Short-Term TSLA Price Movements - 2016

[Papafox]

I think we will drop 10%, the miss was just enormous and the full year guidance was practially lowered too as they are sticking to the 50k delivered in H2, so now we are looking at around 79k. I also think this will add to the increasing investor frustration (we also see here) with targets that are missed again and again. I think we will drift further down towards Q2 earnings as it won't be pretty.

Your prediction is overly pessimistic, I believe, because investors can already see the writing on the wall for 3rd quarter. With 5K vehicles in transit and a likelihood of at least 24,000 vehicles produced in 3Q, investors won't want to miss the early October deliveries announcement or the early November 3Q ER. Many investors, particularly institutional investors will just ride out any short-term dip so that they remain positioned for the 3Q and later periods. I agree with you that there will be some dread about the 2Q ER, but we could see it happening much like the 4Q 15 ER in which we missed yearly delivery guidance but the forward-looking statements by Musk and others more than compensated and the SP began a nice climb from that date forward.

 

[Johann Koeber]

What's the bis deal with the delivery numbers?

14,370 delivered
5,150 in transit, which is up 2,535 from last Q

my math goes like this: 14,370 deliverd + 2,535 more in transit (I count those as 'quasi' deliveries) = 16,905

Close enough, ie within the stated 1% uncertainty in the numbers.

Expect output in Q3 to ramp to 2,200 (from 2,000)
Implying linear ramp curve = average 2,100 per week x 12 weeks to the quarter = 25.200

Same math gives 27,600 in Q4

Remember these are not deliveries, but production. Anyway 50,000 deliveries are still in the cards. Just don't make the mistake of thinking the number of cars in transit will sink - it tends to be a week or two of production (at least, depending on where the customers are located).

 

[AlMc]

My prediction is that it will drop 5 to 10 percent tomorrow. Will certainly test 200 again.

The bigger setback is that market will yawn at gigafactory reveal, with all the talk around future guidance.

This is basically a lost opportunity in turning around the sentiment.

I agree that this is a missed opportunity to start a series of positive catalysts and finally make 'a win feel like a win'.

I admit to growing tired of trying to make a 'miss feel like a win'

 

[sundaymorning]

Tesla in Europe is at $208. I hope we hold $200.

With 5,000 cars in transit, if tesla can produce at a steady clip Q3 is looking to be a sure hit. As others have alluded, 3rd Q is sold out.

 

[X Yes?]

Well, as I explained to you earlier.

That thread is about ONE car. I can think of several reasons that the car was not delivered to its initial purchaser and now ended up at another lucky Model-X owner without a long waiting time.

Can you please stop spreading this FUD, at least until you find real proof about a SIGNIFICANT number of cars. And no, 5 or even 10 cars would NOT be significant.

If you keep repeating this non-issue this without offering very much better proof you run the risk of being accused of trolling.

I know demand is an 'inconvenient" topic that you tried to shut down previously, only to bring up in a subsequent post.

Instead of just saying it's not an issue, let's hear how your demand story continues until the Model 3 release?

I'm watching:

1. Deliveries fall when they were promised to rise this quarter.
2. The reinstatement of the "referral" program
3. Cars not meeting the Guaranteed Residual Value. And resold at lower than anticipated values, making used cars more attractive.
4. Model X off to other markets earlier than expected because orders have been cancelled or delayed in the U.S.
5. Very heavy media coverage of potential suspension problems and Tesla's previous use of Goodwill agreement to silence people that had out of warranty adjustments.
6. AutoPilot concerns
7. A Model S refresh, then a margin hurting Model S 60 a few week after.

 

[Perfectlogic]

Your prediction is overly pessimistic, I believe, because investors can already see the writing on the wall for 3rd quarter. With 5K vehicles in transit and a likelihood of at least 24,000 vehicles produced in 3Q, investors won't want to miss the early October deliveries announcement or the early November 3Q ER. Many investors, particularly institutional investors will just ride out any short-term dip so that they remain positioned for the 3Q and later periods. I agree with you that there will be some dread about the 2Q ER, but we could see it happening much like the 4Q 15 ER in which we missed yearly delivery guidance but the forward-looking statements by Musk and others more than compensated and the SP began a nice climb from that date forward.

We have just had 2 quarters of large misses, who says they will hit their ambitious Q3 target, at this point I think the chance of a miss is greater than 50%. The demand situation is also up in the air, did Tesla get a temp boost from adding the S60 that will fall off a bit in a few months? Is what is holding deliveries up right now eating some of the X backlog? Perhaps, I think the X waiting times have shortened quite a bit.

What's the bis deal with the delivery numbers?

Tesla knew the number of cars in transit would go up, that will happen as you deliver more cars. 5k in transit isn't a huge number when you are producing 2k/week.

 

[X Yes?]

JeffreyY, you make an interesting point. Demand levers are the way that Tesla keeps demand roughly in line with production capability and Autopilot 2.0 is one of those demand levers. Your behavior is quite rational. We have enough X and S orders at the moment to keep production hopping through the 3Q and Elon says 4Q as well. Add more demand levers such as a heads-up display before it appears in Model 3, no mirrors (when the government allows), 100kwh battery as they are needed. Here's another one: Get the $7500 federal EV tax credit before the stepdown begins during the Model 3 deliveries. S and X sales can level off at 2400/week and that's okay. We only need these vehicles to sell at this pace through the introduction of Model 3 and by that time they have served their purpose.

If you are arguing that S or X wouldn't be selling at this pace without this particular demand lever being pulled, congratulations, you are right, and you're on your way to understanding how Tesla manages demand to fit the production capability. Now, can we move on to more interesting topics?

Demand levers are a useful tool for Tesla, they pulled out all the stops for Q2. As a short term bear, I really expected them to make the number this quarter, they gave every indication that they would. The price action through Friday seemed to indicate good news was on the way. But the numbers were terrible and does not bode well for "earnings" especially now the the SEC is directing them to report as GAAP numbers. It will be interesting to see what levers are available to pull, going forward.

 

[sunhelm]

especially now the the SEC is directing them to report as GAAP numbers

You say this as if this is a new thing and insinuating somehow the financials will be worse because of this rule. They have been doing this reporting (GAAP and non-GAAP and the reconciliation) since the SEC rule was adopted.

Final Rule: Conditions for Use of Non-GAAP Financial Measures
Summary: As directed by the Sarbanes-Oxley Act of 2002, we are adopting new rules and amendments to address public companies' disclosure or release of certain financial information that is calculated and presented on the basis of methodologies other than in accordance with generally accepted accounting principles (GAAP). We are adopting a new disclosure regulation, Regulation G, which will require public companies that disclose or release such non-GAAP financial measures to include, in that disclosure or release, a presentation of the most directly comparable GAAP financial measure and a reconciliation of the disclosed non-GAAP financial measure to the most directly comparable GAAP financial measure. We also are adopting amendments to Item 10 of Regulation S-K and Item 10 of Regulation S-B to provide additional guidance to those registrants that include non-GAAP financial measures in Commission filings. Additionally, we are adopting amendments to Form 20-F to incorporate into that form the amendments to Item 10 of Regulation S-K. Finally, we are adopting amendments that require registrants to furnish to the Commission, on Form 8-K, earnings releases or similar announcements.

Dates: Effective Date: March 28, 2003.

 

[Papafox]

We have just had 2 quarters of large misses, who says they will hit their ambitious Q3 target, at this point I think the chance of a miss is greater than 50%. The demand situation is also up in the air, did Tesla get a temp boost from adding the S60 that will fall off a bit in a few months? Is what is holding deliveries up right now eating some of the X backlog? Perhaps, I think the X waiting times have shortened quite a bit.

Tesla knew the number of cars in transit would go up, that will happen as you deliver more cars. 5k in transit isn't a huge number when you are producing 2k/week.

For the past two or three years the bears have been harping on demand is going to fail and every quarter Tesla finds enough demand to keep growing production by 50% a year. In an earlier post I listed several very potent demand levers that will be available to Tesla in the near future. There's nothing new in this "demand is going to fall" argument.

How can you be forecasting a 50% chance of doom and gloom for 3Q when production is already up to 2,000 vehicles/week and enough orders are already in to take Tesla through September? I find nothing enlightening about this discussion. It is the same old demand fears but with the kicker that Tesla won't even be able to maintain its current production rate. Yawn.

Edit: Sorry folks, I realize I'm feeding the bears again. I'm off to enjoy a fun 4th of July. Wishing you all the best regardless of what country you live in.

 

[tander]

We have just had 2 quarters of large misses, who says they will hit their ambitious Q3 target, at this point I think the chance of a miss is greater than 50%. The demand situation is also up in the air, did Tesla get a temp boost from adding the S60 that will fall off a bit in a few months? Is what is holding deliveries up right now eating some of the X backlog? Perhaps, I think the X waiting times have shortened quite a bit.



Tesla knew the number of cars in transit would go up, that will happen as you deliver more cars. 5k in transit isn't a huge number when you are producing 2k/week.

Does it really matter if the guidance of a fast growing company is off by a few days? If those 5k in transit were delivered wouldn't they have beat guidance? Assuming they make 6-8k this month, won't July end up being their best month ever?

 

[tander]

For the past two or three years the bears have been harping on demand is going to fail and every quarter Tesla finds enough demand to keep growing production by 50% a year. In an earlier post I listed several very potent demand levers that will be available to Tesla in the near future. There's nothing new in this "demand is going to fall" argument.

How can you be forecasting a 50% chance of doom and gloom for 3Q when production is already up to 2,000 vehicles/week and enough orders are already in to take Tesla through September? I find nothing enlightening about this discussion. It is the same old demand fears but with the kicker that Tesla won't even be able to maintain its current production rate. Yawn.

When the reviews start coming out saying that the Model S/X are terrible cars, then let's talk about demand. Unless that happens or the competition gets hugely better there's not much to worry about.

 

[JeffreyY]

Man a ton of negative comments to this article on WSJ.com. I was finally impressed WSJ released a non-negative / balanced article on Apple Or Tesla Seems like they a bunch of negative readers.

Tesla Motors Reports Global Sales Rose in Latest Quarter

 

[Nagrani]

At the end of the day manufacturing is hard whether you are making twenty widgets or twenty million, but not impossible. And the more you make, the better you get at making


Does it really matter if the guidance of a fast growing company is off by a few days? If those 5k in transit were delivered wouldn't they have beat guidance? Assuming that they make 6-8k this month, won't July end up being their best month ever?

Yes. I think the response from sophisticated investors is going to be neutral. If there is a big drop tomorrow - I'll probably add some leaps (purchase long dated calls) to my portfolio

 

[TMSE]

Tesla in Europe is at $208. I hope we hold $200.

With 5,000 cars in transit, if tesla can produce at a steady clip Q3 is looking to be a sure hit. As others have alluded, 3rd Q is sold out.

I wouldn't rush to call 3rd Q sold out yet. The current September/late September delivery estimates must have enough buffer for transit time, averaging about 2 weeks worldwide including US.

I look for late October/ November delivery estimates for the confirmation of 3rd Q sell off. It is likely we reach that milestone before Q2 earnings call in the first week August.

 

[eloder]

Tesla Ordered To Pay $6,00 Fine Per Model S P85D Sold In Norway For Listing Wrong HP Figure

Not sure if this was posted yet, Tesla got slapped with a rather hefty fine in Norway for all P85D's sold.

 

[Mike Ambler]

You can't do that, obviously.

Alitalia!

 

[TMSE]

Man a ton of negative comments to this article on WSJ.com. I was finally impressed WSJ released a non-negative / balanced article on Apple Or Tesla Seems like they a bunch of negative readers.

Tesla Motors Reports Global Sales Rose in Latest Quarter

It is a good indicator of large short interest being held by the unsophisticated average joe investors on Main Street. In such weird situations, large short interest is actually a huge positive for the stock.

 

[hoang51]

Tesla Ordered To Pay $6,00 Fine Per Model S P85D Sold In Norway For Listing Wrong HP Figure

Not sure if this was posted yet, Tesla got slapped with a rather hefty fine in Norway for all P85D's sold.

I know read this news somewhere else before, so it is old. Tesla has the option to appeal the decision. So the ruling isn't set just yet.

 

[MitchJi]

This is basically a lost opportunity in turning around the sentiment.

I agree that this is a missed opportunity to start a series of positive catalysts and finally make 'a win feel like a win'.

Maybe the sentiment turns around within a few weeks anyway.

 

[maoing]

That price action was based on volume of 19K. Not indicative of anything.

The price action before Q2 report reminds me What happened before Q4 report.