Short-Term TSLA Price Movements - 2016

[esk8mw]

Are we talking about the same capex guidance? In the Q3 shareholder letter, Tesla (Wheeler), guided for $1B in capex in Q4. Not spending that (or something reasonably close) would be considered a redflag about the CFO's cost projection abilities.

Note, I have every expectation that Tesla will find cost savings where they can, and will spend pretty close to what they guided for in Q4. I'm just taking issue with your expectation that a capex spend under guidance (assuming significant at least $100 million under, otherwise cap raise issue doesn't get addressed) and then viewed as a positive by the market. You can't be off by almost 10% and still be expected to be trusted on faith alone.

They also said this on the call:

"Jason S. Wheeler - Tesla Motors, Inc.

On CapEx, our original guidance at the beginning of the year was $1.5 billion, and then when we made the initial announcement to bring forward production of 500,000 vehicles into 2018, then we bumped it up. And I think now we're just getting smarter about that, and that's why we brought that guidance back down in the letter this quarter.

Elon Reeve Musk - Tesla Motors, Inc.

Yeah. We're probably just too conservative on our capital projections, but it's turned out to be that we can do this with less capital than anticipated."

Right or wrong, it's pretty clear to me that they are pretty much making educated guesses on capex as they go, as they've adjusted the guidance like 3 times in 2016. From Elon's words, they are clearly guessing on the conservative side. If they end up telling us that they only needed $600 million in Q4 because things are cheaper than they anticipated, I won't be mad.

If you reread the transcript you will see it's full of talk about capital efficientcy, changing the way things are done traditionally, benefits of scaling, etc. They tend to run with themes. I expect this to get used again. If bears (not you, to be clear) want to tell me it's a bad thing when Tesla can arrive at the same result with less money I'm happy to take their money when they get proven wrong in Q3 2017.

 

[MitchJi]

I hope you are right (as I am long Jan 18 calls) but I don't know. All the time frames I look at (with the caveat that I don't pay much attention to the intraday charts) show a broken SP, that unless it can quickly recover some key moving averages, IMHO, will continue to head lower.

The problem I see with J18 calls is that even though I believe that there is an excellent chance of an SP recovery between now and this summer (or maybe not), any minor hiccup in the M3 launch will probably be blown out of proportion. If for example
they produce 50-100k cars by Dec-Jan that's not a failure as long as they ramp to high volume in Q1, but I don't believe that the market will see it that way.

 

[ongba]

The problem I see with J18 calls is that even though I believe that there is an excellent chance of an SP recovery between now and this summer (or maybe not), any minor hiccup in the M3 launch will probably be blown out of proportion. If for example
they produce 50-100k cars by Dec-Jan that's not a failure as long as they ramp to high volume in Q1, but I don't believe that the market will see it that way.

Those were the furthest out I could purchase in April of this year. If TSLA can demonstrate some SP appreciation in the next 3-4 months, I will be looking to roll to the 2019 LEAPS.

 

[MitchJi]

Those were the furthest out I could purchase in April of this year.

Me too, but I'm a little nervous about them, which isn't good with options. OTOH I'm completely confident about my J19 240's.

What's the strike price of your J18's?

 

[ongba]

Me too, but I'm a little nervous about them, which isn't good with options. OTOH I'm completely confident about my J19 240's.

What's the strike price of your J18's?

I have the 200 strike price, bought when TSLA was at ~255, so delta at the time was 0.78.

 

[Intl Professor]

We may all fall into the abyss!

Don't stare at it!!

 

[racer26]

Don't stare at it!!

Look where you want to go...

Oh wait, maybe I've been watching too much Canada's Worst Driver again, does that work for stocks?

 

[jgillispie]

So by your definition, the Bolt is not built as a mass market car then since it applies to only a particular use case, not for the everyman/everywoman.

To get elevated for mass consumption, it needs a DCFC infrastructure.

Personally I'd say it's not a mass market vehicle since they are only going to make ~30k a year. It could be very difficult just to get one when they finally hit all 50 states.

 

[racer26]

Personally I'd say it's not a mass market vehicle since they are only going to make ~30k a year. It could be very difficult just to get one when they finally hit all 50 states.

IF* they hit all 50 states.

Its not difficult to imagine that they might be able to sell 100% of production in ZEV states alone, and if they can, why would they choose to sell them elsewhere?

 

[MitchJi]

I love this!
Tesla pushes boundaries of Michigan’s direct sales law and opens showroom in the state

Michigan is the home state of the Big Three automakers and the most populated state in the US that still doesn’t have a Tesla store or service center. For that, you can thank a law backed by GM and local dealerships that prohibit automakers from operating car dealers in the state.

Tesla has been trying to open a store and service center in Michigan for the better part of the last 3 years, but it wasn’t able to get around the law, which is why it sued the state earlier this year. While the case is in court, Tesla went ahead and opened a showroom in Troy yesterday – something that pushes the boundaries of Michigan’s direct sales law.

The showroom is located inside the Nordstrom store in the Somerset shopping mall and it’s part of the expanding partnership between Tesla and the department store.

The automaker first opened a small retail gallery in the Nordstrom store at The Grove in Los Angeles earlier this year and last week, it opened a second location on the other side of the country in Charlotte, North Carolina.

While the fact that Tesla is opening a car showroom inside a Nordstrom department store is certainly an interesting strategy, that’s not what is most interesting about the location.

Michigan’s direct sale law is among the most strict in the US. Tesla is not even allowed to offer service to its owners (over 400 of them), who have to travel to neighboring states or use Tesla Rangers (Tesla’s mobile repair service) to have their vehicle serviced.

In other states where Tesla is not allowed to sell directly to customers, like Texas, the automaker is still able to operate service centers and showrooms where the company can show the vehicles and talk about them to customers, but for anything related to the buying process, employees refer customers to Tesla’s website where they can order it or to out-of-state retail locations. The company calls those locations “galleries”.
<Snip>

 

[Touring]

Maybe this is not just a fight between shorts and longs anymore . let's face it , tesla is overrated . We are all assuming that tesla will dominate the world , but 'everyone' will make electric cars in the near future , so it's not going to happen . Tesla's market cap makes it one of the most valuable car manufacturers in the world . That's just... eh..ludicrous .

 

[Krugerrand]

Here is a treat. Well done Tesla, go get them to change their opinion!

Tesla Hosts Lobby Group Shunned by Ford Over Climate Stance
<snip>

This is sheer brilliance. They can't ignore you when you and your product is Right. In. Front. Of. Their. Faces. It starts with a raised eyebrow. Then the thought, 'Hmm...what is that it? It looks interesting.' The realization you're on the wrong side of the fence won't come to everyone, but the lightbulb will click for a few. That's all it takes to get the ball rolling. Keep your friends close, but your enemies closer. Or if you prefer, make friends of your enemies.

 

[Krugerrand]

The issue is it is hard to say that the Bolt is not acceptable without a wide DCFC network. Simply because a driver may stay within their 80-100 mile radius for 320 days per year and may rent a car for a couple weeks, use the family-truckster for other trips, whatever.

A 200+ mile EV is wonderful for anyone who wants to use it in their region daily - whomever makes it. The DCFC argument is something of a straw-man.

And yet that argument was used against Tesla since the beginning of Tesla. But now that we've replaced Tesla whatever Model with GM Bolt, suddenly 'Look Ma, a 200+ mile EV without fast charging (remember, NONE of that existed before Tesla) is awesome!' Give me a break.

 

[Krugerrand]

I have to say that Elon has "said a lot" and many times, they are not backed up by actual business facts but possibly "long stretches" of hopefulness leading to an agreement among the flock of followers. All the while, the CFO and other company leaders within have to run around and try to make what he said actually happen.

You mad because it works?

Elon: We need lots and lots and lots of batteries, so we'll build our own Gigafactory.
Bonaire and his best fried Tftf: What!? Not possible. Where is the money coming from? Nope. Can't be done. Won't happen.

 

[larmor]

And yet that argument was used against Tesla since the beginning of Tesla. But now that we've replaced Tesla whatever Model with GM Bolt, suddenly 'Look Ma, a 200+ mile EV without fast charging (remember, NONE of that existed before Tesla) is awesome!' Give me a break.

Just because a car is an EV doesn't automatically make it a tesla MS/X competitor. Just like s-class mercedes is not the same market as a C class merc, 7 series bmw vs. 3 series. Yes for some people, a car is a car. But then for those people, they are not in the market for a panamera, s-class, 7 series, etc. Tesla made a luxury car which is an EV.

BMW-i3 made an econobox EV as does GM with the bolt. If I were looking at 3-series BMW, i doubt i would even think about the i3. MS and MX are pricey cuz they are luxury class, and fast (faster than most sports cary, FWIW). I don't think that an S class or 7 series has the same performance profile as their smaller siblings...

Tesla is here to expand the EV market, and there is more than enough room in the world for 300k M3 and 300k bolts- but i doubt the bolt will reach this level as it will cannibalize GM's own ICE sales...

 

[Krugerrand]

TSLA SP now below all key simple moving averages (5, 10, 20, 50, 200) on daily, weekly and monthly charts as the slow bleed continues...a quick panic induced flush to the 150s followed by a hammer candle on high volume, would be preferable to this persistent slow drip...

I think Tesla should just disrupt this moving average thing, the head and shoulders thing, the cup and saucer thing, the hammer thing, the candle thing, the flag thing, all the inverted things, the Bollinger Band thing etc... No reason for it to follow any of those preconceived notions of what makes its SP go up or down or sideways anymore than there's reason for Tesla to ever sell cars via some antiquated third party dealership model. Release the Unicorns!

P.S. There are people here who couldn't handle a quick panic induced flush. I fear for their health. They need time to adjust via a slow bleed. We're doing it for them.

 

[neroden]

The native-Americans were so right to think seven generations ahead.

For reference, this was specificially a Haudenosaunee (Iroquois) concept -- part of the Great Law Of Peace. The tradition states that this was laid down by the Lawgiver, after a massive devastating total war in which both sides burnt each others' crops, houses, etc. repeatedly and destroyed everything, with the result that everyone starved and both sides were in awful shape for many years.

This was long thought to be myth, but archaeology has uncovered a soil layer -- at approximately the right time period -- which is most likely the result of repeated crop burning and destruction in a fairly short period.

So, the Haudenosaunee probably learned this rule the hard way.

 

[dennis]

The argument needs additional input. Such a driver is someone:
- only has one car in the family
- cannot rent a car (must be 25 yo or older)
- does not have a credit card for a rental for long term drive

The issue is it is hard to say that the Bolt is not acceptable without a wide DCFC network. Simply because a driver may stay within their 80-100 mile radius for 320 days per year and may rent a car for a couple weeks, use the family-truckster for other trips, whatever.

A 200+ mile EV is wonderful for anyone who wants to use it in their region daily - whomever makes it. The DCFC argument is something of a straw-man. but you are right - a Volt adds the "less range anxiety" but fails the binary mind approach. Either-or. Either it is ICE or BEV. However, the Volt offers something of a super-hybrid approach. Drive electrically for days if not weeks, then pick up and drive cross country which then can be "supercharged" at tens of thousands of gas-stations. upon arrival, plug-in again and drive the city area electrically for days more. Volt owners seem happy, as do Tesla owners. The issue is "what works for most"?

It is interesting that before tesla had the supercharger network built out many claimed it was limiting Tesla's ability to sell cars. Now you're claiming the lack of a DCFC for the Bolt is "something of a straw-man".

 

[Krugerrand]

Grant me a little dramatic effect with words here. If you prefer, I will rephrase to say, "All morning long, the buying by longs and selling by shorts has seen the stock price rise and fall but overall it is in a virtual stalemate. That situation is quite possibly going to change in the final hour as the buying vs. the selling falls out of equilibrium at this price." Personally, I prefer "duking it out".

Way to go @MitchJi, you've turned him into an old windbag.

 

[neroden]

But are those points valid?

1. From supercharge.info, everything looks pretty good, I think. Those data points are pretty conclusive as to no slowdown:View attachment 204370
2. And regarding the Gigafactory, the latest drone flyover suggests spectacular growth (ref. Electrek, Teslarati or somewhere here for visual). The next good info should come first week of January, as far as I know.

Yeah, Superchargers and the Gigafactory are well in hand.

Service Centers are a massive weak point and are *definitely* not expanding fast enough, so I think that's an obvious location of deferred CapEx.