Short-Term TSLA Price Movements - 2016

[stealthology]

Here's a re-cap of Chanos' bear argument on CNBC today:

• Combined TSLA and SCTY have about $1B in cashburn
• Buried in the merger proxy was an interesting disclosure that the Tesla board took a pass on providing SCTY with a bridge loan. Chanos says if you're willing to buy the whole company, wouldn't you be willing to extend $100m for a few months pending the deal closing?
• Talking about the deal itself: "it may not happen, by the way"
• If you look at a credit related score, like the Z score, Tesla has put itself into the walking insolvent by doing this deal.
• The Model 3, as people think it will be configured, will never be $35K. $45-50K car is a big difference from a mass market car.
• Gigafactory still mostly incomplete, lots of competition, and huge cashburn.
• Brings up SpaceX and that they were looking into the fact that it could be a U.F.O. that may have caused the explosion, and says "this is a circus.."
• If you take out Musks' shares, institutions account for 90%+ of shares.

 

[tander]

As nice as share recalls would be, I try to stick with fundamentals that I can wrap my head around. As a long-term investor, quarterly gyrations are kind of annoying, but for short-term stuff sometimes it's a good thing. For the upcoming quarter, the best fundamentals I know of to go by are delivery numbers. I think most people in here probably have their own estimations for Q3 based on their own optimism levels/info/WAGs. My guess is they will make about 24k, which I think is conservative since it's based on 2k a week, and they stated they plan to exit this quarter at 2.2k a week, although I didn't allow for any downtime (which I think is okay because they were all long months).

However the big wildcard I see is the nearly 4k in transit number from last quarter. I think most people assume that in transit number is only going to go up with the number of cars produced, which has been the case for the last two quarters. But sometimes it works the opposite way as with q416 when they made 14037 and delivered 17478. If this were to happen for Q3, it's possible we could be looking at deliveries up there in the 28k+ zone, which would be their best quarter ever by far, and around twice the previous quarter, and assuming margins are decent that would be enough for a squeeze all on it's own, and would probably drown out any merger drama.

Is that going to happen? I don't know, I think it's actually probable though since they have made it a clear objective to aim Q3 at being really good (which they don't normally do). Getting that in transit number down would be a pretty smart way to make the quarter look extra good. It might depend most on how many far away orders they have, which I'm guessing is a growing number, but they could also get creative with logistics to keep transit down.

Anyway that's my 2 cents, let me know if any of my numbers are wrong.

 

[racer26]

Damn I know all what you said is true. So that makes me more anxious about M3 sales and envious to GM. Plus, most M3 buyers won't get the $7500 FED credit (hopefully $3750 still), and that makes Bolt even more attractive.

What makes you think most M3 buyers won't get the credit? Its been beaten to death ad nauseam here, but in essence, from the day you deliver your 200,000th US BEV or PHEV, you get the remainder of that calendar quarter, plus one more at $7500, and then it drops to 3750 for the following 2 quarters.

The more recent success that Volt is finding is pushing GM in a race to the finish line with Tesla. They will both sell their 200,000th car in the US in late 2017 or early 2018.

Tesla has explicitly said that they will game the system, so you can bet that Tesla's 200,000th US delivery will happen on the first day of a calendar quarter, and the floodgates of M3's will open after that.

First of all, with the way GM has tried to block the sale of Tesla vehicles in multiple states, I am effectively boycotting GM and all its products. That is simply not a company I want to support. <snip> Once the Model 3 is out, you would have to be crazy to buy a Bolt if the price is similar. That would be like buying a Mustang over a Porsche 911 if they were the same price.

Agree 100%

The price of the Bolt (around $37k), is AFTER the federal tax credit (unless they have already started discounting the car). Also GM has been going through its allotment of the tax credit with cars like the Volt.

$37.5k MSRP of Bolt is before credits. Its been frequently advertised as about $30k after credits.

You can add to that: setting EV's back a decade with their handling of the EV1 program, lobbying CARB to relax ZEV requirements and negligent homicide of 124 people with their faulty ignition switches. I will never buy a GM product.

I wouldn't have bought a GM product before any of that (I'm a lifelong Honda guy), but I agree.

The Idea that the Bolt is a EV Sonic and a 15G car is ridiculous.

The Bolt is the same size, shape and platform as the Buick Encore that sells for between 24 and 33 G's. GM moved 70 thousand of those in the US and 160,000 globally last year. The Bolt has more room than the Encore, goes 0-60 in almost half the time, has some tech the Encore lacks, and doesn't use gas.
At least from the photos and prototype, the Bolt seems much closer quality wise to the Encore and from first drives show it being way more fun to drive.

The Porsche Cayenne Turbo shares the basic same platform as a VW Touareg; Is the Cayenne just a $40G car with a turbo?

I might have agreed with you if Bolt was wearing a Buick or Cadillac badge, and had the appropriate trimmings to fit.

Encore and Sonic are essentially the same car too. Buick is the mid-range brand, though. I'll grant you that Bolt is trimmed a bit nicer than usual Chevrolet fare, but its not up to Buick standards.

The difference between a Cayenne Turbo and a Touareg is that the Cayenne has a high performance Porsche engine in it and higher end trimmings. But yes, its mostly a $40k car with a Porsche label on it.

Most cost-conscious people are unwilling to buy Acura or Lexus instead of the corresponding Honda or Toyota models for the same reason.

I guess that's really my point. For their price point, both Volt and Bolt should have been wearing a Buick badge, not Chevrolet.

 

[TrendTrader007]

Chevy Bolt is an awfully ugly looking car and i will not be caught dead in one
i got 2 M3 reservations and i am not giving a freakin dime of my hard earned money to GM

 

[tlo]

Comma.ai will ship a $999 autonomous driving add-on by the end of this year

 

[luca]

What makes you think most M3 buyers won't get the credit? Its been beaten to death ad nauseam here, but in essence, from the day you deliver your 200,000th US BEV or PHEV, you get the remainder of that calendar quarter, plus one more at $7500, and then it drops to 3750 for the following 2 quarters.

The more recent success that Volt is finding is pushing GM in a race to the finish line with Tesla. They will both sell their 200,000th car in the US in late 2017 or early 2018.

Tesla has explicitly said that they will game the system, so you can bet that Tesla's 200,000th US delivery will happen on the first day of a calendar quarter, and the floodgates of M3's will open after that.



Agree 100%



$37.5k MSRP of Bolt is before credits. Its been frequently advertised as about $30k after credits.



I wouldn't have bought a GM product before any of that (I'm a lifelong Honda guy), but I agree.



I might have agreed with you if Bolt was wearing a Buick or Cadillac badge, and had the appropriate trimmings to fit.

Encore and Sonic are essentially the same car too. Buick is the mid-range brand, though. I'll grant you that Bolt is trimmed a bit nicer than usual Chevrolet fare, but its not up to Buick standards.

The difference between a Cayenne Turbo and a Touareg is that the Cayenne has a high performance Porsche engine in it and higher end trimmings. But yes, its mostly a $40k car with a Porsche label on it.

Most cost-conscious people are unwilling to buy Acura or Lexus instead of the corresponding Honda or Toyota models for the same reason.

I guess that's really my point. For their price point, both Volt and Bolt should have been wearing a Buick badge, not Chevrolet.

Customers don't care and don't know where is the bolt's platform from,
chevy sonic or buick encore, it doesn't matter

In their mind, bolt's shape is identical to a cheap chevy sonic

 

[Novice]

I am looking at the possibility of a recall from a spectator's standpoint, trying to understand the flow of shares. Who has been selling? Once TSLA begins one of its downward journeys, all sorts of longs including institutional investors have a reason to reduce their holdings until they see evidence that the slide has bottomed out. This is why I've been hoping to see at least 2 positive days of TSLA trading in a row, to change the momentum and put bulls back in the driver's seat. The tough call is naming the bottom, of course, and for this reason many TSLA longs such as myself ride out the downward run because we strongly suspect the turn up is not far away. The outlook for 3Q delivery numbers in early October gives a reason for bulls to increase their TSLA holdings prior to that date.

:You can look at today's loss as coming from a cup of macro pressure, a half cup on downward slide momentum, a quarter cup of Bolt range seasonings, and three heaping tablespoons of FUD from various quarters. From this ingredient's list, you could assume that the drop today would have been greater than it was without some short shares being recalled, and if we see some additional recall pressure plus good macros soon, we will see green again (remember what that looked like?). In particular, I think an unexpected rise in TSLA SP an hour before closing is a good sign that some shorts are covering, because it's not a particularly attractive time for longs to jump in and suddenly start buying without some news to support that move.

On a day with 3.6M shares of TSLA trading hands, I find the estimate of 3M of those shares being bought to close short positions as being unrealistic. Let's see if vgrinshpun gets his answer from Ihor Dusaniwsky. TSLA held up better than the Dow today, even with the ingredients in today's recipe.

Will the merger of tesla and solar city then provide further immense downward pressure on the SP prior to the q3 result release ? If this is so we've got another negative pressure and the end result taking into the eventual upward pressure prior to q3 may not be so favorable
Would hope that in view of the extremely low RSI and large short percentage any eventual short squeeze unleash would be pronounced enough to negate all the current losses to take the SP up beyond the 220s

 

[Bgarret]

I think that article is mostly crap. I am a bit too distracted and lazy right now to go through it point by point. Maybe later.

Great. Look forward to your response when you have the time.

 

[drinkerofkoolaid]

1) The first Chevy bolt vehicles might be produced a few months earlier than the Model 3. However, GM will not be producing the Bolt at high volume, and most dealers won't be properly equipped to service them. GM will never sell a significant number of the Chevy Bolt.
2) I predict GM will have 1000x more problems with the Bolt than Tesla has had with any Tesla vehicles and might not be able to fix the problems.
3) No educated person who can afford to buy a $30,000 - $50,000 would consider a Bolt over a Tesla. GM will probably end up paying GM dealers to move inventory, by offering deals to people that basically make the Bolt a free vehicle. GM will lose a lot of money if GM tries to sell a lot of the Chevy Bolt.
4) EV charging network compatible with the Chevy Bolt is probably too complicated for most regular car buyers.

5) Chevy Bolt. Brought to you by the company that thought this was a good idea.
http://jalopnik.com/5426190/chevy-volt-dance-worst-automotive-marketing-ever

 

[postpast]

I might have agreed with you if Bolt was wearing a Buick or Cadillac badge, and had the appropriate trimmings to fit.

Encore and Sonic are essentially the same car too. Buick is the mid-range brand, though. I'll grant you that Bolt is trimmed a bit nicer than usual Chevrolet fare, but its not up to Buick standards.

Ya, it's a little ironical, but Pontiac would probably be the best branding for GM electrics; Some premium features and more performance.

Chevy sells Tahoe's and Corvettes, so there is a a market for higher priced goods, the question is if it comes with the trimmings. Reviews say it is very quiet; will it come with Buicks sound tech? They are testing it with Lidar, will it come with Caddies Supercruise? Chevy today makes some really bad and really good interiors; where will the Bolt be?

We will have to see.

 

[CatB]

5) Chevy Bolt. Brought to you by the company that thought this was a good idea.
http://jalopnik.com/5426190/chevy-volt-dance-worst-automotive-marketing-ever

Wow. Couldn't even stomach watching the entire video.
Jalopnik was way too kind when it said it was saccharine - sounds like pure sugar to me.

 

[madodel]

Comma.ai will ship a $999 autonomous driving add-on by the end of this year

I seriously think you'd have to be nuts to try that, but based on past youtube videos there is a market for it.
If it is as good as the addon 3D gizmo I bought for my TV there will be death and destruction all over the place. ;-)

 

[postpast]

1) The first Chevy bolt vehicles might be produced a few months earlier than the Model 3. However, GM will not be producing the Bolt at high volume, and most dealers won't be properly equipped to service them. GM will never sell a significant number of the Chevy Bolt.
2) I predict GM will have 1000x more problems with the Bolt than Tesla has had with any Tesla vehicles and might not be able to fix the problems.
3) No educated person who can afford to buy a $30,000 - $50,000 would consider a Bolt over a Tesla. GM will probably end up paying GM dealers to move inventory, by offering deals to people that basically make the Bolt a free vehicle. GM will lose a lot of money if GM tries to sell a lot of the Chevy Bolt.
4) EV charging network compatible with the Chevy Bolt is probably too complicated for most regular car buyers.

5) Chevy Bolt. Brought to you by the company that thought this was a good idea.
http://jalopnik.com/5426190/chevy-volt-dance-worst-automotive-marketing-ever

1) The first Bolts will be produced at least a year earlier than the first Model 3's. If we were to go by the Model X Launch than it may be three years before we see the Model 3 mass produced,
2) At the start of last year GM had 50 Bolt prototypes undergoing testing. The Volt is also pretty reliable. I will not link to any Model X Posts.
3) Tesla's are not for everyone; for example, I would not recommend one for my mom. Lots of people A)like GM as a brand B) Do not live near a SC C) Would only buy a car after test driving.
4) Most Bolts will likely be second or third cars.

 

[brian45011]

I doubt the specifics of the inside leak. Sure, GM might lose $5k car on low volumes (ie., 10-20k cars/year). But once the Bolt reaches 50k cars a year, I'm fairly confident they'll be at least marginally profitable.

GM is initially offering the Bolt in ZEV markets.

 

[Stretch2727]

Since this is "Bolt day" I will add my 2 cents.

-I think it will sell reasonably well but strategically it misses the mark.
-Electric cars for now should be a premium offering. Should have be been a small Cadillac sedan offered at about $50K.
-The lack of a good charging network will limit demand.
-Most of the dealers will treat it as a second class car.
-I am a little bit suspicious of the EPA range with 60 Kwh capacity. The manufacturers self certify to these numbers based upon an EPA test routine. The EPA does not actually test it. Just like Ford and Hyundai overstated MPG numbers the numbers for the Bolt seem on the optimistic side if it has a 60 Kwh usable battery. Owners and time will tell if this is realistic.

In the end it will be no comparison to the looks, performance, functionality (AutoPilot, AWD, etc.) of the Model 3 at a similar price point.

 

[anticitizen13.7]

1) The first Bolts will be produced at least a year earlier than the first Model 3's. If we were to go by the Model X Launch than it may be three years before we see the Model 3 mass produced,
2) At the start of last year GM had 50 Bolt prototypes undergoing testing. The Volt is also pretty reliable. I will not link to any Model X Posts.

Be careful about drawing an analogy between Model X and Model 3. Tesla admitted that the X was overly complex and difficult to build. The 3 was designed from the ground up to be simple to manufacture.

Of course nobody knows exactly how this will turn out. I simply think it is unwise to declare that the 3 will be as late and problematic as the X.

 

[RobStark]

1) The first Bolts will be produced at least a year earlier than the first Model 3's. If we were to go by the Model X Launch than it may be three years before we see the Model 3 mass produced,
2) At the start of last year GM had 50 Bolt prototypes undergoing testing. The Volt is also pretty reliable. I will not link to any Model X Posts.
3) Tesla's are not for everyone; for example, I would not recommend one for my mom. Lots of people A)like GM as a brand B) Do not live near a SC C) Would only buy a car after test driving.
4) Most Bolts will likely be second or third cars.

1) Likely not true but possible. Model 3 is not Model X.

2) See 1) Model X designed to be best CUV on planet. Model 3 designed for ease of manufacture and affordability.

3) GM cars are not for everyone . See 83% of Americans who buy new cars every year. And 95% of Europeans that buy new cars every year.

A) Not a high correlation between people who like GM as a brand and want to buy a new electric car. See GM's own statistics, GM plug-in buyers are overwhelmingly conquest buyers.

B) Not a lot buyers for 2017 and 2018 electric cars that don't live anywhere near a SC.

C) You will buy able to test drive a Model 3 before buying it. Why buy a secondary car that is only good as a secondary when for the same dough(if it is true that Bolt's are flying off the lots) you can buy a better electric vehicle that can fully replace an ICEv?

 

[3Victoria]

Model Y will mop up Bolt.

 

[madodel]

B) Not a lot buyers for 2017 and 2018 electric cars that don't live anywhere near a SC.

The SC network is for improved long distance traveling. That is a definite benefit for Tesla that GM and others lack but not sure why people are concerned about buyers being near a SC. The beauty of an EV is you charge it at home and it is ready to go when you wake up. I've only been to my nearby SC twice in 7 months. The first time was to test charging using a SC and the second time was for the unofficial grand opening. It didn't exist at the time I reserved my X or even when I picked up my X.

 

[postpast]

Be careful about drawing an analogy between Model X and Model 3. Tesla admitted that the X was overly complex and difficult to build. The 3 was designed from the ground up to be simple to manufacture.

Of course nobody knows exactly how this will turn out. I simply think it is unwise to declare that the 3 will be as late and problematic as the X.

Ya, that was a response to someone saying that the the Bolt would have 100 times the problems and be delayed compared to the Model 3. It was an attempt to bring context.

As for timelines... Tesla set aggressive ones and delivers behind schedule.They have as much as said so themselves. The Model 3 will be dependent of hundreds of suppliers. I think any reasonable expectation would be a few to show before Q4 2017. A good increase in Q2 2018 and start of real production by the end of that year.