Short-Term TSLA Price Movements - 2016

[Yggdrasill]

I'm amazed some folks would be ok with Apple scooping up TSLA for $40 or $50 billion.

My absolute minimum would be $100 billion.

Agreed. I don't see Elon Musk selling for a mere 50 billion. At least not to Apple with their anti-competition practices. Tesla was founded to spearhead the EV revolution, and should continue having open patents and offering SUpercharger access to all companies who want to contribute.

Something in the 100-200 billion range would be acceptable. (Of course, Elon could potentially want to sell if someone offered 50 billion, *and* firm promises for building Gigafactory 2 and 3, one car factory in Europe and one in Asia, 50,000 new superchargers and also continuing to have open patents, and offering Supercharger access to the competition, etc.)

 

[Scott Ales]

I believe selling Tesla is closely related to any advancements or needed capitol for SpaceX. Traveling to Mars is his highest priority at this point. In my humble opinion he has certainly accomplished the goal of proving the EV opportunity to the world. Once the M3 hits I seriously doubt we'll be able to retain his interest. Which isn't necessarily a bad thing.

 

[marvinat0rz]

Ive held my shares since 2012/2013 when I acquired them. I'm not going to sit here and tell anyone that I'm pleased with TSLA or tesla mgmt. It's been a very rough ride over the last year or so. I expected less heartburn especially the multi-year MX launch delays. Do I think TSLA can hit 100B+ market cap in the years ahead? Sure... But if I could get $50B cash out now via acquisition, I'd take it.

Still, I've always maintained the best option for an immediate reset in TSLA valuation would be a multi-billion dollar minority investment in Tesla by an Apple or a Google. In this way EM stays in control and TSLA instantly rockets to a far higher share price.

I have dream...

I was under the impression that a significant part of the Model X delay was due to increasing production capacity on Model S, because it sold a lot better than Tesla management expected. So in that regard, the delays were a net plus. And if TSLA hadn't had the ridiculous appreciation that it had in 2013-2014, and rather had a gradual appreciation from 2012 until now, no one would be complaining. It's just the manic/depressive cycles of the stock market that makes this look like anything but a massive stock market success. Unfortunately, it hinges on when the shares were purchased.

Seems to me like Tesla management has in fact done an incredibly good job during these years: Huge battery factory, cheap capitalization, solid Model S production and delivery, excellent work in making EVs compelling, Supercharger buildout which is a huge competitive advangate down the road, build-out of production capacity for residential/utility battery packs, deployment of autopilot hardware which enables data gathering on autopilot/self-driving better than any other company has the capability of. Long-term this still looks really bright to me, assuming that the Model 3 is a hit. A lot hinges on that.

 

[Hogfighter]

Agreed. I don't see Elon Musk selling for a mere 50 billion. At least not to Apple with their anti-competition practices. Tesla was founded to spearhead the EV revolution, and should continue having open patents and offering SUpercharger access to all companies who want to contribute.

Something in the 100-200 billion range would be acceptable. (Of course, Elon could potentially want to sell if someone offered 50 billion, *and* firm promises for building Gigafactory 2 and 3, one car factory in Europe and one in Asia, 50,000 new superchargers and also continuing to have open patents, and offering Supercharger access to the competition, etc.)

Which is the reason Tesla won't be purchased. Why buy the cow when the milk's free? Tesla has opened their patents. Apple would rather spend their money building their own car, rather than pay a premium for Tesla.

 

[anon]

Firmware 7.1 has just been released. I don't expect it to have a meaningful impact on the share price, but there are two new features that might get some favorable press attention: summon and perpendicular autopark.

http://www.teslamotorsclub.com/showthread.php/60293-Firmware-7-1

 

[Zaxxon]

That is a fantastic set of improvements. I doubt it'll move the stock, but it sure is welcome.

 

[FluxCap]

That is a fantastic set of improvements. I doubt it'll move the stock, but it sure is welcome.

This is a digression, but sometimes I forget how the average person just has no idea just how far ahead Tesla Motors is from anyone else on the planet, and Tesla isn't slowing down innovation but accelerating it. This is the kind of thing that will shock the average sedan buyer when the Model 3 is in volume production. It will be a multiplicative marketing effect as well in which neighbors tell others about this amazing new thing. Imagine your neighbor watching your Tesla Model 3 park itself, and the only thing they will want is to ditch their sedan as fast as possible and buy one. I mean, "Summon" is actual human-free production car driving. Granted it's just parking, but still. It's a robot car parking itself with sensors. In production. Right now, not "the future." Amazing.

 

[Zaxxon]

Agreed.

 

[ev-enthusiast]

Firmware 7.1 has just been released. I don't expect it to have a meaningful impact on the share price, but there are two new features that might get some favorable press attention: summon and perpendicular autopark.

http://www.teslamotorsclub.com/showthread.php/60293-Firmware-7-1

Press conference about SW version 7.1 AND new Features next week?

 

[Papafox]

This is a digression, but sometimes I forget how the average person just has no idea just how far ahead Tesla Motors is from anyone else on the planet, and Tesla isn't slowing down innovation but accelerating it. This is the kind of thing that will shock the average sedan buyer when the Model 3 is in volume production. It will be a multiplicative marketing effect as well in which neighbors tell others about this amazing new thing. Imagine your neighbor watching your Tesla Model 3 park itself, and the only thing they will want is to ditch their sedan as fast as possible and buy one. I mean, "Summon" is actual human-free production car driving. Granted it's just parking, but still. It's a robot car parking itself with sensors. In production. Right now, not "the future." Amazing.

Part of the process of the average investor realizing just how advanced Tesla vehicles are becoming takes place when analysts speak of these advances and upgrade their targets for TSLA. Part of the headwinds at the moment is that the average target is around 280 and many of the brighter analysts have targeted in the 300s. A simple reiteration of target price can help if that target price is in the 300s. In order for an analyst to upgrade or reiterate they need confidence that 2016 numbers are going to be good. Continued technological progress by Tesla does not go unnoticed by analysts, because technological progress leads to more demand for the product. The biggest hurdle is Model X ramp up, though. Fortunately, the past week looks like a robust week for Model X deliveries, and we now see not only signature buyers getting VIN numbers or deliveries but we also see about 20 regular production Model X buyers reporting VIN numbers, which suggests these vehicles are in production, which suggests that production levels of X are increasing. Thus,

Model X ramp up > analyst upgrades or target reiterations > TSLA stock price appreciation

 

[Lessmog]

I love this arena.
Trying hard not to break out in verse, or worse: haiku.

 

[ev-enthusiast]

I love this arena.
Trying hard not to break out in verse, or worse: haiku.

I don't know if I'm in love, has been a little too tough lately.

 

[Papafox]

I love this arena.
Trying hard not to break out in verse, or worse: haiku.

Thanks Lessmog for refraining from the haiku. Over time we've learned that maxing out of bear sentiment on this forum is a strong buy signal and poetry, especially haiku, is a "sell immediately" signal.

 

[Krugerrand]

I believe selling Tesla is closely related to any advancements or needed capitol for SpaceX. Traveling to Mars is his highest priority at this point. In my humble opinion he has certainly accomplished the goal of proving the EV opportunity to the world. Once the M3 hits I seriously doubt we'll be able to retain his interest. Which isn't necessarily a bad thing.

I disagree. I think something's changed in the last year to year and a half for Elon in regards to Tesla. I've heard him mention a couple times of going the way of making it a 'family' business ala Ford. I've also heard him slightly change his dialogue; he used to say he'd remain CEO only through to seeing Model 3 hit mass market and then relinquish that role but still remain 'vested' in Tesla. He doesn't talk quite like that anymore. I think he'll be sticking around longer. Just a hunch.

 

[AlMc]

I disagree. I think something's changed in the last year to year and a half for Elon in regards to Tesla. I've heard him mention a couple times of going the way of making it a 'family' business ala Ford. I've also heard him slightly change his dialogue; he used to say he'd remain CEO only through to seeing Model 3 hit mass market and then relinquish that role but still remain 'vested' in Tesla. He doesn't talk quite like that anymore. I think he'll be sticking around longer. Just a hunch.

I believe selling Tesla is closely related to any advancements or needed capitol for SpaceX. Traveling to Mars is his highest priority at this point. In my humble opinion he has certainly accomplished the goal of proving the EV opportunity to the world. Once the M3 hits I seriously doubt we'll be able to retain his interest. Which isn't necessarily a bad thing.

EM staying longer term as CEO and if that is a great, good, so-so, or a negative thing is an interesting debate/discussion topic. Not one for the short term thread so I apologize as I do not want to get into this discussion here.

 

[Causalien]

EM staying longer term as CEO and if that is a great, good, so-so, or a negative thing is an interesting debate/discussion topic. Not one for the short term thread so I apologize as I do not want to get into this discussion here.

I disagree with Elon staying on as ceo for both.

From my point of view, he should come to TSLA full time and bring it to fruitionwhile leaving SpaceX to its lieutenants. Yes, make it into a family business. Make sure the family is powerful enough because of TSLA that he can use profit from TSLA to further advqnce SpaceX agenda.So many regulatory problems can be solved by having voters (manufacturing emoloyees) paying taxes and legally bribing the politicians. If Elon is as powerful as the Saudi kings today, the Electric push wouldn't be this tumulous.

Excuse my rant, I am just recently disillusioned about the free market after seeing the Saudis are able to do what they did and distort the market for 6 months longer than my projection. I now suspect they will go the whole way and oversupply for 4 more years. This is the power that I believe we need for the electric push.

 

[MitchJi]

EM staying longer term as CEO and if that is a great, good, so-so, or a negative thing is an interesting debate/discussion topic. Not one for the short term thread so I apologize as I do not want to get into this discussion here.

IMO the short-term SP would take a huge hit if EM announces he is leaving.

The biggest hurdle is Model X ramp up, though. Fortunately, the past week looks like a robust week for Model X deliveries, and we now see not only signature buyers getting VIN numbers or deliveries but we also see about 20 regular production Model X buyers reporting VIN numbers, which suggests these vehicles are in production, which suggests that production levels of X are increasing.

What I wanted to convey earlier is that we can keep an eye on the MX forum to see if problems are decreasing and if production levels are increasing, between now and the Feb ER/CC. For good or bad that will impact the short-term SP. I think that it's likely that one of the reasons for zero configurations outside of the U.S. are QC problems, which I think is the issue slowing the ramp. So in addition to looking at deliveries and the number of vehicles that are in production, we should try to track QC problems (I'm going to start a thread there to try to do that) and watch for any configurations outside of the U.S.

Also is it possible for management to say something positive enough about prospects for positive cash flow that would trigger a bump in the SP? Something like:
"in December with most of the MX cap-ex behind us and the beginning of MX income, we were very close to cash flow positive for the month, so we don't see any reason why Q1...".

If so is it likely?

 

[Causalien]

IMO the short-term SP would take a huge hit if EM announces he is leaving.


What I wanted to convey earlier is that we can keep an eye on the MX forum to see if problems are decreasing and if production levels are increasing, between now and the Feb ER/CC. For good or bad that will impact the short-term SP. I think that it's likely that one of the reasons for zero configurations outside of the U.S. are QC problems, which I think is the issue slowing the ramp. So in addition to looking at deliveries and the number of vehicles that are in production, we should try to track QC problems (I'm going to start a thread there to try to do that) and watch for any configurations outside of the U.S.

Also is it possible for management to say something positive enough about prospects for positive cash flow that would trigger a bump in the SP? Something like:
"in December with most of the MX cap-ex behind us and the beginning of MX income, we were very close to cash flow positive for the month, so we don't see any reason why Q1...".

If so is it likely?

Not likely. They will probably push cashflow positive another quarter back. The last time they guided, Model X deliveries was supposed to start beginning of Dec and for about 1000 Model X. Also, not hearing anything about Tesla enrrgy this quarter at all probably means it did not contribute to any earnings beside the initial orders of research projects by utilities. Oil and gas being where it is, utilities have most likely delayed the implementations to take advantage of the cheap commodities.

 

[AWDtsla]

Which is the reason Tesla won't be purchased. Why buy the cow when the milk's free? Tesla has opened their patents. Apple would rather spend their money building their own car, rather than pay a premium for Tesla.

Patents are worthless, it's the talent that matters. Actually no, patents are more like negative worth because of the army of lawyers you need to deal with them.

 

[Julian Cox]

A steady upwards trend will only set in if Tesla delivers good financial results. The reason TSLA has been flat since 2014 is that the company has missed guidance in 2014, only met the lower end of lowered guidance in 2015, and suffered stupid and unnecessary delays due to questionable engineering choices for Model X. Things will turn around very quickly if Tesla finally manages to ramp Model X, gets into the 1600-1800 units/week range, and achieves free cash flow. If Tesla can get more revenue and profit from Tesla Energy, this will be icing on the cake.

Until this happens, the stock is going to bounce around the 230 mark, plus or minus tens of $ either way. Keep in mind that from Late 2010 to Early 2013 (a period of roughly 2.5 years), TSLA essentially went nowhere, and traded in the 25-35 $ range. It wasn't until the company delivered solid results in May 2013 that the stock left that plateau. To get off the current plateau and to the next level, the company has got to deliver the goods.

I encourage people NOT to throw in the towel at this time. There is no guarantee of what will happen in the next year, but a Model X ramp and shipment of Tesla Energy products has a lot of potential to finally give the stock a real breakout. With Model X deliveries truly under way, it's a real product now, and not the 6 unit "launch" that we saw at the end of September.

Looking further down the line, I hope the jump to the Generation 3 level isn't as irritating, but I think Tesla has learned its lesson with Model X. We'll see in March when Model 3 is revealed.

+1 or at least +0.5 for this as well as the comment on guidance credibility and -1 about all the stuff regards selling the company to Apple etc.

I deducted 0.5 because I take issue with judging the company's choices regards the Model X. Believe it or not, Model X is a masterstroke of both engineering and timing. Sure it has frustrated some reservation holders that would have preferred it existed exactly as it exists now only two years earlier, but that is not realistic. Apparently the competition could come up with nothing over that period to tempt those customers away and what moving that program has done is permit Tesla to advance the resources necessary to lay down the mother of all charging and service-center networks and also to transfer real-world validated drive train engineering from the Model S to the Model X without having to iterate on engineering issues in the field with two vehicle programs in parallel. There is also the small matter of developing the silicon-carbon anode cell for the 90KWh packs. This is the core of the program that will incrementally take Tesla's commercial production cell energy density from 260Wh/Kg to 380Wh/Kg in the 2018 time-frame resulting in 5% or so annual range extensions in parallel with cost reductions. While the bears sing themselves to sleep with dreams of competition Tesla is pulling away from the competition exponentially because of this. This is fundamentally what will overturn the energy and transportation economy from transporting chemical energy in fossil fuels to storing electrons and this what Tesla is all about: Cost Per KWh and storage energy density.

I look at the Model X as it actually is. It is as an addition to the business plan laid out in 2012 not a delay to it. Why? The Model S practically made the 2014 and 2015 numbers promised for Model S and Model X combined. The company would appear to have leveraged its Gigafactory funding through the Model X program just in time for the Model X and Tesla Energy to pay for the Gigafactory. Between those two programs plus Model X Tesla seems to have convinced Panasonic that it can keep pace with its contractual cell-order volume commitment and boom, $1.6 billion commitment from Panasonic pops out. I guess Panasonic approves of the Model 3 Alpha (or Beta) too.

Possibly worth reiterating at this juncture that the 2016 fundamentals will jump simply because Model S Model X and Tesla Energy are all selling in parallel. This is a 180 degree about turn and quantum leap forwards when compared with Model S part funding Model X and Tesla Energy development with nothing left over to show for it. This is 180 degrees from the bear thesis that Model S itself was unprofitable and that R&D is 'just a cost of doing business that all automakers have to account for before reporting their numbers'. A classic error derived from a paradigm shift (real one). A few $billion R&D into engine efficiency gets you 1% extra efficiency or something at the same time as every competitor also gets a 1% efficiency boost at the same cost. A few $billion in the case of Model X gets you a new vehicle program that just happens to be the instant class leader in C/SUVs and a doubling of production - and a whole energy storage business on the side. Big, big difference.

The Model 3 won't be irritating in terms of delays. It will be 'irritating' maybe in terms of cash for production equipment but I don't think we have to worry about that. I think that will be self-justified on the back of Model 3 reservations.