TSLA Market Action: 2018 Investor Roundtable

[ValueAnalyst]

I'm liking that forum i striking very reasonable, somber, pessimistic note today. Bodes well for the SP. Or, have I blocked out too many cheerleaders?
I am not blind to the risks though, and I'm ok to revisit $310, $280, and $250, should the dice fall that way

Don't worry; I'm still here.

 

[bdy0627]

That part, we are in strong agreement on. My short hand on this advisable caution regarding trying to predict short-term movements, (short-hand which, I began using here in June when we were trading in the $380s), is to think of the TSLA price at any given moment as X dollars +/-$50 (as in post #12475 for example).


2017 Investor Roundtable: TSLA Market Action


"[snip]

As I said yesterday, I have little idea whether the stock price currently is $383 +/-$50, $433 +/-$50 or $333 +/-$50. The bit in those figures I have by far the most confidence in is the +/-$50, and by price, I mean what we will see quoted, not my valuation of the company.

To be clear, I think the shares are currently undervalued for a long term investment (hang onto any core shares!)

[snip]"

I appreciate your posts on the stock ranges. Those have been helpful and have turned out to be quite accurate.

 

[ValueAnalyst]

The one thing that really got to me: him talking about how all the other OEMs not even being aware of the potential improvements in production speed! Tesla is still far from matching the production speed of others! Of course I am convinced he has a clear plan to bring about major breakthroughs in production speed and efficiency, but it really would serve him well to save these comments until after he's achieved these goals! Rant over..

The other: "3 months, 6 months at the outside"

 

[bdy0627]

Judging by the descriptions of the semi-automatic lines on the conference call, I think 2500/week could be reached in June *without* the new automated lines...

I didn't get that impression at all. What makes you think that?

 

[bdy0627]

Don't worry; I'm still here.

You're off the cheerleader list.

 

[Ulmo]

The real irony here is that he is moving to a company that Tesla is actively aiming to put out of business. @JonMc 'd only do it if he doesn't actually believe that Tesla will succeed with their FSD program.

Which company?

 

[bdy0627]

After the ER and CC, I thought the stock would trickle down for a week or two. This wasn't quite what I had in mind. I added today starting when we were around 3% down, then again at 5% and 6%. I think these are good prices relative to 2-3 months down the road, but we may get some even lower prices coming up. Clearly, this market is spooked.

 

[22522]

Everyone seems to think the drop is about results. I think at least part of it is concern about Tesla walking away from 40 % of their depositors, in exchange for money now.

For me, a late reserver trying to help Tesla with supplier leverage, the short range push to 2019 rolled me to mid 2018 AWD, with hopes of a base interior and short range battery.

If the late promise of the short range option sticks, and is not just a milking operation to move those who will move to a higher priced car, people think that Tesla could lose 40% of their depositors forever (or until battery prices fall).

There are a lot of individual investors in the early line for whom a $50,000 car will not work. They have done the math, even with the tax credit.

Pushing that $35K car past the credit pushed that car out of their future.

Maybe Elon will decide that he does want to do what it takes to earn their business when his incentive plan changes.

My hope, or expectation, is that it is a milking operation.

I would estimate that 35% of the TESLA stock price is based on goodwill. So this "smart" accounting move will drive the stock price down toward $227.

The question is:

"Will Elon recognize his hubris fast enough to catch it?"

 

[Starno]

I'd just say let's wait for end of Q1.

 

[myusername]

There was no change announced yesterday as to Tesla's expectations of Model 3 production, this year, or any year forward. New information disclosed yesterday means vehicles delivered this year will have a higher ASP than previously expected, and so 2018 revenues will be higher than expectations prior to yesterday, but, there was no change in guidance re vehicles to be produced.

not if volume is lower. the whole point of a lower ASP is volume. which is where traditional auto companies succeed.

 

[Zhelko Dimic]

Everyone seems to think the drop is about results. I think at least part of it is concern about Tesla walking away from 40 % of their depositors, in exchange for money now.

For me, a late reserver trying to help Tesla with supplier leverage, the short range push to 2019 rolled me to mid 2018 AWD, with hopes of a base interior and short range battery.

If the late promise of the short range option sticks, and is not just a milking operation to move those who will move to a higher priced car, people think that Tesla could lose 40% of their depositors forever (or until battery prices fall).

There are a lot of individual investors in the early line for whom a $50,000 car will not work. They have done the math, even with the tax credit.

Pushing that $35K car past the credit pushed that car out of their future.

Maybe Elon will decide that he does want to do what it takes to earn their business when his incentive plan changes.

My hope, or expectation, is that it is a milking operation.

I would estimate that 35% of the TESLA stock price is based on goodwill. So this "smart" accounting move will drive the stock price down toward $227.

The question is:

"Will Elon recognize his hubris fast enough to catch it?"

I feel this is a bit bigger perception problem than the real problem.
Small battery with AWD is probably going to be only $USD 4K extra, so at $39K I don't think as many customers are truly lost as you seem to think. Unless, unless premium package stay mandatory throughout 2018; and here is where Tesla keeps things fuzzy, probably didn't even make a decision and decision will depend on the elasticity of demand once they have production humming.
BTW, I completely agree with Tesla's approach, given circumstances

 

[Zhelko Dimic]

After the ER and CC, I thought the stock would trickle down for a week or two. This wasn't quite what I had in mind. I added today starting when we were around 3% down, then again at 5% and 6%. I think these are good prices relative to 2-3 months down the road, but we may get some even lower prices coming up. Clearly, this market is spooked.

I'll have to check my medications, they may be responsible for what I'm about to say, but I'm feeling slightly spooked and mostly excited.
The way I see today is that this drop gave me opportunity to leverage at the time I judge appropriate for it.
If we go up, I'll make bunch of money and take some leverage off the table at $360.
If we stay flat, I'm good waiting; my DITM options have almost no time value.
If we go down, I'm ready for another round of leveraging.
If we go down again, I have $500K HLOC line that I haven't used since the end of '16; last time I used it was when we dropped to $150 Feb '16, and I retired it at the end of the same year around $220.

Edit: No, TT007 didn't hijack my account! It's just that my 'Elon will screw up execution' buffer has almost run-out dry!

 

[3Victoria]

Agree. I am seriously leaning toward SR/AWD ... better efficiency and range over SR/RWD, so >230 miles? Likely good for me. Better performance. But not a solution to icy roads ... the brakes are the same and spinning your front tires is not a solution to making a corner. Good snow tires a must. ANd the extra cost should not break the bank.

 

[anticitizen13.7]

Everyone seems to think the drop is about results. I think at least part of it is concern about Tesla walking away from 40 % of their depositors, in exchange for money now.

There are a lot of individual investors in the early line for whom a $50,000 car will not work. They have done the math, even with the tax credit.

Pushing that $35K car past the credit pushed that car out of their future.

This is along the same lines as my concern earlier about loss of goodwill.

One school of thought is that demand for Tesla cars is strong enough that even a crowd of disgruntled reservations holders doesn’t matter because others will gladly take their place. Another common argument is that people who couldn’t afford the Model 3 without the tax credit had no business buying in the first place, because the credit’s future is subject to the whims of the US government.

I think it’s a mistake to write off these folks. Customers who feel badly treated will spread ill will by maligning the company to family and friends. Customers who can’t afford today may be able to afford tomorrow, but may not return after feeling insulted.

Investors here should be going to Reddit, Electrek, and the Model 3 subforum here to read for themselves what the customer base is saying. Many are justifiably angry and bitter.

Tesla has sort of been here before... a long time ago with the Tesla Roadster. The company had bad delays and had to raise the price on some orders after a certain date. Elon actually went before a meeting of reservation holders to deliver the bad news, apologize, and explain the situation.

Tesla may need to do something similar to acknowledge the feeling of the customers who feel slighted by the delays and the fact that recent Model S/X buyers seem to be jumping the line (no apparent cutoff date for “current owner” benefit). Potential customer need to know that their business is valued even if they aren’t the high rollers.

 

[3Victoria]

I'll have to check my medications, they may be responsible for what I'm about to say, but I'm feeling slightly spooked and mostly excited.
The way I see today is that this drop gave me opportunity to leverage at the time I judge appropriate for it.
If we go up, I'll make bunch of money and take some leverage off the table at $360.
If we stay flat, I'm good waiting; my DITM options have almost no time value.
If we go down, I'm ready for another round of leveraging.
If we go down again, I have $500K HLOC line that I haven't used since the end of '16; last time I used it was when we dropped to $150 Feb '16, and I retired it at the end of the same year around $220.

yeah, big drop is a golden opportunity.

 

[SteveG3]

not if volume is lower. the whole point of a lower ASP is volume. which is where traditional auto companies succeed.

it won’t be

mun, either you are grossly uninformed or that last comment was intellectually dishonest. would you consider, just this one time, laughing this off and admitting it’s the latter. I promise not to use it against you if you just go with the humor/acknowledgement.

 

[Todd Burch]

TSLA getting trounced today.

EVERYTHING’s getting trounced today. TSLA might have been slightly green were it not for the markets tumbling.

 

[Sudre]

I don't know a lot about setting up manufacturing lines, but 'just taking it apart and moving it over' seems to me like an immense over-simplification of the entire process.

Relatively speaking it's not that big of a deal. I have installed lines at many different places from cars, beer, chips, soap and chip wafers. (altho the chip wafer company did file for chapter 11.. wasn't my fault) It's labor intensive but basically insert tab A into slot A type stuff. Level and square within mills go get the next section while the other crew makes power connections.

The great thing about most line install/relocation is typically you can pre-install all the needs. With a German company I am sure they know exactly where feeds need to go. That part is probably being installed now before the equipment arrives.

Sunedison had their equipment on an industrial raised floor (think monster computer server floor). All needs, power, steam, chemical, venting, etc. were run under the floor while the old equipment continued to run above. Simple one point connections and the machines were swapped in hours. The old system needs were removed while the new system ran. I hope Tesla is thinking this far ahead. Anybody tour the Gigafactory? It sounded like Elon has Fremont setup like that only a bigger scale. Line up top and below is services and material transfer.

I also have to say I love working with the Germans. They are so darn precise. With their equipment, if you have the needs met by their spec you can assemble it then simply turn it on after the tech checks it out and it runs.

 

[defc0n]

I'll take a guess at who might have messed up the module assembly automation. It was likely a company that Tesla was already working with closely for a long time. Someone who Tesla thought could do the job without close supervision. I won't mention any names. In any case in the end, it is a big fail on Tesla for not knowing that such a mission critical machine was unworkable until it was at the factory.

Does it rhyme with sanaponic?

 

[30seconds]

personally i think this is a big drop more based on market volatility than anything else. I expect the overall market to be rocky for the next couple of weeks, or at least until we see if this is a temporary dip or if something larger is going on.

I'm holding on to dry powder, but may start to buy LEAPS in stages starting next week.