Short-Term TSLA Price Movements - 2016

[Krugerrand]

I agree, it does seem wrong. But we've heard before, in retrospect, of private investor conference calls and about the fact that after each ER all the analysts get to stay on the line and have a private Q&A session with management. Does seem unfair to us retail investors, doesn't it?

This happens in all industry sectors. It's not unique to investing. And it certainly is part of the whole 'life isn't fair' that we learn as children.

Logically, publically traded companies are going to spend a bit more time wining and dining the investors that can help them most. That's not us. We can't move the needle on the stock price. We can't play a significant role in the huge capital raises. We don't influence tens of thousands of people with our monthly investment letters to our clientele.

On the other hand, I think Elon has gone to great lengths to help us all know where he's steering the ship; Secret Master Plans, tweets, interviews, blogs.

 

[vgrinshpun]

I don't know "the truth" regarding Silveo tech, and neither do you. I look at what was claimed, and what actually happened. The Buffalo factory did not launch as planned.

I did not claim to know the truth, just quoted SolarCity statement. If you don't know the truth, why dismiss it?

I do not see changed plans regaring the Buffalo Factory as an indication that SolarCity statement is false. You lost me here.

 

[vgrinshpun]

The trading is pretty interesting today - steady climb on a low volume. Although the cost of shorting went down dramatically and there are plenty of shares svailable to short, with the exception of few minutes after opening, the short sellers are hesitant to deploy their arsenal. Perhaps they see writing on the wall - that TSLA is ripe for move up - and are in a waiting mode.

 

[esk8mw]

So the 25 year old in Solarcity investor relations person is also an expert on this technology and is willing to divulge the truth?. You would need to be very close to the actual engineering to know if the Silveo IP has made a contribution or was a failure. Since the factory didn't launch as planned there is a real possibility that the tech is a failure or simply not important.

But it is all sunk cost anyways. The new solar roof selling in volume is what matters now. Solarcity/Tesla will continue to sell the low cost systems too.

OK, this post makes it clear to me that you haven't worked with/for an IR department in a public company before, so here's some firsthand knowledge. That 25 year old IR person usually has a direct line to the CEO and CFO. Sensitive questions or ones that can't be answered with verified information from within the company simply do not receive a response. Questions requiring knowledge from other areas will be referred to those areas, not just randomly answered, under penalty of death (OK, exaggerating here, but only slightly). Any response to a novel question is run by the CEO, CFO or other senior executive with direct knowledge of how the company wants to respond.

If the IR guy gave an offhand, incorrect response to a question of significant importance like this, they would be fired on the spot. It's literally job 1, 2 and 3 for these guys not to give out sensitive or incorrect information. This is the face of the company speaking to us - if you can't trust the IR department to give correct information then you have to admit that you don't believe the words coming out of senior executives' mouths, because you better believe they helped craft the 25 year old's response.

 

[brian45011]

Seems to me they are pretty cheap right now, and we're entering a string of good news (hopefully ;-).

Regulatory credits likely to add $250-300 million to the bottom line in 3Q16. CARB reported 80,227 ZEV credits transferred (sold) from 10/1/15 through 8/31/16 but Tesla has only reported $65 million in ZEV credit revenue during the first nine months of that eleven month period. Zero Emission Vehicle Credits

Even though CARB cut-off the reporting period at 8/31/16, what Tesla reports will be regulatory sales through 9/30/16 (corporate average fuel standard and green house gas credits sold are in addition to ZEV credit sales)

The unexpected $85 million net income from regulatory credit sales in 1Q13 was a major factor in the steep share price increase then. Could be similar next week

 

[Drax7]

Buy Solarcity, shut it down, give away to panasonic whats left.
Introduce a roof/solar panels sold at
tesla stores and let cross selling do its magic.
The no brainer part sort of eludes me.

 

[NOLA_Mike]

Tesla Earnings to Highlight Rapid Growth -- The Motley Fool

Tesla Earnings to Highlight Rapid Growth
But investors will be looking beyond soaring vehicle sales.

Daniel Sparks
(TMFDanielSparks)
Oct 18, 2016 at 10:03AM

 

[esk8mw]

Regulatory credits likely to add $250-300 million to the bottom line in 3Q16. CARB reported 80,227 ZEV credits transferred (sold) from 10/1/15 through 8/31/16 but Tesla has only reported $65 million in ZEV credit revenue during the first nine months of that eleven month period. Zero Emission Vehicle Credits

Even though CARB cut-off the reporting period at 8/31/16, what Tesla reports will be regulatory sales through 9/30/16 (corporate average fuel standard and green house gas credits sold are in addition to ZEV credit sales)

The unexpected $85 million net income from regulatory credit sales in 1Q13 was a major factor in the steep share price increase then. Could be similar next week

Whoa. Could you walk me through the math to $250-300 million? I ask because (i) $76 million is the highest ZEV credit figure I see from Tesla in the past couple years and (ii) Elon was REALLY complaining about ZEV credits being worth pennies on the dollar on the last call so maybe they simply don't have much value anymore.

If they really tripled ZEV credits I will take out a HELOC to buy calls (not really).

 

[vgrinshpun]

Regulatory credits likely to add $250-300 million to the bottom line in 3Q16. CARB reported 80,227 ZEV credits transferred (sold) from 10/1/15 through 8/31/16 but Tesla has only reported $65 million in ZEV credit revenue during the first nine months of that eleven month period. Zero Emission Vehicle Credits

Even though CARB cut-off the reporting period at 8/31/16, what Tesla reports will be regulatory sales through 9/30/16 (corporate average fuel standard and green house gas credits sold are in addition to ZEV credit sales)

The unexpected $85 million net income from regulatory credit sales in 1Q13 was a major factor in the steep share price increase then. Could be similar next week

If this pans out, the trading after the ER will be epic.

This is exceptional dig, kudos for researching this!

 

[MitchJi]

Read up on regulation FD.https://media2.mofo.com/documents/faqs-regulation-fd.pdf

Elon said he did exactly what I described. You can either believe in the regulations on the books or in standard industry practices. You could also choose to believe in the tooth fairy if you want to.

 

[electracity]

OK, this post makes it clear to me that you haven't worked with/for an IR department in a public company before, so here's some firsthand knowledge. That 25 year old IR person usually has a direct line to the CEO and CFO. Sensitive questions or ones that can't be answered with verified information from within the company simply do not receive a response. Questions requiring knowledge from other areas will be referred to those areas, not just randomly answered, under penalty of death (OK, exaggerating here, but only slightly). Any response to a novel question is run by the CEO, CFO or other senior executive with direct knowledge of how the company wants to respond.

If the IR guy gave an offhand, incorrect response to a question of significant importance like this, they would be fired on the spot. It's literally job 1, 2 and 3 for these guys not to give out sensitive or incorrect information. This is the face of the company speaking to us - if you can't trust the IR department to give correct information then you have to admit that you don't believe the words coming out of senior executives' mouths, because you better believe they helped craft the 25 year old's response.

It is clear to me that you have never worked at a real tech company. The answer can be technically defensible but fundamentally untrue. Something failed with the Silveo effort. Perhaps simply capital availability. Perhaps the fundamental module design. Or perhaps scaling manufacturing.

Critical investors thread would not constantly overlook the obvious. Perhaps these sorts posts can be moved to a non-investors forum. Perhaps a new "why I'm crazy for Tesla" section. Then this thread could actually include mostly critical thinking that actual investors apply to stocks.

 

[racer26]

Whoa. Could you walk me through the math to $250-300 million? I ask because (i) $76 million is the highest ZEV credit figure I see from Tesla in the past couple years and (ii) Elon was REALLY complaining about ZEV credits being worth pennies on the dollar on the last call so maybe they simply don't have much value anymore.

If they really tripled ZEV credits I will take out a HELOC to buy calls (not really).

80,227 ZEV credits.

1 ZEV credit is worth ~$4000 due to the penalties an automaker has to pay if they don't produce or purchase enough credits.

80,227 * 4000 = $320,908,000

$320,908,000 - $65,000,000 reported in 4Q15, 1Q16, 2Q16 = $255,908,000

That's pretty serious. Perhaps this is (part of) the mystery cash infusion TSLA got that made the money woes go away?

Looks like TSLA was the seller of 85.5% of all ZEV credits sold in that 11 month period.

Matching up the buyers and sellers, looks like Fiat Chrysler, Ford, and Honda bought all of TSLA's ZEVs.

Looking at previous year editions of that page, looks like the most credits TSLA has sold in those 11 month periods previously was 1,554.

That's MASSIVE.

 

[mickificki]

Investors Meeting at Gigafactory Jan 5!

Tesla to hold a special event at the Gigafactory on January 4, 2017

 

[esk8mw]

80,227 ZEV credits.

1 ZEV credit is worth ~$4000 due to the penalties an automaker has to pay if they don't produce or purchase enough credits.

80,227 * 4000 = $320,908,000

$320,908,000 - $65,000,000 reported in 4Q15, 1Q16, 2Q16 = $255,908,000

That's pretty serious. Perhaps this is (part of) the mystery cash infusion TSLA got that made the money woes go away?

Looks like TSLA was the seller of 85.5% of all ZEV credits sold in that 11 month period.

Matching up the buyers and sellers, looks like Fiat Chrysler, Ford, and Honda bought all of TSLA's ZEVs.

2 questions:

1. Are we sure that 16Q2 was a 0 for ZEV? I didn't see a number in the letter and I know he complained about credits being worthless, but that doesn't necessarily prove the number was 0. Either way, probably a small number so maybe doesn't matter.

2. Even if a ZEV is worth $4k, isn't it possible they sold for far less, given Elon's "pennies on the dollar" statement, or am I missing something?

 

[techmaven]

80,227 ZEV credits.

1 ZEV credit is worth ~$4000 due to the penalties an automaker has to pay if they don't produce or purchase enough credits.

80,227 * 4000 = $320,908,000

$320,908,000 - $65,000,000 reported in 4Q15, 1Q16, 2Q16 = $255,908,000

That's pretty serious. Perhaps this is (part of) the mystery cash infusion TSLA got that made the money woes go away?

Looks like TSLA was the seller of 85.5% of all ZEV credits sold in that 11 month period.

Matching up the buyers and sellers, looks like Fiat Chrysler, Ford, and Honda bought all of TSLA's ZEVs.

Yeah, that's a crap ton of credits. Tesla only sold ~600 in 2014, ~1500 in 2015. However, it is very unclear how much each ZEV credit is worth... it isn't fixed. Selling 80,000 is a crap ton.

 

[austinEV]

Maybe you missed Audi`s latest announcement of their next-gen Tesla killer to be released 2 years from when you read this post (whenever you read it)?

Audi's EV's are the car of the future, and always will be.

 

[MitchJi]

New ‘ultra-fast 350 kW charging stations’ for EVs to be deployed in Europe in partnership with Audi, BMW and others

Ultra E, a project born out of an alliance between European carmakers, utilities and other companies, announced today the deployment of 25 new charging station for electric vehicles along the trans-European transport network (TEN-T).

The group is referring to the stations as “Ultra-Fast-Charging” and claims that they have a power output of “up to 350 kW” or more than twice the capacity of the currently most powerful DC fast-chargers available.

The network will be using the CCS charging standard and it will be connecting the Netherlands, Belgium, Germany and Austria.

Currently, there is no passenger electric car capable of charging at a rate anything close to 350 kW, Tesla’s vehicles have the highest capacity at 120 kW, but in the meantime, the network will be used by electric buses and trucks which are starting to be deployed.

Electric cars will also be able to use the system with a charge rate of 50 kW, but the Ultra-E alliance expects that passenger cars capable of charging at 350 kW will arrive by 2018 – when the project is expected to be completed.

We are talking about adding around 190 miles (300 km) of range in about 20 minutes.
<Snip>

I think if nothing else I bet this will trigger SC improvements.

 

[esk8mw]

It is clear to me that you have never worked at a real tech company. The answer can be technically defensible but fundamentally untrue. Something failed with the Silveo effort. Perhaps simply capital availability. Perhaps the fundamental module design. Or perhaps scaling manufacturing.

Critical investors thread would not constantly overlook the obvious. Perhaps these sorts posts can be moved to a non-investors forum. Perhaps a new "why I'm crazy for Tesla" section. Then this thread could actually include mostly critical thinking that actual investors apply to stocks.

No, actually I've worked for companies of all types, fast moving tech (bigger and smaller than SCTY/TSLA) included. IR is taken seriously across the board and that goes double for a company whose every move is in the news. Giving it another read, this is a statement to a reporter. So, consider that the PR department has also vetted the statement.

Look, you are taking words directly from the company (which were vetted by someone important) and either saying they are outright lying/clueless or otherwise twisting them beyond all recognition. The statement is quite clear and the onus is on you to bring evidence to the contrary. Your evidence was that the IR department is deceptive or stupid - great critical thinking!

It's pretty hilarious that you'd prefer to exile me - who actually works with companies in these exact capacities every day and shares information about the process on a regular basis - to a separate "I'm crazy about Tesla" thread so you can engage in this super serious "critical thinking from actual investors."

 

[techmaven]

2 questions:

1. Are we sure that 16Q2 was a 0 for ZEV? I didn't see a number in the letter and I know he complained about credits being worthless, but that doesn't necessarily prove the number was 0. Either way, probably a small number so maybe doesn't matter.

2. Even if a ZEV is worth $4k, isn't it possible they sold for far less, given Elon's "pennies on the dollar" statement, or am I missing something?

Definitely was not zero, but Tesla didn't break it out. How much revenue must it have been in order for them to break it out?

Automotive revenue includes revenues related to deliveries of new Model S and Model X vehicles, including internet connectivity, Supercharger access, and specified software updates for cars equipped with Autopilot hardware, as well as sales of regulatory credits to other automotive manufacturers, amortization of revenue for cars sold with resale value guarantees, and Model S and Model X leasing revenue.

It is definitely categorized as cash flow from operating activities, but likely lost in the accounts receivable?

 

[esk8mw]

Yeah, that's a crap ton of credits. Tesla only sold ~600 in 2014, ~1500 in 2015. However, it is very unclear how much each ZEV credit is worth... it isn't fixed. Selling 80,000 is a crap ton.

Whoa again. Well, I think it's clear they aren't selling for the full $4,000. I bet his pennies on the dollar rant was occurring right as they were selling the Q3 credits (Aug 3, 2016). Hopefully this was hyperbole and the credits were sold for at least, say, 50% of the $4k. I'll take an extra $150 million, please!