Short-Term TSLA Price Movements - 2016

[joseph7h]

Just one observation from Tesla's Autopilot PR crisis:

In the past, I always consider Tesla as the Apple in autos which will keep 30+% of the benefits/profits in the value chain. Now it seems the reality is just the opposite as suppliers (say MBLY) seem in a better position: when there's an accident, it's Tesla's issue/failure, not MBLY's; when everything goes well, MBLY get their fair portion.

How long can this go before Tesla leverage its end customer facing advantage (by squeezing profit margin of the suppliers) and take biggest chunk of the profits?

 

[joseph7h]

Just one observation from Tesla's Autopilot PR crisis:

In the past, I always consider Tesla as the Apple in autos which will keep 30+% of the benefits/profits in the value chain. Now it seems the reality is just the opposite as suppliers (say MBLY) seem in a better position: when there's an accident, it's Tesla's issue/failure, not MBLY's; when everything goes well, MBLY get their fair portion.

How long can this go before Tesla leverage its end customer facing advantage (by squeezing profit margin of the suppliers) and take biggest chunk of the profits?

In this point of view, MBLY seems like a better investment than Tesla, doesn't it?

 

[racer26]

It's a good plan until it isn't... Just don't overextend yourself and average down on margin and be prepared to hold it for as long as it takes (or set a STRICT stop-loss and follow it), trust me.

Heh, yeah, making risky plays on margin seems a little too risky for me. Some of you out there have some serious cojones.

I'm only playing with real dollars that are mine (and in a tax-free account!). While its more than I'm super comfy with being extended on this particular position, total downside risk is roughly equal to the gains I made on Monday, so its not really THAT risky in the grander scheme.

 

[joseph7h]

European Auto Regulator Doesn't See Anything Wrong with Tesla's (TSLA) Autopilot
Electrek.Co on Twitter

 

[Vitold]

Just one observation from Tesla's Autopilot PR crisis:

In the past, I always consider Tesla as the Apple in autos which will keep 30+% of the benefits/profits in the value chain. Now it seems the reality is just the opposite as suppliers (say MBLY) seem in a better position: when there's an accident, it's Tesla's issue/failure, not MBLY's; when everything goes well, MBLY get their fair portion.

How long can this go before Tesla leverage its end customer facing advantage (by squeezing profit margin of the suppliers) and take biggest chunk of the profits?

Just like with Takata airbag recall?

 

[Curt Renz]

European Authority says no safety concerns with Tesla's Autopilot after beta scare
Electrek Article

EDIT: I now see that joseph7h posted similarly while I was composing. However, I've included a direct link to the article.

 

[joseph7h]

Just like with Takata airbag recall?

No, I think here Takata is actually the bigger loser than auto makers (they got to bear the cost, I guess).

 

[SunCatcher]

European Auto Regulator Doesn't See Anything Wrong with Tesla's (TSLA) Autopilot
Electrek.Co on Twitter

That's because there is't anything wrong with it.
Operators just need to learn to pay attention, and not watch movies, climb into the back seat, etc., etc. It has its limitations, and the driver needs to respect that. Just pay attention!

 

[winfield100]

Yes. I read and occasionally contribute. I'll bet you have me pegged as "ValueAnalyst"

would that be correct?

 

[X Yes?]

You probably didn't see yourself as Benedict Arnold either.

I gave you a "funny" on this post. I'm pretty secure in my patriotism, so I won't be whining to the moderator to have it removed.

Yes, use the ignore button, and be sure not to un ignore and peek at my posts when someone throws a tantrum.

Most of my contributions concern events happening regarding Tesla, some don't wan to hear any news that does not fit their narrative. I'll further note, I'm not trying trying to rile the faithful, this flare up was my response to dc_h post directed at me.

 

[jhm]

New York utility turns to DERs to avoid $11.8M substation upgrade

This is the sort of opportunity that a combined Tesla Energy - SolarCity could really go into. A utility wants a DER alternative to a $11.8M substation upgrade. Think of the substation as a microgrid. Tesla brings in a combination of Powerpacks and behind the meter solar and Powerwalls. All systems within the substation communicate and coordinate to manage peak loads on the substation, voltage regulation, and backup with islanding capability. The utility gets an aggregated interface to the microgrid. Problem solved at minimal cost to utility and all ratepayers.

 

[X Yes?]

would that be correct?

No, of course not.

 

[winfield100]

Unfortunately none from you. You're just clogging up the thread with garbage. I don't think I've ever put someone on ignore, so congrats on possibly being the first with your no value content.

apologies to all for responding the X Yes? my ONLY excuse is i have a "funky" laptop with a cheap display and I could not see the thumbs up/thumbs down icons and was completely unaware of ignore function. again apologies

 

[MartinAustin]

In this point of view, MBLY seems like a better investment than Tesla, doesn't it?

Maybe so. I don't take that point of view however. The vast majority of these problems involve the driver not operating the car properly. This isn't always due to "instructions being unclear" or some other issue that can fall at the feet of Tesla. It is because the drivers know what they are required to do, and are simply not doing it. This type of behaviour happens every day in every other brand of car. texting while driving, putting your makeup on, reading a book, eating food, etc. etc.. And then there are the other issues where other non-Tesla vehicles caused the accident (truck crossing oncoming cars, for example).

Tesla has yet to have a problem where their Autopilot software did something materially wrong. Tesla has been correct all along in insisting that the driver still has full responsibility for everything the car does.

Meanwhile the media continue to discuss Tesla and Autopilot, and it's getting to the point where it is simply good publicity for Tesla. Someone else mentioned this yesterday. A representative from Consumer Reports was just on the TV, talking about how dangerous and suggestive the name "Autopilot" is. They didn't have any other complaints about the actual Autopilot product... they said it was fine, and the name just gives drivers the wrong impression about what is possible. This is so far into the area of subjectivity and so far away from discussing concrete facts that basically Tesla has the media under full control without paying Dollar One for publicity. While we see Lexus and Mercedes ads during the commercial breaks, we see Tesla during the editorial segments getting mulled over by a bunch of confused pundits. Probably the best outcome possible for TSLA.

TSLA vassilating during all this... waiting for the Master Plan blog update, which will probably be during the weekend.

 

[roblab]

European Authority says no safety concerns with Tesla's Autopilot after beta scare
Electrek Article

I loved the MB self driving advertisement, which finished with "Mercedes Benz: The Best or Nothing". And we already know MB is not the best at self driving. HA! If only advertisements were honest!

 

[joseph7h]

Maybe so. I don't take that point of view however. The vast majority of these problems involve the driver not operating the car properly. This isn't always due to "instructions being unclear" or some other issue that can fall at the feet of Tesla. It is because the drivers know what they are required to do, and are simply not doing it. This type of behaviour happens every day in every other brand of car. texting while driving, putting your makeup on, reading a book, eating food, etc. etc.. And then there are the other issues where other non-Tesla vehicles caused the accident (truck crossing oncoming cars, for example).

Tesla has yet to have a problem where their Autopilot software did something materially wrong. Tesla has been correct all along in insisting that the driver still has full responsibility for everything the car does.

Meanwhile the media continue to discuss Tesla and Autopilot, and it's getting to the point where it is simply good publicity for Tesla. Someone else mentioned this yesterday. A representative from Consumer Reports was just on the TV, talking about how dangerous and suggestive the name "Autopilot" is. They didn't have any other complaints about the actual Autopilot product... they said it was fine, and the name just gives drivers the wrong impression about what is possible. This is so far into the area of subjectivity and so far away from discussing concrete facts that basically Tesla has the media under full control without paying Dollar One for publicity. While we see Lexus and Mercedes ads during the commercial breaks, we see Tesla during the editorial segments getting mulled over by a bunch of confused pundits. Probably the best outcome possible for TSLA.

TSLA vassilating during all this... waiting for the Master Plan blog update, which will probably be during the weekend.

I agree with you that most of the autopilot crash crisis is media hype. My real question is when Tesla will get the benefits of assuming the biggest risk (vs MBLY, NVDA, ALB) and its stock can perform better than these suppliers.

 

[winfield100]

SolarCity is gaining quite nicely. It's up about 2%. Tesla seems to be responding with going green recently.

Here's a trade idea for a cash poor Tesla bull who believes the acquisition will go through between .122 and .131.

Sell 100 shares TSLA.
Buy 820 shares SCTY.
Net about $2000 cash.

When the acquisition goes through, 820 shares SCTY converts to 100 to 107.4 shares of TSLA.

So for the whole trade on can net about $2000 plus 0 to 7 shares of Tesla.

One must determine for oneself if this is worth the risk. The downside is if this deal does not go through and the return on 820 shares of SolarCity is less than the return on 100 shares Tesla minus $2000 cash.

My own outlook is that, if the deal does not go through, this will be bad for Tesla share prices. Basically, such a failure would reflect poorly on Musk and his visionary leadership. So I'm not convinced that holding Tesla shares through this is any safer than holding SolarCity shares. So if you're seriously worried about that, pulling out a little cash is not a bad thing.

So I think Tesla bulls should get solidly behind the acquisition and position themselves to make about 10% on the deal.

@jhm am curious, why not sell the 100 TSLA and get 860 shares SCTY? as more or less even trade? (or ~92-93 shares TSLA and 820 SCTY) (i usually DCA equities)

 

[Curt Renz]

Meanwhile the media continue to discuss Tesla and Autopilot, and it's getting to the point where it is simply good publicity for Tesla. Someone else mentioned this yesterday. A representative from Consumer Reports was just on the TV, talking about how dangerous and suggestive the name "Autopilot" is. They didn't have any other complaints about the actual Autopilot product... they said it was fine, and the name just gives drivers the wrong impression about what is possible. This is so far into the area of subjectivity and so far away from discussing concrete facts that basically Tesla has the media under full control without paying Dollar One for publicity. While we see Lexus and Mercedes ads during the commercial breaks, we see Tesla during the editorial segments getting mulled over by a bunch of confused pundits. Probably the best outcome possible for TSLA.

Indeed, the barrage of news amounts to free advertising for a company that does not pay to advertise. Many people are still unaware or vaguely aware of Tesla Motors and its cars. When they hear "complaints" in the media about Tesla being so far into the edge of automotive technology, it may inspire them to take a test drive and learn for themselves..

 

[racer26]

@jhm am curious, why not sell the 100 TSLA and get 860 shares SCTY? as more or less even trade? (or ~92-93 shares TSLA and 820 SCTY) (i usually DCA equities)

I presume so that if the merger goes through at the bottom end of the deal, you still end up with your 100 TSLA at the end of the day.

 

[Papafox]

As I posted here:A flight instructor teaches Tesla Autopilot, in a critical flight situation (the autopilot is flying an approach to landing, close to the ground), airline pilots monitor the performance of the autopilot with great vigilance and remain ready to take over in a moment's notice if the operation is not progressing properly. Thus, "Autopilot" remains an appropriate word for describing Tesla's system. Consumer Reports fails to understand that even in a modern jetliner, autopilot operations sometimes fail and the autopilot needs to be carefully monitored during critical situations (such as on approach and close to the ground). Consumer Reports is incorrect in criticizing Tesla for using the word "Autopilot" because CR really doesn't understand the need to monitor an autopilot's performance in aircraft.