Short-Term TSLA Price Movements - 2016

[brian45011]

From Tesla's last secondary SEC Form 424(b)(5):

"Goldman Sachs Bank USA ... has made extensions of credit in the aggregate amount of $275 million to Elon Musk and the Elon Musk Revocable Trust dated July 22, 2003, or the Trust, a portion of which Mr. Musk used to purchase shares of our common stock in our public offering in May 2013 and private placements in June 2011 and June 2013. Mr. Musk will pay the purchase price for up to the 83,974 shares of our common stock he has indicated a preliminary interest in purchasing in this offering with a portion of the existing loan from Goldman Sachs Bank USA."

Elon, I recommend you move your banking to a firm that is more aligned with your long term interests.

I think you may be quoting the August 2015 equity offering. The May 2016 equity offering stated:

""In addition, beginning in June 2011, Goldman Sachs Bank USA, an affiliate of Goldman, Sachs & Co., made extensions of credit to Mr. Musk and the Elon Musk Revocable Trust dated July 22, 2003, or the Trust, a portion of which Mr. Musk used to purchase shares of our common stock in our public offerings in May 2013 and August 2015 and in private placements in June 2011 and June 2013. Interest on the loan accrues at market rates. Goldman Sachs Bank USA received customary fees and expense reimbursements in connection with these loans. Mr. Musk currently has no outstanding borrowings with Goldman Sachs Bank USA. "

 

[Chickenlittle]

I would be very upset if i were a follower of GS. imagine if you bought stock based on their prior upgrade, the company out performs and THEN they decide there is a risk of being late on model 3 based on prior years old information. did they not realize that model s and x and roadster were late previously? funny as tesla keeps approaching their potential the bar keeps getting raised instead of lowered. who here really believed that model x out in a year, over 80K cars delivered, AP to current degree 3 years ago??

 

[AlMc]

So did i

I sold some today. Being the conservative bull I am I will buy back at $180 or $220 whichever comes first.
I will be looking at small positions in options until then with TSLA.
I salute all longs that are holding and accept that I may miss out on the 10% gain you will realize that I won't if we see $220 first.

Long term we are all good.

 

[Turing]

Well, this is an interesting section in that :

In the near-term we do see Tesla achieving a positive EPS result in 3Q16, mainly on strength of vehicle deliveries achieving half of the company’s 2H16 guidance. This puts our updated 3Q16 EPS estimate of $0.28 above consensus of $0.07. Additionally, we raise our estimates to fully incorporate the Tesla Energy business – driving a net positive increase to our 2016 through 2019 EPS estimates.
Valuation.

Positive EPS, TE revenues. And still they downgrade by this much.

Apparently tesla having its best quarter ever and beating all analyst estimates by several thousand deliveries and keeping guidance at 80k where many analysts expected another lowering of year end guidance - increased concern over model 3 execution, execution concern wrt M3 that they didn't have a few months ago during their last report. GMAFB.

 

[EinSV]

This depends on who you ask.... really.

If you are referring to my prediction that Tesla will likely meet or beat its 2018 vehicle production goals, that's certainly true. I'm sure my opinion is very much in the minority.

If you are referring to my statement that Tesla met or exceeded production goals for the Model S they made when they IPO'd, well I don't really think there is any reasonable dispute about that.

The initial launch was on the timeline predicted in the IPO and after working out the production kinks in 2012 Tesla beat its long-term production goals for the Model S in the first full year. In fact, by Q1 2013 they were already almost hitting their full production run rate (4900 v. 5000 per quarter) and by Q2 2013 were already exceeding it (5150 v. 5000). Tesla Model S - Wikipedia, the free encyclopedia

 

[Quesder]

Hi All,
I add more at $200.84 . Rational tells me that should not be afraid of downgrade that is based on nothing.

 

[brian45011]

I am human, so it's always a possibility.

Does that mean you think GS' projection of $0.28 EPS is non-GAAP?

If my computation of GS projecting non-GAAP $0.77 EPS in 4Q16 is in the ballpark, and the stock based compensation and non-cash interest remain essentially unchanged, then GS is projecting a slightly GAAP positive bottom line for 4Q16.

 

[FluxCap]

I thought I'd share a personal anecdote. Sitting at a shared booth at a sushi place at Heathrow this Tuesday I overheard 2 german businessmen talk about Tesla. We started talking and it seems like one of the two had almost bought a Model S but the cost with the options he wanted ended up being too much. As they paid the older guy had a credit card with a Mercedes Benz logo on it so they might be connected to the autoindustry or at least were fairly knowledgable about it and Tesla.
The interesting thing was that they beleived Tesla wouldn't be able to sell the M3 for $35k and they where using the cost of upgrading the battery for the roadster as a yardstick for Tesla's battery prices. When I told about the "less than $190/kWh" price quoted they didn't believe that. So the point I'm trying to make out of this slightly random datapoint is that many fairly knowledgable people don't know or can fathom that tesla might be at $150/kWh when the Gigafactory comes online next year.
The other interesting thing was how impressed they were with the Tesla Model S, even though they felt the interior was lacking compared to german OEMs. I do get the distinct feeling from the germans I know (not just these two guys) that there's a feeling the Model S should have been german and it is a hit to national pride. I also found it interesting how they called Tesla's use of Ludicrous button, easter eggs etc as playfull and not stupid or silly. They seemed to think that was an advantage for Tesla. I obviously agree, but I was surprised german businessmen also feel that way.
This is of course just 2 people I met at an airport, but it seems this follows a general trend I've seen in Germany and Belgium for the feelings towards Tesla.

Cobos

From speaking to several of my German friends with knowledge of / connection to the auto industry there, I'm convinced that they "get it" more than any other legacy auto manufacturer, but this doesn't mean they fully comprehend the realities of what the Model 3 will do to the market when it is released. It's sort of denial at this point - their engineering brains are fighting their innate fears of whether they can change and adapt in the face of a car that will begin to obsolete vast swaths of their business models. They know they have to change, and I suspect the Germans will be the first to adapt to survive, though I'm not certain all of them will survive (VW's dieselgate scandal will have long lasting repercussions).

On days like today when the deviousness and vindictiveness of a Wall Street investment bank are revealed in an act of insidious sabotage (spinning the overwhelming positive possibilities of GAAP profitability into a mediocre achievement/inflated expectation), I am reminded that all we have to do is survive the hatred and fearmongering, and we will indeed change the world. Sometimes that feels harder, but if we thought upending the entire planet's transportation and energy infrastructure would be done without a massive fight, we are reminded today that we must not grow complacent. Multiple interests are indeed "out to get us" from so many corners, and though they will ultimately fail, we must remain vigilant, dedicated, and focused on the goals outlined in the master plan. I take heart that I'm positive Elon will never forget these goals and has aligned the entire company towards achieving them.

Also, I am going share shopping soon, but I don't think the fallout from this latest bout of negativity is over.

 

[AlMc]

From speaking to several of my German friends with knowledge of / connection to the auto industry there, I'm convinced that they "get it" more than any other legacy auto manufacturer, but this doesn't mean they fully comprehend the realities of what the Model 3 will do to the market when it is released. It's sort of denial at this point - their engineering brains are fighting their innate fears of whether they can change and adapt in the face of a car that will begin to obsolete vast swaths of their business models. They know they have to change, and I suspect the Germans will be the first to adapt to survive, though I'm not certain all of them will survive (VW's dieselgate scandal will have long lasting repercussions).

On days like today when the deviousness and vindictiveness of a Wall Street investment bank are revealed in an act of insidious sabotage (spinning the overwhelming positive possibilities of GAAP profitability into a mediocre achievement/inflated expectation), I am reminded that all we have to do is survive the hatred and fearmongering, and we will indeed change the world. Sometimes that feels harder, but if we thought upending the entire planet's transportation and energy infrastructure would be done without a massive fight, we are reminded today that we must not grow complacent. Multiple interests are indeed "out to get us" from so many corners, and though they will ultimately fail, we must remain vigilant, dedicated, and focused on the goals outlined in the master plan. I take heart that I'm positive Elon will never forget these goals and has aligned the entire company towards achieving them.

Also, I am going share shopping soon, but I don't think the fallout from this latest bout of negativity is over.

Flux:What is your read on the macro environment. That bothers me as much as the FUD.

Thanks Al

 

[JRP3]

Until TM proves otherwise one has to consider that being late with the M3, while not a certainty, is a possibility given past history.

Certainly, and given past history it is the more likely possibility. On the other hand one would need to assume that they have not learned anything about what caused the previous delays, and haven't made corrections to address those issues. I think it's safe to say they will miss the July "launch" date, which was only put in place to motivate suppliers, and probably Tesla employees as well, but I also think it's safe to say they will start production before the end of 2017. If that production is more than a handful of hand built cars then I'll call that a win. Depending on actual volume the market may or may not agree.

 

[dc_h]

I think what Elon meant is that he despises advertising intended to convince a person to buy a product, they would probably not otherwise buy.
Advsrtising that is not complex, and is primarily intended to edicate people about the product is not necessarily a bad thing.great product should sell itself.


The person who wrote this article should be ashamed of themselves and possibly fired for writing that article.

Elon has 5.5 million followers on Twitter. He follows 55 accounts, of which 19 (including Kimble Musk) are individual people.

1) This is a very pathetic attack for any journalist to make.
2) I'm positive all, or most of the 55 accounts he follows employ a significant number of women.
3) This is an extremely small sample size. It is misleading, not to mention unscientific and illogical to try and draw any inferences from who he follows on Twitter.

I could go on for hours about what's wrong with the article, but i don't see a point. Might email the author to highlight the many problems with the article.

He should eat his pride and unfollow Al Yankovik.

 

[Turing]

Tesla as a public company delivered the Model S on time. When Tesla went public in June 2010, it had only one alpha prototype of the Model S, no real production experience and did not even have possession of the Fremont factory yet.

Nonetheless, it announced a target production date of 2012 with an ultimate production goal of "up to approximately 20,000 cars per year." TESLA MOTORS INC (Form: 424B4, Received: 06/29/2010 06:12:24). It launched the Model S in mid-2012, as predicted, and beat its production goal of "up to 20,000" vehicles in the first full year (2013). In other words, once Tesla had adequate funding from the IPO, it was off to the races.

I believe Tesla is very likely to repeat this result and meet or beat its 2018 vehicle production goals.

And we essentially only have two data points on launch timing. The model s was the first car they actually built on their own. It was relatively simple compared to the model x, and they were more or less on time with it. They were late on the model x but as has been pointed out that was a far more complicated car - and if you just compare the model X development to production time vs industry average for development/production for a high tech luxury SUV, you find they did pretty good on overall timing relatively speaking. I would expect some modest delays over the model 3, but i think the simplicity of manufacturing design should be a big factor here. And i think we can all agree that the tesla team has become more seasoned since ms/mx which should add not subtract confidence.

 

[Jayjs20]

Well, I'm definitely feeling the pain of loss right now. The rollarcoaster of emotion has settled down though, I almost panic-sold an hour ago.

I'm wondering, where are the short sellers in all this? Have they decided not pile on? Is it harder to drive the price down once it's already dropped a good amount? Or are they what's keeping the price horizontal right now?

 

[FluxCap]

Flux:What is your read on the macro environment. That bothers me as much as the FUD.

Thanks Al

Well, (and remember this is not investment advice) I'm operating on the theory that the world will keep on spinning after the November US election, which means an HRC victory, and my portfolio is set up accordingly. There is literally no portfolio strategy that is safe in a Trump presidency, in my opinion. I will seriously consider leaving this country with my capital if Trump wins. However, in an HRC administration, next year holds good things in store for sustainable energy and tech-heavy portfolios.

I am unconcerned about other macro noise at present.

 

[vgrinshpun]

That's only quasi true. Tesla Motors to Manufacture Sedan in California (NASDAQ:TSLA)

In June 2008, Tesla said they were targeting late 2010 serial production of MS.

The press release you are referring to was issued on Jun 30, 2008, prior to the market crash of 2008. What are we discussing here? Tesla ability to EXECUTE once appropriate resources are allocated and activities are scheduled, or their ability to anticipate external cataclysmic events?

As far as I am concerned they launched Model S on time.

 

[madodel]

He should eat his pride and unfollow Al Yankovik.

Or at least follow his own mother. ;-)

 

[bdy0627]

I just added some more shares as well. Fundamentals have certainly not contributed to this drop. Seems like a great price to me given how Tesla did in the 3Q. It also seems like the stock doesn't do really well unless there is a lot of negative sentiment. Thank you GS for at least assisting with the sentiment.

 

[rallykeeper]

So I think that conservatively we could expect TE bringing $3.4GWh x $162/kWh = $550MM in 2017. The upside is about double of this if 10x growth mentioned by Elon and JB will pan out.

All in all I expect TE contributing about $500MM of gross profit in 2017.

This seems like a pretty conservative estimate, particularly when you think through how the ramp would work for all of 2017.

myusername's intent notwithstanding, he or she actually stumbled upon an interesting question. What should we expect to see in announcements for large scale projects in 4Q16?

I think we should only expect to see .34 GWh. Here's my math based on a pretty simple ramp:

1Q - 2X prior quarterly rate - .34 GWh
2Q - 4X - .68 GWh
3Q - 6X - 1.02 GWh
4Q - 8X - 1.36 GWh

Stated another way, if you see more than .34 GWh announced in 4Q16, 10X growth may very well be achievable. Stated even another way, missing .34 GWh in 4Q isn't as important as what happens in the subsequent quarters.

Per our other conversations, this isn't a Tesla capacity/supply problem. If demand is a problem for this rate, itt seems like Tesla can accelerate demand by aggressively bidding on the bigger projects given that the GF will be spitting out a lot more batteries at this point. As a result, you would expect Tesla to win more than its fair share of big contracts.

Finally, to any cynics of this analysis, vgrinshpun's estimate is entirely based on 2 projects. Tesla only needs to win 4 similarly-sized projects in 4Q to stay on pace. That seems completely possible.

I'm starting to get very comfortable that TE will be adding a lot of value very soon.

2018 will look even better as many of the "pilot" projects convert into large scale projects for these utilities.

 

[Turing]

@vgrinshpun And others. What would you say is the industry timing cycle average for bringing a entirely new car/platform luxury suv to market from let's say prototype to volume production? It seems to me that if you just look at the mx development time relative to industry average, it was actually pretty damn impressive, delays and all.

 

[generalenthu]

Finished backing up the truck on scty 2019 leaps. Couldn't have gotten in without the push today. Thanks Obama.

On a more serious note, no point raging on goldman. Their last upgrade was embarrassingly close to the cap raise goldman underwrote.