Short-Term TSLA Price Movements - 2016

[Electrifying]

All that matters is the production number. ... Tesla is on pace to produce 83,000 cars this year. This is what investors will focus on on Tuesday.

Yes, Stock Markets are Forward Looking, albeit short sighted. That's why Apple could be making a gazillion dollars and still trades at a PE of 10 given its iPhone slowdown. I think it's just a matter of time the $222 down-gap gets closed and $285 ATH surpassed. Sometimes longs see too far out into the rosy picture and forget the big money usually can only see a couple quarters out.

 

[austinEV]

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.

I also think the decline on Tuesday could be muted. The long term indicators are positive, the short term ones are the negative ones. But, this has been the consistent story now for a few quarters. Sadly this result isn't "surprising" anymore. Had they delivered a BEAT I think that would have been the whopper surprise.

Plus, as others have pointed out, the stock is hard to short now.

The valuation is about the M3 release next year. TE news could be coming end of july as well.

 

[Curt Renz]

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?

Unfortunately, many people including the media tend to assume that the monthly “sales” reported by the established manufacturers are the number of cars delivered to consumers. As you imply, those manufacturers’ customers are mainly their own franchised dealerships. The reports are for the number of cars delivered to lots for the dealers’ inventories. The cars then sit on those lots until they are sold to consumers.

Tesla reports quarterly on the number of cars actually delivered directly to consumers who have placed custom orders. This could only be somewhat comparable to the number of cars actually sold by dealerships. However, the backlog of custom orders for Teslas creates a not really comparable situation. The same for the production and transit constraints of a new company in a capital intensive industry. Nevertheless, if it were the franchised dealerships that reported sales rather than the manufacturers, comparisons might be more meaningful.

Indeed, for Tesla in its current state, production is a more important metric than deliveries. And a far more important consideration will be the ability to produce and deliver millions of Model 3s and later models. It is this latter factor that accounts for the bulk of the Tesla share price.

 

[theschnell]

Wish I could share in the optimism some still possess at this time. I cannot help but brace for 8 - 12 weeks of pain. Would love to be wrong...

 

[Curt Renz]

In my opinion, concern about the SolarCity deal is overdone. Perhaps any or all conjectures about the motivations are true. That really shouldn’t matter. A former SolarCity would initially be a very small part of Tesla. But Elon may make it something really big in direct association with Telsa Energy, which his cousins may not have been able to do on their own. The market may be starting to come to that realization, which could account for the fact that the TSLA share price has so quickly climbed back to near its level before the proposed deal was announced and despite both Brexit and a fatal accident.

 

[Mike Smith]

With all the bad news in the past month I'm guessing any short term investors have already sold. Also, there is also no stock available to short. If the stock doesn't fall much or actually rises, the shorts could decide that the stock is no longer falling on bad news and stampede for the exits. The longs will support this since long term guidance was reaffirmed. It's counterintuitive, but this has all the makings of a surprise short squeeze.

A side note - recently in an interview on CNBC Ron Baron told us that in the recent equity offering there was actually more demand to buy shares but Tesla declined the money. This means someone is probably still out there looking to buy stock at or around $213.

 

[Lump]

Anyone bother to check Ron Baron's performance over the last decade?

 

[postpast]

Looking at the numbers, I have to question the Model X production rate. I don't think it has been brought up yet, but the number released indicate that Tesla produced on average less than a 1000 cars a week for both May and June.

The optimistic view would be that there was a one time delay fixing up Model X's and refreshing the Model S.

The other possibility would be that May and June was spend slowly producing Model X's to try and fight backlog and then they rushed back to S production to try and get near guidance.

 

[yesla]

From April to now, we are trading in a down channel.
A major support line is 170-180 where I would definitely start buying back in.
I know we talked about a fake inverse head and shoulders formation a little while ago, but with the recent drop to 140 range in Feb, I can see a much cleaner formation taking shape. The shoulder line being the 180 area.

Given the uncertain Macro, SCTY deal and Q2 miss, I would be happy to find strong support at 180 before we find catalyst for a reversal to complete the inverted head and shoulders to test and breakout of ATH. maybe Q3 ER? I hope I didnt jinx it.

Like other level headed investors have said, a miss is a miss. So how can the market to reward a miss like this? I dont know... We already dipped to 185 on the SCTY news and recovered based on Q2 beat expectation. so... what do catalyst do we have next to reverse all of this? a grand opening party.... YaY XD

 

[yesla]

Tesla autopilot came out Oct. 2015. till May 2016, it recorded ~130M miles before the first fatal accident. Thats just a little more than half a year. incredible!
Given the growth rate of new vehicles, the data should double by Q3. and then again by Q1 2017. I am actually getting nervous now, with more and more autopilot enabled cars on the road, the chances of seeing another fatality gets higher. I really hope to not see another incident until next year. freak accident or not.

 

[BornToFly]

I would not look for TE to save Q2 ER. Elon has said that TE won't be a significant source of revenue until the end of the year. My personal feeling is that the SP is more likely to drop Tues/Wed than hold or rise. I would not be surprised if we end up below 200 in the next week or two. Gigafactory opening may boost it 5-10%, but then the Q2 ER is going to hurt the stock for the month of August. I think below 200 in August is likely. I hope I'm wrong.

 

[postpast]

Tesla autopilot came out Oct. 2015. till May 2016, it recorded ~130M miles before the first fatal accident. Thats just a little more than half a year. incredible!
Given the growth rate of new vehicles, the data should double by Q3. and then again by Q1 2017. I am actually getting nervous now, with more and more autopilot enabled cars on the road, the chances of seeing another fatality gets higher. I really hope to not see another incident until next year. freak accident or not.

Yup,,, That is the risk.

If there is two more fatal incidence this year, than Tesla Auto Pilot is no more.

It doesn't matter if the driver is distracted, asleep or drunk. Three fatal accidents using AP that would have been avoided by a attentive driver would make AP a hundred times more dangerous than driving a car recalled by GM due to the Ignition Switch.

 

[Cosmacelf]

Elon just can't be trusted. Two months ago, they said they were on track for 2Q delivery.

Tesla energy has been a massive bust - Powerwalls were supposed to be shipping in large numbers a year ago.

Remember Elon waxing poetic and almost coming to tears when he described the sculptural beauty and utility of the Model X second row seats? You can call it an exaggeration, I call it delusional.

Model X production ramp was a lie. A few essentially hand built cars delivered in September, then a bunch of crappily built ones just before end of year (I got one, fifth time in the shop, doors still can't open close reliably, among other things).

I love my Model S. I'll say it now, though. It's about time people started talking about needing a new CEO. Elon should remain as CTO, but not run the company, as it obvious he can't run it.

 

[Curt Renz]

Tesla autopilot came out Oct. 2015. till May 2016, it recorded ~130M miles before the first fatal accident. Thats just a little more than half a year. incredible!
Given the growth rate of new vehicles, the data should double by Q3. and then again by Q1 2017. I am actually getting nervous now, with more and more autopilot enabled cars on the road, the chances of seeing another fatality gets higher. I really hope to not see another incident until next year. freak accident or not.

Given the recent publicity about relying on Autopilot while distracted (watching a movie?), I suspect drivers will become extra cautious. Something similar may have happened three years ago when two Model S's in quick succession caught f_re after their undersides hit road debris. While Tesla provided more protection, it may also have been that drivers became more alert to road debris. Since then, there have been no more such incidents.

Meanwhile, as beta testing continues, Autopilot software will continuously improve. The next upgrade will almost undoubtedly recognize a semi-trailer perpendicular to the car's path.

 

[maoing]

Very well said! Elon's "lies" just keep hurting TSLA longs and feeding TSLA shorts very well in the past 2 years. You never know how much bullsh*ts in today's statement wrt. Future promises. TM can always find absurd excuses 3 months from now. Again TSLA is becoming more and more difficult to believe until they show real "steak".

Elon just can't be trusted. Two months ago, they said they were on track for 2Q delivery.

Tesla energy has been a massive bust - Powerwalls were supposed to be shipping in large numbers a year ago.

Remember Elon waxing poetic and almost coming to tears when he described the sculptural beauty and utility of the Model X second row seats? You can call it an exaggeration, I call it delusional.

Model X production ramp was a lie. A few essentially hand built cars delivered in September, then a bunch of crappily built ones just before end of year (I got one, fifth time in the shop, doors still can't open close reliably, among other things).

I love my Model S. I'll say it now, though. It's about time people started talking about needing a new CEO. Elon should remain as CTO, but not run the company, as it obvious he can't run it.

 

[sunhelm]

Anyone bother to check Ron Baron's performance over the last decade?

Pretty impressive I think.

 

[sunhelm]

The mood here has been very cynical. What I'm failing to grasp is how people miss the fact that while it was a lousy Q2, June was pretty impressive. If June is now at a 2000 per week clip, then, what does that bode for July and onward? If you are long TSLA, now is not the time to bail, it looks to me the runway is clear for take off from here on out. This time feels different than the prior Q1 " exponential ramp" business.

With 5,000 units in transit, how can people argue there is a demand constraint still? It sucks that they missed delivery numbers and the horde will see this as a red flag and run for the hills. That is the fear that always makes you lose your shirt. Hang tight longs!

 

[Lump]

Ron Barons Focused Growth that you choose is underperforming its benchmarks & S&P 500 & started in 1996

His flagship Growth fund as well is underperforming

 

[Yggdrasill]

IMHO, the important figure is production. Whether Tesla delivers 14k in Q2 and 22k in Q3, or 16k in Q2 and 20k in Q3 is completely irrelevant.

I like seeing that production is ramping up in accordance with guidance. And I haven't had much hope that Q2 would be amazing. Q3 is where Tesla really needs to kick ass.

 

[sunhelm]

Ron Barons Focused Growth that you choose is underperforming its benchmarks & S&P 500 & started in 1996
View attachment 183918
His flagship Growth fund as well is underperforming
View attachment 183919

That post of mine was in response to how Baron's funds are performing. In relation to other managed funds, I think that's impressive. Of course compared against a broader index like the S&P 500, almost all managed funds do not perform as well in the long term. That's a fact. It's that landmark discovery by Vanguard's Jack Bogle and is the reason they continue to earn loyal followers. It's also why most of my 401k is in index funds.

Investing in TSLA is hopefully, an informed decision, different from, er, autopilot index fund investing. Would you abandon TSLA now because of an underperforming April and May month and disregarding the fact that June was stellar? Granted this is the short term, the stock may get punished on Tuesday. Come to think of it, with short sellers out of ammo and almost no available stock to short thanks to likely weak longs that have since capitulated, I'd say the majority remaining holding the stock are strong longs that will not get swayed by the deluge of hit pieces that have already started to rain down.