Short-Term TSLA Price Movements - 2016

[ggr]

Well, there are just some things too dirty to haul in my Model S.

It's a car, and if you don't count the Roadster, it's pretty much my daily driver. When I had a damaged roller trash can that needed to be replaced, the people at the county waste management center were shocked! (1) that I would ever put an old trash can in such a nice car, and (2) that it would even fit!

 

[FredTMC]

They have done a crazy amount of cap raises. And the merger isn't great for dilution either, but it's less than 10% which isn't bad if you think SCTY is an asset. But cap raise dilution is only bad if they are "down rounds" which I think Musk only has 2 of now, if they are "up rounds" which I think I heard Musk has like 35 of, and even his down rounds haven't been that dilutive.


Those were really good points, I didn't catch those nuances. Details details. @FredTMC did the mods ever say how to donate? I couldn't find it. If it ends up over 25k what happens then?

Yes, thanks

I'm sending $200 check donation to the address below per their instructions


Please feel free to send a check to the following address:
Tesla Motors Club
211 Hope St. #283
Mountain View, CA 94042

IF deliveries end up over 25k for Q3 then I'll happily shave my head and post to TMC and declare you the ultimate winner of our bet

Best
FredTMC

 

[mrdoubleb]

I wonder when we are going to flip a

30 dislikes... 6 funny-s... and a dozen responses with "this will move up 10% to 20% on good deliveries" -- and in the end... i win on Price is Right rules while TSLA sits 3% above last Friday's close.

You are a broken clock sir. Once the merger clears and the ER shows a profit this pressure cooker will explode. If anything we just underestimated the uncertainty about the discounts and the merger vote.

 

[esk8mw]

BTW, estimated delivery time for MS in US jumped from Late October to December. It appears that Tesla is gearing up to emptying delivery pipeline in Q4.

https://teslamotorsclub.com/tmc/posts/1765471/

This one confuses me. With production humming the way it is and US orders being prioritized in September, I find it hard to believe there is a US production backlog right now - see end of September ability to go from order to delivery in like 2 weeks. The factory isn't sitting there doing nothing, though, so the most logical explanation must be that international orders are robust and that Tesla is committed to wiping out the non-US X backlog in Oct/Nov production. Is this your read as well?

Also, I'm dense - could you explain how US deliveries moving to December indicates a pipeline emptying scenario?

Q4 could be huge if they try and move everything again. 5500 in transit + produce around 25,000 + whatever's left in inventory. I don't think 28k is out of the question. Oh, and Tesla Energy ramp

 

[dakh]

Yeah but the poster was referring to market expectations which is not the same as TMC expectations.

Lol and you're referring to analyst expectations with, alas, are not market expectations either. Market expectations are pretty much in the stock price, sans any gaming going on.

 

[Intl Professor]

If there is a pipeline emptying going on, might it not foretell beginning of the AP 2.0 hardware?? WAG. Just hoping.

 

[Runarbt]

This one confuses me. With production humming the way it is and US orders being prioritized in September, I find it hard to believe there is a US production backlog right now - see end of September ability to go from order to delivery in like 2 weeks. The factory isn't sitting there doing nothing, though, so the most logical explanation must be that international orders are robust and that Tesla is committed to wiping out the non-US X backlog in Oct/Nov production. Is this your read as well?

Also, I'm dense - could you explain how US deliveries moving to December indicates a pipeline emptying scenario?

Q4 could be huge if they try and move everything again. 5500 in transit + produce around 25,000 + whatever's left in inventory. I don't think 28k is out of the question. Oh, and Tesla Energy ramp

US deliveries doesnt spend months on a boat, hence cars produced in desember can be delivered same month. Cars to europe spend months on a boat. For This pipeline to be emptied, cars cant be produced and shipped later than october(?).

Eu cars produced oct-sept can be delivered in desember. Us cars produced nov/des can be delivered in desember = empty pipeline

 

[mrdoubleb]

I wonder when we are going to flip a

You are a broken clock sir. Once the merger clears and the ER shows a profit this pressure cooker will explode. If anything we just underestimated the uncertainty about the discounts and the merger vote.

OT: sorry about that first line there, don't know where that came from or what it was supposed to mean... Maybe I started to type a reply for sg else, decided against it, but the TMC text box saved it and wanted me to continue... Seen that before.

 

[schonelucht]

I'm generally a believer in the idea that "price is truth" in the market. I just can't seem to fathom what I'm missing. I understand there is perceived uncertainty in the GM due to reports of discounting. Outside of that, how a beat on ambitious numbers (that no one believed was possible) does not cause a significant reaction has me flummoxed. /sigh

I think, and it's something what a lot of people on this board are missing, is that the good news is already priced in. Tesla simply already trades at a level that assumes it will grow at least 50% for the foreseeable future. When a valuation bear like @myusername challenges the price level of Tesla by pointing out other car makers, he's not even taken seriously. "GM/BMW isn't a growth company like Tesla", such is the entrenchment of the idea that Tesla will grow in the market. Well then, if everyone knows Tesla will grow, then that truth is priced in the market. And when Tesla does actually grow, there is no reason for the price to move up or down by a lot.

I must say, that I am strictly speaking about Tesla Automotive in the above. I don't think the same growth expectation is already baked in for Tesla Energy. Should Tesla come out this or next quarter with out of the world nice numbers on that part of the business, then I think there is a possible repeat of 2013 in the cars with the stock price moving up very significantly. That said, I am a bear on Tesla Energy, so I don't believe in it as much as some here (both on the size and on the margins of the business). At least the last few weeks Tesla Energy partners have been able to announce some good utility scale project wins so maybe I must reconsider if they can keep that up.

 

[drinkerofkoolaid]

I think, and it's something what a lot of people on this board are missing, is that the good news is already priced in. Tesla simply already trades at a level that assumes it will grow at least 50% for the foreseeable future. When a valuation bear like @myusername challenges the price level of Tesla by pointing out other car makers, he's not even taken seriously. "GM/BMW isn't a growth company like Tesla", such is the entrenchment of the idea that Tesla will grow in the market. Well then, if everyone knows Tesla will grow, then that truth is priced in the market. And when Tesla does actually grow, there is no reason for the price to move up or down by a lot.

I must say, that I am strictly speaking about Tesla Automotive in the above. I don't think the same growth expectation is already baked in for Tesla Energy. Should Tesla come out this or next quarter with out of the world nice numbers on that part of the business, then I think there is a possible repeat of 2013 in the cars with the stock price moving up very significantly. That said, I am a bear on Tesla Energy, so I don't believe in it as much as some here (both on the size and on the margins of the business). At least the last few weeks Tesla Energy partners have been able to announce some good utility scale project wins so maybe I must reconsider if they can keep that up.

The big mistake people make is trying to compare Tesla's market cap to other Automobile Manufacturers. I don't think Tesla is pricing in the Model 3 being on time, very successful, and very profitable. Many analysts are still skeptical that Tesla can make money selling the Model 3.

Tesla Energy is a wild card that certainly isn't being priced in, since it has been speculated that Tesla has already received 500,000 reservations for the Powerwall.

Think about it like this. Have GM's sales peaked, or are they likely to continue to grow going forward? The market for ICE vehicles is at its peak, while the market for Electric Vehicles is in the very early days. Which company should have a higher market cap, Tesla, or GM? A companies market cap is usually a reflection of where investors think its profit will be in the future. I'd say Tesla is worth a lot more than GM if we agree that 10% of all new vehicles sold will be EVs ~ 2020.

 

[SebastianR]

US deliveries doesnt spend months on a boat, hence cars produced in december can be delivered same month. Cars to europe spend months on a boat. For This pipeline to be emptied, cars cant be produced and shipped later than october(?).

Eu cars produced oct-sept can be delivered in december. Us cars produced nov/des can be delivered in december = empty pipeline

I think there is something to this: At the end of 2016 Danish taxes on EVs will raise dramatically again. I got an email from Tesla saying that any car ordered before mid-October can be delivered this year, and that whatever comes after will be more expensive. I expect no significant amount of Tesla orders in DK from Mid-October until the year end.

 

[Turing]

I think, and it's something what a lot of people on this board are missing, is that the good news is already priced in. Tesla simply already trades at a level that assumes it will grow at least 50% for the foreseeable future.

You can't be both one of the most shorted stocks out there and also have success priced in. The whole reason it is so shorted is a big percentage of the market still thinks it will fail. If the market was assuming tesla would successfully grow 50% a year for the foreseeable future there wouldn't be 28 million shares sold short.

 

[Gerardf]

One thing the Q3 deliveries killed is hopefully this stupid case :

http://hgtlaw.com/wp-content/uploads/2016/10/2016-09-30-Pl.-Opening-Trial-Brief-stamped.pdf
Tesla Making Excuses For So-So Sales, Investor Says - Law360

He actually seems to want to proof Tesla was not having Model-x production issues in Q1-2 and get compensation and for missed 2016 deliveries. (at a moment that it was only July 2016 !?!?)

In the paperwork: "Plaintiff is questioning whether Tesla is misleading shareholders as to the reasons why Tesla’s sales figures are so low."

Well, going to be interesting to defend 60+ % (For Q3 111%) Y-o-Y growth is low for a car company
What a waste of time and resources.

And : "As of the end of the 2016 Q2, Tesla had sold less than 140,000 vehicles, including both the Model S and the Model X. In contrast, General Motors Company sold 9.8 million vehicles in 2015 alone."

Eeehhhh.. that sounds pretty familiar ? @myusername are you by any chance Shahid Haque ?

But the conclusion in the document is maybe telling :
For the foregoing reasons, Plaintiff respectfully requests that the Court grant judgment in its favor and enter an Order requiring Tesla to permit Plaintiff and his attorneys to inspect and copy the books and records described herein, and in the June 15, 2015 Demand and July 18, 2016 Demand, and requiring Tesla to pay Plaintiff’s reasonable attorneys’ fees and expenses

This person already tried to get access to the books in 2015, and now again in 2016. And all this because he held some TSLA shares and hoped for higher deliveries in Q1-2 ??? I can not imagine he thinks he can really win anything with this, he will of course lose a lot of money in legal costs. Maybe getting access to company confidential information is the real reason for such cases, and someone (competitor / hedge fund) is paying him to do so ? Earlier Model-X, and now specially detailed Model-3 info could be worth a lot of money.

 

[schonelucht]

I don't think Tesla is pricing in the Model 3 being on time, very successful, and very profitable.

Quick back of the envelope calculation shows it does : 1 million car at $40k, gross margin 25%, is $10B gross profit. SG&A is $900M to sell 50k cars. Eficiency gain of 300% gives us SG&A of $6B. Throw in R&D and interest expenses and we are looking at $3B net profit. A market cap of $32B today is quite appropriate for a company that has a shot at running a $3B yearly net profit in 3-4 years time.

 

[theschnell]

"Just valuation and comparison to other auto makers which we've heard here for years and it's really getting old"

when someone on this board makes a suggestion that TSLA will go 2x... and then another person replies with 3x... and then another person claims $1T market cap... and another replies with $10T market cap... these are all discussions of valuation.

what you are not interested in hearing is someone asking why... I guess you're suggesting that everyone on this board has already decided that Tesla has a guaranteed path to 10 million cars per year and an equal solar industry so any questioning of this is just old news.

i find this to be very strange.

What's strange is that you think you are the first or only to ask why. Which we have given reasons over and over. Wether you agree with those reasons is another story, but it's been discussed many times. I guess you're just new around here so we should give you a break in that regard. But I believe we have already done so.

 

[Sancho]

most people still don't get it. I do think they will start to see the light after the Model 3 is in full production, and S and X have been significantly improved further, and the other companies are just beginning to deliver a product at low volume that is years behind Tesla offerings. I now think that we will be under 240 for a 50 day for 6-12 more months. Which is o.k. by me, because it will give me time to buy a few thousand more shares at a great price.

I'm also assuming TSLA stays under 240 for the next 12 months. In addition to the points you raise, people also need to see the margins of Model 3. The wall of doubt is enormous here.

That said, I'm not sitting on the sidelines. I'm long with ITM options. Not too aggressive, and not much premium that I sacrifice if I'm right and TSLA is flat for the next 12 months. But I could just as easily be wrong, and the stock starts to climb in anticipation of Model 3 release. I'm willing to risk a little premium loss for the peace of mind of not having to time which of the false starts of the climb of stock price is the real beginning of a surge over 300.

Of course I could go even less aggressive by just holding common, but Tesla is my high growth play; if I'm going to bet any money on a high risk proposition that TSLA clearly is, I need a large potential reward. The trick here is to find a suitable amount of leverage that provides that reward, but withstands the likely high volatility over the next 12 months. And to invest a suitable amount of money that I can afford to lose, but will make a real difference if I win.

 

[vgrinshpun]

This one confuses me. With production humming the way it is and US orders being prioritized in September, I find it hard to believe there is a US production backlog right now - see end of September ability to go from order to delivery in like 2 weeks. The factory isn't sitting there doing nothing, though, so the most logical explanation must be that international orders are robust and that Tesla is committed to wiping out the non-US X backlog in Oct/Nov production. Is this your read as well?

Also, I'm dense - could you explain how US deliveries moving to December indicates a pipeline emptying scenario?

Q4 could be huge if they try and move everything again. 5500 in transit + produce around 25,000 + whatever's left in inventory. I don't think 28k is out of the question. Oh, and Tesla Energy ramp

See explanation here.

 

[schonelucht]

See explanation here.

That's certainly correct. On top of that, there are at least 2 weeks of factory shutdown planned this week. If those are scheduled between the end of overseas production and beginning of US production, it's quite easy to explain why earliest wait time is December for the US. The fun consequence is that European wait times are now shorter than for the US.

 

[vgrinshpun]

That's certainly correct. On top of that, there are at least 2 weeks of factory shutdown planned this week. If those are scheduled between the end of overseas production and beginning of US production, it's quite easy to explain why earliest wait time is December for the US. The fun consequence is that European wait times are now shorter than for the US.

Do you know for fact that there will be a two week shutdown in October (rather than one week in October, and another week in December), or it is your educated guess?

 

[schonelucht]

Do you know for fact that there will be a two week shutdown in October (rather than one week in October, and another week in December), or it is your educated guess?

No, just guessing. I am merely saying it is a possibility that there is some downtime scheduled between EU production and US production that could be up to 2 weeks. If the shutdown is for retooling then it makes sense to schedule all the planned downtime at once.