2017 Investor Roundtable: TSLA Market Action

[RABaby]

Drawing a similarity between politicians and prostitutes strikes me as rather disrespectful.
I grew up in Nevada, and there's nothing those working girls have ever done to deserve this type of comparison, just saying.

Previously acknowledged when Krugerrand took equal offense.
You are absolutely correct that the girls you favor are supremely cleaner than the whores in congress.

 

[geneclean55]

No idea if this is accurate or not. But the person does comment a lot on Tesla articles over on electrek.

 

[D-egg-O]

Yes, it’s very frustrating. I’ve contacted Tesla IR several times in the past regarding this and asked for fair disclosure (ie, all meetings with Tesla management where material info is discussed should be recorded and posted, etc) but to no avail.

IIRC, this is something you discussed with Andrea, right?

 

[ggies07]

This is what I wrote in September 2016 here:
Short-Term TSLA Price Movements - 2016

To me there are two main possibilities regarding effects of Model X ramp on Model 3:
1. Tesla learns from their mistakes, and does a much better job with Model 3.
2. Tesla doesn't learn from their mistakes, and Model 3 ramp has major issues like the X.

Now, I know we're on TMC and it's a fan club so anti-Tesla comments aren't appreciated, but I'm a Tesla fan and investor... so please don't take my comments as anti-Tesla. I'm trying to be constructive. That said...

I have my doubts as to if Tesla has really learned their lesson with Model X. Tesla/Elon points to hubris and the difficulty making the Model X as the main problem for the X issues, and they point to designing Model 3 with DFM (Design For Manufacturing) principles. I think that helps. But I don't think it hits the nail on the head.

In my opinion, I think the more important problem was that Tesla didn't do comprehensive enough testing on the Model X. They should have had 50+ Model X prototypes on the road, running all day in various instances in public and private places, and this should have gone on for at least 6 months prior to production. If they had done this, they would have caught all the major problems of the X and fixed them. The problem with the X, as I see it, is that they skimped on the testing. Tesla decided to "hide" the Model X from public and even when they showed the car, it seemed like they only have 4(?) prototypes. Even at the X reveal event at end of Q3 2015, one of the Model X FWDs wouldn't open and they had to remove it as a test drive vehicle. Even at the event, it was clear the FWDs had major issues. Perhaps it was because Tesla wanted to save money, but to have only 4 (again I'm speculating and could be wrong, but I'd like to see me proven wrong) test vehicles is crazy. And it's probably the main reason they didn't catch all the problems.

Yes, the Model 3 will be easier to manufacture. But they also have a much more aggressive ramp schedule with much larger volume goals. So, any problems will be magnified.

What I'm looking for is whether or not Tesla will show evidence that they have 50-100 test vehicles doing extensive and rigorous testing at least 6 months before production. If they do this, then I think Model 3 ramp will go great. If there's no evidence of this (and we still hear or see just a few to several prototypes in January 2017), then I'd be worried that Model 3 ramp will not only go slower than anticipated but also have more quality issues than expected.

And as a Tesla fan and investor, I'm hoping Tesla nails the Model 3 ramp.


I didn't see any evidence that Tesla had an extensive fleet of Model 3 test vehicles (ie., 50-100) in Jan 2017. In fact, I don't remember seeing any evidence that Tesla EVER had an extensive fleet of Model 3 test vehicles... but perhaps the vehicles at the Model 3 delivery event was their main batch of test vehicles. If so, that's sadly very late. And probably a big reason for this delay. There's obviously going to be parts to replace and things to fix, and having a test fleet of just 30 cars or so in July 2017 and claim that you're going to be producing thousands of cars/week just a few months later, is unrealistic.

Alright, now you can throw your stones at me.

I thought the Oppenheimer note said that the delay was due to supplier parts, so how can you blame Tesla on this?

 

[Intl Professor]

Random Thought

After hours is up, so is volume over 400,000 shares. I don't keep track of volume but I've seen many days of 80,000 or so. Does this portend what I think it does for tomorrow? No dry powder and an inveterate long so immaterial to me.

 

[AlMc]

This is what I wrote in September 2016 here:
Short-Term TSLA Price Movements - 2016

To me there are two main possibilities regarding effects of Model X ramp on Model 3:
1. Tesla learns from their mistakes, and does a much better job with Model 3.
2. Tesla doesn't learn from their mistakes, and Model 3 ramp has major issues like the X.

Now, I know we're on TMC and it's a fan club so anti-Tesla comments aren't appreciated, but I'm a Tesla fan and investor... so please don't take my comments as anti-Tesla. I'm trying to be constructive. That said...

I have my doubts as to if Tesla has really learned their lesson with Model X. Tesla/Elon points to hubris and the difficulty making the Model X as the main problem for the X issues, and they point to designing Model 3 with DFM (Design For Manufacturing) principles. I think that helps. But I don't think it hits the nail on the head.

In my opinion, I think the more important problem was that Tesla didn't do comprehensive enough testing on the Model X. They should have had 50+ Model X prototypes on the road, running all day in various instances in public and private places, and this should have gone on for at least 6 months prior to production. If they had done this, they would have caught all the major problems of the X and fixed them. The problem with the X, as I see it, is that they skimped on the testing. Tesla decided to "hide" the Model X from public and even when they showed the car, it seemed like they only have 4(?) prototypes. Even at the X reveal event at end of Q3 2015, one of the Model X FWDs wouldn't open and they had to remove it as a test drive vehicle. Even at the event, it was clear the FWDs had major issues. Perhaps it was because Tesla wanted to save money, but to have only 4 (again I'm speculating and could be wrong, but I'd like to see me proven wrong) test vehicles is crazy. And it's probably the main reason they didn't catch all the problems.

Yes, the Model 3 will be easier to manufacture. But they also have a much more aggressive ramp schedule with much larger volume goals. So, any problems will be magnified.

What I'm looking for is whether or not Tesla will show evidence that they have 50-100 test vehicles doing extensive and rigorous testing at least 6 months before production. If they do this, then I think Model 3 ramp will go great. If there's no evidence of this (and we still hear or see just a few to several prototypes in January 2017), then I'd be worried that Model 3 ramp will not only go slower than anticipated but also have more quality issues than expected.

And as a Tesla fan and investor, I'm hoping Tesla nails the Model 3 ramp.


I didn't see any evidence that Tesla had an extensive fleet of Model 3 test vehicles (ie., 50-100) in Jan 2017. In fact, I don't remember seeing any evidence that Tesla EVER had an extensive fleet of Model 3 test vehicles... but perhaps the vehicles at the Model 3 delivery event was their main batch of test vehicles. If so, that's sadly very late. And probably a big reason for this delay. There's obviously going to be parts to replace and things to fix, and having a test fleet of just 30 cars or so in July 2017 and claim that you're going to be producing thousands of cars/week just a few months later, is unrealistic.

Alright, now you can throw your stones at me.

I thought the Oppenheimer note said that the delay was due to supplier parts, so how can you blame Tesla on this?

While we can not definitely say the ramp issue is a 'Tesla problem' vs a 'supplier problem' I will give one of the examples I know of with the X ramp.

One reason given for the X ramp delay was the lifters for the FWDs. You may recall there was a lot of finger pointing by Tesla and the German manufacturer of the hydraulic lifters. Tesla severed ties with the supplier and the supplier sued Tesla. The dispute was settled. What terms I do not know. Now, as the story goes Tesla decided very late before production began of the X that electric lifters were 'better' than hydraulic ones and decided to go with the electric ones. So, there was a delay in getting quantity in of those lifters.

Was this a supplier issue or Tesla change at the last moment causing the 'supplier issue'.

I am not saying this type of problem is happening with the 3 ramp but it has with past new vehicle ramps so it is not out of the question.

 

[TMSE]

Yes, it’s very frustrating. I’ve contacted Tesla IR several times in the past regarding this and asked for fair disclosure (ie, all meetings with Tesla management where material info is discussed should be recorded and posted, etc) but to no avail.

It is not unusual for public companies to host meetings or information sessions with institutional investors or analysts while not divuging much details to the general public. Even Intel Corp, a paragon of corporate governance, does this frequently. A hilarious example, wherein a INTC bull and an author on SA went to great lengths to find out what happens behind those closed doors: Intel Developer Forum And 'Backroom Investor Day' - Privileged Group - Intel Corporation (NASDAQ:INTC) | Seeking Alpha

 

[GoTslaGo]

MACD had the downward cross at the beginning of July. It has been negative for almost 4 months, but the stock refuse to go down. This set up usually leads to big rally.

I assume you are referring to the weekly period.

 

[TradingInvest]

While we can not definitely say the ramp issue is a 'Tesla problem' vs a 'supplier problem' I will give one of the examples I know of with the X ramp.

One reason given for the X ramp delay was the lifters for the FWDs. You may recall there was a lot of finger pointing by Tesla and the German manufacturer of the hydraulic lifters. Tesla severed ties with the supplier and the supplier sued Tesla. The dispute was settled. What terms I do not know. Now, as the story goes Tesla decided very late before production began of the X that electric lifters were 'better' than hydraulic ones and decided to go with the electric ones. So, there was a delay in getting quantity in of those lifters.

Was this a supplier issue or Tesla change at the last moment causing the 'supplier issue'.

I am not saying this type of problem is happening with the 3 ramp but it has with past new vehicle ramps so it is not out of the question.

I read about the dispute, the hydraulic product from the supplier can't perform as promised. Otherwise Tesla wouldn't have gone the extra length to redesign the whole thing in house. It's a supplier problem.

 

[TrendTrader007]

Investing for outsized gains is not easy for most. You need a cautious side and a bold side. Most people err on just one side. They're either too cautious without the boldness needed to seize big opportunities. Or they're too bold without the caution (and due diligence) needed to handle their investments with care. Not too long ago, a bunch of people lost everything they had on GTAT, and those promoting that were people from this forum (but on another site). People got carried away at the possibilities of making a fortune and took too big risks at the expense of ignoring the cautious side.

I can tell you've developed a cautious side from your experience and you combine it with your bold side. You know there's a high probability (ie., 80%+) that TSLA stays above your cost basis, and makes a big run at some time... whether it's this year, next year, or the next. And you're dead set on riding that wave. But you also know when to get out when you need to get out. And you know not to make stupid bets, or if you make them you know how to cut your losses and get out. I think you're going to make a lot of money of your TSLA investment.

I would say though when you post possibilities, like "TSLA going to $2000 in 18 months" that you also add what probability you assign that possibility. Reason being is some folks are going to take that like you're 100% confident that TSLA will be a $2000 in 18 months. I know, it seems ridiculous that people would actually read your post, believe it to be 100% true, and go buy tons of calls off of that, but you'd be surprised. There are surprisingly a good number of people easily influenced by hype, and also lack the cautious side for whatever reason (lack of experience or temptation of quick gain). You'd think that nobody here has their entire net worth in TSLA OTM calls expiring within the next 6 months, but you might be surprised.

it would really be tragic for someone/anyone to make a bold short term bet on the magnitude of SP rise and lose out big.
some traders/investors are way too sure of themselves and they lose out big.
i'll tell you a little story. back in April 2015 i was extremely bullish on TWTR and i was carrying a position of 65K shares or so. i was very active on TWTR back then and thought the stock was going to the moon. there was this ex-hedge fund coach who had put her entire net worth in TWTR and had margined it 100%. i think she was carrying a position of 40k shares with half of them borrowed. on the morning of April 28, 2015 (when TWTR was going to announce its earnings after hours) i bought another 1000 shares at the open. then about 15 to 20 minutes after the open the stock started acting really funny. there was huge selling in high volume. i got a really bad feeling and i dumped my entire position of 66k shares at a $2 loss so i took a hit of about $130 K or so. i stayed out of TWTR and i repeatedly warned on TWTR that the stock was going to go down big. no one believed me especially this heavily margined trader. long story short, TWTR fell $18 that day. had i not liquidated my position i would have taken a loss of about $1 million. i then forecasted that TWTR was going down to $17 or so and nobody including this trader believed me and she actually blocked me on TWTR for talking negatively about the stock after she had lost tons of money on her position. i never found out what happened to her but i suspect nothing good.
in the stock market there are the quick and the dead and those who are unwilling to change their mind rather quickly lose out big. nothing is sure or sacred in the markets. when the times change you change or risk losing it all

 

[AlMc]

I read about the dispute, the hydraulic product from the supplier can't perform as promised. Otherwise Tesla wouldn't have gone the extra length to redesign the whole thing in house. It's a supplier problem.

There are two sides to that story. We each have one. No offense, I'll stick with mine but since I was not present at the time I can not be 100% certain.

My evidence: If hydraulic lifters were not the problem why not replace the German supplier with another hydraulic lifter supplier instead of going with electric.

 

[bdy0627]

Estimate of 3005 is rediculous why not 3006 or 3004. Giving an estimate of 3005 shows ignorance that the prediction can be that precise. Why not 3000? It’s not just form it indicates that there is a lack of understanding

It is bizarre that he would put that 5 in there. No idea why. But, I don't believe 3,000 at this point sounds ridiculous at all.

 

[TrendTrader007]

I assume you are referring to the weekly period.

you're correct. it's the weekly MACD. there is a curious negative divergence between SP and MACD similar to Oct/Nov/dec 2013 after which SP rallied 65% in less than 2 months ( i was long that time) and Spring of 2014 after which SP rallied 50% over 4 months
if this time is no different, especially since despite negative divergence and negative MACD we currently have a surprisingly strong 13 and 34 weekly EMAs i suspect with any good news we COULD (not will, Thanks Dave T) see a possible rally to $480 over the next few months?!
Take that to the bank Chanos!

 

[MP3Mike]

My evidence: If hydraulic lifters were not the problem why not replace the German supplier with another hydraulic lifter supplier instead of going with electric.

They didn't have time to roll the dice with another supplier. So they brought it in-house, and they didn't have the experience/knowledge to go with hydraulics. (They have experience/expertise with electric motors not hydraulics. )

 

[geneclean55]

Random Thought

After hours is up, so is volume over 400,000 shares. I don't keep track of volume but I've seen many days of 80,000 or so. Does this portend what I think it does for tomorrow? No dry powder and an inveterate long so immaterial to me.

Looks like over 400,000 shares traded hands between 4 and 4.01 pm. I guess this was some kind of late fill for closing trades of the day that just spilled into AH. It is a VERY large number for what was otherwise a fairly ordinary volume type day. Not sure what to make of it.
Papafox has some thoughts in his thread.

 

[AlMc]

They didn't have time to roll the dice with another supplier. So they brought it in-house, and they didn't have the experience/knowledge to go with hydraulics. (They have experience/expertise with electric motors not hydraulics. )

I will stand by my interpretation but will let this back and forth end as it was just to show that Tesla (Fremont) could be the (or one of the)
bottleneck(s) and not just a supplier.

 

[geneclean55]

Woot woot
Seems like it was a ~2 week delay.

Twig Mouse on Twitter

Received VIN on Sept 25
Body mated to drive-train ~Sept 25-26
Twig mouse hoped to receive car Oct 2-3
Twig mouse received car Oct 16

 

[FredTMC]

No idea if this is accurate or not. But the person does comment a lot on Tesla articles over on electrek.

View attachment 254363

Woot woot
Seems like it was a ~2 week delay.

Twig Mouse on Twitter
View attachment 254391
Received VIN on Sept 25
Body mated to drive-train ~Sept 25-26
Twig mouse hoped to receive car Oct 2-3
Twig mouse received car Oct 16

Nice. Do we have VIN?

Need more data points. AKA, more deliveries.

But great to see

 

[geneclean55]

Nice. Do we have VIN?

Need more data points. AKA, more deliveries.

But great to see

I didn't ask. Twig Mouse has been a great resource. Don't want to scare him off.

 

[AlMc]

I didn't ask. Twig Mouse has been a great resource. Don't want to scare him off.

Good news. Thanks

But, 246 produced in 16 days. Are we suppose to watch for things that end in 6?

EDIT: Thanks @geneclean55 ...fixed weeks to days..my bad