Short-Term TSLA Price Movements - 2016

[3mp_kwh]

Does the Solarcity acquisition give Tesla the ability to leverage a cost-effective solution with commercial property owners as a way to put fueling facilities at locations that work within people’s daily activities and schedules? Tesla fueling facilities on commercial properties could have dozens of superchargers or destination chargers per location and might be able to build-out this infrastructure quickly if it’s also to the economic advantage of the commercial property owners—thereby solidifying Tesla’s charging standard as the standard that other manufacturers conform to.

One factor I think you didn't mention on the commercial side, was the ability to avoid demand charges. Demand charges are only beginning to show up in residential rate-design (Like Salt River, AZ did to its solar owners), but have been a fixture in commercial for a long time. This is where monthly kwh's get repriced based on a momentary load draw which exceeds, say, 50kw or more. Typically, there are a couple of kw tiers. Shifting away from that, or blunting it with battery discharge, has its own economics for storage in markets like NYC.

I'm not for this merger, and am only long TSLA. I'm coming back to see what the institutions are considering doing, or if they are leading on about their intentions.

 

[electracity]

4. Pivot shift to an energy company (any of you out there have experience with pivot shift in your startups?) of which this new utility is not govt supported

I doubt they plan to continue to grow the solarcity end for the medium term. They likely want to sell a feature rich higher end solar system. You don't do that and try to be the high volume leader.

 

[larmor]

So what does TSLA need to do next, besides:
1. Building and selling, and yes delivering high end electric sedans on par with an s class or panamera
2. Building, selling and even delivering a high end-read expensive, SUV/CUV on par with a cayenne
3. Making the worlds largest battery plant, because hard to make a cord long enough to keep your electric car plugged in
4. Pivot shift to an energy company (any of you out there have experience with pivot shift in your startups?) of which this new utility is not govt supported
5. Because everyone needs some 'lectricity to recarge that darn phone which went from 100% to 60% in the course of one hour alerting servers that you woke up
6. Get energy for free from the sun and in the meantime, drive oil down to record lows in the past 5 years....
Not sure what else has to happen, or just continue trending the latest macro, Britain leaving the EU, Messi leaving Argentina national team...

A couple more, which the market has 'ignored' :
7. Agree to build cars locally in China to sell locally
8. Get Cramer to change his mind on TSLA...

 

[Spidy]

We haven't signed anything for a factory in China
- Elon Musk on Twitter

 

[Ulmo]

Soros seems to think it's option-A

George Soros: The European Union Is Heading For A 'Disorderly Disintegration'

Big money, i.e., those who want to control the world, are upset that they aren't going to be able to control the world as easily. They are making a fuss, and bringing the markets down with them. The fundamentals of the marketplace are built upon products, and the products will not suffer due to UK/GB/Britain leaving the EU; the opposite, the individual vitality created by a single culture in the UK will allow superior products to be built in the UK, and competition from other companies in the world, and this will increase the value of the marketplace. It also reduces control by the big-money types, who are really butt hurt that anybody would want to break up right now, and in their evil minds, "steal" their power. I think all of this stock market reaction to brexiting is a well orchestrated fear campaign by these evil people. It will have an impact on the stock market day to day, week to week, month to month, but year to year I think the stocks will go to the fundamentals of products, and the only long term difference is an improved market.

When I was a child, I didn't understand Einstein's comment that many smaller countries is better than fewer bigger ones. Now I do understand him. USA has diminished as it has grown in population.

 

[Svetlin]

Time for lottery ticket shopping. July 8th $210s are under a dollar. Just got a few. But I'm fearful to commit any more funds for leaps or stocks, in case we see further drops.

 

[austinEV]

I don't think beating the quarterly estimate is a sufficient condition to rally.
Its necessary but not sufficient until the economics of this deal are understood.
Frankly I cannot say I understand them . Those enlighten please explain.

Normally I might sign on to a viewpoint like this. To state your point another way, pessimism on TSLA makes it so a beat is shrugged off, because it is under a dark cloud.

BUT, I don't think that is what is going on. The TSLA story is completely, mind-blowingly positive if you believe the story Musk is telling. It is getting harder and harder to do so the more he promises. The sizzle/steak ratio is at an all time high, and the stock is suffering due to it. THAT is what caused the selloff last week, the sizzle/steak ratio got out of hand. I believe the stock price will recover with any substantial improvement to the denominator in that ratio. If the Q2 deliveries are a stout beat, that is steak. That is saying "look guys, we talk a lot but we also deliver." ANY for-sure, in-fact, present-case accomplishment in TSLA fundemental financials will be a force multiplier. Reducing that S/S ratio is key now.

This is why I have been annoyed with Musk and Co in the last 6 months for launching each new promise campaign. That sends the ratio out of whack. They can fix the ratio by accomplishing great, concrete things or by being quiet, the latter is way easier. The market is in no mood for sci-fi sounding plans.

Plus (12:30) TSLA is damn near recovered. Go team.

Edit: up 0.5%... any specific news item? Looks isolated to TSLA. some TMC member go buy a million shares?

 

[Jayjs20]

Didd...did we miss some big piece of news or something?

 

[Curt Renz]

TSLA is holding up better than NASDAQ so far.

All the other automotive companies are down much more than TSLA.

Indeed, both of these statements have been true both Friday and today.

Now TSLA has been moving steadily into the green.

Somebody knows something.

 

[Runarbt]

awh... I was hoping for another go at 140, and then I'd sell my Model S and og all in on 1year options.

 

[MartinAustin]

TSLA is damn near recovered

From what... the Brexit vote? It would need to be back to $221 to recover from the SCTY business.

I assume everyone knows about Elon's tweet today regarding factory in China? He said, to one of the blogs that lazily repeats news without checking the facts, that "Tesla has not signed anything for a factory in China."

Even though it's not portending some new corporate growth, at least it's firm information.

 

[Calvin.K]

Wow tesla is on the move.. any idea what is the driver behind this action?

 

[EinSV]

Didd...did we miss some big piece of news or something?

As @Gerardf pointed out in another thread, SA permabear Paulo Santos changed his position from "short" to "neutral."

http://seekingalpha.com/article/3984582-tesla-likely-see-margin-improvement

Absent a better explanation, I'm going with ripples of fear (if not outright terror) spreading like wildfire through shortlandia from this shift.

Quotes (shamelessly lifted from @Gerardf's post):

"There are reasons to believe Tesla is going to see visible gross margin improvement."

and

"The short thesis is now entirely based on coming competition, but true competition will only arrive during late 2017/2018. That's too far away for it to influence most investors. A better timing will probably be had closer to that event."

 

[Drax7]

this is too good to be true, any sustainable piece of fundamental news

 

[austinEV]

From what... the Brexit vote? It would need to be back to $221 to recover from the SCTY business.

I assume everyone knows about Elon's tweet today regarding factory in China? He said, to one of the blogs that lazily repeats news without checking the facts, that "Tesla has not signed anything for a factory in China."

Even though it's not portending some new corporate growth, at least it's firm information.

I just meant to the green for today.

 

[austinEV]

As @Gerardf pointed out in another thread, SA permabear Paulo Santos changed his position from "short" to "neutral."

http://seekingalpha.com/article/3984582-tesla-likely-see-margin-improvement

Absent a better explanation, I'm going with ripples of fear (if not outright terror) spreading like wildfire through shortlandia from this shift.

Quotes (shamelessly lifted from @Gerardf's post):

"There are reasons to believe Tesla is going to see visible gross margin improvement."

and

"The short thesis is now entirely based on coming competition, but true competition will only arrive during late 2017/2018. That's too far away for it to influence most investors. A better timing will probably be had closer to that event."

That is actually a pretty remarkable development. That unofficial upgrade might well spook a few shorts.

 

[MartinAustin]

That is actually a pretty remarkable development. That unofficial upgrade might well spook a few shorts.

Agreed... pretty big that Paul Santos is now "neutral" on the stock.

I wonder if it occurred at 11:55am EST? - when about 150,000 traded. Since that point it has been on a sort of rocket-launch curve, and volume has been pretty healthy.

 

[Jayjs20]

Whether Ron Baron or this guy, I still find it amazing that one person's words can do so much.

 

[MikeC]

As @Gerardf pointed out in another thread, SA permabear Paulo Santos changed his position from "short" to "neutral."

http://seekingalpha.com/article/3984582-tesla-likely-see-margin-improvement

Absent a better explanation, I'm going with ripples of fear (if not outright terror) spreading like wildfire through shortlandia from this shift.

Quotes (shamelessly lifted from @Gerardf's post):

"There are reasons to believe Tesla is going to see visible gross margin improvement."

and

"The short thesis is now entirely based on coming competition, but true competition will only arrive during late 2017/2018. That's too far away for it to influence most investors. A better timing will probably be had closer to that event."

I don't think shills like him wield any real influence. He's just paid to scare off small retail investors. We'll see how long he stays neutral - he'll figure out pretty quickly he doesn't get nearly as many pennies for neutral TSLA articles.

 

[Gerardf]

SCTY is following TSLA up since then. So it is not some rumour about doubt on the aquisition.
(Personally I am convinced the aquisition was already a sure deal before it was announced)

Paulo is for sure not the reason for the SP to rise, but he did write something interesting :

But, just 2 weeks later, Tesla has amended its hand. The Model S60 no longer has an option to "switch on" its 75kWh battery. Instead, there's a separate Model S75. This is a world of difference. The lack of an option to increase range later on forces the customer to do a worst-case analysis when initially choosing what model he's going to buy and live with. Under such scenario the adoption of the 75 version will be much, much higher than when the customer could choose later and fix any mistakes. We already know this because the adoption of the original S60 was pretty low.

I have not yet checked this out.
Edit: only found this so far. Tesla Officially Adds 4th Version Of Model S - 75 kWh