Short-Term TSLA Price Movements - 2016

[Julian Cox]

I'm already at a big loss due to macro... Hoping on a positive swing, but it seems so very risky at the moment.

Very frustrating. This just gives me that talking to a brick wall feeling.

All of the information and analysis necessary to prevent this has been presented here in exhaustive detail. Why are you hoping for a positive swing? What has macro got to do with anything right now? Why did you not simply read and understand what has been written here for your own good?

 

[Papafox]

I believe the drop in TSLA SP during the past hour was caused by this CNBC hit piece, featuring the usual suspects such as Bob Lutz, but also including a quote from Panasonic Eco System's Chief Engineer that claims Elon Musk might be getting ahead of himself in claiming the viability of TE utility-grade products.
Tesla stock is not a buy—no matter what earnings say
I expand my discussion in the fact or fiction thread.

Edit: Familial Rhino also pointed out in the Fact or Fiction thread that the Wall Street Journal has also just released a hit piece with the usual contents.

My guess is that the forces opposed to Tesla realize the possibility of Tesla trying to raise some money in the near future and they wish to depress the SP to make such a move more difficult. There's no coincidence that these hit pieces have come out the day before the 1Q16 ER.

 

[austinEV]

Very frustrating. This just gives me that talking to a brick wall feeling.

All of the information and analysis necessary to prevent this has been presented here in exhaustive detail. Why are you hoping for a positive swing? Why did you not simply read what has been written here?

Julian, are you in cash or puts? I don't think we will head up by the end of the week but I am not convinced we will head down too much, too fast either. Plenty of reason to think this will be a +/- 2% reaction.

 

[Ulmo]

I'm not one to follow actual stock trades on, since my net on $TSLA is not good. But, FWIW, I'm being paranoid and staying in cash, for ER. Which is to say, I'm afraid that SP is too close to what others deem to be possibly SP-correct for me to gain in any predicted swings, and those predictions could be wrong.

We already know a lot of positive and negative will be available to be put into the report. I don't see spectacular news on deliveries. But, as a growing company, I expect to see all of the things a growing company does to grow to be growing. That will be good.

And, from my view depth level, there's a wild card on TE. That's fantastic. But I only see the start of flight, not actual flight. But Tesla Energy is a simple business, and could inject huge amounts of anything into the company. Including huge amounts of money.

 

[mrdoubleb]

For all those complaining about Elon doing QC on the Xes... please tell me you understand this is what makes Tesla Tesla.

Does he micro manage? Are you kidding me?! Have you followed this company/guy?! And yes, that shows in many areas like the hectic corporate communication (and burning through PR people). But he doesn't do it, because this is a garage shop with no adequate personnel, or know how. The guy has an insatiable hunger to understand every problem and solve it too.

He is not a member of the GM board flipping through QC reports and reading lines by the PR department, he would personally pull apart the ignition switch and understand how all the pieces click until he finds the issue. Yes, this has upsides and downsides, but what is undeniable is that his charisma and leadership style made Tesla what it is today.

 

[austinEV]

Okay so UBS, one of the most bearish investment banks on TSLA, predicts an adjusted loss of 90 cents/share (vs the general consensus of roughly 58 cents).... Due to the fact it seems like delivery miss and that expected -.58/share loss is built into the current SP, would it be wise to exist TSLA positions ahead of ER and re-invest when the market overreacts to the greater than expected loss? Or is it possible the FUD/negativity will be overtaken by improved guidance, better than expected S orders, possible hint as to production ramp, giga news, and affirmation of pack costs (both vehicle and TE-related)? Looking for some guidance here, thank you!

Yeah, we have have been debating this very question non stop for weeks in this very thread. Do your homework and make a call, or sit in cash if you don't know.

For all those complaining about Elon doing QC on the Xes... please tell me you understand this is what makes Tesla Tesla.

Does he micro manage? Are you kidding me?! Have you followed this company/guy?! And yes, that shows in many areas like the hectic corporate communication (and burning through PR people). But he doesn't do it, because this is a garage shop with no adequate personnel, or know how. The guy has an insatiable hunger to understand every problem and solve it too.

He is not a member of the GM board flipping through QC reports and reading lines by the PR department, he would personally pull apart the ignition switch and understand how all the pieces click until he finds the issue. Yes, this has upsides and downsides, but what is undeniable is that his charisma and leadership style made Tesla what it is today.

Elon "personally doing QC on model X" probably involved him doing this for an hour, putting the fear of God into those whose actual job it is to do QC, and threatening to come back without notice to make sure they were doing a good job. Let's not perpetuate the idea he is manually doing QC 24/7, that just isn't the case.

 

[drinkerofkoolaid]

If the big automobile manufacturers are focusing on increasing sales of trucks and SUVs shouldn't that increase the demand for and value of gold ZEV credits?

 

[austinEV]

Don't read this thread extensively. Plus it's hard to decipher a lot of it... There are a lot of false predictions too.

Wow Tanner. It is bad enough to ask for a personalized trade recommendation, and personalized summary of all that has been debated over the last 3 months. Then to just flatly admit you haven't read the postings...

 

[tanner]

Wow Tanner. It is bad enough to ask for a personalized trade recommendation, and personalized summary of all that has been debated over the last 3 months. Then to just flatly admit you haven't read the postings...

Let me rephrase, I've skimmed, and some of it I suppose I didn't want to believe - my bad, I guess.

 

[Lessmog]

Wow Tanner. It is bad enough to ask for a personalized trade recommendation, and personalized summary of all that has been debated over the last 3 months. Then to just flatly admit you haven't read the postings...

And as a final straw, complain about superfluous commentary making the thread unreadable ...

In view of the last comment, just stay on the side.

 

[doctoxics]

Musk was just referencing autonomous fleet. It does not require a different kind of vehicle in any physical sense. Although it is true to say that it is possible to strip a car of everything expensive that is driver centric, for example high acceleration performance, and just run pod cars. I think this is the Apple plan.

However without any doubt to my way of thinking, the optimum way to introduce and to fund the expansion of such a service is the Tesla Model 3 just the way it is.

Why:

* It's a recognizable car that is desirable to get into. No culture shock or weird factor.
* It's recognized to be a safe car to get into. No weird factor.
* The very broad cumulative customer real-world on-road experience with this exact car with exactly the sensors it will actually have and background-mode full autopilot on board means that this exact car will likely get approved. No legislative battle to introduce an untested AI/Vehicle combo to legislators with no real world customer mileage and safety stat comparisons.
*It's desirable to own as a personal car with the added benefit that it can join a fleet at the touch of a button. No weird downsides.
*The ability to push that button just turns the economics of car purchasing upside down. The car is a profit center, not a depreciating asset.
*The Tesla SuperCharger network (updated with snake autonomy & in large charging garages) and the Service Network are cost centers, not profit centers - aligned to servicing the fleet at least cost.
*Taking a percentage of autonomous mileage fees to cover hailing, scheduling and billing and to cover maintenance monitoring, service, valeting, energy and insurance will be just insanely profitable for Tesla. The capital cost of fleet financing is customer side, massively incentivized by the balance of mileage fees received from ride-share (just by hitting the share my car button on the app - which of course dedicated fleet owners will rarely if ever disengage).
*Uber has established the market value of a chauffeured mile at around the $2 mark. Model 3 will cost about $12 cents to operate, all in. So Tesla can undercut Uber by 50% and make an 833% gross margin to cover basically a call-center of fleet-service managers, the balance of lets say 500% net profit would remain available to split with its customers in a giant positive feedback loop.

Agree that Elon's intent in his statement is as you describe above. Your reasoning is 'right on' and similar to my own thoughts on the utility of the Model 3 in an autonomous network run by Tesla.

 

[drinkerofkoolaid]

I particularly like this quote from the CNBC hit piece.

The $5 billion dollar plant is as big as the Pentagon Tesla, and Tesla is hoping to produce 500,000 lithium ion batteries annually.

Like if you notice the error.

The rest of the article is a nonsensical rant about government subsidies, with the author claiming Tesla will need government support to fund the Gigafactory, and doubting EVs are green.


The author then throws in this baseless and incomprehensible portion.

Tesla's model relies strongly on a "green" administration. According to the Los Angeles Times, all of Musk's ventures: Tesla Motors, SolarCity and Space Exploration Technologies, known as SpaceX, together have benefited from an estimated $4.9 billion in government support. The figure underscores a common theme running through his emerging empire: a public-private financing model underpinning long-shot start-ups

 

[Johan]

Guys the ignore feature doesn't work as intended if you keep replying to him.

 

[mrdoubleb]

Let's not perpetuate the idea he is manually doing QC 24/7, that just isn't the case.

I don't think I did that, that would be a pretty silly thing to argue. But I do believe it was more than just introducing the Fear of God to the poor souls on an unlucky shifts. I do believe there is an element of him trying to get first hand impression of the quality issues.

 

[Ulmo]

Re: Elon Musk micro-managing QC:

But I do believe it was more than just introducing the Fear of God to the poor souls on an unlucky shifts. I do believe there is an element of him trying to get first hand impression of the quality issues.

Agreed, and agreed, and I think that's what every CEO should do, and hasn't done. You can always hire yes-men managers. And tank your company.

This concept of CEOs, who don't know their product, being good for company, is obscene. Indeed, I think a lot of American companies have been in the practice of not succeeding on purpose, because I think they know a good product sells better, and obviously they haven't been making good products, so to me, it seems fairly obvious they must not want to succeed. Maybe they get huge huge huge short options on their stock prices and want to really cash in. Maybe that's what their boards reward them for these days. I don't really know. But I think EM would be better off paying attention than not paying attention. To do the work than not to do the work. To be involved than not to be involved. To understand than not to understand. Etc.

If he understands the full product and the full chain of command, he can work on both, especially the chain of command, and get really good results. If on the other hand he follows in the footsteps of our declining country and just hires and encourages yes-men, he'll get yes'ed into oblivion.

 

[austinEV]

I don't think I did that, that would be a pretty silly thing to argue. But I do believe it was more than just introducing the Fear of God to the poor souls on an unlucky shifts. I do believe there is an element of him trying to get first hand impression of the quality issues.

Agree with that. Sorry, for the record my snarky comment wasn't directed at you, but that the repeated invoking of the idea that he was doing personal QC, you were just the last person to reply to. Based on the language being used in this thread it was an article of fact that he was doing that, which just isn't true. He did it for a while then stopped because he is a busy person not a QC-bot. Someone upthread said it was "bullish" that he was personally doing QC which is questionable logic if true, and it isn't true. He just scared the QC people into fixing their test holes, which should push upstream to whatever is getting missed in manufacturing.

 

[Julian Cox]

This belongs in "Future Car" forum. I wouldn't be mad if a moderator moved it there. Sorry. OTOH, if they mention it in the ER ...



I think the balance of the future car as a backdrop to the people passively sitting inside it, rather than machine that someone has to actively operate, is somewhere in between what Tesla and Apple is doing. Apple is looking at it like an iPhone, and Tesla is looking at it like a car. I look at it more like a virtual reality conference center, and a bedroom. It is an interior functional room (with full audiovisual computational communications on every surface/eye/ear transition, and with all the cushions and safety necessary to sit or sleep) that positions itself. It's not a glorified iPhone or a sports vest, like Apple and Tesla (respectively) look at it. It's somewhere in between, and more than, what those two have revealed, so far.

So, my conclusion is that neither Apple nor Tesla is spot-on for this market segment, but that BOTH of them will be within ear's shot of it, and basically figure out how to get there eventually. Tesla is WAY ahead in the actual motive part of it. I haven't seen any compelling software from Apple lately that suggests they are anywhere near the software side this would require, despite software being their "forte" (if anything, right now, their legacy is hindrance). Both have a long way to go to achieve this, and this is ripe for a home-garage effect takeover from any side, but Tesla is in a better position to snap up that garage software company (that has a redundant EV platform) than Apple is in snapping up a garage EV car maker (that has a non-redundant software platform that Apple will want to unwisely chuck). There would be so much not-invented-here at Apple the product would be buried (software vs software). Tesla has the problem that they aren't an attractive buyer for companies (look at how they treated George Hotz).

So, I think Tesla is way ahead, and has ample room to prove they can actually win in that realm (regardless of whoever else also wins along side them), or fail, for that matter. I haven't seen my vision clearly articulated by the engineers of either company, and this is precisely the sort of thing that would be shrouded in secrecy, so I wouldn't expect to. But my intuition is that it is not 100% in action. That's either extremely high future growth because they surprise the hell out of the market with great (heretofore secret) product, or just steady as she goes current view (nothing spectacularly secret, but can clearly get to any future market segment with deft execution).

I suspect what is bothering you here is merely the parsing out the sequence of future events that need to happen to avoid running into a check mate. For example a bedroom on wheels if it were presented now has no obvious path to regulatory approval - at least not without Tesla's help in doing the necessary prior steps to transition from cars that must have a steering wheel and a legally responsible driver to broad regulatory acceptance of cars without steering wheels - mixed in on the roads among cars that must have steering wheels.

The Tesla Model 3 approach is absolutely optimal to INTRODUCE and develop autonomy and to progress it beyond merely transporting people and onward to advanced robotics to replace human tasks for which many journeys are taken. So for example loading and unloading as well as transportation in between. There is absolutely no point in a human driving to and from Walmart and wandering around shelves with a shopping trolley, standing in line at a checkout and lugging plastic bags into and out of a car. This is just a mindless chore destined for automation. Two solutions, both will work: Send your Autonomous EV down a pick and pack line built for autonomous cars at an Amazon warehouse (or a future Walmart warehouse that can do the same thing) or send an autonomous humanoid Tesla picker and packer in the car - while you do something much more valuable to you as a human - like sleep or to meet people you actually want to meet.

Tesla's actions will open the market for autonomy for followers like Apple. Which is why it would make sense, if sense Apple has, to aim for a concept that is closer to yours straight out of the gate. One which leverages Apple's interface and content strengths and is less heavy on relating to the owner driver.

BUT: You need to have an owner driver's car that is capable of transitioning to full autonomy and do nothing else that is weird in the process. That's the Model 3. The other thing that is completely vital and why Tesla will Dwarf Apple is that Apple only has a couple of hundred $billion that I strongly suspect it is tempted to partially deploy to own its own Apple autonomous fleet. Tesla's distributed capital model has ALL of the money in existence at its disposal. Many $Trillions is a serious understatement of the market access to capital of the autonomous Model 3. Anyone with $42K to spend or simply borrow to spend will make upwards of 100% returns on their investment annually by buying a Tesla Model 3 at the total expense of the ICE and Oil industries. How much of the world's consumer capital and global capital reserves do you think would be attracted to the opportunity to make 100%+ annual returns? Personally think the answer is just about ALL of it.

I think Google is lost in these woods. They seem to think that the idea is to sell autonomy to existing car makers like an android interface for an infotainment system. It won't fly. Nobody would allow an ICE vehicle in their grocery line at Walmart spoiling the vegetables and the costs associated with depreciation, service and maintenance will allow the EVs to just undercut them on price to the point of stupidity not to mention the dealership trap. Furthermore Google does not have anything like the edge with interfaces and content that Apple has.

 

[Irishjugg]

Julian, are you in cash or puts? I don't think we will head up by the end of the week but I am not convinced we will head down too much, too fast either. Plenty of reason to think this will be a +/- 2% reaction.

I don't know man, the market is spastic. I haven't really seen any ER result in that small a move this earnings season. I'm existing at least 5% either way and probably down.

Tanner, people are being hard on you, but you asked a question that was basically "what have you people been taking about the entire last week". I don't expect a rise to answer your question, so if you are in shares possibly hold longer term (they will go green eventually), if you are in options then I'm sorry for your losses.

 

[sunhelm]

Someone upthread said it was "bullish" that he was personally doing QC

Yup, but since it was just a bullet point summary, didn't think it would be interpreted as EM personally applying the seals on falcon wing doors. It is bullish in the sense that the freakin' CEO is making sure this problem is solved and shut up the naysayers for good.

 

[drinkerofkoolaid]

Looks like a re-test of the breakout point after the sharp V. Will probably either re-test $200 or breakout to new highs. I think we'll get a sneak peak about what to expect at the conference tomorrow, at 11:45 am EST.

Edited to correct the time. The website says 8:45am in California.