Short-Term TSLA Price Movements - 2016

[NOLA_Mike]

Julian's posts are anything but pointless.



You know a lot about the shorts. I had to look that up. Denial Bay is a small fishing village in South Australia. Apparently this is where they are staying, all the while enjoying delicious sandwiches filled with Fud.
View attachment 171036

Nice. Often goes well with a big serving of:

 

[sub]

My mother in law kept thinking about reserving, the line kept getting longer and longer as we all know. I finally told her to stop thinking about reserving, reserve then think.

350006

That makes 4 that I'm personally responsible for, 2 for myself plus 2 others. Just doing my part!

 

[maoing]

I think this month is the best timing to raise capital compared to FCF+ after Q2 ER. The reason being TM needs to expedite the M3 factory/GF build out immediately from now to satisfy the huge demand. Meet or pull-in the schedule is much important than proving self-funding ability, WS will be pleased to raise big chunk of money in this M3 hype.

Very excited about the strong reservations. Really hoping for tesla to accelerate launch date.

Clearly they can raise all the capital they want. Things were looking bad in Feb with the market collapsing. Looked like tesla would need to control their CapEx burn rate and rely on FCF to appease the street.

IMO, Tesla is certainly no longer constrained. Go get any capital they want and they have over $300m from Reservations. So, cash on hand is probably ~$1.5B.

1). Bring up GF new form-factor cells for Model3 with Panasonic lines SOONER and with higher production rates.

2). Get stamping dies built (in-house capability now)

3). Build the first Model 3 body-in-white line. Robotic welding.

4). Build the first Model 3 conveyor-based assembly line.

I think getting to INITIAL production launch sooner than Q4'17 is FAR more valuable for the SP than solely planning for higher rates in 2018 and beyond. (Need to do both of course... Quicker launch and higher ramps)

I do not want to hear about body changes months from now (e.g, trunk hatch, etc). Just lock down the design soon and start building out the lines.

I do NOT want to hear about new factories NOW. This is all "out year" stuff. Let's just have M3 rolling off the first Fremont production line by a year from now.

Boom!

 

[Drax7]

Very excited about the strong reservations. Really hoping for tesla to accelerate launch date.

Clearly they can raise all the capital they want. Things were looking bad in Feb with the market collapsing. Looked like tesla would need to control their CapEx burn rate and rely on FCF to appease the street.

IMO, Tesla is certainly no longer constrained. Go get any capital they want and they have over $300m from Reservations. So, cash on hand is probably ~$1.5B.

1). Bring up GF new form-factor cells for Model3 with Panasonic lines SOONER and with higher production rates.

2). Get stamping dies built (in-house capability now)

3). Build the first Model 3 body-in-white line. Robotic welding.

4). Build the first Model 3 conveyor-based assembly line.

I think getting to INITIAL production launch sooner than Q4'17 is FAR more valuable for the SP than solely planning for higher rates in 2018 and beyond. (Need to do both of course... Quicker launch and higher ramps)

I do not want to hear about body changes months from now (e.g, trunk hatch, etc). Just lock down the design soon and start building out the lines.

I do NOT want to hear about new factories NOW. This is all "out year" stuff. Let's just have M3 rolling off the first Fremont production line by a year from now.

Boom!

Fred, do they have to order quite a few hundred robots to manufacture the 3 .
That alone will take a while until delivered . Lots of planning goes into the process
Including raising capital . Lots of moving parts.

 

[FredTMC]

Fred, do they have to order quite a few hundred robots to manufacture the 3 .
That alone will take a while until delivered . Lots of planning goes into the process
Including raising capital . Lots of moving parts.

Yep. And Original plan was initial production by end of 2017. I'm fairly certain the old constraint was the need to control CapEx burn rate. That's no longer the constraint.

What's the new critical path item(s) for a quicker launch? Probably one of those build out items I listed.

I've toured factory a couple times. The robotic body-in white line is fairly compact and straightforward. Yes, they'll need to order more robots. Kuka makes them. I don't think they're hard to get

If I had to guess, I'd say building out the entire conveyor based assembly line is the critical path.

 

[hoang51]

Very excited about the strong reservations. Really hoping for tesla to accelerate launch date.

Clearly they can raise all the capital they want.

...

I do not want to hear about body changes months from now (e.g, trunk hatch, etc). Just lock down the design soon and start building out the lines.

I do NOT want to hear about new factories NOW. This is all "out year" stuff. Let's just have M3 rolling off the first Fremont production line by a year from now.

Boom!

I don't think Tesla would accelerate the release of Model 3 when it is still being revised as indicated by a tweet storm from Elon. But it would be wise to increase capacity instead.

As for raising capital, I don't think Tesla needs to with the deposit funding they received. They should be able to use some of it to fund the Model 3 production line to increase capacity. But if Tesla did raise capital, I'm not surprised if they decided to anticipate heavy ordering of Model 3. That'll depend on the Model 3 reservation number.

As for body change, it won't happen. Elon already stated that there will be no hatch back because the reason for the trunk is to fit people in the back row of seats rather than make the car a full size grocery car.

Having Model 3 rolling out a year from now is not prudent. Quantity vs quality. Elon already stressed that Tesla strive for quality. It's more important to widen the pipe of output rather than speed up the output ahead of schedule.

 

[Bgarret]

Sydney is 14 hours ahead of EDT, so assuming that Sydney store opens at 10am, it will be 8pm on the East Coast. This is why, I think Elon tweeted that one week totals for the reservations will be posted on Wednesday. Today at 8pm will be exactly a week since last Thursday, 10 am in Sydney.

So it looks that we can expect a tweet some time after 8pm EDT.

But what is that in EST (Elon Standard time?)

 

[FredTMC]

I don't think Tesla would accelerate the release of Model 3 when it is still being revised as indicated by a tweet storm from Elon. But it would be wise to increase capacity instead.

As for raising capital, I don't think Tesla needs to with the deposit funding they received. They should be able to use some of it to fund the Model 3 production line to increase capacity. But if Tesla did raise capital, I'm not surprised if they decided to anticipate heavy ordering of Model 3. That'll depend on the Model 3 reservation number.

As for body change, it won't happen. Elon already stated that there will be no hatch back because the reason for the trunk is to fit people in the back row of seats rather than make the car a full size grocery car.

Having Model 3 rolling out a year from now is not prudent. Quantity vs quality. Elon already stressed that Tesla strive for quality. It's more important to widen the pipe of output rather than speed up the output ahead of schedule.

Thx

I'm talking about moving up launch by 3-6 months to mid 2017 instead of late. Capital is no longer a concern.

Model 3 is designed for "ease of manufacturing"

 

[drinkerofkoolaid]

Yep. And Original plan was initial production by end of 2017. I'm fairly certain the old constraint was the need to control CapEx burn rate. That's no longer the constraint.

What's the new critical path item(s) for a quicker launch? Probably one of those build out items I listed.

I've toured factory a couple times. The robotic body-in white line is fairly compact and straightforward. Yes, they'll need to order more robots. Kuka makes them. I don't think they're hard to get

If I had to guess, I'd say building out the entire conveyor based assembly line is the critical path.

The initial plan was officially to begin initial production by the end of 2017. Tesla likely knew demand would be higher than expected, just not by how much. I suspect Tesla has been working on a way to address a situation where demand was a lot higher than expected. I suspect Elon might need to begin accelorating whatever plan Tesla had a lot sooner than expected.

The crazy high demand also means Tesla is likely to receive very generous terms and incentives from any current or prospective suppliers.

 

[30seconds]

I would really like them to announce a new car factory in next quarter or two

 

[stevej119]

My mother in law kept thinking about reserving, the line kept getting longer and longer as we all know. I finally told her to stop thinking about reserving, reserve then think.

350006

That makes 4 that I'm personally responsible for, 2 for myself plus 2 others. Just doing my part!

I was fitting a bike to a customer who had just purchased it on Saturday. While I was making adjustments to the bike I said "if only I could sell as many bikes this weekend as the orders Tesla just took for the Model 3." That started a Q&A which resulted in her pulling out her phone and depositing $1,000 with Tesla in the middle of her fitting.

350007

 

[chickensevil]

Complements of our own RobStark: Model S outsold MB S-Class in Europe in 2015 (narrowly). This should grab some headlines, or... inspire a tweet from Elon.

This is now two continents down, this bodes very for the total limits of demand for the MS globally being *at least* around 80-90k a year. Assuming the MX can carry its own weight, that means 100k production target won't be enough and they will need to add at least another 50k capability. I'm quite happy to continue to see this playing out like I said back in 2014 when Tesla first outsold the S Class in the US. People tried to suggest that it wasn't fair because the S Class was on its last year before a refresh. Well eat that naysayers!

 

[SBenson]

It's good to see that expectations did not go completely out of whack:

How many reservations will Elon report Wednesday?

 

[drinkerofkoolaid]

Maybe Uber worked out a deal with Tesla for 500,000 deposits, that would bring the total to 850,000-900,000? It's unlikely but always possible lol.

Why the dislike lol? . Über did say would buy the entire 2020 production from Tesla, if Tesla could make them fully autonomous. If Uber still wants to buy 500,000 Tesla in 2020, they better have a deal worked out with Tesla soon. If Uber waits until 2017 to work out a deal it might not be possible without Uber partnering with Tesla (perhaps by paying for an Uber factory?) to significantly increase production.

 

[Julian Cox]

I think this month is the best timing to raise capital compared to FCF+ after Q2 ER. The reason being TM needs to expedite the M3 factory/GF build out immediately from now to satisfy the huge demand. Meet or pull-in the schedule is much important than proving self-funding ability, WS will be pleased to raise big chunk of money in this M3 hype.

Respectfully I think you are thinking from a purely financial perspective like a guy with only a hammer thinks of all problems as nails that need pounding.

There is a critical path to rolling out Model 3 (not the way Elon uses the expression) just the ordinary way.

In the most simplistic terms omitting iterations and mutual dependencies but without conceding accuracy:

Establish the product and the process to build it then scale the process.

Reverting to the way Elon uses the expression: Serious money is on the critical path at the scale the process step - but it is not on the critical path before then no matter how big the scale.

Also. Raising money generally comes with an implied obligation to deploy it efficiently. If they had a spare $10 billion raised right now that would de-risk any concern of raising it later but they couldn't spend it until they were done getting clear on exactly what they were spending it on. There is also an opportunity cost to rush into it. Funding a proven and costed out process that will definitely deliver a product that consumers will love at good retained margins is a total no brainier. Seeking funding at any stage prior to that being established attracts a discount for execution risk. Also given the situation Tesla is actually in - with more time and more complete execution towards readiness to deploy capital comes more competing offers of funding to choose between. This is especially true when the execution reference data of MS, MX and Tesla Energy is building strength in the background following more than two years of spending to bring those projects to simultaneous fruition. We are just entering the first ever quarter (Q2) with all three pulling in proper cash simultaneously. The before and after photos will be jaw droppingly different in terms of fundamentals - and you think they should tee off a Q1 miss for a raise on hype alone when they don't need the money yet? No! That would be mindblowingly dumb!

I say that the optimum situation for Tesla is to have a cash flow positive and profitable business with a million M3 reservations, an astonishing lead in Autopilot technology and autonomous charging and a production-ready Model 3, Gigafactory Module 1, And beta-scale production line all up and running.

Then hit it with all the cash in the world to duplicate these items on silly favourable terms because the world will quite naturally and quite literally throw cash at them under such circumstances. That's 6 months away.

 

[RationalOptimist]

Elon time:

@elonmusk
@FreshDialogues will have the full week's number early tomorrow morning

 

[The Blue Owl]

 

[windgrins]

New Tweet from Elon. Numbers out in the morning.

Elon Musk on Twitter

 

[RationalOptimist]

before the market opens? you'd think it would need to be.

 

[sunhelm]

If you liked shorting Tesla at $190, you're gonna love shorting it at $280!

It's not catching a falling knife.

It's dousing a launching rocket, with gasoline.