Short-Term TSLA Price Movements - 2016

[PaulRocket]

Huge progress at the Gigafactory:
Tesla Gigafactory: stunning new 360 image of ‘Gigafactory 1’ shows progress ahead of production ramp up

 

[AudubonB]

I admit to being uncertain as to whether Macy's can tell Gimbel's. And a head count of all those who knew that reference prior to looking it up.

Starting again: I'm not sure if FMR and Templeton discussing amongst themselves how they would vote on a proxy runs afoul of disclosure laws. However, let's think it through. Ron Baron can appear on an investment show and say he's for the merger; DaveT can write on this forum he's against it or I that I'm for it. There is zero problem here even though NEITHER of those venues - TMC or CNBC - meets the SEC's strictures for public disclosures, and if on the other hand it were Tesla Motors that revealed specific corporate information on this thread there would be hell to pay and then some.

"But FMR owns X percent of TSLA and Audie owns less. So one's material and the other isn't". No - fortunately, it doesn't work that way. Either both situations are material or both are not.

So I THINK there aren't any such problems and I know for sure that when I was a member of some investor Splinter Groups* we often would share such information and opinions amongst ourselves.

*Curt Renz and some others likely know the reference; buy- and sell-side analysts have formal associations to share ideas and strategies within their areas of expertise.

 

[JBRR]

The interest cost of shorting tesla was/is high at times, making the arbitrage less profitable
If not outright unprofitable.

Good point. That cost is low now though, so arb spread should close (and increase in tesla short number should rise towards merge date - and fall after merger completes).

 

[JBRR]

Very off topic but should be shared.

Before the Flood

 

[stealthology]

I apologize if this was already posted, but it seemed pretty significant:
Panasonic announces 22.5% module-level efficiency solar panel

1 year ago Panasonic announced a 22.5% module-level efficiency panel; which set a new world record for module-level efficiency based on mass production technology. Efficiency verified by Japan's National Institute of Advanced Science and Technology.

Funny enough, just days prior to Panasonic's announcement, SolarCity announced they produced the world's most efficient rooftop PV module, achieving 22.04% module level efficiency.

 

[bdy0627]

If we view sentiment as the driver of the stock price, it appears more likely than not that sentiment will not change in the short term. SCTY is the driver of this. There was negative sentiment towards SCTY previously, and that is now directed at TSLA. Recent Tesla announcements have done very little to change market sentiment towards Tesla because they can't remove the SCTY uncertainty. It's all just noise to the market right now. I think we can reasonably assume that this negative sentiment over the uncertainty about SCTY will continue for a while. Tesla now has the huge job of reversing the negative SCTY sentiment. In my opinion, that can only come with time, as financials demonstrate SCTY is not negatively impacting Tesla. My best guess is that this will take at least 2 more financial quarters to demonstrate. If by then, the Model 3 plans are on track and SCTY is not weighing down Tesla's financials, the stock is likely to start to take off as investors anticipate the imminent financial growth of Tesla. You definitely want to be maximally invested by then.

If this is true, the question is how best to invest in Tesla for the next few months. Most of us here have long term investments in Tesla. No reason to change that. However, how should we approach trading in TSLA over the next few months? I am not an options trader. I simply buy or sell TSLA as I see fit. With this volatility and apparently random stock movements, I can't imagine trying to predict the SP for options trading. I would be a nervous wreck. It appears to me that TSLA is unlikely to take off in the next few months and then increasingly likely to trend up after that. It seems likely that it will trade in a narrow range for a while but with daily volatility. Why would we expect the SP to breakout based upon the Nov. 1 event or the presidential election? While possible, that doesn't appear likely at all.

I see the SP dropping as we get closer to the merger and then gapping down immediately after the merger. TSLA is likely to drop substantially immediately after the merger not just because of the negative sentiment but also because of the stock play that many are doing. Traders will sell and take their profit immediately after the shares convert to TSLA. I think it's wise to get on the sideline until after the merger, then pick up shares on the cheap. I think there will be an excellent opportunity to buy TSLA on the cheap a few days after the merger. This is all just my opinion of course.

 

[electracity]

Good points, but I think the merger is already priced into the stock. Or perhaps more accurately, the SCTY drag is already being felt. I agree that it will take a few quarters of financials post merger to get past this phase.

If we view sentiment as the driver of the stock price, it appears more likely than not that sentiment will not change in the short term. SCTY is the driver of this. There was negative sentiment towards SCTY previously, and that is now directed at TSLA. Recent Tesla announcements have done very little to change market sentiment towards Tesla because they can't remove the SCTY uncertainty. It's all just noise to the market right now. I think we can reasonably assume that this negative sentiment over the uncertainty about SCTY will continue for a while. Tesla now has the huge job of reversing the negative SCTY sentiment. In my opinion, that can only come with time, as financials demonstrate SCTY is not negatively impacting Tesla. My best guess is that this will take at least 2 more financial quarters to demonstrate. If by then, the Model 3 plans are on track and SCTY is not weighing down Tesla's financials, the stock is likely to start to take off as investors anticipate the imminent financial growth of Tesla. You definitely want to be maximally invested by then.

If this is true, the question is how best to invest in Tesla for the next few months. Most of us here have long term investments in Tesla. No reason to change that. However, how should we approach trading in TSLA over the next few months? I am not an options trader. I simply buy or sell TSLA as I see fit. With this volatility and apparently random stock movements, I can't imagine trying to predict the SP for options trading. I would be a nervous wreck. It appears to me that TSLA is unlikely to take off in the next few months and then increasingly likely to trend up after that. It seems likely that it will trade in a narrow range for a while but with daily volatility. Why would we expect the SP to breakout based upon the Nov. 1 event or the presidential election? While possible, that doesn't appear likely at all.

I see the SP dropping as we get closer to the merger and then gapping down immediately after the merger. TSLA is likely to drop substantially immediately after the merger not just because of the negative sentiment but also because of the stock play that many are doing. Traders will sell and take their profit immediately after the shares convert to TSLA. I think it's wise to get on the sideline until after the merger, then pick up shares on the cheap. I think there will be an excellent opportunity to buy TSLA on the cheap a few days after the merger. This is all just my opinion of course.

 

[mejojo]

You're talking about a commute that's a good bit more than the average American commute.

My home, even with my EV, averages about 13-14 kwh per day.

You cannot possibly be arguing that your usage or your commute is anywhere near typical.

How much electricity does an American home use? - FAQ - U.S. Energy Information Administration (EIA)

shows that the lowest average usage in the continental US is about 550kwh/month (18kwh per day), with very low uptake of EV, so we can assume the EV component is not represented. Add in a commute half my length, and you are up to 30kwh/day for the LOW average usage.

In the South, daily usage averages well over 1000kwh/month (33kwh/day).

 

[MitchJi]

"But FMR owns X percent of TSLA and Audie owns less. So one's material and the other isn't". No - fortunately, it doesn't work that way. Either both situations are material or both are not.

So I THINK there aren't any such problems and I know for sure that when I was a member of some investor Splinter Groups* we often would share such information and opinions amongst ourselves.

Somewhat related, and relevant anyway, I received the following via a PM from @esk8mw, because I wanted to determine a safe date for buying SCTY options (I think he wouldn't mind he sharing this):

Hi Mitch - there's a 99.9% chance the voting results will be made public on the voting date, November 17. They are tallying the votes as they come in and are getting daily updates from their proxy solicitor, so they know how the vote is trending already. Since TSLA is largely held by institutions, they will know when each institution votes because the votes will come in large chunks.

As soon as enough institutions vote, they will know with certainty if the vote is locked up likely days in advance of the meeting (some institutions wait until the last possible second, however, on the theory that late breaking info could change their vote).

The only wrinkle is that voters can change their minds up to the meeting date (usually only if they are in person at the meeting, though). There's a super remote chance that the vote could be super close and a voter could change its mind during the meeting and cause them to re-tally (delaying the vote being made public), but I'd say that's a .001% chance. We will almost certainly know on November 17.

 

[dennis]

Very off topic but should be shared.

Before the Flood

I just returned from a trip to Patagonia with Nat Geo's travel arm. The geologist travelling with us gave several very good lectures, including one on climate change. I learned two very interesting things:

1) Not all of the rise we are seeing in the ocean level is due to ice melting. Approximately half is caused by groundwater depletion, which in itself is a huge threat.
2) Some portion in the rise in CO2 levels is due to man-made factors, while some is part of the long term heating and cooling cycles that the planet has experienced. Scientific models do not agree on the split, but it may be 30%-60% caused by human activity.

 

[MitchJi]

I just returned from a trip to Patagonia with Nat Geo's travel arm. The geologist travelling with us gave several very good lectures, including one on climate change. I learned two very interesting things:

2) Some portion in the rise in CO2 levels is due to man-made factors, while some is part of the long term heating and cooling cycles that the planet has experienced. Scientific models do not agree on the split, but it may be 30%-60% caused by human activity.

Would you please clarify if the split might be 60% human caused or 30%.

Edit Addition:
I think I figured out what you meant. Your figures of 30-60% are not the split , but the range of possibilities?

 

[EinSV]

If we view sentiment as the driver of the stock price, it appears more likely than not that sentiment will not change in the short term. SCTY is the driver of this. There was negative sentiment towards SCTY previously, and that is now directed at TSLA. Recent Tesla announcements have done very little to change market sentiment towards Tesla because they can't remove the SCTY uncertainty. It's all just noise to the market right now. I think we can reasonably assume that this negative sentiment over the uncertainty about SCTY will continue for a while. Tesla now has the huge job of reversing the negative SCTY sentiment. In my opinion, that can only come with time, as financials demonstrate SCTY is not negatively impacting Tesla. My best guess is that this will take at least 2 more financial quarters to demonstrate. If by then, the Model 3 plans are on track and SCTY is not weighing down Tesla's financials, the stock is likely to start to take off as investors anticipate the imminent financial growth of Tesla. You definitely want to be maximally invested by then.

If this is true, the question is how best to invest in Tesla for the next few months. Most of us here have long term investments in Tesla. No reason to change that. However, how should we approach trading in TSLA over the next few months? I am not an options trader. I simply buy or sell TSLA as I see fit. With this volatility and apparently random stock movements, I can't imagine trying to predict the SP for options trading. I would be a nervous wreck. It appears to me that TSLA is unlikely to take off in the next few months and then increasingly likely to trend up after that. It seems likely that it will trade in a narrow range for a while but with daily volatility. Why would we expect the SP to breakout based upon the Nov. 1 event or the presidential election? While possible, that doesn't appear likely at all.

I see the SP dropping as we get closer to the merger and then gapping down immediately after the merger. TSLA is likely to drop substantially immediately after the merger not just because of the negative sentiment but also because of the stock play that many are doing. Traders will sell and take their profit immediately after the shares convert to TSLA. I think it's wise to get on the sideline until after the merger, then pick up shares on the cheap. I think there will be an excellent opportunity to buy TSLA on the cheap a few days after the merger. This is all just my opinion of course.

I agree regarding the importance of sentiment but I think it may be unrealistic to expect that negative sentiment would evaporate if SCTY concerns were addressed.

Before the SCTY merger was announced, the market was up in arms because Tesla planned to build 500,000 cars by 2018 after receiving 373,000 Model 3 reservations. Before (and after) that there were fears about Autopilot accidents. Before that was the Model X launch, suspension scare, fears about demand for Model S/X, etc.

And that was all just during the first 9 months of 2016. The same has been true over much of Tesla's life, with a bit of a reprieve in the 2013-2014 timeframe after the successful Model S launch.

While all of these concerns were "valid" in the sense of presenting risks, I believe they all have been blown way out of proportion to the actual risks they posed to the company. What we are seeing IMO is the effect of a propaganda campaign by short sellers and other naysayers that has been more successful than it has had any right to be. I seriously doubt alleviating the concerns with the SCTY merger will bring this to an end -- there will always be some new worry to blow out of proportion.

I don't know when sentiment will change, but my money is that a company growing at well over 50% per year (or in 2017, likely over 100%), selling high margin products to huge markets, and constantly innovating will eventually win out over the naysayers.

 

[MitchJi]

I just listened to the AP 2.0 hardware audio again l. Elon said that he is extremely confident that using the current sensor suite will allow them to produce cars that are at least twice as safe as manually driven cars. He mentioned 10x-100x safety improvements requiring additional sensors.

On another audio (I'm not sure which one) he said don't bet against the twice as safe prediction.

 

[stealthology]

I know that oftentimes a merger is approved by shareholders, but is held back by regulatory/etc issues before being official. Can we expect a fairly quick vote count, like maybe within a week?

 

[dennis]

I think I figured out what you meant. Your figures of 30-60% are not the split , but the range of possibilities?

Correct. I guess the important point is it is not 100%, nor is it 0%.

 

[Value Ev]

Before the SCTY merger was announced, the market was up in arms because Tesla planned to build 500,000 cars by 2018 after receiving 373,000 Model 3 reservations. Before (and after) that there were fears about Autopilot accidents. Before that was the Model X launch, suspension scare, fears about demand for Model S/X, etc.

.

No, the "market" was not up in arms about all of that. If the "market" were, the stock have been trading below 100.

There were reports about all of that, shorts commenting on it, people here up in arms that someone would even mention one of those points, etc. etc., but the "market" kept it all in stride and Tesla kept their market cap of around half of GM's despite having significantly less profit and EPS.

 

[SBenson]

No, the "market" was not up in arms about all of that. If the "market" were, the stock have been trading below 100.

There were reports about all of that, shorts commenting on it, people here up in arms that someone would even mention one of those points, etc. etc., but the "market" kept it all in stride and Tesla kept their market cap of around half of GM's despite having significantly less profit and EPS.

You should take your valuation theories to PG&E and J&J and stop with this silliness.

How about we create a thread just for Valuation? Just like we did one for Demand as there was near infinite trolling on that subject here in this thread.

Add: Here, Valuation, have fun.

 

[electracity]

No, the "market" was not up in arms about all of that. If the "market" were, the stock have been trading below 100.

There were reports about all of that, shorts commenting on it, people here up in arms that someone would even mention one of those points, etc. etc., but the "market" kept it all in stride and Tesla kept their market cap of around half of GM's despite having significantly less profit and EPS.

Oh, lets just ignore that at 200 the market recognizes a 20x premium for Tesla's potential. Even some of the nastiest of the seekingalpha bloggers think Tesla should be at 100.

 

[Value Ev]

You should take your valuation theories to PG&E and J&J and stop with this silliness.

How about we create a thread just for valuation? Just like we did one for Demand as there was near infinite trolling on that subject here in this thread.

My comment was about the "market being up in arms" about all these issues.

So your assertion is that the market being "up in arms" about all those issues is what kept Tesla from being worth even more? That is what kept the longs from buying even more stock and Fidelity from upping their stake? Well okay then.

I disagree. There clearly was news on all this, but the market wasn't "up in arms'". You want to see up in arms? Look at Twitter, or Theranos or any number of other companies in which the market, public or private, turned against the company.

BTW, aren't those new panels BEAUTIFUL?!
The market seems to really LOVE them, the press has been really positive about them.
Many people here seem to really love how good they look, even though there is an efficiency hit.

And you thought people who dare agree with Elon on the importance of the aesthetics of solar panels were trolls. Why are you so negative on Elon's vision?

This thread is about short term price movements, weird that a you think discussing the valuation has no place here - doesn't the sp depend on people's view of the valuation? LOL.

 

[TMSE]

I think if the solar roofs were operational that Elon would have mentioned that and even showed the power generation. As is though, it seems these were early proof-of-concept roofs that show that solar roofs can look amazing. I think there's still a lot of work to get done.

Btw, I was at the event last night. Hanging with @FredTMC and his wife. Fun time. Great event with great food and not too crowded.

The roofs looked amazing! Even better in person. I couldn't tell that they were solar roofs before the presentation. Out of the 4 houses I speculated that maybe one or two of the houses might have solar roofs but "for sure" not all of them. When Elon said they were all solar roofs, people around me were in shock and disbelief. Guy next to me kept saying "holy sh**, they look amazing." He couldn't stop repeating himself.

The roofs looked better than normal roofs. Everyone at the event was impressed at how good the roofs looked.

I spent a lot of time talking to a Tesla engineer who was answering questions about the new powerwall. The Powerwall 2.0 looks like a hugely improved product over Powerwall 1.0. Looks like the inverter is a 5000 way DC to AC inverter so that battery power can be fed into house (or grid). However, of installing solar you'll still need an inverter for your solar panel system, I was told.

The Tesla engineer said that Powerwall 1.0 install costs we're roughly $7-8k, largely due to the need to install another inverter. So with the new Powerwall, install costs go down dramatically since the inverter is built-in the the Powerwall.

I was also told the solar roof was largely a Solarcity product, meaning development was largely done at Solarcity.

I keep wondering why there was no demo of power generation.

This event was announced over a month ago. Initially it was in San Francisco, likely in a real brand new housing development. There must have been some issues, regulatory or otherwise, which must have prevented them doing it over there. They must have shifted to demo in a studio setting after the San Francisco event plans fell apart.

What is most puzzling is Elon tweeting on Friday about pulling in the event for 5:30 pm instead of 7 pm for obvious reasons. What could be the obvious reason other than power generation demo? There can only be one explanation as to why the demo didn't happen:
1) there were last minute glitches, or
2) Elon was lying.

My belief is that there were last minute glitches, I hope I am right. If I were right, Tesla would setup a demo house with real power generation by the end of this year. It isn't really that hard. I have seen many school projects on sustainability with demo houses.