-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
- Status
chickensevil
Active Member
Intrigued by the straight line theory, I thought I would play around with something
So I drew up some straight lines which match each of the three tops from the point of stock explosion toward the beginning of 2013. Obviously with the comments from Elon previously stating that the shorts were going to regret betting against Tesla that he felt that the stock was undervalued at the time, so the lines would not be perfect because the correct "straight line" should originate somewhere before the explosion in price I would think.
The three top lines reflect a path which was "overvalued" including our current top. The bottom line is the undervalued line (If the stock ever drops to here, BUY IT!) So looking at the only line left, which I drew as somewhere in between the current top and the "bottom" which might possibly reflects Elon's view on "fair value".
The extended grid lines show the extension for Jan 1 2015 and Jan 1, 2016, so you can see the line happens to cross (I swear I drew the grid lines after I drew everything else) the 300 barrier at the end of the year. Again, this is just a play on the "Elon Straight line" theory, and nothing more... Take it for what you will.
- - - Updated - - -
Which didn't quite succeed I might add.
I think he probably has a set target for what the stock price should be at a particular time in the future, based on Tesla's performance (sales, production etc.). This has been encapsulated in the document (i forgot which) that details his stock and options based on future stock price (valuation), along with other operational goals. Clearly, in setting those goals (I think one of them was a 42 billion dollar market cap or something, and some other goals are like completion of the model 3 etc. correct me if I'm wrong) he, along with the board of directors, have discussed those targets and have determined that those valuations are right for the operational goals linked to them that will occur in the future. To determine the time he thinks those valuations are "right", you need to look at the time he has expected those operational goals to happen. It is also probably reasonable to conclude that the board has determined those valuations to be challenging (on the high side) but realistically achievable in order to drive the CEO to fulfill the goals set for the company.
chickensevil
Active Member
Wow, that was a very hostile comment. He was just stating the obvious that everyone has a different meaning of fair value. Every time a trade happens SOMEONE is buying the stock at that price point. So someone out there thought that 284 was a good price this morning and worth the buy... of course it could just be someone shorting the stock at that level as well, but still... the trade happened... on the flip side someone thought it was time to sell because they were happy with that price (or thought it was going to go down.
If noone thought the stock was worth 284 then the trade wouldn't have happened.
On the other hand, if everyone thought that Elon was right and it was time to jump ship, the market would have been completely flooded by shares today and the price would have almost totally collapsed... since that didn't happen clearly someone thought it was worth holding on to.
chickensevil
Active Member
If we are going based on that determination then we are WAY out of scope because that was set in 2012 and expires in 2022. It could be that they gave 10 years to give more than enough time to hit those milestones, but the path we are on, all those will be cleared out by 2017 (except maybe the 30% GM for 4 consecutive quarters... that is by far the toughest one). But lets assume we clear all them in 2017, that means they would need a ~42B market cap at that time to execute those, which means a share price of $337 at that point and time in the future? That seems a little too low to me based on a modest multiple and where they will be executing in 2017. If the share price is only 337$ I will be disappointed because that means so much has not gone like we want it to with the company.
That's exactly my point. It seems low to you (and many of us) but I'm trying to put it in Elon's perspective, not our perspective - which if you look at the "plan" formulated by him and his board, we are WAY high in the short term, but the price is good in the long term according to the plan... which is exactly what he said last night
Chickenlittle
Banned
Everybody blaming a comment about stock price for today's 3% decrease. Of course everyone satisfied with deal, at least I have not heard they didn't get enough from anyone. I believe this was the classic buy on the rumor and sell on the news. Comment had little to do with it. Expectation of giga choice to be made seemed imminent for days. The price was high enough with stop losses in place that it didn't take much to get it started down hill. Next news maybe pre release for third qtr or actual 3rd qtr results. Pricing and ability to order model x
IMO there's some fallacy in Elon's notion that a stock is "too high" short term but "fairly priced" long term. The market is the ultimate leading indicator--the sum collective of the knowledge of every market participant. The whole reason TSLA is this expensive right now is precisely because of the company's long term potential. The market doesn't pay 80+ times earnings--an insanely high multiple--for current or even near-term future earnings. It pays that much for long-term earnings potential.
Of course, that doesn't mean every person who buys TSLA is in it for the long term. But if you're talking about whether the price is "fair," the only way to fairly calibrate that question is by making "fair" a function of the long-term potential. Otherwise, you'd have to say that pretty much every high-growth stock ever wasn't "fairly" priced--even the ones that kept going up and up and up.
(For the record, I suspect Elon knows this, at least intuitively. I think what he said was purposeful.)
Of course, that doesn't mean every person who buys TSLA is in it for the long term. But if you're talking about whether the price is "fair," the only way to fairly calibrate that question is by making "fair" a function of the long-term potential. Otherwise, you'd have to say that pretty much every high-growth stock ever wasn't "fairly" priced--even the ones that kept going up and up and up.
(For the record, I suspect Elon knows this, at least intuitively. I think what he said was purposeful.)
Vger
Active Member
I think Elon was simply telling it as he sees it, and feels it. I think it puts ridiculous pressure on him when the price gets sky high. He shields himself from criticism a bit by being skeptical of the peak prices.
Any investor "scared" away by such comments does not deserve the long-term gains they will miss due to such silliness.
Besides, 3% is a small move for this stock. So it erased three days of gains, big deal!
Any investor "scared" away by such comments does not deserve the long-term gains they will miss due to such silliness.
Besides, 3% is a small move for this stock. So it erased three days of gains, big deal!
bonnie
I play a nice person on twitter.
+1. I think we read too much into comments like this from Elon. He's proven time and time again that he will say what he thinks. He will be making that same comment on a regular basis for years to come, while he continues to reward the longs again and again.
Not sure it's "reading too much" to assume that somebody of extreme intelligence like Elon Musk is savvy enough to know how to manage expectations (and thereby boost the chances of long-term success). I'm sure he does legitimately feel it's "too high," but I'm also sure he knows the power of his public comments and uses that power strategically for the company's long-term benefit.
In the short-term (and this is the short-term thread, after all...) we are more concerned about whether or not the stock will keep going up in the next few weeks/months, which is only marginally correlated with the proper valuation of the company.
Yup.
Then again, Elon has also said that he is not an investor. Each one of us has engaged in many more transactions of tsla stock than Elon has (I believe he has made one buy and zero sells since tsla went public?). So maybe he doesn't know that, because that's not his job. Which is why I don't really care much what he says about the stock. I think he just says whatever's on his mind, like Bonnie mentioned above. He's done this many times before, about the stock and others wise. it's just his thing.
Last edited:
mershaw2001
I'm short the short sellers
jhm
Well-Known Member
What if I were to tell you that the Gigafactory will pay for itself before it reaches full capacity?
dmckinstry
Model X 2019
I think this is how the next few months are going to shake out. At least this is what I would do if I were at Tesla. Things won't get interesting around Q3 results time.
I think we are going to see a nice surprise reveal with the Beta Model X. Sometime in Q3 that will help Q4 margins and drive Model S demand that is/will be cannibalized with Model X.
I think in Q3 we will see a Model S AWD. Theory has been thrown around before but hear me out. The timing is perfect as Model S will need a "refresh." In addition, It will be a higher margin car to help GM in Q4 from a depressed Q3. It will buy Tesla time to test model x platform in the wild to make tweaks to the dual motor drive train. It will undoubtedly make people buy a Model S while cancelling/shifting X reservations thereby delighting customers in 2 ways: curtailing wait time and satisfying demand for an AWD sedan. In addition to Q4 we'll see first iterations of autopilot and the special extended roadster pack as a surprise.
In addition, test drives of AWD models can drive demand for the skeptics of the model X drive train by giving people a taste.
Just a theory. So how does this bode for the stock? Stuffing demand. Higher margin cars. Customer delight. I think it bodes well and we'll see the Stifel target price much sooner than we think.
I think we are going to see a nice surprise reveal with the Beta Model X. Sometime in Q3 that will help Q4 margins and drive Model S demand that is/will be cannibalized with Model X.
I think in Q3 we will see a Model S AWD. Theory has been thrown around before but hear me out. The timing is perfect as Model S will need a "refresh." In addition, It will be a higher margin car to help GM in Q4 from a depressed Q3. It will buy Tesla time to test model x platform in the wild to make tweaks to the dual motor drive train. It will undoubtedly make people buy a Model S while cancelling/shifting X reservations thereby delighting customers in 2 ways: curtailing wait time and satisfying demand for an AWD sedan. In addition to Q4 we'll see first iterations of autopilot and the special extended roadster pack as a surprise.
In addition, test drives of AWD models can drive demand for the skeptics of the model X drive train by giving people a taste.
Just a theory. So how does this bode for the stock? Stuffing demand. Higher margin cars. Customer delight. I think it bodes well and we'll see the Stifel target price much sooner than we think.
- Status
Similar threads
- Locked