Short-Term TSLA Price Movements - 2016

[neroden]

Model X design studio still not open for general public. Why are they still in reservation mode?

Hypotheses:
(1) Still trying to keep demand down while they work the last few bugs out. It might just be one option which still needs debugging or has supply chain constraints, but they may want to get all of them all sorted before opening up the design studio.
(2) Finalizing "production" options packaging. They've had a lot of whipsawing of options packaging on Model S and people didn't like it. If they're planning to make a packaging change I think they'll do it before opening the design studio up.
(3) Web team too busy with Model 3, will open up Model X design studio next week

 

[Julian Cox]

Advertising revenues are the lifeblood of the media. Tesla does not advertise. It is a competitor of companies that advertise heavily. Of course Tesla will likely advertise eventually, and media outlets may be wise to start developing favorable relationships with Tesla.

Tesla editorial sells copies and clicks for others to advertise against. Best money spinner - negatively spun Tesla article with a load of Audi and BMW ads. Go too far though - no more Tesla interviews, press and earnings call invites, lots of angry letters to the editor and comment streams full of stop it - so bit of a fine line for the media to tread.

BMW actually bought the Google and Youtube search terms Tesla, Model S, Elon Musk to promote the launch of the BMW i3 - judging by the sponsored BMW content and ads that invariably appeared at that time.

I know advertising and this is not smart - essentially stamping an eye catching BMW endorsement for the attention of any BMW customer curious about Tesla when the latter frequently owns the Internet and BMW never does. Bridges like that can be traversed in either direction and BMW has far more dealership foot-traffic to lose than it could possibly gain especially if the grass starts to look greener on Tesla's side - which just happened for the vast majority of their ICE customers and 100% of their i-program customers.

 

[neroden]

But when is 'eventually'? I can't see a single reason for traditional advertising in the foreseeable future, I just can't.

According to Wikipedia word-of-mouth was sufficiently powerful for the Model T that Ford did not purchase advertising between 1917 and 1923. Let's say Tesla might need advertising in, oh, 2035?

 

[BobSk]

Love how this guy puts Corey in his place. I'm beginning to hate his snarky & unsubstantiated commentary.

Why Customers Rushed to Order Tesla’s Model 3

The guy Liam Denning seems intelligent and unbiased. On the other hand, Bloomberg's Cory Johnson seems to have a short position on Tesla. Check his past comments whenever Tesla did something great. Maybe he took a short position long time ago?

 

[neroden]

I used to be a BYD investor. But watch out, if Tesla decides to produce buses (it's only a matter of when), everyone else has to step aside. No matter how much lead they had.

I don't think Tesla will decide to do that.

The heavy vehicle market (full size buses, full size tractor trailers, panel vans) is *really different* from the light duty vehicle market. For one thing it's basically 100% fleet sales. For another they're still body-on-frame because each fleet wants a custom body. For another, they have different duty cycles and so the motors should be specced differently. Right now they are *not* made by the carmakers -- I think Volvo is the only carmaker in the bus business, and all the other competitors are strictly busmakers. No reason to believe that'll change.

Same with motorcycles; I don't expect Tesla to make motorcycles either. Zero's doing a very respectable job there.

Someone's gonna make electric construction equipment (backhoes, dump trucks, bulldozers) but again, it probably won't be Tesla.

That's fine. Now, if one of these markets *inexplicably* has no serious electric competitors in 2030, Tesla will probably take a look at it, as part of the goal of accelerating the electrification of everything. But I think Musk will be happy if someone else does the work to deal with these other markets! Remember, he only financed Tesla *because* GM crushed the EV1 and Toyota crushed the first gen Rav4-Ev. He was happy to let the existing automakers do the work; he only stepped in because they refused to.

 

[eepic]

After lining up in the rain early in the morning to put in my M3 reservation then seeing pics in the tent thread on TMC, I'm incredibly happy as a long term shareholder.

With respect to the stock price, recall that for the analysts and mainstream followers Model 3 is the car that gives Tesla its auto business valuation. The questions they had for it were:

1) Is there actually demand for it?
2) Can they actually produce that many?
3) Will they actually make money on it?

We just saw the biggest and toughest question get completely destroyed. This means the likelihood of an outcome where Tesla reaches Tesla 2.0 or Tesla 3.0 (borrowing from DaveT's terminology) just went up significantly. The assumptions and probabilities to the valuation models should reflect this and PT's raised like Andrea's.

However, I am genuinely curious and a bit surprised by the price action Friday after such a huge new piece of fundamental information. Borrows were already tight, so I would have thought it would be difficult for new shorts to enter even if they wanted. As a long, there's no way I would rationally sell for a few % gain this week given how the story has changed. So the question is... who sold the 16 million shares around these levels???

 

[Julian Cox]

It will most likely come from the board and also be fueled by consumer pressure and national pressure.
They have to change how they do investment calculations and decisions and plan and invest for very high volumes even if they don't know if they can sell them, if they don't they are going to be priced too high or be a less good product. They have never done this before but only modeled for high volumes if that model or platform had a history of high volumes. Tesla would not sell Model 3 for $35k either if they expected life-time production to be 100k.

Their current plan for electrification is to sell PHEV for 5+ years and mark them up with the extra drive-train cost and then have government incentives to bring the difference down. By doing this they can build up both EV experience and supplier contracts and eventually move to BEV in a less risky way than doing it right now. If 20% of vehicles sales are PHEV that would be GF volumes of batteries in total so it would also bring battery cost down.

Model 3 and Tesla destroys those plans. Government are not going to be as willing to give credits to PHEV when it is clear you can build a BEV with zero emissions. Current loyal customers will ask them over and over why they don't have a good BEV, and many will abandon their brand and buy a Tesla. And buyers with no loyalty that don't need the range advantage or refueling away from home advantage with ICE and PHEV will buy a Tesla, too.

The only way out for them is to take huge a gamble on BEVs they don't know if they can sell. For example VW need to invest and model for a million Golf electric and order batteries for that volume. They also have to make this work with the dealer network and make sure there is battery capacity available which Tesla solved with GF.

I don't think any current CEO is prepared to do this. It is just too risky and the decisions for the coming years are already in place. Fundamentally changing how the company do investment calculations is also a very big thing.

In the end they will continue with the PHEV plan and do BEV to at most 5% commitment so Tesla won't have any serious competition.

These companies make engines, transmissions and chassis components and assemble them together with fuel tanks and exhaust pipes. Electronics and a lot of other stuff is outsourced. What does the management mainly comprised of aging ICE engineers do when ICE and transmission line workers and the engine development R&D department gets wind that the management is contemplating abandoning the work for which they have trained and qualified to start focusing on EVs - and respond with threats of union strike action? I would guess that would be a factor to consider.

 

[ssq]

This thread is more like everything Tesla than short term price movement. Don't get me wrong - loving the thoughts shared but very few are on point. I should probably head to the long term price movement or trading strategy thread then...

 

[BobSk]

I don't think Tesla will decide to do that.

The heavy vehicle market (full size buses, full size tractor trailers, panel vans) is *really different* from the light duty vehicle market. For one thing it's basically 100% fleet sales. For another they're still body-on-frame because each fleet wants a custom body. For another, they have different duty cycles and so the motors should be specced differently. Right now they are *not* made by the carmakers -- I think Volvo is the only carmaker in the bus business, and all the other competitors are strictly busmakers. No reason to believe that'll change.

Same with motorcycles; I don't expect Tesla to make motorcycles either. Zero's doing a very respectable job there.

Someone's gonna make electric construction equipment (backhoes, dump trucks, bulldozers) but again, it probably won't be Tesla.

That's fine. Now, if one of these markets *inexplicably* has no serious electric competitors in 2030, Tesla will probably take a look at it, as part of the goal of accelerating the electrification of everything. But I think Musk will be happy if someone else does the work to deal with these other markets! Remember, he only financed Tesla *because* GM crushed the EV1 and Toyota crushed the first gen Rav4-Ev. He was happy to let the existing automakers do the work; he only stepped in because they refused to.

Have you checked BYD's E6? Under the hood is as crowded as ICE cars. I don't understand why do they need so much stuff. I also had a chance to look at the inside of BYD's K9 bus. It's nice but there are significant drawbacks. Elon can make one at the super next level.

 

[neroden]

This thread is more like everything Tesla than short term price movement. Don't get me wrong - loving the thoughts shared but very few are on point. I should probably head to the long term price movement or trading strategy thread then...

*Blush* Sorry, that's partly my fault. I tend to be a holistic thinker and as a result, when I'm involved in a topic it tends to, well, *meander*.

 

[Emil]

Ugh ... this is on the front page of Mashable, warning painful to read: Tesla Model 3 vs. Chevrolet Bolt: Battle of the long-range EVs

 

[BobSk]

After lining up in the rain early in the morning to put in my M3 reservation then seeing pics in the tent thread on TMC, I'm incredibly happy as a long term shareholder.

With respect to the stock price, recall that for the analysts and mainstream followers Model 3 is the car that gives Tesla its auto business valuation. The questions they had for it were:

1) Is there actually demand for it?
2) Can they actually produce that many?
3) Will they actually make money on it?

We just saw the biggest and toughest question get completely destroyed. This means the likelihood of an outcome where Tesla reaches Tesla 2.0 or Tesla 3.0 (borrowing from DaveT's terminology) just went up significantly. The assumptions and probabilities to the valuation models should reflect this and PT's raised like Andrea's.

However, I am genuinely curious and a bit surprised by the price action Friday after such a huge new piece of fundamental information. Borrows were already tight, so I would have thought it would be difficult for new shorts to enter even if they wanted. As a long, there's no way I would rationally sell for a few % gain this week given how the story has changed. So the question is... who sold the 16 million shares around these levels???

I made an explanation a while back and again on Friday. It's related to the Call holders closing their options. Market makers buy back these Calls that they originally sold, then they immediately sell their long shares. They make money from the time value decay. They don't want to take too much risk holding huge amount of shares. There are other reasons too, the above is the main reason. For long-term investment, these really don't mean much. For trading, you should have bought when the stock went above $228. I have a stop loss. But I suggest don't put your stop loss at the popular levels. Shorts intentionally hit those levels to force you sell.

 

[BobSk]

Ugh ... this is on the front page of Mashable, warning painful to read: Tesla Model 3 vs. Chevrolet Bolt: Battle of the long-range EVs

The biggest advantage of Tesla cars are safety and autopilot, also OTA updates, great services, etc. None of those were mentioned in his comparison. I used to keep a list about who I should ignore. Unfortunately the list got so big it's becoming hard to manage. The quarter million reservations showed many people know more than that guy. Also lots of those "opinions" are actually paid by someone. Advertisement is a big industry, they get quite creative. An extensive research showed around 4000 people took money from XOM and Koch brothers, they work hard to discredit the global warming theory. If a guy keeps writing in the same biased way, I know he is likely to be paid.

 

[Runarbt]

What?? For real..? Cool! (M3 beta tester email)

laughingstock22 - $TSLA for those who don't think they're already not in pre p... | StockTwits

 

[Papafox]

The guy Liam Denning seems intelligent and unbiased. On the other hand, Bloomberg's Cory Johnson seems to have a short position on Tesla. Check his past comments whenever Tesla did something great. Maybe he took a short position long time ago?

We're clearly going to have to show this video with Cory Johnson's snarky remarks at the Teslanaire's convention some day.

 

[chickensevil]

It is starting to look obvious that there is an unpublicised agenda up to Q1 ER. Thereafter it is open to much more speculation.

Edit] Look at it the other way round. If he wanted to raise before before Q1 ER, what would you expect him to do now? My answer: exactly what he is doing now.

Or, you know, he is just super excited about the positive response that was better than even the most crazy bull out there and way above anything the company themselves expected. The highest prediction was 100k in the first 24hours... and we blew right through that and everyone, including myself, thought that notion would be crazy talk.

 

[mejojo]

What?? For real..? Cool! (M3 beta tester email)

laughingstock22 - $TSLA for those who don't think they're already not in pre p... | StockTwits

Let's see...what is the date on that post?

 

[Rafael]

And yet we know Unveil Part 2 is "the super next level". And that Part 2 will be closer to production. Well my point is Musk is being coy here...tomorrow or next week is closer to production. We are going to be treated to Part 2 at some time in April once Musk is happy that the VALUE meme is sufficiently diffused into humanity's consciousness. Stand by!

Just for the record, I'll put my WAG for total reservations in April at 10m (i.e. $10B in deposits!). I'll pick up from there if Q1 deliveries are reasonable.

This is just completely, utterly mad. The prediction goes to the same category with flat earth conspiracies.

 

[allz]

In next 30min or so Elon should tweet the numbers

 

[sunhelm]

What?? For real..? Cool! (M3 beta tester email)

laughingstock22 - $TSLA for those who don't think they're already not in pre p... | StockTwits

You know this got me thinking, maybe the part 2 reveal is that deliveries might be earlier than later 2017.

I don't know but something about the way Elon coyly saying during the reveal that hopefully deliveries will happen by then makes me think this was his other card that he has close to his vest.

Remember, GF is no longer a constraint. Various comments on the test drive saying the quality fit and finish of the car.

But then again, is it still April 1 somewhere?