Q3 Venting Thread

[justthateasy]

I think TMC is a great support community for days like today. So after reading through the various threads since Q3 earnings have come out, I thought it would be a good idea to start a thread for those who want or need to express their frustrations here instead of the normal investor threads.

(Mods, please move this to the right place if needed, thanks.)


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When I re-bought into TSLA last week when it dipped into the mid-150s, I thought it was going to be easy money after today. Boy oh boy was I wrong. The ramp up to today was great and my latest play was up in a great way but come tomorrow morning, a week's worth of gains (and then some) will go up in smoke.

Since the earnings report was released this afternoon, it's been the only thing on my mind. I've been out an about running errands and such since and I'm usually very good about separating emotion from the decisions I make but I found it to be extremely difficult to do this afternoon. I think that today has become the emotional tipping point that has been building up since October 1. Now it's about dealing with the huge dip in the emotional roller coaster.

On the brighter side however, even though today has been rough for many of us and subsequently the rest of the week, the story isn't over and there is plenty to look forward to with Tesla. A lot of our portfolios are still up for the year right?

 

[RationalOptimist]

Longer term, this is healthy for the market. Too many had become geniuses at placing what they thought were one-way bets. There's no such thing as easy money to be made here.
But for those with patience, there is a way to make a great deal of money longer term.
Buy. Hold.

 

[sub]

Agree, I joked with my wife today that we lost some imaginary money. When I initially bought into TSLA it took a dip and stayed there for a couple of weeks, I got a bit nervous but I was in for the long run. I have been rewarded and expect to be rewarded more. Nothing has changed long term, ER was good but not great. I'm not going to lie, I may check the ticker first thing tomorrow with my eyes covered, but I'm optimistically hoping we hit the bottom already. I wouldn't wager any money on that however.

 

[Krugerrand]

Okay, I'm venting about the fact I've got nothing to vent about. I'm as happy as a clam.

 

[Ocelot]

I will vent. While I hold 75per cent of my holdings in stock...the other 25% was in options. I did not hedge, and rolled the dice. Ugh.

 

[mershaw2001]

I will vent. While I hold 75per cent of my holdings in stock...the other 25% was in options. I did not hedge, and rolled the dice. Ugh.

My vent: my tesla position was 33% shares, 33% puts with 180 strike, and 33% calls with 190 strike. I'd try to weather the storm, but my other two largest positions also took a 21% and 12% hit today (failed drug test and issuance of stock), so altogether it's a perfect storm and i'll have to pare down what i've got on margin significantly to deal with this margin call.

 

[austinEV]

my vent: They sounded like they were trying to talk down the stock. Zero enthusiasm and half hearted, like students working for a C on a project. I agree with whoever (sorry not sure who it was) who wondered if there wasn't a painful absence in the room, like they were all set to announce some supplier breakthrough that didn't materialize so they had to go live with B material and they knew it.

- - - Updated - - -

Vent #2: All this talk of batteries, supplier constraints seemed to bore Elon. But he really wanted to talk about the years-away factory 2.0 "gigafactory".

I have heard the positive version of this on TMC, which is that the battery and non-battery supply constraints will be ironed out in the medium term and they are already thinking of a bigger factory. Good times ahead.

The tired Elon mindset version: My team will work out the supply issues and Panasonic is set for batteries, those are solvable problems. My concern is that as soon as those problems are solved we will go to 800 (made up example) cars/week and then hit the limitation of the line we have set up at Nummi. I see now all the dumb mistakes we made. I want to daydream about the bigger factory we will need. Its a machine to make machines... the first one was set up on the cheap designed to get up fast. The next one will be design for high efficiency...

 

[justthateasy]

my vent: They sounded like they were trying to talk down the stock. Zero enthusiasm and half hearted, like students working for a C on a project. I agree with whoever (sorry not sure who it was) who wondered if there wasn't a painful absence in the room, like they were all set to announce some supplier breakthrough that didn't materialize so they had to go live with B material and they knew it.

- - - Updated - - -

Vent #2: All this talk of batteries, supplier constraints seemed to bore Elon. But he really wanted to talk about the years-away factory 2.0 "gigafactory".

I have heard the positive version of this on TMC, which is that the battery and non-battery supply constraints will be ironed out in the medium term and they are already thinking of a bigger factory. Good times ahead.

The tired Elon mindset version: My team will work out the supply issues and Panasonic is set for batteries, those are solvable problems. My concern is that as soon as those problems are solved we will go to 800 (made up example) cars/week and then hit the limitation of the line we have set up at Nummi. I see now all the dumb mistakes we made. I want to daydream about the bigger factory we will need. Its a machine to make machines... the first one was set up on the cheap designed to get up fast. The next one will be design for high efficiency...

For the small amount of time that I was able to listen to the call live, I couldn't believe how many times I heard the word "constraint(s)". I kept thinking, "is this the same Tesla/Elon Musk we know and love?"

A look at the bigger picture, even the best (Apple as an example) have blown it when it comes to presentation.

 

[smorgasbord]

Let's see,

5500 cars delivered, probably 500-1000 "in-transit", and about 6000 cars promised for Q4. But production is at 550/week, which for a 12 week quarter (shutdown for XMas?) would still be a beat at 6600 cars.

135kW SuperChargers in Germany!

Revolutionary Service Announcement coming soon!

Battery supplies for 2014 ironed out.

Enough batteries for well over 250K cars for the next 4 years is a "floor, not a ceiling."

Demand outstrips production, even with zero advertising.

Model S + Model X assembly lines setup for 100K cars/year, with contingency plan if demand is more than that.

Gen-3 to have a step-change in battery technology.


I think TSLA is going to pull a TRIP. Go look at their earnings reaction last month. This was a very good report - Tesla is investing in its business.

 

[DaveT]

Let's see,

5500 cars delivered, probably 500-1000 "in-transit", and about 6000 cars promised for Q4. But production is at 550/week, which for a 12 week quarter (shutdown for XMas?) would still be a beat at 6600 cars.

135kW SuperChargers in Germany!

Revolutionary Service Announcement coming soon!

Battery supplies for 2014 ironed out.

Enough batteries for well over 250K cars for the next 4 years is a "floor, not a ceiling."

Demand outstrips production, even with zero advertising.

Model S + Model X assembly lines setup for 100K cars/year, with contingency plan if demand is more than that.

Gen-3 to have a step-change in battery technology.

I think TSLA is going to pull a TRIP. Go look at their earnings reaction last month. This was a very good report - Tesla is investing in its business.

Thanks smorgasbord for looking at the positive. It was somewhat strange to me that Elon seemed to give mixed messages when he wouldn't give any 2014 guidance numbers (instead emphasizing multiple times they're production-constrained) while at the same time saying battery constraints for 2014 is taken care of and mentioning the panasonic 1.8b cell deal.

Edit: Actually after thinking about it, there could be three different battery problems going on.
1. Immediate battery supply - can't solve the problem, can only manage it.
2. 2014 battery supply - taken care of. (but question is when in 2014 does this get solved)
3. Gen3 battery supply late 2016/2017 - working on giga factory plans/ideas (in progress).

So, the short-term (#1) can't be solved, just managed. 2014 (#2) seems solved but they won't tell us exactly when it will be and no FY 2014 guidance numbers. And Gen3 (#3) is in progress of finding a solution.

It seems like Elon articulated #1 and #3 well but #2 wasn't explained much. It's too bad because #2 is probably the most important for the ST price action of TSLA.

 

[Convert2013]

Thanks smorgasbord for looking at the positive. It was somewhat strange to me that Elon seemed to give mixed messages when he wouldn't give any 2014 guidance numbers (instead emphasizing multiple times they're production-constrained) while at the same time saying battery constraints for 2014 is taken care of and mentioning the panasonic 1.8b cell deal.

Agree. Not the most investor friendly briefing, at least from a clarity perspective. It will be up to the better quality analysts now to put the pieces together get dig out facts to build their models, which I expect to be positive, as already started by Morgan Stanley.

 

[clmason]

Could it be possible that the depressed mood of Musk on the call was purposeful with the intention of temporarily bringing down share prices so that employee stock options would have a low share price water mark?

I believe employees are given a time window where the low point within that window sets their options strike price. So for the thousands (?) of employees who were hired in the period, this low mark would be their strike? And therefore as share price recovers their options are more ITM and they have incentive to stick around?

Maybe also help attract employees who otherwise would not be interested becuase the stock options don't mean much when the growth has already happened.

Also, does that impact the dilution rate due to stock options at all. I'm not sure how share price impacts this.

Not an expert by any stretch but throwing it out there for those who know more than i to chime in on.

I can envision a discussion between Deepak and Elon - a short and steep correction could be beneficial for X.Y.X reasons.

Musk has too much passion for the business to really be depressed with the great numbers they reported in the Qtr. I think there is more than meets the eye.

 

[bhuwan]

Could it be possible that the depressed mood of Musk on the call was purposeful with the intention of temporarily bringing down share prices so that employee stock options would have a low share price water mark?

I believe employees are given a time window where the low point within that window sets their options strike price. So for the thousands (?) of employees who were hired in the period, this low mark would be their strike? And therefore as share price recovers their options are more ITM and they have incentive to stick around?

Maybe also help attract employees who otherwise would not be interested becuase the stock options don't mean much when the growth has already happened.

Also, does that impact the dilution rate due to stock options at all. I'm not sure how share price impacts this.

Not an expert by any stretch but throwing it out there for those who know more than i to chime in on.

I can envision a discussion between Deepak and Elon - a short and steep correction could be beneficial for X.Y.X reasons.

Musk has too much passion for the business to really be depressed with the great numbers they reported in the Qtr. I think there is more than meets the eye.

Malicious intent doesn't seem to bode well with me ... But anything is possible.

 

[austinEV]

Could it be possible that the depressed mood of Musk on the call was purposeful with the intention of temporarily bringing down share prices so that employee stock options would have a low share price water mark?

I believe employees are given a time window where the low point within that window sets their options strike price. So for the thousands (?) of employees who were hired in the period, this low mark would be their strike? And therefore as share price recovers their options are more ITM and they have incentive to stick around?

Maybe also help attract employees who otherwise would not be interested becuase the stock options don't mean much when the growth has already happened.

Also, does that impact the dilution rate due to stock options at all. I'm not sure how share price impacts this.

Not an expert by any stretch but throwing it out there for those who know more than i to chime in on.

I can envision a discussion between Deepak and Elon - a short and steep correction could be beneficial for X.Y.X reasons.

Musk has too much passion for the business to really be depressed with the great numbers they reported in the Qtr. I think there is more than meets the eye.

No, if Tesla wanted to give it's employees money they are free to do that. The options they give out can have whatever strike they want since they are paying for them when they get exercised. If employees were mad that their 170's were underwater, Tesla could just write them a check pretending they were 140's instead of tanking the market cap. The options conspiracy would be (I don't think this at all) that they tanked the price because employees were about to vest millions of shares and cost the company a bunch of money and maybe lose key employees. with the stock price lower they owe less and fewer people leave. And, new options grants could have a smaller quantity and still seem attractive. no way that is going on though.

 

[justthateasy]

I didn't think I'd be using this thread again so soon to vent but I think we all need it today.

I've lost a lot this week and I feel so helpless. I can't help but feel that the bubble has burst and we may be seeing NFLX happen all over again. The only silver lining with that is the fact that even though it was beaten down hard, it came back roaring. I hope we see the same happen with TSLA.

 

[ZenMan]

I didn't think I'd be using this thread again so soon to vent but I think we all need it today.

I've lost a lot this week and I feel so helpless. I can't help but feel that the bubble has burst and we may be seeing NFLX happen all over again. The only silver lining with that is the fact that even though it was beaten down hard, it came back roaring. I hope we see the same happen with TSLA.

I certainly believe in the short term there will be more pain, but then something will leak (Maybe Tesla adding more employees for a third shift -- indicating battery supply issue resolved), and then it will come back quickly. I'm looking to buy back in, but not until we have a major catalyst to change the narrative.

 

[turbodreamer]

I didn't think I'd be using this thread again so soon to vent but I think we all need it today.

I've lost a lot this week and I feel so helpless. I can't help but feel that the bubble has burst and we may be seeing NFLX happen all over again. The only silver lining with that is the fact that even though it was beaten down hard, it came back roaring. I hope we see the same happen with TSLA.

Feel the same way. There were many times TSLA had dropped significantly and I held through, but i'm sad to say I sold all my options and shares today (even my 2015 leaps). Luckily I bought in very early on and came out with a nice gain in the end. Half of my gains were wiped out in the last few weeks alone. I hope your right in that it will come back roaring, but I don't see it in the near future. For now I think I'm going to wait and watch.. enter back in when I feel the time is right.

 

[bonnie]

How many of us kept hoping for a dip to buy more|buy back in? Opportunity is knocking.

That's all I'm saying. It's easy to be upbeat when the stock keeps going up. Fundamentals haven't changed. The future is just as bright (well, brighter from where I sit) as it was when everyone was talking $200 or more. Model X and Gen3 are coming.

The story is just playing out.