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BriansTesla
Old school meets new tech
I believe we might see an unusually stable SP in the short term. There may be a bunch of new buyers looking to get in and a fair number of others ready to take a little profit, so these two groups may keep the SP trapped. The next substantial movement may require a good tweet or some actual good or bad news.
Edit: A slow climb is also possible.
Edit: A slow climb is also possible.
Julian, Thanks for the excellent insightful commentary.
I want to zero in on the snippet above. To my simplistic mind the execution risk is very low because all they have to accomplish is to establish one very successful battery line and auto line. Then it becomes merely a task of copy-paste, which any good manager should be able to pull off. Sure there will be some geographic/regulatory subtleties but that is something Tesla can hire for. So execution risk is rather quite low.
Is that the right way to look at it? Do you have more to add?
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You didn't ask me, but to my mind the biggest execution risk is managing financials while building out for M3. They are doubling a lot of things (SCs, superchargers, production capacity, employees) and investors will be spooked if things are not timed appropriately. This is tricky to balance given that accelerating production is the most important thing right now and this goal is in tension with the managing cash issue. Wheeler is going to have to earn his money these next 2 years,
I believe we might see an unusually stable SP in the short term. There may be a bunch of new buyers looking to get in and a fair number of others ready to take a little profit, so these two groups may keep the SP trapped. The next substantial movement may require a good tweet or some actual good or bad news.
Edit: A slow climb is also possible.
I'm in agreement with this. I think we've enjoyed a decent rise lately, the M3 euphoria and gobsmacking reservation numbers are out and factored in, and I don't anticipate a huge continued run up to Q1ER since we know deliveries are a miss. I don't think the ER will necessarily be bad overall, just that it's unlikely to have a huge buy the rumor. I also don't expect significant M3 ramp acceleration news for the next 30 days or so, as that requires some planning and is unlikely to materialize overnight.
As such, I wrote a covered May 6 call for $300. I chose the 6th rather than the standard May date just in case there's a jump right before the ER, which is likely to be after the 6th. I chose $300 because it's several bucks over the ATH and even with a rise I don't see us breaking the $280 and ATH resistance in that timeframe. If I turn out to be wrong and we get to $300 prior to then, well that's a first-world problem.
Not that anyone cares, but I wanted to get my rationale out there in case anyone wants to critique the trade or the thought process behind it.
hockeythug
Active Member
Properly picking suppliers that can actually deliver next time around would be good for starters. Also standing by their word of the 3 being "less complicated'. Seeing things like full glass roofs and "spaceship" like display and steering systems scares me. The guy can't help himself.
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Well... looking at the reveal video and Elon's rather coy look as he said he was confident deliveries would start before the end of 2017... I initially took that as a self-deprecating joke about Tesla Time. But I can also see he could have plans to deliver much sooner, while keeping that a surprise for shock and awe results.
Yeah, I sure don't want the Model ≡ expectations to go through the roof (it slices! it dices! it cooks breakfast!) and then the actual car being understandably less than those stratospheric expectations.
I totally agree, FCF is the next thing to propel the stock. And because of this, I see few reasons to be aggressive as the past two months. We won't know any financial information until May ER which is a month away. The macro becomes choppy and VIX had a big jump. This is not good for any individual stocks. Looking from a TA perspective, TSLA also needs to rest a bit before the next big move. Not doom and gloom here, just think it needs some consolidation.
Thanks for sharing your thoughts.
I understand the cash concerns but my sense is that people in general, and bears in particular, are hyper-focussed on cash outlays and not enough on inflows.
As Julian pointed out eloquently a number of times, till so far only Model S was making money but model X, model 3 and Tesla Energy were eating money. Starting this quarter (more so Q2) we should see three things making money (S, X, TE) and only model 3 eating money. So the equation is changing quite dramatically.
In terms of overall capital needs, the consensus seems to be around $3Billion capital raise.
I think people will be very pleasantly surprised when the reality kicks in. Here are an assorted list of facts people are missing
a) Model X revenues (this is to a big degree being factored in by analysts)
b) Tesla Energy revenues (from what I can tell, this is not being factored in at all)
c) Factor in various government incentives, competing to get Tesla, be it free sites, or even free full factories, or tax/cash incentives or a combination of stuff.
d) Even if it is in fact $3Billion, Tesla has no need to raise it all at once. This will get phased in gradually.
e) So lets say, worst case, $2Billion is raised upfront. It will not all be equity. There will be sizable non-dilutive debt as well.
In a nut shell there is a good chance that we will have less than 1Bil equity dilution. I think that will be quite a shocker to many. I expect the stock to spike when financing is done.
The Blue Owl
Endangerous Herbivore
Hah! Standpoint Research actually exists, it turns out. This Ronnie Moas guy is on CNBC right now explaining how Tesla is a house of cards. Compares Tesla's market cap with Mazda, Fiat, Ferrari, and Porsche, and of course GM. Somehow he also throws in Bed Bath and Beyond in there.
He's actually getting some pushback from the hosts.
He's actually getting some pushback from the hosts.
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jhm
Well-Known Member
The Blue Owl
Endangerous Herbivore
I wish I could, but his spiel is mostly empty. It's the same tired "valuation" argument we've heard thousands of times before. Some people cannot believe that what Tesla is actually doing right in front of their eyes is really happening, and conclude that it can't possibly be true.
I am worried that there may be a slew of noobie TSLA bulls caught up in this updraft... and even a slight reversion would cause these weak bulls to sell out.
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