Short-Term TSLA Price Movements - 2016

[hobbes]

Classy of him not talking down the Bolt or dissing it.

That is one thing I really like about Elon. I remember when he was talking in Germany just after diesel gate came to light, he never talked down Volkswagen either.

Really liked the call, too! Things are progressing as they should. It´s good someone asked about whether the share price drop had an impact on demand and the answer was basically: no.

 

[everman]

They know there are a lot of questions from investors.

Agreed! How many other people on here have had to field questions from friends/parents? "What is going on? It's dropped so much!"

Case in point, my phone rang during the call and it was my Dad to ask what was up with the stock because his broker was calling him. My dad didn't know today was earnings. Had to tell him I was on the call and I'd talk to him tonight.

 

[FluxCap]

A very nice letter, solid guidance, and Tesla Motors is focused on cashflow and operational efficiency in delivering its present and future product lines. I'm a buyer here.

 

[MartinAustin]

Was I right in observing no Adam Jonas, no questions about Tesla autonomous car divisions? Perhaps AJ just has his answers from previous CC's and didn't need to show up to this one. But it's weird if AJ saw no interest in personally updating the information he uses to produce price targets (in view of the fact that he put one out just a few days ago without all of today's information)

Elon didn't give Andrea James much to work with! Pretty much shut her down. (Her questions were pretty detailed though.) Perhaps the "we're no longer showing all our cards" comment a few CC's back heralded the beginning of a new era for Elon. Today's answers, to quite a few people, were definitely a lot less informative and open than in past years.

RE: Model 3 reveal... he was just playing with us. OF COURSE they're going to show the car. Every other Elon-hosted reveal event has included a car... driven onto the stage by an assistant and rotating on a platform after that. (Even the Tesla Energy reveal showed a chap showing off the innards of the PowerPack.) There's NO reason they would do anything less. During his opening remarks at the beginning of the CC he says "We're really looking forward to the unveiling of the Model 3 at the end of next month, I think it's going to be really well-received." Would he really say that if he was going to show pictures only?

These were very strong results, and the 2016 guidance is stunning. However we should not be surprised when the bear/short-backed analysts spin all this any way they want tomorrow and through the week. There are all sorts of ways to continue negative discussions about Tesla's future.

 

[hockeythug]

Phil Lebeau might be the only sane person on CNBC.

 

[gene]

However we should not be surprised when the bear/short-backed analysts spin all this any way they want tomorrow and through the week. There are all sorts of ways to continue negative discussions about Tesla's future.

That's fine, I have some cash here waiting to buy more.

 

[stealthology]

Could there be a reason shorts would wait until tomorrow morning to cover vs. today after hours?

From here, I'm hoping we can get some analyst upgrades tomorrow morning. Thoughts?

Jonas was there. He asked a Model X ramp question early on.

It didn't sound like Elon is much a fan of AJ.

 

[tlo]

Was I right in observing no Adam Jonas, no questions about Tesla autonomous car divisions?

Jonas was there. He asked a Model X ramp question early on.

 

[The Blue Owl]

Elon didn't give Andrea James much to work with! Pretty much shut her down. (Her questions were pretty detailed though.) Perhaps the "we're no longer showing all our cards" comment a few CC's back heralded the beginning of a new era for Elon. Today's answers, to quite a few people, were definitely a lot less informative and open than in past years.

Elon tried to be coy, but Andrea knows how to ask questions in a way that squeezes the information out. She pinned him down quite effectively on battery costs.

 

[FredTMC]

That was disappointing about Model 3... They better work day and night to get it done by March 31st.

I took it as they're going to show the car but they just don't know how many features they want to talk about

 

[HookBill]

After hours trading shows TSLA up almost $14/share at 7:05 ET.

 

[Gerardf]

The form 10Q will show / confirm in the CEO grant section if the alpha and/or beta prototype of the Model-3 is ready.
That should be up latest tomorrow ?

 

[FredTMC]

Could there be a reason shorts would wait until tomorrow morning to cover vs. today after hours?

From here, I'm hoping we can get some analyst upgrades tomorrow morning. Thoughts?



It didn't sound like Elon is much a fan of AJ.

No one likes trading after hours
you don't get good prices with the spread
so many wait till tomorrow to cover
remains to be seen if there's a lot of covering or Not

 

[hockeythug]

The form 10Q will show / confirm in the CEO grant section if the alpha and/or beta prototype of the Model-3 is ready.
That should be up latest tomorrow ?

Yeah, it will be a 10-K and as of now isn't on EDGAR yet. Prolly soon.

 

[techmaven]

Please PM me if you want to get together for a Google Hangout at 9:00pm EST, 6:00pm Pacific.

 

[BornToFly]

The form 10Q will show / confirm in the CEO grant section if the alpha and/or beta prototype of the Model-3 is ready.
That should be up latest tomorrow ?

I don't know if they need an alpha prototype to roll something onto the stage. I can't remember with the Model X if the alphas came a while after the reveal....

 

[jesselivenomore]

Q4 gross margin over 22%
Q1 guidance >15k
2016 guidance 80k
Model X ramp "no critical unresolved design issues"

If we get all of those the stock should be above 170 just on a reactionary bounce. Should be a good chance. Anything less and there will be big questions.

Q4 automotive margins were 25% ex one time expenses
Q1 guidance 16k
2016 guidance 80-90k
Model X ramp on track

And most importantly:

On the other hand what we absolutely do not want to see is:

"Cutting 2016 capex due to "current market conditions" to focus on FCF positive."

The market would not react well to that. You want to see FCF positive from production growth and deliveries growth - NOT from cut backs.

That is exactly what SCTY is doing, cutting back on growth to focus on profitability - and the market is absolutely punishing it because growth is how these stocks got their multiples in the first place. Unfortunately, there isn't many better alternatives since the capital markets are freezing up. If Tesla can produce the cashflow to fund the Gigafactory and Model 3, then this decline will snap back quickly. If they need to raise capital, it would confirm why the stock is getting hit. If they need to raise capital, can not, and thus need to scale back growth to achieve their goals, their multiples will really get hit.

The risks associated with the above is the primary driver for the current "crash". This issue was explicitly addressed in the ER to alleviate current market fears.

"We expect to generate positive net cash flow and achieve non-GAAP profitability for the full-year 2016. Thus our cash balance at theend of 2016 should increase from the year end 2015 level. We plan to fund about $1.5 billion in capital expenditures without accessingany outside capital other than our existing sources that support our leasing and finished goods inventory."

So the reason why I bought afterhours is not because I believe this is the bottom, that I do not know. In fact, recent price action is so negative that it wouldn't surprise me if we broke 140 eventually. The reason I bought is because without the need to access outside funding, it takes away the stocks worst case risk below $120 or even below $100. The market has already started asking the question "can Tesla stay afloat without access to capital markets - which are now closed?" If those questions were left unanswered, or worse if the answer was "no", then solvency would have been the next thing being called into question. However, with this ER, if we can take Tesla at their word, this question was answered positively. So given that, I am comfortable buying shares here and averaging down knowing the worst case scenarios are likely off the table.

 

[Crowded Mind]

You must spread some Reputation around before giving it to jesselivenomore again.

Drats.

 

[vgrinshpun]

Let's talk about demand.

• Model S took more than 25% market share of the US Large Luxury Vehicles in 2015
• Company does not see impact of the turmoil in the Financial Markets on the rate of incoming reservations
• Rate of increase of incoming orders exceeds rate of production ramp. Customer deposits grew 10% year over year (from $257,587K in 2014 to $283,370K in 2015) at the same time as deliveries grew by 51% YoY.
• Company confirmed expectation for further growth of demand in the most mature market - NA

 

[anticitizen13.7]

Disagree. If he was sure he would have said: "Of course we're going to show the actual car at the unveiling event".

I think it is most likely that Tesla will show something physical of the Model 3 at the March event. How much they show is the question.

This is commonplace in the automotive industry. Using Honda for example, because I am a Honda guy, when American Honda "revealed" the 10th Generation Civic design in early 2015, they only showed the exterior 2-door Civic. It wasn't until months later that Honda showed the interior and sedan design, and provided details on the new turbocharged powertrain. Even with the 10th Generation Civic now on sale, Honda still hasn't fully revealed the car: the 5-door hatchback, the Si trim, and the Type-R variants of the Civic are still under wraps until later this year.

I would expect that at a minimum, Tesla would show the exterior design, just like they did with Model S and Model X. I would also expect some detail on the expected range and/or battery capacity, and motor options (RWD, dual-motor, etc). I would not be surprised if the interior design was hidden and/or incomplete or shown in concept pictures only. I would also expect specific features may not be disclosed, such as availability of the HVAC biofilter system.

I don't know if they need an alpha prototype to roll something onto the stage. I can't remember with the Model X if the alphas came a while after the reveal....

The Model S "reveal" was basically a body and interior concept built around a torn-down Mercedes S-class. The Model X prototype was shown around for years, and we only saw alphas when street testing began (the infamous video of a prototype doing burnouts on a parking lot near a shipping container vessel).