Short-Term TSLA Price Movements - 2016

[drinkerofkoolaid]

If you listen to the entire 1.5 hour conference call that took place on June 21st about the merger, Elon mentioned he expected to be able to release the information within the next few weeks. Today is one month from the day the proposal for the merger was announced.

Note:Elon emphasized that he expects Tesla's batteries to be sold out well into the foreseeable future.

Powerwall, Powerpack, Model S, Model X, Model 3, etc.

One of the most significant reasons the merger makes a ton of sense is Tesla can sell Solar Panels and Battery Storage in states that only allow Tesla to have "art galleries". There are no state laws that prevent Tesla from selling Solar Panels and Battery Storage.

Once every Tesla showroom begins to sell SolarCity, panels, the customer acquisition costs and installation costs, not to mention all costs associated with any service that is required will fall substantially.

It's worth noting that Tesla closed above the 200dma.

 

[neroden]

Yes. Autonomous electric Taxi bus . Exactly!

I read the link you posted. Actually. It makes a lot of sense. Increasing taxi buses at the expense of mass transit sounds like a bad idea for the cities. But who says mass transit needs to go? Maybe taxi bus just replaces a bunch of personal cars that's only really used to buy groceries. Could still help a lot

That would be great!

 

[neroden]

Jarret Walker is a mass transit consultant. He seems outright hostile to Musk's suggestion. He imagines that Musk intends to take riders out of packed large busses and put them into put them two at a time into smaller vehicles, which of course would crowd the streets. This is an absurd, strawman interpretation of what Musk is propsing.

No, it's pretty much what he said.

[He is clearly wanting to increase ridership of mass transit in lieu of building cars that are cheaper than the Model 3. Musk clearly sees the need to reduce vehicle miles traveled. The challenge is to design mass transit options that encourage people to move away from personal autos and into higher density vehicles. Smaller autonomous vehicles can help feed passengers into higher density busses and trains.

Hopefully that's what Musk meant, becuase that makes sense and would be great.

Unfortunately Musk's bizarre history with Hyperloop, which he made up on the back of a napkin *as part of a public attack on California HSR*, claiming that it would cost less (nope, all the cost is in civil construction which is identical) and ignoring the fact that it has lower capacity.... this means that I'm much more inclined to expect that Musk meant what he said and really was proposing to take riders out of packed large buses and put them a few at a time into smaller vehicles.

Because that's *exactly what he proposed* as an "alternative" to HSR -- taking riders out of packed trains and putting them a few at a time into smaller vehicles. (It's not really an alternative.)

Musk has *form* here, and although I'd love to give him the benefit of the doubt, this latest nonsense is precisely in the same line with the bogus claims about Hyperloop.

I want you to be right about what he's proposing. Really want you to be right. The evidence points the other way though.

 

[SBenson]

I wish they really did everything on your list except for the hybrid vehicle. Why not? just spend the next 2 years working on being a fast growing EV company that makes a ton of money. Then issue the same SMP2, when the headlines would declare EM a visionary genius? I mean he will still probably make it all work, but his plan has more funding asterisks than a Republican tax plan.

Your satirical plan would add credibility to the bank. That CREDIBILITY would allow him to leverage up and save the world. By building credibility first he will have more capital to go spread into other markets and save the world.

I don't run Tesla and shouldn't so I won't get my way. I love the enthusiasm. The stock valuation is not the issue. The issue is that he overextends and burns the whole thing down by trying to do too much too soon. Why the all-fired hurry? Slow down 50% to increase the chance of success 3 fold. I want to dial down the meter so that we actually get the stuff on his wish list.

If we were to go by faith: although he is a bit of an aggressive risk taker, we would hope that Musk would be conscious of financial matters and will have adequate buffers for inevitable occasions like recessions.

My gut sense was that TE, especially PowerPacks will provide a bridge to Model 3 and then Model 3 will provide a bridge to all those other ambitious things.

What I find bizarre is that there is absolutely no mention of PowerPacks or grid services in SMP 2.0. As though this business line doesn't even exist. Really strange!!

Maybe he is holding the surprise for GF party? But still very odd that a "master plan" which is meant for like a decade won't have it at all.

 

[zdriver]

I will stop arguing after this post. Yes the storage will exist. I am skeptical it is worth subjecting batteries to very high charge cycles while reducing useful freight capacity. The selling price for the batteries on the road only (2.2M trucks) may be around 2.2M x 1000 kWh x $200/kWh = $440B. At even $1M/mile overhead lines cost (excessive), that figure would cover almost 10X the length of all the interstates in the US.

Obviously it is in Tesla's (ours?) best interest to sell moar batteries, and if they invest in supercharger-like truck stops, maybe the all battery option will happen. I have yet to see how it is a more efficient use of energy, resources, or capital. I have no vested interest in overhead lines, I just thought investors would be interested to know that it is not automatic all trucks will have massive gigafactory supplied batteries onboard.

I'm (really) new here, so forgive me if it hasn't already been brought up, but I suspect it's the effort and risk involved working with others not fully invested (politically) their ideas, sinking or delaying a plan unexpectedly. Elon seems to prefer being in control of as many variables as possible.

Look at how vertically integrated Tesla and SpaceX are, look at how they responded to a slow supplier earlier this year - "Our bad, we're not vertically integrated enough". They can't force line installs along major interstates without actually owning them. They can, however build an electric truck and let the market decide if they want it. If no one wants to buy them, too bad for them, and start hauling freight autonomously. Point is, batteries are getting better, and they're looking to be at the forefront of that effort. Better to be ready to execute when the battery tech is there, than just get started at that point. Or, leverage their battery tech and production ahead of everyone else.**

Else, they go the overhead line way... until some well paid lobbyist (or 50) gets the project delayed a couple years in a state or two, then they have to sink more money into politics. That's a lose-lose game, IMO.


** I've been doing tests on some Tesla cells circa 2015, and aging wise, they don't act like "normal" lithium-ion. Mine came from a car with ~40k miles, and after "abusing them" a bit more (high/deep discharges, fast charges), they're still gaining capacity. My early suspicion is they're designed to reverse-age for the first several years/couple hundred cycles. Further, just limiting full charges to ~80% capacity does mind-blowing things for cycle lifespan - something really easy to do if you have predetermined freight routes - if you only need 40% capacity to deliver a load, don't charge past 50-60%.

 

[drinkerofkoolaid]

In case you weren't aware, most trains, planes, already operate with some sort of Autopilot. The person sitting in the "drivers seat" is still expected to be fully alert, and attentive. I don't see any scenario that ends with Tesla having to remove the AutoPilot feature.

Worst case scenario, Tesla and all companies that release vehicles with any sort of Autonomous driving, might need to provide some sort of training course to make sure people who buy their vehicles owners explicitly understand how AutoPilot works, and that they still need to pay attention even when AutoPilot was active.

 

[austinEV]

I think this is profound enough to expand on it. I am aware it is satire, but it's arguably pretty close to a good plan:

Dear shareholders,
A new position, "Czar of stock price appreciation" has been mandated by some large shareholders. This individual's decisions will override those of Mr. Musk. Our Master Plan 2 is as follows:

Ok, not a full time position and don't announce it, but sure. Musk can tap someone savvy to do the most basic policy polish. For instance, don't announce the need for a capital raise before doing the raise. Just someone to help unforced errors when it costs nothing to do so. Wheeler can do this just fine.

Tesla will dispense with this silly goal of making the planet a better place and focus on what's really important: short term profits

Rephrase: "We are doubling down and focusing on the most important project, the Model 3. This is critical not only for the >400k reservation holders, Tesla and our air quality but the success of this line will allow us to further expand and be self funding. Of course we continue to have secret programs that we are working on and I look forward to sharing more details in the future!"

While Tesla's staff strongly believes the SCTY acquisition makes sense, that acquisition has been abandoned, due to short-term market resistance

I am ambivalent about this one, and there is no face saving way to back down now. But they could have just waited. Why the hurry? If the "risk" is that they are about to become wildly profitable and more expensive, that is easily fixable by continuing to plow revenue into growth. So I guess don't do this one, too late.

Tesla has been working on some larger vehicles, but those projects have been shelfed in favor of reducing our R&D expenses. The real payoff for Tesla is getting Model 3 spun up without any distractions. In lieu of new products, Tesla will instead offer its current vehicles in 3 additional colors

That is more or less perfect. Less flippant about the 3 colors, but model 3 focus is fine.

Service centers will now become profit centers, with increased fees for Tesla servicing

Don't do this one either. Not even possible since most of the fleet is in warranty.

A special 2-wheel drive "Bob Lutz" version of the Model S will become available within a year, with a gasoline-powered engine in the front of the car used to recharge the new 35kwh battery, giving the vehicle range of 400 miles and an EV range comparable to that of the Nissan Leaf.. This vehicle is being offered to those who might experience range-anxiety with purely-electrical vehicles.

Just a bad vehicle. The capital cost would be horrendous.

Rather than waiting for the 2Q ER, we want to let you know right now that more than 2100 vehicles/week are rolling off the Tesla assembly line at the moment. Catering to investors with short-term call options is a new focus of the new Tesla.

Rephrase: "Rather than waiting for the 2Q ER, we want to let you know right now that more than 2100 vehicles/week are rolling off the Tesla assembly line at the moment. [Catering to investors with short-term call options] [Operational excellence] is a new focus of the new Tesla"

Rather than risk offending the media by carrying on business without print advertising, Tesla will now be advertising regularly in Fortune magazine, the Wall Street Journal, Los Angeles Times and other fine publications. We feel the better editorial coverage this move will buy us more than compensates for the cost.

Rephrase: "We are concerned that consumer confusion about Tesla products and EV's in general is becoming a problem. We are announcing an engagement with an advertising firm to begin a modest TV campaign to get control of our branding" (Ok, that is terrible. imagine it well written)

I want Tesla to keep dreaming and plan for all the Semi's and buses and snakes and hide it in the SG&A. But present the right priorities. They don't actually have the capital they need to do everything anyway, so just time the dream a bit later. You can always update the master plan.

Edit: I LIKE the master plan. I got chills reading it. But I am IN THE CHURCH, of course I do.

 

[woof]

How much does urban geometry change when all the parking spots are moved to the outskirts? Autonomous cars don't need localized parking. Just removing street parking frees up 2 lanes for all the Muskian pods to travel.

 

[drinkerofkoolaid]

I suspect the Gigafactory event will be very significant for a few reasons.

1) It will show analysts and the media how rapidly Tesla is ramping things up. It will also show how how far the factory has come and the current production rate Tesla is capable of achieving.

2) A few analysts have pointed out that most analysts who cover Tesla rarely visit the factory, and rely on anecdotal, or vague inferences when creating their projections.

3) As some have pointed out, the Gigafactory might be able to produce enough batteries for 1million vehicles + X number of Powerwalls/Powerpacks. I think we'll hear more about this at the event.

4) Any information about a Tesla truck will be huge. Every person I've spoken to who works in the insurance industry, or the automobile industry has said they don't believe its possible for Electric Trucks to take off. Zero analysts have included a Tesla Truck in their projections. Even Adam Jonas admitted he was very surprised when he heard Elon mention that. Elon also mentioned that at least one Tesla Truck currently exists.

5) There are many surprises that could be announced at the event.

6) Tesla mobility will be a huge deal for local driving. Many people use Taxis to travel 4-5 miles, say from the train station to their house. Tesla Mobility would be perfect for this and the risk would be minimal. I suppose Tesla Mobility would require Tesla vehicles to be equipped with some sort of camera, to hold passengers accountable for any damage to the car, but for the most part it would likely make a lot of sense. The only catch would be that Tesla would probably need to create a background check system similar to what AirBnB uses, to prevent bad customers or high risk customers from using or abusing the system.

How long is an average Uber ride (or a regular taxi ride)? - Quora

7) Tesla Mobility creates the opportunity to make at least $5,000 + annually for anyone who owns a Tesla. This would have a very significant positive impact on the economy, and would make buying a Tesla the obvious decision for millions of people.

 

[austinEV]

Another after hours heart-attack quote at 181.88. I have got to stop checking.

No one is taking my offer to buy at 220, so again BS. I wish this would stop. Someone is playing a game.

 

[austinEV]

Another after hours heart-attack quote at 181.88. I have got to stop checking.

No one is taking my offer to buy at 220, so again BS. I wish this would stop. Someone is playing a game.

I fixed it by buying a share. Geez. You can thank me now.

 

[dakh]

I wish they really did everything on your list except for the hybrid vehicle. Why not? just spend the next 2 years working on being a fast growing EV company that makes a ton of money. Then issue the same SMP2, when the headlines would declare EM a visionary genius? I mean he will still probably make it all work, but his plan has more funding asterisks than a Republican tax plan.

Your satirical plan would add credibility to the bank. That CREDIBILITY would allow him to leverage up and save the world. By building credibility first he will have more capital to go spread into other markets and save the world.

I don't run Tesla and shouldn't so I won't get my way. I love the enthusiasm. The stock valuation is not the issue. The issue is that he overextends and burns the whole thing down by trying to do too much too soon. Why the all-fired hurry? Slow down 50% to increase the chance of success 3 fold. I want to dial down the meter so that we actually get the stuff on his wish list.

It is a fallacy to think that throwing more money at the problem (at Tesla if you look at it from the business perspective) would make things faster. This is not how it works. They're funded pretty well, and if they thought they would do much better with more money they'd go get that.

There will not be any problem at all raising money to build more factories once GF1 is proven and Fremont is, um, making Model 3's at a rate of handgun fire. There will be a stampede to fund that. More money in the short to medium term would be useless, they need to build "v 0.5" of everything first. Engineering and design don't scale at all with more people. There's the right size of the team for the job and I have no reason to doubt Tesla has that figured out. The way to go faster is to hire the absolute best talent available. For Tesla, it's easier to accomplish than for anyone else in the business. That is the key advantage.

 

[AlMc]

Another after hours heart-attack quote at 181.88. I have got to stop checking.

No one is taking my offer to buy at 220, so again BS. I wish this would stop. Someone is playing a game.

Yep....And what is the point of selling at $181 or thereabouts in early Afterhours?

 

[Jayjs20]

The worst part is that they're creditable, since we've had a number of mass crashes recently

17:00 $ 222.07 1
16:52 $ 181.8818 Low 250
16:50 $ 222.14 200
16:49 $ 222.14 80


I don't think this qualifies as a game. Seeing 1 share sold for much less than the current going price 10+ times in a row, immediately after it starts to go up, is a game. To someone more knowledgeable than I, is that a technical thing or is someone really is messing with the SP?

 

[austinEV]

I am the share at 222.07 FYI. It updated Nasdaq.com but not google finance.

 

[Johan]

As with most of you, I found SMP2 to be visionary. The market wasn't impressed. What would it take to raise the SP with SMP2? Here's one:

Dear shareholders,
A new position, "Czar of stock price appreciation" has been mandated by some large shareholders. This individual's decisions will override those of Mr. Musk. Our Master Plan 2 is as follows:
* Tesla will dispense with this silly goal of making the planet a better place and focus on what's really important: short term profits
* While Tesla's staff strongly believes the SCTY acquisition makes sense, that acquisition has been abandoned, due to short-term market resistance
* Tesla has been working on some larger vehicles, but those projects have been shelfed in favor of reducing our R&D expenses. The real payoff for Tesla is getting Model 3 spun up without any distractions. In lieu of new products, Tesla will instead offer its current vehicles in 3 additional colors
* Service centers will now become profit centers, with increased fees for Tesla servicing
* A special 2-wheel drive "Bob Lutz" version of the Model S will become available within a year, with a gasoline-powered engine in the front of the car used to recharge the new 35kwh battery, giving the vehicle range of 400 miles and an EV range comparable to that of the Nissan Leaf.. This vehicle is being offered to those who might experience range-anxiety with purely-electrical vehicles.
* Rather than waiting for the 2Q ER, we want to let you know right now that more than 2100 vehicles/week are rolling off the Tesla assembly line at the moment. Catering to investors with short-term call options is a new focus of the new Tesla.
* Rather than risk offending the media by carrying on business without print advertising, Tesla will now be advertising regularly in Fortune magazine, the Wall Street Journal, Los Angeles Times and other fine publications. We feel the better editorial coverage this move will buy us more than compensates for the cost.

Mahalo! Props where props are due! Aka-mai indeed dude.

 

[zdriver]

I'm betting the Gigafactory/battery cells were mostly left out of SMP2 because he sees it as already "figured out", and delivered to the execution stage. Mention of it possibly becoming a bigger business than selling cars was the tip-off to me.

In engineering in general, "figuring it out" is almost always the hard part. Delivering those solutions to the point of executing on them is next hardest. Once you've proven that solution is viable, you're free to use it to solve the next big problem.

Sure, not a good way to approach it for short term, but SMP1/2 was never about short term - more so solving and proving things considered impossible are actually possible. Elon probably doesn't even consider cheap batteries to be a problem anymore.

 

[TMSE]

You are confusing PowerPacks withs PowerWalls

You are right, I was referring to PowerWalls. As for PowerPacks, your customers are large businesses or utilities. They pay zero price to brand and care all about cost benefit. There will be a lot of competition and I do not think Tesla has much future prospects there.

Think about it: PowerPacks are stationary objects and they do not need to meet the stringent requirements of battery pack in an automobile. Tesla battery pack technology is an overkill for that use case. So, you will have plenty of competition from mediocre players.

 

[drinkerofkoolaid]

I am the share at 222.07 FYI. It updated Nasdaq.com but not google finance.

After hours on a Friday is strange. I feel bad for the person who sold 250 shares at a 19% discount. Remember to always use limit order, especially after hours!
I guess the person who bought them must have been pretty happy. That's $11,000 in 1 second.

 

[Ulmo]

If they let him back, he has to keep his posts to 144 characters.

I've tried to keep all my Twitter posts gross, but it's near impossible. How about 1,024 characters? Or, at least 512?