Short-Term TSLA Price Movements - 2013

[bonnie]

As usual, I've been letting this thread slide for the past week, so sorry for the late reply.

Been doing a lot of research on battery technology recently and I agree 100%. Tesla could do, or come close to doing a credible Gen III right now, so I am getting to the point of just assuming that we'll see Gen III in 2016.

Their recent hires, and the time needed for a credible development program (along with the need to strike while the iron is hot) lead me to expect an Alpha reveal of a Gen III prototype within 12 months, and possibly before 2013 is out.

Yep. +1 on this. I expect to see something about Gen III before the end of the year. Not because I have any magical spidey powers. But because the market is ready (faster than anticipated), the cash is in place ... all signs point to NOW.

But first I want my X, please.

 

[FredTMC]

Yep. +1 on this. I expect to see something about Gen III before the end of the year. Not because I have any magical spidey powers. But because the market is ready (faster than anticipated), the cash is in place ... all signs point to NOW.

But first I want my X, please.

+1! Lets see Alpha by year end. That would be amazing.

 

[kenliles]

Yep. +1 on this. I expect to see something about Gen III before the end of the year. Not because I have any magical spidey powers. But because the market is ready (faster than anticipated), the cash is in place ... all signs point to NOW.

-1 on this for me. That's way too soon given X. And the the price would be too high too meet the goal - needs to be in the $30ks not $45k+;
In addition, gross margin for that volume needs to start high after reaching 25% on SnX. Also, needs next gen battery order of magnitude improvement, not just currently doable. imo

 

[brianstorms]

The very first thing I thought of when Elon first made mention of an upcoming "mystery announcement" later this year was that it was going to be the Gen III Alpha unveiling.

But I share concerns it could dilute Model X market interest. And there's that pesky thing about the technology not being ready for a few more years yet.

 

[c041v]

In the USA, this type of financial transaction is taxed at your income tax rate. I live in NYC so I may have other taxes associated with it too. But, I plan on seeing about 35% of my gains taken from me. Fair enough, it's how it works. But it will hurt. IF you hold a stock for 1 year, then the tax rate is fixed at 18% (20% now?) and is known as a "long term capital gain". Everything I've made is short term so it's considered income.

I might have my company start to take a bit more out of my check so I will have covered more for taxes. Or possibly just calculate the tax money and put it in US Treasuries for a year. I could also pay off some student loan interest to balance it out - will need an accountant to see the best route for me.

Like I said, good problem to have.

In Canada, they came up with Tax-free Savings Account (TFSA)account a few years ago. All Capital Gains are Tax-free, and any 'room' you realize with a gain remains even if you withdraw, which you can do as often as you like. It's like a IRA/RRSP except you can withdraw at any time with no tax consequences. The downside is that you can only contribute around $5K annually (it is indexed with inflation to a degree) and investments cannot be leveraged.

I sure wish I had my TSLA holdings in that account. D'oh.

 

[CapitalistOppressor]

It’s possible for SpaceX to make money by contracting with governments and corporations to send their material into orbit or return some of it. Sending people to the Moon or Mars as a private venture would be a financial sinkhole. Nevertheless, Elon envisions devoting his later years (and his greatly multiplied fortune due to Tesla Motors) on his space colonization dreams. I’ll invest heavily in his practical ventures Tesla Motors and SolarCity, but he’ll have to pay for his Mars ticket without my help.

In the long term, I see SpaceX as having the potential for being a significantly more valuable play than any automaker. I'll admit, I don't have any particular insight into Elon's plans, but I can easily see SpaceX making oodles of money on a 30 year horizon, with zero limit on growth possibilities.

In contrast, Tesla has the potential to become a behemoth in the auto industry. But it's not generally recognized yet, that Tesla is also going to dramatically shrink the car market. A Model S class vehicle already has the potential to be a virtually indestructible product (absent a few design bugs with gimpy door handles or pano roofs and such).

On a 30 year horizon, Tesla (and other carmakers) will be scraping the bottom of the emerging market barrel in order to compensate for reduced markets in the advanced countries, as cars with multi-decadal lifespans become the norm.

 

[JRP3]

When 2017 rolls around the cost will have come down a lot on batteries/tech due to Moore's Law...

Batteries do not follow Moore's Law: http://ephase.blogspot.com/2011/11/moores-law-for-batteries-dont-count-on.html

 

[ShortSlaver]

Heh, I'm an AAPL refugee too I was trying to delay my AAPL sale to 2013 so I don't have to pay as much in taxes, but you know what, in the first half of 2013 AAPL dropped WAY more than if I had sold in Nov/Dec 2012. So, the lesson here is DO NOT LET TAX CONSIDERATIONS DICTATE WHEN YOU NEED TO SELL.

Now, I have a six-figure loss for 2013 and I don't have to worry about capital gains for a LONG time.

Must be different in Canada but in the USA you can only deduct $3,000/year in capital losses I believe.

 

[moltenfire]

In Canada, they came up with Tax-free Savings Account (TFSA)account a few years ago. All Capital Gains are Tax-free, and any 'room' you realize with a gain remains even if you withdraw, which you can do as often as you like. It's like a IRA/RRSP except you can withdraw at any time with no tax consequences. The downside is that you can only contribute around $5K annually (it is indexed with inflation to a degree) and investments cannot be leveraged.

I sure wish I had my TSLA holdings in that account. D'oh.

Investments in a TFSA can be leveraged - using options. I use TD, and you can definitely hold US options in your TFSA.

 

[aznt1217]

Batteries do not follow Moore's Law: http://ephase.blogspot.com/2011/11/moores-law-for-batteries-dont-count-on.html

Interesting read, that's why I said /Tech haha. I'm wondering if there's a breakthrough in manufacturing or better systems to manage batteries. Maybe not directly the batteries themselves but everything else surrounding it.

 

[bollar]

But it's not generally recognized yet, that Tesla is also going to dramatically shrink the car market. A Model S class vehicle already has the potential to be a virtually indestructible product (absent a few design bugs with gimpy door handles or pano roofs and such).

On a 30 year horizon, Tesla (and other carmakers) will be scraping the bottom of the emerging market barrel in order to compensate for reduced markets in the advanced countries, as cars with mulch-decadal lifespans become the norm.

I am skeptical of this. I've never had to replace a car due to the ICE wearing out and I've put > 250K miles on more than one Mercedes. It was all of the other systems wearing out -- systems that also exist on the Tesla, such as A/C, suspension, and all of the electrical doo-dads -- that made me move on. I really don't think the Tesla will be able to provide signficantly better reliability in this area. I'm happy to be proven wrong, though. I don't mind holding a car for eight to ten years if it's working.

 

[CapitalistOppressor]

That was talked about earlier- the GENIII was always to frame 2 models just like the S-X; no new news there either

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well we just added another $B or so today in valuation , that will only take a few years of sales to close the gap just created. As long as we're in fantasy land, I don't really see anything stopping the first Trillion dollar company by earnings report. I'd target $800 by then.

Don't forget, the platform will underpin the new Roadster as well. And probably pickups for both S and GenIII platforms. That wasn't in the story, but Elon has mentioned it, and it makes sense.

 

[JRP3]

Interesting read, that's why I said /Tech haha. I'm wondering if there's a breakthrough in manufacturing or better systems to manage batteries. Maybe not directly the batteries themselves but everything else surrounding it.

Better management will only provide minimal results. What's needed is batteries that simply need less management. The LiFePO4 cells I use in my car don't seem to need active management or cooling for example, but they don't have the energy density of the cells Tesla is using. However Tesla ends up losing much of that energy density advantage in all the packaging and temperature management those cells require. A more advanced chemistry would hopefully not need as much support, or conversely would be so cheap that the cost of management wouldn't matter. In any case all significant advances need to come from the battery, not any of the other systems.

 

[kcveins]

Must be different in Canada but in the USA you can only deduct $3,000/year in capital losses I believe.

This is correct, but you can carry over any capital gain losses indefinitely - so if you lost 100K on AAPL, this can be used to offset the 100K gain in TSLA over the next year or 2 or 3...

 

[CapitalistOppressor]

-1 on this for me. That's way too soon given X. And the the price would be too high too meet the goal - needs to be in the $30ks not $45k+;
In addition, gross margin for that volume needs to start high after reaching 25% on SnX. Also, needs next gen battery order of magnitude improvement, not just currently doable. imo

Tesla needs 3 years for the development cycle, so pricing would be based on material costs (in this case the batteries) in 2016 or 2017. Battery prices will be where they need to be for Tesla to hit their preferred Gen III price targets. There is no need for gee whiz breakthroughs.

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I am skeptical of this. I've never had to replace a car due to the ICE wearing out and I've put > 250K miles on more than one Mercedes. It was all of the other systems wearing out -- systems that also exist on the Tesla, such as A/C, suspension, and all of the electrical doo-dads -- that made me move on. I really don't think the Tesla will be able to provide signficantly better reliability in this area. I'm happy to be proven wrong, though. I don't mind holding a car for eight to ten years if it's working.

An anecdote does not replace evidence. Current generation ICE vehicles are massively better than cars 20 years ago, and we are already seeing the effects as used cars cannibalize the new car market. The average age of the fleet is well over 10 years now, which is by far the highest its ever been in history. But even these cars wear out far faster than a Model S class vehicle will.

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my advice to everyone is to look at the chart- do the numbers; and be real careful out there-
we are in territory now where the buyer at these valuations per share are arguably more crazy than the shorts ever were.
disclosure- I'm still long my shares (closed my option calls), so by all means keep it going- but in fairness I tell my family-friends and anyone who asks; this valuation is far out of reality (even Elon himself would no doubt admit that- hence the last minute finance deal);
I suspect the odds are good for a better entry point even as more rise may be in the cards from Elon announcements -

Yes, I have no clue how I should be playing this, besides holding on for dear life. I've already got a winning lotto ticket in my hands, but if I pick whats behind door #3 I might get a big new bucket of cash, while door #1 might cut me off at the knees.

That said, Tesla's method of announcing sales and reservation results is pushing the next significant reality check back for a couple of months. And all of the news coming down the pike will either be recycled good news, or new good news. It will take a real golden BB to knock market psychology off of the track its likely to stay on until the next conference call.

And long term, I see nothing but amazing goodness if Tesla manages to maintain demand at the ~25k/year level its probably at right now. Even a U.S. pullback can be balanced as they push into global markets.

Still, this stock going on a tear again almost immediately after it got market validation at a $92 level is freaking me out a bit, lol.

 

[brg2290]

And I'm not sorry I sold half my TSLA at $92.4 the day before it reached $97. But, I was tired of waiting to get my Model S. Now, I can (so to speak) have my cake and eat it too.

I'm in Spokane, can I have a ride?:smile:

 

[ShortSlaver]

So, we're hot again in pre-market. Anyone making a move today? I've considered some June options to play through the next couple Musk announcements.

It looks like the overall market will be down today - always something that makes me nervous. Yesterday we had a major bull rally on the market at large which TSLA may have benefitted from.

Updated:

Up to $114.50 in pre-market...christ.

 

[Majerus]

insane.. 115 in pre-market.

 

[CapitalistOppressor]

Holy. Moly.

 

[aznt1217]

I'm not touching. This supercharger should be bananas. Looking forward to free press at D11