Short-Term TSLA Price Movements - 2016

[Julian Cox]

Satellites for broadband are notoriously slow. Latency is a serious issue. I wouldn't expect much from this.

Nope. The exact opposite. Round-trip latency is a problem for geostationary. Not for the SpaceX 4000 x LEO-sat system and it will be faster than is physically possible through copper or fiber-optics on land. Free-space transmission in a vacuum, fewer routers and routers on orbit can operate at or near superconductor temperatures.

This is yet another example of first to market with a physically impossible to compete with giant global businesses in a portfolio of other firsts in physically impossible to compete with giant global businesses: Reusable rockets and Autonomous EV Vehicles and Energy (the latter once this is well past the tipping point with nat gas and coal generation a few short years from now). It is absolutely impossible to launch 4000 satellites economically without Musk's consent, same as it is absolutely impossible to launch autonomous fleet services without his consent either. That's real power right there.

P.S. Congrats to longs that bought at $19x ~ $200. I think you will find my commission rate is very reasonable, only 10% of the upside at July 30th ;-).

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Mostly agree with you, but if they don't ramp up X in the quarter to a decent number, wouldn't you say FCF positive in Q1 is unlikely?

I think the Model X ramp is going just fine but for the sake of cash-flows Model S is just fine too. The big deal is that Q4 '15 was the last of the big spenders on Model X production equipment sign-off so I think FCF positive in Q1 is safe enough regardless. The next big spend will be on Model 3 but that is a while off now and I think it will be financed separately in Q3 '16 and based upon off-the-charts Model 3 reservations.

 

[dreamingof3]

How are institutions evaluating Tesla at 205 -those that bought the secondary at 242?

 

[Julian Cox]

I did just that! Started in 2012, over 2500 shares at present./

GREAT!

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Julian Cox and others,
Thank you for the extensive discussion about the prospects for TSLA in 2016. I'm sure you saved lots of forum members from bailing at what may well be the bottom of the dip. Macro forces prevail at present and anything can still happen, but at least today we're seeing what a turnaround looks like.

I believe the discussion was appropriate for this thread because it so much affected people's decisions on how to trade during this short-term crisis.

Absolutely and you are most welcome.

Worth keeping an eye on the prize. 27 million shares sold short is a 5.6 $billion market cap piñata that can either get away of get smashed with profits. Every single aspect of the short thesis that is holding up that piñata is wrong - short term fundamentals, long term fundamentals, competitive threat, oil price threat even macro-economic threats are applicable solely to Tesla's competitors. There is nothing to fear here except fear itself.

 

[dc_h]

Short term:
Macro (market, oil, currency)
Model X ramping speed (below 300~bearish --
Earnings - specifically gross margin Q4 and forward estimates
Model 3 reveal on time & 2017 still on target

Wild cards
GF production ahead of schedule
Model X production hold up
Production estimate above 1600 weekly in Q1
Autopilot accident\fatality or major legal roadblock
Uber contract for Model 3 cars

 

[AlMc]

Anecdotal evidence indicator: a good friend of mine called me today on the phone. We meet about once a month, both have small children and busy jobs. He has reservation #2 EU for Model X, got it on opening day after following my enthusiasm and taking delivery of S (he drives a LEAF). Anyway, also from my inspiration he owns TSLA. Got in around $100-120 IIRC. He's a good friend but we rarely take the time to just call each other to shoot the breeze. Yet today he did, but after a few minutes it was clear he wanted my view on TSLA. He was obviously considering selling his holdings and try to catch the falling knife ("get back in a little lower") or maybe he was likely just scared and had a knee jerk notion to just sell (I think even at $200 he's up >100% considering forex as well). I got him to reconsider using common sense: the market is being schizophrenic and much of the macro drop has to do with the cascading effects from it becoming painfully obvious how much stranded assets there will soon be in the fossil businesses. This drags TSLA down but for no good reason longer term, in fact on the contrary who will emerge as a big winner and likely go-to stock when this mini crash blows over? That's right TSLA, solar stocks etc. If he (and me, and you) didn't sell at $240 a couple of weeks ago why on earth would you sell at $200 today?

Anyway, a personal piece of anecdotal evidence that suggests to me that the sheep are running scared.

Addition: thx AlMc for mentioning my prediction that turned out true but as you said, for all the wrong reasons (I thought the Norway SC fire would have a lot of short term impact).

What are TMC friends for!:wink:

 

[McMuggets]

Whelp, here's hoping with fingers crossed. Pretty much doubled my TSLA holdings in the low 200's after spending profits made selling SCTY in the 50's. Short term might be a little scary, but it's a long-term hold for me in my "moonshots" portfolio.

I know this isn't a SCTY thread, but I also picked up some SCTY shares today at $37. Just as an aside.


Does anyone here see TSLA short-terming down to $180? I certainly hope not!

 

[Electrifying]

Nope. The exact opposite. Round-trip latency is a problem for geostationary. Not for the SpaceX 4000 x LEO-sat system and it will be faster than is physically possible through copper or fiber-optics on land. Free-space transmission in a vacuum, fewer routers and routers on orbit can operate at or near superconductor temperatures.

I am sure the shorts are incapable of grasping these concepts which require at least high-school level of STEM education.

 

[Julian Cox]

Does anyone [] see TSLA short-terming down to $180? I certainly hope not!

The holders of 27 million commitments to buy $230+

Intraday chart making nice little higher highs. $208.04 and looking good. Boys and girls champagne may be too soon but a pat on the back all round I think would be excusable.

 

[Papafox]

The holders of 27 million commitments to buy $230+

Intraday chart making nice little higher highs. $208.04 and looking good. Boys and girls champagne may be too soon but a pat on the back all round I think would be excusable.

And a bounty on the head of anyone who even thinks of writing a haiku!

 

[sub]

I really hope that those that bailed this morning in a panic have cleared their space of any object that could be used to inflict pain upon themselves.

 

[CyberDutchie]

Julian Cox and others,
Thank you for the extensive discussion about the prospects for TSLA in 2016. I'm sure you saved lots of forum members from bailing at what may well be the bottom of the dip. Macro forces prevail at present and anything can still happen, but at least today we're seeing what a turnaround looks like.

I believe the discussion was appropriate for this thread because it so much affected people's decisions on how to trade during this short-term crisis.

I second that! I had 8 contracts expiring this week with $150 strike and made the decision to exercise those with margin, instead of my original plan to sell the contracts for a (meh) profit, thanks in part to Julian and others countering the doom and gloom here. The gain of today alone will cover the margin interest for the next 18 months!

 

[tinm]

I like others would've bought more but I'm so maxed out on TSLA it's difficult. Started buying in 2012, more in 2013, more in 2014. 2015 and the start of 2016 have been rough, but I'm a die-hard long, and plan to hold until the stock's close to $1000/share.

I think in the short term, assuming a) macro events don't send the world into a tailspin, and b) Tesla doesn't screw up its execution, the stock will recover nicely and resume the march to $300+ within 6-8 months.

 

[McMuggets]

I like others would've bought more but I'm so maxed out on TSLA it's difficult. Started buying in 2012, more in 2013, more in 2014. 2015 and the start of 2016 have been rough, but I'm a die-hard long, and plan to hold until the stock's close to $1000/share.

I think in the short term, assuming a) macro events don't send the world into a tailspin, and b) Tesla doesn't screw up its execution, the stock will recover nicely and resume the march to $300+ within 6-8 months.

I went crazy in at these share prices in hopes of not $300 in 6-8 months but rather believe it can be there in 4 months. Think about it.... Model 3 reveal in 2.5 months
as well as a potentially swing to profit in Q1 2016.

 

[stealthology]

The economy is either headed for a recession or it isn't. This is a pretty binary event. If it is not, then buying TSLA here and averaging down is the right thing to do. But if it is, then buying here is a risky proposition, moreso than people think. Buying based on TSLA's fundamentals in the face of macro markets going the other way is a particularly dangerous proposition. Because even as TSLA's fundamentals continue to improve, the equity markets can price assets completely differently in a bull market environment compared to a bear market.

From 2007 to 2008 AAPL's revenues increased by 50%, while its stock price declined by 60%.
From 1999 to 2001 AMZN's revenues increased by almost double, while its stock price declined by 95%.

Now, that was in the midst of an internet bubble and a financial crisis, neither of which I believe to be the case today. So do not take this as alarmist, because I DO NOT think TSLA will be hit that hard. However, the point is, improving fundamentals is no guarantee of an appreciating stock price when there are macro headwinds. Even if we only get a run of the mill recession here, which to me is the most likely bear scenario(not 2000 or 2008), TSLA can still be impacted quite a bit. Again, in a bull scenario where we avoid a recession, now(200) is the time to buy.

Now does that change the long term story in the event of a recession? No. Indeed, AMZN and AAPL are both up tremendously even from their 1999/2007 highs. But, the point is this, had you started buying too early, you would have run out of powder when the real buying opportunity came. Or worse, lost everything before the eventual rise.

With that in mind, where are we now? At the end of a bull market correction? Then buy. Or at the beginning or a bear market(even if it is a mild one)? Then sit tight, or even hedge.

I cannot answer that question for you guys. But just know that it IS a question. Not a certainty. Something I do not see enough people asking themselves.

The last recessions we had were 2007 and 2001. I realize these are just terms, but the definition is 2 straight quarterly declines in GDP.

 

[jesselivenomore]

The last recessions we had were 2007 and 2001. I realize these are just terms, but the definition is 2 straight quarterly declines in GDP.

I know the definition of a recession. What about it?

 

[dreamingof3]

Disappointing how hard this banged off of 210

 

[uselesslogin]

I went crazy in at these share prices in hopes of not $300 in 6-8 months but rather believe it can be there in 4 months. Think about it.... Model 3 reveal in 2.5 months
as well as a potentially swing to profit in Q1 2016.

It is funny that we all assume the reveal will be like March 31st. Did Elon ever say "late March?" Wouldn't it be nice if he surprised us with a March 1st reveal? Anyway a man can dream.

 

[Crowded Mind]

It is funny that we all assume the reveal will be like March 31st. Did Elon ever say "late March?" Wouldn't it be nice if he surprised us with a March 1st reveal? Anyway a man can dream.

Late March was specified in a quarterly shareholder letter.

 

[Noble Ninja]

It is funny that we all assume the reveal will be like March 31st. Did Elon ever say "late March?" Wouldn't it be nice if he surprised us with a March 1st reveal? Anyway a man can dream.

For the Model X, he mentioned a few times it would be late July and we ended up getting the reveal at the end of September. So I expect Model 3 reveal by end of May.

 

[uselesslogin]

For the Model X, he mentioned a few times it would be late July and we ended up getting the reveal at the end of September. So I expect Model 3 reveal by end of May.

Yeah, well, at least they only have to produce one semi-functional prototype for this reveal...