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Papafox - I'm a big fan of your posts. Please keep them coming. I'd just add to your comments that (given the volatility) there is lots of premium in the weekly and monthly options of TSLA. So longs and other big market makers that write calls/puts to the marketplace are sometimes incentivized to keep TSLA within a tight range so they can keep the weekly and monthly premiums to themselves. You see this constantly with stocks like AAPL and terms like option pinning and max pain are coupled with surprise media attacks on the stock to bring or adjust price to a certain spot to get that magic price achieved. It's not a conspiracy theory - it happens all the time. Trust me.
There are lots of comments about $8K AP 2.0 and $35K M3 base model.
Consider this: What if demand for 2.0 hardware is sufficiently higher than M3 capacity (Fremont/GF)?
Should Tesla honor orders on cars that are ordered without AP 2.0? Maybe they will just mandate it? or just give some ridiculous wait time like 2 years, or worse, make it indefinite?
With or without Tesla Network if people are willing to fork over the AP 2.0 price. All bets are off. The $35K car simply may not ever happen. Maybe it exists only in theory.
Consider this: What if demand for 2.0 hardware is sufficiently higher than M3 capacity (Fremont/GF)?
Should Tesla honor orders on cars that are ordered without AP 2.0? Maybe they will just mandate it? or just give some ridiculous wait time like 2 years, or worse, make it indefinite?
With or without Tesla Network if people are willing to fork over the AP 2.0 price. All bets are off. The $35K car simply may not ever happen. Maybe it exists only in theory.
racer26
Active Member
You've missed the boat.
The hardware is not an option. All cars leaving Fremont get the hardware. Period. The only option is activation of the software.
Theoretically, Tesla could allow your car to join TN even if *you* didn't take the option. The car is capable of it, and it could just not let you use it in self-driven mode.
hardware like cameras and the nVidia processors can be produced in large quantities, easily several million in short order like 4 to 6 weeks. Have you noticed how many smart phones are made each year? Over 1 billion each year! They all have processors and cameras. The factories in Asia can produce them easily. So, the electronic hardware can never be a bottleneck for Tesla.
He's missed it twice, because that's not even the mission of the company - it's to transform the transportation industry as quick as possible to EVs. The car driving itself is just a feature that came along with all of this.
Yes it is a promising future but there are also many obstacles ahead. First you need the tech on the level of at least as capable of human in any condition, then you need to prevent driver-less specific problems that may rise, then you need to persuade regulation over the world accept it, then you need to wait the entire society considering this socially acceptable, then you need Uber not figuring out the tech by then.
200/20. That's called pinning. Good job Wall Street guy with multiple screens on your desks and a nice little black box of High frequency trading. Wish the SEC would catch these guys once and put them in jail
Navin, Thanks much for this post. A muted finish to the day is exactly what we got. With a close at 200.09, there's not much gain in exercising a 200 call option, and of course 200 put options that expire today are worthless. What I like is that TSLA closed in the green above 200 today, which is a really nice setup for Monday morning's amateur hour trading.
Edit: With all the time value that disappeared with 200 calls and puts with today's expiration date, the big dogs who sold those calls and puts were indeed the winners
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Quick question. Analysts expectations of Q3, did they come to their conclusion before or after EM revealed the delivery numbers? Is it possible that they increased expectations after finding out how many vehicles were delivered, raising expectations and making it more difficult to beat?
Basically, I am really, really not in a position where I can take a negative ER right now.
Basically, I am really, really not in a position where I can take a negative ER right now.
But their product is not continuously online. They can do it but yet again they are behind.
Wow... what an exhilarating finish. The bears had pushed the price down to $199.85 with 2 minutes to go, and the ticker was flying as the bulls then mounted a final push and went over 200 to 200.10-200.15. Bears then mounted yet another counter-attack that failed.
14,648 $200 puts expired worthless, 11,158 calls at $200 were ITM. Of course, the actual prices of both options had cratered, so most people that held either one watched their values go to near zero anyways. But one side got to exercise and retain their value, there bear side watched it go completely worthless.
PS, off topic: The war over AAPL was more interesting to me today... especially how it was fought hard over no man's land.
14,648 $200 puts expired worthless, 11,158 calls at $200 were ITM. Of course, the actual prices of both options had cratered, so most people that held either one watched their values go to near zero anyways. But one side got to exercise and retain their value, there bear side watched it go completely worthless.
PS, off topic: The war over AAPL was more interesting to me today... especially how it was fought hard over no man's land.
Just for fun, but also to get a feel for what the general vibe is.
Anyone want to guess what will happen on Monday? Will some random analyst downgrade Tesla? Will someone significant upgrade Tesla based on new information? Will Tesla pre-announce earnings?
Anyone want to guess what will happen on Monday? Will some random analyst downgrade Tesla? Will someone significant upgrade Tesla based on new information? Will Tesla pre-announce earnings?
racer26
Active Member
Serious green side strength on the 200 number. Maybe the shorts really are running out of motivation to keep it below $200.
I sure hope Elon's got the hurt cannon as loaded as I think he does for the ER next week.
I think ZEV alone is prepped for a big surprise nobody but a few of us here seem to be expecting. Tesla sold a little less than twice as many ZEV credits this year as in any year previous. Last year, TSLA earned ~$180M selling credits. So far in the preceding 3 quarters (the ZEV credit reporting window is a quarter out of sync with TSLA's fiscal year), we've sold ~$65M.
There is a lot of ways to calculate it, but:
Option A) We sold all those credits in the previous quarters for $65M and we got nothing this quarter for them much like 2Q16. $65M / 80,227 credits sold = $810/credit. This is a hard floor on what we could have gotten for the credits. In the middle of 2Q16 the rules changed for ZEV credits, meaning the number required by other automakers in 2017 and 2018 is reduced from what it was. This may have reduced the value of ZEV credits starting in 2Q16.
Option B) The credits sold in 4Q15 and 1Q16 were sold at around about the then going rate of $3500-4000, we sold hardly any in.2Q16, and the remainder were sold in 3Q16 for some lower amount. I expect this is what happened, as prior to the 2Q16 changes, there was no reason for the value of a ZEV credit on the open market to be any different. Lets assume we sold those 4Q15 and 1Q16 credits for $3750. $65M / $3750 = 17,333 credits sold. 80,227 - 17,333 = 62,894 credits left to sell in 3Q16. If we managed to still get the $3750 for them, that would be $235.8M of juice to the bottom line in 3Q16. Even if we got 50c on the dollar to what we used to get, that still be ~$118M of juice. With 149.8M outstanding shares, $118M of juice represents +$0.787 EPS on top of whatever we otherwise would have earned assuming $0 from ZEVs. We know for a fact that we sold them for at least $810/credit.
I believe the near-term loosening of the CARB restrictions (because its back with a vengeance in 2019, and its still unclear if the big automakers will be able to generate enough credits on their own to comply then, so they're gonna want to stockpile credits in this lull) may have reduced the market value of a ZEV credit somewhat, but I don't think that effect will be very big. I expect we will see around $1.20 EPS worth of juice from ZEVs this quarter.
That, coupled with the fact we sold 24,500 cars, which should improve margins (by distributing the fixed costs over more cars) and the temporary belt tightening on the expenditures (holding back on opening new stores, etc). I expect we may have been positive EPS before considering ZEV credits.
EDIT: Additionally, CARB was mulling over the idea of restricting a ZEV net producer like Tesla's ability to sell credits to a certain limit. That may have provided Tesla some extra motivation to accept a bit less for them right now than it otherwise would have by holding on to them until 2019 when others might clamber to buy them, in order to keep Tesla's inventory of credits it doesn't need low, rather than get stuck with a pile of credits you're forbidden to sell.
Tesla retorted that to restrict credit transfers in such a way is ridiculous, and unfairly punishes those doing the most to achieve CARBs goal of widespread adoption of ZEVs. I tend to agree.
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True, i meant it more in the context of investing in mobileye over the next few years, big autos could look at the success of Tesla and start working on replacing mobileye in the next 3-4 years with their own driver assist systems.
Point taken. But my point is on the revenue side.
What if Tesla prioritizes orders which pay for AP? and enough number of people pay for it that capacity is fully used? Should Tesla deliver cars to people who don't ask (and thus pay) for it?
A $35K car may not exist at all in that case. The starting price is $43K if AP payment effectively becomes mandatory.
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