2017 Investor Roundtable: TSLA Market Action

[Reciprocity]

The planned acceleration rate for Model 3 production appears to have been quite wisely considered. Hiccups in the Model X ramp must have served as a lesson.

Initial Model 3 owners will essentially serve as beta testers. Their concerns should quickly result in improvements on the assembly line. Employees will be the first owners. Their input will go directly to Tesla engineers. Then non-employee California Model 3 owners will be communicating with engineers.

Virtually all bugs should be cleared out before production is really cranked up and deliveries can be made to those of us further east. If this ramp-up indeed goes as planned, the market should be expected to nicely reward long-term shareholders.

I agree and disagree. I think the memory of Model X is fresh and painful and led Elon to low ball these estimates and he has his real numbers, which would probably be to aggressive, but humanly possible though not probable. I think there is a good chance for upside surprises at each point, not big numbers but lets say they deliver 50 instead of 30 and 200 instead of 100 and so on. Just coming out with 30, 100 and 1500 is extremely conservative and could be purposely overly conservative, which would be the opposite of Elon's tendency to exaggerate. I go back to the Q4 2016 earnings where they decided to only give 1H 2017 guidance for delivers and they were very conservative. The issue has been that even if they meet the low end of the guidance, people throw a fit and act like the world is coming to an end. How quickly they forget 2016 when Tesla missed the full year guidance by 3K on the low end and over 13k for the high end. It would make you think that people actually thought they were going to deliver more then 50k cars in 1H on 2017 based on the way the stock reacted. My point is that if Elon has learned anything, its that he can be conservative and beat expectations for once. I believe he is the type of guy who wants to be accurate as an engineer and scientist, but he also has some hubris issues that conflict with that need to be accurate. Only time will tell, but I think there could start to be some minor surprises to the upside with Model 3 and really all the guidance going forward. I also think they will want to help support the stock price just in case they need to tap the markets for GF3-6 and the Y. I see them wanting to really push to get the Y and Semi out to thwart any competition that Tesla is actually causing due to having 500,000 reservations for a car no one has even touched yet.

 

[Irishjugg]

I'll DM you so we take this convo off this thread.

Personally I would prefer that you just dropped it here. I'm learning too

 

[Esme Es Mejor]

What do you think will happen to the SP if they announce 600K or 700K M3 reservations? The 373K reservations happened in one month. It has been 15 months since then and Elon said the count goes up every week. So it is not unreasonable to expect that the reservations might have doubled during that time. Just saying...

Last I saw, customer deposits were $613 million. If that were all Model 3 deposits, I believe that would be 613,000 reservations. However, some of those deposits are from S/X purchasers who are waiting for delivery.

Does anyone have a more recent number for customer deposits? And does anyone have a good method for estimating what portion of customer deposits belong to S/X orders?

It looks to me like Model 3 reservations are in the 400-500k range, but I'd like to be able to make a more accurate estimate.

In addition, it seems the number of reservations will jump as more and more people see the car and see that production is real.

 

[AlMc]

I agree and disagree. I think the memory of Model X is fresh and painful and led Elon to low ball these estimates and he has his real numbers, which would probably be to aggressive, but humanly possible though not probable. I think there is a good chance for upside surprises at each point, not big numbers but lets say they deliver 50 instead of 30 and 200 instead of 100 and so on. Just coming out with 30, 100 and 1500 is extremely conservative and could be purposely overly conservative, which would be the opposite of Elon's tendency to exaggerate. I go back to the Q4 2016 earnings where they decided to only give 1H 2017 guidance for delivers and they were very conservative. The issue has been that even if they meet the low end of the guidance, people throw a fit and act like the world is coming to an end. How quickly they forget 2016 when Tesla missed the full year guidance by 3K on the low end and over 13k for the high end. It would make you think that people actually thought they were going to deliver more then 50k cars in 1H on 2017 based on the way the stock reacted. My point is that if Elon has learned anything, its that he can be conservative and beat expectations for once. I believe he is the type of guy who wants to be accurate as an engineer and scientist, but he also has some hubris issues that conflict with that need to be accurate. Only time will tell, but I think there could start to be some minor surprises to the upside with Model 3 and really all the guidance going forward. I also think they will want to help support the stock price just in case they need to tap the markets for GF3-6 and the Y. I see them wanting to really push to get the Y and Semi out to thwart any competition that Tesla is actually causing due to having 500,000 reservations for a car no one has even touched yet.

In summary: 'A win should feel like a win'

 

[kbM3]

With today being a green day, TSLA has just traded red-green-red-green for the past 9 sessions in a row. If the oattern continues, tomorrow would be a red day and Wednesday a green day.

If that pattern continues for a a month, we could all become billionaires

 

[kbM3]

I agree and disagree. I think the memory of Model X is fresh and painful and led Elon to low ball these estimates and he has his real numbers, which would probably be to aggressive, but humanly possible though not probable. I think there is a good chance for upside surprises at each point, not big numbers but lets say they deliver 50 instead of 30 and 200 instead of 100 and so on. Just coming out with 30, 100 and 1500 is extremely conservative and could be purposely overly conservative, which would be the opposite of Elon's tendency to exaggerate. I go back to the Q4 2016 earnings where they decided to only give 1H 2017 guidance for delivers and they were very conservative. The issue has been that even if they meet the low end of the guidance, people throw a fit and act like the world is coming to an end. How quickly they forget 2016 when Tesla missed the full year guidance by 3K on the low end and over 13k for the high end. It would make you think that people actually thought they were going to deliver more then 50k cars in 1H on 2017 based on the way the stock reacted. My point is that if Elon has learned anything, its that he can be conservative and beat expectations for once. I believe he is the type of guy who wants to be accurate as an engineer and scientist, but he also has some hubris issues that conflict with that need to be accurate. Only time will tell, but I think there could start to be some minor surprises to the upside with Model 3 and really all the guidance going forward. I also think they will want to help support the stock price just in case they need to tap the markets for GF3-6 and the Y. I see them wanting to really push to get the Y and Semi out to thwart any competition that Tesla is actually causing due to having 500,000 reservations for a car no one has even touched yet.

There is another reason historically for his optimism. He sets impossible goals that are almost always missed.

This drives the team to maximum effort and they overachieve. Analysts don't like this. They somehow miss the magnificence of what Tesla does achieve.

 

[D-egg-O]

Personally I would prefer that you just dropped it here. I'm learning too

I purchase near the money or slightly out of the money puts. I wait until just prior to the major event to purchase them given how volatile they are. In the case of final Model 3 reveal and Q2 earnings, I'm thinking of maybe buying 1 put on Friday afternoon, in case the final reveal is not received well or if we get a bigger run this week leading up to it. It really depends what the share price does the next four days.

Then I'll purchase more puts Tuesday afternoon before the market closes (and right before the shareholder letter is released.)

Like I said, I treat these puts as short term insurance. If they make money, I buy more core shares (and close out the covered call options if possible).

 

[Reciprocity]

There is another reason historically for his optimism. He sets impossible goals that are almost always missed.

This drives the team to maximum effort and they overachieve. Analysts don't like this. They somehow miss the magnificence of what Tesla does achieve.

Thinking about it a bit more.. and I totally agree. But Elon is also pissed at all the negativity and bashing of him personally has his company (employees) in general. Statements like "They really want us die so bad they can taste it" makes me think that Elon is going to be spiking the ball in the end zone soon. This ramp is going to be big a giant middle finger to all the naysayers and FUDsters. Normally I wouldnt think he would care but recent comments like the one above lead me to believe he wants a big win here. This is another reason for a beat on the original guidance. I am not talking bout big beats, just a smoother ramp to 4-5K a week by Dec.

Elon Musk on Twitter

 

[kbM3]

Thinking about it a bit more.. and I totally agree. But Elon is also pissed at all the negativity and bashing of him personally has his company (employees) in general. Statements like "They really want us die so bad they can taste it" makes me think that Elon is going to be spiking the ball in the end zone soon. This ramp is going to be big a giant middle finger to all the naysayers and FUDsters. Normally I wouldnt think he would care but recent comments like the one above lead me to believe he wants a big win here. This is another reason for a beat on the original guidance. I am not talking bout big beats, just a smoother ramp to 4-5K a week by Dec.

Elon Musk on Twitter

I actually agree. He has come in on time with the GF and M3 production start. I actually thought about that when I wrote "historically" in my original post.

 

[T3slaTulips]

The 373K reservations happened in one month.

true, but also true is:
The 373,000 reservations happened in one week.

 

[DragonWatch]

Elon/Tesla keep things close to the vest. When they miss a target, they are usually up front about it.

Accidents, manufacturing burps, design flaws are all tackled up front and corrected, as best I can determine from my armchair position.

Me, I am just happy with what I see as an end result to the positive. The negative stuff is usually anger and misguided, but I watch like a hawk to ensure I do not miss something ~ hopefully.

M3 ~ thank my god it is Friday

 

[Jayjs20]

TSLA soared pass the exponential moving average and the middle BB today, meeting some resistance at the 50 day MA. Hopefully, this is the second step in heading back to the upper BB.

 

[CyberDutchie]

Last I saw, customer deposits were $613 million. If that were all Model 3 deposits, I believe that would be 613,000 reservations. However, some of those deposits are from S/X purchasers who are waiting for delivery.

Does anyone have a more recent number for customer deposits? And does anyone have a good method for estimating what portion of customer deposits belong to S/X orders?

It looks to me like Model 3 reservations are in the 400-500k range, but I'd like to be able to make a more accurate estimate.

In addition, it seems the number of reservations will jump as more and more people see the car and see that production is real.

Yesterday, I was told by the Tesla rep at Stanford Mall Showroom that if I reserve a Model 3 today, I get it by the end of 2018.

 

[Lhan]

Last I saw, customer deposits were $613 million. If that were all Model 3 deposits, I believe that would be 613,000 reservations. However, some of those deposits are from S/X purchasers who are waiting for delivery.

Does anyone have a more recent number for customer deposits? And does anyone have a good method for estimating what portion of customer deposits belong to S/X orders?

It looks to me like Model 3 reservations are in the 400-500k range, but I'd like to be able to make a more accurate estimate.

In addition, it seems the number of reservations will jump as more and more people see the car and see that production is real.

Tesla Model 3 Reservation Counter

 

[dennis]

true, but also true is:
The 373,000 reservations happened in one week.

Musk claimed "some 400,000 pre-orders" the last week in April. The 373,000 number (net of 12,000 cancellations and duplicates) was stated in a mid-May 2016 SEC filing. That was the last update.
Tesla has 373,000 Model 3 reservations as of May 15, after 8k cancellations and 4k duplicates

 

[Esme Es Mejor]

Well, that was a fun day. All my shares are green now, even the 100 shares I bought at $338 on the way down to the recent bottom ($307? $304?).

The lead to the handover party should put upward pressure on the price; the lead to ER should put downward pressure. The biggest near-term pressure-- the production ramp-- is currently unknown and unknowable.

 

[geneclean55]

At least money won't be flowing into Google stock tmrw

 

[AlMc]

At least money won't be flowing into Google stock tmrw

Agreed. Problem is WS is punishing companies that don't have stellar ERs.
I don't expect Tesla Q2ER to be stellar

 

[MitchJi]

1. Agreed. Problem is WS is punishing companies that don't have stellar ERs.
   I don't expect Tesla Q2ER to be stellar

   I believe that the main thing for TSLA is the M3 production ramp.
   
   If the SP went to $38+ based on tweets and some rumors, isn't ATH possible with the full reveal and production actually starting?
   
   I'm now saying that you are incorrect, but pointing out that an alternative scenario is reasonable.

 

[JBRR]

Ihor Dusaniwsky on Twitter