Short-Term TSLA Price Movements - 2013

[deonb]

Absolutely right! Best part is you get to live in and enjoy property. Can't really use stock for much other than the investment.

Property investment is fantastic, but your live-in property is not an investment. If I learned one thing from my dad, it's this.

He also thought it's a great investment, and started by buying a property (this in South Africa, but same principle applies in U.S), for R16'000 in 1980. Even moved around and did buy-and-flips 20 times or so, so we moved around endlessly when I was a kid. Notably numbers I remember as he was "upsizing"on the way were R90'000 in 1983, R160'000 in 1988, R350'000 in 1993, and now he has a R1 million paid off property. If he just stayed in the original one, it would also be worth R1m - all that buying and flipping didn't help a thing.

But fine, still good investment, you'd think? After all - R16000 to R1m is a 13% year over year return!

No. It's not. First of all, he had to make mortgage payments over 30 years. Secondly, you will always need a place to live. If he tries to realize his "million" gain, he would just need to find somewhere else to live, which would cost the same. Your primary property is just a sunk cost. It's nice that you have to only sink it once in your life - making it slightly better than a car, but it's not an investment to you - just to your children.


5 years ago we figured out his mistake and decided I'm not going to make the same one. So together we started buying properties on my name and renting them out. Started with 1 - now have 5. Used 100% loans, so was a tiny investment (document fees + I'm signing surety + ~$5000 in total mortgage shortfalls for the first 2 years). 5 years later they're showing a monthly profit and the shortfalls have been made back.

Not a lot of money there yet, but if we just leave it alone without acquiring any more (though we are), by the time I retire in 25 years that's today's equivalent of $300k, or alternatively with rent, today's equivalent of $1500 per month for life, assuming exchange rates stay parallel to relative inflation - actually doing better than that. All from $5000 in an already regained short-term investment. The whole thing makes TSLA's potential look like buying MSFT.

And the best part is - by doing this across country borders... total further risk: zero. (If property values and rental prices tank, and I go bankrupt in South Africa ... meh. I don't live there anymore.). I don't exactly know why they let someone who lives and earns money in another country sign surety, but they do.


Anyway, coming back to the point - your primary property is not and never will be an investment. Find a way to acquire additional properties (especially while mortgage rates are low - get in fixed), and then you're golden.

 

[twinklejet]

Financial Times article: http://www.ft.com/cms/s/3/61681cac-ffac-11e2-b990-00144feab7de.html#axzz2bMoW7DBO

Unfortunately, there are still doubters... Look at this comment:

While I agree that what goes up will eventually come down (and settle at a market price everyone is comfortable with)... to say it is going up on hot air plus all those other comments AFTER Tesla has posted Q2 earnings... I mean, seriously? Does anyone agree with this guy?

 

[DonPedro]

The 800 cars for Norway by year-end is clearly sandbagging, at least on the demand side. This is why I think that raised guidance for deliveries is also just saving ammo for Q3 report.

As proven by this quote today on E24 (Norwegian business news site; my translation):

Tesla do not want to disclose how many cars have been ordered by Norwegian customers.

- We are going to deliver way above 1000 cars this year. Let's just say that the 13 first you can see here are just the tip of the iceberg, says Tesla's [Oslo Store Manager] Wold.

 

[Norse]

As proven by this quote today on E24 (Norwegian business news site; my translation):

Yeah that 800 number is really showing that they are lowballing!

 

[DonPedro]

Seems others are already questioning the GAAP - non-GAAP reconciliation. I'm not an accountant. Is there anything to this?

https://twitter.com/zerohedge/status/365210209909604352

In general, I actually agree that the use of non-GAAP accounting should be a source of concern (or at least caution) for investors. As you all probably know, GAAP means Generally Accepted Accounting Principles (in this case referring to US GAAP, which are set by the Federal Accounting Standards Board - FASB).

Non-GAAP means "we invented our own way of accounting, because we didn't like GAAP". There are no rules for "non-GAAP", so any kind of funny accounting can be employed. There are two main reasons for doing this: (1) You want to cook the books and look better and (2) your business is special, and GAAP does not reflect your performance well.

Too often it is the first reason that dominates the decision. I certainly don't think Tesla is in this category. Nevertheless, it is important for investors to be aware of the stuff they have changed from GAAP:

1. Stock based compensation expense. This is basically the loss to shareholders from the company issuing stocks and options to employees - the cost of dillution. This figure was $12.5 million in Q4'12, $14.9 million in Q1'13 and $19.3 million in Q2'13. This is a large and obviously recurring figure that I can see no justification for excluding from non-GAAP. Stock-based compensation replaces other compensation, and you cannot argue that your "underlying run rate" would do fine without such costs.
2. One-off costs (in this case a $16.4 million fee for early extinguishment of DOE loans). Fair enough, you can argue that these only pertain to this quarter, so they do not say anything about the performance of the company. On the other hand, revenue sources that are not sustainable (ZEV credits) are booked in non-GAAP, so there is an element of cherry picking to this argument.
3. Lease accounting ($19.3 million). GAAP forces you to be cautious about lease accounting, because in a way you own the car and have not fully sold it. This is true for Tesla only if the resale value drops beyond the guarantee. GAAP forces you to make this conservative assumption, while Tesla's non-GAAP assumes that this is not an issue. The truth is somewhere between the two.
4. Non-cash interest expense related to convertible notes ($1.8 million). Not sure what this is, but being non-cash it probably involves dillution. So it is the same discussion as item 1 above.

As an investor, I would prefer to see non-GAAP that only corrected for the lease accounting. The other items should have stayed in IMHO.

And in general, for companies where I don't have the luxury of investigating as closely as I do with Tesla, I want to see GAAP only. Non-GAAP could mean anything.

 

[justthateasy]

Hello everyone!

I'm new to the TMC forums as I have finally registered an account but have been lurking for the past few weeks.

First and foremost, I just want to say a few things.....

Thank you to everyone for giving their ever so valuable insight about Tesla Motor and TSLA. I have learned a lot from everyone here and like most people here, made a little profit on the side. I believe with Elon Musk at the helm, Tesla is paving the future of the automobile and will radically change transportation as we know it. Lastly, congratulations again to everyone!


With all that said, where can we expect TSLA to go today? Any predictions on the highs and lows of the day or will it be too volatile today along with the next few days to even put a new base number out there?

I'm holding a long position that I bought at $105 but I'm really tempted to take the profits within the first hour of trading and buy back in another day if the stock finds itself in the 130-140 range. My only concern is when the 161 convertible notes come into play which can happen very soon.

Thanks for any insight at this juncture as I'm a little unsure what to do at this point.

 

[sahanim]

Hello everyone!

I'm new to the TMC forums as I have finally registered an account but have been lurking for the past few weeks.

First and foremost, I just want to say a few things.....

Thank you to everyone for giving their ever so valuable insight about Tesla Motor and TSLA. I have learned a lot from everyone here and like most people here, made a little profit on the side. I believe with Elon Musk at the helm, Tesla is paving the future of the automobile and will radically change transportation as we know it. Lastly, congratulations again to everyone!


With all that said, where can we expect TSLA to go today? Any predictions on the highs and lows of the day or will it be too volatile today along with the next few days to even put a new base number out there?

I'm holding a long position that I bought at $105 but I'm really tempted to take the profits within the first hour of trading and buy back in another day if the stock finds itself in the 130-140 range. My only concern is when the 161 convertible notes come into play which can happen very soon.

Thanks for any insight at this juncture as I'm a little unsure what to do at this point.

If you believe in tesla and elon musk. i would keep your money where it is. There is no use in trying to figure out when to get out and come back in. It's the devil's game that you dont want to pay.

My Prediction for price today? North of 165

 

[DonPedro]

I thought the letter and conference call was better than "very good" but below "complete blowout." I'll call it "very, very good."
- strong revenue, profit, units delivered, GM
- confident guidance for profitability in Q3/Q4, 25% GM by end of year, and 40k annualized demand by end of 2014
- Tesla is basically saying, "we're kicking ass like we said we were going to."

I mostly agree. However, for me the cloud in the blue sky for me was the information on the growth trajectory. I think that in light of what was said, the growth expectations we've had here on the forum are too aggressive. I noted:
- Model S production ramp-up seems to be constrained by supply chain issues, which will not be resolved before Q1 or Q2 next year. We do not know which production level they will be constrained to until then - maybe the level they are at now?
- Model X is still not top-of-mind for neither R&D nor top management (but will be soon). This was a surprise to me - I would have thought that at least in terms of R&D this would be the main focus.
- Model X will only come in any significant volumes in 2015. I thought there would be meaningful numbers already in H2 2014.
- It did not seem that much is going on yet in terms of GenIII development. They "see a roadmap" to the $35k vehicle, but Elon said is not even spending more than 5% of his focus on this.
- There was no indication that R&D spending was increased after the cash raise to accelerate either new model. This makes sense as long as production ramp-up is the challenge.

Based on this information, I would not expect GenIII sales to become important before 2018. That is later than I was previously thinking.

Otherwise, great results.

 

[justthateasy]

If you believe in tesla and elon musk. i would keep your money where it is. There is no use in trying to figure out when to get out and come back in. It's the devil's game that you dont want to pay.

My Prediction for price today? North of 165

I'm definitely going to hold for the foreseeable but putting a trailing stop in case we run into a massive pullback. I don't want to get AAPL'd....... again. :redface:

Wow, 165 is far far more bullish than I would have thought. My conservative prediction is a high of 155 and leveling out at 148. Then again, we all ready hit 158 in pre-market trading.

 

[retinadoc]

Tesla Stock Owners After Q2 Conference Call.... Thank You Elon and Tesla!

 

[bhuwan]

So does anyone think that there's still room to get in?

 

[justthateasy]

So does anyone think that there's still room to get in?

I hope shorts get in at this level.

 

[nursebee]

shorts getting blown away Bruce Willis yippie kai yay style 158!

 

[DonPedro]

So does anyone think that there's still room to get in?

I am guessing that there will be better opportunities during the next 12 months. Look for a timing where markets are not setting ATHs. There is a time to buy, a time to wait and a time to sell. I am unsure of which it is, but most likely it is not the first.

 

[Norse]

I hope shorts get in at this level.

Im buying more today. Just buy and hold is the best strategy I Guess.

 

[CyberDutchie]

- Model X is still not top-of-mind for neither R&D nor top management (but will be soon). This was a surprise to me - I would have thought that at least in terms of R&D this would be the main focus.

I didn't interpret it this way, I heard that Elon is personally spending a lot of time on the Model X and that they are working on refining the car. (You could sense he had to restrain himself to not talk about any of those refinements.) I would characterize that as top-of-mind (there can/should be more than just one area that is top-of-mind).

Here is the part of the transcript where they discuss Model X:

Yes. We are hard at work on the Model X refining the design. We expect to be in limited [volume] to deliver a small number of units at the end of next year and then volume production would recur in 2015. So, in terms of, if you are trying model it financially, I would model it more in 2015 than in 2014. Although we are on track to deliver University customers at the end of next year.

From a product standpoint, the Model X is our primary focus, obviously at this point. For the most part, our researchers are spending a lot of time personally on the Model X and trying to get the details right. I think there are some things we can do to improve the Model X over the early demonstration prototype that people have seen. I think there is room to make it better.

So we are going to push pretty hard to make it better than what people have seen. I think this is an exciting feature as that, I mean that I love that, hopefully other people like them to.

(...)

In terms of executive time, I think the Model X is swiftly raising to become the main priority but it's not quite there yet but it will be soon. I am allocating an increasing portion of my time to that every week. Probably in the fourth quarter it becomes the top one, the top item. That's my guess. These are just somewhat of qualitative statements.

 

[InTheShadows]

I am guessing that there will be better opportunities during the next 12 months. Look for a timing where markets are not setting ATHs. There is a time to buy, a time to wait and a time to sell. I am unsure of which it is, but most likely it is not the first.

I'm not so sure this will happen, we all thought it would happen last quarter too and it never did.

 

[aznt1217]

I think a lot of this conference call was a set up for Q3 surprise and more importantly, Elon has learned a crucial lesson. Lesson being: underpromise, overdeliver. In the past, he's over promised and under delivered and the press was all over it. I can't imagine he enjoyed that.

To answer people's questions, I believe there's more upside. I wouldn't expect a frenzy or squeeze like many here foolishly hope. Tesla will now consolidate and establish a new range. This has all the characteristics of a bubble, BUT the only difference is there's tangible product/performance behind it (which is why I'm still in). I just hope it won't be an AAPL scenario where options and Wall Street prop the share price up and start throwing out pie in the sky estimates.

I think in the next few weeks, we'll be seeing some big money come in from large investors. The Tesla team is attending some industry investor conferences that usually drum up some new money (if managers hear what they like).

For those who are new to investing and who are hoping for some magical answer on whether you should buy or sell. At the end of the day it's your money. This is still the internet. We don't know who lurks. Put it this way though, you can have your money sit in a savings account and get 0.9% at most, or dabble a bit and make a few basis points above that. At these levels, don't get greedy and be nimble if you are a short term hold. If you are long, sit back and live life.

 

[CapitalistOppressor]

I mostly agree. However, for me the cloud in the blue sky for me was the information on the growth trajectory. I think that in light of what was said, the growth expectations we've had here on the forum are too aggressive. I noted:
- Model S production ramp-up seems to be constrained by supply chain issues, which will not be resolved before Q1 or Q2 next year. We do not know which production level they will be constrained to until then - maybe the level they are at now?
- Model X is still not top-of-mind for neither R&D nor top management (but will be soon). This was a surprise to me - I would have thought that at least in terms of R&D this would be the main focus.
- Model X will only come in any significant volumes in 2015. I thought there would be meaningful numbers already in H2 2014.
- It did not seem that much is going on yet in terms of GenIII development. They "see a roadmap" to the $35k vehicle, but Elon said is not even spending more than 5% of his focus on this.
- There was no indication that R&D spending was increased after the cash raise to accelerate either new model. This makes sense as long as production ramp-up is the challenge.

Based on this information, I would not expect GenIII sales to become important before 2018. That is later than I was previously thinking.

Otherwise, great results.

Yes the comments on GenIII were the most wishywashy I've heard from him. That said, the reasons for it seem to be the same ones we were discussing last week in my Cost per kWh thread.

Specifically, the massive increase in the potential sales of the Model S platform are projected to soak up battery production capacity that otherwise would have gone to GenIII. We've gone from expectations of 30k units per year for the platform to a potential for 100k+.

There just isn't room anymore for GenIII and that issue has recently climbed to the top of the list for Tesla for the same reason it did for me. Demand in North America is being sustained at a level that nobody really expected, and that suddenly makes GenIII a really heavy lift because of lack of capacity, and the need to adjust near term expectations for GenIII itself dramatically higher.

 

[davecolene0606]

The one thing that was apparent in yesterday's call was that GenIII can be done with no new breakthroughs in the core battery chemistry and that the improvement were in the associated electronics. Not withstanding the supply of cells issue, I sure,like that it can be done with "without any miracles" (close to,what he said I think).