Short-Term TSLA Price Movements - 2016

[Gerardf]

I predict within 2 years every outstanding share will be owned by core supporters as the weaker longs are slowly weeded out. Then there will be 0 shares sold and the price will be $6000+ a share irrespective of what is going on with the company.

Bold prediction, very bold.. We have a thread and sheet for that ;-)
Prediction Thread - "You Called It"

 

[Krugerrand]

Rationally, yes. But emotionally in a confined group, no.

When someone's bread and butter is on the table, most will do whatever it takes to protect it. Survival trumps pretty much everything else in life.

I think it's a mistake to project what goes on on this forum and assume/predict/speculate it'll be same for employees when they get the car. That's not reasoning from first principles.

 

[racer26]

Has anybody noticed we've at least recovered back to the correct side of $200 for the time being (though the price action is SUPER unstable)?

As for equity markets closing to TSLA due to SCTY deal? I really doubt it. SCTY will be around 5% of the merged company's value. The much more important thing in the eyes of equity investors in TSLA is that pile of M3 reservations. Thats ~$14B of future revenue already on the hook, and we're told to expect that to be less than a full year's production at full clip. Never mind that for every one person willing to put down money 18+ months out, there will be at least 2 or 3 willing to buy one when they can get it in a month or two.

EDIT: Of course the market flips on me the second I post that.

 

[racer26]

Also - unusually huge volume - we're 45 minutes into the trading day and already well over 33% of the average volume.

 

[FredTMC]

Has anybody noticed we've at least recovered back to the correct side of $200 for the time being (though the price action is SUPER unstable)?

As for equity markets closing to TSLA due to SCTY deal? I really doubt it. SCTY will be around 5% of the merged company's value. The much more important thing in the eyes of equity investors in TSLA is that pile of M3 reservations. Thats ~$14B of future revenue already on the hook, and we're told to expect that to be less than a full year's production at full clip. Never mind that for every one person willing to put down money 18+ months out, there will be at least 2 or 3 willing to buy one when they can get it in a month or two.

EDIT: Of course the market flips on me the second I post that.

Yep. I noticed.

I'm my view the stock should be higher today

1) Musk's email new from Friday

2) stock was oversold from last week

 

[AlMc]

Anyone dumb enough to short a stock like TSLA or SCTY deserves to be taken to the cleaners. You don't look at fundamentals and short a stock, that doesn't trade on fundamentals to begin with. A single tweet and they lose 20% or more. Elon Musk could write a blog post that he will build a hyperloop to deliver 45,000,000 cars a day from Fremont to every house in the world and the stock will be up 600% in 30 minutes. No less believable than saying 500,000 cumulative deliveries by 2018. He knows his audience.

I predict within 2 years every outstanding share will be owned by core supporters as the weaker longs are slowly weeded out. Then there will be 0 shares sold and the price will be $6000+ a share irrespective of what is going on with the company.

I hope you are correct but I have as hard a time believing your scenario as accepting that TM will go bankrupt in that same time frame.

You are the 'anti FUD'

 

[Seesaw]

Yep. I noticed.

I'm my view the stock should be higher today

1) Musk's email new from Friday

2) stock was oversold from last week

I'm not sure.. The SolarCity deal continues to be a big concern for me.

In a way I think the email is a little unfortunate - it helps at the moment, the problem is it may take away from the positive angle of any good financial result. People will say the result was engineered by deferring costs etc. and also suggests the quarters after may be tough. but probably by then the email would of been forgotten.

 

[tanner]

Also - unusually huge volume - we're 45 minutes into the trading day and already well over 33% of the average volume.

Shorts taking profits and new dip buyers coming in.

 

[Drivin]

Yep. I noticed.

I'm my view the stock should be higher today

1) Musk's email new from Friday

2) stock was oversold from last week

3) Don't forget there will be a blog post at the end of the weekend.
A blog post. That should be worth $2.78/share.

 

[FredTMC]

I'm not sure.. The SolarCity deal continues to be a big concern for me.

In a way I think the email is a little unfortunate - it helps at the moment, the problem is it may take away from the positive angle of any good financial result. People will say the result was engineered by deferring costs etc. and also suggests the quarters after may be tough. but probably by then the email would of been forgotten.

I recall AMZN did this same profitability move a year or so ago and it's stock went crazy. Basically, Jeff Bezos reminding Wall St that they can be profitable, but normally they choose to continue to invest in growth. Net result for AMZN? They are now one of the highest market cap stocks...

 

[RobStark]

I agree that Tesla employees could provide better feedback than average customers, of course. My doubts stem from the experience here on TMC. You don't get 'likes' (or previously 'rep') for just criticism or the occasional bear argument, here. And we're the fans. So I can imagine the reputation that employees DON'T want to get amongst their peers, the superfans. (Anonymity could be a solution, but there's no anonymous reporting on your VIN.)

Reporting problems accurately to Consumer Reports may hurt Tesla in the short to medium term and may cause Tesla super fans to lie on surveys and say everything is fine.

Reporting problems accurately to Tesla is nothing but helpful to Tesla. Tesla will not publicize outsized problems in a press release but get to fixing the problem. Plus, you get your car fixed at the Service Center as opposed to living with the problem.

 

[FredTMC]

I'm not sure.. The SolarCity deal continues to be a big concern for me.

In a way I think the email is a little unfortunate - it helps at the moment, the problem is it may take away from the positive angle of any good financial result. People will say the result was engineered by deferring costs etc. and also suggests the quarters after may be tough. but probably by then the email would of been forgotten.

Yeah, I see SCTY as a variable (an uncertainty for TSLA) but it's not the whole story for Tesla's future. The greater story is model 3 is coming and there's huge demand and tesla will be very profitable in a year or so. That is the big picture.

 

[electracity]

Yeah, I see SCTY as a variable (an uncertainty for TSLA) but it's not the whole story for Tesla's future. The greater story is model 3 is coming and there's huge demand and tesla will be very profitable in a year or so. That is the big picture.

How will Tesla be very profitable in a year or so with 13,000+ solarcity employees? Even if the new solar and battery strategy works, it will probably take 2-3 years to establish the new profitable solar retain channel.

Tesla selling solar becomes exposed to the same problem of changing state solar policies faced by solarcity today.

 

[neroden]

I'm not trying to be mister doom and gloom here, but just want to point out something that some people seem to be missing. The equity markets are not an infinite piggy bank for entrepreneurs. Tesla has been able to raise whatever cash it needed in the past really quickly, so the temptation is to think that this will continue. But if conditions change, like a stock market sell off (October is looming and the whole market looks frothy right now), or Tesla deciding to saddle itself with another money losing business (Solarcity), then it is possible it won't be able to raise money at an acceptable valuation. We know the equity markets were closed to Solarcity already.

You know what happens when companies run out of cash? Yeah, it's the leading cause of bankruptcy (that's a joke, it's effectively the only cause of bankruptcy). Now Tesla has options if it can't raise enough equity, including

...phoning up Sergey Brin and Larry Page.

 

[neroden]

How will Tesla be very profitable in a year or so with 13,000+ solarcity employees?

I think absolutely everyone expects huge SolarCity layoffs. Musk avoided the word layoff but he kept talking about "cost savings" from "sales" and saying stuff like "within the first year".

 

[neroden]

People always try to give "reasons" for short-term price movements. This is mostly a mug's game. But here's mine:
-- new availability of shares on the lending market (and no, I don't know where they came from) caused sidelined shorts to pile in. This caused a small downward move.
-- algo momentum trading accelerated this
-- this continued until it hit the limit-order buy-in level for price-sensitive longs, which is probably right around $200 for a lot of people, which caused buyers to move in

There has been a reduction in short interest, but it doesn't account for the sudden appearance of millions of shares of SCTY on the lending market, overnight one day last week. Someone with large holdings was convinced to add their shares to a lending program, or someone switched their account from cash to margin.

 

[Cosmacelf]

...phoning up Sergey Brin and Larry Page.

Aren't they also investors in SpaceX? You know, the company that just blew up a rocket last week? Just saying...

Speaking of which, that rocket explosion probably was another drag on Tesla stock price. Very few people know if SpaceX needs an investment round itself or not, and that's just another potential drag on Musk's financing ability. The fact that the company apparently does not know what caused the explosion yet isn't helping...

 

[racer26]

How will Tesla be very profitable in a year or so with 13,000+ solarcity employees? Even if the new solar and battery strategy works, it will probably take 2-3 years to establish the new profitable solar retain channel.

Tesla selling solar becomes exposed to the same problem of changing state solar policies faced by solarcity today.

Simple.

A) There won't be 13,000+ SCTY employees joining the TSLA fold. This is one of the biggest areas for cost cutting, as you can have a combined sales force. I imagine a goodly portion of the SCTY installers will remain afterward, but they can then ALSO be leveraged for things like EVSE installs for TSLA products.

B) As I mentioned before, in comparison to TSLA, SCTY is tiny. Its less than 5% of the combined company. So no matter what, its going to have a minimal impact on TSLA's bottom line.

C) Model 3 and the ridiculous demand that will ensue once they're shipping in quantity. SCTY is <5% today, with just S+X. Once Model 3 starts raking in the cash, the SCTY chunk will likely be even smaller.

D) TSLA is already fighting state legislatures on dealership protectionist laws that make no sense, so joining forces with SCTY, they can use the other product line to get a foot in the door in those states where one or the other is being crippled by laws, and raise public support. Getting the public to make noise to their legislators is the best way to get the laws changed - after all, those are the voters, and failing to listen to what the voters want doesn't bode well for your re-election. In order to get the public to make noise, you have to make yourself and your product known, which is difficult in the markets that TSLA and SCTY are legally shut out of. Joining forces they will be able to skirt some of those restrictions enough to get the word out. (IMO Republicans ought to love TSLA. Its an American company, using American talent, to manufacture an American product that bests anything the world has to offer, and they're building it in America. What's not to love?)

 

[EinSV]

...phoning up Sergey Brin and Larry Page.

I don't think that will happen as long as Google and Tesla are developing competing autonomous driving systems. Plenty of other deep pockets out there who would be happy to fill in for Larry and Sergey though.

 

[3Victoria]

This group keeps recycling the arguments. I had thought we had come to an understanding of SC several weeks ago. We were told that SC would have some difficulties raising money during the take over period and might need bridging loans, and that's what the bond issue was. The plan was always to beta test early production close to the factory in order to fix early production flaws. Using employees for this is logical and efficient, since they obviously live close and attend the factory regularly. We have no indication that raising money is difficult for Tesla. The apparent danger for Tesla is all the negative sentiment from vested interests actively opposing them.