Short-Term TSLA Price Movements - 2015

[Drax7]

Revealing configurator implies car is ready, revealing the car reduces uncertainty .
Less uncertainty implies less risk.

 

[austinEV]

Revealing configurator implies car is ready, revealing the car reduces uncertainty .
Less uncertainty implies less risk.

Endlessly delaying the website is indeed a huge risk, suggesting that they have major problems. I think the minimal accomplishment would be a website and first shipments in Q3. NOT doing the minimal would be a disaster. Doing the minimal should not be a big 10% stock move, it should be doing the minimal. This is my argument anyway. Obviously I am no longer positioned to take advantage of such a pop, so I will let it drop lest I be accused of being a bear

 

[Gerardf]

Actually you are laying out why I don't think the webpage and first deliveries should be a big deal.

I do not agree.

If August passes in silence, without any confirmation of cars being configured, the market might very well interpret this as 'another broken promise by Elon'. We might not agree with that, but what we think is not important here. The market might find it a very bad sign and react badly.

With TSLA going down with the Nasdaq up, we might already see that fear getting priced in.

 

[mdemetri]

Likely down today despite NASDAQ up because shorting the stock is allowed again today; rule 48 was tripped on Monday and blocked further TSLA shorting until today. If the NASDAQ falls off a cliff at the end of the day today like yesterday, it will take TSLA further down with a high beta (my guess under $210).

 

[jesselivenomore]

We are trading very similarly to the months/year prior to the model s launch, flat trading range between 21-37 then, 180-280 now. What's interesting is that the stock did not break that range until a full 8 months after the model s's launch. While it did have an initial boost after we started shipping, gains were quickly faded. It wasn't until cash flow positive until the market really took off. That fits with the idea that besides an initial relief rally after the model x launch, which may get faded, the real move may be a few months away when we get full production. Of course it should be a much smoother ramp so less time than the 8 months for model s.As for the risks, as long as the macros don't enter a bear market, I believe the market will be very forgiving of tsla. 5000 cars or a month or two delay does not change the long term story, so unless there are huge execution failures, we should hold the range above 180. If we do enter a bear market, then all bets are off. Personally I don't see that. The current environment is much more similar to 2011 Greece crisis, 2010 flash crash, or even 1998 the last asian crisis. In other words, a violent market correction, rather the start of a economic downturn ala 2000 or 2008.

 

[anticitizen13.7]

I do not agree.

If August passes in silence, without any confirmation of cars being configured, the market might very well interpret this as 'another broken promise by Elon'. We might not agree with that, but what we think is not important here. The market might find it a very bad sign and react badly..

I am certain that the market will react badly to further delays.

Lack of a configuration site isn't bad in of itself, but it is a symptom or indication that something is going wrong.

Basically, I think Tesla should stop giving out timelines. They rarely if ever meet them, and this is damaging the credibility of the company. I'd just say "it's ready when it's ready" from the get go, and issue blog post updates at various milestones (like Alpha, Beta, and RC).

 

[FredTMC]

I am certain that the market will react badly to further delays.

Lack of a configuration site isn't bad in of itself, but it is a symptom or indication that something is going wrong.

Basically, I think Tesla should stop giving out timelines. They rarely if ever meet them, and this is damaging the credibility of the company. I'd just say "it's ready when it's ready" from the get go, and issue blog post updates at various milestones (like Alpha, Beta, and RC).

no more delays tesla. Come on. Ridiculous

 

[v12 to 12v]

I am certain that the market will react badly to further delays.

Lack of a configuration site isn't bad in of itself, but it is a symptom or indication that something is going wrong.

Basically, I think Tesla should stop giving out timelines. They rarely if ever meet them, and this is damaging the credibility of the company. I'd just say "it's ready when it's ready" from the get go, and issue blog post updates at various milestones (like Alpha, Beta, and RC).

I suspect that there will be "Invitations to Configure" sent out for the Model X so that the website will not be swamped. Invitations to configure were sent out in batches for the Model S.

 

[SteveG3]

A thesis of mine: The "X reveal" will not be the stock boost people think it will be. I could be *very* wrong, but recall this is a development that is highly expected. The only reason for a short term boost would be a risk-off relief rally, but that might be a modest affect. I think Model X will be cumulatively a big victory for TSLA, but it will come in stages like this:

1) first deliveries of some founders cars, like 50.
2) Opening of design web page (I think founders will choose options in conversations, not the website)
3) Good reviews of the car from consumer reports, car and driver etc.
4) appreciable volumes of X shipping
5) Appreciable cash flow from X sales
6) weekly run rates higher than ever, S+X

MOST of those things won't happen until like Jan/Feb. The finanicial goodies are worse, maybe as late as May 2016 when Q1 results are announced.



Someone explain why the X reveal will be a big deal? Is the idea that the new secret features (big windshield, special middle row seats, ?) are just going to be gangbusters? Or will there be so much relief that the product is real that causes a surge? I just don't have it in my gut. As a stockholder I will think "good, they did a thing they needed to do". To use the overused phrase, isn't this priced in?

There's definitely points worth considering in your thesis Austin.

As to what design studio for X can do...

new features: I think there's one potential new feature that could make a big difference that you did not list... a ~100 kWh battery. my gut says it's better than a 50% chance. I know at least one person who will view that as a massive negative, but I think most would find it quite a positive. I think it would most likely near immediately be followed by a bigger battery for the Model S, at a better value than the current biggest size Model S. Best car and SUV, getting better in the one area still most criticized vs. ICE.

what's more, it kind of starts a psychological countdown to Xs delivered. as you say, we don't know if it will be ~50 deliveries and then a very slow pace, or what, but this car is highly anticipated, only more so given the delays.

As to your calendar, some more details,

-first, for context, IIRC, Founders Model S were in July, first drips of Signatures in September

-NYTimes "possibly biggest game changer since Model T" very strong review came out in September, along with other prominent newspapers in September/October timeframe. Tesla loaned cars for these reviews. Motor Trend Car of the Year was in the first week of November. I think there's a strong chance the X wins SUV of the Year from Motor Trend and others (Automobile gave the S it's Car of the Year before Motor Trend).

- those paying attention on TMC got even earlier indications of the S' strong execution... right here on TMC there were very positive thorough member reviews flowing through

- updates on ramp up pace. while we almost certainly will not have the kind of detail we did with the S, when VIN numbers of deliveries helped fine tune the pace of the ramp up, we are likely to get some feedback between now and January on the pace of the ramp up.

I understand that all the positives I mentioned had little impact on the stock price from September 2012 to January 2013, but Tesla was far less known at the time, and this made it's detractors far more effective in muting the reaction to all these positives with their barrage of bear noise, mostly about how 2012 Tesla wasn't going to get production up fast enough to avoid bankruptcy.

 

[hockeythug]

Hell of a week so far.

 

[Curt Renz]

Tesla Motors is among the five stocks most liked by Trip Chowdhry of Global Equities Research after the market selloff as reported today (Aug 26) at 16:00 EDT by Benzinga.

Link: Chowdhry's Picks

Excerpt:

Why Tesla?

Chowdhry pointed out that large automakers such as Audi, BMW, General Motors Company and Toyota Motor Corp are all scrambling to come out with a "Tesla Killer." He added that "probably none of these companies will be successful."

Chowdhry also reiterated that Tesla is "fast becoming" a multi-product, multi-geography and multi-revenue technology company.

Shares remain Overweight rated with an unchanged $385 price target.

 

[jhm]

BFPT alert

I'd just like to point out that $219 is at the current 5th percentile of sentiment with a 12 month median sentiment BFPT of $349. This is 59% upside potential within a year. Opportunities this good only come around a couple of weeks per year. With this much upside you may want to forego the leveraged drama of options and just buy shares.

Good luck everyone.

 

[pGo]

Completely agree with you. Steve Jobs was a maniac about the iPhone's design and manufacturing precision, and that frustrated many engineers. But there probably would have never been the iPhone if Jobs did not push everyone to achieve the impossible. Pretty sure what went on sale in June 2007 was still not 100% what Jobs wanted, but it was close enough to bring his vision to life and was at least one order of magnitude better than any existing phone at the time. Musk is the same time of product visionary and perfectionist. Granted, EV's core advantage is the powertrain -- that what helps the consumer MAKE SENSE of buying an EV. But a great passenger car needs to be more than that. It needs to be a complete package of great user experiences integrated seamlessly. Features like the falcon doors which will (as advertised, hopefully) make day-to-day activities such as putting the toddlers into the back seat a lot easier and enjoyable. That's the kind of design that makes the consumer LOVE the product. These things are by default very hard because we all want convenience and comfort so if it was easy to do it would've been done a long time ago.

Hopefully Musk is more on the Steve Jobs 2nd inning than 1st inning at Apple.

 

[techmaven]

I'd like to take this opportunity to provide a little perspective on the tardiness of the Model X. It was unveiled on February 9, 2012 which is before the launch of the Model S. To see some perspective on Tesla's viewpoint at that time, here is a presentation from August 23, 2011:

Report

They thought that they would have the Model S at 20,000 units a year.
They thought that in late 2013, they would then have the Model X with 10,000 to 15,000 units per year.

It was a reasonable thought given the price point and the expected market penetration in their respective segments - but we know that the Model S had both harder birthing pains and far more positive reception than Tesla expected. Could they have imagined demand exceeding 45,000 units a year, eclipsing their projections for both Model S and X combined volume? No.

They didn't need to ship the X because they had their hands full just expanding the production level to accommodate the demand for the S alone. They also found that with this level of demand, it would be cheaper, easier and less risky to continue to refine the Model S, introducing all sorts of various technologies on the S first. If they had to ship the X to get the volumes, then they would have shipped it earlier, but it would be a far less developed, far less impressive vehicle.

Of course, that presentation also states that with $662 million in cash and DoE loan, they didn't need to raise capital to ship the S and the X. Again, that changed when the S was a hit beyond their wildest dreams. Instead of launching the X as soon as possible for as cheap as possible, they moved the Supercharger network and the Gigafactory forward in their planning since they could raise the money. They are launching the X with a factory expansion that is capable of about 100,000 units a year instead of the original 30-35,000 vehicles a year.

 

[SteveG3]

Later today Consumer Reports rating of the P85D is expected.

I mentioned this last week, and some said they don't see it moving the stock. Perhaps not, but I'm not so sure... I think it could move the stock either direction.

CR rated the Model S a 99 out of 100 in the Spring of 2013, a rating only one other car from all the other auto manufacturers has ever achieved over many decades.

Will the P85D match that 99 or come close? It's a bit of a tough expectation scenario. If the car is scored several points lower, I'd expect that to draw a lot of attention, as the 99 score drew a lot of attention and in a sense is a prominent Tesla trophy (and we've already seen there are those out there keen to write something negative about Tesla). I'm not sure whether CR considers the P85D a separate vehicle they are rating, or an update of the rating of one vehicle, the Model S. I'm about 75% sure it's the former, but even if it is, don't look for the media to get that right... I think they'd still go with headlines "Model S no longer Top CR Car, Rating lowered" and let others worry about the facts.

Of course, the P85D could also score a 99, I think that would get some positive coverage, but not big coverage.

Then CR could score the car a 100. If it does, wow, that will get attention now, and will be a selling point for the Model S, and EVs in general for a long time.

I also think there's some chance that in discussing their rating of the P85D, they will look back on Tesla's emergence over the past few years generally and their 2013 impressions and 99 rating of the Model S specifically. I could either see this as a positive discussion, or possibly even a bit of a walk back (i.e. ~a ground breaking car, but maybe we were too quick on the trigger with our 99 rating).

I have some concern the 3.5 second 0-60 time might kick up some media swirl (with some pointed criticism from the likes of the WSJ). I've done some research about CR's automotive testing and I'm very confident that they do not use rollouts (a way of starting a drag race that results in a lower time in a race) when they test 0-60 times. I also did some searches on rollouts, most of the relevant basics are captured in the video linked below. Repeatedly I saw rollouts described as shaving 0.3 seconds off 0-60 times. The guy who made this video also said the top U.S. auto magazines, Road and Track, Motor Trend, Car and Driver (and U.S. manufacturers) do their 0-60 tests using rollouts. He also said the European magazines do not use rollouts. In the video he gives a pretty clear explanation and simulation of what a rollout is.

The truth about 0-60 mph Times - Rollout and how it is used... - YouTube

(you may want to turn the volume down for the first 15 seconds or so of the video)

whether it moves the stock or not, it will be nice to read a new Tesla review from these thorough testers as we wait for the Model X.

UPDATE: A CBS affiliate, KIMA-TV in Washington, has given us a big hint it's a 99 or 100, with this,

Highest rated car ever | Consumer | KIMA CBS 29 - News, Weather ...

6 hours ago ... Consumer Reports has just finished testing the latest Tesla and the Model S P85D earned the highest score of any car it has ever rated.
www.kimatv.com/news/.../Highest-rated-car-ever-323009801.html

link on affiliates page doesn't work. link to google search showing the early posting below. seems extremely unlikely to be a hoax. wording could mean 99 or 100, but I'm feeling the 100 : )

Google

 

[All Your Bases]

The Tesla site now down for Maintenance :smile:

 

[MitchJi]

There is no connection between the two. The Model X was in part purposely delayed because things changed. I've stated a few times in the past, the Model 3 can not be delayed because it's directly tied to the Gigafactory and Tesla's partnership with Panasonic and others.

The GF is not dependent on the M3. Tesla could make a good return selling Powerpacks. At this point that is probably easier than making cars.

 

[Johan]

Nice. X configurator going online today?!?

Edit: Back online, meh - no X configurator.

 

[allz]

Site back online - I do not notice anything new. Do you?

 

[Bgarret]

http://www.cnbc.com/2015/08/27/tesl...adline|headline|story&par=yahoo&doc=102950088

100/100 - P85D's perfect score by consumer reports.

P85D originally scored a 103 until they had to adjust their model....turn it up to 11.

"There's no other product that scores a 100 at Consumer Reports. It's unlike anything we've ever seen," he said.