Short-Term TSLA Price Movements - 2015

[Newb]

Tft, the people browsing this thread have too much knowledge of why Tesla is investing money so quickly to be scared by such statements. If you have a valid bear case, please make it, but investment in Model X, superchargers, gigafactory, etc. [...is not a valid bear case]

+1

tftf, I learnt to not flame bears, because I realized their cases are very helpful to add to my own long-term investments. So, in line with Papafox and AlMc, I welcome your valid bear case. Why should we expect TSLA to drop to e.g. $180, $150, or even below $100, short-term?

If you're an anti-Tesla/TSLA activist, for some reason: Why do you want them to fail?

 

[aznt1217]

Musk will keep the story going well into 2016 with the Model 3 mule unveiling (March 2016) and hyping pre-sales numbers. That will be his last bullet however.

I'm looking to keep my position until late 2016 or even 2017.

Turing CF-positive obviously depends on future investments, there are too many open questions regarding international roll-out, Model X ramp up and Model3 related expenses...but at this rate I don't expect them to be CF-positive except for a single quarter.

Not even their outgoing CFO believes in being cash-flow positive by Q4 2015 for certain any longer. It's now postponed to Q1 2016 (by then, he will likely have left Tesla anyway..).

As I pointed out above the leaving CFO predicted being cash-flow positive from operating activities back in Q4 2013 (CC) for 2014, how did that turn out?

Their latest line of credit (June 2015) already uses collaterals in the EU and North America.

The future is therefore more and more dilution imho if they want to keep growing.

You're going to keep your position until late 2016 or even 2017 and yet you can't provide us with a PT that I've asked you for repeatedly. At what point does your thesis change? Us bulls set our stops and publicly let people know when we will re-assess our positions. Please share yours.

Deepak does think they can go CF positive by Q415 depending on the X ramp up. That was the one caveat. You also say the future is more and more dilution-- while some of that may be true, I highly doubt it. This big assumption you have is their cash burn rate will continue at this pace. It simply won't. The valley of cash spend is really related to GF1, Tesla Energy, Model X, and preparations for Model 3. You need to spend money to make money and this is phase 1. The cash from this will be used to get to what I call phase 2 which is international expansion of manufacturing capabilities in Asia.

If there were a capital raise that were in the future, it would be for even further growth. Right now there's enough to lay the foundation for 500k cars a year production.

 

[mrdoubleb]

No need to guess, they already stated guidance for 2016 in their last letter to the shareholders : they expect demand and production between 83200 and 93600 cars. Anything less than 80k for deliveries is a downward revision for me and I believe the market will see things the same way.

Thanks I forgot about that.

 

[FredTMC]

Here's my assessment of how Tesla gets to 50k deliveries in 2015

I'm not discussing "demand" here. This is a production analysis.
We know there's backlog for MX and I'm assuming enough demand for MS.

Clearly, short term SP will be greatly affected by q4 performance.

Facts:

- 11,580 cars delivered in Q3

- Q4 guidance is 16,858 cars delivered

- 5,308 more vehicle deliveries in Q4 needed over Q3


Q4 production Rate:

Based on Tesla's guidance, Tesla is saying they'll deliver over 16,800 cars. In order to get there, this is an avg weekly production rate of 1400 cars. This means that the conveyor-based human assembly line has this capacity by design. Furthermore, Elon has said they will be capable of 1600-1800 per week into next year. Keep in mind this general assembly line assembles MX AND MS cars. I'm not talking about the robotic body weld lines (old body line #1 and new body line #2)

Assumptions:

#1). 500 MXs delivered in Q4

#2). 500 additional "inventory" cars in Q4 v Q3 (Tesla didn't appear to push inventory cars hard in Q3)

#3). 1 additional week of production vs Q3 (Q3 had one week production stoppage for factory upgrades). This accounts for over 1400 more cars in Q4 v Q3

#4). a day or two of production lost due to the Q3 factory power outage. I guess a 300 vehicle impact.

Summing these assumptions above is 2,700 more cars in Q4 vs Q3.

Take the incremental 5,300 cars needed in Q4 and subtract these 2,700 cars above is 2,600 more MS's in Q4 vs Q3

Takeaway: Tesla needs to produce & deliver 2,600 more new MS than Q3 to hit guidance (~220 more MS per week). Is this doable? Absolutely. They've told us they are ramping in Q4.

Guys, I expected more comments about these Q4 production estimates. Let me hear your critical thinking.

Again, my takeaway for Q4: If tesla makes 2,600 more MS's vs Q3 and 500 MX's then they can hit guidance

 

[techmaven]

That kind of proves my point, no?

The car industry moves very slowly compared to other sectors (especially the "tech sector" that is so often quoted when rosy scenarios for TSLA are constructed) and requires tons of cap-ex.

More generally, the EV field will be very crowded by 2018-2020 by cars from many brands while Tesla has issues ramping up beyond 0.5% passenger car market share by the end of decade (0.5% would be an absolute best-case scenario that not even sell-side bulls like MS' Adam Jonas believe in, he long cut the "500k cars by 2020" in his estimates)!

Anyway, I'm repeating myself and I answered the questions so I will leave it at that.

That's way too simplistic. Model X was originally thought to have been needed to achieve a run rate of 50,000 vehicles a year. That clearly was not the case. Now, I do think the Model X is late, but I am not sure how much of a real impact that is to the business in the long term. In other words, if the Model X was not even a thing - Tesla was going straight from the S to the 3, and include the dual motor drivetrain development and autopilot development as well as factory expansion, would the production ramp be roughly where it is now? Would capex spend be roughly where it is now? I would guess yes, it would be relatively close. We don't know the depths of Model S demand but certainly, when there is a new product launch, the "older" product might suffer some temporary Osborne effect. Let's say Tesla cancelled the X. That would have a short term stock price hit, the new line would build S's, and so would that really affect production ramp over the long term? We don't know the depths of S demand globally. Even if you say that the Model S demand is near plateau run rate in the markets they are already in, there are plenty of markets that Tesla doesn't yet have any presence. Further, service centers and Superchargers are still missing in quite a few of the top 30 media markets in the U.S. alone. The expansion just within the U.S. and Canada is far from over for the S. Tesla has been carefully setting up their business with de-risking maneuvers at the right junctures - the Model X is part of that, the Tesla Energy products is part of that. Now, I think they made mistakes with the X, but the long term picture is still intact.

Next, the EV field won't be crowded. The rest of the non-Chinese automakers won't be able to ship all that many EVs. They can talk about them. They can ship a few. It is very likely that Tesla will easily be able to sell each and every vehicle they produce in 2020, even with the Bolt shipping, the Leaf v2, whatever 4 seater SUV Audi Q whatever, the Aston Martin $300,000 Rapid-E, the Porsche whatever that is searching for infrastructure, and so forth. Take a look at the combined possible output of all the automakers sans Tesla and ex-China and the 2018 numbers are pitiful. Thus far, even the 2020 numbers look terrible. There isn't going to be much competition between the EVs, it's going to be against ICE. People will clear out GM's Bolt inventory too unless there's a major problem with it. Just going from no competition to possibly some competition doesn't mean crowded. Further, the most likely candidates for real Model 3 competition, GM and Nissan have their own problems. GM is the company that is willing to let you die over $5 and also willingly let people go to jail instead of owning up to their mistakes. Nissan goes for cheap, as in batteries that degrade because they didn't put in liquid thermal management, poor L2 charging rates, insists on CHAdeMO that is going away, and insists on terrible styling. Plus, they signed with LG and so we no longer know just what their build capacity will be like with the next generation cells since they chose against their joint venture with NEC. Their Infiniti BEV was cancelled and remains cancelled. They want to play in the vehicles at a lower price point than the 3. That's fine, there's plenty of room.

You can certainly make a lot of money shorting TSLA. You can also lose a lot of money on the bull side of TSLA by buying high and selling low or mistiming options plays. I can certainly understand being bearish about TSLA in a quarter or even 2 quarters, but to have a short position for year over year? That hasn't gone well and it likely won't go well.

 

[Drax7]

For Elon to be making predictions of manufacturing in China when the Model x is not yet ready,
indicates to me his mind set in not in the least worried about the ramp up in model x.

If I'd be worried about model x , I would be quiet. Very quiet and worried.

 

[sub]

Guys, I expected more comments about these Q4 production estimates. Let me hear your critical thinking.

Again, my takeaway for Q4: If tesla makes 2,600 more MS's vs Q3 and 500 MX's then they can hit guidance

I'm very cautiously optimistic that they can pull off 50k+ deliveries, your numbers are an example of how it could be done.

 

[mrdoubleb]

Guys, I expected more comments about these Q4 production estimates. Let me hear your critical thinking.

Again, my takeaway for Q4: If tesla makes 2,600 more MS's vs Q3 and 500 MX's then they can hit guidance

Ok, so I've already replied 99% agreeing with you (expect I am hoping for a better X ratio this year), but here are 2 critical thoughts we can chew on:

1.,
As Elon said the 2 production lines combined will have a maximum theoretical output of 2k cars per week, some have interpreted that as 1k each. Others have also said, that, while eventually both lines may produce both S and X, initially they expect the old line to stay exclusively S and the new one to be dedicated to X. They have cited complex re-calibrations and adjustments for Line No. 2 to be able to do both S&X shooting down the idea, that while Tesla is waiting for X parts, they could just use the second line to double S production.

So. Are they able to produce more than 1k Model S per week? You seem to think so, I would agree, others may not.

2., some have argued on these forums whether Tesla would be able to do so many deliveries, as in actually having enough manpower to boost Q3 to Q4 by 50%ish. Others cited job ads for delivery specialist being hired in droves.

Discuss!

 

[jesselivenomore]

I'm looking to keep my position until late 2016 or even 2017 if needed. I'm patient.

By 2017, the problem for you won't be patience. It will be solvency.

 

[mrdoubleb]

For Elon to be making predictions of manufacturing in China when the Model x is not yet ready,
indicates to me his mind set in not in the least worried about the ramp up in model x.

If I'd be worried about model x , I would be quiet. Very quiet and worried.

Also, many people take his words about the X being "difficult to build" as difficult to manufacture. I interpret it as difficult to complete engineering.

Having heard JB talking about almost all of their engineers being off of S and X and 100% focusing on Model 3, I would say this strengthens your theory.

 

[AlMc]

Ok, so I've already replied 99% agreeing with you (expect I am hoping for a better X ratio this year), but here are 2 critical thoughts we can chew on:

1.,
As Elon said the 2 production lines combined will have a maximum theoretical output of 2k cars per week, some have interpreted that as 1k each. Others have also said, that, while eventually both lines may produce both S and X, initially they expect the old line to stay exclusively S and the new one to be dedicated to X. They have cited complex re-calibrations and adjustments for Line No. 2 to be able to do both S&X shooting down the idea, that while Tesla is waiting for X parts, they could just use the second line to double S production.

So. Are they able to produce more than 1k Model S per week? You seem to think so, I would agree, others may not.

2., some have argued on these forums whether Tesla would be able to do so many deliveries, as in actually having enough manpower to boost Q3 to Q4 by 50%ish. Others cited job ads for delivery specialist being hired in droves.

Discuss!

Yes, I am confident they can ramp production enough to meet 50k. As long as supplier issues are not a problem the robotic lines and manpower at Fremont should be more than sufficient. But you have to ship and deliver 50% more vehicles, regardless if they are S or X Q over Q....They may need to sacrifice some margin in OT pay and going back to some truck transport vs trains to the east coast and, as usual, prioritize local deliveries. But, they need either a lot more efficient DSs or a lot more of them....All possible but IMO the factory output is less of a risk to get to 50k than the delivery side of the equation

 

[doggusfluffy]

Tesla Motors and reliability problems: Do they even matter? - Fortune

Even Brian Johnson, an analyst at Barclays PLC who has taken a more cautious approach to the company, says Tesla has frequently adopted a practice of “kaizen” (constant improvement) around its products, and feels comfortable that Tesla will be able to address the reliability issues. He also noted other leading luxury sedans fail to make the Consumer Reports recommended list, yet still sell.

 

[FredTMC]

Ok, so I've already replied 99% agreeing with you (expect I am hoping for a better X ratio this year), but here are 2 critical thoughts we can chew on:

1.,
As Elon said the 2 production lines combined will have a maximum theoretical output of 2k cars per week, some have interpreted that as 1k each. Others have also said, that, while eventually both lines may produce both S and X, initially they expect the old line to stay exclusively S and the new one to be dedicated to X. They have cited complex re-calibrations and adjustments for Line No. 2 to be able to do both S&X shooting down the idea, that while Tesla is waiting for X parts, they could just use the second line to double S production.

So. Are they able to produce more than 1k Model S per week? You seem to think so, I would agree, others may not.

2., some have argued on these forums whether Tesla would be able to do so many deliveries, as in actually having enough manpower to boost Q3 to Q4 by 50%ish. Others cited job ads for delivery specialist being hired in droves.

Discuss!

Thx. On #2 above about manpower... I'm sure tesla has scaled manpower as needed to support increased production. Keep in mind that it's not linear increase (IMO). In other words, the general assembly line conveyor just moves a little faster

i will say that I did a Factory Tour on Sep 30th (day after MX Event). The parking lot at Fremont is completely full. Hard to get a parking spot. Been this way for many months apparently.

 

[Curt Renz]

It's a bit odd that virtually every day for the last few weeks we open and slide.

Do you investment scholars have any trends on this vs the past few months.

It seem very consistent to me as of late.

Meaning, the first hour of trading primarily.

It's incredibly normal, and I've been watching Tesla share price action since early 2013. Here at TMC we call the first hour of trading "The Amateur Hour". Although the effect often extends into midday. If I were a daytrader, I could have profited handsomely. The hedge fund algobots are daytraders, and they seem to have been setting up this pattern and profiting nicely from it.

Any good news like a potential Tesla factory in China heard this morning can cause an initial pop upward. Then the hedge funds that are generally short sellers can program their algobots to flush out weak longs and daytraders whose stop loss limits are hit, often in the manner of cascading domininoes. At a point during the day when that appears to have run its course, the hedge fund algobots can start covering some of their short positions by buying back shares.

 

[aznt1217]

It's incredibly normal, and I've been watching Tesla share price action since early 2013. Here at TMC we call the first hour of trading "The Amateur Hour". Although the effect often extends into midday. If I were a daytrader, I could have profited handsomely. The hedge fund algobots are daytraders, and they seem to have been setting up this pattern and profiting nicely from it.

Any good news like a potential Tesla factory in China heard this morning can cause an initial pop upward. Then the hedge funds that are generally short sellers can program their algobots to flush out weak longs and daytraders whose stop loss limits are hit, often in the manner of cascading domininoes. At a point during the day when that appears to have run its course, the hedge fund algobots can start covering some of their short positions by buying back shares.

It's so scary how this is a normal thing... and the average American doesn't know it. Being in Finance I'm skeptical of this, but unfortunately I'm jaded and now I believe it to be true. The market is equal... to an extent. Anyway, for Scott Ales, in regards to Tesla we're in a "boring phase" of the company. This is similar to when they were focused on ramping model S production. It was quite boring as in there was no insane price action without any particular news. The one unique thing we had this week was Consumer reports throwing a wrench at us. Until the next bit of positive news, we'll have this love/hate fluctuation and as Curt says the bots and fund manager will make their money this way be taking from the weak.

Usually I map out Tesla like this.

Pre-Market: big orders placed to make things skew either positively or negatively
Open: Usually builds and stays in same direction as premarket
10:30 - 11:00: the direction swings in the opposite direction or stays the same but to a smaller magnitude
11:00 - 2:00: the lunch time lull, things don't really pick up and just undulate.
2:00 : the direction accelerates and determines the rest of the day

 

[Curt Renz]

It's so scary how this is a normal thing... and the average American doesn't know it. Being in Finance I'm skeptical of this, but unfortunately I'm jaded and now I believe it to be true.

Below is a video in which Jim Cramer explains how hedge fund managers manipulate share prices. Note how the apparent manipulation of TSLA by hedge fund algobots often coincides with the timing of anonymous FUD being spread about TSLA on internet message boards and article commentary. Those bearish commenters hiding behind the cloak of anonymity could well be the hedge fund managers who want to manipulate the share price without being caught being the ones who are doing so. As Cramer points out, the manipulative trades and deceptive propaganda are eventually seen for what they are, and the share price returns to the natural path that it was destined to follow.

 

[drinkerofkoolaid]

On the plus side, just about every possible "bear argument" is now priced into the stock. Very tempted to double my position going into earnings. So many catalysts in the near term and the stock is more oversold than it has been in a very long time. This decline has been caused almost entirely by noise, not facts.

 

[Papafox]

With no real reason for TSLA to drop to 208 on this Friday afternoon, with a tendency of the stock to gravitate towards 210 this past week, and with expected buying activity on Monday morning first hour, I've just bought 100 shares to play the weekend game. Worst case scenario is that I'll have to hold the shares to get an eventual gain.

Note: trading with satellite internet on my flight to Hawaii. This is very cool technology.

Note 2: I suspect enabling of autosteer on recent Model S cars will persuade quite a number of current owners to upgrade their cars in the near future. Although rough spots exist with the technology, I find autosteer to be a very compelling addition to the Model S.

 

[Causalien]

It's so scary how this is a normal thing... and the average American doesn't know it. Being in Finance I'm skeptical of this, but unfortunately I'm jaded and now I believe it to be true. The market is equal... to an extent. Anyway, for Scott Ales, in regards to Tesla we're in a "boring phase" of the company. This is similar to when they were focused on ramping model S production. It was quite boring as in there was no insane price action without any particular news. The one unique thing we had this week was Consumer reports throwing a wrench at us. Until the next bit of positive news, we'll have this love/hate fluctuation and as Curt says the bots and fund manager will make their money this way be taking from the weak.

Usually I map out Tesla like this.

Pre-Market: big orders placed to make things skew either positively or negatively
Open: Usually builds and stays in same direction as premarket
10:30 - 11:00: the direction swings in the opposite direction or stays the same but to a smaller magnitude
11:00 - 2:00: the lunch time lull, things don't really pick up and just undulate.
2:00 : the direction accelerates and determines the rest of the day

When I first came to this board. I was really surprised on the lashback on some of the things I said that I have come to know as truth through a decades+ of stock market experience. Now these things are mostly internalized here in everyone thanks to the teachings of others on this board. Every other investment board I visited follows this pattern. Imagine how hard it is to ramp this up from a board of (guessing here) 10 000 people to the rest of america. Elon's job is probably 1000x harder.

It's hard to make things happen, that's why I've made the decision long time ago to never be a short or aide the short side of things even though my balls are of the prophetic dimension when it comes to precision.

 

[hobbes]

Note how the apparent manipulation of TSLA by hedge fund algobots often coincides with the timing of anonymous bearish TSLA comments on the internet.

It looks to me as if they also make good use of negative news coming out independently, like the CR downgrade, and that way put the stock price reaction out of proportion.