are just as many people willing to bail it out as those want to see it fail.

and then there is steve jurvetson.......

 

[racer26]

i would suggest you personally go the a local National Drive Electric Week (starting this weekend) National Drive Electric Week 2016
and a local National Solar Home Tour The 2016 National Solar Tour (both USA, sorry and apologies to elsewheres) to guage wants and desires of EV's and demand for long range and short range EV's

I did not mean to suggest that I saw that outcome as being likely at all. Quite the opposite in fact. I'm long both TSLA and SCTY, and so I certainly hope such an outcome doesn't happen. Additionally, I drove a 1st gen Honda Insight for several years, and would buy a BEV if there was one available that met my needs on range and price (hence my Model 3 reservation within seconds of online reservations opening, before the unveil). I certainly am a believer in EVs and foresee rough times ahead for the automakers that don't adapt quickly. I just meant that I cannot see any possible outcome before that which doesn't simply result in one investor or another dumping even more cash into TSLA. After Model 3, I see one *exceedingly unlikely* possibility, *if* somehow demand for high-performance long-range EVs made by Tesla evaporates.

I believe that Model 3 represents a repeating of history from the Model T of 110 years ago. Ford created a whole new way of doing business in the auto industry, and for 110 years, basically everyone else has been using the same formula he pioneered. With the efficiencies created by Alien Dreadnought very possibly mirroring the sorts of achievements Ford made with the moving assembly line 110 years ago, and the Model 3 bringing a long-range high-performance EV to the masses at a price average people can afford, mirroring the affordability of the Model T and the way it mobilized America 110 years ago, there are a lot of undeniable parallels.

In 1903, the Ford Motor Company had 12 investors owning a total of 1000 shares with a Market cap of $28,000.
In 1919, Henry Ford, Edsel, and Clara bought out the other investors in a leveraged buyout for a total of $108M (about $80M of which was borrowed). I can't find a record of how many shares the Ford family retained control of in the intervening period, but even if you assume they bought all 1000 shares in 1919 for $108M, that represents $108,000 per share, based on an initial value of $28 per share, a nearly 4000x increase.

If I'm right and Tesla is similarly successful? Elon's estimate of a $1T market cap will look conservative.

 

[EinSV]

This doesn't really make sense to me. If google thinks Tesla is a real competitor on autonomous driving then taking a chunk of Tesla is a way to hedge its bet on the technology. Why have one horse in the race when you can have two? And Tesla's approach is quite different, which also makes it a reasonable hedge. They also have other things that make them common allies, both are important CA companies to mention one, the strong personal relationship between Musk and Page, ect. Apple is another likely CA suitor with deep pockets.

One of Tesla's core strategies is to beat the entire industry to autonomy by a substantial margin and use that as a major competitive advantage in the marketplace. Google is racing to supply autonomy to the entire industry. Those two strategies are fundamentally incompatible. IMO, Tesla is not going to give away anything to Google that would put this core strategy at risk, and Google has no reason to fund its competitor. Circumstances could change but that's how I see it right now (you are free to have a different opinion of course). If Tesla gets its back against the wall and needs funds might Sergey or Larry invest? Sure, but the chances of Tesla being in that situation are so small IMO that it's not really worth discussing, all the fearmongering and FUD that swirls around Tesla notwithstanding.

 

[dennis]

Page.

Funny I was reading that passage in Vance's book while you were writing this.

 

[Oil4AsphaultOnly]

One of Tesla's core strategies is to beat the entire industry to autonomy by a substantial margin and use that as a major competitive advantage in the marketplace. Google is racing to supply autonomy to the entire industry. Those two strategies are fundamentally incompatible. IMO, Tesla is not going to give away anything to Google that would put this core strategy at risk, and Google has no reason to fund its competitor. Circumstances could change but that's how I see it right now (you are free to have a different opinion of course). If Tesla gets its back against the wall and needs funds might Sergey or Larry invest? Sure, but the chances of Tesla being in that situation are so small IMO that it's not really worth discussing, all the fearmongering and FUD that swirls around Tesla notwithstanding.

I'm pretty sure that 2nd premise is incorrect. Google is not supplying anything to the auto industry other than car play. The podcars are of their own design and for the express purpose of locking in eyeballs (note the main interface is a touchpad with no steering wheel nor brake pedal access).

If Tesla offers to make google apps the default entertainment app on the center console, then google will get what they want without having to get the podcar to work (nor the vehicle liability associated with it).

 

[EinSV]

I'm pretty sure that 2nd premise is incorrect. Google is not supplying anything to the auto industry other than car play. The podcars are of their own design and for the express purpose of locking in eyeballs (note the main interface is a touchpad with no steering wheel nor brake pedal access).

If Tesla offers to make google apps the default entertainment app on the center console, then google will get what they want without having to get the podcar to work (nor the vehicle liability associated with it).

With respect to autonomy, which is the big issue, I think it's fair to say that (a) Google has no plan to become a car manufacturer and (b) it is talking to and working with other manufacturers about how it will roll out its autonomy software/service while keeping its long-term options open to work with different manufacturers. Google Denies Plans To Expand Self-Driving Car Partnership With Fiat Chrysler I believe I overstated the case that Google will necessarily supply the entire industry with self-driving technology. But whether it works with one automaker, multiple automakers or the whole industry, given Tesla's strategy and Google's strategy, including its recent entry into ride-sharing through Waze, they are direct competitors in this space unless and until they decide to join forces, which seems unlikely in the foreseeable future. Could happen as a backup plan for Tesla if it loses the autonomy race, but that .would not be a very desirable outcome for Tesla.

 

[MitchJi]

SolarCity Corporation's Best Product in 2016 So Far -- The Motley Fool

<Snip>
Amid it all, SolarCity has brought a transformative product to market that could drive the company's results for years to come, but it hasn't gotten much attention because of Tesla Motors' drive to buy the company and the falling stock price. Here is SolarCity's best product of the year and why it could transform the company.
<Snip>

Earlier this year, SolarCity fixed that major gap in its offering and started selling solar loans to customers. Loans are as short as 10 years with a 2.99% interest rate or as long as 20 years with a 4.99% interest rate. And it could change the company's future.

The good (and bad) of solar loans
In a lot of ways, loans are much better for solar installers and customers. The solar installer gets cash upfront and doesn't have to take on the financing risk a lease or PPA comes with. In SolarCity's case, it gets all of the revenue from building the solar-power system upfront, which could help it become cash flow positive far more quickly than the lease/PPA model.

For the customer, he or she can take advantage of tax benefits and the solar-power system becomes an asset when he or she sells their home. A lease/PPA is by definition a liability he or she hopes a new homeowner will take on.

The downside is that it's much easier to compare the cost of solar-power systems being bought with cash or a loan. SolarCity doesn't have a product differentiation from competitors and uses many of the same components a local installer may use. So, now it's competing on cost.
<Snip>

With a Tesla invertor and storage Tesla will have a differentiated product.