Short-Term TSLA Price Movements - 2016

[AlMc]

No, not really at all. Pointing to SEC language with enough hedging to create a privacy fence is something you do when are desperate and trying to create confusion. Properly drafted disclosure (as here) describes current state of things while allowing plenty of leeway to ultimately do whatever he wants.

It's obvious to anyone not trying to twist the language like a contortionist that something has fundamentally changed with the cash position. He essentially put off raising cash for 6 months during the most capital intensive period of the company's lifecycle. Something's up.

I totally agree that 'something's up'.....Very interesting week or so ahead.
Whatever one's opinion on EM and his tweets, he does have a flair for the dramatic

 

[AlMc]

@AIMc
here is link to about only author worthwhile i read on SA anymore. engineers POV, otherwise a bunch of "hoohah"
http://seekingalpha.com/article/4001134-tesla-already

Thanks. I will check it out.

 

[GoTslaGo]

The only explanation that fits is that they're unveiling the model Y. They could charge 2k for reservations and expect to receive 300,000, for $600m raised which, along with earnings in q3 and powerpack 2.0 pre-payments is why they no longer need cash.

It would also dovetail nicely with the recent removal of the Model X 60D, as a Model Y should fulfill this end of the price spectrum. Likely with a better gross margin.

 

[MitchJi]

The only explanation that fits is that they're unveiling the model Y. They could charge 2k for reservations and expect to receive 300,000, for $600m raised which, along with earnings in q3 and powerpack 2.0 pre-payments is why they no longer need cash.

Why wouldn't that cause the stock to tank? There's already concern about them being able to produce the M3 on time, the GS analyst for example. What happened the last time that they introduced an SUV? The Y is supposed to have FWD's btw.

Sure. But that the planned cap raise was annulled because the stock didn't react to the numbers as hoped for is just as plausible, yet no one is even considering it as a possibility. Or that the money is needed only a quarter of two later because the model 3 is delayed by that time frame.

Not plausible.

The stock didn't react to the numbers because they haven't been released yet.

M3 delay by 3-6 months now is highly unlikely.

 

[anon]

CNBC's article says that the cash raise was for the SCTY acquisition and now it won't be necessary. Of course we know it was mostly for Model 3, but headlines like this could boost support for the merger and reduce the arbitrage in the days ahead.
Surprise! Tesla to unveil new product, says won't need more cash to buy SolarCity

 

[brian45011]

Your data centers must have ground floor access then. In the cities, most don't, and running conduit and demo/construction work can easily cost 6-figures and up.

If they are re-purposing high rises, many have stand-by diesel generators on their roofs to power essential functions like elevators. data centers, lighting etc. during Utility overload (outage) events. I remember working on a a demand curtailment program for P&GE with half a dozen BOMA managers of several large office buildings near the foot of Market in the early 1980's.

 

[CatB]

Or maybe he's going to announce this month that M3 is ramping up nicely, and may be available early. Send out demo M3s in Q1 for test drives, and once that gets hyped up, then take reservations for the Model Y...

 

[Hawkeye]

I would think Model Y would be a good one to release sooner than later. Same skateboard, maybe a little longer for cargo room. You can keep the interior identical to the 3. So two separate lines for the body and same line for after paint (like the S and X). Assuming demand is 85-90% of the 3, you are close to doubling production with the incremental cost of design/engineering and body line. The rate limiting steps would be space at freemont (maybe already figured out) and battery supply.

 

[GoTslaGo]

Why wouldn't that cause the stock to tank? There's already concern about them being able to produce the M3 on time, the GS analyst for example. What happened the last time that they introduced an SUV? The Y is supposed to have FWD's btw.

Stock may tank, but releasing info on Model Y would play into current consumer demand for CUV/SUVs (see @RubberToe's excellent updates on sedan demands and CUV/SUV demands.

As @Mike Smith pointed out it could be a great boost in cash reservations.

Also the FWDs are only a possibility, since Elon deleted his tweets about them when asked:

Elon Musk just teased the Model Y in a tweet (which he immediately deleted)

I would hope that the Model Y would be a simpler design, like the Model 3.

I hope the announcement will be Model Y (since Tesla dropped the X60D option).

 

[mrdoubleb]

When Elon revealed the 100 he tweeted that there would be a 'product announcement'. He's calling this a 'product unveiling', which means live event. This tells me it is a significant, all-new product.

The tweet also says that it will be 'unexpected by most'. I think his is referring to the Model Y unveil not being expected this early.

Part 2 of the models 3 and Y unveil would come later at another event. It makes sense to reveal the Model Y now so that people see how much better it will be than the bolt.

As unlikely as this is, I would give about 40% to this (50% is AP2 and 10% is sg else). Others have noted this could be related to the Model X 60 disappearing - making room for Y - and that a few hundered million in reservations could help with the cash sans the capital raise. Also, it may not be that far fetched to assume that they have 1 early prototype of Y ready to show off.

 

[2virgule5]

The one week interruption at the Fremont factory was likely linked to the product announcement, and this is something you will be able to buy right away - I don't think model 3 or a related future product makes sense now. Model S coupe or variation of existing platform, S or X is a tempting hypothesis. AP 2.0 doesn't fit 'unexpected by most' unless he's talking general public at large (now one is expecting level 4 hardware in 2016...).

 

[AlMc]

I would think Model Y would be a good one to release sooner than later. Same skateboard, maybe a little longer for cargo room. You can keep the interior identical to the 3. So two separate lines for the body and same line for after paint (like the S and X). Assuming demand is 85-90% of the 3, you are close to doubling production with the incremental cost of design/engineering and body line. The rate limiting steps would be space at freemont (maybe already figured out) and battery supply.

I hope it is not the 'Y' announcement. I agree that it will stimulate demand and bring in some more deposit money.
*Possible* negatives: It might Osbourne some X orders and it might also just have some existing '3' sedan reservation holders just switch their deposits to the Y. The latter applies to me. My nuclear family has 5 reservations for the 'sedan 3'. Four of those would flip to the Y *IF* it were to be released in a similar time frame

 

[AlMc]

@AIMc
here is link to about only author worthwhile i read on SA anymore. engineers POV, otherwise a bunch of "hoohah"
http://seekingalpha.com/article/4001134-tesla-already

Thanks. I will check it out.

An excellent article. By totally ignoring SA I missed this....Sometimes bear sites provide useful info

 

[MitchJi]

It's obvious to anyone not trying to twist the language like a contortionist that something has fundamentally changed with the cash position. He essentially put off raising cash for 6 months during the most capital intensive period of the company's lifecycle. Something's up.

Agree, and from the tone of his tweets it's clearly good news.

I would think Model Y would be a good one to release sooner than later. Same skateboard, maybe a little longer for cargo room. You can keep the interior identical to the 3. So two separate lines for the body and same line for after paint (like the S and X). Assuming demand is 85-90% of the 3, you are close to doubling production with the incremental cost of design/engineering and body line.

Exactly how the X was described with the S. I hope not. It's unlikely because it doesn't sound like his intention is to cause the SP to tank.

 

[esk8mw]

Trying to decipher the product announcement. The breadcrumbs are out there, which makes it fun. The data suggests model y but the timing seems off.

I think it's a demand lever because the announcement is 2 days after the referral program ends.

Ending the 60 on the X only makes me think they need to create some distance between the x and...something else.

The word unveiling instead of announcement makes me think it's a full event, but a new model would be rather minute!

The word product implies it's a physical thing rather than software. Ap 2 seems too obvious. Model 3 part 2 is too obvious. Powerwall 2 seems possible but I'd think that would be addressed in the 28th event.

I predicted Elon would start defending the sp on Friday. Came quicker than I thought!

 

[brian45011]

but do these numbers/options make sense?

Tesla announced it was repaying the ABL draw after 6/30/16. It can draw again as needed.

 

[brian45011]

But Elon said, that the product is not expected by most.

Why not folding 2nd row seats and suicide doors for the X?

 

[brian45011]

it would be very difficult for Goldman to underwrite an offering while just having downgraded the stock with a lower than current share price.

What? No Chinese wall?

 

[JBRR]

I subscribe to a newsletter called Inside Electric Vehicles.
They linked this Morgan Stanley presentation by Adam Jonas.

Morgan Stanley

Thought it was awesome.

 

[MitchJi]

From SA:

To date, neither Tesla or Panasonic have publicly disclosed cell chemistry with high enough specific energy for a successful Model 3.

Wrong! The only make or break issue for the M3 cells is cost.

If the Gigafactory turns out batteries that don't meet the performance, storage capacity or life expected, then both Tesla and its Gigafactory could end up on the ash heap of history. And, Panasonic, to say nothing of Tesla shareholders, could feel pain along the way.

Absolutely true, but also absolutely no reason to believe for an instant that they won't do that.

It would be comforting to Tesla long investors, and perhaps disconcerting to some Tesla "shorts" if Tesla and Panasonic clearly had in-hand the critical cell chemistry needed to make Model 3 successful. Alas, neither Tesla or Panasonic have shown such battery chemistry improvements to the public. As far as we know from public statements, the exact degree of improvement and development status of Model 3 battery chemistry is either a mystery hidden within an enigma, or a hideous heap of hype, depending on one's current investment position in or disposition toward the company.

Absolute horse manure! Tesla/Panasonic developed and introduced at least three new chemistries without problems recently. Two for TE and the 90 with added silicon. How many times in the past has Panasonic introduced new cell cell chemistries without problems? They don't need a new chemistry, but they are probably going to introduce at least two with the 2170 cells. One for TE and one for cars. What would make anyone believe that they can't handle this?

It's insanity!