2017 Investor Roundtable: TSLA Market Action

[Runarbt]

Looking for another way to make money out of this run up. anyone tried to sell puts? How does this work?

Edit: nah.. looked it up on optionsxpress, and realize i need to have money to buy the stock available while the put is active. So one 300put 2019, will make me 8000, but tie up 30000 the whole time it is active.

I think my money is put (no pun intended) better to use buying itm calls than selling puts.

And if my only wish was to buy stocks at a lower strike, selling puts at my wanted buy price would be the way to go. Get the put money, and in case of a dip, also get to buy the stock at wanted price level. Better than running after the sp waiting for a buying opportunity which may never come.

 

[GoTslaGo]

Looking for another way to make money out of this run up. anyone tried to sell puts? How does this work?

I think you need to talk to @neroden.

 

[Capn Bob]

but... wouldn't test drives come first?... it says "for current reservation holders"... which makes sense. who's going to slap down $40k+ without ever setting their eyes on the car?

i mean... I know some of you guys would... but you're a little nuts.

Well, @myusername, if you're looking for the ultimate "nuts" guy on here to pour scorn on, I may hold the title.

Without ever having seen a Tesla in person, I ordered a Model S P90DL at the start of 2016 for delivery to Spain, at large import expense, without any service or support structure in the country. Since then I've accumulated 20,281 shares, mostly with borrowed money. Oh, and TSLA is the first and only stock I've ever bought.

Is that "nuts" enough for you?

From where I'm standing, 2.8 million Euros up and hooning around in a Lambo killer, I'll take "nuts" over "Debbie downer, permabear, glass-half-empty, TMC troll" any day.

Let's meet here again in 5 years, we'll compare bank balances and see who's calling who "nuts" then, haha.

 

[ValueAnalyst]

I suspect we gap up tomorrow.

InsideEVs published this too. Tesla To Deliver 83,000 Model 3 Sedans In 2017?

This is in-line with my 75,000 delivery estimate, which I made here months ago but received many "disagrees" at the time...

I'm not gonna mention any names @DaveT

 

[ValueAnalyst]

I think my money is put (no pun intended) better to use buying itm calls than selling puts.

I never understood why people don't claim the puns they accidentally run into...

it's like finding a $20 in your pocket, and throwing it in trash.

 

[techmaven]

I suspect we gap up tomorrow.

InsideEVs published this too. Tesla To Deliver 83,000 Model 3 Sedans In 2017?

A number of us visited the factory recently. We signed NDA's. I'm not going to get into specifics. However, Ben Sullins here should have called out Steve Funk as being completely clueless. The NUMMI lines no longer exist. There is no NUMMI truck line or small car line anymore. Anyone that has "seen" the factory through the National Geographic specials and Tesla videos and is familiar with the original NUMMI knows this. We already knew there was a Body in White line #1 that was built for the S and was reconfigured at least once. We already know there a new Body in White line #2 that was built at considerable expense for Model X. We already know that the original South Paint Shop was replaced by the North Paint Shop through the Bay Area Air Quality Management District permits.

Mr. Funk may have had some automotive factory expertise, but he clearly knows almost nothing about Tesla's Fremont factory and is just wild ass guessing. Tesla states that they can build 500,000 vehicles at Fremont and the new paint shop was contracted to build that many:
Tesla Motors building the world’s most advanced paint shop – with Eisenmann technology - Eisenmann SE

As for the Model 3 ramp... well, let's just say that I want to temper expectations as it is dangerous for investors to get too optimistic. I would love to see 80,000 Model 3's this year, but there are also ramifications for a number that big. Before the VIP tour, I was guessing 20-30k, with very few in July and August. I was hoping for some people outside of Tesla/SpaceX to configure vehicles in October and get some deliveries in November. I think that level of expectation is reasonable and healthy. Remember, the bears thought either bankruptcy before Model 3 launch, or maybe 2019, then maybe 2018, now Tesla is going to be a failure by delivering in 2017 because they will lose so much money on each one.

 

[techmaven]

in this video he states (from the article):

"Tesla is projecting to produce “1,000 vehicles per week in July, 4,000 per week in August and 5,000 per week in September, before hitting the target of 10,000 vehicles per week sometime in 2018.” In 2018, the goal is to produce 400,000 vehicles."

The way he put is... this is what Tesla has projected.

Does anyone have any references where Tesla actually said this? I do not recall this coming from the CC.

The full quote from the Q4 earnings transcript:

Well, I feel pretty confident that we should get there by the end of this year, to 5,000 a week. Now, I do want to separate this from parts orders. I know a number of our suppliers are listening. It's impossible to keep – like nothing is a secret these days, it seems. Yes. It's like major intelligence organizations cannot keep a secret. It's like, really – I don't know who can, honestly. So, when we place parts orders with our suppliers, we've told them 1,000 a week in July, 2,000 a week in August, and 4,000 a week in September. These are parts orders. Then the parts need to arrive. They need to be turned into a car. And the car needs to be delivered to customers.

None of these things occur instantaneously. And we have what I call, like, maybe the term paper problem of, like, I was a teaching assistant in college. And no matter what date we set the exam paper for, when the term paper was due, there's always like some number of people that are late. It's just the way it goes. People sometimes – well, and I'm guilty of this too. Like too optimistic about the timing or they get unlucky or something like that.

So, we have to set these really strict dates, then some number of people are late, but it only has to be (34:27) 1%, and then we either have to make those parts manually at great cost or slow down the production rate. And when I say great cost, when you make something manually as opposed to through mass production, it can be 10 times, 20 times, 30 times more than a part that's handmade as opposed to made with high volume production equipment.

So, that's essentially – I'm trying to give you, like, what's the problem space look like in my head so that you can at least try to model it. You know what I know. And if I knew which 1% of suppliers it was, right now, I would honestly take action. But I don't because I don't know who's going to be unlucky. I don't know who's being really optimistic. But the 1,000, 2,000, 4,000, those are the deadlines we've set out for our suppliers for parts delivery and then parts get made into cars, cars need to get delivered. Those are three separate steps.

These numbers are what they ordered from suppliers... that might not get delivered. The parts might not be of sufficient quality. They might not be of sufficient volume. There might be problems with the design. There will be problems with production ramp. And so forth.

Of one were extremely optimistic, I'd take 50% of those numbers and push them back one month. So, maybe 100 total in July (mostly hand built or corrected/finished), 500/week in August, 1,000/week in September, 2,000/week in October, and 3,000/week in November, and 4,000/week in December, with hitting near 5,000 a week in the end of December. That's 40,000 or so. I think that's as optimistic as one can get. Half that number... 20,000 would still be a big win.

We have to be prepared for 5 in July, 10 in August, 500 in September. For reference, here are the production ramps for the S and the X:

S: 12, 19, 43, 86, 300, 400, 1790, 1200, 1400
X: 6, 4, 5, 199, 214, 270, 270, 1860

On the 7th month, S went to thousands. For the X, it was the 8th month. However, there is another factory change that is worth noting... July 2014. They reconfigured the factory at that point. Installed a series of new robots, altered the general assembly area dramatically to build the dual drive Model S and eventually the X. Then go look at their production numbers... ramp afterwards was pretty good.

 

[Reciprocity]

My issues with @myusername are not that they seem to spread FUD, but that they are not very good at it and that it is mostly pointless to FUD it up in this forum. They should try Twitter or stock twits where the FUD can really do assume good and pull in some big whale shorts. More shorts = more squeezeyness. FUD has not deterred the stock and shorts are responsible for several short covering rallies because shorting a stock does not in and of itself have the power to drag the stock price lower. More shorts more upside. This really leads me to believe that smart money is behind much of the FUD, driving up the chances of a squeeze and the size.

 

[Reciprocity]

A number of us visited the factory recently. We signed NDA's. I'm not going to get into specifics. However, Ben Sullins here should have called out Steve Funk as being completely clueless. The NUMMI lines no longer exist. There is no NUMMI truck line or small car line anymore. Anyone that has "seen" the factory through the National Geographic specials and Tesla videos and is familiar with the original NUMMI knows this. We already knew there was a Body in White line #1 that was built for the S and was reconfigured at least once. We already know there a new Body in White line #2 that was built at considerable expense for Model X. We already know that the original South Paint Shop was replaced by the North Paint Shop through the Bay Area Air Quality Management District permits.

Mr. Funk may have had some automotive factory expertise, but he clearly knows almost nothing about Tesla's Fremont factory and is just wild ass guessing. Tesla states that they can build 500,000 vehicles at Fremont and the new paint shop was contracted to build that many:
Tesla Motors building the world’s most advanced paint shop – with Eisenmann technology - Eisenmann SE

As for the Model 3 ramp... well, let's just say that I want to temper expectations as it is dangerous for investors to get too optimistic. I would love to see 80,000 Model 3's this year, but there are also ramifications for a number that big. Before the VIP tour, I was guessing 20-30k, with very few in July and August. I was hoping for some people outside of Tesla/SpaceX to configure vehicles in October and get some deliveries in November. I think that level of expectation is reasonable and healthy. Remember, the bears thought either bankruptcy before Model 3 launch, or maybe 2019, then maybe 2018, now Tesla is going to be a failure by delivering in 2017 because they will lose so much money on each one.

I love Ben's work but you cannot compare building an icev to and electric one and you can't compare 1990's volumes to what can be achieved with modern robots. An EV is much simpler to manufacture and automate. Did GM/Toyota make engines and transmissions and Axel's at nummi? Even if not, neither does Tesla. I'm pretty sure that Tesla has targeted closer to 1M cars from nummi based on 2 lines for model 3 (currently only 1 being installed) then speeding up those lines over time as the process is refined to be more highly automated. It's either that or they will need a new car factory soon to hit 1M in 2019.

 

[techmaven]

I love Ben's work but you cannot compare building an icev to and electric one and you can't compare 1990's volumes to what can be achieved with modern robots. An EV is much simpler to manufacture and automate. Did GM/Toyota make engines and transmissions and Axel's at nummi? Even if not, neither does Tesla. I'm pretty sure that Tesla has targeted closer to 1M cars from nummi based on 2 lines for model 3 (currently only 1 being installed) then speeding up those lines over time as the process is refined to be more highly automated. It's either that or they will need a new car factory soon to hit 1M in 2019.

Ah... Ben's work was total crap in this video. And Tesla makes the S/X motors, battery packs, drive units, and so forth at Fremont whereas the equivalents to those were not assembled at NUMMI. I do not believe that an EV is inherently materially simpler to manufacture and automate, certainly not at the final assembly plant and certainly not what Tesla had been doing up until now. With that said, I do believe Tesla is pushing automation in a new way just by the commentary of the new manufacturing boss hired from Audi.

Oh, crap... I just realized I've been commenting in the TSLA market action thread. Argh.

 

[SBenson]

 

[Runarbt]

View attachment 231528

This confirms that short positions stay aprox at 10billion. The sp rise past half year has lead to adjustment in short positions, and slow covering to keep total short positions at 10billion.

A steady rise in sp followed by a steady slow covering, might if sped up maybe turn completely self-propelled?;-) then we might get a propper short squeeze?

 

[SBenson]

View attachment 231528

A couple of notes

This data is more of an educated guess or an estimate. Probably best there is for timely daily data. Overtime trends align with exchange data but don't match spot on.

Having said that if the pattern were to repeat we should see continual covering and an associated rally just about now.

The silly macro winds keep interfering with the trend or else we would have been in 400s already by now.

 

[Irishjugg]

TSLA is not available in my 401K. I've already moved from a SP500 fund to a bluechip growth fund which has TSLA, and last few months it has kicked SP500's a$$. I also might be leaving my job soon, so thinking about rolling the 401K to an IRA and put more into TSLA.

Open a solo 401k and move the money to that. You can call the current 401k plan administrator and ask "Does anything in the plan document prevent me from doing an in-service transfer?" Asking it that way gets around the whole they don't want you moving the money out issue. If nothing prevents you from doing so, then you can open a solo 401k and do the IST to it then invest in whatever the hell you want, TSLA, actual real estate, whatever.

EDIT: I've since realized this discussion was moved. Mods, please feel free to move my posts on the topic to the proper place.

 

[BornToFly]

Could the opening of the store and pending delivery of hundreds of cars in Dubai mean there are about to be some new TSLA buyers with really big pockets? Tesla vehicles arrive by the hundred in Dubai as the first store/service center is about to open
TSLA is the first and only stock I have ever purchased, and it all happened after I got my first Model S in 2013 and realized how special it was (and quickly sold my nearly new Porsche 911S).

 

[Irishjugg]

Someone had said take a 401K loan, I would not do this if you are leaving your job as you have to pay back the loan withing some period of time, like 6 months at most, after you leave your job. I would assume you wouldnt be able to roll it over until you pay back the loan either. My 401K has some tech funds with 4-5% Tesla holdings.

Edit: I would suggest rolling it over when you leave your job then convert it to Roth. That way when your Tesla stock goes to $2000/share, then you wont pay taxes on it when you retire.

It's 60-90 days depending on plan something like 90% of the time.

Also, you would technically be able to rollover without payingthe loan first but that would instantly default the loan and you would pay taxes on the outstanding loan amount.
Source: I have 48 days left

A Solo 401k is a better option.

 

[myusername]

View attachment 231528

also... your list is showing 5/15 and 5/31 at different levels than what was actually reported and being shown on nasdaq's site. is there a reason for this?

nasdaq shows:

5/31: 30.960m shares
5/15: 31.692m shares

meaning a drop of only 650k... whereas yours shows a drop between those dates of 2.45m.

 

[everman]

The full quote from the Q4 earnings transcript:



These numbers are what they ordered from suppliers... that might not get delivered. The parts might not be of sufficient quality. They might not be of sufficient volume. There might be problems with the design. There will be problems with production ramp. And so forth.

Of one were extremely optimistic, I'd take 50% of those numbers and push them back one month. So, maybe 100 total in July (mostly hand built or corrected/finished), 500/week in August, 1,000/week in September, 2,000/week in October, and 3,000/week in November, and 4,000/week in December, with hitting near 5,000 a week in the end of December. That's 40,000 or so. I think that's as optimistic as one can get. Half that number... 20,000 would still be a big win.

We have to be prepared for 5 in July, 10 in August, 500 in September. For reference, here are the production ramps for the S and the X:

S: 12, 19, 43, 86, 300, 400, 1790, 1200, 1400
X: 6, 4, 5, 199, 214, 270, 270, 1860

On the 7th month, S went to thousands. For the X, it was the 8th month. However, there is another factory change that is worth noting... July 2014. They reconfigured the factory at that point. Installed a series of new robots, altered the general assembly area dramatically to build the dual drive Model S and eventually the X. Then go look at their production numbers... ramp afterwards was pretty good.

I agree with this realistic scenario as well. I work in high volume manufacturing and many or all of these issues will pop up with varying degrees of severity. The first slope of the curve is flat for a reason.

My guess for M3 shipped in 2017 lives between 25-45K, and would love to be pleasantly surprised to the upside. (That's where the 'lucky' comes in that Elon talks about)

 

[Irishjugg]

Best part is, no other major tech stock got that kind of end of the day jump, so it wasn't market or sector driven.

Poor SNAP though, just keeps getting worst for them.

I mean, SNAPs business is currently garbage with no real plan for the future. It's astonishing to me that enough suckers even existed for them to IPO. Unless major changes happen, SNAP is my bet (right behind Fiat Chrysler) for going to 0.

 

[winfield100]

There is a hysterically funny article on sleezykinky alfalfa that attempts to place a value, using Black and Scholes of a "musk call option" to justify the value of Tesla vs present value (tho it left out the $1.04billion june "increase" in the option due to shorts losses.
reading it is a mult level funny and estimates. I can see a few things extra. from whats goiing on the "Musk call option" value is rising with an estimate of 87,000 Model 3's in 2017, AND if "neural mesh" comes "online" the "Expiry" of the "Musk call option" ceases to matter as "Musk" wont expire.
it can be read on a quantum level as both dead serious and tongue in cheek and all in between, the reader chooses
There's A Musk Call Option In Tesla's Stock Price - Tesla Motors (NASDAQ:TSLA) | Seeking Alpha

""The call option is equivalent to $94 - $130 price premium with a mean estimate of $115.

TSLA Valuation

More importantly, the estimates of the call option and the stock price premium allow us to better understand the "real" TSLA mispricing as specified in Equation (1). Since what we try to do here is to measure the valuation of founders' vision, we take a short cut in estimating the fair value portion by simply drawing the opinion from the street analysts. From Bloomberg's analyst recommendations, the consensus (average) fair values range is around $265. Adding an extra $115 Musk's price premium, the resulting TSLA share at $380 becomes fairly priced (Table 5).