2017 Investor Roundtable: TSLA Market Action

[jbcarioca]

I think they get confused by multi-country reservations. My Australian reservation says Dec17-Jan18, but they apparently said no deliveries in Australia until 2019 as well.

Since my post there seems more evidence that your observation must be correct. They seem to have generalized that current owners will be prioritized but then disregarded country-level issues. AFAIK they've not estimated when Brazil deliveries will begin, but it seems highly unlikely that Australia, UK, NZ, Japan would not have high priorities. That is, RHD markets are high potential and are already established. As important as Brazil is to me it cannot possibly have deliveries before the others, or even at the same time.

Maybe those estimated dates are more superficial than we'd like them to be.

 

[neroden]

So this seems like another nonsense move, and it does smell like market manipulation by short-sellers. (I'm beginning to pick up the "smells" of it from Papafox.)

I'm largely sitting tight, but I am wondering whether some, all, or none of my cash-secured puts will execute at the end of the week. I'm good either way -- it just changes my strategy for the week *after* that. I should probably just ignore things until market close on Friday, or even until noon on Saturday, but it's hard to resist checking.

FWIW, max pain looks like it will be pulling TSLA up until sometime in late September (of course new options positions could change that).

 

[ValueAnalyst]

It does not matter when they hit the 30% gross margin. The goal is simply stated as "get there for four quarters". It's not stated as "stay there continuously forever". I assume it's there to encourage cost control and pricing discipline, and once it's achieved, they figure Musk will have learned the *habit* of pricing discipline and they won't sweat a drop to 29%

You completely missed the purpose of the question, which was to understand if EM had a large incentive to get to 30% GM sooner rather than later.

I'm expecting Tesla to achieve that 30% gross margin for four quarters sometime in the 2018-2019 period. My point is simply that they have made a stated goal and we shouldn't expect pricing cuts (chasing market share at the expsense of margin) until they've achieved it.

Your timeline is very aggressive. I don't expect four trailing quarters of 30% company-wide gross margin until either Gigafactory is at full scale (i.e. 2020), Tesla Semi is in scale production (late 2019 to 2020), Powerpack revenue increases above $10B run-rate (late 2019 to 2020), or Tesla Network reaches scale (2023).

 

[ValueAnalyst]

Reuters is attributing today's fall in TSLA to Elon's "production hell" comment.

Hasn't Tesla been in production hell ever since they started? All depends on one's attitude...

I don't think Elon was all that serious when he was saying it.

Media outlets simply give people who can't deal with cognitive dissonance what they want: a reason.

 

[racer26]

You completely missed the purpose of the question, which was to understand if EM had a large incentive to get to 30% GM sooner rather than later.



Your timeline is very aggressive. I don't expect four trailing quarters of 30% company-wide gross margin until either Gigafactory is at full scale (i.e. 2020), Tesla Semi is in scale production (late 2019 to 2020), Powerpack revenue increases above $10B run-rate (late 2019 to 2020), or Tesla Network reaches scale (2023).

Elon's CEO grant expires in 2022. He must achieve the milestone before it expires. Its worth ~$170M to him personally to do so if you assume SP at the time is the minimum required by the grant - much more if you assume something realistic for the 2022 SP. I expect he will find a way to achieve it, as it will likely be worth something like half a billion to him.

 

[ValueAnalyst]

Elon's CEO grant expires in 2022. He must achieve the milestone before it expires. Its worth ~$170M to him personally to do so if you assume SP at the time is the minimum required by the grant - much more if you assume something realistic for the 2022 SP. I expect he will find a way to achieve it, as it will likely be worth something like half a billion to him.

Perfect. That aligns with the timeline I laid out.

 

[neroden]

Elon's CEO grant expires in 2022. He must achieve the milestone before it expires. Its worth ~$170M to him personally to do so if you assume SP at the time is the minimum required by the grant - much more if you assume something realistic for the 2022 SP. I expect he will find a way to achieve it, as it will likely be worth something like half a billion to him.

It is also clear that he really likes maintaining control of the company so *regardless* of the stock's value he'd like to have a larger share.

I'd forgotten about the 2022 deadline; thanks. I think they'll probably achieve it well before that.

 

[jhm]

The rate in Georgia is fantastic. A typical commercial account is about 9c/kWh + peak demand charge of $19/kW. So this is cheaper power than most businesses get directly from GeorgiaPower. Residential rates are even higher. So someone that can't charge at home is actually paying less to Supercharge.

 

[McKricas]

There are many here that don't understand the Stock Market and how the market acts.

There's no need to talk about "manipulation" or "voodoo" or any other reason. In a stock like TSLA that doesn't happen. Period.
The market acts on its own disregarding most of the outside things .

The stock price today went the direction it should... and it will continue until the current movement is completed.

This is a continuation of a short term trend that started on day 27 and before that the medium term already have changed to bear. Look at June 23th for the first moment of change. Only Long term is still Bull.

Some news only amplifies the movement, it rarely changes its direction. Except at exhaustion moments.

 

[erthquake]

There are many here that don't understand the Stock Market and how the market acts.

There's no need to talk about "manipulation" or "voodoo" or any other reason. In a stock like TSLA that doesn't happen. Period.
The market acts on its own disregarding most of the outside things .

The stock price today went the direction it should... and it will continue until the current movement is completed.

This is a continuation of a short term trend that started on day 27 and before that the medium term already have changed to bear. Look at June 25th for the first moment of change. Only Long term is still Bull.

Some news only amplifies the movement, it rarely changes its direction. Except at exhaustion moments.

No offense, but this is an incredibly naive statement. If media manipulation didn't work, then outlets like TheStreet and Marketwatch would not constantly republish the same info-lite stories over and over again so that they repeatedly appear in financial app news feeds.

Do you think it's just coincidence that the Tesla Workers' Organizing Committee published a unionization letter today, one (working) day after the Model 3 reveal, and two days before the quarterly ER?

 

[larmor]

No offense, but this is an incredibly naive statement. If media manipulation didn't work, then outlets like TheStreet and Marketwatch would not constantly republish the same info-lite stories over and over again so that they repeatedly appear in financial app news feeds.

Do you think it's just coincidence that the Tesla Workers' Organizing Committee published a unionization letter today, one (working) day after the Model 3 reveal, and two days before the quarterly ER?

Of course more worrisome is if the robotic line becomes linked to AI, and then wants to unionize, may be bargain for more lubrication...

 

[GoTslaGo]

There are many here that don't understand the Stock Market and how the market acts.

There's no need to talk about "manipulation" or "voodoo" or any other reason. In a stock like TSLA that doesn't happen. Period.
The market acts on its own disregarding most of the outside things .

The stock price today went the direction it should... and it will continue until the current movement is completed.

This is a continuation of a short term trend that started on day 27 and before that the medium term already have changed to bear. Look at June 23th for the first moment of change. Only Long term is still Bull.

Some news only amplifies the movement, it rarely changes its direction. Except at exhaustion moments.

Did you read Prechter? I have his book, but haven't had a chance to read it yet. Sounds vaguely like part of his thesis.

 

[dmckinstry]

I added two shares at 327.70, my holding is still small (below 15 shares)

I managed to buy three after hours for 323.47. My limit order was for 324.00. I don't know why it went through at that price, as that was the price at closing. I guess someone else had a limit sell price at that level.

 

[neroden]

There are many here that don't understand the Stock Market and how the market acts.

There's no need to talk about "manipulation" or "voodoo" or any other reason. In a stock like TSLA that doesn't happen. Period.
The market acts on its own disregarding most of the outside things .

The stock price today went the direction it should... and it will continue until the current movement is completed.

This is a continuation of a short term trend that started on day 27 and before that the medium term already have changed to bear. Look at June 23th for the first moment of change. Only Long term is still Bull.

Some news only amplifies the movement, it rarely changes its direction. Except at exhaustion moments.

This is mere chartism. The fact is that the chart movments are driven by actual people's (and bots') behavior. We're trying to understand the people's behavior; we're looking at a deeper level than you are.

 

[madodel]

He was serious. The "production hell" statement was made in front of Tesla employees who are going to have to ride that steep S curve, not in front of investors or customers.

It is so easy to take it out of context... few can resist.

It will make it that much sweeter when they break through 500k a year and those employees will be able to say they made it through production hell. The idiots can manipulate the SP now but eventually there will be no denying the brilliance of this company. Let them have there battle, we will win the war.

 

[Zhelko Dimic]

He would know his "production hell" comment would be picked up and for some time negatively influence stock price.
My thought is that as long as he's sure they do not need to do another cap raise until Q1 2018, he doesn't much care how SP bounces
around the next few months. If they hit their end of year production rate in Dec/Jan. that should take care of raising SP to a point where
they can do another cap raise if they need or want one.

that comment is a first sign of good proper expectation setting - one that can be reached or beat, rather than painting rosy futures that are never fulfilled.
This is what I always wanted Musk to do, to reset relationship with WS, where he would eventually be trusted by The Street.
Bravo!

 

[Jayjs20]

I'm a little sad that my broker's app locked up after I confirmed my sell order at 340. When it came back online, the SP was already down.

What sadness.

 

[kenliles]

that [production hell] comment is a first sign of good proper expectation setting - one that can be reached or beat...

hell-fire makes particularly succulent steak--

 

[adiggs]

hell-fire makes particularly succulent steak--

The sear is excellent, but the residual sulfur is not so good.

 

[MitchJi]

I've also seen reviews over the weekend where they say the s-curve chart means 5000/month run rate in Dec. And another says 75000/year the next few years. Perhaps they will clarify on Wednesday.

They are hoping for five thousand per week in December.