Short-Term TSLA Price Movements - 2016

[Curt Renz]

That's correct. Model S sales see sequential decline in last three quarters. There is no other explanation better than model S demand issue. Not only model S but the model X demand issue will pop up as backlog running thin in Q3. It's inevitable for Tesla to lower full year guidance by 5-10K in coming months.

Production around 2,000 week and improving. Model X delivery is now late September. S is September. We are at the beginning of July. Your demand arguments don't hold water, as usual.

If wait times were to become greatly reduced due to more rapid production, demand would likely be boosted significantly. A typical consumer doesn't start looking for a new car until problems develop with his old one. Then he'd like to be able to quickly trade in his old car and drive away with a new one.

There are undoubtedly many people who would like a Tesla, but are unwilling to wait while their old car further deteriorates. Not only would shortening the waiting time increase demand, so would having inventory on hand for prospective buyers who might be especially impatient.

 

[ev-enthusiast]

Production around 2,000 week and improving. Model X delivery is now late September. S is September. We are at the beginning of July. Your demand arguments don't hold water, as usual.

TM does know the new car order rate for both Model S and X directly from their customers ordering their new vehicles around the globe. In the current investor news release about Q2 production and delivery numbers TM mentioned that there is enough demand for both Model S and X to support the guidance for Q3, Q4, and the entire year 2016:
With continued productivity improvements, Tesla expects output to reach 2,200 vehicles per week in Q3 and 2,400 vehicles per week in Q4. Current order rate trends and backlog support production at those levels.

Saying that there is not enough demand implies saying that TM is lying here.

 

[yesla]

If wait times were to become greatly reduced due more rapid production, demand would likely be boosted significantly. A typical consumer doesn't start looking for a new car until problems develop with his old one. Then he'd like to be able to quickly trade in his old car and drive away with a new one.

There are undoubtedly many people who would like a Tesla, but are unwilling to wait while their old car further deteriorates. Not only would shortening the waiting time increase demand, so would having inventory on hand for prospective buyers who might be especially impatient.

perhaps... for econo cars... I'd doubt MS buyers have that kind of issue... look how long people waited for MX. they may have 99 problems but a reliable car ain't 1. Although, I do love your attitude.

The initial impression of the numbers seem to make sense. EM didn't sleep on the factory floor to admire his newly installed planetarium projector. And If run rate of 2000/wk is to be believed, then I guess execution came through in the end right?... And somehow, that makes me believe in the 500K by 2018 forecast even more.

 

[drinkerofkoolaid]

Yawn. All this means is guidance for next quarter for next quarter will be significantly higher than expected. The pundits will say whatever they want, irrespective of the facts. In my opinion, the stock won't fall much because of this news. Also, I suspect Elon will announce something positive to counter any negative comments from idiot journalists.

 

[Curt Renz]

If wait times were to become greatly reduced due to more rapid production, demand would likely be boosted significantly. A typical consumer doesn't start looking for a new car until problems develop with his old one. Then he'd like to be able to quickly trade in his old car and drive away with a new one.

There are undoubtedly many people who would like a Tesla, but are unwilling to wait while their old car further deteriorates. Not only would shortening the waiting time increase demand, so would having inventory on hand for prospective buyers who might be especially impatient.

perhaps... for econo cars... I'd doubt MS buyers have that kind of issue... look how long people waited for MX. they may have 99 problems but a reliable car ain't 1. Although, I do love your attitude.

That's undoubtedly true for those who have actually bought Tesla cars. What's unknown is the number of people who were considering a Tesla but were unwilling or unable to wait. You are likely right that the masses may prove to be more impatient than the wealthy, which should make my points even more applicable when the Model 3 is released. But I suspect that my considerations still apply to a large number of Model S and X prospects.

 

[AlMc]

A miss is a miss just like a win should feel like a win, especially for a growth company guiding for a 10 fold increase in deliveries per quarter in the next 18 months.
What will TSLA do in the coming days?.....no idea....but in the SHORT term this was not a good quarter.

 

[larmor]

Yawn. All this means is guidance for next quarter for next quarter will be significantly higher than expected. The pundits will say whatever they want, irrespective of the facts. In my opinion, the stock won't fall much because of this news. Also, I suspect Elon will announce something positive to counter any negative comments from idiot journalists.

yawn++
All the cars they have produced will be sold... Are all iphones made all ready sold? Better news is wait time is longer-no wasted resources on idle inventory. QA more rigorous. Acceleration of production per week by quarter, apparently TM has a spreadsheet and knows how to use it...

was just at newport beach Fashion Island store, very crowded today, should i have directed the people to read newsbits or clickbait?

 

[TMSE]

Yawn. All this means is guidance for next quarter for next quarter will be significantly higher than expected. The pundits will say whatever they want, irrespective of the facts. In my opinion, the stock won't fall much because of this news. Also, I suspect Elon will announce something positive to counter any negative comments from idiot journalists.

The stock might actually bump up on Tuesday. I expect Q3 guidance at 26K (13wks*2K). Q4 expectations will be ~29K (13wks*2.2K). Note that these are at the low end as I have used the run rates as you enter the quarter, not the median. Actual numbers should be better than my estimate.

 

[sundaymorning]

Was expecting a beat, but 2 weeks delay on execution is about 4,000 cars, which sounds about right with the 5,000 in transit. Base on this miss I hope the scty deal doesn't go through. Again, the benefit of being long is that you can wait it out until "it's business as usual." When you trade the short term, even with all the information gathered, it's still a roll of a dice. Stay away from options!

 

[Curt Renz]

The stock might actually bump up on Tuesday. I expect Q3 guidance at 26K (13wks*2K). Q4 expectations will be ~29K (13wks*2.2K). Note that these are at the low end as I have used the run rates as you enter the quarter, not the median. Actual numbers should be better than my estimate.

You may be right. Tuesday could be a repeat of Friday when TSLA opened down on news of a fatal accident, then closed well to the upside. I really don't see the delivery numbers as being bad once early spring production delays and custom ordered cars in transit are taken into account. It's good that investors have a couple of days to consider all factors.

The outlook for increased production rates is most encouraging. If that leads to faster delivery times, it may inspire more buyers who might otherwise be unwilling to wait. What will be of overriding importance will be the ability to rapidly get the Model 3 into the hands of the masses of people who do not want to wait long after ordering. Once great numbers of Model 3s are seen on the roads and owned by people's friends, the growth rate of Ford's Model T a century ago may meet its match.

 

[eloder]

Was expecting a beat, but 2 weeks delay on execution is about 4,000 cars, which sounds about right with the 5,000 in transit. Base on this miss I hope the scty deal doesn't go through. Again, the benefit of being long is that you can wait it out until "it's business as usual." When you trade the short term, even with all the information gathered, it's still a roll of a dice. Stay away from options!

We can only hope, though given the absolutely horrible timing of the SCTY acquisition offer (they had to have known deliveries were slated to be poor!) the "bailout" theory is definitely looking heavily plausible. Or in other words, SCTY must go through or Musk loses his cheap solar panel factory due to bankruptcy.

I'm holding off from further investing until we get some really significant drops, or until we get concrete news that Tesla short-term is back on track. This quarter is a disaster and as others mentioned earlier, financials are going to be taking a huge hit due to the unusually large number of vehicles produced but not yet paid for by customers. Even with gigafactory unveiling, I'm personally taking caution until after Q2 ER.

 

[CALGARYARSENAL]

Nobody knows how the stock will react. That is the thing about Tesla. Every time I have though about selling and buying back......there ends up being a rally from out of nowhere. Lets face it, the news wasn't great, but I am chalking it up as growing pains.

On a seperate note, I exited Mass tonight and was driving home when my eyes spotted a lovely Tesla S in my neighbourhood (not the kind of neighbourhood where you usually see nice cars). Sign from above to stay long

 

[Subhuman]

One thing I haven't seen anyone touch upon is Tesla Energy. Is it possible that Tesla's quarterly number may end up much better than anticipated do to no longer being exclusively based on vehicle production. Tesla has really kept a tight lid on powerwall / powerpack expectations. Could this be a card in their back pocket?

 

[DesertCO]

For any one curious, I had run a few TA's for both directions of Q2 [del #'s]. I will focus on the Q2 [del #'s] miss, because I actually thought it would be close to 16K -- so given that it's even off of my low estimate, this will likely be a few points lower. My retrace calculated $179, which rests just slightly at/above the 14 Day RSI at 30% [Friday close], which correlates to the 3-10-16 Day MACD MAS. I figured that area would be a support. If it breaks through that support channel it's basically uncharted waters for my TA. At that point I would tend to flavor a Fib retracement pattern on a longer trend, but I am guessing low 170's.

Curious question I have for anyone that might know. I overheard a conversation about the difference in Tesla 'Delivery numbers' as opposed to other auto manufactures. Essentially stated is that other manufactures use other metrics such as 'delivery to dealership'. Such metrics are even more skewed than Tesla because often times a vehicle that is delivered to a dealership surpasses it's 90 day hold back (the grace period a dealership is given before it begins paying interest on a vehicle sitting that has not been sold). Yet, it is counted as a figure, even though not assigned an owner. Tesla on the other hand, only counts delivery when in possession of the new owner and all paperwork correct. Seems a bit unbalanced.. If Tesla were to use the same metric, technically the delivery number would be 18K. Can anyone shed some light on this difference?

 

[EinSV]

One thing I haven't seen anyone touch upon is Tesla Energy. Is it possible that Tesla's quarterly number may end up much better than anticipated do to no longer being exclusively based on vehicle production. Tesla has really kept a tight lid on powerwall / powerpack expectations. Could this be a card in their back pocket?

I am very bullish on TE in the long-term but my expectation is that it will probably be Q1 2017 before TE sales volumes are significant enough to seriously move the needle on cash flow and earnings. By then, I expect Tesla will be pouring every nickel they get out of TE sales into the Model 3 ramp.

At some point, Tesla may decide to announce the volume of its orders and its expected production ramp for TE products. That could have an impact on the stock price but Tesla appears to be playing things close to the vest. So it is possible they could start providing some numbers as soon as the GF party but I personally am not banking on it.

 

[TMSE]

Curious question I have for anyone that might know. I overheard a conversation about the difference in Tesla 'Delivery numbers' as opposed to other auto manufactures. Essentially stated is that other manufactures use other metrics such as 'delivery to dealership'. Such metrics are even more skewed than Tesla because often times a vehicle that is delivered to a dealership surpasses it's 90 day hold back (the grace period a dealership is given before it begins paying interest on a vehicle sitting that has not been sold). Yet, it is counted as a figure, even though not assigned an owner. Tesla on the other hand, only counts delivery when in possession of the new owner and all paperwork correct. Seems a bit unbalanced.. If Tesla were to use the same metric, technically the delivery number would be 18K. Can anyone shed some light on this difference?

Yes, it is very much unbalanced indeed. Moreover, Tesla is building cars to order, not to inventory like others. Tesla is and has been production constrained. So, production numbers should be the right metric in addition to gross margin. Large institutional investors know this and will sit tight or add more.

Don't be surprised if you see TSLA move up on Tuesday. What would your TA predict in that scenario?

 

[geneclean55]

For any one curious, I had run a few TA's for both directions of Q2 [del #'s]. I will focus on the Q2 [del #'s] miss, because I actually thought it would be close to 16K -- so given that it's even off of my low estimate, this will likely be a few points lower. My retrace calculated $179, which rests just slightly at/above the 14 Day RSI at 30% [Friday close], which correlates to the 3-10-16 Day MACD MAS. I figured that area would be a support. If it breaks through that support channel it's basically uncharted waters for my TA. At that point I would tend to flavor a Fib retracement pattern on a longer trend, but I am guessing low 170's.

Curious question I have for anyone that might know. I overheard a conversation about the difference in Tesla 'Delivery numbers' as opposed to other auto manufactures. Essentially stated is that other manufactures use other metrics such as 'delivery to dealership'. Such metrics are even more skewed than Tesla because often times a vehicle that is delivered to a dealership surpasses it's 90 day hold back (the grace period a dealership is given before it begins paying interest on a vehicle sitting that has not been sold). Yet, it is counted as a figure, even though not assigned an owner. Tesla on the other hand, only counts delivery when in possession of the new owner and all paperwork correct. Seems a bit unbalanced.. If Tesla were to use the same metric, technically the delivery number would be 18K. Can anyone shed some light on this difference?

What will you be looking out for on Tuesday morning? I assume opening below the 205/206 support or slicing through that would indicate a downward trajectory?

 

[Mike Smith]

All that matters is the production number. Investors aren't concerned about the ability to actually deliver the 500,000 model 3s to customers. The important takeaway is that second half production guidance has been reafirmed - Tesla is on pace to produce 83,000 cars this year. This is what investors will focus on on Tuesday.

 

[DesertCO]

Yes, it is very much unbalanced indeed. Moreover, Tesla is building cars to order, not to inventory like others. Tesla is and has been production constrained. So, production numbers should be the right metric in addition to gross margin. Large institutional investors know this and will sit tight or add more.

Don't be surprised if you see TSLA move up on Tuesday. What would your TA predict in that scenario?

On a beat, I had an immediate resistance at 221.x, and 225.8x. I figured depending on the beat, and overall market (given the uncertainty of macro market tides as of late) we would be somewhere between those goal posts on Tues/Weds. I think there would be a strong resistance at the 225.8x zone with heavy short interest. Of course, those fundo's can always be a surprise when we blow through them and smart shorts cover or get an MC.. But I figured that zone offered a good consolidation point.

 

[DesertCO]

What will you be looking out for on Tuesday morning? I assume opening below the 205/206 support or slicing through that would indicate a downward trajectory?

I think if the direction changes, it will move quickly to the retrace. I wouldn't doubt a move to sub 200 in the first trading day. Just IMHO. I typically only use a metric of a daily chart to determine direction though - especially with TSLA. But yes, two red sticks on Tues/Weds will certainly indicate a trend change to that zone.