Short-Term TSLA Price Movements - 2016

[VanE]

Wow! Bought some mid July options yesterday to offset some of the losses I made with my 'ingenious' idea to buy mid July 240,00's one day before the SCTY news, but I didn't expect to see green already!!

Are the 'smart shorts' covering for the Q2 numbers or is there something else going on?

 

[austinEV]

Wow! Bought some mid July options yesterday to offset some of the losses I made with my 'ingenious' idea to buy mid July 240,00's one day before the SCTY news, but I didn't expect to see green already!!

Are the 'smart shorts' covering for the Q2 numbers or is there something else going on?

Markets are all up sharply, TSLA just has a high beta. This 3 day run might not have anything to do with TSLA. (Monday was unusually good for TSLA but probably more about being oversold pre-brexit). This is a GOOD thing if you are trying to trade for near term white swans.

 

[ggr]

Wow! Bought some mid July options yesterday to offset some of the losses I made with my 'ingenious' idea to buy mid July 240,00's one day before the SCTY news, but I didn't expect to see green already!!

Are the 'smart shorts' covering for the Q2 numbers or is there something else going on?

News is starting to come out about a potential delivery beat, so I think there is buying pressure both from shorts covering and general investors bargain-hunting. The problem with this is that once everyone is expecting the good numbers, even "normal good" numbers begin to feel like a miss. I expect continued run-up through Friday (buy on the rumor) with a potential sell-off next Tuesday if the deliveries are less than a blow-out. I also bought some mid-July options near the recent lows, and will probably sell half of them on Friday if the runup is still going then.

 

[austinEV]

Electracity, I feel like you have better insight in this type of stuff than me. So I ask... Why do you think anyone be interested in a Solar+Battery system from Tesla, or anyone else for that matter, with a price of 35K (Musk's prediction)? Electricity is dirt cheap in much of US and from my understanding it's comparably priced in rest of the world. What's the point of a 35K expense? Showoff? Cachet? It can't possibly be a valid economic reason, can it?

I know of a bunch of model-3 reservation holders. Absolutely none of them would even remotely consider a fancy solar+battery system, let alone at a 35K price. Pretty much everyone is satisfied with grid electricity to a point nobody ever even thinks about it. The rare few Earth conscious folk take solace in the fact that grid itself will switch to Solar over time. Hence no need to proactively do anything.

Others please feel free to chime in as well. Genuine question.

@SBenson I want to answer this. I am among the weirdos who would love, love, love to buy a solar+storage system. My dream house has rainwater collection with 20-30k gallon storage, solar thermal, 10-15kW solar pv, and 100kWh of storage (I know that last one isn't realistic). I might well spend 100k of eco-luxury on top of my house price but being in-fact or nearly independent is very appealing to me, even if it is really silly. I have tinkered with all of these pieces in the past and I know they can be a real PITA and utility services are fire and forget, and have subsidized externalities. (Electricity is cheap because of free pollution and water is cheap because its "free" from the lakes and aquifers.) I want to clear my green conscience, have cool toys, have green cache, and a measure of zombie apocalypse proofing. People think nothing of installing 50k pools, I don't think 50k of solar+storage is a worse choice. People scratch their heads and say "it doesn't pay off". Neither does your pool, your third car, golf club membership, or boat. I would trade carbon free air conditioning for a boat, and I can afford both.

Edit: The reason I have never actually pulled the trigger on solar PV on my past houses is no good battery storage options. Storage really is the "last piece" as Elon said. I am essentially designing my next house around it.

 

[FredTMC]

News is starting to come out about a potential delivery beat, so I think there is buying pressure both from shorts covering and general investors bargain-hunting. The problem with this is that once everyone is expecting the good numbers, even "normal good" numbers begin to feel like a miss. I expect continued run-up through Friday (buy on the rumor) with a potential sell-off next Tuesday if the deliveries are less than a blow-out. I also bought some mid-July options near the recent lows, and will probably sell half of them on Friday if the runup is still going then.

Thx.

My view is hitting guidance of 17k deliveries is enough to cause some weak shorts to cover. Why? Short interest is near all-time high and borrowing costs for shs to short has moved up

If tesla reports over 18k+ deliveries, there will really be "stormy weather in Shortsville"

Macros are certainly helping today, but Bottomline is some shorts will certainly want to cover thru Friday. Actually, tesla MAY even report after close on Thurs. (they done that in the past)

 

[doctoxics]

None of us have actually seen those aesthetically pleasing Silevo panels.

 

[Cosmacelf]

I wonder why this state with very favorable net metering terms and where residential solar is more popular than anywhere else in the US, the utilities are now forced to increase rates while many other states are decreasing their rates. What a mystery. I'm sure the solution is more residential solar.

There are a bunch of reasons why CA rates are so high. First, refined oil and gas prices are higher in CA so that increases gas fired plant cost.

Second, we have a dearth of transmission lines into the state, so we pay dearly for imported power.

We have very onerous environmental laws meaning it is hard and expensive to build more power plants.

We have a renewable power generation mandate which requires the utilities to purchase both utility scale renewable and have residential renewable power.

We have regulators that are essentially on the payroll of the utilities which allow things like the recent shutdown on the San Onofre nuclear power plant due to maintenance problems, the result of which the ratepayers get to pay the utility not only for the cost of the shutdown, but we get to pay the utility a rate of return on their nuclear power plant investment even though it isn't producing electricity anymore.

We have a supine press and/or a disengaged electorate that isn't demanding the scalps of people who are perpetrating these frauds against our wallets.

Oh, and the cherry on top, take a look at the minutes of our power regulator (CPUC) ... Every 3 months, buried in the minutes, are awards to environmental groups to pay for their lawyers who brought inane environmental issues to the attention of the regulator. The regulator forces the utility to pay these environmental group's lawyers, which, given the utilities have a guaranteed rate of return, means electric consumers pay for the environmental lawyers.

Finally, we have a tiered rate structure that allows apartment dwellers to pay almost nothing for electricity (and they still complain about it), while jacking up the rates for homeowners who use more.

 

[JRP3]

It is quite clear that many overly bullish people doesn't like hearing the opposite side of the story, but that doesn't change the fact that it should still be part of the main discussions here for the sake of anyone reading and the bulls themselves actually, being unrealistic in your expectations can make you take on way too much risk.

Apparently you're too busy with your own comments to notice the large volume of other negative, (yet better presented), posts about the potential merger. You seem to have created a fantasy world in which you are the only person on the forum pointing out potential issues, when in fact you are not. You may not be as special as you seem to think.

 

[VanE]

View attachment 183267

I think SBenson meant the new panels of Silevo that Elon Musk mentioned during the shareholders call about the SCTY merger.

The problem with these 'aesthetically pleasing' panels is that nobody has ever seen them, so it's not a great argument for buying Solar City.

 

[esk8mw]

Let's talk about Q2. X, in detail. This will be longish.

So, starting Q1 we know 2606 have been delivered and 3166 have been produced. That's 560 in transit at the end of the quarter, guaranteed to be delivered.

Let's look at X Q2 production. VINs in the 12,000+ range are being assigned right now and VINs in the 9-10,000+ range are scheduled for delivery by quarter-end. If 10k VINs are being delivered, it's fair to say that production exceeds 10k VINs by some level, but let's be conservative and assume just up through 10k VIN has been produced.

If VINs through 10k have been produced through Q2, what does this mean for overall Q2 X production numbers?

Start with Founders, which have a separate VIN count. I know at least a few are headed overseas and thus were probably built/delivered in Q2. Call it 10.

Now sigs, which again have a separate VIN count (I think). I think US had about 1200, all of which were built/delivered in 2015 or Q1. However, Model X tracker shows sig VINs up to 2635. I'm assuming all were at least built (and probably will be delivered) in Q2. 2635-1200 = 1435 Sigs produced.

Now production, which is tricky. Of the 3166 previously produced, how many were Founders/sigs? Again, I think it's the 60 or so Founders and 1200 US sigs, so call it 1260. Subtract from 3166 and you have 1906 production VINs produced prior to Q2. 10,000 production VIN range produced in Q2 - 1906 previously produced = maximum of 8094 production VINs produced in Q2.

But 8094 is too high for a number of reasons. (1) Some VINs haven't started production yet. Call it 1000? It looks safe to say that VINs though 7k or so are scheduled for delivery. A lot of 7-9k appear to be headed overseas, which means many were produced but not delivered. 9k+ seems to have a bias towards low-hanging CA fruit for end of quarter rush. and (2) a number of VINs were probably sent out as demos. Maybe 400? I know a lot of stores don't even have them yet so this might even be high. If you can think of other reasons VINs would not be in circulation please share!

So, 8094 max X production VIN possible - 1000 waiting for production - 400 demos = 6694 production VINs produced in Q2.

10 Founders + 1435 Sigs + 6694 Production = 8139 X produced in Q2.

Turn to S. (1) We know new orders far outpaced production in Q1 from the Q1 deliveries PR. So, big backlog. (2) Then we had Model 3 reveal which drove traffic and interest to the S. Then we had the refresh which also spurred orders. (3) Finally, the 60 was introduced, which should have generated more orders.

With that in mind, average S production over the past 3 quarters is 13,157, with a high of 13,530 in Q4 2015. Everything we've read indicates that mfg efficiency has increased in Q2, and not just for X ramp issues being resolved. I think it's fair to say we are at least matching that Q4 high and very likely exceeding it by a significant margin given the 3 factors outlined above. Let's go conservative and assume a 5% increase over that Q4 high, so 14,207 S produced in Q2.

8139 X + 14,207 S = 22,346 cars produced in Q2. This is a 1719/week run rate, which doesn't sound insane given news that they met or exceeded 2000/week like 5 weeks ago.

Of the 22,346 cars produced, how many were delivered? Several ways to look at it. They guided for a 3k delta (20k produced and 17k delivered), which would be (gulp) 19,346 deliveries.

If we look at deliveries as a percentage of production on a quarterly basis, the lowest of the past 4 quarters is 88.6% and the highest is 124.5% (Q4, clear outlier since emptying pipeline). Average is 91.4% when the outlier is removed. Given unusual Q2 circumstances with lots of X on boats, let's use the lowest number, 88.6%. 88.6% of 22,346 is (double-gulp) 19,805 deliveries.

My model shows these deliveries numbers as slightly non-GAAP profitable (but FCF negative due to accelerated capex). Consider that short interest is at an all time high and...oh boy.

STRONG DISCLAIMER: I am NOT a professional. This is my first time trying to model quarterly performance for anything. I am an amateur at best. I am not in finance. I probably missed lots of factors and incorrectly assigned values to others. People have gotten BADLY burned trying to trade on VIN guesses before because they do not issue sequentially, meaning VIN numbers are likely to be inflated (and some possibly skipped altogether? I don't know). Please do not trade on these guesses alone and do your own research.

 

[mejojo]

It's Solar Electricity. Ironically in Westchester county, I see you are from Brooklyn. It's a small family and probably a small system, I don't know specifics. But I found the 5 to 7 year payback to be an interesting data point nonetheless.

Note that cost is after all rebates.

I spent 13K after rebates with Solar City for a 4KW system, and I was told that if I used a local installer, I could have cut about 5K off of that. However, I preferred to go with a "name brand" for long-term value.

 

[Perfectlogic]

There are a bunch of reasons why CA rates are so high. First, refined oil and gas prices are higher in CA so that increases gas fired plant cost.

Second, we have a dearth of transmission lines into the state, so we pay dearly for imported power.

We have very onerous environmental laws meaning it is hard and expensive to build more power plants.

We have a renewable power generation mandate which requires the utilities to purchase both utility scale renewable and have residential renewable power.

We have regulators that are essentially on the payroll of the utilities which allow things like the recent shutdown on the San Onofre nuclear power plant due to maintenance problems, the result of which the ratepayers get to pay the utility not only for the cost of the shutdown, but we get to pay the utility a rate of return on their nuclear power plant investment even though it isn't producing electricity anymore.

We have a supine press and/or a disengaged electorate that isn't demanding the scalps of people who are perpetrating these frauds against our wallets.

Oh, and the cherry on top, take a look at the minutes of our power regulator (CPUC) ... Every 3 months, buried in the minutes, are awards to environmental groups to pay for their lawyers who brought inane environmental issues to the attention of the regulator. The regulator forces the utility to pay these environmental group's lawyers, which, given the utilities have a guaranteed rate of return, means electric consumers pay for the environmental lawyers.

Finally, we have a tiered rate structure that allows apartment dwellers to pay almost nothing for electricity (and they still complain about it), while jacking up the rates for homeowners who use more.

I don't question that there are other reasons as to why CA electricity is expensive, even if it makes the whole system more expensive like I argue it couldn't singlehandedly be the cause for what seems to be a large difference between CA power cost and elsewhere as residential solar still is a small part of the mix, but it could be the cause of a further widening in cost. I would love to see the cost trend of utilities that have to deal with a lot of residential solar compared to the rest, especially going forward as it becomes an even larger part of the mix, I think it would be very telling.

Apparently you're too busy with your own comments to notice the large volume of other negative, (yet better presented), posts about the potential merger. You seem to have created a fantasy world in which you are the only person on the forum pointing out potential issues, when in fact you are not. You may not be as special as you seem to think.

I have never said I'm the only one posting a negative opinion on here. If you are refering to our discussion in the other thread that was about the forum in general, recently there has been a lot of negative opinions, as there always are even here when the SP takes a hit. But that is pretty much the only time you see anything negative posted, apart from a very small minority of perhaps 2 or 3 posters.

 

[Jayjs20]

It's really been struggling for the last 30 minutes to hit the next plateau. I hope we haven't peaked already for the day.

 

[vgrinshpun]

Electrek reporting that Model 3 inverter will have output in excess of 300kW (400hp+). I am looking forward to seeing complete specs of the AWD performance version - it is doubtful that it can be beat by anything using ICE for propulsion.
Full release of specs should bode very well for reservations and ASP...

 

[VanE]

Let's talk about Q2. X, in detail. This will be longish.

So, starting Q1 we know 2606 have been delivered and 3166 have been produced. That's 560 in transit at the end of the quarter, guaranteed to be delivered.

Let's look at X Q2 production. VINs in the 12,000+ range are being assigned right now and VINs in the 9-10,000+ range are scheduled for delivery by quarter-end. If 10k VINs are being delivered, it's fair to say that production exceeds 10k VINs by some level, but let's be conservative and assume just up through 10k VIN has been produced.

If VINs through 10k have been produced through Q2, what does this mean for overall Q2 X production numbers?

Start with Founders, which have a separate VIN count. I know at least a few are headed overseas and thus were probably built/delivered in Q2. Call it 10.

Now sigs, which again have a separate VIN count (I think). I think US had about 1200, all of which were built/delivered in 2015 or Q1. However, Model X tracker shows sig VINs up to 2635. I'm assuming all were at least built (and probably will be delivered) in Q2. 2635-1200 = 1435 Sigs produced.

Now production, which is tricky. Of the 3166 previously produced, how many were Founders/sigs? Again, I think it's the 60 or so Founders and 1200 US sigs, so call it 1260. Subtract from 3166 and you have 1906 production VINs produced prior to Q2. 10,000 production VIN range produced in Q2 - 1906 previously produced = maximum of 8094 production VINs produced in Q2.

But 8094 is too high for a number of reasons. (1) Some VINs haven't started production yet. Call it 1000? It looks safe to say that VINs though 7k or so are scheduled for delivery. A lot of 7-9k appear to be headed overseas, which means many were produced but not delivered. 9k+ seems to have a bias towards low-hanging CA fruit for end of quarter rush. and (2) a number of VINs were probably sent out as demos. Maybe 400? I know a lot of stores don't even have them yet so this might even be high. If you can think of other reasons VINs would not be in circulation please share!

So, 8094 max X production VIN possible - 1000 waiting for production - 400 demos = 6694 production VINs produced in Q2.

10 Founders + 1435 Sigs + 6694 Production = 8139 X produced in Q2.

Turn to S. (1) We know new orders far outpaced production in Q1 from the Q1 deliveries PR. So, big backlog. (2) Then we had Model 3 reveal which drove traffic and interest to the S. Then we had the refresh which also spurred orders. (3) Finally, the 60 was introduced, which should have generated more orders.

With that in mind, average S production over the past 3 quarters is 13,157, with a high of 13,530 in Q4 2015. Everything we've read indicates that mfg efficiency has increased in Q2, and not just for X ramp issues being resolved. I think it's fair to say we are at least matching that Q4 high and very likely exceeding it by a significant margin given the 3 factors outlined above. Let's go conservative and assume a 5% increase over that Q4 high, so 14,207 S produced in Q2.

8139 X + 14,207 S = 22,346 cars produced in Q2. This is a 1719/week run rate, which doesn't sound insane given news that they met or exceeded 2000/week like 5 weeks ago.

Of the 22,346 cars produced, how many were delivered? Several ways to look at it. They guided for a 3k delta (20k produced and 17k delivered), which would be (gulp) 19,346 deliveries.

If we look at deliveries as a percentage of production on a quarterly basis, the lowest of the past 4 quarters is 88.6% and the highest is 124.5% (Q4, clear outlier since emptying pipeline). Average is 91.4% when the outlier is removed. Given unusual Q2 circumstances with lots of X on boats, let's use the lowest number, 88.6%. 88.6% of 22,346 is (double-gulp) 19,805 deliveries.

My model shows these deliveries numbers as slightly non-GAAP profitable (but FCF negative due to accelerated capex). Consider that short interest is at an all time high and...oh boy.

STRONG DISCLAIMER: I am NOT a professional. This is my first time trying to model quarterly performance for anything. I am an amateur at best. I am not in finance. I probably missed lots of factors and incorrectly assigned values to others. People have gotten BADLY burned trying to trade on VIN guesses before because they do not issue sequentially, meaning VIN numbers are likely to be inflated (and some possibly skipped altogether? I don't know). Please do not trade on these guesses alone and do your own research.

I think that the MX deliveries will be a bit lower (~1K), because I believe there will be more MX's in transit. MS deliveries look on point.

But is there anybody on this thread that believes that it won't be a beat?! I love to read all the hypotheses about a (significant) beat and I personally think that it will be a beat, but I would like to read some bearish hypotheses. (it's always good to have a balanced view)

 

[schonelucht]

I can't imagine the solar systems you guys are installing in the US! I paid less than 5k for a system that, on a yearly basis, produces more than our household consumes (utility pays me money). No air conditioning probably helps a lot. We have full net metering so I haven't really had the need to calculate out which price a battery is financially viable.

 

[Gerasimental]

Electrek reporting that Model 3 inverter will have output in excess of 300kW (400hp+). I am looking forward to seeing complete specs of the AWD performance version - it is doubtful that it can be beat by anything using ICE for propulsion.
Full release of specs should bode very well for reservations and ASP...

Perhaps the most important information in there, though, is the greatly improved gravimetric and volumetric current density as well as low cost. The power rating is just an upper bound on vehicle power, since this could be limited by battery discharge rate or motor power.

 

[austinEV]

I can't imagine the solar systems you guys are installing in the US! I paid less than 5k for a system that, on a yearly basis, produces more than our household consumes (utility pays me money). No air conditioning probably helps a lot. We have full net metering so I haven't really had the need to calculate out which price a battery is financially viable.

With net metering acting as a free battery storage will never make financial sense. The battery gives you grid backup insurance and insurance against the day that net metering goes away, which it must eventually.

 

[30seconds]

With net metering acting as a free battery storage will never make financial sense. The battery gives you grid backup insurance and insurance against the day that net metering goes away, which it must eventually.

In the long run Tesla/SCTY acts as a power supplier to the local grids and can use the home batteries + remote software on a large scale to buffer in both directions. This is one of the reasons why they want to sign consumers under PPAs and not sell installs outright. This would be complimentary utility scale powerpack installs.

 

[MitchJi]

I interpreted it more as a prediction for the future production rate.

The Tesla-SolarCity deal explained through some amazing quotes by Elon Musk
Elon Musk: Our engineering team has worked very closely with Panasonic to make dramatic improvements to the cell manufacturing efficiency. I think we’re probably approaching 3x the efficiency of the best plant in the world. I think that’s pretty good. Cells will be going through that thing like bullets from a machine gun. In fact, the exit rate of cells will be faster than bullets from a machine gun.

Having seen a machine running is something different than producing cells in the GF that are ready to be installed in packs and cars.

I just listened to the quote, at 1:14 he says that "cells are going through that thing like bullets from a machine gun. In fact...". Then someone comments that he's looking forward to his next visit and Elon says "come to the Gigafactory opening it will be eye opening."

Which I think confirms my orginal point was that by the party we can probably expect something that will impact the SP.

Also much earlier than that in the talk, about 38 minutes he said something that everyone who is worried about the finances should keep in mind. They will make available detailed financial information that he believes will be compelling. So all of the worries and arm chair analysis is based on incomplete information. Please stop worrying about this,at least with posts on this thread! The other time Elon used the term compelling was about EV's. How did that work out (M3 reservation lines).

Is sunpower or firstsolar a better takeover than solarcity, assuming
Wonderful synergies ?

I think two key assets are the silevo technology and the NY panel factory.