Short-Term TSLA Price Movements - 2014

[PeterJA]

In terms of financing - we all remember [Elon] said "no financing needed" in early May just days before the bank deal that lead to the Sr. Notes financing.

This is oft-repeated misinformation. He actually said the following (I have partially corrected Seeking Alpha's terrible transcript and added emphasis):

Elon Musk - Chairman, CEO, and Product ArchitectSure.

Well, we don't have any plans right now to raise funding. Potentially we expect to be – we were positive cash flow in Q1 and we expect to be there relatively sort of neutral on cash flow in Q2. But if it was possible, we could be opportunistic about raising a round, but we have spent no time on that at all. So if we were to do a round, it would be for the reasons that you mentioned which is to ensure that if there was some unexpected supply interruption, some sort of risk event, but should potentially protect against a portion of your event that there could be some merit to doing a round.

Tesla Motors Inc (TSLA): Tesla Motors' CEO Discusses Q1 2013 Results - Earnings Call Transcript - Seeking Alpha

The last sentence of the transcript is garbled nonsense that I didn't correct because I didn't relisten to the recording just now. But I specifically remember (from relistening before) that he said "opportunistic," not "optimistic" as misprinted in the transcript.

 

[Julian Cox]

Anyone think today's price movement relates to this statement from Elon?

JRP3 that article you linked: http://www.autonews.com/article/2014...#ixzz2qKRFIKUr is absolutely extraordinary.

If you ever needed to relax about the prospects for Tesla - that will do just fine.

If the auto industry is really that clueless I almost feel sorry for them.

Regarding mention of the giga factory I have no idea if that knocked the price (according to my browser the page has become members only anyway).
More likely the stock took a dip on the word recall disconnected from the word adapter lead.

I have a suspicion and a theory that Musk deliberately invited in the shorts around Q3E to pay that giga factory much sooner than they thought.

 

[772]

I read that wall-o-text of an article hoping that it would be an interview with Elon like it said it would be last week... instead I got a bunch of ICE manufacturer propaganda ($100K niche car, not a daily driver, China is not EV-friendly, costs $10K to install solar charging at home, it's for "newbies" (seriously wtf))

I agree with Julian, if that's what the ICE heads keep telling themselves late at night, TSLA is in great shape, although as a mass EV adoption supporter it is very sad to read.

 

[TSLAopt]

I read that wall-o-text of an article hoping that it would be an interview with Elon like it said it would be last week... instead I got a bunch of ICE manufacturer propaganda ($100K niche car, not a daily driver, China is not EV-friendly, costs $10K to install solar charging at home, it's for "newbies" (seriously wtf))

I agree with Julian, if that's what the ICE heads keep telling themselves late at night, TSLA is in great shape, although as a mass EV adoption supporter it is very sad to read.

+100

You nailed it, it was like a wall of text...lots of quotes from all different people saying basically the same FUD.
So annoying...

 

[aznt1217]

Much of this maybe repeats but here is my 2 cents for the old and the new.

To the article posted above
It's absolutely incredible how pig headed some people are. Reading that article about the sales model of a Tesla not working was straight up silly and shows you how disconnected and prehistoric some business people are. Case in point, Amazon is experimenting with delivering cars and truecar pretty much has a hybrid model of online buying a car.

The article is really interesting in the fact that it clearly highlights human nature of envy and jealousy. These guys WISH they were Elon Musk and will continue to doubt. It's not that complicated really... Who would you choose to follow an old geezer or a visionary. I'll make the comparison to John Sculley and Steve Jobs. There was a boardroom warrior versus someone who understood making a compelling product will deliver profits in due time. Nothing has changed, core values are still there and so is the mission.

To those who keep getting nervous about the recall... Like we said it's old news and it's being treated like a recall even though no cars are going back.

NAIAS
The Model X can be there and I'm pretty confident it is. In the last CC, Elon said he was devoting significant amount of time to Model X development in Q4. For those who are saying that the car isn't there because it has to be on the show floor now, that's simply not the case. Plenty of automakers roll out their cars in doors with a nice little show. It happens every year at the NY Autoshow... So I'm not sure why there was intense debate about it.

The possibility of a AWD Model S is unlikely... But very possible. For those who remember Peter Rawlinson and Franz interviews the X and S platform are identical. We've all seen the motor of Model S and the underpinnings, it was built for modularity. On this note, I actually think what takes the most time to develop are the "opportunity space" engineering problems. Back in one of Elon's interviews they talked about how they spent a lot of time engineering the door handles. What's probably holding up the X is perfecting Falcon Wing door engineering and the interior ergonomics of the car. This cannot be underestimated, especially for a person like Elon. He's probably scrutinizing over it heavily because he's going to need to fit his 5 growing kids in the vehicle.

For those debating buying shares and those panicking... Stop because that's when money is lost, when you think too much.
Also for those super Tesla bulls, we need to all keep ourselves in check and our expectations. Many of us had phenomenal succuess last year, unfortunately it's also this success that's out greatest enemy because it makes us want to do it again so badly we'll make mistakes. There's plenty of time to make money on shares, but the question is HOW MUCH and what can you stomach.

 

[v12 to 12v]

JRP3 that article you linked: http://www.autonews.com/article/2014...#ixzz2qKRFIKUr is absolutely extraordinary.

If you ever needed to relax about the prospects for Tesla - that will do just fine.

If the auto industry is really that clueless I almost feel sorry for them.

Amen. They are putting quotations around statements made by “EV industry executive”, “a former executive” and “a veteran executive”, and they are trying to pass that off as news or insight?
It is an attempt at starting unaccountable chatter in the gossip mill at an "Auto Show". I now understand why Elon hasn't been that hyped about doing the circuit.
I think that its getting to be stock hoarding time.

 

[JRP3]

JRP3 that article you linked: http://www.autonews.com/article/2014...#ixzz2qKRFIKUr is absolutely extraordinary.

If you ever needed to relax about the prospects for Tesla - that will do just fine.

If the auto industry is really that clueless I almost feel sorry for them.

Agree that it was basically a great bull argument.

Regarding mention of the giga factory I have no idea if that knocked the price (according to my browser the page has become members only anyway).
More likely the stock took a dip on the word recall disconnected from the word adapter lead.

Just thinking of the last time Elon mentioned possible financing, and then soon after went on to issue more shares, I'd expect the bears to jump on this statement as proof of another round, and subsequent dilution.

 

[Julian Cox]

Agree that it was basically a great bull argument.


Just thinking of the last time Elon mentioned possible financing, and then soon after went on to issue more shares, I'd expect the bears to jump on this statement as proof of another round, and subsequent dilution.

Shorts are in a world of trouble, I think we are looking at another setup. Elon's behaviour around Q3 did not make any sense without the deliberate wish to pack the stock with shorts. He succeeded.

I have to defend the 9342 Q4 figure.

From the NHTSA letter - the language is formal and exact legal terminology using the units of quantity applicable to recalls (numbers of vehicles affected). This letter IS talking about vehicles delivered, not just numbers of NEMA adaptors in a bin somewhere or vehicles sitting in a factory or on a ship.

29222 "2013 Model S vehicles equipped for, and delivered with, certain NEMA14-50 (240 volt) Universal Mobile Connector (UMC) adapters"


Bottom line of this calculation is as stated previously: 9972 in Q4. With a higher percentage GAAP profit yield owing to a heavy skew to EU deliveries that do not suffer adjusted earnings for lease accounting.

I know the longs got pretty bruised up on Q3 but this is highly indicative of meaningful payback.

 

[AlMc]

Shorts are in a world of trouble, I think we are looking at another setup. Elon's behaviour around Q3 did not make any sense without the deliberate wish to pack the stock with shorts. He succeeded.

I have to defend the 9342 Q4 figure.

From the NHTSA letter - the language is formal and exact legal terminology using the units of quantity applicable to recalls (numbers of vehicles affected). This letter IS talking about vehicles delivered, not just numbers of NEMA adaptors in a bin somewhere or vehicles sitting in a factory or on a ship.

29222 "2013 Model S vehicles equipped for, and delivered with, certain NEMA14-50 (240 volt) Universal Mobile Connector (UMC) adapters"


Bottom line of this calculation is as stated previously: 9972 in Q4. With a higher percentage GAAP profit yield owing to a heavy skew to EU deliveries that do not suffer adjusted earnings for lease accounting.

I know the longs got pretty bruised up on Q3 but this is highly indicative of meaningful payback.

Julian, I enjoy reading your posts and learning from you. I am very bullish on the long term prospects of TM. However, I would say there is no way that TM produced, much less delivered 9342 vehicles in Q4. I hope I am wrong because that number will allow me to retire the day after Q4ER. I think the numbers of adapters represents all the existing adapters that need to be replaced. These are for cars sold with adapters, second adapters purchased (I have two, one for work, one for home), and for all the adapters laying in boxes at TM that will be shipped out with future cars.

Future charge cords purchased by TM for resale will then come in with the new adapters. But all current charge cords, whether in people's garages or at TM need the new adapters.

Just one person's opinion.

 

[TSLA Siempre]

I'm a pretty ardent long, but this is stuff of fantasy and wishful thinking. I really wish I was wrong. I have an outsized part of my portfolio in TSLA, due to its great 2013 run-up. The 9000+ figure seems out of whack. Your long case is no better than the autonews's bear case.

I really don't think Elon is luring in shorts. This serves no good purpose except to subject the stock to unnecessary fluctuations.

For the record, I do believe in a lot of conspiracy theories with respect to Tesla....I do think that the f***'s were in some way related to nefarious sabaotge (although i think the drivers had nothing to do with it). D Strickland's new lobbying job smells awfully fishy too. Media reports aimed at discrediting the company, its products, and future, are all suspect in my eyes. Elon playing games with the stock...no way.

- - - Updated - - -

and for the record, i do enjoy reading your posts and the other contributions you've made to TMC and other websites in support of Tesla.

 

[dha]

...However, I would say there is no way that TM produced, much less delivered 9342 vehicles in Q4. \

They needn't have produced that many. As per Q3 shareholder letter:

"Production in the quarter significantly exceeded deliveries in order to fill the pipeline of vehicles in transit to Europe and provide cars for service and marketing uses. "

 

[AlMc]

They needn't have produced that many. As per Q3 shareholder letter:

"Production in the quarter significantly exceeded deliveries in order to fill the pipeline of vehicles in transit to Europe and provide cars for service and marketing uses. "

Correct. But for argument sake let us say there were 1,000, even 2,000 cars in transit. Do you think TM produced and delivered 7,000-8000 cars in Q4. I hope so...but for the record....I say 'No way'.


Elon stated in an interview that at the end of Q4 they were producing 'close t0, 600 cars/week'. At the beginning of Q4 they were 'almost producing 500/week'. 12 week production cycle: Average: 550/wk (generous average). Total produced (not necessarily were All delivered): 6,600

 

[772]

I dunno, the line Julian quoted leaves little room for doubt. So, now I have to think about how Tesla could have possibly delivered so many cars in Q4. For one thing, it seemed like they sold a lot of inventory and loaner cars towards the end of the quarter (see the threads mentioning lack of loaners at service centers).

From the Q3 shareholder letter, TSLA had $347.5 million worth of inventory at the end of Q3... if we use a conservative estimate of each car being worth $100K, the inventory is 3475 cars. If they were delivering manufactured cars at an average of 550 per week x 13 weeks in Q4, that's 7150 cars. Then there is question of a batch of European deliveries in route. Add that all together and 9972 seems possible. So, I think, good catch Julian! :smile:

 

[AlMc]

I dunno, the line Julian quoted leaves little room for doubt. So, now I have to think about how Tesla could have possibly delivered so many cars in Q4. For one thing, it seemed like they sold a lot of inventory and loaner cars towards the end of the quarter (see the threads mentioning lack of loaners at service centers).

From the Q3 shareholder letter, TSLA had $347.5 million worth of inventory at the end of Q3... if we use a conservative estimate of each car being worth $100K, the inventory is 3475 cars. If they were delivering manufactured cars at an average of 550 per week x 13 weeks in Q4, that's 7150 cars. Then there is question of a batch of European deliveries in route. Add that all together and 9972 seems possible. So, I think, good catch Julian! :smile:

I sincerely hope all the 9,000+ forum members are correct. But be careful how you place your 'bets', I mean TM stock purchases and options if you are relying on this figure. If you are all right and I am wrong I will be the first person to admit it and say 'well done' and then I will buy the Super AWD S that I could then afford.

 

[GenIIIBuyer]

I dunno, the line Julian quoted leaves little room for doubt. So, now I have to think about how Tesla could have possibly delivered so many cars in Q4. For one thing, it seemed like they sold a lot of inventory and loaner cars towards the end of the quarter (see the threads mentioning lack of loaners at service centers).

From the Q3 shareholder letter, TSLA had $347.5 million worth of inventory at the end of Q3... if we use a conservative estimate of each car being worth $100K, the inventory is 3475 cars. If they were delivering manufactured cars at an average of 550 per week x 13 weeks in Q4, that's 7150 cars. Then there is question of a batch of European deliveries in route. Add that all together and 9972 seems possible. So, I think, good catch Julian! :smile:

Don't get too carried away with that $347.5 million inventory number, since that number would include 'unfinished goods' as well. AKA all the parts when cars are in the 'sourcing parts' order phase.

 

[JRP3]

Let's not forget the previous Q's over estimations of vehicles sold that turned out to be wrong.

 

[AlMc]

Let's not forget the previous Q's over estimations of vehicles sold that turned out to be wrong.

+1. I was one who sorely overestimated that number. I was off by 1,000 and I had no where near the most optimistic prediction.

 

[772]

Don't get too carried away with that $347.5 million inventory number, since that number would include 'unfinished goods' as well. AKA all the parts when cars are in the 'sourcing parts' order phase.

That's a good point, but given Tesla is limited by battery supply, that would only mean that their 'inventory' could grow larger than that 3475 number if Panasonic ever delivered a bunch of supply at once, by turning the unfinished cars to finished cars faster. Even so, just selling half that inventory would get the deliveries close to 9,000, no?

 

[Krugerrand]

Here we go again. Making mistakes is perfectly okay. Not learning from your mistakes...not so much.

 

[772]

Well, I won't be making any decisions based on a 9k+ number. I was mostly trying to figure out if it was possible.

Anyway, I hope to say "I told you so" :wink: