Short-Term TSLA Price Movements - 2015

[FluxCap]

The ER is a time to consider all such things. The Frog was boiling slowly, if you will. ER is a time for a bunch of Tesla amateurs to come around and have an opinion for 3 days.

OK, I chuckled because that is so spot-on in so many ways.

 

[Johan]

Short covering tomorrow should be interesting. It doesn't look like most of the volume today was short covering.

The volume today looks like accumulation and panic selling, combined with broad market weakness. Didn't follow the market, and sort of formed a base.

Yeah. Lots of weak stops taken out and smart money flowing in today.

 

[anon]

Does anybody know if Adam Jonas has commented yet? I couldn't see anything. I think there is at least some small chance that he could surprise with a massive upgrade because of the Uber thing, like he did early last year with his surprise massive upgrade for the gigafactory.

 

[dalalsid]

Does anybody know if Adam Jonas has commented yet? I couldn't see anything. I think there is at least some small chance that he could surprise with a massive upgrade because of the Uber thing, like he did early last year with his surprise massive upgrade for the gigafactory.

That will put him one step closer to trip chowdharys lunacy of he does that.

 

[everman]

One thing from the ER that really struck me was the confluence of a few comments.

1) Revise weekly production rate to 1,600-1,800 cars
2) Identifying that 2,000/week is 'max capacity'
3) "Winning's got to feel like winning"

These three comments lead me to believe that he is realistically looking at factory capacity, and taking into account an actual OEE to set reasonable expectations. It also seems to me that he is giving his team the ability to exceed the targets, to "win", which will provide the opportunity for 'beats' in the coming quarters.

I take this to be a good set up for future quarters.

 

[replicant]

Here's another hypothesis: Elon intentionally lowered guidance to surprise the market with unexpected results in Q4, and raise money right when the stock price jumps.

 

[aznt1217]

Here's another hypothesis: Elon intentionally lowered guidance to surprise the market with unexpected results in Q4, and raise money right when the stock price jumps.

Or... After spacex's strutgate he realized not all suppliers are musk specification ready

 

[replicant]

Or... After spacex's strutgate he realized not all suppliers are musk specification ready

That was my thought as well. There's so much to learn by being a leader in multiple industries (space, auto, energy and financing).

 

[anticitizen13.7]

To add to the drama:

http://www.TeslaMotorsClub.com/showthread.php?t=50173

Some info/rumor related to the Model X launch was deleted at the request of Tesla and a forum member. Lolz.

 

[anticitizen13.7]

You could say the same thing about people investing the new dollars. Yes, those investments could pay off. But at the moment of printing dollars or capital raises, there is dilution.

No.

The difference is that when government creates new dollars by pressing some computer keys to "print" money, that money isn't exchanged for any goods and services.

People like you and me, who are in possession of legal dollars, generally have those dollars because they were the result of work or some kind of productive investment. If we choose to put those dollars into Tesla, we are putting stored work value into the company. We are NOT exchanging empty value for shares.

If Tesla were to create shares and give them away FOR FREE, that would dilute share value. If Tesla as an economic unit doesn't grow in any metric, but the # of divisions increases, that is dilution. People buying new shares means $ going into Tesla, which increases Tesla's economic footprint (has more stored value to use).

Again, fiat currency supply expansion and company stock capital raises are different things.

 

[mejojo]

Again, fiat currency supply expansion and company stock capital raises are different things.

Not to armchair CFOs, a couple of which appeared here today.......

 

[aznt1217]

To add to the drama:

http://www.TeslaMotorsClub.com/showthread.php?t=50173

Some info/rumor related to the Model X launch was deleted at the request of Tesla and a forum member. Lolz.

That was a while ago. Probably just house keeping because Tesla should be the one controlling the information and keeping a single version of the truth.

 

[dmunjal]

No.

The difference is that when government creates new dollars by pressing some computer keys to "print" money, that money isn't exchanged for any goods and services.

I thought that when the Fed prints dollars (QE), they take that new money and exchange it for Treasuries and MBS?

 

[BoerumHill]

I thought this exchange halfway through the CC was insightful.

Question: More of a guidance question. It was touched on earlier that the 1600-1800 is down from I think what was being floated around as 2000 for next years [weekly] production level. I get that the production overall might be lower based on a slower ramp. Is there something structural that is keeping you from hitting that 2000 on a run rate basis? Understanding that you can surge to that at a certain point....is there something that you've during the launch you just realized you're just not going to have the capacity you thought you'd have?

Musk: "Umm...Frankly....the main thing is we don't want to set...high expectations so that then the only way we can feel good about the future is if we exceed those really high expectations. Winning needs to feel like winning, if that makes any sense. Thats really why we are sort of setting those numbers. Could we do 2000? Aspirationally, yes. Do we want to commit to that? Ideally not."

Set the bar at achievable levels.

 

[mmd]

No.
If Tesla were to create shares and give them away FOR FREE, that would dilute share value. If Tesla as an economic unit doesn't grow in any metric, but the # of divisions increases, that is dilution. People buying new shares means $ going into Tesla, which increases Tesla's economic footprint (has more stored value to use).

IMO, this issue can't be explained just by looking at it theoretically. There is a demand-supply factor here. Otherwise, the big companies won't be doing any stock buybacks with their own cash.
If Tesla were to raise $30B tomorrow by issuing the same no. of shares it has today, its market cap won't rise to $60B, but may end up near $40B. So, each share will be worth 2/3 what it is now. Obviously, the smaller the amount raised, the lesser the impact. On the bright side, if running out of money is a major concern, new cash infusion can assure the investors and the company share may rise disproportionately.

 

[Curt Renz]

I thought that when the Fed prints dollars (QE), they take that new money and exchange it for Treasuries and MBS?

Yes, although the dollars are not literally printed. Those dollars are newly created by electronic funds transfers, however the securities already existed. The securities are just IOUs, and while they are sitting in the government's inventory they accomplish nothing constructive. But the new money received by the banks can be lent to businesses or individuals for constructive purposes.

When a corporation sells newly created shares, those are a type of security that never before existed, but the money taken in exchange has already been in existence. That received money now belongs in common to all of the shareholders, not just the new ones. The company's net worth has grown, but that is shared by a greater number of owners. Any supposed dilution is somewhat illusory since the value of the company has increased. Of course this assumes that the price of each new share is sufficient to compensate for the increase in their number. As an analogy, the pie has grown larger and is cut into a greater number of pieces, but each piece has the same weight as a piece of the smaller version of the pie. Meanwhile, those new funds can be put to work in expanding the company's operations for the benefit of all shareholders.

 

[anticitizen13.7]

That was a while ago. Probably just house keeping because Tesla should be the one controlling the information and keeping a single version of the truth.

The deletion of the original post at the request of Tesla only happened today. This has led to speculation that the post was true and Tesla is trying to hide supplier problems, or the post is false and damaging customer confidence, or some combination of the two, since there were multiple allegations.

Personally I don't think we will know the answer until late September, when Tesla either succeeds or fails at making its first delivery goals.

I thought that when the Fed prints dollars (QE), they take that new money and exchange it for Treasuries and MBS?

Open Market is one way to pump liquidity into the system. There are other tools available, including direct loans from the Discount Window. The Fed can directly push money to a bank if that bank can't get loans from other banks.

Khan Academy has pretty extensive videos on how this all works. This American Life also had an episode about how money is created.

 

[EldestOyster]

When a corporation sells newly created shares [...] Any supposed dilution is somewhat illusory since the value of the company has increased. Of course this assumes that the price of each new share is sufficient to compensate for the increase in their number.

I'm never quite sure if the idea is that the company holds unsold shares or whether they just "print more". Your opening remark seems to indicate the latter. So, with that mechanism, what is the eventual result of doing too much of this (since there's an unlimited supply of "newly created" shares)?

Sometimes I can understand better if we take some parameter to ridiculous levels. My guess is at some point the value of the company stops increasing, or they run out of things they can (or need to) buy.

 

[Curt Renz]

I'm never quite sure if the idea is that the company holds unsold shares or whether they just "print more". Your opening remark seems to indicate the latter. So, with that mechanism, what is the eventual result of doing too much of this (since there's an unlimited supply of "newly created" shares)?

Sometimes I can understand better if we take some parameter to ridiculous levels. My guess is at some point the value of the company stops increasing, or they run out of things they can (or need to) buy.

It's possible for the shares to have been authorized earlier and simply be kept in the company treasury. Until issued to individuals or businesses they could be considered to be the property of all of the shareholders, although not yet really of any value or a part of the float. Or more usually they may not be created until the time of a subsequent public offering. If subsequent offerings or profits have brought in so much money that the company cannot put it all to worthwhile use, the first option is to pay dividends to the shareholders, and the second is for the company treasury to buy back shares and leave them idle as in the first case I mentioned.

 

[Causalien]

Elon,

I recommend you that you source a normal second row off-the-shelf seat (like any other SUV) for Model X and give a discount for people who take these seats. Then provide half price off for later when these people want to upgrade to the "Sculpted" seats...(probably just the founders and signatures series people) IF this is what's actually holding up the mass production.

Probably my final suggestion. I have a full time job and my own empire that requires my attention now.