Short-Term TSLA Price Movements - 2015

[CatB]

I scanned the article and the comments, don't bother. It's the 2015 stupid convention, appears to be an annual event.

Guess it will be another good day to buy low tomorrow. When stupid talks, stupid listens...

 

[Robert.Boston]

Thank you, now I (sort of) understand it.

But what is the cost of equity? No interest paid. No dividends paid?

I would vote for an equity raise if the efficiency of the additional cash is equal or greater than the return on the existing equity. In that case: no dilution. If the new equity capital is put to less efficient uses, then that is the dilution.

For debt it is easier to calculate the cost - it is the interest paid.

What is the cost of equity? I guess the expectations of the shareholders in terms of future dividends, future value of the company etc play the main rolls and are difficult to grasp. Where to look to find out about these expectations? They are reflected in the share price.

So offering new stock at current share price does not dilute (short term). Medium and long term it depends how efficiently the cash is put to work.

A little late to this discussion, but please refer to the Modigliani-Miller Theorem that says, in effect, that the value of a firm is unaffected by whether new capital is raised by debt or equity. Debt appears to be cheaper than equity because existing equity holders are pushed down in the seniority stack.

 

[Chickenlittle]

Insight: Tesla burns cash, loses more than $4,000 on every car sold - Yahoo Finance

Posted in the other thread. The comments are even more entertaining. Feels like I'm in 2013. The article is fair to an extent but the headline is just stupid

Making progress. If I remember previous value per car was 20,000

 

[pGo]

Lower oil prices are here to stay.
Oil Futures Signal Weak Prices Could Last Years - WSJ

 

[sub]

Guess it will be another good day to buy low tomorrow. When stupid talks, stupid listens...

I've got cash ready, waiting for the appropriate discount.

 

[jhm]

Lower oil prices are here to stay.
Oil Futures Signal Weak Prices Could Last Years - WSJ

I certainly expect oil to continue to decline, but gasoline will continue to grow 15 to 20% annually relative to oil. So gasoline can certainly climb even as oil falls. For car shoppers it's the cost if gasoline that matters.

 

[SteveG3]

I did a quick scan & a few tidbits were interesting to me (understanding 10-Q's are filled with potential risks)

We expect our long-term sales outside of North America will be almost half of our worldwide automotive revenue. Despite initial challenges in China, we plan to continue to invest in our infrastructure there as we believe that China could be one of our largest markets within a few years. However, as compared to markets in the United States and Europe, we have relatively limited experience in China and other Asian markets; thus, we may face continuing difficulties meeting our future expansion plans in Asia.

We continue to invest in construction of the building and utilities at the Gigafactory and in production equipment for battery, module and pack production. We will be responsible for the overall management of the Gigafactory and will engage with partners who have significant experience in battery cell and material production. We have partnered with Panasonic to manufacture and supply us with battery cells and we anticipate bringing on additional partners to create a fully integrated industrial complex. Although planning discussions with production and supply chain partners continue to progress, to-date we have not formalized any agreements with any other partners. Given the size and complexity of this undertaking, the cost of building and operating the Gigafactory could exceed our current expectations and the Gigafactory may take longer to bring online than we anticipate.

perhaps,

"we have not formalized any agreements with any other partners"

+

Elon's comments about a secondary potentially mitigating risk

= given that only Panasonic has reached an agreement with us, we have to consider a secondary offering of stock as a potential backup plan to Tesla putting up $2 billion for the GF and the rest of the money coming from multiple partners in addition to Panasonic.

To my view, not ideal, but not a challenge to the basic course Tesla has mapped out.

 

[drinkerofkoolaid]

perhaps,

"we have not formalized any agreements with any other partners"

+

Elon's comments about a secondary potentially mitigating risk

= given that only Panasonic has reached an agreement with us, we have to consider a secondary offering of stock as a potential backup plan to Tesla putting up $2 billion for the GF and the rest of the money coming from multiple partners in addition to Panasonic.

I think Elon wants to get demand as high as he can before the Model X release, to show Panasonic and other suppliers that he is serious about the type of volume he is expecting. Remember how he mentioned one of the main caveats for the Model S ramp up was that suppliers were waiting for proof that he could produce the type of volume is was telling them to prepare for? Panasonic is a fairly conservative company, and is investing a fairly substantial amount into Tesla, and is already ahead of schedule from where they initially expected to be.

There is an investor meeting next week for Solar City on the 12th, and Tesla is going to begin finalizing orders for the Model X within the next 2 weeks. I'm still wondering when we will find out the details of any arrangements Tesla has worked out with banks, companies, or individual people. I stand by my point that Tesla would have no problem obtaining access to a $20-40 billion credit line if Tesla needed the capital to accelerate production, to meet demand. Elon has a lot of very wealthy friends, and there are a lot of banks and financial institutions that see an opportunity to make a lot of money by lending to and investing in Tesla.

 

[ScepticMatt]

If this is 100% accurate, it will be very interesting.

China looks to copy California’s electric vehicle incentives : Renew Economy

In addition to a proposed new policy almost identical to California's electric vehicle mandate and incentives,

"A separate scheme directed at consumers also provides potential buyers with direct monetary incentives for selecting more-energy-efficient vehicles. Under the scheme, drivers will receive points that are cash redeemable for every mile covered in a fully electric vehicle. Conversely, drivers will have to pay a premium for distances covered using conventional gasoline cars."

It is true, but not news, apart from new implementation details.
News Release: 2013-06-18 California and Shenzhen, China, sign agreement to cooperate on fighting climate change

SHENZHEN, CHINA - Moving to further strengthen California's ties with China, California Air Resources Board Chairman Mary Nichols and Director of the Shenzhen Development and Reform Commission Xu Anliang signed a memorandum of understanding today in Shenzhen that will expand cooperation at the subnational level to tackle global climate change.

The agreement builds on the significant diplomatic and business exchanges between California and China over the past year and a half, including the Governor’s Trade and Investment Mission to China in April – which featured a visit to Shenzhen and Governor Brown's meetings with President Xi Jinping earlier this month and last February .

Under today’s agreement, California and Shenzhen have agreed to work together to share policy design and early experiences from their climate trading programs, in order to build strong, stable and growing markets for clean energy technology and greenhouse gas emission reductions.

Chairman Nichols was invited by the Mayor of Shenzhen to participate in the inauguration today of China’s first Emissions Trading System (ETS). The event, which represents an important milestone in China’s efforts to combat climate change, included a national conference attended by China's national leaders on climate change, including Vice Chairman of the National Development and Reform Commission Minister Xie Zhenhua. Leaders of the seven provinces and cities hosting China's first ETS pilots also attended this conference, together representing over 200 million Chinese residents.

“Congratulations to Shenzhen for taking this important step forward today,” said Nichols at the inauguration ceremony. “We are pleased to work with you in the effort to combat global climate change. The actions of states, provinces, and cities are creating a foundation that national and international action can spring from. We are blazing the trail.“

The collaboration will focus on building effective systems for data gathering, emissions verification, market monitoring, compliance and enforcement. Additionally, California and Shenzhen agree to monitor and share the best available climate and pollution-related science and research. The goal is to use the data to identify and evaluate additional policies, including performance standards, and to support low-carbon economic growth and reduce toxic air pollution.

During the Governor’s visit to Shenzhen in April, he discussed joint action on climate change with Shenzhen Party Secretary Wang Rong and toured Shenzhen-based electric vehicle and battery technology company, BYD. The Governor also signed the first agreements ever between a subnational entity and China’s Ministries of Commerce and Environmental Protection during the trip.

While in China Chairman Nichols will also meet with representatives of the national government to discuss follow-up actions to Governor Brown's April trip to China and his recent meeting with President Xi. Areas of discussion will include next steps to share information on the most successful approaches that have been developed to control climate change and air pollution.

 

[ev-enthusiast]

New analyst downgrade over the weekend by S&P Equity Research to sell (link).

Efraim Levy, analyst at S&P Capital notes that the company’s financials revealed a massive cash burn over the quarter. He also drew investors’ attention towards the company’s revised down delivery guidance for full year. With a prior rating of Hold, the analyst now recommends a Sell on the stock with price target of $225, which depicts a depreciation potential of 9.08% from the last closing price of $242.51 through Friday’s close.
[...]
The analyst is concerned over the company’s cash flow needs and margin pressure for near term. For the longer term, however he still anticipates rapid growth in automotive profit by 2017 and beyond. One of the main issues is that much of the financing needs are for capital expenditures. During the organization’s earnings call on Wednesday, the company did not elaborate on whether it is planning or it will need to issue additional equity. The analyst, on the other hand, feels that Tesla would need to issue additional equity to finance these short-term capital expenditures.
[...]
On the back of these ongoing expenditures and the possibility of additional funding needed, the analyst slashed his price objective by $10 to $225 and cut the earnings per share (EPS) estimate for fiscal year 2015 by $1.12 per share to a loss of 67 cents per share. EPS estimate for fiscal year 2016 is also reduced by $1.25 to $2.50 per share.
[...]
Even with the short-term concerns, the analyst still foresees considerable opportunity for Tesla from both of its automotive and nonautomotive business segments, including its vehicles and upcoming crossover SUV Model X and another Model 3. With the launch of Model X during the third quarter, S&P Capital is expecting earnings and sales to surge for fiscal year 2016. The analyst also believes that the reduced delivery guidance for fiscal year 2015 can also be recovered.

(link)

New upgrade by Vetr out today from hold to buy with $269.02 price target (link).

 

[Curt Renz]

New analyst downgrade over the weekend by S&P Equity Research to sell.

That S&P downgrade was actually published on Friday morning and appeared in my TD Ameritrade account at that time.

Meanwhile I see that Reuters has reissued its FUD about losses on each new car sold as though it were a new article today. Yahoo is again featuring it. Actually, Tesla enjoys a hefty profit margin on each new car sold. The authors disingenuously count development costs for future car models, energy storage systems and the battery Gigafactory.

All of the weekend nonsense FUD articles appear to be part of a bear attack designed to shake out weak longs at the market opening this morning.

 

[CALGARYARSENAL]

Tesla CTO Hikes Hacking Bounty To $10K (And Does A Shot)

Not sure if increasing the bounty to $10K is correct or FUD, but doesn't seem right. When something is working, why spend more money? Must be a FUD attack article?

If it is correct, I just don't see the upside - wasteful cash burn at this stage. People will hack these for free publicity. Why spend $10K you don't have?

 

[ev-enthusiast]

That S&P downgrade was actually published on Friday morning and appeared in my TD Ameritrade account at that time.

Meanwhile I see that Reuters has reissued its FUD about losses on each new car sold as though it were a new article today. Yahoo is again featuring it. Actually, Tesla enjoys a hefty profit margin on each new car sold. The authors disingenuously count development costs for future car models, energy storage systems and the battery Gigafactory.

All of the weekend nonsense FUD articles appear to be part of a bear attack designed to shake out weak longs at the market opening this morning and perhaps encourage new shorts.

Thanks for providing the info of an earlier release of that above mentioned analyst report from S&P.

Article about $4k losses per vehicle:
Yes, losses per car is obviously the wrong metric here, no need for any discussion.
Amazing to see how many news outlets actually copying parts or even the entire article.
Even in German speaking press in Germay!

BTW some rumour about Model X official release after first Founders deliveries will take place in September at IAA in Frankfurt in Germany (link).
While I do know that this is not the traditional Tesla-way to introduce new tech, this could have a tremendous press echo.

 

[hockeythug]

Tesla CTO Hikes Hacking Bounty To $10K (And Does A Shot)

Not sure if increasing the bounty to $10K is correct or FUD, but doesn't seem right. When something is working, why spend more money? Must be a FUD attack article?

If it is correct, I just don't see the upside - wasteful cash burn at this stage. People will hack these for free publicity. Why spend $10K you don't have?

You are concerned about what about is essentially pocket change to help prevent 100x more bad press regarding hacking?

 

[CALGARYARSENAL]

You are concerned about what about is essentially pocket change to help prevent 100x more bad press regarding hacking?

Yes actually - when people are willing to hack for free and when your likely spending several million on internal software engineers already. Once again.....why fix something that isn't broken? Seems like $9000K per hack that doesn't need to be spent.

 

[hockeythug]

Yes actually - when people are willing to hack for free and when your likely spending several million on internal software engineers already. Once again.....why fix something that isn't broken? Seems like $9000K per hack that doesn't need to be spent.

It obviously was broken as Tesla was using an out of date web browser with a 4 year old WebKit vulnerability.

 

[aznt1217]

That S&P downgrade was actually published on Friday morning and appeared in my TD Ameritrade account at that time.

Meanwhile I see that Reuters has reissued its FUD about losses on each new car sold as though it were a new article today. Yahoo is again featuring it. Actually, Tesla enjoys a hefty profit margin on each new car sold. The authors disingenuously count development costs for future car models, energy storage systems and the battery Gigafactory.

All of the weekend nonsense FUD articles appear to be part of a bear attack designed to shake out weak longs at the market opening this morning.

Best video. ever. I love how we all forget it when the sky is falling (temporarily). Thanks for the relinks and reminders curt.

 

[MonroeSS]

From the CNBC link: "Tesla, most of whose cars are built to order directly, delivered 11,532 cars in the second period and said it had an operating loss of about $47 million, for an operating loss per car of about $4,000."


Where did they get the $47 million from? I don't see it mentioned anywhere in the Q2 letter. I see non gaap gross profit $280 million minus sg&a $183 million equals $97 million operating profit ($8,400 a car).

 

[doggusfluffy]

1st Tesla P90D Deliveries In Transit... Prepare For Ludicrous Reaction Videos | CleanTechnica

We’ve been waiting, waiting, waiting… and looks like we won’t have to wait much longer. An Illinois resident noted yesterday that his Tesla Model S P90D (with the Ludicrous option… of course) is now “in transit.”

 

[ev-enthusiast]

Could Thursday's intrady low of $236.12 be the area of a double bottom today?

I do not see any additional bad news out today.
- Lots of duplicates of article about $4k losses per Model S produced.
Great fun to read as there are just too many flaws in it
- Lots of duplicates of article about hacking.
Will not really do a lot of harm as the hackers worked together with Tesla, already helped Tesla to fix the code and at least one of em is now working for Tesla.

In fact amazing to see these two articles flowing through the different news channes (even internationally) simply by copy and paste without almost no revision / fact checking.