Short-Term TSLA Price Movements - 2016

[R3D-83]

Perhaps someone can dig up worldwide sales numbers for BMW 3 series and similar cars.

BMW 3 series sales numbers:

Calendar year	Total production	US sales
1995		54,720[SUP][13][/SUP]
1996		50,248
1997	337,800[SUP][14][/SUP]	-
1998	376,900[SUP][14][/SUP]	-
1999	454,000[SUP][14][/SUP]	77,138[SUP][15][/SUP]
2000	509,007[SUP][14][/SUP]	89,681
2001	533,952[SUP][14][/SUP]	103,227[SUP][16][/SUP]
2002	561,249[SUP][14][/SUP]	115,428
2003	528,358[SUP][14][/SUP]	111,944[SUP][17][/SUP]
2004	449,732[SUP][14][/SUP]	106,549[SUP][18][/SUP]
2005	434,342[SUP][14][/SUP]	106,950[SUP][19][/SUP]
2006	508,479[SUP][14][/SUP]	120,180
2007	555,219[SUP][20][/SUP]	142,490
2008	474,208[SUP][21][/SUP]	112,464
2009	397,103[SUP][22][/SUP]	90,960[SUP][23][/SUP]
2010	399,009[SUP][24][/SUP]	100,910
2011	384,464	94,371[SUP][25][/SUP]
2012	406,752	99,602[SUP][26][/SUP]
2013	500,332[SUP][27][/SUP]	119,521[SUP]^[/SUP][SUP][27][/SUP]
2014	480,214	142,232[SUP]^[/SUP][SUP][28][/SUP]

 

[lango]

Model 3 will take sales from many different sources. The comparison with 3-series is mostly interesting because it has been used to describe Model 3. I think it will take plenty of sales from other vehicles too, maybe even more so than 3-series/A4/C-Class category. To name a few:

Toyota Prius
Nissan Leaf
Volkswagen Golf
Volkswagen Jetta
Chevrolet Volt
Chevrolet Bolt
Tesla Model S (although S will still continue to grow)

So Model 3 will take a lot of sales also from cars that are never cross bought with the German prestige brands Audi, BMW and Mercedes.
And let's not forget the Y model that will take sales from all the smaller SUVs.

The "stealing" of sales from many different sources is interesting because I think it will mean that no particular manufacturer will find Model 3 to kill their product line, and therefore they will keep being focused on Hybrid and ICE up to 2020, further extending Tesla's lead within BEVs. It also means that 300-350k in total of Model 3 and Model Y will be super easy for Tesla to achieve by 2020. Anyone that doubt this target has no clue and have not done their research imo.

Model X and Model S I think are different as they steal sales from mostly expensive cars, particularly Model X (Porsche Cayenne, Audi Q7, BMW X5 etc).

Also, I have probably missed some American cars as I don't know that much about them.

 

[replicant]

Here's the trend in Google searches for Tesla Motors since 2004:

Big jump since Feb 8:

It looks like most of the interest was from US/Canada, and related to the model 3 (queries like 'new model', 'tesla model 3').
Interest in the the company (queries like 'tesla stock', 'tesla earnings') increased but represent a minority of the jump.

There wasn't some intense media coverage (News searches for Tesla Motors since 2008):

We learned few things from Elon, and only on Feb 11:
- exact date for the reservation opening (March 31 in stores, April 1 online) and the deposit amount of 1000$
- lack of Sig version

That was retweeted 4K times, which isn't that big.

How do you explain this recent rise in interest for the Model 3?

- - - Updated - - -

Something definitely happened on Feb 8.

Look at the stats of /r/teslamotors:

 

[Spidy]

 

[replicant]

Over these 7 days, the share of interest for the stock remains pretty low (see the bars on the left of your chart) and doesn't explain the x5 jump shown in my 2nd graph.

 

[Johan]

Over these 7 days, the share of interest for the stock remains pretty low (see the bars on the left of your chart) and doesn't explain the x5 jump shown in my 2nd graph.

The correlation is near 1. Many different unique search terms all group to "Tesla Motors" as a topic. "tsla" is one. Others are likely "tsla stock", "tesla stock", "tesla stock price" etc.

The point is basically all the increased searching is explained by interest in the stock (not Model 3, yet). Patience though, grasshopper...

 

[AudubonB]

Now go banish your own post to the politics thread. Sheesh, mild-mannered yet doesn't follow the rules very well.

You should google "Absolute power"

 

[nienco2]

My initial reaction is to keep in mind though JB has a modest salary as CTO. Understandably, him selling his shares in the past provided financial security and stability. Now that he has the money, he can afford the taxes on the exercise of his options and that is an important sign.

I'm confused about all the talk about EM and JB paying taxes on their options. It is my understanding that there is no taxable event when exercised if these are incentive options, ISO's which is my assumption. Also selling shares after the exercise makes a huge difference tax wise if the shares are not held 1 year. So reading these recent exercises as some important bullish signal is hard to see. More likely just exercised because they are now fully vested and would expire .

http://www.investopedia.com/articles/optioninvestor/07/esoabout.asp

 

[ZenMan]

I'm confused about all the talk about EM and JB paying taxes on their options. It is my understanding that there is no taxable event when exercised if these are incentive options, ISO's which is my assumption. Also selling shares after the exercise makes a huge difference tax wise if the shares are not held 1 year. So reading these recent exercises as some important bullish signal is hard to see. More likely just exercised because they are now fully vested and would expire .

http://www.investopedia.com/articles/optioninvestor/07/esoabout.asp

From your own Investopia link:
"Taxation begins at the time of exercise. The bargain element of a non-qualified stock option is considered "compensation" and is taxed at ordinary income tax rates. For example, if an employee is granted 100 shares of Stock A at an exercise price of $25, the market value of the stock at the time of exercise is $50. The bargain element on the contract is ($50 - $25) x 100=$2,500. Note that we are assuming that these shares are 100% vested."

So it is best to exercise when the stock is low because the difference between Exercise price and Market value is treated as ordinary income.

 

[Johan]

From your own Investopia link:
"Taxation begins at the time of exercise. The bargain element of a non-qualified stock option is considered "compensation" and is taxed at ordinary income tax rates. For example, if an employee is granted 100 shares of Stock A at an exercise price of $25, the market value of the stock at the time of exercise is $50. The bargain element on the contract is ($50 - $25) x 100=$2,500. Note that we are assuming that these shares are 100% vested."

So it is best to exercise when the stock is low because the difference between Exercise price and Market value is treated as ordinary income.

That for NSOs, not ISOs, allegedly.

 

[nienco2]

From your own Investopia link:
"Taxation begins at the time of exercise.

No, with all due respect that is for non qualified options, EM and JB and all key employees are ISO's , surely incentive based. Explanation is further down that page and the tax consequences are very different.

 

[30seconds]

I'm confused about all the talk about EM and JB paying taxes on their options. It is my understanding that there is no taxable event when exercised if these are incentive options, ISO's which is my assumption. Also selling shares after the exercise makes a huge difference tax wise if the shares are not held 1 year. So reading these recent exercises as some important bullish signal is hard to see. More likely just exercised because they are now fully vested and would expire .

http://www.investopedia.com/articles/optioninvestor/07/esoabout.asp

For sales this size, where you wouldn't reasonably expect to have offsetting losses during the rest of the year, the estimated tax is typically due a few weeks after the end of the quarter. It will/ can be adjusted if the shares are sold by the end of the year. Otherwise there is a penalty for not paying the estimated tax.

 

[nienco2]

For sales this size,

Exercise is not the same as sale. Look, these guys are exercising the right to purchase shares at less than $5 that's all. Who wouldn't do that? I guess my only concern is that there may be some in this forum who are taking the information of an exercise as some strong commitment by key employees and making that information a part of their investment thesis. Plenty of other reasons one might be bullish I just don't see this information as one of those reasons. The stock could drop to $10 and these guys would still have 100% gains on their investment if they sold, and that's when you have a taxable event.

 

[uselesslogin]

I looked at a similar filing from almost a year ago and it had similar wording and mentioned 7.2 million shares exercisable within 60 days of dec 31 2014. And I don't see anything showing that those happened (in fact I see evidence clearly stating otherwise). So perhaps there is something we are missing. And probably why I'm not in charge of anyone's money besides my own lol.

Guess I should mention...don't take anything I take seriously lol. I'm more looking for guidance rather than attempting to guide anyone here.

If the options were expiring within 60 days of Dec. 31st wouldn't they use the word 'expire?' To me exercisable is a synonym for vested. Not that I speak from any knowledge here but considering last years had the same language that is what I would think.

 

[vgrinshpun]

No, with all due respect that is for non qualified options, EM and JB and all key employees are ISO's , surely incentive based. Explanation is further down that page and the tax consequences are very different.

This is true for JB, but not true for Elon - he has non-qualified stock options, and taxes are due at the time of exercise.

 

[Buddyroe]

Anyone have a counter argument to this? This is basically exactly what I said a couple of days ago about Tesla getting by on big promises after big misses. It's like a sick cycle carousel - they have to promise big to make up for the latest miss - and that leads to the next miss - rinse, repeat.

Tesla Did Not Hit Its 2014 or 2015 Guidance

The saddest thing of all is that the actual achievements have been nothing short of miraculous. But, when you set yourself up for failure quarter after quarter and year after year, it's tough to overcome. I sure wish they had guided 75-80k deliveries this year. It still would have been impressive, but much easier to hit, and if you do get into the 80 to 90k range, you just explain that it has been an even more phenomenal year than was expected. They paint themselves into a corner with the top-line expectations every time. It's got to get old for the employees to spend the last month of every quarter desperately trying to get cars out the door and delivered to customers just to try to get to the delivery guidance.

And you can say, "look, they don't want to sandbag and get a reputation for low estimates that they always beat." Hey, when you've over-estimated so many quarters/years in a row, you can get by easily with a couple of low estimates. It will just balance out the high ones. And then you can begin to push the cusp a little again on estimates. But, the plain and simple fact is, Tesla has built itself a horrible reputation of missing targets and being late on everything. That has GOT to be turned around.

 

[nienco2]

This is true for JB, but not true for Elon - he has non-qualified stock options, and taxes are due at the time of exercise.

That's interesting that those particular options are NSO do you know why that would be?

 

[vgrinshpun]

Exercise is not the same as sale. Look, these guys are exercising the right to purchase shares at less than $5 that's all. Who wouldn't do that? I guess my only concern is that there may be some in this forum who are taking the information of an exercise as some strong commitment by key employees and making that information a part of their investment thesis. Plenty of other reasons one might be bullish I just don't see this information as one of those reasons. The stock could drop to $10 and these guys would still have 100% gains on their investment if they sold, and that's when you have a taxable event.

As noted in my previous post Elon's options are non-qualified, so he owed taxes on the bargain value at the time of exercising, so it was clearly a very bullish signal that he sent (now twice) to the shareholders.

JB's options are part of ISO, so he is not taxed at the time he exercised them. There are two reasons that this is very bullish signal indeed:

• I am watching these filing very closely and for the past couple years do not remember any instances when JB exercised and DID NOT sell the shares. The reason is clear - these options are essentially a part of the compensation package and JB, like others, rely on this income. He might well be selling shares for this latest exercising event, but LATER, when the SP is reasonable in his view. If that is the case, there is zero incentive for him to sell these shares now - by delaying the sale he is set to only gain (assuming that he is confident that the SP we are seeing right now is too low)
• Even at the favorable price, he still had to come up with almost $300K to exercise these options. There is no reason for him to do it at any time except the last day before these options are set to expire - why put up cash if these options belong to him anyway? The only reason for him to exercise these options way before the expiration is to send strong bullish signal to the shareholders - that he is confident in the future of the company and is willing to put cold hard cash to back up his belief.

 

[colettimj]

Tesla has built itself a horrible reputation of missing targets and being late on everything. That has GOT to be turned around.

I feel like they've put themselves into a damned if you do, damned if you don't position. Lower guidance with the goal of beating it; they get slammed for no longer growing as fast as they were. High guidance and then missing the targets (as they seem to have done so far) and they get the reputation for exaggeration and failing to execute. Frankly, I'd like to see them take the first approach and become a company that consistently exceeds guidance and surprises in a positive way. Doubt that will happen.

 

[vgrinshpun]

That's interesting that those particular options are NSO do you know why that would be?

I suspect that the reason lies in the size of his stake in the company and him being on the Board.

Also your implication that only this batch of his options is NSO is inaccurate - all of his options are non-qualified. Here is the link to another Form 4 - back from 2013.