2017 Investor Roundtable: TSLA Market Action

[racer26]

First many cars are going to employees, not press or customers. No one will come to know if any Model 3 was delivered, or what/how many were delivered. A few pics may be 'leaked' once in a while to keep the excitement up.

This is what GM called test fleet back in 2015, before production of Bolts for customers began in Nov 2016.They gave out pre-production cars to employees to drive around and record issues to fix. Nothing novel.

No. That's a test fleet. Tesla is actually selling these cars to the employees. Big difference. Similar results, except that those are still revenue-generating cars. GMs Test fleet was a few tens of Bolt EVs. Tesla's employee cars starting production in July will be hundreds or thousands.

 

[Krugerrand]

First many cars are going to employees, not press or customers. No one will come to know if any Model 3 was delivered, or what/how many were delivered. A few pics may be 'leaked' once in a while to keep the excitement up.

How many is 'many cars are going to employees'? And is that 'many' not in contradiction to 'a few pics may be 'leaked' considering all those many employees will be driving them around, posting pics on FB etc...

We'll know when Model 3s are being made in any quantity. Rest assured.

 

[MikeC]

First many cars are going to employees, not press or customers. No one will come to know if any Model 3 was delivered, or what/how many were delivered. A few pics may be 'leaked' once in a while to keep the excitement up.

This is what GM called test fleet back in 2015, before production of Bolts for customers began in Nov 2016.They gave out pre-production cars to employees to drive around and record issues to fix. Nothing novel.

Tesla isn't "giving these out" - the employees are actually paying for them. That may be novel coming from a legacy automaker perspective but it can be done when the product is actually desirable.

 

[racer26]

No. That's a test fleet. Tesla is actually selling these cars to the employees. Big difference. Similar results, except that those are still revenue-generating cars. GMs Test fleet was a few tens of Bolt EVs. Tesla's employee cars starting production in July will be hundreds or thousands.

GMs test fleet is more akin to what Tesla started producing for Model 3 in early February.

 

[stoebs]

Elon stated they are telling suppliers to be ready to supply parts for Model 3 at a rate of 1000 cars/month for July, 2000/month for August, and 4000/month for September. He then emphasized that Tesla has to assemble those parts into cars and deliver them to customers, so production and delivery rates will obviously be lower.

My recollection was that these were the weekly run rates; but I can't go back and listen again right now. Anyone else have this?

 

[1kEE]

My recollection was that these were the weekly run rates; but I can't go back and listen again right now. Anyone else have this?

What I picked up was 5000 a week by end of year... please correct me if I'm wrong!

 

[jbcarioca]

What I picked up was 5000 a week by end of year... please correct me if I'm wrong!

Elon just repeated that he had a "high confidence" of reaching 5000 per week before the end of 2017

 

[AudubonB]

Mod -

Okay, all. Frenzy time is over. Please relegate all non-market action posts to over there.

 

[Gerasimental]

Relevant to this thread:

Given what we have read and heard today, how will the stock move, and where will it end up tomorrow, and why?

 

[favo]

My recollection was that these were the weekly run rates; but I can't go back and listen again right now. Anyone else have this?

Yes, you are correct. They are weekly, not monthly rates. (For some reason, I can't edit my post anymore.)

 

[mmd]

Elon just repeated that he had a "high confidence" of reaching 5000 per week before the end of 2017

Does this include S,X and 3? Then how much is it per week for Model 3 part? Seems like 2.5k-3k a week. So, there isn't a way to reach 50k M3 this year, even in this very optimistic scenario.

 

[KLC13]

Relevant to this thread:

Given what we have read and heard today, how will the stock move, and where will it end up tomorrow, and why?

To get this thread back to market action:

Tesla Longs's are genuinly long term investors. I think this ER is very exciting for longs and no reason to sell immediately. $300 is on the horizon and I can see most longs wait to get to that milestone...

For shorts, this is frustrating. The ER didnt give them enough ammunition (except the CFO but return of Deepak kind of ruined it).. I can see shorts get out in the near term.

So I see the stock continuing its gains in the next coming weeks...

 

[Papafox]

I don't hear anyone saying on this thread, "this ER makes me nervous, I'm getting out." I think longs have settled into a wait for Model 3 mode. Nobody wants to miss that upswing, when it comes. More immediately, I still believe that Q1 delivery numbers and ER should look very nice, as alluded to in the letter (ER at least). The future looks really sketchy for shorts, and so if we see some more big dog shorts jump ship this week (400,000 share types), then the SP will definitely climb. There's a certain amount of ambiguity in the short run about this ER, and ambiguity is something the shorts have been known to take advantage of by selling hard on opening to define the ER as a negative. The problems with this approach is 1) shares available to short may be in short supply and 2) the big dog shorts who were so successful with manipulations in the past may already be out and not interested in coming back in. If I see a dip on open I'll be watching it carefully for a true reversal. Such a dip might be our best buying opportunity this week.

 

[TrendTrader007]

I don't hear anyone saying on this thread, "this ER makes me nervous, I'm getting out." I think longs have settled into a wait for Model 3 mode. Nobody wants to miss that upswing, when it comes. More immediately, I still believe that Q1 delivery numbers and ER should look very nice, as alluded to in the letter (ER at least). The future looks really sketchy for shorts, and so if we see some more big dog shorts jump ship this week (400,000 share types), then the SP will definitely climb. There's a certain amount of ambiguity in the short run about this ER, and ambiguity is something the shorts have been known to take advantage of by selling hard on opening to define the ER as a negative. The problems with this approach is 1) shares available to short may be in short supply and 2) the big dog shorts who were so successful with manipulations in the past may already be out and not interested in coming back in. If I see a dip on open I'll be watching it carefully for a true reversal. Such a dip might be our best buying opportunity this week.

I'm buying even more tomorrow
I don't see how shorts can twist this into anything sustainably negative
The biggest positive for SP is 5000/week later this year and 10000 cars/week sometimes in 2018
This gives me great confidence that TSLA is headed to $1000/share within 2 to 4 years (I'm being very conservative here) so a SP below $300 is a steal and I'm buying with both hands

PS: this stock may very well be $2000+ within 4 years
Highly likely IMO

 

[TrendTrader007]

Did you listen to the ER? It was quite clear the 5k/wk was Model 3 ONLY.

That makes me even more bullish
Just finished listening to CC and can't help feel super bullish

 

[neroden]

Relevant to this thread:

Given what we have read and heard today, how will the stock move, and where will it end up tomorrow, and why?

Market responses are weird. They can go down on good news and up on bad news, or, obviously, do the reverse.

Anyway, I think our only clue is after-hours trading. Which was seriously weird.

There was a jump from the $273.51 close to $280 just after market close; a further rise prior to the webcast; a drop during the webcast, and then stability at $278 with a slight drop to $277.67 at 8 PM.

If the earnings report had been received really badly I would have expected a large drop after-hours. If the earnings report had been received really well I would have expected a large jump after-hours. So I guess neither happened.

If anyone has a clue as to what the heck was going on, please do tell me. Because as far as I can tell this makes no sense and must be meaningless noise.

 

[neroden]

that means there will be one silly... that's exactly what that means. he said something nearly verbatim during Q215 ER and 5 days later they announced it.

No, what it means is more specific: he'll do a capital raise *if the price is right*. But he won't do a capital raise at disadvantageous prices.

So if the price rises again towards $290 or $300, we might expect stock issuance. If he could issue straight-up bonds at under 5% interest rates, he'd probably do that. But if the stock price crashes to $220 and he can't get decent rates on bonds, then he probably won't do a capital raise and will just conserve money to get through the launch.

 

[neroden]

Operating expenses also increased, probably because of Solarcity inclusion

I dug through the numbers. The change in earnings from Q3 to Q4 and the increased OpEx is almost entirely due to SG&A. Everything else is either one-time or insignificant.

Tesla claims this is due to expansion of service centers, stores, etc. But I haven't seen a service center in upstate NY yet. So make of that what you will. Maybe it is SolarCity overhead.

 

[neroden]

I suspect TSLA is engineering the next ER a bit.

Speaking of "engineering" the ER:

There is an GAAP accounting change in revenue recognition which may be done for Q1 2017 and must be done for Q1 2018.

There is a GAAP accounting change in lease accounting which may be done in Q1 2017 or Q1 2018 and must be done for Q1 2019. It is advantageous for Tesla to make the change along with the revenue accounting change, but it may not do so (due to the potential need to change the accounting for the various people who bought the securitized loans).

This is going to substantially change the reported results for Q1 from the various convoluted SolarCity leases and PPAs and tax equity financings and securitizations but I'm not really sure exactly how.

 

[neroden]

They narrowed the M3 window down from "late 2017". Not to a quarter, but to a month!!! September volume production. Holy hell. On track is an understatement!

Huh. So I predicted that one more-or-less correctly. Guessed the ER numbers wrong though.

I will say that 5000 cars per week, which he said he was pretty sure they'd reach by the end of 2017, is a mere 260,000 per year -- not nearly as fast as they need to be going to clear that backlog of orders.