Short-Term TSLA Price Movements - 2016

[Papafox]

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...).

Your points are consistent with Elon revealing the heads up display for S and X on October 17. Why not add AP 2.0 hardware for good measure?

 

[drinkerofkoolaid]

Moving ahead with next gen Autopilot hardware means Tesla almost certainly got the green light from regulators. All the BS about regulators allegedly attacking Autopilot will likely turn out to be nothing more than BS.

 

[dakh]

They don't need to deliver on that at all (zero) to shock the market. Five to ten times the output of a normal state of the art factory, which Elon said is one car every 27 seconds. The labor savings are substantial, but not anywhere close to 100%. Something like 50% fewer workers preforming more complex tasks.

That's true. I was going for a comparison with a tech company though. There are people working in the data center as well, and stuff does fail, require maintenance, upgrades, etc. They're not working on the final product though. Tesla's stated [sub-]goal is to have the same happen in the manufacturing business.

 

[dakh]

Your points are consistent with Elon revealing the heads up display for S and X on October 17. Why not add AP 2.0 hardware for good measure?

Ah so that actually could also be a good candidate -- like was discussed previously, they'd have to ship the fancy HUD that's planned for Model 3 on S and X at some point. Maybe this is that point and they have to do it now since, well, the cars coming off the factory floor will have them installed. Seems a bit early though.

 

[dakh]

(a) I like to think you meant dilution, and not delusion,
(b) capital raises are not necessarily dilutive anyway, since the extra shares are offset by the incoming money; it's a positive sign if none is needed, though.

Yea I noticed the autocorrect but too late for edit. It was/is agonizing!

 

[dakh]

Moving ahead with next gen Autopilot hardware means Tesla almost certainly got the green light from regulators. All the BS about regulators allegedly attacking Autopilot will likely turn out to be nothing more than BS.

If they simply run similar algos over a different set of hardware and some additional sensors, why would regulators care? Actually from what I can tell there's not that much regulatory oversight anyway, it's just a fancy cruise control from regulatory perspective. They're not claiming full autonomy just yet.

 

[oneday]

After the dip last week, I planned on transferring some dry powder into my investment account. Although, It didn't appear that I needed to rush it. I'm slapping myself now.

I think it's safe to say that sub 200 buying opportunity is behind us. Though I admit I am horrible at predicting the market.

 

[MitchJi]

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

Don't you mean that your family will flip orders if the seats are replaced with folding seats .

 

[Oil4AsphaultOnly]

Not if the discount for the purchase is greater than the cost of capital.

Even so, it's still difficult to imagine anyone (who doesn't provide the money) authorizing such a large pre-payment (~$1B).

So the fact that Tesla never "needed" additional funding, but would take it anyway if the terms are good. I think the recent brouhaha with GS and MS is a direct response to failing to agree on the terms of the next fundraising. It's still a net positive, because Tesla can shop around and make sure those investment bankers know who's in control. The ABL provides them with almost $1B in short-term financing, so they'll probably tap that to complete whatever factory purchases they need to make in Q4 and see if any doors open up along the way.

An additional thought is that if Q3 was GAAP positive, then Q4, with a slightly higher delivery total (~1000 more to make 50k H2 possible) would provide an extra ~$22 million (25% GM) towards the bottom line. It might not seem like much, but it's extra money. Or did I miss something?

 

[vgrinshpun]

you seem like an angry person.

This is just the well reasoned Bear perspective which clearly is missing on this Forum

The (not thought) provoking remarks like this is the hallmark of this user and is a clear indication that the goal is to sidetrack and sabotage any intelligent discussion on this Forum aka trolling.

 

[TrendTrader007]

First pie-in-a-wallstreet-face for GS tomorrow ?

That analysts rating is about to get even much worse (not that it CAN get much lower)
David Tamberrino : Ranked #3,978 out of 4,190 Analysts(#9,202 of 9,650 overall experts)

Great start for his first TSLA analyst report.

think of this analyst as the all time contrarian indicator
they say no one rings a bell at the bottom
this guy does!

 

[AlMc]

Don't you mean that your family will flip orders if the seats are replaced with folding seats .

If the seats in the second row don't fold in the 'Y', but do in the '3 sedan', you know which one we will all be getting!

 

[Rarity]

I think the Fremont expansion is to take the production capacity from 400-500k per year to closer to 900k. Tesla will need this capacity when they are going to start producing the Model Y, hopefully late 2018.

The presentation from the city to the city council suggests the build-out is mainly warehouse space in order to meet the 500k production goal. Given the timing -- is there enough time to do the build-out before 2018? -- I do wonder whether we should take that at face value, however.

 

[Ryo]

Part of me thinks the new product announcement might be a Tesla-only ride sharing platform. We know from MP 2.0 they want to develop a phone app to summon a car and release your car to the autonomous fleet. Why not release this platform before full autonomy is available? Give a greater percentage back to the drivers than Uber while charging Uber black premium rates.

 

[TrendTrader007]

I am going to recommend a ban on myusername for intentional spreading false information and trolling. I'll put him on /ignore as well.

i put that idiot on ignore few days ago

 

[myusername]

This is just the well reasoned Bear perspective which clearly is missing on this Forum

The (not thought) provoking remarks like this is the hallmark of this user and is a clear indication that the goal is to sidetrack and sabotage any intelligent discussion on this Forum aka trolling.

yeah... sorry about that... but it's in response to basically an attack. i'm not going to respond directly to someone that simply hates everything I say because of my general sentiment on the stock. why lump me into a category of:

"So another terrified bear I follow who is currently trying to backpedal on his entire bear thesis of financial insolvency"

when did I say this?... I didn't... I was simply discussing an alternate possibility for today's activities and it dissolved into a "kill the troll" campaign by those that claim to be on the righteous side of this argument.

sorry... but there is extreme bias here. i'm fine with that and expected it. but I think I've been on the high path during these meltdowns.

 

[MitchJi]

.
They don't need to deliver on that at all (zero) to shock the market. Five to ten times the output of a normal state of the art factory, which Elon said is one car every 27 seconds.

The labor savings are substantial, but not anywhere close to 100%. Something like 50% fewer workers preforming more complex tasks.

That's true. I was going for a comparison with a tech company though. There are people working in the data center as well, and stuff does fail, require maintenance, upgrades, etc. They're not working on the final product though. Tesla's stated [sub-]goal is to have the same happen in the manufacturing business.

I'm sorry, but I was mainly referring to production speed. If they only match state of the art speed they'll be making an M3 every 27 seconds. The market isn't expecting that!

 

[MikeC]

I'm glad that it looks like Elon has decided it's not optimal to telegraph capital raises. It adversely affected the last offering at $215, which could have been at $250, and it dampened the recent Q3 delivery numbers.

 

[dennis]

I've heard a lot of fantasies on how the money will appear in Teslas bank account. All slightly possibly at most just as plausibly that the cap raise deal was annulled because the market didn't react as hoped for on the Q3 results. Or even worse, that Q3 financials are actually not that good anyway, ie miss on profitability. It's even plausible that the cap raise is annulled because model 3 and associated cap needs are postponed. All just as plausible as a utility pre-financing a $4B TE purchase.

I don't believe that those are just as plausible. And the reason is that Elon continues to play the long game, and the most important thing currently to succeeding in the long game is the Model 3 ramp. So if Tesla needed additional capital in Q4 to stay on the accelerated ramp for the Model 3, Elon would raise it at $200 or $190 and take the extra dilution vs. a $230 price. Elon does not optimize for the short term, and he has proven that to us many times recently. Remember how the announcements of 500K vehicles in 2018 and the SolarCity acquisition tanked the stock? Both short term hits because of Elon executing on his long term vision.

 

[vgrinshpun]

vgrinshpun said: ↑
For example, if it TE signs agreement with a large utility, say Oncor of Texas for supply of 10GWh of BES througout the 2017 with upfront payment in return to heavily discounted price, say $350/kWh instead of the list price of $445/kWh, it can bring $3.5B in cash upfront, with $1.1B of this payment being gross profit, ensuring, as I speculated earlier profitability in 2017.



The upfront payment/most probable scenario is unlikely to come from Oncor! Oncor's majority owner (80%), Energy Future Holdings, has filed for bankruptcy protection. How is Oncor Protected?

The "ring fence" was as much about regulatory separation as it was about creditor protection. Texas/ERCOT has a bifurcated structure: Generation (in most of the state) is competitive and largely unregulated (other than ERCOT's role). Transmission and Distribution (T&D) utilities are regulated by the Texas PUC, because of the old regulated monopoly concept that economic monopolies are entitled to a return of and a return on their investments. Figuring out what is "fair" for the return of and on is a ponderous, expensive, time-consuming process.

The process is complicated by the reality that in a bifurcated market, stationary storage is a hybrid--neither fish (unregulated generation) nor fowl (regulated T&D).

The consequence of the bankruptcy coupled with the regulatory conundrum means Oncor is unlikely to buy 10 Gwh of battery storage anytime soon.

(The old-timers at EFH/Oncor from the time when TXU was an integrated, regulated utility still have scabs over wounds from "prudency" hearings about Comanche Peak.)

I used Oncor as an example because they had a plan to buy 5GW / 15GWh of stationary storage which independent study concluded would be benefitial at $350/kWh. The reason for this large project is that wind accounts for about 15% of Texas' installed generation capacity. This large percentage of renewables put significant strain on the grid, could lead to power interruptions, and results in wind generators at times switching of generation because grid is not able to absorb it.

I do not know how likely agreement with Oncor specifically is, but an offtake agreement is a plausible way to obtain cash Tesla needs to avoid the capital raise.

There are, however, few interesting points to keep in mind regarding the Oncor:

• According to the article linked by @doggusfluffy, although Oncor's parent company is in bankruptcy, Oncor continues operate and is profitable: "Oncor was not part of the bankruptcy and in fact has continued to turn a significant profit."
• There is an intersting connection between Oncor and NextEra Energy, which per @pGo is rumored to pursue agreement with Tesla: on July 29, 2016 Next Era reached definitive agreement to acquire Energy Future Holding's interest in ONCOR Electric Delivery Company.
• Since the definitive agreement above, as of Sept.19 2016 Next Era has boosted its offer for Oncor by $300 million and won court aproval for the acquisition.
• The deal also needs approval by the PUC