Short-Term TSLA Price Movements - 2016

[mmd]

Here is an in-depth Model X review out today. Is this the first such video? The FWDs work perfectly here. Here is to hoping that they are much improved now.

2016 Tesla Model X P90D Signature w/Ludicrous Mode Power Up, Test Drive In Depth Review - YouTube

The mood here has become pretty negative lately. I think, if cash burn can be reduced significantly so Tesla doesn't need to raise cash in a year, things should get better. The GF spending can be cut back a lot. There is no need for a large batter factory right now. Plenty of cells coming from Panasonic. I believe, the Model X, FWD and the autonomous driving are what led to the massive cash burns in the last few quarters (well, a majority of it anyway). Here is to hopes that next 3-4 quarters, Tesla can preserve its cash.

 

[uselesslogin]

wait... .35... that would be amazing!

:biggrin: I think the referral program is the only thing standing in the way of that number. Basically taking a 2% hit on margin for the referral program removes $.25 EPS.

 

[FredTMC]

:biggrin: I think the referral program is the only thing standing in the way of that number. Basically taking a 2% hit on margin for the referral program removes $.25 EPS.

Tesla's said before that referral program hit is non-existent because brick and mortar store cost is largely offset

 

[dmunjal]

Is it just me, or is the whole macro environment just a huge over-reaction to china and oil? The price of oil is down due to _deliberate_ over-supply by Saudi Arabia, NOT reduced consumption due to global recession. So if europe is recovering, and China's market is simply maturing (5% growth is pretty good for the 2nd largest economy in the world - $10 trillion in 2015), then isn't there a false correlation between oil prices and a global recession? Aren't we in the midst of decoupling oil from energy consumption?

If my thesis is right, and this is a bear-market in momentum only, then a reversal should be expected as soon as people realize there isn't an economic meltdown pending. When can we expect the light-bulb to turn on? Or are there recession indicators that I've missed? Aside from oil, and China's manufacturing sentiment being slightly below 50, what else is there?

As I said before, this has nothing to do with China and oil. Those are both symptoms of a stronger dollar. The Fed stopped QE a year ago and stopped ZIRP last year. They are also telegraphing 4 more rate hikes this year. All this has taken the dollar to new highs against all currencies. Except China which is pegged to the dollar. Because of this, their export business has slowed down, especially with their neighboring Asian trading partners. Oil is also hit by the rising dollar. Yes, there is oversupply but that's been the case for some time now.

The reversal will come when the Fed recommits to cheap money, ZIRP/NIRP, and more QE. Let's see what Yellen says tomorrow morning.

 

[dmunjal]

Okay, I'll bite. The FED raising interest rates would be to slow down the economy and keep inflation under 3%. The historical reason for this was that when the economy grew quickly, consumption would increase and commodity prices would go up with it, ergo inflation going up. So generally speaking, the FED raising rates should actually be seen as a positive sign, since it indicates confidence that the economy is growing and inflation needs to be kept in check. With CPI being down, there should be no need for the FED to act. If the FED lowers rates, that would be an indicator of a slowing economy, but we're not seeing that, and unemployment is pretty good to boot. Raising rates would only reduce the amount of capital available to do "work".

I'm pretty sure that's how others would interpret a rate raise as well, so I can't agree that the FED rate is the boogeyman that's scaring everyone.

They raised rates in December HOPING that the economy was getting better. They were obviously wrong.

 

[eloder]

They raised rates in December HOPING that the economy was getting better. They were obviously wrong.

The economy is still getting better. The stock market != the economy. 8 year unemployment low, second biggest wage growth in 8 years, and how many years of continuous private sector job growth (with it being fairly strong in recent time) indicates a strong US economy. Strong US dollar does indicate a strong US economy too, since we're a net consumer society and net importer, rather than a net exporter. Even when that hits companies like Tesla (which sucks, don't get me wrong), the economy and consumers as a whole have a lot more purchasing power.

Cheap money forever is a bad policy that creates bubbles, or worse creates depressions when there's no ammunition to counteract an actual recession.

Anyways, the markets didn't die when the rates were raised. They started nosediving in 2016, not December.

 

[dmunjal]

The economy is still getting better. The stock market != the economy. 8 year unemployment low, second biggest wage growth in 8 years, and how many years of continuous private sector job growth (with it being fairly strong in recent time) indicates a strong US economy. Strong US dollar does indicate a strong US economy too, since we're a net consumer society and net importer, rather than a net exporter. Even when that hits companies like Tesla (which sucks, don't get me wrong), the economy and consumers as a whole have a lot more purchasing power.

Cheap money forever is a bad policy that creates bubbles, or worse creates depressions when there's no ammunition to counteract an actual recession.

Anyways, the markets didn't die when the rates were raised. They started nosediving in 2016, not December.

I don't actually believe the job market is all that great. Most new jobs are part-time, low wage services, and other minimum wage jobs. That's why wages have remained stagnant throughout the recovery.

As for the 2016 timing, I think that was more related to taxes. And it takes time for people to digest what the Fed's intentions are.

 

[uselesslogin]

Tesla's said before that referral program hit is non-existent because brick and mortar store cost is largely offset

It isn't like they closed stores. On a financial statement the sale was discounted $2,000.

 

[FredTMC]

It isn't like they closed stores. On a financial statement the sale was discounted $2,000.

I'm making it clear to anyone reading this what tesla said on last CC regarding referrals and its effect on margins

 

[Ocelot]

Well this is worrisome. The strong U.S. Dollar will hurt demand. A fully loaded model S in Canada pushes up over 194 000 dollars. I probably would buy puts for tomorrow , but I spent all my money on LEAPS a couple months back. Oh well.hopefully shares will recover some losses. Constantly playing the should of game in my head...

 

[sub]

I'm making it clear to anyone reading this what tesla said on last CC regarding referrals and its effect on margins

I think they were comparing it to the cost of opening a new store, not that it decreased costs at current stores. Also, every car was not sold via referral so trying to make calculations on this is pointless.

 

[FredTMC]

Janet Yellen at 10am EST on Wednesday. The show before our show.

 

[dmunjal]

Janet Yellen at 10am EST on Wednesday. The show before our show.

What Janet Yellen Could Say Tomorrow To Unleash A Market Surge | Zero Hedge

 

[stealthology]

Puzzle for you guys who want to find out when X will ramp up to ~full production. Use your imaginations guys:
Elon Musk QA with fans in Paris (2016.1.29) - YouTube

Fast forward to 4:10.

Elon: "so we have Model S in production at about 1,000 units/week, and we're trying to ramp up model X to roughly a comparable units/week, and hopefully we should be at that production level around.. well close.. maybe sometime in Q2 of this year.."

What was Elon about to say right before he said 'well maybe sometime in Q2 of this year'? 'well close..' to what? Close to the end of the year? Close to the end of Q1?

 

[dakh]

This sucks for TSLA and SCTY employees the most -- they're working long hours making the master plan a reality and they get slapped in the face by stuff they got no control over.

- - - Updated - - -

What was Elon about to say right before he said 'well maybe sometime in Q2 of this year'? 'well close..' to what? Close to the end of the year? Close to the end of Q1?

Maybe he's finally learning to take the number that pops in his head and multiply by 2 or 3.

 

[Yggdrasill]

Puzzle for you guys who want to find out when X will ramp up to ~full production. Use your imaginations guys:
Elon Musk QA with fans in Paris (2016.1.29) - YouTube

Fast forward to 4:10.

Elon: "so we have Model S in production at about 1,000 units/week, and we're trying to ramp up model X to roughly a comparable units/week, and hopefully we should be at that production level around.. well close.. maybe sometime in Q2 of this year.."

What was Elon about to say right before he said 'well maybe sometime in Q2 of this year'? 'well close..' to what? Close to the end of the year? Close to the end of Q1?

I read that as close to 1,000 units/week. (Maybe 800 units/week?) Though I can't review the video right now.

 

[Spidy]

Tesla's said before that referral program hit is non-existent because brick and mortar store cost is largely offset

I know they said it, but I don't buy this. People in Service Centers and Showrooms will be working anyway. What other cost is there on which they would save money? Where exactly does the savings come from? If at all they all have been working more in the last quarter to make that big Q4 push. Not to mention it was even possible to use the refferal code when ordering in the store.

 

[AustinPowers]

Well this is worrisome. The strong U.S. Dollar will hurt demand. A fully loaded model S in Canada pushes up over 194 000 dollars.

This is something that worries me as well, as I can see the same thing over here. A barenaked S70 (non-D) without any options (or even destination charge) now starts at 78K Euro (roughly 87K US Dollar) in Germany. Even for a car as great as an S70, that's a lot. Add to that the fact that options are far more expensive over here as well (premium interior e.g. is the equivalent of around 3.700 US Dollar).
Will certainly be interesting to see how demand over here develops.

 

[Matias]

Elon Musk has to defend TSLA in tomorrow ER/CC, he needs to give bullish guidance at least (even might miss later on). Otherwise he can't afford to see both SCTY and TSLA dropping like rock and his ambition for those two companies might be just over. Without high SP --> no fund raise --> no gigafactory --> no model 3, then TSLA only worth less than $100。So it's Elon and investors' gamble tomorrow, we shall see either low 120 or 170。Which side you choose?

Deliberatly giving a false positive guidance is a crime.

 

[Gerardf]

European markets so far are now up (I was not so sure after Japan closed). Somewhat surprisingly it is the banks going up after DB.