Short-Term TSLA Price Movements - 2015

[FredTMC]

TM already missed Q3(slightly) and Q4(huge), it won't be pretty if they miss Q1 again, I truely hope it won't happen. Otherwise heading towards $150 is possible

Yep. Agreed.

I havent seen seen any indication that any new customer orders are slipping beyond March 31st. If anything we've seen cases where customer deliveries are being pulled forward into Q1 that were originally estimated after Q1. To me, this is a great sign that production is really humming.

 

[jaanton]

This comment is complete speculation... My observations of tech stocks over time and the multiple crashes and upswings has lead me to believe that management of companies can take advantage of large stock value swings and that they in a way, like them. When companies issue stock options, it's helpful for the recipient to have them issue when the price is low. That makes the option have a low strike price and a high likely hood that the option will become valuable. And this can happen quite quickly. Consider, there may be good reason to lower production of an old product prior to the release of a new product, people do not like to think they just bought something which is obsolete. The short term investors will say the company is stalling, the stock price may go down, the company then issues options to the executives, the new product is announced, the stock goes up, the executives win big. This could happen in just a few months. I'm not saying that Tesla is following this practice. But I offer it as a possibility.

 

[Johan]

This comment is complete speculation... My observations of tech stocks over time and the multiple crashes and upswings has lead me to believe that management of companies can take advantage of large stock value swings and that they in a way, like them. When companies issue stock options, it's helpful for the recipient to have them issue when the price is low. That makes the option have a low strike price and a high likely hood that the option will become valuable. And this can happen quite quickly. Consider, there may be good reason to lower production of an old product prior to the release of a new product, people do not like to think they just bought something which is obsolete. The short term investors will say the company is stalling, the stock price may go down, the company then issues options to the executives, the new product is announced, the stock goes up, the executives win big. This could happen in just a few months. I'm not saying that Tesla is following this practice. But I offer it as a possibility.

While this is sometimes true, in the case of Tesla I actually believe Elon and the management team when they say they don't care about the stock price short term, and that the swings are a distraction. They are not looking for an exit.

 

[dmunjal]

This comment is complete speculation... My observations of tech stocks over time and the multiple crashes and upswings has lead me to believe that management of companies can take advantage of large stock value swings and that they in a way, like them. When companies issue stock options, it's helpful for the recipient to have them issue when the price is low. That makes the option have a low strike price and a high likely hood that the option will become valuable. And this can happen quite quickly. Consider, there may be good reason to lower production of an old product prior to the release of a new product, people do not like to think they just bought something which is obsolete. The short term investors will say the company is stalling, the stock price may go down, the company then issues options to the executives, the new product is announced, the stock goes up, the executives win big. This could happen in just a few months. I'm not saying that Tesla is following this practice. But I offer it as a possibility.

This happened all the time in the 90s. I worked at companies that would time bad news announcements right before stock options would be priced for employees and executives.

 

[Auzie]

Every miss is taken as an opportunity to discredit elon, and his vision, though the car has improved beyond
our expectations and tesla is on path to the ultimate objective.

Now we have the market correcting as S&P earnings are expected to decline the first
2 qtrs of the year. Dollar strength and oil collapse are weakening earnings in the short term
though longer term they are huge benefits.

Imo every miss is squarely in Tesla's court, as it demonstrates their current business capability. The market reaction to misses is correctly placed.

I am not grasping how strong dollar and oil collapse benefit Tesla in the long term. My expectation for both these two factors is to put downward pressure on TSLA.

This comment is complete speculation... My observations of tech stocks over time and the multiple crashes and upswings has lead me to believe that management of companies can take advantage of large stock value swings and that they in a way, like them. When companies issue stock options, it's helpful for the recipient to have them issue when the price is low. That makes the option have a low strike price and a high likely hood that the option will become valuable. And this can happen quite quickly. Consider, there may be good reason to lower production of an old product prior to the release of a new product, people do not like to think they just bought something which is obsolete. The short term investors will say the company is stalling, the stock price may go down, the company then issues options to the executives, the new product is announced, the stock goes up, the executives win big. This could happen in just a few months. I'm not saying that Tesla is following this practice. But I offer it as a possibility.

Such scenario could be possible for some businesses but I highly doubt it for Tesla.

Many people at Tesla placed a lot of their own personal stakes on the line to take the business off the ground against all odds. Behaviour that you describe would be highly in congruent with everything Tesla has done so far.

The appropriate metaphor would be to propose that a person that just risked their life to save another person is now scheming and plotting to take advantage of the same person. Highly unlikely.

 

[techmaven]

Imo every miss is squarely in Tesla's court, as it demonstrates their current business capability. The market reaction to misses is correctly placed.

I am not grasping how strong dollar and oil collapse benefit Tesla in the long term. My expectation for both these two factors is to put downward pressure on TSLA.

i agree that I don't think that lower oil prices help Tesla. However, the accompanying drop in commodities pricing should help a lot. Copper has dropped a lot, aluminum is down, nickel is at a 5 year low. If the battery cells are priced in yen, dollar strength problems might be partially offset there. Similarly, commodities sourced from Canada and all sorts of components sourced from overseas will be cheaper. Dollar strength is actually good for Tesla if they are getting a substantial break in raw component costs and selling to primarily U.S. customers. I suspect that Tesla has a bit of control, but is far more interested in just getting vehicles to customers overall rather than tweaking allocation to markets based on exchange rate.

 

[Auzie]

i agree that I don't think that lower oil prices help Tesla. However, the accompanying drop in commodities pricing should help a lot. Copper has dropped a lot, aluminum is down, nickel is at a 5 year low. If the battery cells are priced in yen, dollar strength problems might be partially offset there. Similarly, commodities sourced from Canada and all sorts of components sourced from overseas will be cheaper. Dollar strength is actually good for Tesla if they are getting a substantial break in raw component costs and selling to primarily U.S. customers. I suspect that Tesla has a bit of control, but is far more interested in just getting vehicles to customers overall rather than tweaking allocation to markets based on exchange rate.

Valid reasoning for importers and might help Tesla a little bit in a short term.

Perhaps prices of some parts can be lowered due to cheaper commodities, but the prices are sticky and there are time lags that mute these effects.

My understanding is that Tesla will have 98% parts made in US once Gigafactory kicks in. All components parts prices have to go down to offset revenue losses due to a strong dollar.

 

[Drax7]

Lower oil and strong dollar are non inflationary. Non inflationary growth is the best of all worlds,
that is what we have here in the USA.

tesla gaming the timing of options at this point in their growth cycle is inconceivable in my
mind, and that type of manipulation by the current management seems highly unlikely
given their ethics

 

[jhm]

Let's not forget that Tesla incurs alot lot of transportation costs moving materials to factories and shipping finished goods to market. Most of this transportation runs on petroleum products. And this is one of the main motivations for colocating production. As a manufacture selling in three contenets, Tesla is short on oil and dependent on an oil based transportation system.

 

[techmaven]

Valid reasoning for importers and might help Tesla a little bit in a short term.

Perhaps prices of some parts can be lowered due to cheaper commodities, but the prices are sticky and there are time lags that mute these effects.

My understanding is that Tesla will have 98% parts made in US once Gigafactory kicks in. All components parts prices have to go down to offset revenue losses due to a strong dollar.

The labeling is misleading, since a part that has 99% overseas raw materials but assembled in a parts supplier in the U.S. is considered domestic. Also, Canada is considered domestic and a lot of raw materials comes from Canadian mines. USD strength relative to CAD helps Tesla. The Japanese cells have to get raw materials from Chile, Canada, and other places where the yen has been relatively strong. I just hope that some of that cost savings is passed onto Tesla.

 

[Auzie]

The labeling is misleading, since a part that has 99% overseas raw materials but assembled in a parts supplier in the U.S. is considered domestic. Also, Canada is considered domestic and a lot of raw materials comes from Canadian mines. USD strength relative to CAD helps Tesla. The Japanese cells have to get raw materials from Chile, Canada, and other places where the yen has been relatively strong. I just hope that some of that cost savings is passed onto Tesla.

I though Canada is part of US:wink:

Techmaven, we hope for the same. Most relevant factor for Tesla might be a strong healthy economy in US and worldwide, everything else is just details and noise.

 

[MikeC]

The labeling is misleading, since a part that has 99% overseas raw materials but assembled in a parts supplier in the U.S. is considered domestic. Also, Canada is considered domestic and a lot of raw materials comes from Canadian mines. USD strength relative to CAD helps Tesla. The Japanese cells have to get raw materials from Chile, Canada, and other places where the yen has been relatively strong. I just hope that some of that cost savings is passed onto Tesla.

Re: FX risk, we know from the 10K that the cheaper cost of cells from Japan more than offset relative losses from sales in Norway and China in 2014.

"Foreign Currency Risk

Our revenues and costs denominated in foreign currencies are not completely matched. We commenced deliveries of Model S in June 2012 to customers in North America and to European customers in August 2013. We recently introduced Model S to China, Hong Kong, Japan, and Australia. Through December 31, 2014, a majority of our revenues have been denominated in U.S. dollars. However, we have materially greater revenues than expenses denominated in the Chinese yuan and Norwegian krona, and materially greater expenses than revenues denominated in the Japanese yen. Accordingly, if the value of the U.S. dollar depreciates significantly against currencies where we have a net short exposure, our costs as measured in U.S. dollars as a percent of our revenues will correspondingly increase which may adversely impact our operating results. Conversely, as the value of the U.S. dollar appreciates significantly against currencies where revenues exceed expenses, our revenues as measured in U.S. dollars may be reduced.

As a result of a favorable foreign currency exchange impact from foreign currency-denominated liabilities, especially related to the Japanese yen, we recorded gains of $2.0 million on foreign exchange transactions in other income (expense), net, for the year ended December 31, 2014."

 

[jhm]

It sure sounds like Musk is targeting a 240 mile "ideal" range for the Model 3 for a "real world" range of 200 miles. Upping the ante on GM?

Musk: Tesla Model 3 Must Have 200 Miles Or More “In Real Worldâ€￾ | CleanTechnica

 

[techmaven]

Re: FX risk, we know from the 10K that the cheaper cost of cells from Japan more than offset relative losses from sales in Norway and China in 2014.

...

As a result of a favorable foreign currency exchange impact from foreign currency-denominated liabilities, especially related to the Japanese yen, we recorded gains of $2.0 million on foreign exchange transactions in other income (expense), net, for the year ended December 31, 2014."

Great catch. So the cells are definitely in yen. That might not be enough to offset the NOK losses directly, as the drop is 25% from the summer, or about 12.5% quarter over quarter. Going the other way, the dollar gained 20% over the yen over the same period, but relatively flat from last quarter. So about 20% of the price of the car is sourced in yen from Panasonic. About half the car is sourced overseas, which should have the same kind of drop. Aluminum, sourced from Alcoa has dropped about 10% in the same time period and copper has dropped 20%.

 

[Lump]

Elon Musk: Tesla Charging Locations Will Be - NASDAQ.com

Here's some nice news. Tesla is really cranking up the Destination Charging program. It sounds like this could be getting close to critical mass where any business that hopes to attract Tesla owners as customers will need to sign up.

I'm not sure how this squares with the idea that Tesla will not offer the dual charger offer. I actually took up that option recently primarily to make optimal use of Destination Charging. At 58 mpg while you shop or eat at the location of your choice, Destination Charging is almost as good as Supercharging. So I'm not sure why Tesla would want to pull back on dual chargers at this point in time.

It sure sounds like Musk is targeting a 240 mile "ideal" range for the Model 3 for a "real world" range of 200 miles. Upping the ante on GM?

Musk: Tesla Model 3 Must Have 200 Miles Or More “In Real Worldâ€￾ | CleanTechnica

Posting 2 old news articles on a down day?

 

[sundaymorning]

Oil is slowly creeping back up, currently $49.70 as I type.

 

[jhm]

http://www.avafin.com/articles/1041992.html

More old news.

 

[vgrinshpun]

Love the old news, please keep it up.

As was discussed in the Tracking Short Interest thread, there was huge increase in institutional ownership of TSLA in Q4 2014, from 69M shares to 79M shares. At the same time short interest stood at 24.6M shares. As was discussed, the gap between all outstanding shares and the likely long term holders of shares - institutions and insiders - narrowed very significantly in Q4 2014. This presents great danger for those holding shares short, as pool of shares available for covering is dangerously low.

Since then the short interest kept creeping up (by about a quarter million shares), while, as indicated in an article linked by jhm, institutions are continuing to scoop up shares at a discount. The pool of shares available for short covering is getting even lower as we speak - the spring is tightening...

The next report on institutional holding is due 45 days after the end of Q1 - on May 15.

 

[FredTMC]

Love the old news, please keep it up.

As was discussed in the Tracking Short Interest thread, there was huge increase in institutional ownership of TSLA in Q4 2014, from 69M shares to 79M shares. At the same time short interest stood at 24.6M shares. As was discussed, the gap between all outstanding shares and the likely long term holders of shares - institutions and insiders - narrowed very significantly in Q4 2014. This presents great danger for those holding shares short, as pool of shares available for covering is dangerously low.

Since then the short interest kept creeping up (by about a quarter million shares), while, as indicated in an article linked by jhm, institutions are continuing to scoop up shares at a discount. The pool of shares available for short covering is getting even lower as we speak - the spring is tightening...

The next report on institutional holding is due 45 days after the end of Q1 - on May 15.

Good. I'm very interested in "Tsunami Part 2". It's been far too long since the original one.

As a nice lead-in, anyone remember April 1st 2013? I sure do... I awoke at a Harris Ranch hotel room on my way to a factory tour and got the most amazing news on my Tesla news feed.

 

[FANGO]

It sure sounds like Musk is targeting a 240 mile "ideal" range for the Model 3 for a "real world" range of 200 miles. Upping the ante on GM?

Musk: Tesla Model 3 Must Have 200 Miles Or More “In Real Worldâ€￾ | CleanTechnica

"Real world" would = rated. That would be similar to our current 265 mile number. I'm sure he's also speaking of range mode charging, much like the 265 does.