2017 Investor Roundtable: TSLA Market Action

[elasalle]

Today, Panasonic, Tesla’s partner for battery production at the Gigafactory, said that process automation has progressed and they now expect the output to “soon” increase.(...)

That would indicate at least one of the bottlenecks in the last week is still Batterie production.

Tesla Gigafactory battery production for Model 3 is about to increase, says Panasonic

This is old news (like 20-30days) .. statement was made post earnings/cc for panasonic .. a lot could have changed by now .. hopefully all for the better

 

[bdy0627]

I added on the dip today. Very little powder left. However, on a huge dip I would find a way to free up some more buying power.

 

[myusername]

20 day... then 1yr:

if charting magic works... then that was a bear flag and a the continuation would be deep into the $200s.

 

[Tslynk67]

Doesn't seem a specific TSLA issue, whole tech-sector's getting hammered...

 

[bdy0627]

I think we are getting the dip I thought we would before climbing. If you look at the chart, there is a pattern where we rarely climb substantially from a very modestly positive consolidation period without first dipping. I don't know how far we will dip, but I think this now creates a more typical setup for us to climb in the coming weeks.

 

[bdy0627]

Doesn't seem a specific TSLA issue, whole tech-sector's getting hammered...

Yes, definitely not TSLA specific at all. We will see how the recovery goes. TSLA may not recover as much as some others. I kind of hope to see it close about where it is as I like the setup for an ultimate climb.

 

[pdq]

future high end versions will be using megacharger. current model S owners can only use supercharger at best.

Jack:

The superchargers are meant for drivers on long trips to eliminate range anxiety, not for locals. I've used them on trips of 300+ miles, and they are great. I pull in with 15 - 20% battery, take a bathroom and coffee break coming back 20 - 30 minutes later and I'm at 75-80% and I'm on my way. I don't see why Tesla should spend money (that they don't have) on a new line of mega chargers.

pdq
'15 P90D

 

[Waiting4M3]

This is old news (like 20-30days) .. statement was made post earnings/cc for panasonic .. a lot could have changed by now .. hopefully all for the better

I don't know why Fred is rehashing old news from Panasonic's 2Q ER call from Oct 30. If there is something new, he should have linked to it. If there is no credible source that this is newer than Oct 30, this seems a little click-baity.

 

[Doit]

Doesn't seem a specific TSLA issue, whole tech-sector's getting hammered...

Yes; today is Jun. 9th Déjà vu. On that date, both TSLA and NVDA had ATHs and went down dramatically (NVDA -15%, TSLA almost -6%). It was a section rotation and money went from tech to biotech/healthcare. Exactly the same today (in term of rotation).

 

[myusername]

I think we are getting the dip I thought we would before climbing. If you look at the chart, there is a pattern where we rarely climb substantially from a very modestly positive consolidation period without first dipping. I don't know how far we will dip, but I think this now creates a more typical setup for us to climb in the coming weeks.

are you saying the $40 cliff drop after earnings wasn't enough?

 

[myusername]

Fidelity. #1 shareholder of TSLA.

Technical issue cripples Fidelity, blocks access to all online accounts

"Spokesman Mike Aalto told CNBC that the issue was not the result of malicious activity."

um... so they're just cutting off their customers while they move a few trillion dollars around?

 

[CorneliusXX]

another pre-market block sale? i never make recommendations... but if I were going to, I'd say "don't buy the dip today".

You mean pretty market block purchase?

 

[avoigt]

This is old news (like 20-30days) .. statement was made post earnings/cc for panasonic .. a lot could have changed by now .. hopefully all for the better

Yes I have been aware that the cell pack level was named as the issue. However the nature of a production line is that you won't have just the one bottle neck to solve. Its an iterative process and on the way you find here and there new issues to solve which is one of the reasons why we have a ramp curve and not the one fix and a step.

And yes this message has been provided before but its all but old news as that this is news of today and sheds a new light on it. Every data point helps to paint the picture. Even if it sounds like "has been said" before which is BTW absolutely true its a different thing if its said again today. It worries we a little as Panasonic seem to have worked on that one quite a while and the statement is not " we have solved it today".

So what I am trying to say is that this is a new data point and I doubt that we deal with the one and only bottle neck and issue.

 

[neroden]

I tend to share this view. My short term price projection is $365/share in 2017/18, which is based on anticipation of good chance of reaching 500k total production for S/X/3 and some Tesla Energy deployments in 2019.

I don’t foresee share price going into the $600 range until 1M vehicles/year and 5B in Tesla Energy are within reasonable reach.

See, I would share this view, but I also didn't see the price going into the $300s until next January, so apparently I tend to be bad on guessing the timelines for this sort of stuff? The market anticipates.

 

[neroden]

New Morgan Stanley note just out, price target unchanged. Hmm, questionable title surely will generate some headlines:

Tesla 2018: $400 then $200?

In this note, Adam Jonas explains that he expects a rise to $400 level in first half of 2018 from Model 3 production ramp and resulting incoming cash flow. Then in the second half of the year, he predicts serious headwinds to come to the forefront (negative catalysts) that push the stock back to $200 levels.

It is not entirely clear what he thinks those headwinds are, other than reiterating two key drivers he listed in May this year when they downgraded the stock:

(1) our view that the global addressable market may not be as accessible as the market expects, and (2) increasing encroachment from consumer electrics and mega-tech firms who are planning comprehensive strategies focused on shared, electric and autonomous transport systems in direct competition with Tesla.

When Jonas is bullish he seems to be living on another planet (not Mars); his valuation models disregard things which are already happening (stationary batteries) and puts high value on highly speculative things (fully autonomous robotaxis). His latest "analysis" seems to have the same problem. He is calling the global addressable market into question? This means he doesn't understand *anything* about cars. And he thinks other firms are providing direct competition? Uh, wake me when that actually happens.

Jonas's analysis is worthless. It isn't even usable as a contrarian indicator, like some of the absolute worst analysts -- it's just gibberish.

 

[Waiting4M3]

When Jonas is bullish he seems to be living on another planet (not Mars); his valuation models disregard things which are already happening (stationary batteries) and puts high value on highly speculative things (fully autonomous robotaxis). His latest "analysis" seems to have the same problem. He is calling the global addressable market into question? This means he doesn't understand *anything* about cars. And he thinks other firms are providing direct competition? Uh, wake me when that actually happens.

Jonas's analysis is worthless. It isn't even usable as a contrarian indicator, like some of the absolute worst analysts -- it's just gibberish.

AJ knows nothing more than the rest of Wall Street in traditional auto, that's why he can't see the valuation of Tesla based on what they're doing with MS/X/3/GF/Alien Dreadnought. He also doesn't get energy infrastructure, so no TE/solar for him. But he does want to pretend to be the leader of the pack in auto, so he throws up "autonomous fleet" all the time. He knows he can say anything he wants about autonomy because none of his traditional auto buddies know how to evaluate that either but they all want to talk about it, so he won't be laughed out of the clubhouse. But if he goes out on a limb about EVs and clean energy paradigm shift, he would.

 

[neroden]

I agree. Except for huge companies with enough cash available, the average trucking company wants an immediate return on their investment (= the purchase of a semi). This is why I believe that the semi reservations will only start to really ramp up close to first deliveries, i.e. 2019. The early adopters do it mainly for PR-reasons, future savings second.

I think the orders of 1, 5, or 10 trucks are all basically for testing, and the PR is the second reason for them.

But then there are the rumored, but not confirmed, larger orders of 100 trucks or more. I believe these from companies which are hoping to "steal a march" on their competition: by getting their reservations in early they hope to be running electrified fleets a year or two before their competitors have a chance to, and they hope to use that to steal market share and drive their competitors out of business. In that context, it makes sense that we've only heard about these from private off-the-record secondhand comments, because they don't want the competitor to know that they're doing it until the waiting line for Tesla Semis is really long and the competitor *can't* get into line early enough to match them on deployment date.

 

[neroden]

VA based on my limited accounting experience, now restricted to watching and tracking happy face days and sadly unhappy face days on Excel; I assume there must be a line or two on the quarterly fillings that reflect the reservations.

Tesla lumps all reservation deposits (Model S, Model X, Model 3, Semi, Roadster, Founders Roadster, Powerwall, Powerpack, Solar Roof) onto one line in the accounting, which makes it hard to sort out *which* products got how many reservations. I think this is fairly deliberate and they don't want to break it out by product.

If true, then we can extrapolate (close anyway ~ plus or minus ten founders Roadsters) how well the reveal actually went. Therefore, unless Elon tweets the number of reservations per category, we should be able to come up with a best guess scenario.

We won't be able to tell the difference between a boom in Semi reservations, a boom in Roadster reservations, a boom in Model 3 reservations, and a boom in Powerwall reservations.

 

[neroden]

That's true for lots of buybacks. It's not true for other cases. It's all relative. Great management usually give growth higher priority than buyback. If you know your company's future earning will be $100 per share per year, and your share price is only $120, then buyback is a no brainer.

If you look at Google, Apple, Berkshire Hathaway's buybacks in recent years, the main reason was they think their shares were undervalued. Not because they run out of ways to expand.

Actually, Berkshire basically has run out of ways to expand and Buffett has been complaining about it. A stock buyback is definitely another option, and the way he figured it, if he couldn't find any other company at a good price, he could buy his *own* at a good price. However, if he'd found a better expansino opportunity, he would have done that instead.

Also Buffet has always said that if the BRK shares aren't undervalued and he can't find good companies to buy... he'll pay a dividend. I'm not sure he has the discipline to do so after all these years of not doing so, but he's been seriously talking about doing so within five years, *because he can't find anything else to invest in*.

Let me be clear: this is good. If your company can't find a good way to grow, buybacks or dividends are way better than blowing money on BAD attempts to grow, which is what a lot of managements do (most major oil companies right now, for example). But while there are still obvious good ways to grow, you take them, and there still seem to be a lot for Tesla.

 

[3Victoria]

We won't be able to tell the difference between a boom in Semi reservations, a boom in Roadster reservations, a boom in Model 3 reservations, and a boom in Powerwall reservations.

I'll take a *bloom* in any of them!