Short-Term TSLA Price Movements - 2014

[Perfectlogic]

I don't know... Far be it from me to doubt what elon musk has up his sleeve, but IMHO, there are several reasons why electric powered commercial jets is not practical at this time.

1) In airplanes, weight is paramount. Every pound is scrutinized. And given the energy density of fossil fuels vs. electric, at this point, hauling a huge battery for long distances just doesn't make economic sense for flights. Whatever savings in cost of electricity vs. jet fuel would be swamped by the loss of freight / passenger capacity due to increased weight.

2) Jets have really short turnover time. I believe Southwest turns its flights within 15 minutes at the gate. I don't think you'll be able to re-charge a plane's battery within 15 minutes. Every extra minute spent at the gate is hugely expensive and would again swamp any savings in fuel efficiency. And battery swap would be a huge deal given the expected size of the battery, likely requiring a larger crew than current refueling crews, again washing out any savings.

3) The process of certifying a battery to meet the safety standards of international flight is long, expensive, and fraught with difficulty. Witness Boeing's troubles with a much smaller, less critical battery in its 787. Think those tesla fires were unfairly damaging to the company? In the 787, a few battery fires and the FAA grounded the entire fleet! I'm not sure why Tesla would want to tackle something like that when there are so many other low-hanging fruit it could pursue right now (grid storage, pickup trucks, delivery trucks, etc.)

4) Annual revenue for commercial jet manufacturing is dwarfed by annual revenue for automobiles. Why go after a much smaller, more difficult market when there's still plenty of automobile market to chase?

Many seems to think that the secret r&d spending is grid storage and autonomous driving, but it is already known they are working on these things so it doesn't make sense to me. Obviously the first plane Tesla would make wouldn't be a 787 replacement, think about how Tesla produced the niche Roadster as their first car model, their first aircraft would probably be a similar niche product being a smaller plane not necessarily meant for commercial use. This would probably take several years so why not start now? I'm pretty sure the stock would fly the day Elon announces they have started pursuing this goal. Didn't they get the Model S to market on less than a billion? If I recall correctly on that I am sure they could make a small plane on a $200M a year r&d budget in 6-7 years. I am not saying they are definately working on this right now, but I give it a 30% chance, which is a lot given noone have mentioned it before.

EDIT: I am obviously not saying they should stop developing new electric car models, that would be absurd. But with $2,6B in cash with a lot more starting to roll in soon with the expanding production of high margin S/X they should be able to find $200M/y to be on the forefront of the electric aircraft revolution too, I am sure it would be a very good investment.

 

[FredTMC]

Was AJ from MS on CNBC today?

 

[FluxCap]

We are currently showing massive resistance to overall market downturn and are among the very few standouts in the entire NASDAQ. This is a very bullish sign for me.

 

[Lump]

AJ was on, while editing my original post I accidentally deleted it.

Bullish as expected.
Mentioned company should have stayed private.
Very excited about AI potential & how software differentiates Tesla from others.

 

[FredTMC]

AJ was on, while editing my original post I accidentally deleted it.

Bullish as expected.
Mentioned company should have stayed private.
Very excited about AI potential & how software differentiates Tesla from others.

great. Thx for summary!

 

[ckessel]

I suppose it's time to roll my J15s for what value they have left. Due to the post ER IV drop, they're about the same as before the ER. The only question is whether it's worth waiting a few days for any analyst updates, though I think most of them seem to have already provided them?

 

[FluxCap]

I am keeping my J15's for sure, personally.

Nice strong resistance against a floundering NASDAQ continues. Very nice to see.

 

[AlMc]

I suppose it's time to roll my J15s for what value they have left. Due to the post ER IV drop, they're about the same as before the ER. The only question is whether it's worth waiting a few days for any analyst updates, though I think most of them seem to have already provided them?

CK: Keeping mine for now as well. Based on your posts my 300s are in a little better shape than your, but not much. I am not naïve. Not looking for getting back to where I bought them, just trying to get to 20% loss. (now about 40%)

 

[justthateasy]

This is one of the weirdest ERs I've ever been a part of because I thought we'd be down 14 points today, we're up 14 points instead, especially as the rest of the market isn't doing as well.

For me, this one wasn't entirely about Q2 numbers but what's coming and I thought the street would be punishing TSLA today for not delivering a better ER yesterday.

I'm just hoping today isn't just some blip on the screen but the beginning of a gradual and more permanent rise in stock price. This might be the dawn of a new era in TSLA where the huge swings won't be as common.

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AJ was on, while editing my original post I accidentally deleted it.

Bullish as expected.
Mentioned company should have stayed private.
Very excited about AI potential & how software differentiates Tesla from others.

I didn't see the segment but if Tesla stayed private, where would they have gotten the money considering Elon was funneling his personal money and going public was a near desperation move as they were on the brink of being forced to call it quits?

 

[Lump]

Here is the CNBC video segment with AJ from today Tesla 'most important car company': Morgan Stanley analyst

 

[FluxCap]

This is one of the weirdest ERs I've ever been a part of because I thought we'd be down 14 points today, we're up 14 points instead, especially as the rest of the market isn't doing as well.

For me, this one wasn't entirely about Q2 numbers but what's coming and I thought the street would be punishing TSLA today for not delivering a better ER yesterday.

I'm just hoping today isn't just some blip on the screen but the beginning of a gradual and more permanent rise in stock price. This might be the dawn of a new era in TSLA where the huge swings won't be as common.

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I didn't see the segment but if Tesla stayed private, where would they have gotten the money considering Elon was funneling his personal money and going public was a near desperation move as they were on the brink of being forced to call it quits?

I think the 100K annual run rate emphasis, the HUGE battery improvement path reveal on the call, the definitive gigafactory news, plus Elon's return to Steve Jobs-like tantalizing form, all combine to make this a knockout ER. No one was expecting a big EPS beat and they came out on the high end of consensus anyway. I also think Tesla would have been at 235 pre-ER if not for the market decimation yesterday.

I think AJ's "staying private" comment was more tongue in cheek and a bit self-serving. I mean, he basically is saying that many of the other analysts with visibility into the company due to being public just don't get it, and they continue to distract the company and the market with inane questions, answered repeatedly but asked again regardless. He's the Bloomberg #1 ranked analyst covering the stock and knows it. He was basically bragging, I think.

 

[austinEV]

Updated box score chart for "earnings play junkies"

 

[Curt Renz]

I think AJ's "staying private" comment was more tongue in cheek and a bit self-serving. I mean, he basically is saying that many of the other analysts with visibility into the company due to being public just don't get it, and they continue to distract the company and the market with inane questions, answered repeatedly but asked again regardless. He's the Bloomberg #1 ranked analyst covering the stock and knows it. He was basically bragging, I think.

Agreed, FluxCap. Analysts are trained in college to consider only the financial metrics that apply to established public corporations. These are companies that have kept producing and selling in the same manner for many decades. Their share prices are expected to shift only marginally in response to a recent quarter’s numbers and the next quarter’s estimates.

This is especially true when evaluating automakers. When a firm assigns an analyst to cover the relatively stable auto industry, his otherwise mundane job becomes complicated when a new dynamic growth company named Tesla Motors is willing to spend all it can to disrupt the rest of the industry. He can’t always tell if the company’s managers are geniuses or madmen.

Jonas was undoubtedly referring to how this presents a conundrum for his colleagues. They find it uncomfortable to evaluate Tesla Motors using the methods in which they have been schooled. Their real job is to estimate what investors will be willing to pay for a stock in the near to medium term. The standard methodology fails them in the case of Tesla. A longer term outlook is required. Jonas’ silent implication appears to be that he has figured out how to move out of the mold and evaluate a growth company’s potential even though it may not be obvious in the current data. That involves a deep understanding, and perhaps strong intuition, rather than pure number crunching.

 

[FANGO]

Hmm. Well, latimes posted this article today saying that Tesla will make 100k cars next year: Tesla announces plan to boost production in 2015 - LA Times

I sent in a correction, telling the author that Tesla said they will have an annualized 100k run rate by the end of the year, which does not mean 100k cars in 2015, but means that they will be up to 2k/week at the end of 2015 and thus will be able to produce 100k in 2016, not 2015.

The author just got back to me, telling me that...

"Thank you for writing. I too was a little confused by the language they were using, in the printed materials and on the analysts’ call. So I double-checked with the Tesla folks, and made sure they meant that they CAN and WILL produce up to 100,000 vehicles in 2015. They said, unequivocally, that they will produce AT LEAST 100,000 vehicles in 2015 – and almost certainly ship that many.
But Tesla uses odd language, and odd accounting practices, which makes everything they do a little confusing – and a little interesting.
As for my language, I don’t think I said how many they would sell, but was quoting them saying how many they’d produce."

I am still pretty much certain that the author has got it wrong and is misunderstanding Tesla. However, if Tesla is telling the press this, that means they're essentially guiding for 100k deliveries next year - maybe not officially with the SEC, but if they're talking about it publicly, then it's basically just as good. Which would be huge, and should have sent the stock up to 300 today. Again, I am almost 100% certain that the author has got it wrong, and the market got it right, which is why the stock only went up 5% and not 30% or something. There's no way Tesla plans to make 100k cars next year.

Anyway, what I'm wondering is, who has a reliable press contact within Tesla who can be asked/told about this, and who can confirm that 100k in 2015 is not correct, and who can start getting to news outlets to correct them before we end up with another fiasco like that one quarter where everyone got way ahead of themselves thinking Tesla would deliver a billion cars?

 

[AlMc]

Hmm. Well, latimes posted this article today saying that Tesla will make 100k cars next year: Tesla announces plan to boost production in 2015 - LA Times

I sent in a correction, telling the author that Tesla said they will have an annualized 100k run rate by the end of the year, which does not mean 100k cars in 2015, but means that they will be up to 2k/week at the end of 2015 and thus will be able to produce 100k in 2016, not 2015.

The author just got back to me, telling me that...

"Thank you for writing. I too was a little confused by the language they were using, in the printed materials and on the analysts’ call. So I double-checked with the Tesla folks, and made sure they meant that they CAN and WILL produce up to 100,000 vehicles in 2015. They said, unequivocally, that they will produce AT LEAST 100,000 vehicles in 2015 – and almost certainly ship that many.
But Tesla uses odd language, and odd accounting practices, which makes everything they do a little confusing – and a little interesting.
As for my language, I don’t think I said how many they would sell, but was quoting them saying how many they’d produce."

I am still pretty much certain that the author has got it wrong and is misunderstanding Tesla. However, if Tesla is telling the press this, that means they're essentially guiding for 100k deliveries next year - maybe not officially with the SEC, but if they're talking about it publicly, then it's basically just as good. Which would be huge, and should have sent the stock up to 300 today. Again, I am almost 100% certain that the author has got it wrong, and the market got it right, which is why the stock only went up 5% and not 30% or something. There's no way Tesla plans to make 100k cars next year.

Anyway, what I'm wondering is, who has a reliable press contact within Tesla who can be asked/told about this, and who can confirm that 100k in 2015 is not correct, and who can start getting to news outlets to correct them before we end up with another fiasco like that one quarter where everyone got way ahead of themselves thinking Tesla would deliver a billion cars?

PM Bonnie or DaveT

 

[The Blue Owl]

I am still pretty much certain that the author has got it wrong and is misunderstanding Tesla.

I agree with you, because this is what Elon said (from the Seeking Alpha transcript):

It's difficult for us to predict the slope of next year, like -- so what is the slope, you know, what does the exact curve of the production rise look like next year. We feel confident of X ending next year at 2,000 units a week of production and demand, absent like some macroeconomic shock. But it's hard to say exactly what the area under the curve looks like. But it's, you know, yeah, certainly more than 60,000 I would think. But, yeah.

I think the X is a transcript mistake, it does not refer to Model X. I'm gonna re-listen to the call now to confirm.

Update: Ok, I just listened to the recording, and the SA transcript is wrong. What Elon said was "we feel confident of exiting next year...". Other than this mistake, the rest of his response was transcribed verbatim.

 

[bonnie]

Hmm. Well, latimes posted this article today saying that Tesla will make 100k cars next year: Tesla announces plan to boost production in 2015 - LA Times

I sent in a correction, telling the author that Tesla said they will have an annualized 100k run rate by the end of the year, which does not mean 100k cars in 2015, but means that they will be up to 2k/week at the end of 2015 and thus will be able to produce 100k in 2016, not 2015.

The author just got back to me, telling me that...

"Thank you for writing. I too was a little confused by the language they were using, in the printed materials and on the analysts’ call. So I double-checked with the Tesla folks, and made sure they meant that they CAN and WILL produce up to 100,000 vehicles in 2015. They said, unequivocally, that they will produce AT LEAST 100,000 vehicles in 2015 – and almost certainly ship that many.
But Tesla uses odd language, and odd accounting practices, which makes everything they do a little confusing – and a little interesting.
As for my language, I don’t think I said how many they would sell, but was quoting them saying how many they’d produce."

I am still pretty much certain that the author has got it wrong and is misunderstanding Tesla. However, if Tesla is telling the press this, that means they're essentially guiding for 100k deliveries next year - maybe not officially with the SEC, but if they're talking about it publicly, then it's basically just as good. Which would be huge, and should have sent the stock up to 300 today. Again, I am almost 100% certain that the author has got it wrong, and the market got it right, which is why the stock only went up 5% and not 30% or something. There's no way Tesla plans to make 100k cars next year.

Anyway, what I'm wondering is, who has a reliable press contact within Tesla who can be asked/told about this, and who can confirm that 100k in 2015 is not correct, and who can start getting to news outlets to correct them before we end up with another fiasco like that one quarter where everyone got way ahead of themselves thinking Tesla would deliver a billion cars?

Got it.

- - - Updated - - -

Got it.

I have good reason to believe things will be corrected shortly. Thanks forum!

 

[kenliles]

Thanks Bonnie

From the reports I've read most have it right. Forbes author linked below and others. Many think he's sandbagging a bit and believe they will double this year to 70,000 in 2015. Actually that's probably fair, but doesn't look like widespread interpretation

7 Takeaways From Tesla's Earnings - Forbes

 

[MartinAustin]

Do not rely on transcripts of TSLA conference calls on Seeking Alpha... tons of really embarrassing errors.

 

[The Blue Owl]

Do not rely on transcripts of TSLA conference calls on Seeking Alpha... tons of really embarrassing errors.

I'm not, I listened to the call myself, as I stated.