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Short-Term TSLA Price Movements - 2015
- Thread starter Robert.Boston
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To me, a 50K miss for the year was a foregone conclusion as soon as Q3 delivery number came out.
The recent news on X slow-ramp actually has slightly bigger repercussions. It means Q1 may not be cash flow positive as many people believe (based on what management said in no uncertain terms). One would think there will have to be certain amount of volume for the cash flow to turn positive. I doubt that we will get there in Q1.
So the squeeze a lot of us have been expecting in spring may actually happen in summer of 2016.
There is a bigger longer term issue here. Some of the folks here are from roadster era or very early model s era. For them this sort of missed deadlines and confusion over deliveries is business as usual. But if you think about it, all these early folks barely kept the stock sideways. It is really the later folks, who came in with Model S success, are the ones that invested heavy and lifted the stock up dramatically. For these newer folks these missed targets might heavily weigh into management's credibility. So I won't be surprised if the stock takes a heavy beating later part of this year or early next year.
The recent news on X slow-ramp actually has slightly bigger repercussions. It means Q1 may not be cash flow positive as many people believe (based on what management said in no uncertain terms). One would think there will have to be certain amount of volume for the cash flow to turn positive. I doubt that we will get there in Q1.
So the squeeze a lot of us have been expecting in spring may actually happen in summer of 2016.
There is a bigger longer term issue here. Some of the folks here are from roadster era or very early model s era. For them this sort of missed deadlines and confusion over deliveries is business as usual. But if you think about it, all these early folks barely kept the stock sideways. It is really the later folks, who came in with Model S success, are the ones that invested heavy and lifted the stock up dramatically. For these newer folks these missed targets might heavily weigh into management's credibility. So I won't be surprised if the stock takes a heavy beating later part of this year or early next year.
I agree on the interviewing calmly. This makes me afraid to jump out of any position. But I'm also thinking that March (Model 3 reveal) and April (Gigafactory launch) are not far away and the Model X will probably be ramped by then. That might be making him calm but that doesn't mean we aren't in for some more bad news. Oh well I am just holding on and ready to buy the next time my plan calls for it.
Citizen-T
Active Member
This is a lot like the Model S launch. I'm not saying that is a good thing. I was hoping that this launch would go better given their experience, but I guess they are still learning. But really, if you look back at what happened with the Model S, they delivered a handful of cars at the launch event and then there was a gap until real customers started getting cars. What I will say is that when production does hit reasonable volumes everyone will forgive and forget. This stuff only seems like a really big deal right now.
So, as for the stock, I've moved to a short term bearish position and long term bullish position. I have puts at various strikes and expirations through Jan '16 and those are balanced with Jan '17 LEAPs.
I wouldn't be surprised to see a panic that revisited $195 again sometime in the next 3 months so I'm defending against that, but by Spring of next year the market will have completely changed its mind yet again and there will be a petition to put Elon's face on the $20 bill. It's a rollercoaster of a ride, but this is how it has always been trading TSLA.
So, as for the stock, I've moved to a short term bearish position and long term bullish position. I have puts at various strikes and expirations through Jan '16 and those are balanced with Jan '17 LEAPs.
I wouldn't be surprised to see a panic that revisited $195 again sometime in the next 3 months so I'm defending against that, but by Spring of next year the market will have completely changed its mind yet again and there will be a petition to put Elon's face on the $20 bill. It's a rollercoaster of a ride, but this is how it has always been trading TSLA.
Citizen-T, Model S vs X - in terms of calendar, aren't they off by a quarter though?
Model S had 2500+ deliveries in Q4 2012. Volume deliveries which led to surprise positive eps happened for Q1 2013, which was announced in early Q2 2013 (april/may).
Model X looks like (or hope) will have a few thousand deliveries in Q1 2016. Volume deliveries which will lead to cash flow positive might happen in Q2 2016 which gets announced in first half of Q3 2016.
Model S had 2500+ deliveries in Q4 2012. Volume deliveries which led to surprise positive eps happened for Q1 2013, which was announced in early Q2 2013 (april/may).
Model X looks like (or hope) will have a few thousand deliveries in Q1 2016. Volume deliveries which will lead to cash flow positive might happen in Q2 2016 which gets announced in first half of Q3 2016.
As soon as I saw the complexity of the car, i was very annoyed. The repercussions are clear and obvious.
But if they are clear to me, they are even more so to Elon. However, he must have done a cost/benefit calculation
and gone with it anyways. He must have figured a few months delay was worth the benefits of the outcome.
If he chose the riskier path, it is because the benefits more than make up for it.
I believe he said something to the extent that this car wasnt needed to get to model 3 anymore. And if thats your (Elon's) outlook on this car, I can see why he has no real issue with delay after delay, and adding significant complexities to this particular vehicle. Was it the right move? I dunno, but I can understand his thought process with the model X, to an extent.
Citizen-T
Active Member
The first Model S deliveries happened over the summer though, if I remember correctly. Model X started at the end of September. So relatively speaking, i think it is the same.
My thoughts exactly. If you've ever watched the Simpson episode where Homer designs a car, that's kind of what the Model X rollout reminded me of (way less preposterous of course in the case of the Model X). But the it just seemed like every new idea was greenlit to the point that the car is probably one of the most complex vehicles ever built. These complexities will take time to iron out in the production process, and I expect a long ramp-up.
"The Homer"
CALGARYARSENAL
Member
Seems like GM's yet another massive safety recall and Ford's less than stellar 3Q earnings are dragging the entire automotive segment down.
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Just my opinion that Tesla should no longer project optimistic info. There is a lot beyond their control and the stock gets punished unnecessarily when they miss them.
Tesla : we will be cash flow positive in Q1
Stock Market : Mmkay whatever dude. we will believe it when it happens. <stock barely budges>
<unforeseen circumstances happen, delay in Model X ramp, not cash flow positive for Q1><Stock gets hammered>
Cash flow positive in Q2, nobody cares anymore.
Same with yearly guidance
Tesla : 55,000 it is!!
Stock market: Yeah right. We will believe it when i see it. No change in SP
Tesla : Maybe 50,000?
Market : SELL!!!
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Just my opinion that Tesla should no longer project optimistic info. There is a lot beyond their control and the stock gets punished unnecessarily when they miss them.
Tesla : we will be cash flow positive in Q1
Stock Market : Mmkay whatever dude. we will believe it when it happens. <stock barely budges>
<unforeseen circumstances happen, delay in Model X ramp, not cash flow positive for Q1><Stock gets hammered>
Cash flow positive in Q2, nobody cares anymore.
Same with yearly guidance
Tesla : 55,000 it is!!
Stock market: Yeah right. We will believe it when i see it. No change in SP
Tesla : Maybe 50,000?
Market : SELL!!!
chickensevil
Active Member
Yes, that would be my definition. That they anticipated all MX Sigs by Dec 31. We still have 2 months to get there, so hopefully it will happen, but as time goes by and we hear nothing on the Sig #2 front (the most likely to get the car pretty early on), it makes me worry. And if they can't stick to "MX ramp will be faster than the MS ramp" then that also really bites... It was something like 3 months from "launch" to actual first real deliveries with the MS (If I recall correctly), Given that it was the end of September this time, I would say that if they don't want to fall behind there then they need to get a decent number out starting December at the latest and it needs to be more than they did in the first month of the S (which shouldn't be too hard of a milestone to beat). That being said, expectations are still pretty high on what the market seems to be expecting out of Tesla, so if they can't do it quickly, I anticipate a short term fallout.
FredTMC
Model S VIN #4925
Gerasimental
Member
Very true. I just can't stand that there's so much misinformation out there. Also tough to stomach that hit from July to now.
FredTMC
Model S VIN #4925
my baseline estimate for Q4 was ~500 MX deliveries thru year end. I never assumed all MX sigs in Q4
my estimation remains that tesla can make it to guidance for Q4 with their increased production of MS
my full assumptions are in this write-up:
Short-Term TSLA Price Movements - 2015 - Page 1524
Gerasimental
Member
I also never really *expected* more than 500, but with some of the recent posts about delivery dates I did have some hope, which is now gone. Oh well, less uncertainty! I think I remember some TMCers saying they were hoping for an announcement of MX current delivery rate in the 100s on the CC, and I was wondering if this news would affect people's plays.
Thanks for your great breakdown of how MS production could be sufficient to reach 50k total. I was hoping to add some thoughts to it with another data point - I hope I'll get around to it after work.
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