Short-Term TSLA Price Movements - 2016

[Irishjugg]

Hmm, how high will it go today, nobody knows yet.

Well I mean, likely no higher than 210 as there hasn't been any positive news or really news of any kind today.

It's gonna be flat to down for a while because that's where sentiment is. If you are going for a quick gain on a small pop I would suggest re evaluating that strategy. Your 207 buy is pretty solid as long as you hold until things head upwards. I hope you are using a tax advantaged account for what sounds like very small margin short term trades?

 

[Causalien]

Well, at the very least we hit a 'new low' in this thread today with the most recent post of "Dr. valueseeker".
Combined with the level of activity of some others that defend the short thesis, I would say that is a sign we might well be close to bottom of the SP as well.

$204 is the 50% retracement. I thought it is a good place to trade on a glance. But then again, nowadays I am not fully tuned in to the stock as I have something else that is demanding my full attention. So take that with a grain of salt.

 

[Johan]

Rally time. Hope it lasts awhile. Got in a bit under 207.

Hmm, how high will it go today, nobody knows yet.

Words of wisdom right there.

In my amateurish opinion both the 50% retracement level and the round psychological $200 will serve as support levels short term. If some negative catalyst takes us below $200 I wouldn't be surprised if we see $180.

 

[Remus]

I have to agree with one of the bear's case: Tesla's expansion plan is almost impossible to achieve and need a lot of money. While I think the bears may miss couple facts so that they may not see the whole picture.

First, Tesla need money. Our society is swamped with capital trying desperately to find return, pushing asset bubbles everywhere. At the same time effective demand for a produce is really hard to come by and companies spend capital left and right trying to create those demand, talking about all those start up in silicon valley. And those scarce demands are exactly what those abundant capital are chasing after.

Now Tesla has an opposite problem, it has enormous demand for their products and surprise everyone, and it needs the capital. It's a buyer's market for capital. How can you die of thirst in a fresh water lake? I did not even mention private capital from people like Larry Page.

Yeah the demand for model X may have a short term weakness, even if it is true so what? I don't see hundreds people line up to preorder a car from any other company. Funny somebody would try to persuade X owners to return the car citing lemon laws. we are talking abut people who put down 5000 dollars waited patiently for years and multiple delays. Wonder how many of them actually do that.

Yeah Tesla may not achieve their goal on time, or not on target. Again so what? It's "shoot for the moon, if you miss, you land in the stars". Even after their missed deadline they are still way ahead of everybody else.

 

[tanner]

Hmm, how high will it go today, nobody knows yet.

I do, not very.... Sadly

 

[MitchJi]

Sorry if I was unclear, my message was meant to man that it only was true for people trading in shares and that it wasn't necessarily correct for options trading in which selling for a loss or rolling leaps makes more sense.

Sadly I am prohibited from trading derivatives by my job, so I haven't spent enough time on proper trading strategy there.

Though when the stock his another crazy low like feb I'm going to be very,

Thanks! Maybe I should have mentioned that rolling these options, is better at a lower price. The Delta of the options I'm selling (J18 160's) was 0.7938. Delta of the options I'm buying (J18 280's) was only 0.4495. But I'm getting 3:1 for a total of 1.3485.

Can you have a friend or relative buy options for you?

I totally agree about TE. The common bear argument is market cap comparisons with Ford, GM, etc. TE will provide a compelling argument that those comparisons are meritless.

If they can be as profitable as we believe that they can be with TE, and ramp quickly in 2017, then quite possibly we could see a huge run.

YES!

Colin Lincoln (Analyst - UBS):
Got it. One final question. Sorry, just one final question. Can you remind us if we're -- are you still on track
for storage of 400 million to 500 million this year, and 400 million to 500 million next year? Is that still on
track?
Elon Musk (Chairman):
JB, do you want to comment on that? One (inaudible - background noise) thing I'd say with respect to
energy, we do see this being a very enormous market, but we're -- it's an exponential growth market.
Exactly where the calendar falls on that S curve exponential makes quite a big difference on revenue. It
will be heavily weighted to the fourth quarter, JB do you want to add anything?
JB Straubel (CTO):
Yes, that's exactly right. It's not a linear extrapolation throughout the year at all. I think we're being fairly
cautious in trying to make sure that we don't over-promise here, and understand what's going to happen
in Q4. It's a little tricky to know how that will grow.

Production is on track. We feel really good about that. Production started off as planned in the
Gigafactory in Q4. Deliveries are on track. We're starting shipments of power walls and power packs
worldwide. We're growing out the sales operations and sales teams around the world. From an execution
point of view, I think we feel really good with where we're at. It's early days to predict how exactly that
exponential growth is going to really integrate.

Initially the plan was to de-risk Li-Ion cell demand for GF production and thus use aggressive pricing to take maximum TE market share while waiting for the Model-3 production to ramp. This was needed to give Panasonic peace of mind for on-time GF financing. No need anymore now Model-3 demand is proven. (and Panasonic will be happy to see their own energy storage can compete on price a bit longer). Instead of ensuring high market share, Tesla now now takes the highest margin per cell produced that the PowerPack market will take until we have GF-2 humming.

No no, no!

Colin Michael Langan - UBS:
Okay. And can you give an update on stationary storage? Is that still trending to your targeted $3 billion to $5 billion (6:02) by 2017?

Elon Musk:
Production limited thing, if we imagine the most we could possibly make make in 2016, we've already sold out of that. If even a small percentage of the orders are valid we're already sold out of 2016, and well into 2017... So it's mostly about predicting our production rate, and we expect very dramatic increases in the stationary storage production. The reason I feel a bit cautious about giving exact estimates is because when you have an exponential increase, the exact calendar window...

And (bangs head on desk) why do we still get posts stating that the purpose of TE is to hedge M3 battery demand? A business with a medium term projected sales of $3 billion to $5 billion with off the hook demand!

OTOH if you can figure out when the exponential increase is going to happen (sounds like Q4 2016 or Q1 2017) there will probably be a chance to make some money on short-medium term calls, because the market hasn't figured this out either.

Someone up thread mentioned the prediction of not being GAAP cash flow positive until 2020.

This got me wondering, does that push up to 2018 along with increased production ramp? I haven't had time to run any numbers yet, but Musk's justification was that they would be throwing off so much cash at that volume level that they wouldn't be able to spend enough on capex to keep up, hence FCF positive.

It is my assumption that spending for incremental volume on an existing product is much lower than spending on initial production for a new product, so capex on model 3 should decrease a lot as they ramp from 500k to 1M cars per year, the only major spending would be on model Y, the truck, bus, etc.

If TSLA would end up GAAP positive in 18 or early 19 and the market hadn't noticed yet, some here may be able to make a killing on LEAPS.

It sounded to me as though Elon is planning to build a new factory in China and the EU, before ramping sales there.

Elon Musk (CEO):
I don't think we'll be raising money for new factories before we add volume production for the Model 3.
And then as Jason was saying earlier, we'll try to find as much of this as possible from operating cash flow.

Elon Musk (CEO):
Our plans for international expansion and establishment of new plants are speculative. We haven't made
any firm decisions.

But some of the things are just sort of common sense that manufacturing cars in California and then
shipping them all around the world is not a very efficient thing to do, particularly as you go to more
affordable vehicles.

So at some point it's going to make sense to have a plant in Europe and a plant in China and probably
plants in other parts of the world. So that's kind of the natural thing you'd expect to do. It wouldn't make
sense to ship cars from California to Europe or California to Asia in those volumes. It's not an efficient way
to go.

Hi Everyone,
JB gave a keynote at a tech conference in Toronto yesterday and 1/2 of the keynote was on the TE business. A few things he mentioned:

Thank you! Information like this is valuable!

 

[Intl Professor]

The X will be fine. Although I doubt there is consumer demand for 80-90K S/X without china. The X will likely have a surge in demand with the car in showrooms and buyer confidence in quality increases. But I do agree that the current short delivery window should be concern for investors.

The X likely has truly improved drive components due to all the effort they had to make fixing the S DU. Tesla capability to respond to X issues is likely much greater than when fixing the original model S problems.

Traditional sales of the X should seem less critical once you realize that Tesla actually designed the Model X as a black car service vehicle.

I think it is time to drop responding to any reports from Dr. Value Seeker which have not already been answered. Some people just like to be noticed and giving them fuel for the fire....or some such proverb I cannot remember because I'm old. They may postethtisth (to butcher a word from Shakespeare) too much that they're just trying to help us poor idiots.

 

[Jayjs20]

Go go last minute rally!

Edit: And I'm out at 208. I'm guessing there's some psychological resistance at 208 today. It was sitting on that number for a pretty long period of time earlier. Don't know if it'll get too much higher than that. Only made 35~ dollars today. Well, not too terrible considering how I just do this for fun. Kind of sucks gaining 50 and having to pay 13.90 in commission fees.

Edit2: Nevermind. I should just bet against my intuition every time from now on.

 

[dha]

Really fighting for a green close here. Indices are majorly bullish which is helping.

 

[NOLA_Mike]

Kind of sucks gaining 50 and having to pay 13.90 in commission fees.

The only one to always make money on a trade - The House ALWAYS wins...

 

[techmaven]

10-Q is up.

Tesla Motors - Quarterly Report

Raw materials dipped $21.4 million, finished goods dipped $3.7 million. Service parts went up a bunch. But the big story is the work in progress... $163.83 million to $199.157 million, or $35.3 million.

Before Model X ramp, Q1 2015 was $63 million and Q4 2014 was $56 million. Even given the much higher pace of production, doubling $63 million to $125 million or so... we are about $75 million cars higher than we probably should be. That's 625 Model X's or so. If you scale by raw materials YoY, we're talking about $86 million in work in progress, or about $113 million over. That's about 941 Model X's lying around waiting for parts. Of course, what should have been is that these vehicles are in much higher production, so even that 941 is a small number compared to what it should be. But that 941 number hopefully is additive to Q2 production number now that production seems to be in a better state.

Sigh.

 

[vgrinshpun]

I am also wondering if the run has something to do with the fact that Tesla quarterly report (10-Q) is out in the last 1/2 an hour...

 

[Fallenone]

From the 10-Q, the board (which is still dominated by EM himself I think), considers

As of March 31, 2016, the following performance milestones were considered probable of achievement:

Successful completion of the Model 3 Beta Prototype;

Completion of the first Model 3 Production Vehicle; and

Aggregate vehicle production of 200,000 vehicles.

 

[Gerardf]

The 10Q is out.

In it this statement :

As of March 31, 2016 and December 31, 2015, we held customer deposits of $391.4 million and $283.4 million.

So an increase of 110 Million !

This might include some of the Model-3 reservation deposits, however it is also possible that that cash is not received yet.

Even more interesting is to realize that most of the 1.000 Model-X sig's were delivered in Q1. Maybe not all SIG's ordered, but that would probably be at least 500 SIG's deliver (I guess more). IIRC each of them were 40k deposit. So al least 20M less MX-SIG deposits in the books. Not only were these (at least) 500 x 40k deposits replaced by new deposits @ US 1.000 each, the final number of deposits for March 31st increased by 110M.

Correct me if I overlooked something, but it seems this is again proof demand continues to be a non-issue.

 

[Fallenone]

So it seems they gave guidance of 50k in H2.

"However, we are making significant progress in increasing production and plan to continue increasing total vehicle production to support over 50,000 deliveries in the second half of this year, which gives us confidence in our ability to deliver 80,000 to 90,000 new Model S and Model X vehicles in 2016. "

 

[FANGO]

This might include some of the Model-3 reservation deposits, however it is also possible that that cash in yet.

Earnings letter stated that these were not counted as of March 31, they were mostly still being accounted for as receivables. So that raise is likely S/X orders - remember they did say that S order rate went up in the last quarter.

 

[jhm]

Earnings letter stated that these were not counted as of March 31, they were mostly still being accounted for as receivables. So that raise is likely S/X orders - remember they did say that S order rate went up in the last quarter.

You know, I have yet to hear any demand constraint theorists admit that a 45% increase in net new orders for the Model S is evidence against their hypothesis. Anyone care to own this?

All talk, no quant.

 

[Fallenone]

You know, I have yet to hear any demand constraint theorists admit that a 45% increase in net new orders for the Model S is evidence against their hypothesis. Anyone care to own this?

All talk, no quant.

Simple, 45% is far less than 100% therefore there's demand constraint.

 

[nienco2]

The original "concern" posted by nienco2 was not a genuine concern but FUD.

Nienco2 -- like his friend Dr. Valueseeker -- is a short seller. Short-Term TSLA Price Movements - 2015 .

It was kind of fun to go back and read that thread. So apparently full disclosure of every move is required to read or post here

I read all kinds of information from varying sources to test my thinking. No insult to anyone on this site but unless there is a large hedge fund or mutual fund lurking nothing that goes on here will affect stock price. Believe that!
The response I got from my October 21 post was very much "fact free", few saw a problem but only a couple hundred X's were delivered that quarter and 100 days later the price was around $150. I covered on average around $165, not being greedy. Did I feel the need to post a chest thumping about my brilliance? No. Then long seemed like a safe bet leading up to March 31, didn't take a genius to see that so no bragging on that move either. Now here I am again around where we were in October but now my short thesis is more long term, Jan 18 puts, and now know there is no point in listing my rationale. There are so many shares sold short that any further downdraft may be buffered by short sellers covering and taking profits so I doubt there will be a steep short term drop, but at least I have the puts. Maybe even back to ATH in the meantime, who knows? I'll sell some near term puts to knock premium off the 18's. I write this only because you bring up how despicable I am when short, fwiw during this same time I was long BTU the largest coal producer who has dropped all the way to BK so unlike others here I also have screw ups.

Last point, a great car (the S) is not the same as a great stock, or visa versa

 

[EinSV]

Simple, 45% is far less than 100% therefore there's demand constraint.

But if Model S orders increased 100% that would be catastrophic -- Tesla might recklessly build enough capacity to fill those orders.