Short-Term TSLA Price Movements - 2016

[Causalien]

After one day of research. I am more pissed off at the fact that in the middle of repaxation for everyone, I have to analyze this *sugar*. I had other things in motion that was already past due for my attention.

Then I dig into scty financials and realize that this will take a lot more effort than I orignally anticipated. At the end of the day when adrenaline has been keeping me awake for two nights I am tempted to just give up and not do the analysis at all.

 

[CALGARYARSENAL]

The only thing that pisses me off is that we would have seen all time highs shortly after Brexit vote had this merger not been announced.

 

[vgrinshpun]

I would like your thoughts to be correct and that in 3-6 months, tesla goes much higher. If that is what on Elons mind as well, tesla is paying a HUUUGE premium for the business seriously in trouble. And, as a shareholder, I would prefer tesla makes an offer and does deal at that price point so dilution is not so high for tesla shareholders. Again, the timing of this deal doesn't make sense.

The timing of this deal is based on product cycle, not short term financial considerations.

The only financial consideration was whether financial constraints prohibit this move at this time, or not, not whether it is short term net gain. They determined that this move short term financially possible, and since it will lead to substantial net financial gain in future, went ahead with it.

Taking this risk, while nobody can even think on this scale IS one of Tesla's main competitive advantages. It was bold moves like this that made Tesla and Space X indisputable leaders in their space, with "competition" hopelessly behind. Apparently Elon's reminder about this during the conference call yesterday fell on deaf ears...

 

[Vitold]

[...]

Assuming SCTY turns out to be a success, is it big enough to move the needle significantly? Discussions with our N.A. Power Utility & Clean Tech team have led us to agree with CEO Elon Musk on some of the potential benefits that could be derived from a combination of TSLA/SCTY. Among those, we'd highlight (1) Lower sales costs for solar/storage; (2) Lower installation costs; and (3) Advantages from integrating solar and storage especially as net metering rules change at the state level. However, these potential benefits appear to be relatively small over the next few years even under rosy scenarios. Exhibit 4 From our perspective, we believe Tesla’s valuation is dominated by the significant opportunities it faces in the areas of shared, electric and autonomous mobility. Our core thesis for the long term direction of the automotive industry lends itself to many of the skills and attributes that Tesla possesses. We forecast Tesla's revenues to exceed $9bn in 2017 vs. SolarCity revenues of a bit more than $600m this year.

It looks like they value Tesla Energy business as insignificant which is at odds with Elon Musk's vision. By growing stationary battery business and moving into solar Tesla will probably be dissed by some car analysts and solar energy analysts - each viewing "the other business" as risk to their "core product".

Personally I like that EM is already looking beyond Model 3. He did that with GigaFactory 1 -- while still working on Model X -- he is doing it with SolarCity now.

I'm sure he is sad no one knows how right he is.

 

[SBenson]

Then I dig into scty financials and realize that this will take a lot more effort than I orignally anticipated. At the end of the day when adrenaline has been keeping me awake for two nights I am tempted to just give up and not do the analysis at all.

This is what I believe will happen to vast majority. SCTY financials are one f'ed-up mess. Beyond comprehension to most anyone, including professionals. I believe this helps in favor of a "no" vote. Unless Musk starts twisting arms into signing the deal.

I believe eventually sanity will prevail:
- No to Brexit
- No to SCTY
- No to Trump

Enough of this bs thrown at us.

 

[WarpedOne]

It is easy to see that which exists now.
It is harder to see what could exist if some exact conditions were met.

I'll wait for SP to fall a little more and then go full in. A trillion dollar company, a 30x bigger than now. Yes, thank you.
You don't believe it? So be it. EVs should not exists if 'the experts' had it right. Same with private space flights etc.

 

[tftf]

Then I dig into scty financials and realize that this will take a lot more effort than I orignally anticipated.

No need to overthink this! Elon is at SCTY since before the IPO and did all the hard work with his team.

See the chart by MS (back when they had their head together!) I posted above, three trillion-dollar-markets (TAM size) ripe for the picking by next decade.

Modest market-share by Tesla in all three markets and Tesla is worth a trillion next decade.

And were we are questioning a little dilution or added short-term risk (minor speed bump)?

Ridiculous in view of the reward.

 

[FluxCap]

The timing of this deal is based on product cycle, not short term financial considerations.

The only financial consideration was whether financial constraints prohibit this move at this time, or not, not whether it is short term net gain. They determined that this move short term financially possible, and since it will lead to substantial net financial gain in future, went ahead with it.

Taking this risk, while nobody can even think on this scale IS one of Tesla's main competitive advantages. It was bold moves like this that made Tesla and Space X indisputable leaders in their space, with "competition" hopelessly behind. Apparently Elon's reminder about this during the conference call yesterday fell on deaf ears...

Well said, and let's hope so. I don't think the bargains in solar companies will last through 2017, either.

 

[stef]

The timing of this deal is based on product cycle, not short term financial considerations.

The only financial consideration was whether financial constraints prohibit this move at this time, or not, not whether it is short term net gain. They determined that this move short term financially possible, and since it will lead to substantial net financial gain in future, went ahead with it.

Taking this risk, while nobody can even think on this scale IS one of Tesla's main competitive advantages. It was bold moves like this that made Tesla and Space X indisputable leaders in their space, with "competition" hopelessly behind. Apparently Elon's reminder about this during the conference call yesterday fell on deaf ears...

Most of the people (and analysts for that matter) still seem to be in the mindset of TM (i.e.: teslamotors), with energy a nice side project and nothing more. In this case, everything not car related can be seen as distractions and troubles.

However, Elon and JB have been making clear a number of times now that they are going beyond that, and that TE is going to be an equally big part of the "new" TESLA. As he said again yesterday, SCTY will be key for that side, and bad timing (for TM) is actually result of the TE schedule. Once you look at it from this perspective, then the timing makes more sense.
Is SolarCity acquisition the best solution for TE? I don't know, but personally I am happy with the new vision and for this reason still trusting Elon and his team on this.
Still, short term it sucks.

Fact is that anyone still looking at Tesla as the old TM should accept that things have changed, and review their position accordingly.

 

[SBenson]

I find these TFTFs timely comments to be very amusing.

It is holding up a mirror to us and our way of thinking.

Selling into bad news is a terrible thing to do. I'm just sitting tight but am seriously contemplating selling out some of my core shares at an opportunate moment.

As Gundlach says this SCTY mess is a confidence destroyer.

 

[Vitold]

A little more respect please. Elon Musk is chairman at SCTY. He has worked on the business model and been there since before the IPO.

Do you think something is not ok with SCTY? I'm sure Elon would have noticed and corrected this a long time ago.

SCTY is on the verge of becoming cash-flow positive. They said so on the call!

You're onto something. EM knows what's best for both, Tesla Energy and Solar City - hence the merger.

 

[Seesaw]

Would the MLM www.powur.com continue after the merger?

 

[RedModel3]

Most financial gurus insist that a company exists purely to provide profit to its stockholders, which seems to me to be a very short-sighted statement. As EM said in the conference call yesterday, he believes the purpose of his company is to make an amazing product. He's doing that. If a company can't make an amazing product, how can it ever provide long-term profit to its shareholders?

I hold stock in both companies, and I'm not betting against Musk.

 

[yesla]

Most of the people (and analysts for that matter) still seem to be in the mindset of TM (i.e.: teslamotors), with energy a nice side project and nothing more. In this case, everything not car related can be seen as distractions and troubles.

However, Elon and JB have been making clear a number of times now that they are going beyond that, and that TE is going to be an equally big part of the "new" TESLA. As he said again yesterday, SCTY will be key for that side, and bad timing (for TM) is actually result of the TE schedule. Once you look at it from this perspective, then the timing makes more sense.
Is SolarCity acquisition the best solution for TE? I don't know, but personally I am happy with the new vision and for this reason still trusting Elon and his team on this.
Still, short term it sucks.

Fact is that anyone still looking at Tesla as the old TM should accept that things have changed, and review their position accordingly.

Good point for those that think SCTY should be acquired in 2 years. well, plans have accelerated by 2 years.

 

[electracity]

Fact is that anyone still looking at Tesla as the old TM should accept that things have changed, and review their position accordingly.

Nothing so deep is happening. A SCTY failure would reduce the luster of Tesla. SCTY is a hot mess that is Musk's problem to fix. The transcript of the call yesterday makes it fairly clear that there is no deep strategy here.

Musk's only "must do" is to bring Solarcity to cash flow neutral. With that act, the only damage to TSLA is dilution of equity.

 

[colettimj]

Most of the people (and analysts for that matter) still seem to be in the mindset of TM (i.e.: teslamotors), with energy a nice side project and nothing more. In this case, everything not car related can be seen as distractions and troubles.

However, Elon and JB have been making clear a number of times now that they are going beyond that, and that TE is going to be an equally big part of the "new" TESLA. As he said again yesterday, SCTY will be key for that side, and bad timing (for TM) is actually result of the TE schedule. Once you look at it from this perspective, then the timing makes more sense.
Is SolarCity acquisition the best solution for TE? I don't know, but personally I am happy with the new vision and for this reason still trusting Elon and his team on this.
Still, short term it sucks.

Fact is that anyone still looking at Tesla as the old TM should accept that things have changed, and review their position accordingly.

Just realized,
TE - Tesla Energy
SL - SoLar
A - Autos

It's so obvious

 

[Runarbt]

A little more respect please. Elon Musk is chairman at SCTY. He has worked on the business model and been there since before the IPO.

Do you think something is not ok with SCTY? I'm sure Elon would have noticed and corrected this a long time ago.

SCTY is on the verge of becoming cash-flow positive. They said so on the call!

I know this is irony from your side, but still this is how i see it. i dont think Elon lies. I think he is more than healthy open, to open sometimes.;-)

Your latest posts have been good ones, u need to work on you irony or those who doesnt know u will take u for a bull.:-D

 

[tftf]

Good point for those that think SCTY should be acquired in 2 years. well, plans have accelerated by 2 years.

Just like the new Model3 delivery plan, pull it ahead and deliver a million by 2020. What's not to like? The car legacy companies can't match these moves, their assembly lines work too slow.

I mean, do we want Tesla to be worth a trillion in just 10 years or only in 20 years?

I say 10. Therefore it's necessary to speed up on the execution side and the SCTY merger.

Some beancounters and analysts are not up to speed, don't listen to them.

Once the train left the station and Tesla is soaring in value by 30X it will be too late for them!

 

[techmaven]

If Tesla didn't ship the Model 3 next year and used all the cell output of the Gigafactory for Tesla Energy, they may make far more gross profit. However, having both sides, transport and stationary storage de-risks each other. Therefore, it is very strange to completely discount Tesla Energy.

Right now, solar companies are pretty well beat down. Buying SCTY has almost nothing to do with Tesla Motors, it has to do with Tesla Energy. And the valuations of Tesla as only Tesla Motors can be completely discounted... they indicate lazy analysis. Hence all the P/E ratio comparisons with GM and Ford for instance. At least Daimler has an energy storage division that isn't just focussed on transport. But we are the the cusp of a change that I think few people are really grasping. It is interesting to me that MS would provide a far more generous valuation to Tesla for competing in the ride sharing business (Uber) than in the energy business. It seems something is out of whack there, as Uber's valuation is roughly double Tesla's at the moment. Clearly, if Uber thought they could get vehicles and the underlying robotic driving technology from Tesla, then Tesla could compete directly against Uber if they chose to do so - I doubt that there is much barrier to entry for Tesla's brand as a ride sharing service. I doubt it is possible to really guess how automated driving robotic ride sharing is going to pan out in the 2020's from an investor/analysts's 2016 limited vision. But likely, of all the people in the world, Tesla's management is amongst those that have the best data and are closest to understanding how the pieces would fit together.

Tesla Energy was not a 2015 story, even though they started shipping product and got their feet wet. It isn't even a 2016 story, even though they are shipping some big projects and is revising their product plans. Instead, it is a 2017 and 2018 story because of the manufacturing investments that have been made over the past few years. Unfortunately, beyond the sketch of Tesla Gigafactory battery cell costs and Solarcity Gigafactory solar panel costs, we don't really have enough of the rest of the picture to understand what is going on. Therefore, investor confusion translates into depressed valuations.

I've been reading some of the analysts' commentary and I quite surprised by how off the mark these professionals seem to be. Are they sandbagging their public commentary? Do they really believe that Audi will have a competitive BEV SUV in 2018 that really matters to Tesla sales? They are still operating on this belief that electric cars are somehow a small niche market and Audi entering it will make any difference to Tesla's sales. That's clearly wrong at this point. The intersections of the long term trends should be very clear at this point, and they still miss it? Or they just say these things to the public and tell their clients something else?

I think one of the biggest problems for TSLA + SCTY valuation at this point is the fact that it combines two historically different analysts... energy and automotive. It is hard enough for automotive analysts to understand TSLA, it is now beyond them to handle TSLA + SCTY.

 

[Runarbt]

Just like the new Model3 delivery plan, pull it ahead and deliver a million by 2020. What's not to like? The car legacy companies can't match these moves, their assembly lines work too slow.

I mean, do we want Tesla to be worth a trillion in just 10 years or only in 20 years?

I say 10. Therefore it's necessary to speed up on the execution side and the SCTY merger.

Some beancounters and analysts are not up to speed, don't listen to them.

Once the train left the station and Tesla is soaring in value by 30X it will be too late for them!

Better, irony more clear