2017 Investor Roundtable: TSLA Market Action

[Zhelko Dimic]

Yeah, I got some buying done on the margin and negative account, thinking about doing exactly what you described (before number release).

Sold some at 219.8 earlier in the day, just enough to bring my account back to 0, instead of being in the red (on margin).

I feel today's selling may be result of profit taking, of many in similar situation like I was, and burnt by TSLA underperformance of the last 2 years.

If results are spectacular(27K+), I would not be surprised to open into $230, even $240. I feel anything above 24K would be still positive.

 

[austinEV]

Tesla Q4 2016 Production and Deliveries


PALO ALTO, CA -- (Marketwired) -- 01/03/17 -- Tesla (NASDAQ: TSLA) produced 24,882 vehicles in Q4, resulting in total 2016 production of 83,922 vehicles. This was an increase of 64% from 2015.

Tesla delivered approximately 22,200 vehicles in Q4, of which 12,700 were Model S and 9,500 were Model X. When added to the rest of the year, total 2016 deliveries were approximately 76,230.Our Q4 delivery count should be viewed as slightly conservative, as we only count a car as delivered if it is transferred to the customer and all paperwork is correct.

Because of short-term production challenges starting at the end of October and lasting through early December from the transition to new Autopilot hardware, Q4 vehicle production was weighted more heavily towards the end of the quarter than we had originally planned. We were ultimately able to recover and hit our production goal, but the delay in production resulted in challenges that impacted quarterly deliveries, including, among other things, cars missing shipping cutoffs for Europe and Asia. Although we tried to recover these deliveries and expedite others by the end of the quarter, time ran out before we could deliver all customer cars. In total, about 2,750 vehicles missed being counted as deliveries in Q4 either due to last-minute delays in transport or because the customer was unable to physically take delivery. Even where these customers had already fully paid for their vehicle, we still did not count these as deliveries in Q4.

In addition to Q4 deliveries, about 6,450 vehicles were in transit to customers at the end of the quarter. These will be counted as deliveries in Q1 2017.

Vehicle demand in Q4 was particularly strong. Q4 net orders for Model S and X, which were an all-time record for us, were 52% higher than Q4 2015 and 24% higher than our previous record quarter in Q3 2016.

Tesla vehicle deliveries represent only one measure of the company's financial performance and should not be relied on as an indicator of quarterly financial results, which depend on a variety of factors, including the cost of sales, foreign exchange movements and mix of directly leased vehicles.

Source: Tesla Motors, Inc.





News Provided by Acquire Media

 

[SBenson]

After hours price holding up quite well. Trading at 213 is not bad at all for the delivery numbers we see.

 

[Zhelko Dimic]

SP holding around $213 in AH, only $4 down! Tesla screws up again and is not severely punished - that's great, no one expect much.

If execution improved and Elon hears about that trick that many use called 'underpromise - overdeliver', we could be onto something in 2017!

My main point is, there is lots of negative sentiment around Tesla, sparks could fly with good news out of GF event tomorrow. I'm adding to my long term shares if there is a selloff tomorrow. Maybe sell some puts too

 

[NOLA_Mike]

SP holding around $213 in AH, only $4 down! Tesla screws up again and is not severely punished - that's great, no one expect much.

That's only fair since there was not much "reward" for last quarter's good delivery numbers.

Seems most of the MOMO is gone for now while $TSLA trades in a range. A significant breakout (either up or down) and it will be back.

 

[Papafox]

I'll be very curious to see vgrinshpun's numbers for the Fidelity short share drawdown/covering in the morning. Back in the pre-merger days, the shorts would take full advantage of a somewhat ambiguous result such as the Q4 delivery numbers. In their minds, this is a clear miss, but the after-hours traders apparently thought otherwise. Shorts would hammer the stock on opening in earlier days. Now, maybe not so much, we'll see. Back during the downtrend, any event that could be a catalyst for pushing the stock price down was an opportunity to make money as a short. Much has changed during this recent uptrend, and many moves by the shorts in recent weeks have proved to be money-losers. Shorting is a much dicier business during an uptrend.

The gigafactory event takes place a few hours after opening in the morning and the type of information that can flow from it could send the stock price higher. Thus, the morning would be a dangerous time to short-sell TSLA, even if it is tempting by previous ways of doing things. Maybe this short-sell deterrence is a big part of the reason why this event was scheduled for right after delivery number reveal.

 

[Mario Kadastik]

Ok, so TSLA did miss on deliveries due to the 22.2k number. However the fact that ca 2750 cars missed their boats and couldn't be delivered just because of timing on the customers means that they did manage to pull even after a down month of November through enough production to make effectively 24950, which is well in line with guidance of 50k in H2 '16.

So indeed the result is mixed. From the actual deliveries and production it's a miss. Then again taking into account the pipeline and the clear number of impacted cars that missed the haircut it's kind of in-line with guidance so this will be a very volatile day for trading as Papafox guessed too. Expect the SP to fly around wildly today especially with the GF event added to the mix.

The big question is what will the analysts expect the EPS etc be as those almost 3k cars are a hit to Q4 ER of the order 300M in revenue and ca 80M in earnings. That probably was the difference between + and -. So we might get downgrades if some analysts want to push it down.

 

[Runarbt]

...

The big question is what will the analysts expect the EPS etc be as those almost 3k cars are a hit to Q4 ER of the order 300M in revenue and ca 80M in earnings. That probably was the difference between + and -. So we might get downgrades if some analysts want to push it down.

Will they downgrade based on one Q?

The 3k cars missed this Q will be extra/bonus on Q1. Along with revenue from AP2.0 on an extra 20k cars, should make Q1 a sure strong positive?;-)

 

[MikeDog77]

Good news is demand is still there and is increasing. Not surprising as more people here about Tesla and Electric cars and they continue to expand their presence in more countries and states. In my opinion it is a little surprising that they are getting an increase in demand with the M3 still out there in the future.

With demand strong it is and always will be about Production. And for the first time since Q1 2014 their production numbers have gone down. I will be curious to here today what their per week rate was at the end of the year and after they solved the issues with the new AP hardware.

Do we have guidance for 2017? Forget the M3 for a minute, how many MS and MX will be made in 2017. I figure based on about a 15% increase in production per quarter they should deliver around 125k MS and MX. I am trying not to speculate on the M3 right now as there are too much unknowns.

I also think their financials will be stronger than their deliveries mainly because of these 2,750 cars that were paid for but not deliveries and the fact that they have been killing it in the energy storage business.

 

[vgrinshpun]

There were 364k shares available at Fidelity at 8:04am, with interest rate unchanged at 1%. There were 76.5k shares borrowed by 8:15am, indicating more borrowing activity than yesterday:

 

[vgrinshpun]

Good news is demand is still there and is increasing. Not surprising as more people here about Tesla and Electric cars and they continue to expand their presence in more countries and states. In my opinion it is a little surprising that they are getting an increase in demand with the M3 still out there in the future.

With demand strong it is and always will be about Production. And for the first time since Q1 2014 their production numbers have gone down. I will be curious to here today what their per week rate was at the end of the year and after they solved the issues with the new AP hardware.

Do we have guidance for 2017? Forget the M3 for a minute, how many MS and MX will be made in 2017. I figure based on about a 15% increase in production per quarter they should deliver around 125k MS and MX. I am trying not to speculate on the M3 right now as there are too much unknowns.

I also think their financials will be stronger than their deliveries mainly because of these 2,750 cars that were paid for but not deliveries and the fact that they have been killing it in the energy storage business.

I estimated it to be 2950 cars/week here. In Q3 shareholders letter Tesla indicated that they are working on expanding existing production capacity at Fremont. Hopefully this increase in throughput in last 4 weeks of the year was achieved due to increased production capacity rather than just OT. In any event, the combination of increased incoming orders and Tesla's ability to produce at the rate higher than 2500cars/week should instill confidence among thoughtful and diligent analysts.

 

[T3slaTulips]

Maybe this short-sell deterrence is a big part of the reason why this event was scheduled for right after delivery number reveal.

Except the event was scheduled well before they knew they would not complete those deliveries. The event is much more likely to have been scheduled based on CES.

 

[vgrinshpun]

122k shares were borrowed at Fidelity, a little less than yesterday (133k). Looks like not to many short sellers jump at this "opportunity"...

 

[doctoxics]

Looks like some big buy orders at the open. Could be a result of Gigafactory1 discussions at the dinner last night between Tesla management and analysts. As mentionsed above, production numbers and increased demand are other positives that may be at play this am.

 

[DriverOne]

Along with revenue from AP2.0 on an extra 20k cars, should make Q1 a sure strong positive?;-)

What revenue from what extra cars? They didn't sell 20K more cars due to AP2. Did they make more revenue from AP2? Possibly (it's a more expensive upgrade) - but then AP2 parts are also more expensive than AP1. I fail to understand your case here, please expand.

 

[tinm]

I wasn't expecting 219.75 this morning. I can only guess the elite investors invited to GF1 know something us retail investors don't. (How is that fair, again?)

 

[NOLA_Mike]

What revenue from what extra cars? They didn't sell 20K more cars due to AP2. Did they make more revenue from AP2? Possibly (it's a more expensive upgrade) - but then AP2 parts are also more expensive than AP1. I fail to understand your case here, please expand.

I can't speak for @Runarbt but I believe he's talking about the assumed inability of Tesla to recognize revenue from AP2 without actually delivering the functionality of AP2. If Tesla delivers the software in Q1 to enable AP2 then they would recognize all that revenue during that quarter.

Mike

 

[DriverOne]

Oh, I see, he did mention Q1. Now I understand, cheers for the clarification!

 

[Papafox]

Except the event was scheduled well before they knew they would not complete those deliveries. The event is much more likely to have been scheduled based on CES.

If you consider the 3Q delivery numbers and 3Q ER, in both cases good numbers were given and yet in both cases the gains of the events were very quickly eroded by shorts capping to keep TSLA below the 200 dma and then a combination of nervous longs and shorts selling. In the case of the 3Q ER, nearly all the gains of the event were lost during the first full trading day. Thus, three months ago even good numbers could be quickly eroded by heavy and creative shorting. Nice to see how things have changed in recent months.

The volume spikes are quite notable. Look at 30K, 40K, and even 60K shares traded within a minute's time.

 

[Navin]

Nice price action today. Someone must have gotten Elon drunk last night at the investor dinner