Short-Term TSLA Price Movements - 2015

[maoing]

SCTY was trading between $50 - $60 for most of the year until the China BS in August, and now trades between $40 and $50.

below $40. I guess it'll retest $35 in a few weeks.

 

[vgrinshpun]

I've seen quite a few posts minimizing or even dismissing as noise the CR "worse than average" reliability rating. Although this rating clearly used (both conscientiously and due to ignorance) in manipulative way, it is significant in several other ways as well.

First, I wanted to stress that CR is *independent*, highly professional organization employing automotive engineers and statisticians that has many decades long history of detailed and accurate reporting of automotive reliability. As a subscriber for more than two decades and an Engineer following their reliability rankings for all that time I can vouch for this.

The problem I see with the way these ratings are interpreted is that they are very rarely put in context. CR thoughtfully report their findings on three different levels.

First, they review how cars perform, including acceleration, handling, emergency avoidance maneuverability, safety, convenience, practicality, etc. These rankings do not consider car reliability, just how good a car performs variety of tasks in different situations. This is the rating system that MS "broke" by getting 103 points out of 100, acing this rating in a way never done by any other car.

Secondly, CR gathers data obtained from the detailed questionnaires that they distribute to all of the members annually. These data are collected and analyzed statistically. MS predicted reliability was "worse than average" as a result of this year review. One thing that is often missed is that majority of high performance premium cars do not rate at the top of the reliability rankings, but rather gravitate to the reliability area between worse than average to average. This is not surprising as these cars usually are more technologically advanced (new technology prone to reliability issues more that established and tried one), have more bells and whistles (which increase probability of something breaking), and have much higher performance (leading to potential reliability issues).


The third review that CR does deals with the customer satisfaction. I look at this as gauging whether the balance between performance, reliability and customer service for any given car hits a "sweet spot" in consumer perception, i.e. whether consumer will buy this car again. Once again in this category MS is at the very top of all the cars ever reviewed by CR.


And here where the reliability plays a very significant role. It is quite clear that customers overwhelmingly would buy MS again, but as we can see the rumblings on this Forum, and as CR reliability rankings demonstrate, reliability is very important and if it slides any lower than it is, the overall customer satisfaction might follow. I think that Tesla is keenly aware of this and is trying to do optimization between the feature content, innovation, *speed of ramping production*, deployment of SC, customer service, etc. I think that the current report will serve as a clear warning signal to the Tesla team.


And here where the significance to the short term stock movements lies. Elon addressed production ramp in several ER, quite often stressing that the goal is not only increase production, but do it at certain quality level and certain profitability. I believe that this is the reason that production ramp takes seemingly excruciatingly slow, deliberate pace. If anything, the current reliability report will likely to serve as a warning bell to the Tesla team, and they likely to be somewhat more conservative in the production ramp. They need to improve the quality, and absolutely can't afford any further deterioration of it.

That is one of the main reasons, I believe, those that have rosy view on meeting this year's delivery targets could be very disappointed. I suggest plenty of caution as IMO the yearly delivery guidance will likely to be missed, and might be revised down during the Q3 ER.

 

[doggusfluffy]

How Elon Musks Mom (and her Twin Sister) Raised the First Family of Tech | Vanity Fair

“They grow up knowing you work hard, and the harder you work, the better you do and the luckier you get,” she recently told VF.com. “They also had to be responsible for themselves, because they had to help me.”

Lyndon Rive, whose parents were entrepreneurs in the natural-health business, recently recalled watching his mother—Kaye—work from 7 in the morning until 11 o’clock at night, every day.

“We grew up thinking that’s what people do, isn’t it? That’s what’s expected,” he says.

 

[Kalud]

Hearing that VINs are getting assigned right now for Sig X, some with completion date in mid-Nov.

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Source: I'm starting to think the X still isn't ready... - Page 15

 

[sub]

well it looks like the talk of 100 Model X delivered or less by year end is not true.

I think the CR report is important and I don't think it should or will be ignored by Tesla. My point of view on it is that it will have little to no effect on Tesla sales short to medium term. I'm willing to deal with some issues with a Tesla because of who they are and where they are in their history. I'm less willing to deal with it from other manufacturers but at the same time I'm a rational person and realize that a car is a very complex thing and no car will ever be perfect. The other side of that is people will walk away from a company like Tesla and everything they stand for because a seat doesn't fold. Takes all kinds.

 

[MitchJi]

And here where the significance to the short term stock movements lies. Elon addressed production ramp in several ER, quite often stressing that the goal is not only increase production, but do it at certain quality level and certain profitability. I believe that this is the reason that production ramp takes seemingly excruciatingly slow, deliberate pace.

No. The reasons are that they can't get enough windshields and seats.

 

[AlMc]

well it looks like the talk of 100 Model X delivered or less by year end is not true.

I think the CR report is important and I don't think it should or will be ignored by Tesla. My point of view on it is that it will have little to no effect on Tesla sales short to medium term. I'm willing to deal with some issues with a Tesla because of who they are and where they are in their history. I'm less willing to deal with it from other manufacturers but at the same time I'm a rational person and realize that a car is a very complex thing and no car will ever be perfect. The other side of that is people will walk away from a company like Tesla and everything they stand for because a seat doesn't fold. Takes all kinds.

As someone who did find the lack of folding seats a deal breaker I resent that remark. I will not, and can not, speak for everyone that cancelled because of that but I can tell you I firmly stand behind TM and their mission statement/goal. Personally, I don't think anyone should 'take one for the team' (so to speak) when it does not meet their needs.

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No. The reasons are that they can't get enough windshields and seats.

I have no solid information but I would bet 'windshields' if I had to pick one.

 

[vgrinshpun]

No. The reasons are that they can't get enough windshields and seats.

Yes, I am talking about MS ramp up. It is deliveries of MS which will make or break this year's guidance. A lot of people think that increasing production/output is similar to flipping the switch. It is not. It is multi-month deliberate process.

 

[CALGARYARSENAL]

It is definitely a cult stock. People saying it is ridiculous to be trading at these levels – have you looked at the price earnings multiple? If the love for Tesla fades as it has with me (hate the X) it could have a long way to fall. Don't be playing with any money you cannot afford to lose.

 

[FredTMC]

No. The reasons are that they can't get enough windshields and seats.

yep. That was the reason given. I'm sure we will get a lot more color on Earnings call.

IMO, if they knew these two parts were coming soon (few weeks) then they would build MXs and add these after assembly.
At the very least, produce some Body in Whites. Maybe they are...

regardless, I think they've ramped MS production for Q4. Enough for guidance? We will see. This will have a dramatic effect on TSLA of course. Further lowering guidance would be pretty negative for the short term SP

No, they're aren't using the new Body Line 2 for MS. It only is configured for MX for now. Elon tweeted before showing MX on the new body line BTW

 

[The Blue Owl]

It is definitely a cult stock. People saying it is ridiculous to be trading at these levels – have you looked at the price earnings multiple? If the love for Tesla fades as it has with me (hate the X) it could have a long way to fall. Don't be playing with any money you cannot afford to lose.

I'm not saying it cannot drop further, and the advice about not betting one's life savings is certainly sound. But this canard about the P/E multiple has to die in the exhaust of a Jetta TDI.

If Tesla were to break even, the P/E would be infinite. How is that useful information for a company in aggressive growth mode? As it has been repeated ad nauseam, they run the company at a loss because they invest every dollar in growth. You can talk about Price / Sales if you want, but mentioning the P/E multiple to argue the stock is overpriced is missing the point.

 

[MitchJi]

IMO, if they knew these two parts were coming soon (few weeks) then they would build MXs and add these after assembly.

At the very least, produce some Body in Whites. Maybe they are...

Maybe not. With a line capacity of 1,600-2,000 per week they probably wouldn't gain very much by doing that, other than further tuning of the line (if necessary).

 

[FredTMC]

Maybe not. With a line capacity of 1,600-2,000 per week they probably wouldn't gain very much by doing that, other than further tuning of the line (if necessary).

Thanks. I'm not expecting big production numbers for MX in Q4. But tons of MS ramping (think referral program)

I think they could use this time to get assembly teams vetted on the assembly line processes for MX. One way to minimize MS production rate impact is to do the MXs on the assembly line near the end of the day (2nd shift).

 

[larmor]

Just perusing modelxtracker: some questions, are there really 28k reservations? that is alot of cash to have on hand and if converted to average sale price of 100k, that would be 2.8 bn revenue from now through next year... What is the cost to make this widget? Not bad for TM, and likely why they will focus on getting MX without issues and not get sidetracked with CR, GF or other seemingly endless FUD....

 

[theschnell]

It is definitely a cult stock. People saying it is ridiculous to be trading at these levels – have you looked at the price earnings multiple? If the love for Tesla fades as it has with me (hate the X) it could have a long way to fall. Don't be playing with any money you cannot afford to lose.

Good advice from someone who recently attempted to sell a naked call on TSLA. Hope you could afford to lose on that one as well. Given that your brokerage didn't let you sell it due to lack of funds, I have my doubts. It is difficult to see you go from one of TSLA's biggest cheerleaders in the short-term thread, to someone cautioning others on long positions while trying to sell an extremely leveraged short position that apparently you can't afford to risk right now because your brokerage firm didn't let you. I have no idea which direction TSLA will take next, but at least my position is small enough I can sleep at night and hold it. I could not sleep selling a naked call of any duration on TSLA, that's for sure. Sometimes I wonder if you even consider your own advice.

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In every circumstance in my career I have grown and prospered from moments that others call, success and failure. To me they both have equal values of learning embedded. My recent loss of significance with TSLA options is no different. It's expensive to learn sometimes. But not learning would be the real tragedy! I am confident that my 3rd tier position of Jan 17s will allow for a full recovery of my losses this past month. So it's basically a matter of sitting on the sidelines till that happens. But I'm still toying with what realistic strategy I might have employed to protect (since I am a bull) my positions. It's interesting that this past cycle is the first time I went naked, and as you know, I got clipped! Every other cycle I had to watch my protection suck the fun out of my portfolio and expire worthless. I don't mind the risk, I just haven't decided exactly how I would have NOT sold my puts by now and gone all in on the buy side several times over the last few weeks.

The last few posts have been good, thanks everyone.

With my Jan 16s near the bottom and March 16s not far off, it seems a recovery for those is unlikely. But I do understand that until I sell a position or it expires, I haven't lost a penny. So I have that!

As far as the next CC goes, it could go either way very easily, I believe there is a greater likelihood we'll drop than pop. But I'm on the sidelines, so no decisions to make about it for me.

And congratulations to those who got this past cycle right or were at least able to add to their positions on the dip.

I have little doubt your third-tier position will come through for you. I have really appreciated your posts from someone who knows the car business so well. I would not completely give up on the other positions either. The Jan 16s may be gone, but the mar. 16s definitely still have some hope IMHO.

 

[Noble Ninja]

I'm not saying it cannot drop further, and the advice about not betting one's life savings is certainly sound. But this canard about the P/E multiple has to die in the exhaust of a Jetta TDI.

If Tesla were to break even, the P/E would be infinite. How is that useful information for a company in aggressive growth mode? As it has been repeated ad nauseam, they run the company at a loss because they invest every dollar in growth. You can talk about Price / Sales if you want, but mentioning the P/E multiple to argue the stock is overpriced is missing the point.

There are many investors and analysts that do everything too much by the book. They are "book smart" but not "street smart".

 

[FredTMC]

TSLA attempting to hold on to $210. Zero help from Nazdaq today. Fairly low vol today. About avg

 

[hobbes]

regardless, I think they've ramped MS production for Q4. Enough for guidance? We will see. This will have a dramatic effect on TSLA of course. Further lowering guidance would be pretty negative for the short term SP

I would guess most investors expect a miss by now - I wouldn´t go as far as saying "priced in", because the shorts will jump if they sense fear, just like they did (I assume) on the Consumer Reports rating change. If they were able to pull on target deliveries by ramping Model S, that would be quite a strong sign as far as demand is concerned... Don´t think they´ll be able to do that because if they only use one line (pretty sure the other one is exclusively for X) - on the other hand they should have quite a few workers waiting for the X windshields, so they could build a few Model S in the meantime .

BTW, in the X forums a first inofficial production end (not delivery) date of mid November emerged for Sig 171: I'm starting to think the X still isn't ready... - Page 15

 

[hockeythug]

I find Ferrari going public odd. Do they need capital for something?

 

[FredTMC]

TSLA attempting to hold on to $210. Zero help from Nazdaq today. Fairly low vol today. About avg

Wow. Someone really wanted TSLA to hold $210 into close. Felt like an options expiration day.