Short-Term TSLA Price Movements - 2014

[chickensevil]

Keep in mind that people's definition of "safety" is different too. I know for Europe they have been shifting into "safety" meaning avoiding an accident in the first place. This actually hurts the MS in Europe for safety ratings because it has basically nothing for collision avoidance (yet). If this is what they are referring to, then yeah, Tesla needs to step it up.

 

[pGo]

To me, Elon confirming 500k vehicles by 2020 ( we know as per JB it could be more), significant free cash flow from mid next year, significant product news, autonomous driving and a lot more in last two days speaks volumes that the biggest Tesla bull as of last Sunday who almost switched side (AJ MS) is on the wrong side of thoughts. So even if Elon didn't like the stock price in 280s, he does not want people to have narrow thoughts on Teslas future. Elon to the rescue.

 

[eepic]

he said his company expects to start generating strong "free cash flow beginning in the third quarter of 2015"

Unless it's a dropoff in cap-ex for Fremont factory expansion or a big stationary storage contract with solarcity............... MODEL 3 PRE-ORDERS????

Timing would be about right for a M≡ product reveal then (about 6-8 months after MX revealed)

 

[chickensevil]

Unless it's a dropoff in cap-ex for Fremont factory expansion or a big stationary storage contract with solarcity............... MODEL 3 PRE-ORDERS????

Timing would be about right for a M≡ product reveal then (about 6-8 months after MX revealed)

I think it is simpler than that. By Q3 2015 they are going to be running probably around 1500 a week run rate. Compare that with Q2 of this year at 800 a week, that is an 87% jump in Revenue. With Profit margins continuing to go up, and the MX helping to push the ASP up higher, lets say 30% at 110k ASP with something crazy like 16,000 vehicles produced... that is 1.76Bn in Revenue for Q3/2015 and 528M in Gross Profit. That is a LOT of income, and at some point in 2015 they will not be expanding at any faster of a rate of deployment so SG&A and CapEx costs for SuperChargers and Stores and Service Centers will flatten out (as opposed to getting a 20% jump each Quarter like we are seeing now).

Model 3 R&D is likely to taper off for a bit, somewhere in there, because they will be well finished with the engineering prototype and won't move forward with the serious R&D costs there until 2016 (just a guess, but the MS and MX have had similar curves). All the MX R&D should be well finished by then...

I really think it is just a simple combination of massive increase in deliveries and a massive flattening out of spending. Which we really NEED to see at some point if they are going to be able to start self-funding not just this Gigafactory but future factories (cars and batteries)

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http://seekingalpha.com/article/2504255-tesla-elon-musk-unveils-secret-2015-margin-target?uprof=45

So add to that line of thinking, here is someone else's number crunching suggesting that they only need to hit around 1.5Bn in revenues with 15% operating margin, and allows for Tesla to spend 225M in CapEx and they will break even. I feel these are some really low balled numbers, but it gives you another path to cash flow positive in 2015, again, without needing to take into account really anything other than MX and MS car sales.

 

[Causalien]

Hello people, if you don't put your name in a reputation comment, I have no way of replying to you.

 

[chickensevil]

Hello people, if you don't put your name in a reputation comment, I have no way of replying to you.

Some people like to make the comment anonymously, I actually like that we are given the choice of revealing or not. Most places it is either one way or the other, you rarely get a choice.

PS: It wasn't me. I always (or almost always) leave my name.

 

[eepic]

I think it is simpler than that. By Q3 2015 they are going to be running probably around 1500 a week run rate. Compare that with Q2 of this year at 800 a week, that is an 87% jump in Revenue. With Profit margins continuing to go up, and the MX helping to push the ASP up higher, lets say 30% at 110k ASP with something crazy like 16,000 vehicles produced... that is 1.76Bn in Revenue for Q3/2015 and 528M in Gross Profit. That is a LOT of income, and at some point in 2015 they will not be expanding at any faster of a rate of deployment so SG&A and CapEx costs for SuperChargers and Stores and Service Centers will flatten out (as opposed to getting a 20% jump each Quarter like we are seeing now).

Model 3 R&D is likely to taper off for a bit, somewhere in there, because they will be well finished with the engineering prototype and won't move forward with the serious R&D costs there until 2016 (just a guess, but the MS and MX have had similar curves). All the MX R&D should be well finished by then...

I really think it is just a simple combination of massive increase in deliveries and a massive flattening out of spending. Which we really NEED to see at some point if they are going to be able to start self-funding not just this Gigafactory but future factories (cars and batteries)

- - - Updated - - -

http://seekingalpha.com/article/2504255-tesla-elon-musk-unveils-secret-2015-margin-target?uprof=45

So add to that line of thinking, here is someone else's number crunching suggesting that they only need to hit around 1.5Bn in revenues with 15% operating margin, and allows for Tesla to spend 225M in CapEx and they will break even. I feel these are some really low balled numbers, but it gives you another path to cash flow positive in 2015, again, without needing to take into account really anything other than MX and MS car sales.

Fair enough, that's probably the case.

But if Tesla were planning to accept reservation dollars for M3, they would realistically start factoring that in as a serious cash boost at some point. I think over a few months they could easily collect in the hundreds of thousands of preorders (multiples of MX), and even 100k non-sig would mean smthg like $2500 x 100,000 = $250mm in cash. If it were to happen, we would expect Musk and co. to hint at it before hand like this.. so I think there's a glimmer of hope

 

[ckessel]

Some people like to make the comment anonymously, I actually like that we are given the choice of revealing or not. Most places it is either one way or the other, you rarely get a choice.

PS: It wasn't me. I always (or almost always) leave my name.

FWIW, I almost never leave my name as it's the equivalent of a +1 button to me.

I was relaying my story of throwing money at TSLA a couple years ago to a coworker when it was $30 and they commented that was cool and too bad it's too late to get in now. I mentioned it's likely to rise still, but he was meaning "on the ground floor" 10x bagger sort of opportunity. Which got me to thinking, even if Tesla does really well, how much growth can we really see in, say, 5 years. Maybe 300%? Nothing to scoff at , but it did remind me that they days of making life changing money off of TSLA are gone.

 

[Chickenlittle]

Keep in mind that people's definition of "safety" is different too. I know for Europe they have been shifting into "safety" meaning avoiding an accident in the first place. This actually hurts the MS in Europe for safety ratings because it has basically nothing for collision avoidance (yet). If this is what they are referring to, then yeah, Tesla needs to step it up.

Saw infinity commercial about collision avoidance today claiming that now you can spend your time driving rather than avoiding accident. I suspect these systems will lead to people being more distracted

 

[ckessel]

Saw infinity commercial about collision avoidance today claiming that now you can spend your time driving rather than avoiding accident. I suspect these systems will lead to people being more distracted

Meh, there have been similar statements about every driver assist item. I remember hearing my grandfather complaining about the new fangled "cruise control" when I was young.

 

[austinEV]

FWIW, I almost never leave my name as it's the equivalent of a +1 button to me.

I was relaying my story of throwing money at TSLA a couple years ago to a coworker when it was $30 and they commented that was cool and too bad it's too late to get in now. I mentioned it's likely to rise still, but he was meaning "on the ground floor" 10x bagger sort of opportunity. Which got me to thinking, even if Tesla does really well, how much growth can we really see in, say, 5 years. Maybe 300%? Nothing to scoff at , but it did remind me that they days of making life changing money off of TSLA are gone.

Uh, 300% is plenty life changing for me. As in working---> not working. I suspect I am not alone.

 

[FluxCap]

Thanks chickensevil. Here is the highlights besides autonomous driving.


In addition to his forecast about autonomous vehicles, he said his company expects to start generating strong "free cash flow beginning in the third quarter of 2015" and could pay for the construction of its planned battery factory without additional borrowing. Tesla raised $2.3 billion earlier this year through a convertible bond offering.

Tesla plans to build advanced batteries at a so-called gigafactory that could cost up to $5 billion, along with partner Panasonic Corp., in an industrial park 15 miles east of Reno, Nev.

Much of the free cash flow should come next year as Tesla ramps up production of its Model X sport utility vehicle, which is expected to begin deliveries early next year. Mr. Musk has told Fox Business that he expected to sell 15,000 next year or 20,000 if "things go especially well."

Mr. Musk also said demand for the company's current, $71,000 and up Model S isn't a problem. "We have a waiting list, but not intentionally."

He also said the company needed to build more service centers before it ramps up sales further.

Tesla isn't working on vehicles beyond the Model X and a planned lower-cost sedan called the Model 3, but he said that "significant" product news is in the works.

When asked how the broader auto industry is progressing on developing a market for electric vehicles, he said "we're behind."
"The big car companies have been a lot slower than I thought," he said.

Thanks very much for this, maoing!

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Uh, 300% is plenty life changing for me. As in working---> not working. I suspect I am not alone.

You are not alone.


Also, here's an interesting article for those on the fence about price action. You make an average 11% return buying on TSLA dips of over 8% in one day:

http://www.bespokeinvest.com/thinkbig/2014/9/15/teslas-tsla-september-15th-bloodbath.html

 

[ckessel]

Uh, 300% is plenty life changing for me. As in working---> not working. I suspect I am not alone.

If you've got enough free money such that a 3x increase over, say, 5 years is life changing then you've already got a crap load of money compared to most folks.

 

[chickensevil]

Also, here's an interesting article for those on the fence about price action. You make an average 11% return buying on TSLA dips of over 8% in one day:

http://www.bespokeinvest.com/thinkbig/2014/9/15/teslas-tsla-september-15th-bloodbath.html

That's a nice 60%+ odds

 

[InTheShadows]

If you've got enough free money such that a 3x increase over, say, 5 years is life changing then you've already got a crap load of money compared to most folks.

If you are only in common shares. However if you are using options you have the potential of doing extremely well if you handle your trades well.

 

[Curt Renz]

As reported by Benzinga "Pacific Crest: Electric Vehicle Struggles Don't Apply to Tesla Motors Inc": Pacific Crest: Electric Vehicle Struggles Dont Apply To Tesla Motors Inc | Benzinga

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As reported by MarketWire through MarketWatch "Tech CU Announces Financing Relationship With Tesla Motors": Tech CU Announces Financing Relationship With Tesla Motors - MarketWatch

 

[maoing]

Thanks Curt for your post. Interesting notes for model X:

Analysts found that Tesla’s Model X pre order levels make it hard to bet against the stock. Recent independent blog reports suggest that Model X reservations have crested 20,000 units. When Pacific Crest looked into this number from Tesla’s sales center; they found this figure the accurate. Given that the Model X is still three quarters away from launching; this number is likely to increase significantly.

As reported by Benzinga "Pacific Crest: Electric Vehicle Struggles Don't Apply to Tesla Motors Inc": Pacific Crest: Electric Vehicle Struggles Dont Apply To Tesla Motors Inc | Benzinga

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As reported by MarketWire through MarketWatch "Tech CU Announces Financing Relationship With Tesla Motors": Tech CU Announces Financing Relationship With Tesla Motors - MarketWatch

 

[Chickenlittle]

Thanks Curt for your post. Interesting notes for model X:

Analysts found that Tesla’s Model X pre order levels make it hard to bet against the stock. Recent independent blog reports suggest that Model X reservations have crested 20,000 units. When Pacific Crest looked into this number from Tesla’s sales center; they found this figure the accurate. Given that the Model X is still three quarters away from launching; this number is likely to increase significantly.

Crested? Can't go higher? Why?

 

[jkliu47]

Sounds like they like using the word 'crest' :biggrin:
Note that the next sentence contradicts that sentiment.

 

[callmesam]

Crested? Can't go higher? Why?

The quote is "reservations have crested 20,000 models." but crested in this context means "rise to" rather than "crested at" which would mean "stopped rising at".

Agree that they must love the word "crest" in all forms and variations.