Model 3 Reveal - How will TSLA do at the reveal, and next few days after?

[Torpedo Ted]

I guess there will be some time before reservation count/interest is revealed. But how do you think the Model 3 reveal itself will affect the stock price?

Personally I have a feeling we will see a significant drop at the reveal, and the days after. The expectations are through the roof, and I simply don't think Tesla are able to present something that meets all expectations. I believe it will be a success in the long term though, but I have a feeling there will be some dissapointment initially.

What do you think?

 

[ludicrousspeed]

I agree. I think the stock will go up prior to the event due to anticipation and that we will go into March 31 higher than the ~$207 price we see today. However, this anticipation causing the run up in SP causes immense expectations and, like you said, I don't think Tesla can meet all of those expectations. Elon even said in the Q4 CC that they're not sure whether to show all of their cards (whatever that means - I'm still 99.99% certain they're showing a prototype and not just pictures.)

Just like the latest X reveal, Tesla scheduled the reveal at the very very end of the quarter, most likely to meet their own deadlines for the public. This tells me that they could be scrambling to get everything together on time. Also, to most people, Elon is not a great presenter. The general reaction to the X event last September was that they need a new speaker because the overall presentation was sub-par. I disagree with the fact that somebody else should speak just because I love hearing him talk and think it would be a shame for anybody else to present for the majority (JB would be acceptable, but still not the same.) I recognize that Elon's stuttering is just a result of him not memorizing speeches, but rather speaking as an engineer from the top of his head and in a truthful, non-deceiving manner. Even more people will watch the M3 event than the MX event, which will mean more people watching who are unfamiliar with Elon and his mannerisms, which will result in more people scratching their head and questioning the presentation as a whole.

So yes, I expect the stock price to fall the week after the reveal, but not by a substantial amount. There are some possibilities that could cause the stock price to rise even further immediately following the event, such as: If TSLA performs poorly during the second half of March and falls below 180-200 prior to the unveiling, if the stores are absolutely packed with mass amounts of people on the first day of reservations and those images go viral, or if Tesla knocks the presentation out of the park by doing something unexpected (like show a sedan and crossover model or if they have the car drive itself onto the stage.) Either way, the M3 is Tesla's version of the iPhone and will eventually propel the stock to all-time highs, so however the stock performs in the weeks/months after the reveal is relatively meaningless.

 

[MitchJi]

JB said that people will be surprised by the number of features that they will include with the M3. He didn't specify that they would be announced at the reveal. I thought that he was implying they would.

 

[esk8mw]

I think the Model 3 reveal will have a hidden meaning - 3 digits, 100. Meaning that the 100 packs for Model S/X will also be announced (to become available July 1 or something). This could cause an uptick despite the inclination to "sell on the news."

Wouldn't it be something if the 3 event also means there's 3 pieces of information? Model 3, 100 packs for S/X and Model Y? I think we see a gap up if there's a surprise of this level.

 

[Fiver]

I think the Model 3 reveal will have a hidden meaning - 3 digits, 100. Meaning that the 100 packs for Model S/X will also be announced (to become available July 1 or something). This could cause an uptick despite the inclination to "sell on the news."

Wouldn't it be something if the 3 event also means there's 3 pieces of information? Model 3, 100 packs for S/X and Model Y? I think we see a gap up if there's a surprise of this level.

You think they would update the X to 100 before they have even managed to catch up and ship out all of the 90's for the X?

/Edit Perhaps a similar setup for when the S90's released where the X90 pack would be upgradeable to the 100 for a minimal cost to existing X owners....

 

[doctoxics]

Elon even said in the Q4 CC that they're not sure whether to show all of their cards (whatever that means - I'm still 99.99% certain they're showing a prototype and not just pictures.)

Since the lead time from reveal to launch is at least 18 months, there will be time for new developments to impact the production version of Model 3. Advancements in autopilot and batteries/battery packs seem to be the most likely updates to be revealed close to launch in late 2017. Having said this, Tesla will likely tell/show us everything they currently are sure of, considering that they are asking us to put up $1,000 and wait 2 years.

 

[MorrisonHiker]

Wouldn't it be something if the 3 event also means there's 3 pieces of information? Model 3, 100 packs for S/X and Model Y? I think we see a gap up if there's a surprise of this level.

It has been done before with the Three Dog Day announcement last July.

 

[esk8mw]

You think they would update the X to 100 before they have even managed to catch up and ship out all of the 90's for the X?

/Edit Perhaps a similar setup for when the S90's released where the X90 pack would be upgradeable to the 100 for a minimal cost to existing X owners....

I think they'll go with the low cost upgrade route. Remember, the jump to 100 was likely planned years in advance - before the X was delayed and had a slower ramp. They probably factored X being on the road for a year or more when the pack upgrade was scheduled to hit, which wouldn't be as "offensive" to X early adopters. Tesla's products are constantly evolving and the best they can do when major events overlap (X rollout and pack upgrade) is to offer cheaper upgrades.

 

[geneclean55]

Also Q12016 deliveries should become available soon after the reveal. May have positive or negative impact?

 

[BornToFly]

My crystal ball is telling me that on the morning of March 31st, they start taking orders in the stores with long lines that make the news, and the stock price spikes during the day. The actual reveal then shows a nice car, but that is a little funny looking (i.e. - covered rear wheel wells) in order to get Cd at or below 0.2, and the stock drops the next several days due to all the criticism from the Bears. Then the stock rebounds shortly after with reports of over 100,000 pre-orders in the first week.

I wish I knew how to, and was able to, use options so that I could make money on that scenario. As a regular stock holder, who would have to pay taxes on gains, the stock would have to drop too far for me to make money selling near end of day on the 31st, and buying back a few days later....

 

[austinEV]

On the 100 packs: It is possible that all X's have them and are software limited to 90. When the time comes to announce the 100 on the model S, they will announce that all 90X's are being upgraded via a patch. This is a reasonable strategy for a few reasons. One, there is a precedent with A/P sensors. Two, they don't want to mess up model S sales by announcing 100 X's and osbourning the S sales. So they have to burn off the old inventory of cells, but they are prioritizing the new cells in the relatively low volume X's. Maybe they didn't want to announce the 100's at the 3 reveal, but perhaps now their hand has been forced.

On the short term impact of the model 3 reveal: Per OP, it is possible that there will be a "sell the news" affect. That would be reasonable considering it has happened every previous product announcement going back to the D. However, this time will be different IMO. Concurrent with the reveal will be the media friendly long lines story as well as *actual* large cash infusions of the deposits themselves, and derisking the "master plan". With a successful, popular reveal, there is a clear line of site to hundreds-of-thousands volume production of S-X-3.

There could be huge volatility. Bears are putting bets down on something bad. If nothing bad happens there is at least a chance of a signficant short squeeze. Also a few days after that, the Q1 deliveries numbers are due.

My current plan is to sit tight through the reveal, unless there is a huge run-up prior to the reveal. To date there has been ZERO run up due to anticipation. We have been following the market only, albeit with a modestly high beta as you would expect.

 

[RationalOptimist]

My crystal ball is telling me that on the morning of March 31st, they start taking orders in the stores with long lines that make the news, and the stock price spikes during the day. The actual reveal then shows a nice car, but that is a little funny looking....

I know some Tesla store employee is quoted as saying it, but it cannot be the case that Tesla would ask people, after x years of anticipation, to come line up at the stores and put down $1k sight unseen, a mere 10 hours before the reveal. That's just silly.

Either there will be some pre-reveal at the stores on the day (unlikely) or, the orders will start (exclusively at the stores) after the reveal that evening. Anything else seems really unfair to those willing to come line-up.

 

[geneclean55]

I know some Tesla store employee is quoted as saying it, but it cannot be the case that Tesla would ask people, after x years of anticipation, to come line up at the stores and put down $1k sight unseen, a mere 10 hours before the reveal. That's just silly.

Either there will be some pre-reveal at the stores on the day (unlikely) or, the orders will start (exclusively at the stores) after the reveal that evening. Anything else seems really unfair to those willing to come line-up.

I was wondering about this. Surely lines around the block will only occur for a vehicle that has a face to it.

 

[Fallenone]

The store employee near my location says he doesn't know how it will be done yet.

I think we shouldn't rule out the possibility that the unveil will happen in the morning. I know Tesla usually does these events around 8-9pm Pacific time but maybe this time is different due to the in-store reservation.

I know some Tesla store employee is quoted as saying it, but it cannot be the case that Tesla would ask people, after x years of anticipation, to come line up at the stores and put down $1k sight unseen, a mere 10 hours before the reveal. That's just silly.

Either there will be some pre-reveal at the stores on the day (unlikely) or, the orders will start (exclusively at the stores) after the reveal that evening. Anything else seems really unfair to those willing to come line-up.

 

[dandurston]

My guess is that Tesla will unveil a pretty normal looking car. Basically a smaller Model S without the nose cone. The stock will drop on this news, but over the long run it'll be a very good thing that they didn't go crazy and just came out with a nice sedan that's everyone likes. So my guess is big lead up in TSLA prior to ~240, then a drop giving back to $215 on April 1, and then a good next few years for the stock ($300 by Dec 31, 2016) driven mostly by great Model X sales and rising margins in 2016.

 

[austinEV]

My guess is that Tesla will unveil a pretty normal looking car. Basically a smaller Model S without the nose cone. The stock will drop on this news, but over the long run it'll be a very good thing that they didn't go crazy and just came out with a nice sedan that's everyone likes. So my guess is big lead up in TSLA prior to ~240, then a drop giving back to $215 on April 1, and then a good next few years for the stock ($300 by Dec 31, 2016) driven mostly by great Model X sales and rising margins in 2016.

I agree on the predicted basic look of the car, but have the opposite feel for the stock movement. To me the risk is that they reveal something only a mother could love. I know that Elon is on record as not wanting to make a weirdmobile, but opinions vary. So if the model 3 is pleasant looking and middle of the road desirable, to me that triggers a risk-off and relief rally.

 

[Nomad]

On the 100 packs: It is possible that all X's have them and are software limited to 90. When the time comes to announce the 100 on the model S, they will announce that all 90X's are being upgraded via a patch. This is a reasonable strategy for a few reasons. One, there is a precedent with A/P sensors. Two, they don't want to mess up model S sales by announcing 100 X's and osbourning the S sales. So they have to burn off the old inventory of cells, but they are prioritizing the new cells in the relatively low volume X's. Maybe they didn't want to announce the 100's at the 3 reveal, but perhaps now their hand has been forced.

...

This got me thinking. Quite a few 90D owners have said that their range is dwindling faster than expected. Tesla reps have countered that it's a software issue that will be fixed soon. It's a long shot, but perhaps erroneous range is due to bungled software intended to hide the true 100 kWh battery capacity. Again, highly unlikely—but fun to think about.

 

[RobStark]

I know some Tesla store employee is quoted as saying it, but it cannot be the case that Tesla would ask people, after x years of anticipation, to come line up at the stores and put down $1k sight unseen, a mere 10 hours before the reveal. That's just silly.

That characterization is just silly. Tesla allowing is not Tesla asking.

No one is forcing you to go to a Tesla store and put a (most likely) fully refundable deposit sight unseen.

For the ultra hardcore Tesla fan, that would buy a Model 3 because it is a Supercharger capable sub $40k BEV even if it is butt ugly, it is a perk to be in front of the reservation list.

Those that need to see the vehicle, see the specification sheet, sit in the vehicle and/or test drive the vehicle first can get their Model 3 later.

 

[BornToFly]

That characterization is just silly. Tesla allowing is not Tesla asking.

No one is forcing you to go to a Tesla store and put a (most likely) fully refundable deposit sight unseen.

For the ultra hardcore Tesla fan, that would buy a Model 3 because it is a Supercharger capable sub $40k BEV even if it is butt ugly, it is a perk to be in front of the reservation list.

Those that need to see the vehicle, see the specification sheet, sit in the vehicle and/or test drive the vehicle first can get their Model 3 later.

Exactly. I just learned that my O.R. nurse is driving 6 hours to Las Vegas to be able to put down a deposit on March 31st at the store (she was told they can't take reservations at the Salt Lake Service Center because of current Utah law). She wants to get her reservation in before April 1st. Many people don't need to see the car, they have faith in Tesla.

 

[tamtam10]

Why would Tesla of all companies limit reservations of Model 3 to in-store? Don't you think we will be able to place reservations online?