Short-Term TSLA Price Movements - 2016

[esk8mw]

That's kind of a cop out answer given how certain you were earlier that there was a definite reason for Elon to take to twitter to specifically talk about the cash needs of his company :



So, yes, I find it an interesting topic to speculate about why he did what he did. It wasn't idle late night rumination on the world being a self-conscious AI. You (and I!) agree some event solicited him to make his remarks. One of your earlier suggestions was that the financials were good enough that they good self-finance. The problem with that explanation is that I haven't seen one single estimate of their financials that even comes close to make that realistically possible. @vgrinshpun made a play on a single one contract worth of $4B in prepaid Tesla Energy products. But that's absolutely far out left field, the single utility name he mentioned in that context was quickly dismissed. And that's really the only one that actually tried to find some way to make the self-financing idea work. That leaves your worst explanation for now : they are delaying cash raise because the terms aren't favourable. But that brings us to the second point :

On the July 1st date. It was being discussed in the context of when must Tesla start building out and spending cash. Even with it being internal, it's still a real goal. Sure,Tesla could already today start eating into that buffer and say that cash intensive projects don't need meet the July 1st goal but let's say Sep 1st. But it would still be a complete repudiation of their original meaning of that internal deadline : that everyone is supposed to be ready and that the buffer is there for the inevitable small, unplanned, hiccups. Purposefully delaying cap ex today however is not a small unplanned hiccup. On the contrary.

BTW. Should, despite all of the above,Tesla manage to self-fund the model 3, the tsunami of hurt will be big time for the shorts. And I personally will feel that everyone who holds their shares into that prediction has absolutely earned every single penny they make from that transaction. It's a bold gamble that deserves a bold pay out. Just not one that I am willing to make.

If you think my answer was a cop out then you didn't read it correct or didn't understand the subtext. In questioning why Elon would take to Twitter, the very clear implication made by Dr. Valueseeker-excuse me, I mean Value Ev-was that there was somehow an SEC violation or something else underhanded about the tweet. My response was a direct one - nothing legally wrong or even questionable about the tweet; I'd advise my own clients in the same way.

To your other point, I haven't been shy in speculating re: the reasoning for the tweet. I didn't say they could definitely self-finance, I said best case scenario is that they are self funding or close to it. If cash outflow is suddenly currently much lower and projected to keep at that level, that means the cash position has improved a lot, which is the central bear thesis-that the business isn't sustainable.

I think we all keep forgetting that the 2.25b capex guidance for 2016 was very weakly maintained in the last call. I believe the direct quote from Elon, going from memory, is that they are keeping the guidance for now, but they think they can beat that number. If Tesla can lower the capex (without pushing the Model 3) and improve the cash position by more than originally thought through high sales/lower opex, that's a double improvement of the cash position. Something that could, say, eliminate the need for a raise for quite some time.

 

[racer26]

Whoa. What happened in the last 10 minutes?

 

[dc_h]

Interesting note earlier in the thread about an AI focusing, in part, on TSLA. With the high volatility and seemingly obvious short runs on the stock every morning, seems like an AI program would not need to be very complex to identify profitable patterns, especially if you are big enough to put hedges high and low to avoid any surprises.
I'm just noticing the pressure on the stock and the fact that more shares are available to short again today. Selling down into good news seems like it can only last so long. The saying is the market can stay irrational longer than you can stay solvent is always a caveat, but for long termers, it seems like the short attacks are opportunities to add small increments to our balances.

 

[myusername]

down on briefly heavy volume... the prospectus was amended... something interesting get changed?... I noticed the "we are currently planning to raise cap" dialog was modified... that doesn't seem like something that would cause a negative reaction though.


http://ir.tesla.com/secfiling.cfm?filingID=1193125-16-735077&CIK=1318605

 

[ev-enthusiast]

Whoa. What happened in the last 10 minutes?

That was a quick move!

 

[dc_h]

Whoa. What happened in the last 10 minutes?

More shares available to short at lower rates, generally equals more shares shorted. Recall last year the near auto-correlation to oil prices. That broke down after it was noted here, not saying it was causation, just that it stopped working after it was called out. Will be interesting to see when shorting stops pressuring prices. An object will continue moving until an equal or opposite force affects the original force. Will be interesting to see if the power of the shorts is impacted on the 17th, 26th and or the 28th. It will be interesting to see if Elon has other catalysts on the horizon as well. I'm not overly optimistic, but it seems that the floor has been raised considerably for TSLA, but the pressure in this band has not changed yet. It would seem that sooner or later, if we keep having positive catalysts, that the price will be forced into a new and higher level.

 

[JBRR]

CNBC US Home
CNBC is live streaming commodity panel at World Energy Congress. No idea if they will say anything relevant to short term trading, but none the less it should be interesting to tune in to.

 

[stealthology]

Whoa. What happened in the last 10 minutes?

Reuters spinning/not comprehending the S-4. Do you really expect anything else from them?

TESLA MOTORS INC - MAY RAISE FUNDS IN FUTURE, INCLUDING THROUGH POTENTIAL EQUITY OR DEBT OFFERINGS; AMOUNT, TIMING OF FUNDS CO MAY RAISE UNDETERMINED TSLA.O - Reuters News (more from s-4) earlier

RTRS - TESLA MOTORS INC - AMOUNT, TIMING OF FUNDS CO MAY RAISE WOULD VARY BASED ON NUMBER OF FACTORS, INCLUDING CO, COMBINED COMPANY�S LIQUIDITY NEEDS SCTY.O TSLA.O

RTRS - TESLA MOTORS INC - MAY RAISE FUNDS IN FUTURE, INCLUDING THROUGH POTENTIAL EQUITY OR DEBT OFFERINGS; AMOUNT, TIMING OF FUNDS CO MAY RAISE UNDETERMINED TSLA.O

 

[esk8mw]

Reuters spinning/not comprehending the S-4. Do you really expect anything else from them?

That's truly comical. Do they seriously not have the software (as I do) to compare filings to see exactly what has changed?

I already posted it above, but they changed the language from giving specific timing and reasoning for the raise (by the end of the year, for GGF, M3 tooling etc.) to giving the standard language everyone gives in filings - we may raise cash at some point in the future (obviously).

This is an unequivocal positive change. It was also already spelled out by Elon in a tweet. The spike downward is literally just a function of algos. They read "cash raise" and "offering" or whatever else in a headline (gee, I wonder if the outlets carefully select headline text? This is a known thing.) and it creates a sell trigger. Shares are sold off, stop losses are ran and daytraders bail, creating a spike down.

Then they get bought back up, like now.

 

[Lessmog]

Reuters spinning/not comprehending the S-4. Do you really expect anything else from them?

I first read that as ROTORS spinning. Maybe not all wrong?

 

[uselesslogin]

Well now the macro is pulling TSLA down. TSLA is still beating the NASDAQ right now.

 

[Quesder]

Damn, MBLY is really sinking. I feel bad that I jumped out only at $39.11. Maybe the rest of it will float for a while. Should have sold at $42, or ever since it had the word fight with Tesla.

 

[Oil4AsphaultOnly]

Money lenders (including the federal government) take measures to assure it is repaid. The covenants and restrictions in loan agreements are one mechanism for doing that and to trigger remedies when repayment appears in jeopardy. Take a look at the covenants and restrictions in the ABL agreements. Tesla was in violation of the covenants in the original DOE loan agreements multiple times, requiring four amendments and two waiver agreements, including acceleration of the bigger loan's repayment date, before the convertible note proceeds were used to pre-pay the balances.



Re-applying would be a futile waste of time. Tesla is NOT going to get a second bite out of that apple for a variety of reasons, probably too many to list, but here are a few:

-when Tesla decides it needs more capital it will want to act quickly. From the time of the initial application in 2008 to approval in late 2009, the original negotiations took well over a year.

-at the time of the original application Tesla had zero debt; a glance at the balance sheet shows that has changed dramatically:

-at the time of the original application Tesla had no credit rating; currently S&P shows it as B- (four levels below investment grade) and on negative credit watch;

-at the time of the original application all of Tesla's valuable assets were unencumbered; Tesla has now granted the ABL lenders security interests in all valuable assets outside of Nevada, putting the DOE in an inferior position. IIRC, the ABL covenants restrict Tesla from taking on new debt and/or require prior approval;

-in the three years since the loans were repaid, Tesla's accumulated deficit has grown from $1.1 billion to $2.9 billion, indicating a loss of $1.8 billion over that three years.

Tesla may be able to raise capital through some kind of equity offering, but borrowing again through the ATVM Loan Program will not happen.

I seemed to have been mistaken. Thank you for the corrections.

 

[doctoxics]

Not something I do very often, but couldn't resist buying November 4 call at 210. Three events between then and now plus Elon's tweet not being reflected in the stock price are a lot for the shorts to hold down. Money I can afford to lose in a well considered bet.

 

[winfield100]

this is slitely OT for short term stock price upward movement, however, today on CNN
{But On topic for longer term}

"...We continue to drive down the cost of space exploration for taxpayers.
This week, we'll convene some of America's leading scientists, engineers, innovators and students in Pittsburgh to dream up ways to build on our progress and find the next frontiers. Just five years ago, US companies were shut out of the global commercial launch market..."
A public private partnership to go to Mars {and space}
{with earths surface being the shoreline of the universe}

Barack Obama: America will take the giant leap to Mars - CNN.com

and the National Geographic 6 part mini series of journey to Mars and colonization

Nat Geo's 'Mars' Series Takes Viewers on Journey to Red Planet

(2.5 million likes so far) {money will come pouring in for investments, etc}

 

[doggusfluffy]

First, let me re-state few obvious things, which I mentioned before. First, the idea I presented was about offtake agreement, NOT The Oncore offtake agreement. The Oncore was just an example.

Second, I clearly stated that it is a possibility, and I do not know what the probability of it happening is, as opposed to your and another member opinion that you both *know* the probability, and in your case it is exactly zero, while @brian45011 thinks that it is close to zero. To clarify it further, it is not the only possibility out there, and I do not think that it is the most likely one.

As far as your apparent reference to @brian45011 "dismissing" the idea for offtake agreement playing any role here, I am curious based on what did you come to this conclusion. I certainly do not believe that the idea was "dismissed", although he certainly tried.

Additionally if you follow the logic, Oncor executives clearly see a benefit for themselves making a deal with Tesla and with NextEra and the PUC negotiating perhaps they have some new structural freedom to swing a deal. I called it a WAG based on the tweet criteria that it was unexpected by some (Tesla Energy and not Motors) and was seemingly referencing something big enough that it removed the immediate need for financing rounds.

Here is the quote at the time.
For Oncor, Texas battery plan fizzles | Energy | Dallas News

CEO Bob Shapard, touting an agreement with the technology company Tesla, said the company was willing to invest $2 billion to make it happen.

Seven months later, the proposal has come to a grinding halt. When the Texas Legislature deregulated the state’s power market back in 1999, it prohibited transmission companies from owning generation and vice versa. Under the letter of the law, batteries are considered generation. And if Oncor were to move forward, it would need the law rewritten. But the proposal quickly drew objections from power generators worried that Oncor was infringing on their turf and questions over costs to ratepayers. In the end, Oncor failed to find a legislator in Austin to so much as introduce a bill on its behalf.

At an energy storage conference in downtown Dallas on Friday, Oncor chief technology officer Michael Quinn could only strike a hopeful note for the future.
“More importantly, I think, we started a conversation,” he said. “I’m hoping in 2017 I’m bringing you an update with a lot of change.”

 

[Value Ev]

, I mean Value Ev-was that there was somehow an SEC violation or something else underhanded about the tweet. My response was a direct one - nothing legally wrong or even questionable about the tweet; I'd advise my own clients in the same way.

Oh, please. I never said anything about an SEC violation or that tweeting is underhanded.

How many other CEOs of 30B firms are out their tweeting about the financial aspects of their companies? What is the actual purpose? Why not just update S-4's, and discuss the quarterly results and plans at the quarterly meetings?

 

[JBRR]

ACS AMA: I'm Kyle Bradbury, Managing Director of the Energy Data Analytics Lab at the Duke University Energy Initiative. Ask me anything about energy storage systems and energy data analytics. • /r/science

Energy storage AMA on reddit.

Should be of interest to most in here.

 

[FredTMC]

Elon often tweets to dispel FUD. Twitter is a valid and efficent form of public dissemination of information. Absolutely nothing wrong with that.

There's Zero reason to wait until a quarterly call to dispel BS.
It's certainly in Tesla's best interest. Shorts don't like that? Good...

 

[PaulRocket]

New pictures inside the Tesla Fremont Factory:
Inside The Tesla Factory