Short-Term TSLA Price Movements - 2016

[Jayjs20]

I dumped all my shares at 184 today. Looking forward to tomorrow's volatility. I hope we run into our good friend 'sub-180' again for a brief moment. I'm counting on you, bears.

Anyways, what are people's thoughts on what will happen to the SP post-merger? Bumps and dips aside, it's been surprisingly horizontal since Monday. I still hold fast to the idea that there are a substantial amount of people waiting on the sidelines until the uncertainty of the merger passes before jumping back in. TSLA is still one of the most watched stocks and I imagine people with large amounts of spare change are aware of the 16B~ in preorders and what that will do to the stock price come next year.

 

[ohmman]

So I brought some chips to this thread, but the truth is that I'm here for the dip. Let's see if anyone brings it tomorrow.

 

[Tenable]

I dumped all my shares at 184 today. Looking forward to tomorrow's volatility. I hope we run into our good friend 'sub-180' again for a brief moment. I'm counting on you, bears.

Anyways, what are people's thoughts on what will happen to the SP post-merger? Bumps and dips aside, it's been surprisingly horizontal since Monday. I still hold fast to the idea that there are a substantial amount of people waiting on the sidelines until the uncertainty of the merger passes before jumping back in. TSLA is still one of the most watched stocks and I imagine people with large amounts of spare change are aware of the 16B~ in preorders and what that will do to the stock price come next year.

I completely understand the sentiment, I also expect a post merger dip and I'm down.. well, a substantial amount of money. However, we are in the low 180s, I think we have far more upside then downside and trying to time the short term movements of late seems to be quite a difficult endeavor. I'm holding my shares and buying some inexpensive put protection, however, I've been crushed so far this year, so of course, its your money, make the most informed decision that you're able. Just giving you my thoughts.

 

[sundaymorning]

I dumped all my shares at 184 today. Looking forward to tomorrow's volatility. I hope we run into our good friend 'sub-180' again for a brief moment. I'm counting on you, bears.

Anyways, what are people's thoughts on what will happen to the SP post-merger? Bumps and dips aside, it's been surprisingly horizontal since Monday. I still hold fast to the idea that there are a substantial amount of people waiting on the sidelines until the uncertainty of the merger passes before jumping back in. TSLA is still one of the most watched stocks and I imagine people with large amounts of spare change are aware of the 16B~ in preorders and what that will do to the stock price come next year.

My guess is that regardless of whether we merge or not, TSLA will begin to slowly move upwards post merger. Having a sense of direction, for the sake of both companies (more so for SCTY) eases investor anxiety. A Tesla beat 4th Q combined with guidance somewhere around 120,000 S&X will certainly restore investor confidence. December is going to be volatile though.

 

[AlMc]

That's a good point, maybe they will do some sort of presentation, maybe a big Indian wedding ceremony?

did I miss another EM tweet? ^^^he is getting married again?^^^

Hope all goes well tomorrow. While I don't like the timing of the merger at this point in TM's history, I do want it to go through and voted 'affirmative'.

 

[tander]

Just a heads up, the current parity price for SCTY is 183.93 * 0.11 = 20.23 not 24.5ish. I wish it wasn't so, but it is

Yes sorry I keep getting stuck on the price from the first merger proposal iteration.

did I miss another EM tweet? ^^^he is getting married again?^^^

Hope all goes well tomorrow. While I don't like the timing of the merger at this point in TM's history, I do want it to go through and voted 'affirmative'.

Well he is marrying two of his children to each other and and Indian wedding ceremony would be just about the coolest shareholder meeting ever.

 

[Krugerrand]

@Papafox, you make the gas engine sound like a nuclear reactor! 99% of the cars sold today, and 99..5% of cars on the road are still ICE cars and those people are doing fine.

Those people are not doing fine. They are dying along with the planet.

 

[larmor]

It is interesting that they are webcasting the meeting. No reason to do that if it is just a perfunctory announcement of the voting results.

It would be of great interest to know what projects that both TM and solarcity are working on, that can now come under one umbrella, and perhaps that will be presented after the merger.

 

[Krugerrand]

Sounds an awful lot like Elon's entire ethos of not doing things unless the engineering first principles say that its the optimal solution.

Lockheed and Boeing build their rockets using all MIL-spec parts (which are much more expensive) because the rocket goes to space, and space is harsh.

SpaceX uses MIL-spec parts only where they are actually required and uses consumer-grade parts wherever possible - by actually testing the consumer-grade parts and seeing if their performance will meet the needs, instead of just assuming that space travel requires MIL-spec parts.

Yes, and I've heard SpaceX explain their approach in this manner (excuse my clumsy wording): Everyone else builds their rockets to never fail, ever. SpaceX builds a rocket expecting something to fail at some point and thusly builds in 'backup' systems, redundancies and things of the like. IE. the rocket can still get the payload to orbit if up to 3? of the 9 engines fail. It costs way more to build something to never, ever fail vs building something with backup plans in mind.

 

[Krugerrand]

Talking of Tweets... So what's this Full Plaid / Outrageous / Irresponsible mode?

View attachment 202549

Now we need an 'ACK!' option button.

 

[Krugerrand]

1000 years ≠ short term.

Well...

The earth is about 4.5B years old. In that context, 1000 years = VERY short term.

 

[Krugerrand]

The 2.5% premium is the built in 'risk' in case the merger vote is 'no'.
Unlikely to see 'no' but strang things can happen when people vote

Agree. But back to thread topic: I was wrong about my short term SP prediction. Stock went up the next day, but then went back down the next day. Interestingly enough, it was a win-win on all counts because I held under both circumstances and thusly continued to pat myself on the back.

 

[Krugerrand]

Elon owning $8 Billion worth of SpaceX is huge. Does it give you any ideas how he could raise $1 billion for Tesla if Tesla ever got in a crunch?

I couldn't get the link to work, but how did he go from 24-27% of SpaceX (last I recall) to now 54%? Did I fall asleep at some point and not realize I had?

 

[theschnell]

I dumped all my shares at 184 today. Looking forward to tomorrow's volatility. I hope we run into our good friend 'sub-180' again for a brief moment. I'm counting on you, bears.

Anyways, what are people's thoughts on what will happen to the SP post-merger? Bumps and dips aside, it's been surprisingly horizontal since Monday. I still hold fast to the idea that there are a substantial amount of people waiting on the sidelines until the uncertainty of the merger passes before jumping back in. TSLA is still one of the most watched stocks and I imagine people with large amounts of spare change are aware of the 16B~ in preorders and what that will do to the stock price come next year.

You're brave. I still feel like take-off could happen anytime without warning. So I'm just hanging on and waiting. Obviously my November calls are toast. So just hanging onto shares and waiting.

 

[vgrinshpun]

Regarding the shareholder's meeting tomorrow, it is not inconceivable that they do a presentation on the state of the companies/merits of acquisition along the lines of "Tesla and SolarCity" Blog Post. It seems that there could be some bits about the state of the companies that might prove news worthy, for example an update on weekly production for Tesla, or a follow up on status of any of the large solar farm/BES projects that SolarCity VP of Development, Energy Storage and Microgrids indicated are under consideration, with any of one of them potentially be of the size to "double what the company has installed".

Hopefully the fact that Elon is pretty chatty today on Twitter bodes well for the tomorrows meeting. Here is funny comment from the Mom:

 

[Xpert]

I completely understand the sentiment, I also expect a post merger dip and I'm down.. well, a substantial amount of money. However, we are in the low 180s, I think we have far more upside then downside and trying to time the short term movements of late seems to be quite a difficult endeavor. I'm holding my shares and buying some inexpensive put protection, however, I've been crushed so far this year, so of course, its your money, make the most informed decision that you're able. Just giving you my thoughts.

A lot of us and possibly hedge funds are waiting for the merger to be over tomorrow with cash on hand. I'm also hoping for a dip tomorrow but I think any dip will be small as anyone who didnt like the merger has likely already lightened up their holding.

My take is that SP should be stabilized after tomorrow, clearing the way for longer term investors to jump in, with or without a small dip. How much lower can SP go in short term vs. massive long term upside? Remember the last cap raise Tesla was valued at $215, that was before the Q3 beat and 2016 delivery target likely also beat. The 15% drop to $184 since then has been way, way overdone IMO.

The only FUD left is Tesla will need a cap raise soon and fear of dilution to ramp up M3, but unless Elon has been lying they won't need one unless the stock goes back way up.

There are plenty of catalysts in the next year it is totally worth the risk if you are holding shares or LEAPS.

 

[CALGARYARSENAL]

A lot of us and possibly hedge funds are waiting for the merger to be over tomorrow with cash on hand. I'm also hoping for a dip tomorrow but I think any dip will be small as anyone who didnt like the merger has likely already lightened up their holding.

My take is that SP should be stabilized after tomorrow, clearing the way for longer term investors to jump in, with or without a small dip. How much lower can SP go in short term vs. massive long term upside? Remember the last cap raise Tesla was valued at $215, that was before the Q3 beat and 2016 delivery target likely also beat. The 15% drop to $184 since then has been way, way overdone IMO.

The only FUD left is Tesla will need a cap raise soon and fear of dilution to ramp up M3, but unless Elon has been lying they won't need one unless the stock goes back way up.

There are plenty of catalysts in the next year it is totally worth the risk if you are holding shares or LEAPS.

My guess is one last plunge to the downside to frustrate those who think the merger will bring stability. After that selling, a sustained prolonged rally that will make your head spin. Good luck to all.

 

[DaveT]

Your cash flow analysis in the posts quoted below is just dead wrong because it deducts from cash flow some very big ticket items like depreciation and amortization that are built into Tesla's income statements as "costs" but do not affect cash flow at all.

Since Tesla's $458M in positive cash generation in Q3 (even excluding ZEV credits, which also are cash) could raise the roughly $2 billion in capital you suggested is needed for the Model 3 ramp if repeated over the next four quarters, it would be helpful if you would acknowledge that your cash flow analysis, particularly the treatment of depreciation and amortization, was incorrect.

Actually, I did want to thank you for pointing this out through your posts. I did miss that Tesla is including depreciation and amortization expenses into their Cost of Revenue, so I definitely was wrong about this. Sorry I didn't reply earlier.

This is an important issue. If Tesla can fund most or all of the capital costs needed for Model 3 out of S/X sales and leases, that frees up a substantial amount of cash that it has in the bank and may generate from TE for other capital-intensive projects, such as accelerating plans for Fremont expansion, new European Gigafactory, Model Y, Tesla Semi, Solar Roof, etc.

I think there is plenty of room for legitimate debate on whether Tesla's Q3 cash generation is repeatable. I personally believe it not only is repeatable but that cash generated by S and X is likely to grow over the coming quarters, but reasonable minds can obviously differ about that.

But we shouldn't have to disagree about basic things like treatment of $280M in depreciation and amortization in Q3, which is $1.1 B projected over four quarters. So nothing to sneeze at.

I definitely agree this is important and it does look like Tesla has really turned a corner with Q3 earnings, especially with free cash flow.

Would love to hear your thoughts on why you think cash generated by S/X will likely grow over coming quarters.

 

[Ameliorate]

Disclaimer, all news we expect and mergers aside, just identifying a possible trend.
Not that I could fight my way out of a wet paper bag covered in charts but if you look at the last 2.5 years (TSLA of course)
Is there anything to this?

There's 3 somewhat distinct highs and lows
Sep 12, 2014 (279) - May 27 2015 (185) dropped 94 over 258 days
July 2, 2015 (280) - Feb 12, 2016 (151) dropped 129 over 226 days
April 15, 2016 (254) - Nov 16 , 2016 (184) dropped 70 over 216 days
So...the last couple years Tesla has seemed to trend downwards over roughly 8 months with a more violent upshot. If there's anything repeatable here we might drift lower for a bit but should be fueling up for some kind of move. Tesla feels pretty oversold to me.

-edit, this has been our most resilient downtrend of the three, losing an avg of .32c per day vs .36 and .54
Whatever that means.

 

[NicoV]

I'm not sure that's actually the case.

In a previous statement Musk said something about increasing the efficiency of the factory and specifically when speaking about improving volumetric efficiency he mentioned that the model example were chips.

I think Keller et all are there to build the "architecture" of the new better factory versions. The techniques of computer architecture with regards to packing things in well and concepts like pipelining in this case would be the goal for the new factory.

This isn't to say that they won't be making chips, they could do both, but I don't see Tesla self fabricating, I see them convincing a bunch of star computer architecture guys to move their skills into a much larger physical system. I think that would be a very compelling challenge to them.

I doubt that. It would be a waste of talent to hire the crème de la crème of the chip design world, an then let them do something anybody with a reasonably good brain could do.

I just read that SpaceX will build a massive internet in the sky sattellite network. No doubt the main customer will be Tesla. Somebody will need to build the chips for that too. (Elon Musk’s stake in SpaceX is actually worth more than his Tesla shares)