Short-Term TSLA Price Movements - 2016

[tander]

Good info. Thanks for posting.

A couple of discussion points:

1) "For Q3, they expect TSLA to deliver ~12k Model S and ~9k Model X vehicles"

Who are "they"?? I didn't see Tesla giving out any Q3 guidance, let alone a fine breakdown between S and X. Did Ben get to privately talk to management? or is this some consensus analyst projection?

2) Ben is the second biggest Bull (right behind Dougherty) among analysts. Looks like he is receding to a non-profitable Q3. I think this is a dead give away that both GAAP and non-GAAP EPS will be negative for Q3 also.

In Q4, merger happens and SCTY financials will be a drag on TSLA financials. So a positive EPS for Q4 is also a suspect.

Ummm... I wonder until when we will be waiting for a positive EPS... It's one thing not to have positive cashflow (it makes sense to do capex) but not having a positive eps is really a bit of a bother for me.

1. That seems pretty modest. 2k a week is 24k for the quarter + up to 5k for in transit improvement. They could have a week off and have another 5k in transit cars and still beat 21k.
2. Don't forget Jonas, he's the biggest bull, although kinda sheepish lately. I wouldn't count on or out a positive Q3, at 22k deliveries they could spend over 400M on capex and still be positive, not including ZEV and battery sales.

 

[dmckinstry]

Great close today. $230.

$230.61. Matched last Thursday & highest since June 8th.

 

[tander]

Deliveries may be high, but this is much expected. The problem of not being profitable still hangs. I'm not very optimistic for H2 16 myself. I can see them being non-GAAP profitable for Q4, but not Q3 nor H2 overall. To meet their target of $2.25B CapEx this year, they still need to spend $1.7B in CapEx in H2. This is exactly the amount they raised earlier. So I expect them doing another capital raise (the modest one) in Q1 next year.

That's a good point, 1.7B is a big number. But I'm kind of thinking that profitability would be kind of the cherry on top at this point, nice but not necessary to be consider "good". I'm starting to think that even some of the FUDers have digested the idea of growth vs profitability, kind of wondering how much it really matters for Tesla right now.

 

[drinkerofkoolaid]

Mark Spiegel explained in 51 seconds.

 

[Fallenone]

That's a good point, 1.7B is a big number. But I'm kind of thinking that profitability would be kind of the cherry on top at this point, nice but not necessary to be consider "good". I'm starting to think that even some of the FUDers have digested the idea of growth vs profitability, kind of wondering how much it really matters for Tesla right now.

The thing is, TSLA needs to show the FUDers with a solid positive eps, or even better, FCF. Nothing else can persuade doubters. And I think that is the trigger for a short squeeze (if there ever would be one), not SCTY merger.

 

[esk8mw]

I think today is the day that weak shorts gave up on TSLA. 169k shares available to short at IB, highest I've seen it for quite some time. Fee rate is also at a recent low of 16.77%.

 

[ev-enthusiast]

Tomorrow's trading session will be very interesting.

 

[SBenson]

1. That seems pretty modest. 2k a week is 24k for the quarter + up to 5k for in transit improvement. They could have a week off and have another 5k in transit cars and still beat 21k.
2. Don't forget Jonas, he's the biggest bull, although kinda sheepish lately. I wouldn't count on or out a positive Q3, at 22k deliveries they could spend over 400M on capex and still be positive, not including ZEV and battery sales.

I'm curious why do so many people confuse and mix in capex into EPS discussion? capex affects cash-flow, but not eps.

Even Musk:

<<Rod Lache - Deutsche Bank Securities, Inc.>>

Sounds like a lot of innovation there. One last just housekeeping thing for Elon or Jason. You'd previously talked about the objective of profitability in the fourth quarter, but I know a lot's changing with the mix and also with the direct leasing. So is that also something that we should think as being pushed out a quarter?

<<Elon Reeve Musk - Chairman, Product Architect and CEO>>

Well, if you exclude Model 3 CapEx ramp, then – well in fact, really for Q3 and for Q4, Tesla would be profitable excluding the Model 3 CapEx ramp.

Am I getting something wrong??

 

[esk8mw]

I'm curious why do so many people confuse and mix in capex into EPS discussion? capex affects cash-flow, but not eps.

Even Musk:



Am I getting something wrong??

I assume he's mentally subtracting additional opex related to Model 3 launch when saying Tesla would be profitable without Model 3 ramp. I'm thinking of things like adding new stores and other infrastructure necessitated by Model 3.

I think he's trying to speak to the people saying OMG TESLA LOSES MONEY ON EVERY CAR SOLD! The point is that Tesla could stop trying to expand and grow and would instantly be a profitable company. Since Tesla has bigger ambitions, however, the profit just isn't going to be there for the time being - until they scale up.

 

[3Victoria]

I thought I was obsessed with Tesla, but MSpiegel beats me all hollow ... but in the opposite direction :-/ A drowning person will grasp at straws.

 

[Sancho]

Tomorrow's trading session will be very interesting.

Every day is going to be interesting for the next 18 months. As of today the market has switched primary focus from the past woes of production to the future promise of M3. The shorts are not going down without a fight, but they are going down.

We've got a ringside seat.

 

[tander]

The thing is, TSLA needs to show the FUDers with a solid positive eps, or even better, FCF. Nothing else can persuade doubters. And I think that is the trigger for a short squeeze (if there ever would be one), not SCTY merger.

Squeeze aside.If they can show increasing sales and increasing margins I think we're at a point where the growth v short term profits argument is sort of moot. Although it'd be nice to just show some profits and end the argument.

I'm curious why do so many people confuse and mix in capex into EPS discussion? capex affects cash-flow, but not eps.

Even Musk:



Am I getting something wrong??

Nomenclature I guess. I should have said OPEX not CAPEX, it seems like a lot of stuff that is broadly CAPEX ends up as OPEX for Tesla.

 

[dakh]

A bit of a recap..

$270 was Aug 5 close a year ago. GF party, master plan, etc. didn't do much. Neither did Q2 ER. One fatal accident did, that was a buying opportunity. Not quite on par with Feb scare but pretty good one still.

Next up, we'll know if technical short squeeze prediction is going to materialize. My bet is it won't, I hope I'm wrong. Personally at this point I'm just accumulating as funds become available. No short to medium plays that I can see but I think current prices are still attractive for long term investment.

 

[Fallenone]

Squeeze aside.If they can show increasing sales and increasing margins I think we're at a point where the growth v short term profits argument is sort of moot. Although it'd be nice to just show some profits and end the argument.

But if you just look at the numbers (disregard X still improving, and introduction of 60), compared to a year ago, ASP is flat in Q2 and expected to drop quite a bit in Q3. GM is better than Q1 and last Q4 but less than Q2 2015. GM Q3 2016 will be lower YoY too. So the gross profit on each car is shrinking. This counters the increasing sales number to some extent and OpEx is outpacing the growth of gross profit and thus you have a growing net loss. This is not a convincing picture to those who doubt TSLA.

 

[drinkerofkoolaid]

Theory1:

Big buyers are buying options spreads on SolarCity. This is why the stock isn't moving much and volume is low.

The same is happening with Tesla. If you look closely at the Septrmber options you'll notice a few interesting things.

Theory 2: "Disinterested parties" are quietly acquiring shares of SolarCity prior to the vote.

 

[srini]

Come on now! That's Teslaccouting 101, known only to the very faithful!! Capex leads to losses, and losses are reinvested for growth!! Only in Teslaland.
Yeah, the $2B for GIGA factory CAPEX did find its way into OPEX. So, yay!! Who cares? To the moon!! Nothing matters!!

 

[Mario Kadastik]

The ask-bid spreads on SCTY are pretty wide, I mean bid $1.5 ask $4.5 is a huge gap. Has been like this a few days. I did find Oct options reasonable and traded a bunch of 24 calls and 21 puts for synthetic longs with no money down, the gap in exchange ratio is alluring and with no money down I've got a wide range where I'm safe

But it's nice to see TSLA green post ER that was known to be financially bad too bad as a safety measure I moved my short term sold puts to Dec/Jan before ER for safety, now moving back had to take higher strikes due to volatility collapse...

 

[tander]

Come on now! That's Teslaccouting 101, known only to the very faithful!! Capex leads to losses, and losses are reinvested for growth!! Only in Teslaland.
Yeah, the $2B for GIGA factory CAPEX did find its way into OPEX. So, yay!! Who cares? To the moon!! Nothing matters!!

It's really just the difference between managerial accounting and GAAP. GAAP is designed turn companies into apples and apples for comparison, managerial accounting is for the companies themselves.

 

[drinkerofkoolaid]

This could be significant. A number of hearings are coming up to discuss how to use funds obtained from CARB violatons. (Such as VW)

Supplemental Environmental Projects

http://www.arb.ca.gov/enf/sep/sep_policy_workshop_notice_080216.pdf

From the below article:

Emissions Reduction Program: The settlement of the company’s Clean Air Act violations also requires Volkswagen to pay $2.7 billion to fund projects across the country that will reduce emissions of NOx where the 2.0 liter vehicles were, are or will be operated.

 

[esk8mw]

Come on now! That's Teslaccouting 101, known only to the very faithful!! Capex leads to losses, and losses are reinvested for growth!! Only in Teslaland.
Yeah, the $2B for GIGA factory CAPEX did find its way into OPEX. So, yay!! Who cares? To the moon!! Nothing matters!!

Sorry about your short position.

Actually, I lied. I'm not.