2017 Investor Roundtable: TSLA Market Action

[neroden]

bought 40x367.5 about 30 minutes ago. looks like i did well

Um.... do you mean you bought calls?

 

[Bobbyducati]

Um.... do you mean you bought calls?

haha yeah. my bad. weekly calls

 

[D-egg-O]

A black boarded white candle? What is this strange thing?

 

[Snapdragon III]

I do believe the competitors are catching up... slowly. Tesla had easily a 10 year lead with the Roadster, a 7 year lead with the S, and is probably down to a 2 or 3 year lead with the Model 3. That said, this has given them what is certainly a 5+ year lead with the Superchargers, and a brand name lead which can't be beat.

The semi may be only a 3 year lead; I'm not sure.

I think that almost everybody is underestimating the difficulty of the situation that Tesla's competitors are in. Even if they were able to kick R&D into overdrive, and design car that was unquestionably better than Tesla, for a better price, it would put huge strain on their existing business. Who is going to buy a 3 series BMW if BMW has a new electric model 3 killer that is vastly superior to both cars? There is no way that they could hit the ground running with manufacturing capacity to match their current ICE capacity, and if they release supper compelling electric cars at low availability, it will kill their existing bread and butter lines of business. If they were to invest hugely in electric vehicle manufacturing prior to releasing the first model, then it were to flop, that would be a huge financial blow too, and would be too risky.

I think they will continue to stumble along with lots of press releases, and half hearted efforts, with their biggest hope being that Tesla will die suddenly from a self inflicted wound (Unfortunately a possibility). They will be more aggressive in markets where they currently do not do a lot of profitable business. For instance, Chevy will try to go after ride sharing with the Bolt, but I would be very surprised if they came out will a super compelling 3/4 ton pickup truck that Osborned the Silverado.

Also, I think Tesla has real lasting advantages in the software side of things, in comparison to every other car company, and I think that lead is more likely to grow over time, than shrink. From a recruiting standpoint, Tesla seems SO much sexier for a young software genius than going to work for Ford. The real deal, saving the planet company mission, allows them to get away with working those geniuses much harder too.

 

[schonelucht]

Not sure how you arrive at this conclusion. Q2 had 25K deliveries despite the 100kwh shortfall in June. It's an all time high delivery in Q3, could it be because they were able to deliver more 100kwh since that no longer is an issue?

That's based on breakdown of model sales in 1) Norway registrations 2) UK registrations 3) Model S tracking website and finally 4) Tesla guidance.

 

[Bobbyducati]

looks like the lunch lull is in effect.

 

[Tslynk67]

Why anyone thought q3 model 3 numbers would matter much is beyond me. It's a rounding error compared to what they're planning for just a few months from now. The market isn't as stupid as we sometimes think.

I agree, but if Tesla had actually hit the plan then we'd be ATHing it right now, methinks. Not because of the number of cars, per-se, but because they would have hit the forecast and demonstrated incredible agility and capability.

Of course lest we forget that M3 is already, what 18 months or so ahead of the original plan and what's being executed right now was said to be "impossible".

so it's all good, patience...

 

[TrendTrader007]

Did you buy the house on margin?

yes

 

[LoveTSLA]

Did I say yesterday that TSLA will be up from yesterday's close? Party time!

All good sign that it will be back to above 360 very soon before the semi announcement.

 

[neroden]

I think that almost everybody is underestimating the difficulty of the situation that Tesla's competitors are in.

For perspective on my comments, I think the most likely competitors are BYD, Geely, and BAIC. Does that help explain my view that they are not worried about cannibalizing their existing business?

 

[vgrinshpun]

In other news from the "competition", the EU "will host auto, chemical and engineering executives nest week to **discuss** developing battery manufacturing in the block to compete with Asian and U.S. manufacturers". Yes they are serious .

Here are some damning excerpts:

German chemical group BASF, automakers Renault and Daimler and engineering firm Siemens are among those invited to Wednesday’s gathering in Brussels.

European Commission Vice President Maros Sefcovic said EU funding could support the creation of a consortium in the sector.

“Our ambition is to create real production in the EU – a full value chain, including recycling,” Sefcovic said in an email to Reuters.

To borrow a word from the important sounding guy, creating consortium to try to compete with Tesla is **structurally** unsound (yes, an understatement here)

“Supporting the roll-out of batteries is simply an imperative if we are serious about the transition into e-mobility,” he said.

This view would have been groundbreaking about a decade ago. Tell us something that is not obvious is a proper reaction today.

“This is a good initiative at the right time,” said a spokesman for Volkswagen, whose brand chief called for the industry to create a regional battery supplier last month.

NOOOO, HE WANTS HIS MOMMY!

Although European carmakers assemble battery packs for electric cars, the region has no significant player in battery cells - the essential building blocks for the batteries that are now mostly made in Asia.

The market is dominated by Japanese firms Panasonic and NEC, Korea’s LG and Samsung and China’s BYD and CATL, as well as U.S. manufacturer Tesla.

Duh!
Plan: Call a meeting to discuss and make plans...

If sales of electric vehicles rise, as many carmakers now expect, developing European cell capacity could cost as much as 30 bln dollars, analysts at Bernstein Research wrote in a note.

“How on earth can the industry build/buy/find enough batteries or raw materials if and when EV demand takes off? This is a critical missing piece of the puzzle,” they wrote.

Duh! (take #2)

But here are the good news, so not to worry too much:

Demand for electric cars remains weak due to limited charging infrastructure and the high costs of purchasing a vehicle. But this may change depending on how quickly battery prices fall, having dropped by 18 percent in 2016 alone.

That is what I call **structurally** uncompetitive.

 

[Snapdragon III]

I don't get it.

Short sellers act like weak holders and can sell enough to trigger a price drop and recover shares at the new lower price.

There has to be a lot of new money coming in to effect a short squeeze steep rise.

Is there enough new money to do that right now?

Just trying to understand.

My guess is that we way overestimate the role "short sellers" are playing in "manipulating" Tesla stock. I think it is more likely that the move down in price over the last few weeks was largely driven by more short term focused longs, who had a pretty good idea what was going on with the model 3 numbers. They have been selling over the last few weeks, in anticipation of todays news. Now that the news is out, it is already priced in, and many of them will probably reenter and start to drive the price back up.

This gets a little in to conspiracy theory land, but say you were running a hedge fund that had $500,000,000 worth of Tesla stock? Why not hire a group of private investigators to do 24 hour stake out on Teslas 1 factory? Attempt to count every finished car that leaves? Hire people the walk the lots at the dealerships in the US and look for Model 3's? etc. It would not cost that much, and would be well worth it if you could have been fairly sure model 3 delivery numbers were a train wreck back when the stock was in the $380's. It wouldn't even be illegal, or unethical, it's boots on the ground research.

 

[TrendTrader007]

shorts dropped the ball today
now they are totally screwed
this was their last chance to press their luck
and they lost
later tonight I will post charts showing clearly how badly shorts will get burned over the next several months

 

[TrendTrader007]

as far as margin is concerned
I totally love it
I make or lose more in a day than average non margined conservative investors do in 10 years
all due to being extremely leveraged
i'm a huge fan of margin

 

[Bobbyducati]

hit my target and bailed on my calls. probably going to think twice about that later today. but gotta play it safe.

 

[Mike Smith]

shorts dropped the ball today
now they are totally screwed
this was their last chance to press their luck
and they lost
later tonight I will post charts showing clearly how badly shorts will get burned over the next several months

I'm guessing the same people who had caught wind about the model 3 production line problems also know about the production line fix.

 

[Curt Renz]

With the Model 3 initial ramp, the priority appears to be making certain that highly reliable cars come off the assembly line. Accelerated production will undoubtedly occur in due course. The reliability of the Model 3 should be considered more important than speed of delivery at this early stage to the more than half million people who have placed reservations. It's what should lead to the positive word-of-mouth that can greatly multiply the already existing demand. Once production moves into the steep portion of the S-curve, it should come much more closely in line with demand.

Wise investors should also see this in the same positive sense. A dip in Tesla shares at the opening tomorrow may present a welcome buying opportunity.

Why anyone thought q3 model 3 numbers would matter much is beyond me. It's a rounding error compared to what they're planning for just a few months from now. The market isn't as stupid as we sometimes think.

shorts dropped the ball today
now they are totally screwed
this was their last chance to press their luck
and they lost
later tonight I will post charts showing clearly how badly shorts will get burned over the next several months

It's those who are shortsighted who sold at the opening. They look at the worst side of recent numbers with no regard for explanations or the future. Many of those are short sellers who sold even more earlier today. Yesterday afternoon they began chatting online joyously among themselves with supreme confidence of a victory celebration today. They may be wise to cover their positions and search for stocks more suitable for their valuation methods.

 

[Snapdragon III]

For perspective on my comments, I think the most likely competitors are BYD, Geely, and BAIC. Does that help explain my view that they are not worried about cannibalizing their existing business?

I agree.

 

[ValueAnalyst]

All good sign that it will be back to above 360 very soon before the semi announcement.

A couple of weeks ago, I called for $400+ by the Semi event.

Model 3 delay of course puts that in jeopardy, but I don't think the delay is as serious as already priced in at $340.

 

[austinEV]

A black boarded white candle? What is this strange thing?

We used to have a lot of those, in the long-long ago. In the before times. 2 weeks ago. Few remember now what once was. History becomes legend. Legend becomes Myth.

I think that almost everybody is underestimating the difficulty of the situation that Tesla's competitors are in. Even if they were able to kick R&D into overdrive, and design car that was unquestionably better than Tesla, for a better price, it would put huge strain on their existing business. Who is going to buy a 3 series BMW if BMW has a new electric model 3 killer that is vastly superior to both cars? There is no way that they could hit the ground running with manufacturing capacity to match their current ICE capacity, and if they release supper compelling electric cars at low availability, it will kill their existing bread and butter lines of business. If they were to invest hugely in electric vehicle manufacturing prior to releasing the first model, then it were to flop, that would be a huge financial blow too, and would be too risky.

I think they will continue to stumble along with lots of press releases, and half hearted efforts, with their biggest hope being that Tesla will die suddenly from a self inflicted wound (Unfortunately a possibility). They will be more aggressive in markets where they currently do not do a lot of profitable business. For instance, Chevy will try to go after ride sharing with the Bolt, but I would be very surprised if they came out will a super compelling 3/4 ton pickup truck that Osborned the Silverado.

Also, I think Tesla has real lasting advantages in the software side of things, in comparison to every other car company, and I think that lead is more likely to grow over time, than shrink. From a recruiting standpoint, Tesla seems SO much sexier for a young software genius than going to work for Ford. The real deal, saving the planet company mission, allows them to get away with working those geniuses much harder too.

Yeah let's all remember that Kodak new all about digital photography. Blackberry knew all about Apple. They just cannot change, even if they know it will kill them.