Short-Term TSLA Price Movements - 2016

[Jayjs20]

So, green or red today?

 

[FredTMC]

So, green or red today?

Certainly seems we will finish mildly green.

TSLA has had amazing relative strength thru this whole Brexit mess.

 

[mrdoubleb]

Certainly seems we will finish mildly green.

TSLA has had amazing relative strength thru this whole Brexit mess.

It is pretty fair to say, that, knowing what we know about the status of the X ramp, S demand a GF1 progress, the 220s were already oversold. Once the Brexit and SCTY hysteria dies down and Q2 numbers come out, the market should realize that too. It will be interesting to see how customer deposits look in the Q2 ER as well.

 

[ggies07]

Just want to throw this Elon quote that he used when talking about SpaceX out again for those that have forgotten about it or those who haven't seen it before regarding Elon's path to transition the world to sustainable generation/transportation:

"Optimism, Pessimism, f*ck that - we're going to make it happen." - Elon Musk

 

[Jayjs20]

Usually, we have those rallies where it goes up, peaks, then dies off, which is why I thought it was over earlier. At the moment though, it still looks like there are people looking to get in, and waiting for the price to drop off a little.

 

[neroden]

Soros seems to think it's option-A

George Soros: The European Union Is Heading For A 'Disorderly Disintegration'

The macroeconomic effects mean this is definitely happening. The Eurozone has "fiscal handcuffs" which prohibit them from implementing Keynesian policies -- basically tying them to a modern-day gold-standard. This is complete and utter madness, it's bad for everyone, and so the Eurozone *has* to collapse. It can't be fixed by amending the treaties to remove the fiscal handcuffs because the German government absolutely refuses to let it be fixed, and the opposition parties in Germany agree (!?!) and the people of Germany agree too (!?!?!). The Eurocrats are insisting that exiting the Eurozone means exiting the EU, *because they're jerks*, and that makes EU collapse even *more* likely. It's really not a question of whether the EU will collapse, but why it hasn't collapsed *yet*. People who understand the macroeconomic situation expected it to collapse in 2009 or 2010!

Britain's exit is a weird sideshow because they weren't in the eurozone. The drop in the pound will have an incredible stimulating effect on Britain however; investment will pour in. It'll take a year or so for people to notice.

 

[neroden]

In trying to determine the worst case scenario with acquiring Solar City, I see two threats: PUCs that allow draconian rewriting of the rules for selling back power to the utilities (and not allowing the grandfathering in of existing installations),

I presume that the Solar+Battery offering from Tesla is specifically designed to counteract this. It may be hard to make it an economical offering, but Musk will sure work at cutting the production costs...

and an economic situation in which debt is coming due and there's a lack of appetite in the market for renewing Solar City's debt at reasonable interest rates that allow profitability. How much could the needed contribution by Tesla to Solar City in a worst case year be?

SolarCity Bailout Analysis
The short term numbers:
375M between Dec. 2016 and Dec. 2017.
+ 230M by Nov. 2018
+ 566M by Nov. 2019

That's... quite a lot, actually. This is really my main concern.

 

[mrdoubleb]

The macroeconomic effects mean this is definitely happening. The Eurozone has "fiscal handcuffs" which prohibit them from implementing Keynesian policies -- basically tying them to a modern-day gold-standard. This is complete and utter madness, it's bad for everyone, and so the Eurozone *has* to collapse. It can't be fixed by amending the treaties to remove the fiscal handcuffs because the German government absolutely refuses to let it be fixed, and the opposition parties in Germany agree (!?!) and the people of Germany agree too (!?!?!). The Eurocrats are insisting that exiting the Eurozone means exiting the EU, *because they're jerks*, and that makes EU collapse even *more* likely. It's really not a question of whether the EU will collapse, but why it hasn't collapsed *yet*. People who understand the macroeconomic situation expected it to collapse in 2009 or 2010!

Britain's exit is a weird sideshow because they weren't in the eurozone. The drop in the pound will have an incredible stimulating effect on Britain however; investment will pour in. It'll take a year or so for people to notice.

Yeah, the other stimulating effect on British economy is going to be that giant paywall between the island and 50% of its markets. /s

 

[neroden]

How certain I am that the residential solar model isn't financially viable and won't be for at least 5 years? I would say 90% sure. 99% that it isn't viable today. 80% that it won't be viable even in 10 years time.

What would change my mind about its viability today is someone pointing out something I have missed which seems very unlikely to me, I have spent a lot of time on this. In the future residential solar will somehow need to reduce cost much faster than utility scale even though it is the same tech. Or both would have to drop extremely low in price, something like 80%+ so the distribution savings that could be made would be significant enough to tip the scales.

I actually have a model for the future in which *remote rural areas* are taken off the grid with solar and batteries, and this becomes a thriving market until it's saturated. The true distribution costs for these areas is *very very* high, and they're currently cross-subsidized by denser, more urban areas. Ergon Energy in Australia calculated that it was cheaper to give remote villages microgrids with solar and batteries than to connect them through hundred-mile-long power lines -- so the *grid* wants to take them off the grid.

As the remote rural areas are removed from the grid, distribution costs will drop for the more urban areas, rendering rooftop solar even less cost-effective in urban areas (where it's already less effective due to *less rooftop space*). So I kind of see it going both ways financially speaking: residential solar in the rural areas, utility solar for the urban areas. I'm not quite sure where the boundary line will be; somewhere in the suburbs, but I don't know how far in. Developers in Australia are already finding that it's profitable to put in microgrids in outer suburbs instead of paying to beef up the distribution lines.

It'll be a bit like the division between being on city water and sewer, and being on wells and septic systems. Except the line won't be in exactly the same place.

Anyway, I seem to be the only person making this particular prediction, so I figured I'd share. ;-) I might even convince PerfectLogic of the value of residential solar in rural areas. (I already know there's one member on TMC who installed solar + batteries because it was cheaper than grid *on the Denali Highway in Alaska* -- I think it was AudubonB?)

 

[Svetlin]

Parroting the French President, the EU sounds like a fraternal Confederacy of Nations not a Prison of Nations.

If the EU does in fact launch an Economic Cold War against the UK what will be the eventual response of the Anglosphere?

BTW Merkel has made the opposite noises.

I agree in general. Merkel seeks a balance between making it work for the UK for the sake of economic stability, and not making it work too painlessly for the sake of political stability.

 

[FredTMC]

Just want to throw this Elon quote that he used when talking about SpaceX out again for those that have forgotten about it or those who haven't seen it before regarding Elon's path to transition the world to sustainable generation/transportation:

When was this quote? Link?

Tia

 

[Curt Renz]

As CNBC just now noted and I immediately confirmed, TSLA is currently today's best performer among the NASDAQ 100. In fact only 6 are currently to the upside.

 

[Drax7]

Has the probability of the merger being called off increased?

 

[VanE]

Has the probability of the merger being called off increased?

Probably not. SCTY also has also risen. If the probability would've increased SCTY would've plummeted.

 

[austinEV]

Wow, strong into the close. +3%. Who called that?

 

[neroden]

IF I've understood SCTY's business model right, they lease solar power for 20 years and finance it by loan? They then collect money from home owner and pay loan interest with this money. So they need to be able to get loan with smaller interest rate than they collect from their customers.

You are correct. They've made it very confusing with the PPA, which effectively conceals the interest rate, but this is what's going on.

To my understanding, they have to refinance the lease several times during this twenty years period.

That *depends*. *Some* of them seem to have 20-year financing. Actually I really wish I had a breakdown of which funding for what panels will have to be refinanced when. This measures the extent of the risk exposure.

So to my understanding, if interest rate rises and is higher than the fixed interest which they get from their customers, their business is not viable

Yep. This is called "maturity mismatch risk". Every bank has it. If a bank issues a billion dollars in 30 year mortgages at 4% in the current environment where savings account deposit rates are 0%, and then 10 years later, savings account deposit rates rise to 5%, the bank is screwed. (The bank is also screwed if they are unable to get a billion dollars in deposits because depositors all go somewhere else.)

This is a risk factor for SolarCity because they do their own financing. I want them to get out of that business and have banks do the financing and take that risk.

 

[pGo]

Has the probability of the merger being called off increased?

No.. CNBC said there is chatter that some of the big shareholders with long-term thoughts may agree to the merger.

 

[Perfectlogic]

I actually have a model for the future in which *remote rural areas* are taken off the grid with solar and batteries, and this becomes a thriving market until it's saturated. The true distribution costs for these areas is *very very* high, and they're currently cross-subsidized by denser, more urban areas. Ergon Energy in Australia calculated that it was cheaper to give remote villages microgrids with solar and batteries than to connect them through hundred-mile-long power lines -- so the *grid* wants to take them off the grid.

As the remote rural areas are removed from the grid, distribution costs will drop for the more urban areas, rendering rooftop solar even less cost-effective in urban areas (where it's already less effective due to *less rooftop space*). So I kind of see it going both ways financially speaking: residential solar in the rural areas, utility solar for the urban areas. I'm not quite sure where the boundary line will be; somewhere in the suburbs, but I don't know how far in. Developers in Australia are already finding that it's profitable to put in microgrids in outer suburbs instead of paying to beef up the distribution lines.

It'll be a bit like the division between being on city water and sewer, and being on wells and septic systems. Except the line won't be in exactly the same place.

Anyway, I seem to be the only person making this particular prediction, so I figured I'd share. ;-) I might even convince PerfectLogic of the value of residential solar in rural areas. (I already know there's one member on TMC who installed solar + batteries because it was cheaper than grid *on the Denali Highway in Alaska* -- I think it was AudubonB?)

I appreciate a fresh view, but I still can't even buy into that. While I do acknowledge that it is cheaper to cut up the grid into smaller pieces in places like Australia where population density is extremely low, it will still be cheaper to install the solar modules on the ground, which won't be a problem in these far out places with lots of land. Even with 1000 houses, or 100 houses it is much cheaper to make 1 solar farm compared to running around installing solar on every house, you will have to connect all the houses into 1 grid anyway. Even with a single house, if you have the land for the panels it is probably cheaper to put them there compared to the roof and you will achieve better power output.

 

[NOLA_Mike]

Somebody knows something. Delivery numbers leaked to the Good Ole Boy Network (R) early?

Volume was above average today as well.

 

[ggies07]

When was this quote? Link?

Tia

It's an old quote from 2008: Now 0-for-3, SpaceX’s Elon Musk Vows to Make Orbit

Wired.com: How do you maintain your optimism?

Musk: Do I sound optimistic?

Wired.com: Yeah, you always do.

Musk: Optimism, pessimism, **** that; we’re going to make it happen. As God is my bloody witness, I’m hell-bent on making it work.

Wired.com: So what have you learned so far?

Musk: Patience is a virtue, and I’m learning patience. It’s a tough lesson.

So this can be applied to what's going on now. Patience is the key.