Short-Term TSLA Price Movements - 2016

[MartinAustin]

Suspected real-world testing of prototyped improved environmental sensors has been spotted -

Tesla Autopilot 2.0 hardware possibly spotted on Model S test mule

 

[Oil4AsphaultOnly]

http://jalopnik.com/volkswagen-may-build-its-own-version-of-teslas-gigafact-1778984998

Although it's only VW's announced intent (like their mythical EV's), would the news of VW's own gigafactory spread enough FUD to temper any stock rise?

Long term, this would have no impact on Tesla's model 3 sales as it should be shoring up VW's offerings and allow them to keep overall market share as ICE market share drops. But with the media click-baiting off of the next "tesla killer", this will probably cause a brief DTU ... maybe over the weekend?

 

[generalenthu]

Gigafactory party on July 29th per Bonnie

 

[CButterK]

http://jalopnik.com/volkswagen-may-build-its-own-version-of-teslas-gigafact-1778984998

Although it's only VW's announced intent (like their mythical EV's), would the news of VW's own gigafactory spread enough FUD to temper any stock rise?

Long term, this would have no impact on Tesla's model 3 sales as it should be shoring up VW's offerings and allow them to keep overall market share as ICE market share drops. But with the media click-baiting off of the next "tesla killer", this will probably cause a brief DTU ... maybe over the weekend?

Well, the VW Batt factory news broke almost 48 hours ago here...

Exclusive: VW Considers Building Own Battery Factory - Handelsblatt Global Edition

So, two full trading sessions thus far, and Mark Spigel(aka Logical thought) has been FUDding about it since 10AM today here...

Mark B. Spiegel on Twitter

Based on tsla price action yesterday and today, we might have just shrugged off this announcement for now. Kinda hard to take VW too seriously nowadays I guess...

 

[FANGO]

I just realized that the problem is that we have started posting about each other, instead of about TSLA. And in some ways this post is contributing to the problem.

Can we all agree to stop posting about each other? Maybe any post that talks about a member of the community should be moderated into a thread titled something like Comments About Members of the Short Term Investors Thread, which I predict would have more content than views.

Been saying this for a while.

Pretty tired of the "lets all talk about the resident egomaniacs" thread. One goes away, another one shows up, etc.

What's the quote? Great minds talk about ideas, small minds talk about people? Something like that.

Here's one basic guideline: if you are compelled to write 20-paragraph screeds every time anyone says anything whatsoever about you, then maybe the Internet isn't the right place to be.

 

[GoTslaGo]

Back on track:

Someone asked a few pages back about the next 30 days. I see the following potentially influential events:

Tesla Motors Shareholder Meeting - new information next week could give a boost, but I'm not counting on it. The most likely outcome here IMO is idiotic questions from the audience that waste everyone's precious time.

Brexit Vote - 23 June. Voters in the UK decide whether to exit the European Union. Should the UK decide on secession, I believe that the uncertainty of the economic impact will throw equities markets generally into chaos.

Q2 '16 deliveries - a bit more than 30 days out, but this should give some indication on how well Tesla is meeting guidance, and whether Model X production is truly ramped up.

I have no idea how these factors will ultimately affect TSLA. I only list them as events that could have impact.

Federal Reserve Meeting? I thought that was soon too.

 

[GoTslaGo]

Well, the VW Batt factory news broke almost 48 hours ago here...

Exclusive: VW Considers Building Own Battery Factory - Handelsblatt Global Edition

So, two full trading sessions thus far, and Mark Spigel(aka Logical thought) has been FUDding about it since 10AM today here...

Mark B. Spiegel on Twitter

Based on tsla price action yesterday and today, we might have just shrugged off this announcement for now. Kinda hard to take VW too seriously nowadays I guess...

I think the key word here is "Considers". Makes it a non-issue, except for hyper-excitable shorts (that sounds vaguely wrong). It might be different if the title said that VW is building.... even then.

 

[MitchJi]

I think the key word here is "Considers". Makes it a non-issue, except for hyper-excitable shorts (that sounds vaguely wrong). It might be different if the title said that VW is building.... even then.

I think it's a plus. Validates Tesla's GF.

 

[GoTslaGo]

@MitchJi

Excellent point!

 

[RobStark]

. Anytime, they can just stop and be EV of Porche.

Porsche is a wholly owned subsidiary of VW because it could no longer make it as an independent even with substantial consulting fees. Porsche leans heavily on VW for basic R & D.

Tesla is in a race to scale up before legacy automakers or major new deep pocketed players like Apple are building EVs at a true mass market scale.

Long Term Tesla can't survive on Porsche like 200k units per year volume.

 

[lango]

Well, the VW Batt factory news broke almost 48 hours ago here...

Exclusive: VW Considers Building Own Battery Factory - Handelsblatt Global Edition

So, two full trading sessions thus far, and Mark Spigel(aka Logical thought) has been FUDding about it since 10AM today here...

Mark B. Spiegel on Twitter

Based on tsla price action yesterday and today, we might have just shrugged off this announcement for now. Kinda hard to take VW too seriously nowadays I guess...

Interesting news. PHEV sales will go up a lot the coming five years so they need batteries for that. This is what guys like Spiegel don't realize, it is mainly or almost exclusively about PHEV for VW and others. From lobbying for government incentives to R&D. They wan't to hold back the BEV development so they can ease into it and not doing the big risky leap. The investments and plans have already been made, and their history prevents them for changing that without re-configuring the whole company (including management and the culture). Changing of those requires mandates from the board and the share holders. It probably also requires a new independent company.

 

[dakh]

Well, since the culprit is unresponsive to any of our attempts to stop

Intl Professor- you should ask for a raise.

Hell yea, I think there should be a PayPal account for all of us to contribute to coffee/beer fund for the forum janitors. Anyone keen on how to make that happen?

 

[dakh]

Thank you! Very informative.


I strongly disagree. I think it's a huge (maybe even historic) investment opportunity. An extremely safe strategy IMO would be to hold stock now, and watch for a good entry point after November to move into Jan19 LEAPS. But I also think it makes sense to have a plan B, hence the J19's vs J18's. Almost as safe as shooting fish in a barrel. I hope to post detailed reasons later.

Note:
I'm personally following a more risky strategy of holding(just purchased) J18 289 strike LEAPS now, paid an average of $21.85. I'll be looking for a good time to either move to cash or shares, and eventually to J19 LEAPS.

The issue with this is macro and overall market recognition of what Tesla is up to and its potential. I am in exactly the same boat as you but I'm starting to get serious about the rest of the world affecting Tesla story. Mohamed Al-Erian's book for example isn't helping with the bravado effort.

 

[dakh]

I think there is at least a $100 of valuation coming. The DEADLINE for that is the model 3 in production with real volume, adding to the financial top line in a big way. So that is, at best, mid 2018, not so far away really. I don't think the stock will suddenly jump from 220 to 320 in a day on the deadline, but when will it go up? Between now and then there is just a lot of spending, build out, risky production starts etc. There will be small to medium positives for sure, but the BIG MAMA good news will be financial receipts from model 3 that validate the long term secret plan, and permanently shift Tesla Motors from a risky upstart to a mid-major manufacturer.

Heck $200 of valuation raise is in play.

From what I can tell historical record shows the market didn't appreciate material steps towards the achievement of the goals that support the current (at the time) valuation, all the way until it was plainly obvious.

Would you then call the BIG MAMA a reveal of real-world Model 3 gross margins?

I think from the bird's eye view, there's only 4 things that matter:

1. basic solvency/execution. Yea I know, but that's what the market is thinking. "The money" have not been demonstrated yet, that's fact. Extreme sensitivity towards negative macro events has to be factored in, and that's not something to sneeze at. Like it or not that's how market perceives Tesla.
2. Model 3 production execution
3. Model 3 margins
4. Tesla Energy contribution?

The timeline for these is mostly 1.5 to 2 years out.

Edit: there's also Autopilot execution but that is outside of the time horizon for LEAPs at the moment. Simply accumulating stock for 5-10 year horizon that would definitely move the needle towards "buy" territory.

 

[lango]

The issue with this is macro and overall market recognition of what Tesla is up to and its potential. I am in exactly the same boat as you but I'm starting to get serious about the rest of the world affecting Tesla story. Mohamed Al-Erian's book for example isn't helping with the bravado effort.

It is extremely likely at this point they will grow at 50% average up to 2020, even if there is a recession. They won't show any meaningful profit during this time as they will reinvest it all for further growth.

So for me then the question comes what metric to use for the share price. I think what makes the most sense is P/S. In the absolute worst case scenario I think a P/S of 1 is possible, that would be very very low valuation for a company with 50% growth. This would give them a market cap of $22.5B end of 2018, assuming about $10B in revenue 2016 and 50% growth 2017 and 2018.

A more reasonable P/S with that growth rate would be 3 which would mean about $65B in market cap in 2018. If the general market is very bullish and growth higher than 50% then I think a P/S of 5 is possible, for a market cap of over $100B.

So all in all I think the current level is a low valuation and the risk reward ratio is great. It gets even better if the target is 2020 and not 2018.

What can wreak havoc on the share price is a failed Model 3 launch with respect to cost and production and then later financing problems. They are betting the company on Model 3. I think that scenario is very unlikely but it becomes a question how much one trust in Musk. it is the only obstacle they have now. Competition is not a concern yet.

 

[Stretch2727]

I think the key word here is "Considers". Makes it a non-issue, except for hyper-excitable shorts (that sounds vaguely wrong). It might be different if the title said that VW is building.... even then.

My experience with German supervisory boards is once it goes to the board the decision is already made. They will build it.

Agree it validates the Gigafactory. Let's see if it is anywhere near the scale of the giga factory. If they are targeting 1M cars in 10 years my guess is it will be a lot smaller.

 

[Gerardf]

The Handelsblatt article is now published, however it requires a (paid) registration.

In Search of New Energy at Volkswagen - Handelsblatt Global Edition

Anybody on the forum who has access and can give a short description of the content ? (copy / paste is probably not allowed).


Edit: Maybe relevant; VW sees 13,8 % (!) decline in May USA sales.
Volkswagen Expected to Have 13% Drop in May Sales

 

[DrJohnM]

See my answer above. And did know you that eating meat, especially beef, is really bad for the planet?

Giving up beef will reduce carbon footprint more than cars, says expert

More carbon footprint than all those evil ICE cars combined.

When do you and all the other Tesla drivers concerned about Mother Earth go vegan?

Why not give up both and while you are at it, give up using the Internet as that also uses Earth resources How much energy do you use up generating all the FUD that you produce?

 

[dalalsid]

See my answer above. And did know you that eating meat, especially beef, is really bad for the planet?

Giving up beef will reduce carbon footprint more than cars, says expert

More carbon footprint than all those evil ICE cars combined.

When do you and all the other Tesla drivers concerned about Mother Earth go vegan?

Do you speak as a vegan yourself or are these new annoyance tactics?

 

[SBenson]

The issue with this is macro and overall market recognition of what Tesla is up to and its potential. I am in exactly the same boat as you but I'm starting to get serious about the rest of the world affecting Tesla story. Mohamed Al-Erian's book for example isn't helping with the bravado effort.

El-Erian is a perma bear. He has been bearish pretty much throughout the bull run from 09 bottom. I try not to read any of his stuff.

Having said that, I do agree that macro is somewhat concerning, primarily with two issues: inevitable rising interest rates, the political dynamic with elections in US. Extraordinary 40 years of bull run in bonds, that effectively caused all other asset price increases, is coming to an end. hard to put a positive spin on it.