2017 Investor Roundtable: TSLA Market Action

[3Victoria]

Tesla fears the Osborne Effect precisely because people will think the Model 3 is almost as good as the S but only costs half as much.

Tesla is in a difficult position because the S is already lacking in creature comforts compared to other cars which cost $70k to $140k. Because of the lack of luxury interior, it will be difficult to differentiate the 3 from the S in many comparable factors which matter. We already know the 3 will have very good range, acceleration, and styling. So these are things it is close to the S on. Tesla's positional challenge is that they have very little they can downgrade from the S to the half-priced 3, because the S is already very spartan in terms of the interior and there isn't a whole lot that can be removed. It's safe to say that removal of the driver's instrument cluster is a pretty ham-handed attempt at finding something, anything, that can be removed to differentiate 3 from S.

It's very, very unclear at this time what effect the 3 will have on S/X sales. If the 3 really is 85-90% as good as the S for half the price, it will dramatically Osborne Effect the S because it will indeed serve as a replacement for the S for all intents and purposes. That being said, if Tesla is busy selling the 3 at a 10:1 ratio to the S, in the end it won't matter because revenue will be so much higher that it will easily offset sales declines in the S/X.

3s are for plebs, so for those that want to be special and display their 'success', they will buy S and X. What S/X sales Tesla loses due to the 3, will be made up by the increased numbers of people becoming aware of the cars. All Teslas will (continue) to ramp up. (And, I expect some classy upgrades to the S/X.)

 

[NicoV]

We don't know how many employee orders there are, but I would expect orders to go by some seniority and engineering, line and then sales. if they have 10 to 12,000 employee orders November is within guidance. Employee orders between Tesla and solar city should be at least 10,000 and could be closer to 20,000.

We also don't know how many of,those want a dual drive car.

 

[Intl Professor]

For some of these guys, who aren't talking out of both sides of their mouth, I think they're simply out of their minds. Just plain crazy. People can be quite intelligent and believe obvious nonsense, *if they're crazy*.

Please define crazy for me.

 

[Intl Professor]

Or worse, if they summoned them. If the car is parked at least you know where it is. If the car moved on its own, along with 100s of other M3 of the same color, how do you know which one is yours?

Ohmman knows, it would be maximum plaid.

 

[jbcarioca]

Please define crazy for me.

DJT

 

[Runarbt]

Tesla fears the Osborne Effect precisely because people will think the Model 3 is almost as good as the S but only costs half as much.

I think they have it covered.

Compare Model S and Model 3 | Tesla

 

[Intl Professor]

DJT

You made me think but I finally got it. (An old dog, you know.) Dual joint thinking, of course.

 

[Words of HABIT]

TSLA is up 80% in the last 6 months and over 50% YTD. Is there still room to gap up?
However I like using another timeframe. TSLA is up only 10% since Sept 7, 2014, more than 2 years, 8 months ago. Think of what Tesla Motors has done since then. Now is there still room to gap up?

 

[winfield100]

Please define crazy for me.

200+ mike's

 

[MitchJi]

Possible ignitions for a short squeeze:

1. Gigafactory 3/4/5/6 full build-out guidance: timeline (by 2020/21) or cost (less than $5 billion) or capacity (more than 1.5m/yr each)
2. Max capacity revisions to Gigafactory 1 or 2 to 1.5m+ cars/yr and 2GW, respectively, by 2020.
3. Why else acquire Grohmann?

1. The cost will definitely be less!

2. Alien dreadnaught production technology will lead to more car production at each Gigafactory, but cell production won't inrease substantially.

3. The same reason that Frank Loyd Wright would use the best builder he can find to implement his vision. Elon had his Production Epiphany, not Grohmann. Grohmann are merely the best people that he could find to implement that vision.

 

[Curt Renz]

After reading some of his "Tesla killer" series, one of which included some offering from Jeep, I would not use "honest" in reference to Walhman. I don't believe for one minute he's dull enough to actually believe what he writes.
Also this Investors Win Victory Against UBS Warburg in Analyst Research Lawsuit

He still seems to not understand or pretends to not understand that Tesla cars have quite positive sales margins, i.e. each car delivered adds nicely to net profit and does not subtract.

The related section of the video published today in which he appears begins at the 11:53 mark.

 

[tinm]

Long-term long here, who's always wanted to accumulate more shares.

Does it seem likely to anyone else that the stock might be going to fall pretty hard in early July due to Tesla probably reporting a drop in S and X sales in Q2? It's tempting to sell some shares in the 325 range and see if I can then re-buy more around 300 or less, as the market goes through a short-term overreaction. Thoughts?

 

[MitchJi]

I think the last great TSLA buying opportunity will soon be upon us. I expect a significant but temporary dip in 4Q17 that will be the result of the Model 3 Osborne effect on MS and MX sales

coupled with production delays on the 3 itself. The Osborne effect will become clear in late 2017 as S sales figures for the year come in. At the same time, the 3 production line will experience inevitable growing pains.

Not going to happen! The price reductions on the MS-MX, along with possible improvements will cause an increase in demand. That will also blindside the oem's who will be trying to sell viable alternatives. This will cause an SP bump when the market figures out that Tesla has a much bigger advantage than they have been given credit for.

I would not say that significant M3 production delays are inevitable.. Likely some delays, but enough to cause the SP to dip? I think its 50/50.

 

[Curt Renz]

Long-term long here, who's always wanted to accumulate more shares.

Does it seem likely to anyone else that the stock might be going to fall pretty hard in early July due to Tesla probably reporting a drop in S and X sales in Q2? It's tempting to sell some shares in the 325 range and see if I can then re-buy more around 300 or less, as the market goes through a short-term overreaction. Thoughts?

My post from 2013 MAR 12: Short-Term TSLA Price Movements - 2013

The final paragraph is pertinent. Also study the surrounding posts.

 

[MitchJi]

@elasalle posted:
Haven't seen this chart before, what does it represent? thanks.

The amounts that the options are worth for given strike prices at particular dates. Red amounts are negative and green amounts are positive.

Sorry, I usually post the link to the site:
Long call calculator: Purchase call options

 

[winfield100]

He still seems to not understand or pretends to not understand that Tesla cars have quite positive sales margins, i.e. each car delivered adds nicely to net profit and does not subtract.

some of us (me) have suspicions the articles are just for clicks and eyeballs and pennies per click

 

[LargeHamCollider]

My post from 2013 MAR 12: Short-Term TSLA Price Movements - 2013

The final paragraph is pertinent. Also study the surrounding posts.

Thanks for these, trying to be clever with TSLA resulted in me making less than I otherwise would have in 2013, it's good to be reminded.

 

[Curt Renz]

some of us (me) have suspicions the articles are just for clicks and eyeballs and pennies per click

Then again they may be short TSLA, or are being paid much more than pennies by those with interests contrary to Tesla, i.e. short sellers, other automakers, auto dealerships, oil companies or the Koch brothers who are known to be offering millions to those engaging in anti-alternative energy campaigns.

They like to refer to "cash burning" by Tesla rather than the investment of revenues in the rapid growth necessary to compete against long established capital intensive industries.

The video appeared to be a "bait & switch" effort by ostensibly drawing viewers seeking an explanation of EV tax credits, before turning into a tirade about the value of TSLA shares.

 

[GoTslaGo]

Long-term long here, who's always wanted to accumulate more shares.

Does it seem likely to anyone else that the stock might be going to fall pretty hard in early July due to Tesla probably reporting a drop in S and X sales in Q2? It's tempting to sell some shares in the 325 range and see if I can then re-buy more around 300 or less, as the market goes through a short-term overreaction. Thoughts?

IMHO,

I wouldn't sell. I would position to buy more. I sold a small amount as the stock ran up in January and have regretted it since (good thing it was a small amount, and getting smaller as I've accumulated more since).

I agree that there may be a drop in stock price in the summer/fall (historically there usually is weakness in the stock market during these two seasons), but I suspect it will be something like 400 to 350. We may see the stock come down to 290s, but doubt much lower than that, and who among us would be prescient enough to be positioned to take advantage of that. Also historically stocks tend to do well q4 and q1 the following year (assuming no catastrophic events...).

Unless S/X sales numbers are incredibly weak for q2 (which I doubt), I doubt that the SP will plummet in July for the simple reason that all eyes are really on Model 3 right now. The issue will be how quickly Model 3 can ramp, what the quality and capabilities of the Model 3 will be. As the Model 3 becomes more real everyday I suspect we will see a strong up-surge in the price through early summer (barring catastrophic macro).

Now after the Model 3 comes out, I suspect the FUDsters will figure out ways to spin it negatively and this may cause some weakness in the SP, but likely later in the summer and early fall (I already have FUD article titles floating in my head about the Model 3, but will not post, they need to make it up themselves). These are also typically weaker/low volume periods in the market. But this weakness will likely be buttressed by expectations for the Tesla Semi (out late September).

So those are my current expectations for TSLA. I will not be selling anytime soon, and positioned/positioning to accumulate more.

 

[ValueAnalyst]

1. The cost will definitely be less!

2. Alien dreadnaught production technology will lead to more car production at each Gigafactory, but cell production won't inrease substantially.

3. The same reason that Frank Loyd Wright would use the best builder he can find to implement his vision. Elon had his Production Epiphany, not Grohmann. Grohmann are merely the best people that he could find to implement that vision.

1. Why? How much do you expect next-gen Gigafactories to cost? How much time do you expect them to take vs five years for Gigafactory 1?