Short-Term TSLA Price Movements - 2016

[Krugerrand]

The long term is brighter... but the market trusts Tesla less at the moment. It needs a reminder of Tesla awesomeness. The question is when would that arrive?

Frankly, I'm tired of all the handholding the market needs at this point.

 

[Krugerrand]

Elon is an unusual person in that he is willing to risk everything. He does not appear to have the same fear reflex as your average investor. That is something he needs to take into account in these presentations.

Disagree. Investors need to understand that which and whom they are investing in right off the bat. It's precisely because he's fearless and will risk it all that we stand to gain so much - and I'm not just talking money here. The only question an investor needs to ask themselves then is: Is it worth the risk?

 

[Jayjs20]

He said the July date is an internal goal date. That's what they aim for, even though they know it's unrealistic, so it shouldn't be taken as any kind of guidance. The date he said the M3 will be ready by is still somewhere in late 2017.

 

[Fiver]

I don't think they will hit the 500K mark for 2018. Just too much too fast. I do think they will hit 70-80% of this. In 10 years hitting 350K or 500K in 2018 will not have mattered as even if they hit 70% of 500K they will be totally dominating the EV market.

Well, quite honestly before I thought the goal of 500,000/yr by 2020 was a pipe dream. But now If anything, I think they may actually hit 500,000/yr in 2020 with the new revised goal.

I agree getting 500,000 in 2018 (and probably 2019) will be a stretch.

 

[PaulusdB]

I agree, after reading that very crass piece of analysis, my first thought was that GS somehow got passed over as main underwriter for an impeding raise.

Or, just the other way around. (Just to keep you doubting your opinions, my friends.)
GS already got the assignment and is now massaging their top clients to buy into the raise, when it happens, soon. They do that by negatively influencing current SP with all means available, that's their purpose in life after all. Shorting, FUD, whatever.
Leading up to the raise they will just as easily start influencing the SP positively. Favourable analyses, based on new details released by EM, supporting SP, short squeeze, whatever.
So they serve both parties very well; their VIP clients get to buy the raised stock at a discount (by averaging with stock bought at the currently discounted SP) and TM gets a raise at a new ATH (much like they did last time).

 

[Drax7]

Some thoughts from a manufacturing guy a day after the conference call.



"I don't think they will hit the 500K mark for 2018. Just too much too fast. I do think they will hit 70-80% of this. "


You base this assertion on manufacturing what?

 

[anticitizen13.7]

Disagree. Investors need to understand that which and whom they are investing in right off the bat. It's precisely because he's fearless and will risk it all that we stand to gain so much - and I'm not just talking money here. The only question an investor needs to ask themselves then is: Is it worth the risk?

It's a hopeless cause. All the research I've read suggests that for the average person, fear of loss is felt 2x as much as happiness from gain. That's why many people tend to buy high and sell low. Almost everyone I know and told about Tesla has refused to invest. Of the few who bought shares, at least half eventually sold because they couldn't stand the short-term volatility.

I've held on to every share I bought, through every major market swing, and every event and non-event. But I am not the average person. People said I'm a psycho when it comes to investments. Co-workers nicknamed me the "Suicide King" during the Great Recession, because I was the only one buying as the Dow Jones plunged into oblivion.

Keeping the door open for an optimum capital raise via secondary offering is why I thought Elon should have done everything to handhold the investment community. It is good to keep this option open in a time that verges on rapid expansion.

 

[FredTMC]

Every analyst who downgraded Tesla today, based on their supposed view that Elon is crazy and lying should be fired. Compete and total BS.

Agreed. But who lowered their Price Target?

I count 5 raised Price Targets today. MS was unchanged

TSLA analysts

Baird/ Ben Kallo. 300 to 338
RBC 180 to 252
Deutsche Bank 280 to 290
Goldman Sachs 245 to 250
Morgan Stanley 335 to 335
UBS. 140 to 160

 

[Krugerrand]

-His comments about having every component ready to insource concerned me. For anyone that has worked in manufacturing and product development you know this is just about impossible. This is the time to leverage suppliers to minimize the capital expense and speed the development. A properly selected, properly managed supplier can add a lot of value. With the model 3 reservations the suppliers will be all over Tesla to get the business. The risk can be managed by having a good team to manage the suppliers. My guess is Tesla has not put much effort in this area (managing suppliers) in the past. You can't just send the drawings and specs and wait for the parts to arrive.

Except - let me remind you of some historical supplier issues Tesla has had; USB cables, tires, windshields, seats, seats again, door mech, seats AGAIN... There's others in there I've forgotten.

Then there was the 'strut' supplier for SpaceX that let them down.

Yeah, um...Go Tesla Vertical Integration!

 

[Krugerrand]

It's a hopeless cause.

Don't feel badly for the redistribution of wealth to your pocket. Somebody has to be on the wrong side of the trade for you to be successful in this regard.

Keeping the door open for an optimum capital raise via secondary offering is why I thought Elon should have done everything to handhold the investment community. It is good to keep this option open in a time that verges on rapid expansion.

At some point the door always closes. You can't stand there the whole day waving your arms and shouting for everyone to come inside before the storm starts. If they're too stupid to see the clouds rolling in, then they deserve to get wet. Just sayin'

 

[Bgarret]

Can file under "when hell freezes over" but we've talked about many capital partners for Tesla - Alphabet, Apple, Sergei, FoxConn....if Elon wanted to make most analysts and experts head explode, he would partner with Jeff Bezos and Amazon, use them for their online sales and logistics expertise....and their money. Bezos will sell anything and he and Elon have "shared" interests. Would make all the valuation nazis choke on their own spit.

Just speculating....

 

[ggies07]

Cramer: Elon Musk getting away with financial murder

Quote:

But we've never seen the likes of Elon Musk in our lives. Musk, the CEO of Tesla makes a total mockery of the process, picking numbers that suit him, and he's not in the least concerned about the consequences of being wrong.
​

And:

Without government subsidies for electric cars, Tesla is a goner.​

He credits Anton Wahlman for calculating that Tesla "loses >$19,000 per car". Concludes with:

Elon Musk can say or do pretty much anything he wants, because he has demonstrable demand for his product.​

ooooooh, this Cramer feller really ruffles my feathers.

 

[tinm]

Anyone think there's a chance that TSLA is already well on their way to arranging an equity raise with another firm rather than the open market? I'm no expert but it seems like there's probably a few companies that wouldn't mind 10% of TSLA in exchange for 3 billion (Google, Apple, Honda, Ford, Uber etc).

Yes. I have a sneaking suspicion we're going to see the announcement of a major investment from a big player (Google, Apple, etc) in the next few months, and Tesla has it nearly in the bag. We'll see.

 

[Fallenone]

His comments about having every component ready to insource concerned me.

From the CC, he said it's not his intention to have everything insource, it just happens sometimes when the supplier cannot keep up. And for the Model 3 internal deadline, I think his comment meant Tesla would be ready to do the incource if certain suppliers failed to deliver, but not neccessarily mean they will keep it that way forever.

 

[Stretch2727]

Some thoughts from a manufacturing guy a day after the conference call.

I don't think they will hit the 500K mark for 2018. Just too much too fast. I do think they will hit 70-80% of this.

You base this assertion on manufacturing what?

10 years in auto manufacturing with one of the big 3.

Generally we used the rule of the 3P's. People, Process, Product.

Change 1P and you can generally have a quick launch. New product in an existing plant with no expansion or new machines/processes.
Change 2 P's and you need a longer ramp. New plant and people with and existing product.
Change all 3 P's prepare for a long ramp.

Model 3 launch is a 2+ P launch. New Product. Hiring a lot of new people. Uses some of the existing process. (stamping, paint shop).

 

[The Blue Owl]

ooooooh, this Cramer feller really ruffles my feathers.

Actually, if you listen carefully to his tirade, he is paying Musk a compliment of sorts. He exaggerates and makes funny faces for comedic effect, and also he has no idea whether Tesla can pull it off so he wants to show his skepticism, but he compares three companies (Tesla, Apple, and Fitbit) and argues that:

• if you have demand growing through the roof you can get away with anything, no matter how outrageous (Tesla)
• if your demand is slowing the markets will punish you despite delivering $10 billion in earnings in line with expectations (Apple)
• if you don't understand the demand for your own product you should shut the **** up, lest you run your stock into the ground (Fitbit)

He also stresses that he does believe the current Model 3 reservations represent only a fraction of the real demand for the product. I actually liked the piece, even though he inserted those stupid remarks about Tesla losing money on every car and being dependent on government incentives.

 

[Seesaw]

In my opinion the SP is very good value at the moment

 

[Dr ValueSeeker]

Really no one speculating that the 2 VP left because they did not want to support the enormous whopper of 100-200 k M3 next year?
you have by now seen what happened and how much time took to start S and X production. You are seeing in these very days how difficult is to ramp up X production, I think it's really hard to believe in 100 K M3 beginning in six month from now...
UJnfortunately, the less a car costs the more it is difficult to arrange its production line since it is needed an optimization cost level not necessary for luxury cars

Let us not forget Tesla predicted 2015 exit rate of 100k cars a year.
Oh wait! May be, they did produce 273 cars on 31 December in 2015, but then ran out of money to buy the parts to sustain that.

 

[The Blue Owl]

Let us not forget Tesla predicted 2015 exit rate of 100k cars a year.
Oh wait! May be, they did produce 273 cars on 31 December in 2015, but then ran out of money to buy the parts to sustain that.

Hey Doc, other than pointing out every time Tesla missed their projections (something which everyone on this forum knows they've done, and most likely will continue to do, and to your and others' dismay they'll keep getting away with doing), do you have an actual prediction? Preferably a testable one. Like, say, a timeframe for when they will go bankrupt.

I keep reading your comments hoping to glean some information from you regarding the future of Tesla, but it's all about the past. Just make your prediction on record, please, so I can finally put you on Ignore until your predicted day of reckoning arrives.

 

[lango]

Please stop arguing. Tesla is not a heavy mature industry and I am not talking about Tesla handing options to companies - least of all ones that can be described and heavy mature industries!

I am talking about a pass through equity-backed options bonus plan for the teams of people that Musk is meeting with in the Tesla supply chain who will be working on Tesla projects for other companies "harder than they have ever worked before because they all want to be part of the Tesla Model 3 program".

It is doable. Its smart. It explains why Tesla would be talking about issuing equities while busy deliberately tanking their own stock. That would be to back a third party incentive scheme to seriously lock suppliers into not screwing up the work or the timeline on the Model 3. They must not have a cock up. What do you expect them to do? Wish harder that doing the same thing as they did with the X will just work better because lady luck has arrived? Are you kidding me?

I cannot hear it any more about how traditional this and that makes doing the ultimately smart mission critical thing that passes the entire Occam's Razor test like no other explanation for Tesla's actions is improbable as far as you are concerned.

Car suppliers are mature, heavy industry (or whatever the term is) and they are not using equity options compensation to their own employees in general. Never said Tesla was in that category, I thought that was clear from my text. It is just not how business is done and these types of businesses have a fixed way of doing things hence the unlikeliness.
The way to get car suppliers to play ball is by legal contracts, ordering large quantities with somewhat long lead times and follow up with communication. With X they did not buy large quantities. If you think the X ramp problems was because they did not offer equity compensation tied to Tesla stock to suppliers then I am not going to try to convince you otherwise.

I can see other reasons how Tesla want to get the SP down, or at-least don't mind if it went down. For example if they wanted to accelerate hiring and wanted to offer a lower base for equity compensation. A much more likely scenario I think is that they needed to commit to the 2018 goal right now and therefore for one reason or the other that we don't know choose to set it publicly and how the SP would react was secondary. I think this also points to lower part being equity raise as the SP does not matter as much if the raise is low. I think they will surprise most how far they are with manufacturing plans and also how they will get the funding and how much funding is needed.

Let's leave this discussion as it is not important for the investment case.