Short-Term TSLA Price Movements - 2016

[dalalsid]

Close.

But no cigar.

He's selling them battery plants. (GF II, III, remember?)

He's selling them the same thing he sold panasonic with GF1. Hey guys, Panasonic is busy with GF1. You want the same deal on GF2, 3 in Europe, Asia etc.

Though I'd be happy with a cell supply for M3 arrangement too. It just means I'll get my M3 faster. And Tesla can get to their newfound goal of 500k earlier than the 2020 GF1 completion. Even if the GF could possibly be enough for 500k in 2018, 1M shortly thereafter, Model Y with even more demand than Model 3 etc. will need a lot of cells.

 

[FredTMC]

He's selling them the same thing he sold panasonic with GF1. Hey guys, Panasonic is busy with GF1. You want the same deal on GF2, 3 in Europe, Asia etc.

Though I'd be happy with a cell supply for M3 arrangement too. It just means I'll get my M3 faster. And Tesla can get to their newfound goal of 500k earlier than the 2020 GF1 completion. Even if the GF could possibly be enough for 500k in 2018, 1M shortly thereafter, Model Y with even more demand than Model 3 etc. will need a lot of cells.

Panasonic has been a fabulous partner.

Tesla and Panasonic are working together on new "cell-manufacturing" equipment that helps to improve cell manufacturing efficiency.

I'm wondering if tesla will, at some point, try to "go vertical" with cell manufacturing? In other words, disintermediate the traditional Asian cell manufacturers and begin producing cells on their own?

Not sure about long term lockup agreement with Panasonic and who owns the patents.

 

[mmd]

I speculate that tesla wants to sell batteries to the koreans.
Now can you prove otherwise?
thats what i got out of the article.

You can believe whatever you like. I am not going to try pulling up anyone's closed eyelids.

I will continue to use Occam's razor and not turn a blind eye to new information that emerges.

If I was the Tesla CFO, I would do as i said. As I argued here a while ago, battery cost is only 30% of the total M3 cost. It would make a lot of sense to save a huge amount of capex by delaying or abandoning the GF expansion, and eat the slight extra costs , if any, in the battery component.

Anyway, let's move on and restart the commentaries on the up and down moves of the SP.

 

[Drax7]

In my view tesla has to quickly get to 2,000 cars produced and delivered per week,
which averages to about $200 million per week in revenues, to offset any financial risk
it may encounter. Once they reach a steady state at that level the rest is
gravy.
The lower the financial risk the higher the stock price.

 

[Tenable]

The GS upgrade makes me think they will take the leading position in the coming cap raise.

Agreed, they are pretty dirty, it was my first thought as well.

 

[FredTMC]

I'm out! Trying to predict the bottom I've gotten too many knife edges for me. I'm waiting until 2nd Quarter results before trying to predict a path for TSLA in the short term. Good luck to all short term stockholders. I'm keeping 70% of my upside for now.

Sorry man. Yeah, you've been tracking Tesla/TSLA a long time. Last coupe years have been v challenging for sure.

I think better times are ahead. I won't be surprised to see a major rebound in the coming months this summer.

 

[FredTMC]

Not sure what just happened with OIL but it just bounced up sharply higher.
Meanwhile, Naz and SP500 look like they may get to HOD

 

[Gerardf]

battery cost is only 30% of the total M3 cost.

In the automotive business 30% is very, very significant. ( duhhh, 30% is very, very significant in ANY business)
Just saving 1% of that 30% is very interesting with the end-user price and the volumes involved.
.... Think about saving 5% of that 30%.. Or even 10% of that 30% ! WOW !

............ I am not even going to ask you to try to imagine saving 30% of that 30% !!!
(IIRC that is the goal of the GigaFactory).

You can be sure that even a saving of 1 cent per LiION cell is considered very interesting.
500k cars per year x 5.000 cells per M3 pack x $ 0,01 = US$ 25 Million per year.

Just my 2 cents .... (would be 50M )

 

[Johan]

More quotes from the GS note, as reported by various sources (I don't have access to the entire note, and even if I did I think it would be a violation to post the whole thingamojing):

"While we believe the volume targets are ambitious, Street and investor expectations seem more grounded and following a 23% decline in the share price post the Model 3 unveil, we do not believe Tesla shares are fully capturing the company's disruptive potential"

Goldman's valuation is based on five probability-weighted scenarios, "plus stationary storage optionality, all of which embed a 20% cost of capital."

Goldman upgrades Tesla, saying 'putting in our reservation for the Model 3'

 

[Johan]

Actually I found the entire thing posted on Zerohedge so I'm just going to repost it:

Goldman Compares Elon Musk To Steve Jobs And Henry Ford, Upgrades Tesla To "Buy" With $250 Price Target | Zero Hedge

Putting in our reservation for the Model 3; upgrading TSLA to Buy

Source of opportunity

We upgrade shares of Tesla to Buy from Neutral with 22% upside to our 6-month price target of $250. While we believe the volume targets are ambitious, Street and investor expectations seem more grounded and following a 23% decline in the share price post the Model 3 unveil, we do not believe Tesla shares are fully capturing the company’s disruptive potential. This combined with a more stable macro backdrop (relative to January/February) and increased confidence in Model 3 demand (from orders and our competitive benchmarking) drives attractive risk/reward. The company has publicly stated it might look to raise capital, and our detailed capex analysis points to capital needs of $1bn.

Catalyst

There are admittedly fewer visible catalysts than before, with the next Model 3 update potentially not until next year. We think the introduction of a mobility service is a possibility, though timing is uncertain as management comments on this have been limited. Ultimately we think the biggest fundamental near-term catalyst will be the ramp of the Model X. While progress appears to have been limited since the 1Q16 update (based on the cadence of April/May deliveries), expectations are low in our view with many on the Sell/Buy sides expecting a cut to Tesla’s 80-90k delivery target. While we acknowledge this risk we view it as discounted and think any positive news on X production would strongly support the shares.

Valuation

Our unchanged 6-month price target of $250 is derived from five probability weighted automotive scenarios plus stationary storage optionality, all of which embed a 20% cost of capital.

 

[ibcs]

Sorry man. Yeah, you've been tracking Tesla/TSLA a long time. Last coupe years have been v challenging for sure.

I think better times are ahead. I won't be surprised to see a major rebound in the coming months this summer.

I've traded TSLA for over 6 years and I couldn't be happier! I agree with you on the better times ahead. It's a lot of work day trading and I'm ready for a break until TSLA decides a strong direction. I might change my mind after the Gigifactory tour from my 5 referrals. Can't wait for the invitation to arrive, but no idea on when.

I sold my last short term holdings today at $213.72. I think for me, I'm waiting until Q2 to see progress. I'm sure I'll miss some runs up and down.

Good luck to all, I'll be lurking!

 

[Gerasimental]

While progress appears to have been limited since the 1Q16 update (based on the cadence of April/May deliveries), expectations are low in our view with many on the Sell/Buy sides expecting a cut to Tesla’s 80-90k delivery target. While we acknowledge this risk we view it as discounted and think any positive news on X production would strongly support the shares.

I wonder if they included this with the knowledge (from sources like the MX forum on here) that significant progress has already been made and deliveries are happening at a higher speed and higher quality. If we run with the idea that they are now triyng to get the SP up for a favourable raise, this gives them a a chance to raise further in early July when deliveries are released.

 

[tanner]

Intraday if the volume stays as low as it is currently, the price will continue downward. If we break below 212, it could easily hit 209 by close. Seeing some green for the past couple minutes, we'll see if that lasts.

 

[Johan]

I wonder if they included this with the knowledge (from sources like the MX forum on here) that significant progress has already been made and deliveries are happening at a higher speed and higher quality. If we run with the idea that they are now triyng to get the SP up for a favourable raise, this gives them a a chance to raise further in early July when deliveries are released.

Could well be. Actually, as I read the line "Street and investor expectations seem more grounded [...]" my mind parsed it to "Street and TMC expectations"

But I agree that yes, they're giving themselves some room here to upgrade soon again based on "surprising news to the upside regarding successful ramp of MX".

 

[techmaven]

Check the links from yesterday. Are you saying, Tesla will still invest $2B-$5B to finish the GF to original scale while buying batteries from Korea for Model 3? To put it mildly, that will be very silly. My comment is less speculative than your false accusation.

Ah, do a careful reading on those articles and see through your blind hatred of Tesla.

That article has almost no content. Tesla met with some battery makers recently. That's it. That's the entire factual content of that Korean article. Everything else is speculation.

It is just as likely that Tesla is shopping for a partner for Gigafactory #2 and #3 to scale beyond 500,000 cars. Panasonic is already in for $2 billion for the Gigafactory on top of their $1.2 billion or so for their Osaka plants and has only so much risk appetite given their failing other businesses, so they might want to wait to commit to Gigafactory #3 or #4. Maybe LG/Samsung/SKI is willing to chip in $2 billion sooner than Panasonic. Complete speculation and more plausible than your speculation.

 

[electracity]

I wonder if they included this with the knowledge (from sources like the MX forum on here) that significant progress has already been made and deliveries are happening at a higher speed and higher quality. If we run with the idea that they are now triyng to get the SP up for a favourable raise, this gives them a a chance to raise further in early July when deliveries are released.

X problems do feel like they are being resolved. Tesla did push some S orders back, perhaps to build more X.

Quantity and quality of building the X is also likely a surrogate for evaluation of the model 3 ramp. Perhaps proof of X success will be a double positive for SP.

They are beating up TESLA on CNBC now. Even Mr. Wonderful.

 

[techmaven]

CNBC and Bloomberg both beat up on Tesla often. Not news.

 

[SPadival]

Lutz did great things when he was with GM, single-handedly dragging that dinosaur into the 21st century.

But now, it looks like he is a hired gun, speaking whatever competitors he is contracting for, are asking him to say.

 

[sunhelm]

Bob Lutz is either a shill or an idiot. Possibly both.

How some people rise to success in life amazes me.

Here's an excellent point by point dismantling of the Lutz lies by fellow TMCer Fred Lambert of elektrek.co. Good Guy Fred!

Former GM Chairman Bob Lutz is spreading false and misleading information about Tesla

 

[Johan]

Here's an excellent point by point dismantling of the Lutz lies by fellow TMCer Fred Lambert of elektrek.co. Good Guy Fred!

Former GM Chairman Bob Lutz is spreading false and misleading information about Tesla

Thanks, good write up by Frederick!

Let's all agree to read it, watch the clip of Lutz denying global warming and then let's all agree to never mention him, his statements about the future of the auto industry or Tesla's future ever again since he obviously has absolutely no idea what he is talking about. As in really, he is completely clueless.