2017 Investor Roundtable: TSLA Market Action

[GoTslaGo]

So is it fair to say CBOE p/c ratio is also indicative of an upcoming short-squeeze because it's pointing to shorts digging their heels before they get blown away? Is that a fair way to put it in your opinion?

I'm not sure.

As far as I understand, CBOE p/c is more of a general macro indicator. Suspect this run up was related to the political issues that occurred (N.Korea, etc...). However as we pass these macro negatives, I suspect there will be a burst of optimism that will come afterwards (and maybe IRS refunds). And in that case there could be a run up of the market as a whole.

Now as for Tesla, if there's general market optimism coupled with good news from Tesla, that could bring in more retail investors. This could create the impetus for a short squeeze, whether the shorts are digging in their heels or not.

FWIW, Hirsch in his Stock Almanac has almost all next week a bullish week for the major indices (Dow, NASDAQ, S&P). I believe except for Monday. So it maybe a "lift all boats" scenario.

 

[ValueAnalyst]

I'm not sure.

As far as I understand, CBOE p/c is more of a general macro indicator. Suspect this run up was related to the political issues that occurred (N.Korea, etc...). However as we pass these macro negatives, I suspect there will be a burst of optimism that will come afterwards (and maybe IRS refunds). And in that case there could be a run up of the market as a whole.

Now as for Tesla, if there's general market optimism coupled with good news from Tesla, that could bring in more retail investors. This could create the impetus for a short squeeze, whether the shorts are digging in their heels or not.

FWIW, Hirsch in his Stock Almanac has almost all next week a bullish week for the major indices (Dow, NASDAQ, S&P). I believe except for Monday. So it maybe a "lift all boats" scenario.

ah now I gotcha. I thought this was P/C ratio for TSLA. Is it possible to run the same analysis for TSLA now vs. Apr 2013?

 

[AnneBoleyn]

I agree. Relationships only mean so much- they're capitalist. The trunking industries will move with the times or be left in the dust.
History has shown us forever alliances are easily broken when it's profitable, more productive, or something "prettier and younger," Tesla will be all of the above for these companies.

*trucking industry wouldn't let me edit- auto text is brutal


(Mod: fixed)

 

[Starno]

So guys what do you expect on Monday and next week ?
I feel like we're going to have a great week, with a possible break through the 320 by Friday.

 

[TheTalkingMule]

The entire market seems set for a 10% pullback, in that scenario a lot of TSLA profits get taken I assume. Flat 290-310 til July if we're lucky.

 

[racer26]

So guys what do you expect on Monday and next week ?
I feel like we're going to have a great week, with a possible break through the 320 by Friday.

The entire market seems set for a 10% pullback, in that scenario a lot of TSLA profits get taken I assume. Flat 290-310 til July if we're lucky.

Paying off debts early seems likely to be seen positively. In the next 2 weeks we expect to open Solar Roof ordering (and presumably get pricing for it too). Then May 3 we get 1Q17 ER, which is likely to include better than expected performance, since we sold a record number of cars in a quarter containing a nearly 2 week shutdown.

TSLA tends to shake off macro weakness when its own news cycle is good.

 

[AnneBoleyn]

So guys what do you expect on Monday and next week ?
I feel like we're going to have a great week, with a possible break through the 320 by Friday.

I really hope you're right. I have seen several Teslas over the last couple of weeks, which for where TT007 and I live is not very common place, which tells me more and more people are jumping on board with the product...
I would think these two announcements would open the stock to even more investors... and perhaps those willing to invest in transportation stock will be looking to "jump plane" and buy Tesla now that they are pulling out aftet that PR nightmare. The timing on Musk's part couldn't be more optimal,

 

[AnneBoleyn]

On multiple fronts....

 

[GoTslaGo]

ah now I gotcha. I thought this was P/C ratio for TSLA. Is it possible to run the same analysis for TSLA now vs. Apr 2013?

I thought about that too, but don't know enough to do that.

 

[RobStark]

Now pickup truck market may be harder to attack, as I assume growl of V8 is part of the manly man image that many owners will have...

Retail buyers yes.

Fleet managers don't give a rats ass about image.

Most F-150s are sold with a 2.7 litre turbo.

Stump pulling contest with Tesla full torque at Zero rmp, towing contest etc played over and over again on Youtube will start to cut the association between ICE noises and performance.

 

[ValueAnalyst]

Do you agree or disagree with the following statement?

At 1,000/w run-rate production (~50,000 per year), Model X is on track to achieve 30% US luxury SUV market (~30,000 per year) in ~2 years.

Take a deep breath and note that it took 4 years for Model S to achieve 30% market share.

Given that Model 3 will be in a more competitive market, even if it achieves 15% US market share in two years, Tesla will need to ramp up to ~4 million cars per year by 2020, including Model S, Model X, Model Y, Tesla Semi, and other models. This is my base case.

This explains the upcoming announcement of "Gigafactories 3, 4, and possible 5" later this year, which means that they can be up and running by 2020 (~3 years from announcement to full production, which is in-line with Gigafactory 1 timeline).

 

[justdoit]

Interesting take here starting at 5:02

I think Elon definitely pays attention to the stock price and times some of his tweets accordingly. Nothing wrong with that Based on this timing I'm hoping for some real good news tomorrow.

 

[DaveT]

Do you agree or disagree with the following statement?

At 1,000/w run-rate production (~50,000 per year), Model X is on track to achieve 30% US luxury SUV market (~30,000 per year) in ~2 years.

Take a deep breath and note that it took 4 years for Model S to achieve 30% market share.

Given that Model 3 will be in a more competitive market, even if it achieves 15% US market share in two years, Tesla will need to ramp up to ~4 million cars per year by 2020, including Model S, Model X, Model Y, Tesla Semi, and other models. This is my base case.

This explains the upcoming announcement of "Gigafactories 3, 4, and possible 5" later this year, which means that they can be up and running by 2020 (~3 years from announcement to full production, which is in-line with Gigafactory 1 timeline).

So 4M cars per year by 2020 is your base case? Is that a typo? Or are you serious?

 

[MitchJi]

Are you concerned about Daimler's efforts in this area? Daimler to build large electric semi truck; Urban e-Truck results good so far

Why? There is room for more than one Semi manufacturer.

And Daimler is not planning to build semi's (battery costs):

While Daimler's press release referred to the upcoming production all-electric model as a "heavy-duty" truck, the Urban e-Truck was a slightly less large medium-duty model.

It featured a 212-kilowatt-hour battery pack, allowing for a claimed range of 124 miles.
<snip>
The Urban e-Truck was a medium-duty vehicle intended primarily for shuttling cargo relatively short distances around cities, and it's likely the low-volume production model will be aimed at similar dtuties.

Short-range operations keep vehicles close to charging stations, circumventing the range issues that currently bedevil efforts at electric long-haul trucks.

This explains the upcoming announcement of "Gigafactories 3, 4, and possible 5" later this year, which means that they can be up and running by 2020 (~3 years from announcement to full production, which is in-line with Gigafactory 1 timeline).

Next GF"s will be faster to build and cost less.

 

[ValueAnalyst]

So 4M cars per year by 2020 is your base case? Is that a typo? Or are you serious?

I was thinking over the weekend about how assuming Elon's earlier projection of 500k in 2020 turned out to be too conservative. Combined with the company's under-the-radar announcement of "Gigafactories 3, 4, and possibly 5," and that Giga1 could be ramped up to supply packs for 1.5m cars (but that they would use only 1m for cars and rest for storage business), I think four million cars from four Gigafactories in 2020, although admittedly seems nutty, is my base case.

Elon will build it if they come.

And they're coming in droves. Just look at the market share Model S and Model X quickly achieved in their respective niche segments. Model S achieved 35% in four years, and Model X is on track to reach similar level in just two years! And they both achieved it without Level 5 autonomy. Model 3 may be fully autonomous from the get-go and will benefit from Tesla's already stellar brand, vs. when Model S and Model X were built, some consumers and tier 1 suppliers were still skeptical of Tesla. But even if you apply even a fraction of 30-35% market share to Model 3, I believe you will see what I'm talking about. Model 3 is the only game in town for years to come.

I don't think people realize this yet, but I think the ICE car industry will come to a grinding halt when the Model 3 hits the roads. Once the Model 3 is fully autonomous, which I believe may be the big announcement in July, why would anyone ever buy any other car? I expect enough people to decide to hold off on any new car purchases until they can get their hands on a Model 3 that Tesla will be forced to revise their 2020 production target upward, once again.

Here's how I see the US car industry playing out in the next three years and beyond: How Will The US Car Industry Evolve In The Next Three Years And Beyond? - ValueAnalyst | Seeking Alpha

 

[ValueAnalyst]

Next GF"s will be faster to build and cost less.

I was thinking that too, but I wanted to ease the forum into my 4 million per year by 2020 projection first. Also, the "faster to build" piece may be the reason why next round will be 3 Giga's at once.

Do you have any estimate of how much faster and how much less? I do think that the Tesla Advanced Automation Germany will make significant improvements for subsequent Gigas, but I don't think we have received any color on this yet.

 

[BornToFly]

I'm not so sure that the next Gigafactories will cost less, because they are going to need the robots, paint shop, etc., to also build vehicles. I have been hoping that the capital raises were over with the Model 3, but if they are going to build several Gigafactories at the same time in the next 3-5 years, I think Tesla is going to need to ask for more money.

 

[ValueAnalyst]

I'm not so sure that the next Gigafactories will cost less, because they are going to need the robots, paint shop, etc., to also build vehicles. I have been hoping that the capital raises were over with the Model 3, but if they are going to build several Gigafactories at the same time in the next 3-5 years, I think Tesla is going to need to ask for more money.

I don't think capital raises are necessarily bad. It depends on at what price the capital is raised, but generally speaking as an equity holder, I would rather have Tesla absolutely dominate new car production from 2017 through 2025 by building as many Gigas as possible as quickly as possible, which would bankrupt competition, vs. ramp up slowly to conserve cash and give ICE manufacturers a chance to catch up.

Tesla can easily push back Model 3 production by a year or two and avoid capital raises, but for what? Why push back hundreds of billions of revenue and tens of billions of profits (remember, slower ramp-up means each year of revenue and profit is pushed down and back) in order to delay a few billion of capex? Look at the capital raise as if you're giving up something as a shareholder in order to get something back in return. It requires case-by-case analysis.

If you've ever worked on a discounted cash flow analysis, it's a no-brainer to pull forward as much Model 3/Y/Semi etc. production as possible because of time value of money, but more importantly, the key is to not give competition a chance to survive. When Elon said they would raise capital to pull forward Model 3 ramp-up by two years, many long-term investors rightfully said "Shut up and take my money."

Having said that, with the Model 3 ramp-up, Tesla may finally be at a point to finance further growth with non-dilutive debt instead of equity raises and convertible debt.

 

[Intl Professor]

in the next 3-5 years, I think Tesla is going to need to ask for more money.

Gobs more money.

 

[Sudre]

Once the Model 3 is fully autonomous, which I believe may be the big announcement in July, why would anyone ever buy any other car?

Well let's say I want to drive from St George to North Rim Gramd Canyon, hike around for the day, then drive home....
nope not going to make it in any Tesla without added inconvenience. I love my S60 and Tesla but for quite some time there is still going to be a reason why a lot of people outside of cities will not buy one.

Let's say I go for a drive in my Tesla T1000 and kayak for two or three days. When I go to drive home in a truck that's been parked at the end of a nowhere gravel road 150 miles from home with vampire drain I am not going to want to sit at a supercharger for 20 minutes. I am exhausted and just want to go home and shower off the poison ivy and campfire smoke. Again love my Model S and when Model 3 comes out my wife and I will be all electric but currently on into the 5 year future there will still be reasons for many people to not feel as I do about Tesla.

Self driving does not solve all the problems. I don't think it will drive on gravel roads or over low water bridges for quite some time. Has anyone driven an autopilot car up to a low water bridge? Does it drive right on thru the water? Does it know how deep it Is? How does it go charge for me while I kayak if it can't cross the bridge?