Short-Term TSLA Price Movements - 2016

[anticitizen13.7]

Nobody likes to see the value of their portfolio fall, seemingly on the whims of analyst reports, but the drama is getting ridiculous.

There are macro conditions (general market uncertainty, China, etc.) that weigh heavily, and after a 6+ year Bull market, there is bound to be some pullback.

Forget the fantasy talk about "no problems with Model X" and "Tesla should partner with VW". None of this will lead to sound investing or even trading. Nobody is likely to be setting up traps for bears, and even if they are, there's no guarantee that they would work.

In times like these with wild short-term price swings, there's only one important fundamental question: Is Tesla Motors still on track to profitably bring a mass-market luxury BEV to the marketplace?

If you think the answer is yes, there is no reason to sell. If you don't believe in the company mission anymore, then sell.

I'm not happy AT ALL with the Model X rollout, which has to this point obviously been botched (4 months after reveal and initial deliveries, there is no :cursing: way that there's no problem if deliveries are basically stalled), but I don't see any indication that the company is off track on its primary mission.

 

[Drax7]

Tesla has screwed up the launch , and now the stock is paying for it. It has little to
do with all the delusional manipulation mentioned here and that is my view. Self deception
is harmful.

The price break today after yesterday's key reversal is awful .
Just manufacture and deliver , then buying support will return.

 

[valuationmatters]

Tesla has screwed up the launch , and now the stock is paying for it. It has little to
do with all the delusional manipulation mentioned here and that is my view. Self deception
is harmful.

The price break today after yesterday's key reversal is awful .
Just manufacture and deliver , then buying support will return.

More likely it is a conspiracy of:

Oil companies
Car dealers
Short sellers
Wall Street
GM
the guy who test drove the Bolt

I am 100% sure.

 

[Bunky]

I think people are giving too much attribution to slow Model X ramp for todays price movement. It certainly hasn't helped but we here are a lot more informed of the situation than many others. Today seemed predominantly macro related with Tesla far from alone in ******** the bed. TWTR down 10%, MBLY down 9%, RACE down 12%.

'Twas a sea of red out there, and the sea was angry today my friends.

 

[demetri]

Receiving my sig X vin 774 in about a week, on its way to CT. Overblown reaction to X delay from analysts. In all scheme of things a few months means nothing, basic plan on track. As long as there are no fundamental problems with X. I think they are finally starting a steady state of deliveries. Extrapolating lateness in development/production/delivery of S and X does not necessarily mean the m3 will be the same. Between the simpler design and experience from building two world class cars the m3 will meet elon's stated timeline. There are a lot of things that can go wrong but I expect them to be early on the m3.
you heard it here first! Does anyone else feel the same.

 

[Julian Cox]

Nobody likes to see the value of their portfolio fall, seemingly on the whims of analyst reports, but the drama is getting ridiculous.

There are macro conditions (general market uncertainty, China, etc.) that weigh heavily, and after a 6+ year Bull market, there is bound to be some pullback.

Forget the fantasy talk about "no problems with Model X" and "Tesla should partner with VW". None of this will lead to sound investing or even trading. Nobody is likely to be setting up traps for bears, and even if they are, there's no guarantee that they would work.

In times like these with wild short-term price swings, there's only one important fundamental question: Is Tesla Motors still on track to profitably bring a mass-market luxury BEV to the marketplace?

If you think the answer is yes, there is no reason to sell. If you don't believe in the company mission anymore, then sell.

I'm not happy AT ALL with the Model X rollout, which has to this point obviously been botched (4 months after reveal and initial deliveries, there is no :cursing: way that there's no problem if deliveries are basically stalled), but I don't see any indication that the company is off track on its primary mission.

Long term you're right. Tesla has a profound first mover advantage on the technologies that will replace the current auto industry.

As for the Model X, you are thinking like a consumer, not like a shareholder.

For the Tesla business and its shareholders there is absolutely no problem with the Model X. There is nothing else comparable for consumers to buy and the business can roll out the product as it sees fit to standing demand in the $billions. Model X customers are going nowhere. Full ramp by Q2 is perfect. If the customers are going nuts with impatience for the product then that's hardly a tragedy from a shareholder's perspective. For sure it would be a tragedy if those customers had another electric SUV supercar to go and buy instead but they don't.

As a shareholder what matters here is that you know (at least you should) that Model X is just fine - and that loads of shorts have bet hard cash on the opposite. If you cannot make money out of an information advantage like that then you may as well give up. Sorry but it is monumentally frustrating to watch people buy into this guff.

Same story with the rest of the stuff. Big cash is bet on the Bolt being relevant because it has a 200 mile range or Model 3 being pushed out because Model X was. It isn't relevant and it won't be.

 

[wheresmyx?]

Based in large part on its innovative products, TSLA has always been a "show me" stock. When Model S production started years ago is when the stock took off. Many "experts" questioned the technology prior to that. EM has generally added to the volatility of the stock with his optimistic timelines. (Obvious exception is when the stock was nearing $300 and he stated on an earnings call that the stock was overpriced in the short run!).

The company needs to execute (i.e.,ramp X production, get gigafactory operating and supplying batteries for model 3, etc), plain and simple. My timeframe as a TSLA shareholder is long term, so I'm willing to tolerate these bad days, but boy, it sure is a test one's belief/religion in the company. Street analysts are not compensated on a long term horizon and just increase the volatility. If you have long term conviction and TSLA doesn't already represent a disproportionate share of your wealth, then buy more while it's on sale.

 

[Julian Cox]

Receiving my sig X vin 774 in about a week, on its way to CT. Overblown reaction to X delay from analysts. In all scheme of things a few months means nothing, basic plan on track. As long as there are no fundamental problems with X. I think they are finally starting a steady state of deliveries. Extrapolating lateness in development/production/delivery of S and X does not necessarily mean the m3 will be the same. Between the simpler design and experience from building two world class cars the m3 will meet elon's stated timeline. There are a lot of things that can go wrong but I expect them to be early on the m3.
you heard it here first! Does anyone else feel the same.

Absolutely, see previous comment to yours.

The issue here is that 9 out of 10 'analysts' are auto industry analysts. The other one is Trip Chowdray who is too smitten for his own good. In a disruption, industry experts are by definition experts in a previous paradigm. In the previous auto industry paradigm, if you have a frustrating product delay then customers walk because all the competitors offer the same kind of product.

- - - Updated - - -

Based in large part on its innovative products, TSLA has always been a "show me" stock.

Correct.

Here's the dynamic. Bears talk stock goes down. Tesla shows them. Stock gaps up. We have a whole year of "here it is" set against a backdrop of 30 million shares sold short. Why the long faces??

 

[lango]

Long term you're right. Tesla has a profound first mover advantage on the technologies that will replace the current auto industry.

As for the Model X, you are thinking like a consumer, not like a shareholder.

For the Tesla business and its shareholders there is absolutely no problem with the Model X. There is nothing else comparable for consumers to buy and the business can roll out the product as it sees fit to standing demand in the $billions. Model X customers are going nowhere. Full ramp by Q2 is perfect. If the customers are going nuts with impatience for the product then that's hardly a tragedy from a shareholder's perspective. For sure it would be a tragedy if those customers had another electric SUV supercar to go and buy instead but they don't.

As a shareholder what matters here is that you know (at least you should) that Model X is just fine - and that loads of shorts have bet hard cash on the opposite. If you cannot make money out of an information advantage like that then you may as well give up. Sorry but it is monumentally frustrating to watch people buy into this guff.

Same story with the rest of the stuff. Big cash is bet on the Bolt being relevant because it has a 200 mile range or Model 3 being pushed out because Model X was. It isn't relevant and it won't be.

Yes, Model X is most likely totally fine. But there is a small chance it is not. Right now that probability is estimated way too high by the market and others and as soon as the real production has started it will of course go to 0.

In the end I think there is a bit of communication problem here. They never said it would be ramped up by now but they tried to communicate too early about the difficulties with weekly prediction of exponential curves and how numbers can move if there are a delay of a few weeks. However, the accuracy of that ramp prediction is not weekly now but more like quarterly at this point. At-least it feels that way without re-reading all statements made. This feeling is also amplified by the fake launch in August 2015. No-one expected it to take 6 months from a car model gets to it's first customer until mass production starts. That approach is Tesla exclusive.

A delay with Model X can also have an effect on the cash position which is critical. Now that problem is also overblown because they can still ship a ton of Model S.

 

[demetri]

+1 bought some June 200's when it dropped to 183 last week. Will buy more tomorrow morning if it's down early. I know 10+ People at work that are ready to put in reservations for the 3. We have 6 of us that have a model S and everyone would love to have one if they could afford it. The 3 is going to be huge.
As far as the X goes, it's going to be the hottest suv to own in the world. Everyone in Greenwich is going to want one. I heard from 3 different people today that they spotted an X. Once we get a few reviews just like the S, we are off to the races. The analysts will be eating their words.

 

[Papafox]

...

The issue here is that 9 out of 10 'analysts' are auto industry analysts. The other one is Trip Chowdray who is too smitten for his own good. In a disruption, industry experts are by definition experts in a previous paradigm. In the previous auto industry paradigm, if you have a frustrating product delay then customers walk because all the competitors offer the same kind of product.

And in the old paradigm, if the economy dipped or your competitors gained an advantage (drop in oil prices), you sold fewer vehicles in the coming year. A disruptive company, on the other hand, is likely production-limited if their business is cars, and the production-limit remains key to the number of vehicles that can be delivered in the upcoming year, since demand remains above the production number.

 

[ludicrousspeed]

Receiving my sig X vin 774 in about a week, on its way to CT. Overblown reaction to X delay from analysts. In all scheme of things a few months means nothing, basic plan on track. As long as there are no fundamental problems with X. I think they are finally starting a steady state of deliveries. Extrapolating lateness in development/production/delivery of S and X does not necessarily mean the m3 will be the same. Between the simpler design and experience from building two world class cars the m3 will meet elon's stated timeline. There are a lot of things that can go wrong but I expect them to be early on the m3.
you heard it here first! Does anyone else feel the same.

Congrats, that's great news about receiving your X. I also have a similar feeling about timing of the initial Model 3 deliveries. I wouldn't go as far to say that Tesla will be "early" on M3, but that the first of the Founders deliveries will probably take place end of December with further deliveries most likely in Jan '18. By producing both the MS and MX, Tesla has gained invaluable experience and will benefit greatly from the complexity of these vehicles. I think the initial "problems" with the X ramp that everybody is freaking out about will ultimately be remembered as a positive and as a huge learning experience that helped them focus on only the essential elements of the model 3.

 

[SBenson]

Receiving my sig X vin 774 in about a week, on its way to CT. Overblown reaction to X delay from analysts. In all scheme of things a few months means nothing, basic plan on track. As long as there are no fundamental problems with X. I think they are finally starting a steady state of deliveries. Extrapolating lateness in development/production/delivery of S and X does not necessarily mean the m3 will be the same. Between the simpler design and experience from building two world class cars the m3 will meet elon's stated timeline. There are a lot of things that can go wrong but I expect them to be early on the m3.
you heard it here first! Does anyone else feel the same.

Just to be precise, are you given an exact delivery date? I'm only asking because several people posted in the X sub forum that the cars are being held up at SCs for weeks together. Many people were not even being given specific dates even though the cars are right there. Don't know if things have improved since I saw this.

- - - Updated - - -

On a separate note people here are really mixing up long term, medium term, short term, and all terms. But I guess that's what this thread has evolved into. The confusion is what is leading to a lot of debate while many folks are probably on the same page (atleast in some of the time frames)

 

[vgrinshpun]

I have no idea how to put this all together anymore. A signature with 42x VIN is still in production and has no delivery date but a production series in Orlando has delivery date of mid Feb (in two weeks)?



In any case, this is disappointing. This all points to sub-15K combined deliveries for Q1. Maybe as low as 13K deliveries.

Like I said a week or two ago. It's best to keep some dry powder available for the Q1 ER.

I agree. The practical ongoing demand ceiling may be something like 10,000 model S a quarter without good sales in China. That could leave a Q1 with 12,000 cars delivered. That low number may be disastrous relative to expectations, but it hardly indicates a fundamental problem with Tesla.

For the investor, Q1 ER may be the best buying opportunity.

I think the demand ceiling (i.e., not getting 50% yoy growth, but could still grow just slower) for S starts around 13-15k per quarter. They have been doing this without pushing too hard on referral/inventory last year.

Fact check: Tesla delivered 17,192 Model S in Q4, pulling up around 2,000 orders from Q1, and still end up with the backlog indicated by the Tesla estimated delivery timeframe around the world per the table below, even though the beginning of the year is traditionally slow period for car sales.

Based on this *current* Model S demand plateau stands conservatively at 17 x 4 =68,000 units per year, or very healthy 70% higher than original as-designed output of the Tesla factory of 40,000 cars to satisfy global demand for Model S and Model X COMBINED. This originally projected 40K/year of combined MS/MX demand was incessantly assailed and ridiculed by Tesla bears.

Tesla will likely deliver at least 18,000 MS and MX in Q1.

Judging by the current freak-out quotient on this thread and sudden appearance of new theatrically aspiring members playing Jokers, we are at or close to the bottom. I've converted some of my long term shares held since the end of 2012 to January 2017 calls.

 

[AlMc]

@Vgrinsphun: I am sure you meant J'17 Leaps.:wink:

 

[vgrinshpun]

Once again I bought some weekly calls, as I think this is selling is overdone and we will bounce. Not a long-term play, just picking up nickels catching some intraday swings.

Same.

Same here. Did similar last week - set up time delayed $185-190 "free" spread. Small stake, but 200%+ profit.

 

[anticitizen13.7]

As for the Model X, you are thinking like a consumer, not like a shareholder.

For the Tesla business and its shareholders there is absolutely no problem with the Model X. There is nothing else comparable for consumers to buy and the business can roll out the product as it sees fit to standing demand in the $billions. Model X customers are going nowhere. Full ramp by Q2 is perfect. If the customers are going nuts with impatience for the product then that's hardly a tragedy from a shareholder's perspective. For sure it would be a tragedy if those customers had another electric SUV supercar to go and buy instead but they don't.

I couldn't disagree more.

For customers who must, in their minds, have a BEV mid-size crossover, there's no other option. However, Tesla's selling point is that the car, service, and overall experience are great. Some customers will just throw in the towel and buy or lease something else rather than deal with the hassle of continual delays and miscommunication. They may very well go to another manufacturer in a few years if alternative BEV crossovers become available. A lost completed sale today may not be a recoverable sale tomorrow.

As a shareholder, I see the past few months as damaging to Tesla's brand and reputation. Early adopters of the Roadster and Model S were willing to put up with delays. As Tesla gets a wider audience, that tolerance for delays begins to wear thin. The Roadster is obviously a sports car and the Model S was admittedly "guy centric" (due to lack of interior storage and amenities). General consumer soccer mom, even a wealthy one, is not going to want to sit around for months to get a new family hauler.

In Ashlee Vance's biography of Elon Musk, there's a story on Elon's thinking about SpaceX: Elon was telling employees that every day that went by with Falcon 1 being delayed was a lost day in the future where SpaceX would not be generating as much revenue as it could generate. I believe the same applies to Model X. Every day that goes by with the ramp stalled for whatever reason, is a day with lost revenue. From a business perspective, Model 3, completion of the Gigafactory, and addition of overseas vehicle manufacturing plants and/or additional Gigafactories is going to require more $, and the sooner Tesla gets that $ in hand, the better.

If Tesla can get this :cursing:show sorted out soon, and the financials begin to reflect strength of deliveries, TSLA will recover. Right now I interpret the current market conditions as reflecting a combination of macro fears and doubt that Tesla can get this situation under control soon. This is specifically dangerous to people playing with options, as nobody knows exactly when there will be a resolution to the Model X situation.

Under these conditions, I believe short term price movements are going to be too volatile for most (non-pro trader) people to make $ trading. I've seen amateur speculators crash and burn many times over the past 20 years. For most people, my advice continues to be the same: invest in TSLA only what you can afford to lose, and plan for holding until at least 2020-2021, which is when I expect that Model 3 and its crossover derivative will be shipping in the hundreds of thousands per year. Vanguard index mutual funds are a much better choice for those who cannot stomach the ups and downs (disclosure: a large % of my tax-advantaged retirement accounts are invested in Vanguard index funds).

 

[vgrinshpun]

@Vgrinsphun: I am sure you meant J'17 Leaps.:wink:

Yep, beat you by one minute, fixing it myself :smile:

 

[Zhelko Dimic]

View attachment 110138

Huh, this sure is encouraging. I was doing my 'channel checks' in September and learned that Tesla delivers very little in Canada beginning of quarter, as they produce for overseas.
Taking into account travel time, right now they're filling last of the ships for overseas and yet they can offer only late March delivery (they already have enough orders to keep them busy through Feb and first part of the March), and that's only for USA and Canada. That certainly looks like pipeline full to bursting...

 

[vgrinshpun]

Huh, this sure is encouraging. I was doing my 'channel checks' in September and learned that Tesla delivers very little in Canada beginning of quarter, as they produce for overseas.
Taking into account travel time, right now they're filling last of the ships for overseas and yet they can offer only late March delivery (they already have enough orders to keep them busy through Feb and first part of the March), and that's only for USA and Canada. That certainly looks like pipeline full to bursting...

They started filling up Late March for NA deliveries a week ago, on 01-26-2016. I interpret "Late March" as Tesla planning to deliver cars on the 16th of March on the day they post this update to the estimated delivery times. I post ongoing updates in the "Website Wait Times for Delivery change" thread.