Short-Term TSLA Price Movements - 2016

[Oil4AsphaultOnly]

Why do you think is their motive in keeping positive news so secretive ? It would have prevented more FUD and damage done to the SP if released earlier as a fresh catalyst.

Also, the price isn't a catalyst on a friday after market close. This market seems to have a tendency of finding negative perspectives of every positive development. Once the elections are over, we should see a new direction in the market in general, and hopefully along with it, all this negativity, and some fresh analyst perspectives.

 

[Bgarret]

For the negative spin on the new solar roof plus Powerwall, Dana Hull in Bloomberg quotes a solar consultant who apparently doesn't understand the economics of TE:

Paula Mints, chief market research analyst at SPV Market Research, questions the economics of the new offering, which can be combined with a home battery.​

“Tesla announced a solar tile -- not new -- with battery that is priced below cost,” said Mints in an e-mail. “Basically Tesla announced another way to lose money.”​

Elon Musk Reveals Solar Roof Made of Glass Tiles in L.A.

Too bad Ms. Hull couldn't be bothered to find someone who actually knew what they were talking about when it came to Tesla's TE costs.

The Paula Mints quote caught my eye too....it was readily available from an email moments after the event and for someone who's website says they are pro-solar, it was surprisingly harsh and combative. You would think that someone working/analyzing/advocating for solar would be positive on the development of (relatively) inexpensive battery backup and innovative solar roofing - but she reacted like the granddaughter of a Rockefeller or someone on the Koch payroll. I don't like the conspiracy theories, but this was pretty discordant.

 

[SunCatcher]

The things shorts do.... as investors we just have to realize all shorts can do is talk and use "tobacco science" to validate their theory. While Elon and the team produce real results, new products, and continue to amaze/attract a strong cult following. Love it, just love it.

Some people like to build up, while others like to tear down. Some things just don't seem to change.

 

[kelevra]

The things shorts do.... as investors we just have to realize all shorts can do is talk and use "tobacco science" to validate their theory. While Elon and the team produce real results, new products, and continue to amaze/attract a strong cult following. Love it, just love it.

I worked for a small value investing fund for a short period of time and know some people in a semi professional value investing student organization which also operates an very small fund. I actually belief in value investing and like to buy shares if i feel they trade under the intrinsic value of the company. I also like buffet and so on and think there a some good ideas. But the problem with most people i know who follow buffet is they don't think for themselves. Everybody just tries to copy what buffet says and they won't even look at a stock like TSLA (for a long position), because it doesn't fit into their pattern. (no history of profits, low p/e) A lot of people don't take the time to deeply analyze TSLA and they underestimate the value of musk, the team, the products and so on. Therefore they just see positive results, which they cannot be explained by some onesided theories they learned and think it must be a scam or they try to justify their false position{Moderator deleted}. Furthermore i also think many people want to diminish TSLA because they feel threatened (Car companies and so on)

 

[Off Shore]

Koch payroll.

I think we're seeing more of that than most of us realize.

 

[ggr]

I love the way TM/EM is setting this up as a win-win for the utility companies. "Hey utilities, back our grand plan and you get more business, not less. The demand for electricity from electric cars will boost your profits." Musk indicated that he projects that 2/3rds of electricity will still be needed from utilities even after TM/SC has succeeded installing solar roofs around the country.

This strategy allows TM/SC to partner with utilities, which in fact is already happening.

Everybody wins here except the fossil fuel extractors and refiners, whose loss can't come quickly enough for the planet's environment and world peace.

Damn you EM, my head is hurting again tonight trying to wrap it around how big your vision is.

I was about to write something to this effect. What Elon said has completely changed my outlook on utilities. There is a spectrum of utility companies, though. Some feel like home solar and storage installations are taking business away from them, and fight it. Others embrace the idea of a cooperative ecosystem. There was a utility in Australia a while ago now, back when CFL bulbs were still expensive, which sent free ones to all their customers. The logic was that if the customers switched out their light bulbs, they could avoid building a new peaker plant, and make bigger profits. I like that kind of logic a lot.

I wish I knew which utilities were smart, and which are dumb (or malicious). Some are obvious, but many just look the same.

Utilities are not going away. Quick guess based on Quick Facts: Resident Demographics| NMHC.org is that about half the population of the US lives in some kind of medium-to-high density buildings where there is no chance that rooftop solar would make much difference to them. I'm going to start trying to figure out which utilities are going to be part of the solution. Nevada is not on that list...

 

[MitchJi]

and 2 more
At these prices every single PP and PW that Tesla can produce will be sold easily. It will even leave a lot of room for the others to still sell their products. The term "Production constraint" is starting to sound very familiar for Tesla. No need for 'bean-counting' on cycling return, there is a big global market with many use cases that can not wait to order and install these TE storage products.

I think the market and analysts underestimates the 2017 TE revenues and profits by at least by one or two factors of 10. Models will need to be updated.

In fact I am about to change my opinion and now start to think that yesterday, combined by Nov. 1st, just might influence and give a nice push to the short-term SP. But the market can stay irrational much longer of course.

Sell as many as they can produce? Obviously!

An order of magnitude? From zero to anything is more than that.

I would hope that the market will figure out that the SCTY acquisition is more than a bailout now, and that combined with the November 1 information will help the ST SP , but I'm not very confident .

Maybe this will at least stop many of the SCTY merger means that Elon's is crazy or bailing out SCTY posts on this thread.

Will be interesting to see whether Tesla will reveal anything about TE projected margins on Tuesday. They have been playing things close to the vest (for good reason I believe) -- we'll see if that continues.

I think that they don't want to provide information that makes it easy to determine their pack costs. That might help give them a competitive advantage, but I don't believe that helps their mission.

One would have to be ignorant, dense, stubborn or purposely obtuse to not to get it at this point. Good thing everyone is trying to do better each and every day of their lives like good human beings.

Great description of the market!

 

[sdtslafan]

I thought the presentation yesterday was awesome, just brilliant. Who would have thought you could make roofs sexy?

I wish I understood better how Tesla will manage without a capital raise. To me it's seems absolutely necessary sometime next year and earlier is better.

Even if they sell 100,000 cars next year at 30 percent margins and 100,000 ASP, that gives them about 3 billion for
Capex, R and D, and operating expenses.

What will Capex be next year? Given it will be roughly 1.8 billion this year, don't we think it will be at least 3 billion next year with model 3 and gigafactory not to mention solar city? Possibly more?

What will operating expenses be next year, 2.5 to 3 billion with solar city?

Another several hundred million for R and D?

So won't they need like 4 billion to make it through next year? Is Tesla energy going to help with this?

I'm not trained in this stuff so please excuse me as I am sure I am off. But is this the big picture?

Who not just do a cap raise now and be done with it? Intrinsic growth from then on? The pie is massive so it's ok if the pieces are smaller.

Isn't this why the stock isn't rising, because tesla still needs a lot of money and we don't know how it will get it?

One gigafactory producing at high volume, model 3 line built, and buffalo operational, the game will be over

 

[AudubonB]

Moderator Input:

Especially on weekends, all in the Investor Forum have a lot of latitude to probe facets of the Teslaworld other than stock prices.

HOWEVER....

....the last pages of posts have shown that a very large number of you would be far better off going to certain other portions of the TMC forum - learning from and asking questions of those frequenters - rather than engaging in some really unfortunate, up-blind-alley, misleading and worse speculation about Tesla Energy.

So, as a favor both to yourselves, to other forum members and to this moderator, please spend some time over there. A lot of us have a very large amount of real-world experience with solar energy, with home applications, with off-grid systems - and many, many of the questions that have been posed here have good answers there; and a lot of the excruciating-to-have-to-read comments made above would not have been posted had their authors read up on the subject before commenting.

Thank you....

 

[SBenson]

I think if the solar roofs were operational that Elon would have mentioned that and even showed the power generation. As is though, it seems these were early proof-of-concept roofs that show that solar roofs can look amazing. I think there's still a lot of work to get done.

Btw, I was at the event last night. Hanging with @FredTMC and his wife. Fun time. Great event with great food and not too crowded.

The roofs looked amazing! Even better in person. I couldn't tell that they were solar roofs before the presentation. Out of the 4 houses I speculated that maybe one or two of the houses might have solar roofs but "for sure" not all of them. When Elon said they were all solar roofs, people around me were in shock and disbelief. Guy next to me kept saying "holy sh**, they look amazing." He couldn't stop repeating himself.

The roofs looked better than normal roofs. Everyone at the event was impressed at how good the roofs looked.

I spent a lot of time talking to a Tesla engineer who was answering questions about the new powerwall. The Powerwall 2.0 looks like a hugely improved product over Powerwall 1.0. Looks like the inverter is a 5000 way DC to AC inverter so that battery power can be fed into house (or grid). However, of installing solar you'll still need an inverter for your solar panel system, I was told.

The Tesla engineer said that Powerwall 1.0 install costs we're roughly $7-8k, largely due to the need to install another inverter. So with the new Powerwall, install costs go down dramatically since the inverter is built-in the the Powerwall.

I was also told the solar roof was largely a Solarcity product, meaning development was largely done at Solarcity.

I agree with this assessment, there's still some work to done. Which is why they stated it won't be available until summer of 2017, which means late 2017 or early 2018. But really, who cares, they're first mover yet again, with a different product people will buy.

I was told by a Tesla employee that either PowerPacks or Powerwall (can't remember which) will be produced in December and shipped out in January. When asked if they'll be produced at Nummi or the GF, the rep declined to say..

There was a fella who was Anti Tesla, anti Elon, anti scty in the crowd. He sat at my table and sparked an awkward conversation, claiming that he worked for the solar industry. He thinks the plant Buffalo plant will remain empty, says the roof designs won't work, etc. After listening to him ramble on for 5 minutes, I finished up my last burger, and told him "don't bet against Elon." His response was, "yea this is the wrong crowd to do that in anyway." I also told him "I'll be buying more shares come Monday," and left. The look on his face was priceless.

The things shorts do.... as investors we just have to realize all shorts can do is talk and use "tobacco science" to validate their theory. While Elon and the team produce real results, new products, and continue to amaze/attract a strong cult following. Love it, just love it.

Very much appreciate this first hand information. Confirms the expectations we have had.

 

[larmor]

I worked for a small value investing fund for a short period of time and know some people in a semi professional value investing student organization which also operates an very small fund. I actually belief in value investing and like to buy shares if i feel they trade under the intrinsic value of the company. I also like buffet and so on and think there a some good ideas. But the problem with most people i know who follow buffet is they don't think for themselves. Everybody just tries to copy what buffet says and they won't even look at a stock like TSLA (for a long position), because it doesn't fit into their pattern. (no history of profits, low p/e) A lot of people don't take the time to deeply analyze TSLA and they underestimate the value of musk, the team, the products and so on. Therefore they just see positive results, which they cannot be explained by some onesided theories they learned and think it must be a scam or they try to justify their false position{Moderator deleted}. Furthermore i also think many people want to diminish TSLA because they feel threatened (Car companies and so on)

This is a great insight on investor and analyst research and behavioral economics for investors.

 

[RobStark]

Even if they sell 100,000 cars next year at 30 percent margins and 100,000 ASP, that gives them about 3 billion for Capex, R and D, and operating expenses.

More like 120k Gen II vehicles.
~30k Model 3's.
Energy Storage.
Solar City. It has revenue as well as cost.

Who not just do a cap raise now and be done with it? Intrinsic growth from then on? The pie is massive so it's ok if the pieces are smaller.

Elon, IMO, doesn't want to do another down round at 200 when last one was at ~215.

Wall Street thinks Tesla desperately needs cash so offers it only on bad terms. Elon is trying to convince Wall Street it does not need new capital so Wall Street will offer it on good terms.

My guess is Tesla can stagger to the Model 3 launch without new capital but drain cash on hand to ~500M. One very bad unforeseen event could really cripple Tesla. So, yes, better to do capital raise as soon as terms are favorable.

 

[EinSV]

More like 120k Gen II vehicles.
~30k Model 3's.
Energy Storage.
Solar City. It has revenue as well as cost.
<snip>.

I would add a couple things.

(1) $3.1B cash on hand at end of Q3

(2) Cash generation in Q3 was strong -- $597M including $$ from vehicle sales to leasing partners ($424M + $173M). It will probably be even better in Q4 due to higher margins and more contribution from TE (minus some additional OpEx from M3 ramp). More details from the Q3 letter:

Our cash flow from operations during the quarter was $424 million due to increased sales, coupled with careful expense management. Free cash flow was $176 million as we invested $248 million in capital expenditures to increase production capacity, accelerate Gigafactory construction, and expand customer support infrastructure. Capital expenditures remain on plan to help us reach our goal of producing 500,000 vehicles in 2018. In addition, we collected $173 million of cash inflows from vehicle sales to our bank leasing partners, which are not included in cash flow from operations. With our strong cash flows this quarter, we were able to reduce the balances on our borrowing facilities by $178 million and settle $422 million of conversions on our 2018 convertible notes, strengthening our balance sheet. After this $600 million in debt repayment, cash and cash equivalents were $3.1 billion at quarter end, compared with $3.2 billion at the end of Q2.​

(3) On the earnings call, Elon said that once the M3 production is up and running, it will generate capital rather than consume capital so the capital-hungry period for Model 3 ramp may be shorter than many expect.

 

[tander]

So with q3 earnings last Wed., the solar/battery stuff last night, Before The Flood hitting tomorrow, the merger info session on Tues, the election, the merger; does anybody NOT see TSLA moving significantly up in the next couple weeks? If so why? Please be specific, not just general cynicism or sideways fatigue.

 

[Krugerrand]

1) Elon specifically compared it to the cost of asphalt roof plus electricity bill.

2) This wasn't a trade show for solar installers nor roof contractors to discuss wiring, code requirements etc etc etc.

3) When Elon spoke of the Tuscan style pieces he specifically spoke of non-solar blank pieces. Dark pieces had solar cells and light colored were blank.

It's almost like the poster didn't actually listen to the presentation, or doesn't understand English, eh?

 

[kelevra]

This is a great insight on investor and analyst research and behavioral economics for investors.

thx. i want to emphasize that i am just a student who worked for a short period of time for this fund as an intern.(and i know some people) those are only early (for me unexpected and a little bit frustrating) observations. another reason for all this BS out there is in my opinion that some shorts lie, to promote opinions that exercise pressure on the SP. actually i think some also lie when they already plan to cover their positions.

my original statement and questions about share dilution and big sellers seems a bit of topic right now, because everyone talks about the friday event. but this is actually the Short Term SP section. is there anyone who knows more? the post is at the end of page 2094. thx a lot

 

[NOLA_Mike]

If possible, can you provide further breakdown if any.. specially state or other incentives or rebates.. I tried looking for a system in the past year in FL and the price is nowhere near what you are paying. Thanks

The $28k was before any incentives or rebates. Of course it is eligible for the 30% Federal Tax Credit and Louisiana had a very generous 50% Refundable Tax Credit up until last year when they went broke and limited the money/discontinued it.

The irony of that is the state is blaming being broke on the downturn in the oil industry.

 

[kelevra]

So with q3 earnings last Wed., the solar/battery stuff last night, Before The Flood hitting tomorrow, the merger info session on Tues, the election, the merger; does anybody NOT see TSLA moving significantly up in the next couple weeks? If so why? Please be specific, not just general cynicism or sideways fatigue.

i think it's hard to figure out how SP moves in the short term. you'll never know how people react. critics will say the roofs doesn't work and the event was just another big selling show. it's at least a chance that trump will get elected. There may be also huge sell offs after a successful merger because investor who didn't like the deal and wanted to exit still had some shares.

 

[AudubonB]

Here is my attempt at an answer to Tander:

I keep tabs on only a few of my former investment management colleagues - for those of you new here, I've been (very) Deep In The Wilderness for many, many years now.

However, the sense that I get from that small sampling is that, disregarding any effects directly attributable to the upcoming US elections, the forces weighing AGAINST a short- and medium-term upward movement by TSLA include:

* Categorization. For better or for worse, institutional investors have an inherent dislike of conglomerates, and industrial conglomerates are easier to dislike than hi-tech or service conglomerates. It is not far-fetched to envision the following hypothetical conversation or mindset at CapServicesRUs: "Is Tesla an automotive company? Nah, not really. Is it an power distribution company? Naah, not really. Is it a solar energy company? Well, no, not really. So can I put it on the Ignore Shelf over there and spend my time considering something that is a car/widget/whatever company? Yeah - that's the easy way out."

* Why wait for Jam tomorrow when I can have Jam today? Profits are good. Profits are neat. Profits are what fund managers like to see in the companies they choose for their portfolios. For all the talk about Searching for the Next Big Enron errr...Chiptole err...FedEx/Microsoft/Apple/Netflix, what an institutional investor really wants to see is some demonstration of continued profits - and growing ones, too. Risk Aversion is a very, very important parameter on Wall St: your job may DOES depend on it. The number of true investor iconoclasts, like Ron Baron, are very few.
Once Tesla does have a consistent string of quarterly profits there should follow a wave of investors who no longer have a built-in reason to ignore the company. In that same regard, if I recall correctly such a string is the remaining requirement for TSLA to join the S&P500, upon which entry many, many hundreds of billions of dollars of index funds will be required to hold positions in TSLA.

* Where's the Big Mo? I haven't a firm handle on how many institutional investors have as a key parameter "momentum", but I do know there are a lot of Momentum Investors out there. With TSLA being stuck in the $200-or-so channel for two years now, that fraction of fund managers will not - CAN not - invest in Tesla. Until it changes.

So: those fund managers, and those of us individual investors, who CAN invest for the long or really long term can use this lull to our benefit. I always will hearken back to my mentor (and one of TSLA's Angel Investors, coming in at the Dark Days of year-end 2008) who did remind me "I'm willing to wait for the long term....just not for the hereafter". Tesla does need to come through with its promise of changing the world - eventually. What does that mean for what ostensibly is a Short-term thread? Well, I did invite - by showing all what I had done - others to come in late last month at $154.35 (I "cheat": bought a big hunk of SCTY at $16.97...so you bet I want that merger to go through!)

 

[SBenson]

A comprehensive report on the solar roof unveil from Green Tech Media

Elon Musk Unveiled A Solar Roof and Didn’t Address Any Pressing Questions