Short-Term TSLA Price Movements - 2015

[ItsNotAboutTheMoney]

So, basically, it is a worthless poll because it just implies that people who were planning to buy a Tesla are "more solid" in their desire to buy a Tesla, right?

If, through all of my reading in different Tesla forums (particularly the SC forums), I stop seeing tons of posts of people trying to figure out how to make their upcoming trip (and someone responding with an offer that the poster can use their personal charger in order to make it), then I'll believe that this software actually achieved something (other than a poll). But, for those who couldn't make it before and needed outside charging to make it, nothing will be changed by this software - you still can't get blood from a turnip. All this software does is maybe do the calculating that everyone has been doing manually. And even if the software proves to be reliable (people won't use it exclusively at first), it may still double your drive time because it has to take a route that has SuperChargers - and people will be right back to chasing down a charging point (personal, camp ground, etc) along a better route to save time.

The only thing that is going to alleviate range anxiety in America is about 200 more SCs. The ability to take almost ANY route, without thinking about it, and knowing there will be SCs on THAT route. I mean, if you believe this software alleviates range anxiety, then it was already alleviated a long time ago - don't drive where there aren't SC's in range. That is pretty simple and basically all the software does.

So, all the industrial revolution and information revolutions have done is saved people time?

Manual trip planning can't realistically adjust in real time to weather forecasts in locations where weather can be highly variable over short distances. That will be useful in locations where people are pushing range or the weather already has significant impact on range.

Since we haven't seen the software, we don't know whether you can set via points so that you can easily cut corners off the SC route.

And, yes, there needs to be more Superchargers, but we know that Tesla's gradually increasing the coverage. But in the meantime the car will integrate previously used charging locations and help with accurate prediction for some of the long jumps. it's 188 miles between Waco and Ardmore, it's 151 miles between Toronto and Kingston, it's 259 miles between Santa Rosa and Shamrock, it's 260 miles between Gallup and Santa Rosa, and I'm sure there are people who are trying to make those journeys who would love to have software in the car that could help them minimize their journey times.

 

[SteveG3]

I think many investors will cast doubt of the real reason behind why production rate will stay flat from mid-Nov. all the way through Q2. As Tesla claimed that "significantly more with minor adjustments, why can't that "minor adjustments" happen in near term to benefit production rate? There only could be two reasons. First, Tesla found new handicaps to prevent production ramp up but it's contradicted with Nov. blog prediction; Second, there is actually softer demand to catch up with the production ramp up. So the production ramp up really needs to wait for demand picking up especially from the big potential market like China and new demands stimulated from new SW update.

Above is just my speculation. Nobody is sure about the real answer.

Maoing,

or reason number three... the Model X introduction which will reveal new features, and draw attention to the X may well temporarily increase the Model S cancellation rate, and temporarily reduce the Model S order rate, so Tesla is looking to let the order backlog swell for the Model S to absorb such likely events. I would imagine that Tesla is planning to incorporate much of the improvements to the X in the S as soon as they can to minimize these issues.

I think it's realistic to see that Tesla is susceptible to some disruption to net orders with a new product launch or major upgrade (I actually have a guess of Elon's "secret weapon" that would be aimed to minimize this, among other advantages). I don't see much of any evidence of a core ongoing demand problem... I would actually be surprised if Model S demand was not substantially higher a year from now than it is today.

 

[maoing]

Steve,

That might be reasonable if backlog extended to Q3, but currently it's still in May/June timeframe and we know X details won't be available until delivery, which is most likely August (right after Q2 ER probably). I think demand is mostly fine for Q2, but I would more worry about the X cannibalization effect if we don't see 3-4 months S backlog at end of Q2.

Maoing,

or reason number three... the Model X introduction which will reveal new features, and draw attention to the X may well temporarily increase the Model S cancellation rate, and temporarily reduce the Model S order rate, so Tesla is looking to let the order backlog swell for the Model S to absorb such likely events. I would imagine that Tesla is planning to incorporate much of the improvements to the X in the S as soon as they can to minimize these issues.

I think it's realistic to see that Tesla is susceptible to some disruption to net orders with a new product launch or major upgrade (I actually have a guess of Elon's "secret weapon" that would be aimed to minimize this, among other advantages). I don't see much of any evidence of a core ongoing demand problem... I would actually be surprised if Model S demand was not substantially higher a year from now than it is today.

 

[mejojo]

...I would more worry about the X cannibalization effect if we don't see 3-4 months S backlog at end of Q2.

Are you referring to people not buying an S because the X is so cool and it will only take 2 more years, if they reserve right away, to get one?

 

[SteveG3]

Steve,

That might be reasonable if backlog extended to Q3, but currently it's still in May/June timeframe and we know X details won't be available until delivery, which is most likely August (right after Q2 ER probably). I think demand is mostly fine for Q2, but I would more worry about the X cannibalization effect if we don't see 3-4 months S backlog at end of Q2.

Maoing, the point would be that throttling production somewhat the past couple of months would allow the backlog to both roll forward AND grow as it does so. In ~June when the X is likely to be shown, the S backlog may be up to 12-15K. Of course, Tesla may have another way of handling the impact of X on S, and may not be throttling demand at all.

for what it's worth, reason #4 to your original point... the low delivery guidance for Q1 may just have been due to the port strike. even though it is settled at this point, 1) it was not settled at the time of the call, 2) even when settled, it's effects continued to play out for weeks, perhaps several months. as Tesla could not know exactly when any decrease to their production rate due to the strike would fully be behind them, it would make sense to guide conservatively (they certainly now have quite a bit of experience to media/wall street overreacting to temporary blips that have nothing to do with the company's long term value).

 

[AlMc]

Maoing/SteveG3: I am not worried about demand for TM products causing a miss on quarterly or yearly guidance. I believe if there were NO X that demand for the S alone would be enough to hit guidance. My worry is a combination of the Osborne Effect coupled with a not so smooth production ramp of the X (ex: introduction of the D was not smooth; seat issues/airbag issue/people cancelling orders because of the delay and because they wanted an AWD vs RWD).

If TM handles the ramp correctly there will be no issue.

 

[renim]

Are you referring to people not buying an S because the X is so cool and it will only take 2 more years, if they reserve right away, to get one?

sounds like China

 

[Auzie]

Maoing/SteveG3: I am not worried about demand for TM products causing a miss on quarterly or yearly guidance. I believe if there were NO X that demand for the S alone would be enough to hit guidance. My worry is a combination of the Osborne Effect coupled with a not so smooth production ramp of the X (ex: introduction of the D was not smooth; seat issues/airbag issue/people cancelling orders because of the delay and because they wanted an AWD vs RWD).

If TM handles the ramp correctly there will be no issue.

I am afraid that ramp up is unlikely to be smooth.

Problem with this stock is the intense scrutiny by both bulls and bears. Such scrutiny shines the light on often natural and inherent business noise, prompting both bulls and bears to eagerly explore the smallest of hiccups. Tough love for Tesla.

 

[AlMc]

I am afraid that ramp up is unlikely to be smooth.

Problem with this stock is the intense scrutiny by both bulls and bears. Such scrutiny shines the light on often natural and inherent business noise, prompting both bulls and bears to eagerly explore the smallest of hiccups. Tough love for Tesla.

Agreed. This is the biggest obstacle in 2015 for TS/TSLA in my mind. TM needs to hit guidance. Missing dealines that they have set just leaves doubt about the GF and model3 coming out in timely fashion. When we hit $290 it was becasue TM was riding the wave of exceeding guidance and everyone translated that into continued meet or beat on everything TM. There is now 'doubt' and the current price reflects that doubt.

 

[Auzie]

Agreed. This is the biggest obstacle in 2015 for TS/TSLA in my mind. TM needs to hit guidance. Missing dealines that they have set just leaves doubt about the GF and model3 coming out in timely fashion. When we hit $290 it was becasue TM was riding the wave of exceeding guidance and everyone translated that into continued meet or beat on everything TM. There is now 'doubt' and the current price reflects that doubt.

If Tesla misses guidance again, stock will go down. It does not look good or invoke much confidence to set self imposed targets and to keep missing them.

Set delivery targets contain a lot of information about the business. They reflect the rate of growth and the ability to execute, hence focus on them.

I am less concerned about product release timelines, as they are loose and vague.

Once the doubt is dispersed, stock might take off again.

Being on the receiving end of scrutiny is extremely unpleasant, but the upside is that it leads to fast improvement.

 

[FredTMC]

If Tesla misses guidance again, stock will go down. It does not look good or invoke much confidence to set self imposed targets and to keep missing them.

Set delivery targets contain a lot of information about the business. They reflect the rate of growth and the ability to execute, hence focus on them.

I am less concerned about product release timelines, as they are loose and vague.

Once the doubt is dispersed, stock might take off again.

Being on the receiving end of scrutiny is extremely unpleasant, but the upside is that it leads to fast improvement.

yep. I'm sure TM was very upset with missing guidance LAST quarter. I doubt they have any interest in missing guidance THIS quarter.

 

[AlMc]

yep. I'm sure TM was very upset with missing guidance LAST quarter. I doubt they have any interest in missing guidance THIS quarter.

Fred....I do hope you are correct!:biggrin: Missing first Q guidance at a time where EM guided for 55K (50% YOY increase) would not be pretty.

 

[Papafox]

yep. I'm sure TM was very upset with missing guidance LAST quarter. I doubt they have any interest in missing guidance THIS quarter.

Compare this final week of the quarter to the final week of Q4. In Q4, Tesla had this large number of cars that had to get out and be delivered. We saw a shortage of delivery trucks, trouble getting some cars through customs into Canada, lots of bad weather, too, not to mention the seat fiasco. I don't see the frantic rush this quarter as with last. There's obviously been some push in the last few weeks of this quarter, but not so much in the final week. The lack of a rush strikes me as meaning all goes well.

 

[sundaymorning]

Low volume today, under 3M shares traded, yet we're up $1.70, what's all this mean? Are we entering a period where low volume no longer dictates downward pressure?

 

[Papafox]

Low volume today, under 3M shares traded, yet we're up $1.70, what's all this mean? Are we entering a period where low volume no longer dictates downward pressure?

Take a look at the posts on the forum and you see less dread about how much lower the stock is going to go and more speculation when it's going to take off. Elon's talk changed the conversation to a more positive note. I think Austin called it when he said we've seen the expected drop after Elon's conference but now we're seeing the positive effect as people realize that the ending range anxiety conference will indeed sell more cars. The Street's survey, as questionable as it was, strikes me as confirmation of Austin's hypothesis.

 

[austinEV]

Fred....I do hope you are correct!:biggrin: Missing first Q guidance at a time where EM guided for 55K (50% YOY increase) would not be pretty.

Well if they had 10 quarters in a row of rampant growth and every single quarter they missed their guidance by 50 cars... the stock would be much higher than it is today. After a while even the street wouldn't care. consistency is king.

 

[AlMc]

Well if they had 10 quarters in a row of rampant growth and every single quarter they missed their guidance by 50 cars... the stock would be much higher than it is today. After a while even the street wouldn't care. consistency is king.

I'll take 10 quarters of rampant growth starting with Q1 2015 :biggrin:. That will take us through Q3 2017. If we then miss by 50 cars per quarter we will have a miss of 200 for the year when deliveries will be a minimum of 100k.... So, I agree with your premise:wink:

 

[maoing]

If Q1 guidance is 20% over Q4, then miss 500 wouldn't be a big deal. But Q1 already guided lower than Q4, so it won't be pretty at all if missed again. We should get better idea when EU data out next week.

Well if they had 10 quarters in a row of rampant growth and every single quarter they missed their guidance by 50 cars... the stock would be much higher than it is today. After a while even the street wouldn't care. consistency is king.

 

[doctoxics]

Are we going to see a major beat of guidance of 9,500 cars sold in Q1?

Andrea James toured the plant a few weeks ago (http://www.streetinsider.com/Analyst+Comments/Tesla+%28TSLA%29+Buy+Rating+Maintained+at+Dougherty+Following+Factory+Tour/10348143.html) and reported 3 shifts and 1,000 cars produced/week. If the quarter is 13 weeks and the first week and perhaps one other week were lost, then 11 weeks at 1,000 cars per week is 11,000 cars. Perhaps not all of these will be sold, but then we have 1,400 cars built in Q4 but not delived until Q1. Also, reports here and elsewhere indicate that the Q1 cars are rich in P85D, meaning greater revenue and profit per car.

 

[FredTMC]

Compare this final week of the quarter to the final week of Q4. In Q4, Tesla had this large number of cars that had to get out and be delivered. We saw a shortage of delivery trucks, trouble getting some cars through customs into Canada, lots of bad weather, too, not to mention the seat fiasco. I don't see the frantic rush this quarter as with last. There's obviously been some push in the last few weeks of this quarter, but not so much in the final week. The lack of a rush strikes me as meaning all goes well.

Yep. I think so too