Short-Term TSLA Price Movements - 2016

[neroden]

Possibly slightly off topic takedown of BYD competition FUD or just something to read while the stock completes its U-turn into an all-out rally.

Thanks. Based on what you've written I don't really expect BYD to move into the western markets successfully for a long time, but... even if all they do is clone Western designs badly, that's enough to take a large portion of the *Chinese* market, isn't it? And that market is enormous. It could be quite sufficient to get them into the #1 carmaker position.

 

[Curt Renz]

The weak longs who were listening to advice given last week from pompous CNBC pretend-to-know-somethings to “sell on the news” may nearly be done. Now we await Tesla delivery numbers that should be released by Monday, perhaps Sunday evening.

After that the analysts may be expected to chime in with revised recommendations and price targets. They are generally conservative and tend to wait for proof that justifies their positions to their bosses. Many of them sense that they are more likely to lose their jobs for picking losers rather than for missing winners. Now they have proof of significant Model 3 demand, and it’s the potential for the Model 3 that that should justify higher share price targets. The Model 3 appears to be the auto industry game changer that some analysts and money managers may be severely berated for overlooking.

Meanwhile, those who reserved a Model 3 now have a vested interest in Tesla Motors. Don’t be surprised if many of them soon decide to become strong long term shareholders.

 

[neroden]

If they come out and say on the Capital Raise: "Hey, we were just going to live off of the money being made this year and next year to fund this, but all this was going to lead to ~80k deliveries in 2018. Clearly, if we operate at that speed, people are going to be waiting a *very* long time for their cars. In order to overcome this we are wanting X billions to try and get production ramped 2-3x faster overall with the goal being 2M cars by 2020."

Or something like that... it would come across well received since everyone's complaint is that they just don't go fast enough.

Yes, this is actually the scenario I'm hoping for. I'm not sure that 100K-200K reservations is enough to trigger this, but we'll see how many reservations there are at the end of the weekend!!!

 

[Yuri_G]

Looks like constant pressure from shorts today. A couple more positive catalysts in the near future and we'll be off to the races.

 

[neroden]

Ok, I think I want to study fundamentals

Yes, you should do this. Even if you're planning to be a short-term trader, it's incredibly valuable to know how things work *long-term*, which means fundamentals.

Thankfully doing fundamentals analysis is really simple mathematically. Really complicated *psychologically* -- you're trying to guess what products the public will buy, and how competent management will be -- but really simple mathematically. It's just a discounted cash flow analysis, basically.

 

[BobSk]

Couple of observations:

1) People this isn't twitter. Please post when you have something to say.
2) Ton's of new Tesla experts today. I have been having conversations all morning with people who want to talk about the 3. This feeds my theory that there are a lot of middle class people who had a mental wall about Tesla products-- no point thinking about something you cannot afford. The wall is coming down.
3) A few of us predicted they wouldn't talk about reservation numbers since it would either be lackluster 30-40k or because the information tends to help competitors more than TM. Well, they had a toteboard and everything. Tweets. It is very front and center. There really aren't a lot of good reasons to do this. It tells competitors they are in trouble and it discourages would-be reservers. The main reason to do it is to support the stock price. That is itself bullish, since it supports the theory that for the first time since 2013, Tesla management is interested in where the stock is trading.

Can't agree with this post on several points.
#1. I actually think disclosing a large reservation number will encourage would-be reservers to act quickly. My theory is when people see the reservation number grow quickly every week, they will reserve too. Otherwise the line could grow to several years long. Eventually they will realize how great this deal is.
#2. Not everything is a conspiracy or a calibrated action. Elon is human. After years of hard work, seeing the great response, I am sure he is excited too, disclosing the reservation number is quite natural. Why did he announce the 180,000 this morning? Part of the reason is he gave a low number last night, lots of medias are quoting that number, which is not up to date.
#3. Most owner/top management like to see their stocks do well. They also understand pushing up the stock without fundamental support is dangerous. I am sure Elon understands this quite well. (This point reminds me last year how Chinese government tried to push up their stock market hoping to maintain the GDP growth, look at the outcome.)

One thing I do agree, Tesla is set up to do well this year. (Cash flow positive, model X ramp up, Gigafactory completion, model 3 reservation, ....)

 

[tanner]

The weak longs who were listening to advice given last week from pompous CNBC pretend-to-know-somethings to “sell on the news” may nearly be done. Now we await Tesla delivery numbers that should be released by Monday, perhaps Sunday evening.

After that the analysts may be expected to chime in with revised recommendations and price targets. They are generally conservative and tend to wait for proof that justifies their positions to their bosses. Many of them sense that they are more likely to lose their jobs for picking losers rather than for missing winners. Now they have proof of significant Model 3 demand, and it’s the potential for the Model 3 that that should justify higher share price targets. The Model 3 appears to be the auto industry game changer that some analysts and money managers may be severely berated for overlooking.

Meanwhile, those who reserved a Model 3 now have a vested interest in Tesla Motors. Don’t be surprised if many of them soon decide to become strong long term shareholders.

Okay, sounds good! So you predict it will go up on Monday? Any guesstimates/targets?

 

[SBenson]

Possibly slightly off topic takedown of BYD competition FUD or just something to read while the stock completes its U-turn into an all-out rally.
View attachment 170014 Little photo of yours truly in a public area of BYD Shenzhen.



BYD won't. Absolutely not. Last time I was at BYD they had barely got to grips with vehicle manufacturing techniques mastered in the West in the 1970s for their BYD E6 and they seriously backed the wrong rustled horse with Lithium Iron Phosphate. The BYD I met are primarily motivated by not getting sued for battery *ires - and until far too recently and probably to this day they rigidly imagined that pacifying the chemistry was the way to do that and under no circumstances could they comprehend the idea of the routing the output of a battery to bypass an in-series PCM let alone a high current DC charging input because according to them that had never succeeded that was not how it's done. The culture I met there tended to know whatever they learned in a Chinese university whose primary function was to aggregate and disseminate knowledge of techniques studied at Western and Japanese joint ventures (effectively state ratified and funded industrial espionage) and then that knowledge appeared to freeze in a time warp in whoever graduated. I witnessed no ability to innovate or even countenance it in the engineers I met there. In fact the LiFePO4 mainstay of the BYD battery business is a battery chemistry design John Goodenough is on the record to state was stolen from him - lifted without recompense in the middle ages of Lithium secondary battery development - and at BYD that design is pretty much frozen in time unhindered and unfazed by A123 taking that tech to its logical conclusion with additives and nanostructuring the chemical contact interfaces and going royally bust in competition with LG as definitive commercial proof of BYD's battery core technology dead end-ness as one could wish for - and the Karma caught *ire regardless and so did the E6 for reasons that were obvious a decade ago or more on the basis of basic common sense. Big wads of self oxygenating reactants separated only by intentionally thin and porous plastic and cased in nylon coated aluminum foil that melts without difficulty if not combusts along with the contents - not good above a critical mass especially when energy density matters in the slightest as it very much does in a vehicle.

The other thing about BYD is a strategic error. Lacking IMO a credible internal driver of innovation and basically reliant on being a contract engineering house with massive access to cheap labor (200,000 employees spread over seven sites at the time) for third party innovators to tap into - what they have actually done is employ a strategy of trying to compete with their customers to the point that they are difficult to trust in a way that Foxxconn with its Taiwanese management isn't. Take BYD a project and more likely than not they'll turn round and make clones of your design under twenty different random brand names and pop them up on Alibaba to see what sticks. Apple for example would not even give them a license to buy one of its iPhone connectors to make an Apple-approved product with - I deduced this because a group of their people asked me to apply for the license and back-door it to them for a cut. Back on point: In the Auto and Automotive battery space BYD has gone too far in trying to take it from both ends. No battery technologist would be mad enough to take them a competent automotive battery design and no auto manufacturer in their right mind would take them a competent vehicle design or any of its manufacturing techniques - so they are kind of muddling in the middle making bad cars with bad batteries - hence the BYD Qin Hybrid of the two - which by the way looks suspiciously like they have reversed an old Toyota Corolla in terms of styling while underneath it's reportedly a stretched BYD F3 platform that famously struggled to even pass a Euro NCAP crash test let alone collect a single star - and yup they are still using the LiFePO4 battery (13KWh lump of prismatic cells), the same basic type which contributed to the BYD E6 having a power to weight ratio that practically prevented it climbing a steep hill. As for the Qin selling in volumes in China, that is not that difficult when the government sets quotas for hybrids and in the case of BYD can effectively buy them from itself in 1000 unit blocks at a time as taxis, subsidize themselves or simply issue purchase vehicle ownership permits to match the quota with nothing else to choose from until the quota is filled - none of it implying any connection to the quality of the vehicle or consumer demand except for demand for a vehicle permit to drive anything at all.

So far they have managed to get Brazil to take a few Qin-s. I suspect NHTSA would fine them on principle for even requesting a US homologation crash test. Like why are you even bothering us when we're busy with cars that might pass?

This is not the Tesla competitor you are looking for.

That is VERY helpful. Thank you!!

 

[CyberDutchie]

Longtime long & lurker, but infrequent poster. The price action today motivated this post:

The mainstream media is very negative about Tesla save for a few outlets like NPR. Everybody is so damn focused on criticizing them. Friggin Wired had a live blog yesterday for the model 3 reveal and it was the second story about Tesla. The first story on them was about how electric cars are not as green as you think. On the 3 reveal day.

LA times likewise bashes them on subsidies, which is all hogwash. NY times tried to screw with them on a range argument. All these liberal pubs, you think, would support Tesla.

So much happened with Tesla yesterday and very little on CNBC. They had a segment about how Tim Cook went to greet some iphone purchasers in the line. WSJ today comes out and bad mouths Tesla.

Its completely friggin nuts.

May be it's old news, but it dawned on me today that Tesla doesn't spend a dime on advertizing while their competitors and oil companies spend tons taking out full page ads, buying superbowl ads and what not.

This is infact hurting Tesla, because this negativity is hurting the share price and raising the cost of capital. I believe it is important because the right thing for Tesla is to raise more capital (as unpopular as it may be on this forum).

The speed advantage more capital gives them would in the long run benefit the shareholders more, as it completely shuts out the traditional automakers and lets Tesla dominate the real contenders like Apple and Google who are certainly looking at this ginormous market.

I think the right strategy for Tesla is to spend a good amount on advertizing, but not on its products. It should take out full page ads on what global warming is doing to our planet. It should talk about the amount of disease and deaths caused by pollutants. Basically the first few minutes of Elon's presentation. It should commit to the media that its going to spend this money. And it will go a long way in shutting up the media.

Hopefully this would create a long run goodwill in the minds of consumers instead of short term demand that Tesla doesn't need more of at the moment. Most importantly it would help co-opt the media, which you have to grant does have a lot of power in shaping peoples minds.

I agree with this, everytime Elon reminds us about the mission of the company and what is at stake, I feel good about supporting the company. And justify in my own mind why I am spending upwards of $200k on buying their vehicles.

And the ignorance out there is just unbelievable. I have colleagues who believe that producing the batteries for my Model X alone has consumed more oil and created more pollution then their gasoline cars will over the life span. Amazing!

 

[neroden]

The big question always remains: should I sell or sit tight and wait for the "hour" to make a U-turn. Who knows...

If you're thinking that short term, you might consider what they call "volatility trades", which you can make using options. I don't do them myself, but they're a way of betting that the stock will have a certain amount of volatility.

 

[tanner]

Also, Elon just confirmed on Twitter that the order count is 198k - wow, closing in on 200!

 

[sunhelm]

This this will make it go up? Elon Musk on Twitter

So let's digest that EM tweet further. Average optioned pricing will be 42K, or 7K more than the base 35 K.

Which means, pricing of the following popular options can be extrapolated for Model 3:

Auto pilot enabled: 2K
Dual Motor: 3K
Mid batt option 2K

I realize the battery option may be low but maybe the dual motor + battery upgrade at 5K at a full GF production clip is probably a good assumption lowering the costs down. Or, a fully paid back software capitalization from S and X sales might have lowered the auto pilot cost.

Thoughts?

 

[Zaxxon]

198k reservations now, per Musk's latest tweet...

 

[SBenson]

Our man Musk is creating a feeding frenzy lol

"Thought it would slow way down today, but Model 3 order count is now at 198k. Recommend ordering soon, as the wait time is growing rapidly."

Elon Musk on Twitter

 

[sub]

One thing I've also learned over the years is when I get excited and start thinking the SP will run away from me, I do the opposite and relax and stay on the sidelines. This has almost had a 100% success rate of a lower entry point soon after. Everyone knows the old Warren Buffet saying.

I'm confident we will resume a nice steady uptrend in the coming days/weeks.

 

[Norse]

Here we go

 

[drinkerofkoolaid]

Elon still hasn't formally upgraded guidance or said how Tesla will increase/speed up production. I think when this info is released the stock will skyrocket. Can Tesla accelerate production plans?

 

[anticitizen13.7]

198k reservations now, per Musk's latest tweet...

I've long believed that there was enormous pent-up demand for something like Model 3, but even 198k reservations is beyond what I'd expected with reservations being open less than 48 hours.

The reservation numbers have blasted a giant hole in the bear thesis of "no demand" and "Chevy Bolt competition".

 

[Tempus]

Elon is REALLY priming the pump..
His latest tweet: Definitely going to need to rethink production planning...

 

[drinkerofkoolaid]

At the current rate of 90 per minute Tesla will have at least 250,000 deposits by tomorrow morning.

500,000 deposits by Monday or Tuesday?