Short-Term TSLA Price Movements - 2015

[Papafox]

If the Tesla feedback is right and what Elon said a few months ago in fox interview to be believed, Tesla will generate substantial positive cash flow once model x is being produced in big quantities. And..... They may generate gaap in black.

However, I now feel that may be Elon has no clue what gaap is and may be he doesn't care about it as he claims that he spends 80% of his time developing products, a thing I believe where he really belongs. I suggest he learns to ignore the kind of questions and go in full swing when it comes to tech and future and humanity.

I agree with Krugerrand that plans may simply have changed at Tesla. What change, you might ask? Notice that Elon talked about millions of cars by 2025 and multiple factories. The obvious implication is that the reinvestment needed to expand this quickly will be consuming excess cash generated by car sales. I see this as an honest statement, not a negative statement. Meanwhile, the value of the company (and stock) can keep on increasing as Tesla becomes a major automobile producer.

 

[sundaymorning]

I agree with Krugerrand that plans may simply have changed at Tesla. What change, you might ask? Notice that Elon talked about millions of cars by 2025 and multiple factories. The obvious implication is that the reinvestment needed to expand this quickly will be consuming excess cash generated by car sales. I see this as an honest statement, not a negative statement. Meanwhile, the value of the company (and stock) can keep on increasing as Tesla becomes a major automobile producer.

Very true, I assume that Elon most likely had plans for millions of cars by 2025 all along; while holding back this thought for the right moment, or maybe he slipped. It is difficult talking up selling millions of cars when all you have is 1-2 years of production to go by, but fast forward to new-found confidence after building a gigafactory, gross margins of high 20s, 50% growth per annum for the foreseeable future, hundreds of super chargers and Model X by summer; then suddenly the "millions" number starts to make sense to investors.

Tesla will simply be one of the fastest growing company in our generation by 2025, this doesn't come with a cheap price tag, especially when you are building the world's most advance EV and continue to innovate at speeds never witnessed by any pre-existing competitor in the industry. If Tesla meets Elon's target of a minimum 2 million M3 by 2025, then we would be talking about 4 new gigafactories with production capacity of 500k each, 4 new Nummi type factories including machines, equipments and robotics all up and running by full capacity within a decade.

This is simply astounding and fits DaveT's model for Tesla 2.0-2.5, as an investor this was what I had expected all along, but to hear Elon say it himself makes the dream a bit closer to reality.

 

[Larken]

If Tesla meets Elon's target of a minimum 2 million M3 by 2025, then we would be talking about 4 new gigafactories with production capacity of 500k each,

Also a positive aspect in regards to gigafactories, if I understood it correctly, and as someone pointed out, that as time goes by the efficiency/density of the batteries are improving (7% yoy) thus requiring less gigafactories than todays stated 35GW / 500K cars.

 

[demetri]

As Bored Elon Musk tweeted yesterday.
@BoredElonMusk: Empires aren’t built by people who look into the future in quarterly increments.

this statement by him says it all! Ron Baron has said this also a few times on CNBC it's not about 33k, 50k or a few delays. Tesla has the potential of making millions of cars within 10 years and he expects to make 10 times his 250m investment. So holding tight my core stock holding and adding a bit at these levels. Short term options are difficult to time, leaps make more sense.

 

[ScepticMatt]

I'm amazed by the Tesla headlines today - just from the first page of google news:

"Tesla stock: Time to ditch it?" (CNN)
"Everything that's wrong with Tesla" (BGR)
"Tesla Model X Crossover Is Finally Coming . . . In 'Early 2016'" (Car and Driver)
"This Chinese Tesla Killer Has A Fish Tank In The Back Seat!" (Business Insider)

Not that I'm surprised given those news outlets, but it's annoying to bypass those to get to "real" news.

this statement by him says it all!.

that's a joke account, if that wasn't clear (notice the missing check mark next to that twitter handle)

 

[virtuesoft]

James Chanos was on CNBC talking about TSLA. I didn't see it myself but from what I can see on Twitter he was negative. We could be in for another rocky day.

 

[vgrinshpun]

D. Galves of Credit Suisse reitarates his rating and $325 PT - long-Term Thesis Intact.
Streetinsider.com digest:

Credit Suisse analyst D. Galves reiterated an Outperform rating and $325 price target on Tesla Motors (NASDAQ: TSLA) Friday, saying while the long-term thesis is intact, demand concerns are unlikely to abate for a while.On recent comments from CEO Elon Musk on China weakness, Galves notes that, according to the company, what was not reported was that exceptionally strong orders in Europe and an uptick in orders in North America fully offset the weakness in China, and that China orders have begun to increase again. That said, earlier in the year Tesla talked about China ad a major growth driver, so the commentary is understandably causing concern, he said.
For an analyst ratings summary and ratings history on Tesla Motors click here. For more ratings news on Tesla Motors click here.
Shares of Tesla Motors closed at $191.87 yesterday.

- - - Updated - - -

James Chanos was on CNBC talking about TSLA. I didn't see it myself but from what I can see on Twitter he was negative. We could be in for another rocky day.

According to Streetinsider.com Jim Chanos said 'we're potential purchasers' of Tesla stock, suggesting that he is buying to cover a short position following the recent drop.

 

[Muskol]

James Chanos was on CNBC talking about TSLA. I didn't see it myself but from what I can see on Twitter he was negative. We could be in for another rocky day.

Saw that as well, premarket dipped down immediately after but volumes are low. For what it's worth, Twitter search of "$TSLA Chanos" shows similar negative statements were made on May 15, 2015, as we know the stock went on a tear to ATH from there.

 

[vgrinshpun]

On Wednesday James Albertine of Stifel offered his notes following the Detroit appearance by Musk, including his opinion on Tesla's profitability outlook (Streetinsider.com digest):

Stifel comments on Tesla Motors (Nasdaq: TSLA) following a presentation by CEO Elon Musk at the 2015 Automotive News World Congress in Detroit, Michigan, and overall impressions from Tesla's display at the North American International Auto Show.Analyst James Albertine believes Tesla is arguably the largest disruptor that the auto industry has seen in about 50 years. Its a segment which requires heavy capital investment and payback periods can take several business ycles.
Albertine said, we continue to emphasize the importance of demand for TSLA products, which by and large, in TSLA core markets, remains on track relative to our current modeled estimates, based on TSLA comments.
On slumping China sales: we temper our concerns given (a) the early stages of TSLA's foray into that market, and (b) noting that the vast majority of auto manufacturers and suppliers have recently highlighted deceleration in China.
On Tesla's profitability outlook: TSLA's cost structure is, rightfully so, levered to investments in growth; both as it relates to the Model 3 (TSLA's attempt to create a more affordably priced mass-market vehicle), and the construction of a world's first, the Gigafactory (TSLA's attempt to boost volume, lower the cost of electric battery cell production). Taken together, comments related to GAAP profitability are not as earth-shattering as they are being portrayed in the media, in our view. TSLA has identified demand for lower-priced EVs and management is investing in profitably filling that demand, but given the long-term investment horizon and capital requirements of the auto business, returns cannot and should not be factored into expectations until, at the very least, the vehicle has been produced and delivered. This is the same as with any auto maker, granted TSLA is building only its third model when other OEMs are focused on models 15-20 (and in many cases continuing to financially support models that have failed to gain customer acceptance).
Conclusion: In short, while we plan to provide a further update post management commentary this afternoon, we believe the initial reaction to CEO comments yesterday is overdone and fails to recognize TSLA's value to the global auto industry, and global auto consumer, which we continue to believe are significant.
Albertine has Tesla at Buy with a price target of $400.
For an analyst ratings summary and ratings history on Tesla Motors click here. For more ratings news on Tesla Motors click here.
Tesla Motors closed at $204.25 yesterday.

 

[Derek Vinyard]

Credit Suisse and MLV&Co reiterate PTs of $325 and $300, respectively

Here are the latest analyst recommendations w/ price targets

 

[jhm]

There was talk a while back on the forum about a Texas factory, before the Gigafactory talk started if I remember correctly. Also trying to remember correctly, I think the talk was that Texas was an excellent choice for a TRUCK (I know you like that word of late) and/or Model 3 (when Fremont is at full production cap) factory. So not the first time there's been talk of Texas 'vehicle' factory.

Hey, we can make truck in Georgia. What makes Texas so special? Atlanta has excellent logistics for East coast market plus the Savannah port is the third largest in US, excellent for access to Europe and beyond. In fact, a lot of cars from Europe come through the Savannah port, so it would be nice to fill those ships up with Teslas and send them right back to Europe.

 

[ev-enthusiast]

But I kind of worry about Adam Jonas might drop a bomb before ER.

Stifel reiterated outperform rating & price target of $400.00 this Wednesday right after Detroit press conference.

Edit: Sorry for duplicate information (vgrinshpun already mentioned before).

Edit2: Thanks Derek for your posts!

 

[virtuesoft]

James Chanos was on CNBC talking about TSLA. I didn't see it myself but from what I can see on Twitter he was negative. We could be in for another rocky day.

I found the video of Chanos on CNBC

http://video.cnbc.com/gallery/?video=3000347173

 

[Robert.Boston]

Moderator's Note

Some posts were moved to TSLA Trading Strategies

Please use that thread to discuss how to turn the information in this thread into profits.

 

[JRP3]

What makes Texas so special?

Was wondering the same. Musk talked about a factory on the East coast, which makes more sense to me.

 

[chickensevil]

JA: Taken together, comments related to GAAP profitability are not as earth-shattering as they are being portrayed in the media, in our view.

See this was exactly what I said. Anyone shocked by the statement that they wouldn't be GAAP profitable until 2020 hasn't been paying attention. The only thing we were told to look for was being decently cash-flow positive in Q3. Which that statement was made before they mentioned the delay of the model X by one quarter, so it wouldn't surprise me if that doesn't happen until Q4... or in a worst case Q1/2016.

Tons of cash will translate into easier funding of another factory *without* the need to raise more funds. This is why they said they don't see a need to raise capital again in the short term. Also why I laugh every time I see someone mention the need to raise capital... because it totally goes against anything that has been said by the company.

 

[Robert.Boston]

Was wondering the same. Musk talked about a factory on the East coast, which makes more sense to me.

My guess is that several factors are at play:

• Texas sales are lagging expectations and market analysis, and Tesla sees the lack of test drives and direct sales as a direct factor. While Connecticut customers can pretty easily hop over to NY or MA for a test, Texans have nowhere to turn.
• Elon likes the business environment in Texas based on his experience with SpaceX.
• Elon could shuttle between a Texas factory and the SpaceX facility easily, a la Hawthorne and Fremont
• Winning in Texas would be a very visible win that could help crack open other states, e.g. Connecticut

 

[Krugerrand]

]What makes Texas so special?

I hear everything is bigger in Texas. *shrug*

Atlanta has excellent logistics for East coast market plus the Savannah port is the third largest in US, excellent for access to Europe and beyond. In fact, a lot of cars from Europe come through the Savannah port, so it would be nice to fill those ships up with Teslas and send them right back to Europe.

I might not be the person who can do anything with this information. :wink:

 

[SteveG3]

I think chickens evil had it right... cash reinvested means reducing or eliminating cap raises in the future. I would not be surprised to see analysts coming out with reports with same price targets through some changes in model with net neutral impact on valuation (it's clear Tesla has been talking to them & one these new notes just said more detailed note from this conversation to follow. this may mean "we have to play with model to reflect details Tesla shed and arrive at essentially the same price target). for example, possibly some lower non GAAP eps nearer term but higher longer term as lower share counts in out years reflect this reinvest cash to lessen future capital raise requirements approach.

 

[austinEV]

Was wondering the same. Musk talked about a factory on the East coast, which makes more sense to me.

Truck capital of the universe. Also a lot of truck manufacturing.

I will always remind people that a tesla truck is at least 7-8 years away. It will be less aerodynamic than a sedan, so you need to have a higher energy density battery to get similar specs as a model S (similar range just driving) and another step up if you plan to tow anything.

I DO think there are niches for light trucks with ~100 mile range for mostly commercial/fleet use.