TSLA Market Action: 2018 Investor Roundtable

[sundaymorning]

A capital raise for what looks like one of the best product of this century is practically a done deal, if Tesla would even consider it remains the question. My observation is that they don’t need it, their cash flow remains healthy and the M3 will sell itself out for the next 5-10 years minimum. Suppliers are tripping over themselves and each other to give Tesla some very favorable rates, this will show in their M3 profit margins once 5,000/ week is reached.

Let’s not forget that last Q was one of Tesla’s highest spending quarter, yet losses came in lower than expected, hence, their $3 billion in cash reserves remains intact. Let’s also not forget that many of TE products will also show up as profit this Q (ie the Australian install) and will continually grow from here on out. Solar roof is next! A friend of mine directly installs for SC, he’s telling me that installations have been in high volume. My guess is that Tesla will do very well in Q2 and exceptionally well in Q3.

Don’t feed the trolls and get sucked in a capital raise apocalypse scenario, they’ve been saying this since IPO when Tesla had zero product or demand to show, so what’s new bears?

 

[Tslynk67]

If putting a few guys from the S/X line adds 100 M3's per day then I'd say to keep them there and take a hit on S/X deliveries for a month or two.

 

[Richgoogol]

Assuming the report indicates what Fields said in the email, with what appears to be a herculean effort for a temporary boost to 300+ per day, what do you think the market does with that? This seems an awful lot like the elon email that was leaked prior to the Q3 ER that was a temporary beat but sold by the market. Language is very similar too. My best guess is more volatility Monday with the market unsure what to do with the numbers after such a huge drop and a little bit of recovery. It doesn't suggest to me a clear buy the news, particularly since the number is almost news now after that email. I wouldn't think we would sell off since production is close, though the temporary nature of the effort will probably be a negative for the market. These market reactions seem impossible to predict anyway.

Given how market is reacting today and suspecting that most traders have already processed the leaked email, it feels like the market have already accepted the fact that it will be a miss and they seem to be ok with it. And given the SP dropping like a penny stock this week, all the bad news have already factored in. Let's just hope Tesla won't throw another curve ball at us stating anything below 1600/week (personal view of a big miss). If that is truly the case, then we might have another reassessment by the traders. That's just how I perceive the current situation.

 

[bdy0627]

Like I said, I like the idea of more then 300/d.. but the email from Doug Field is clear.. This is a quote from Electrek:

Tesla says Model 3 production at ‘over 200 units per day’, pushing to get to 2,500 units/week, says report


This confirmed that they where at over 200 per day, so lets say 1500/w. This is pretty much in line with the estimates I have seen here on this forum. We have all been looking for the signs of 2000+, which 300/day would be at 2100 and greater then 300/day would be outstanding. My concern is that they go back to 1500/w on Monday and they start to grind up to 3k, 4k and eventually 5k. My biggest issue with this that throughout the entire quarter and even with a shut down and exclaiming they had the ability to make packs at 2500/w with equipment already at the gigafactory. This is concerning because it means that they only really went from just under 1000/w to just over 1500/w in a whole quarter. I was really hoping for over 2000/w without any funny games at the end of the quarter and we clearly are getting some end of month gaming of the numbers.

If you think they wont push back 5k, then ok. But from my point of view the ramp is now exponential, its very linear and not even that steep. I wish there were real signs of a post shutdown break through and more vertical graph. Buts its fairly model S/X linear. Which is not terrible, but also its not great for car with 500,000 reservations.

Realistically, they pretty much doubled production from end of Q4. It looks like it was closer to 700/week at the end of December if you try to extrapolate a steady rate, which is difficult to do. Now they are putting in a massive effort to try to boost it from 200+ per day this last week, which will undoubtedly not be a steady rate as we start Q2. It's probably realistic to assume a steady rate of about 1,500 or perhaps up to 1,800 per week at the very most starting in Q2. From past history, it would stay around that rate for at least a couple of weeks into the next quarter. That would likely mean 2,500/week as a true constant production rate would happen perhaps by late April or early May. That's my guess on it.

 

[MP3Mike]

Assuming the report indicates what Fields said in the email, with what appears to be a herculean effort for a temporary boost to 300+ per day, what do you think the market does with that?

Who said anything about a temporary boost? They are over 200/day and ramping. He wants to get to over 300/day by the end of this week. And the workers from the S&X line don't even start on the 3 line until tomorrow. So any ramping that has happened in the last week did not depend on them.

My guess is that it is to give people a chance to work on the Model 3 so that they can say they were part of the Model 3 team. (And maybe see how things work with the new production lines.)

After all do you really think you can bring people in that haven't already worked on the Model 3 line and have them be trained and productive in a single day?

 

[CuriousSunbird]

Given how market is reacting today and suspecting that most traders have already processed the leaked email, it feels like the market have already accepted the fact that it will be a miss and they seem to be ok with it. And given the SP dropping like a penny stock this week, all the bad news have already factored in. Let's just hope Tesla won't throw another curve ball at us stating anything below 1600/week (personal view of a big miss). If that is truly the case, then we might have another reassessment by the traders. That's just how I perceive the current situation.

I think the 10-Q will be more important than the production numbers, particularly as regards the operational cashflow. If it is better than Moody's annualized negative $2 billion the SP will go up, if worse then it will go down. In my opinion.

 

[Reciprocity]

Its actually starting to make sense if you think about this holistically. Follow my logic:

The ramp is not going as expected. The major tax credit milestone of 200,000 was fast approaching. So Tesla makes the decision to sand bag S/X and push for quality over quantity on Model 3. This is a nice way of saying that we are going to really focus on hitting 200,000 in Q3 of 2017 while at the same time pushing a big chunk of Model 3 production to Canada and S/X to all places outside the US. The Doug Field email was really about moral. Let show those haters who have been destroying your hard earned stock options. A small slow down in S/X does not hurt that much in this scenario because most will be shipped over seas, but they are going to unleash the hounds as next quarter winds down so that they can be positioned with tons of inventory as well as US orders back log. Who knows.. just trying to find the bright side of things these days.

 

[Thumper]

I’ll buy my very first Tesla stocks when it gets below $200.

Said Mr. Peabody as he climbed into the wayback machine.

 

[sweter]

Anyway, looks like we've won today. Have a good Easter!

 

[SteveG3]

CNBC has an entire panel working extra extra hard to try to talk down Tesla with nonsense, perhaps a record for falsehoods per minute in the team FUD category

Nomura says keep the faith on Tesla, reiterates 'buy' rat...

 

[Waiting4M3]

Like I said, I like the idea of more then 300/d.. but the email from Doug Field is clear.. This is a quote from Electrek:

Tesla says Model 3 production at ‘over 200 units per day’, pushing to get to 2,500 units/week, says report


This confirmed that they where at over 200 per day, so lets say 1500/w. This is pretty much in line with the estimates I have seen here on this forum. We have all been looking for the signs of 2000+, which 300/day would be at 2100 and greater then 300/day would be outstanding. My concern is that they go back to 1500/w on Monday and they start to grind up to 3k, 4k and eventually 5k. My biggest issue with this that throughout the entire quarter and even with a shut down and exclaiming they had the ability to make packs at 2500/w with equipment already at the gigafactory. This is concerning because it means that they only really went from just under 1000/w to just over 1500/w in a whole quarter. I was really hoping for over 2000/w without any funny games at the end of the quarter and we clearly are getting some end of month gaming of the numbers.

If you think they wont push back 5k, then ok. But from my point of view the ramp is now exponential, its very linear and not even that steep. I wish there were real signs of a post shutdown break through and more vertical graph. Buts its fairly model S/X linear. Which is not terrible, but also its not great for car with 500,000 reservations.

I think you missed an important piece of the 200+/day, that was at the time of the email, which was 3/23, last Friday.

 

[sandpiper]

Who said anything about a temporary boost? They are over 200/day and ramping. He wants to get to over 300/day by the end of this week. And the workers from the S&X line don't even start on the 3 line until tomorrow. So any ramping that has happened in the last week did not depend on them.

My guess is that it is to give people a chance to work on the Model 3 so that they can say they were part of the Model 3 team. (And maybe see how things work with the new production lines.)

After all do you really think you can bring people in that haven't already worked on the Model 3 line and have them be trained and productive in a single day?

I'm very doubtful about this whole line. There might be a small number of jobs that you can bring new people into without training, but it won't be many.

I suspect this is a smoke screen for a minor re-tool on the S/X line. The timing fits; Tesla likes to make these announcements at the end of a quarter.

 

[Waiting4M3]

I'm very doubtful about this whole line. There might be a small number of jobs that you can bring new people into without training, but it won't be many.

I suspect this is a smoke screen for a minor re-tool on the S/X line. The timing fits; Tesla likes to make these announcements at the end of a quarter.

a 1-day retool? Is that even possible?

 

[mongo]

Let's take a moment here to look at a forest.
S has been in production a little under 6 years. X for a little over two.
At 300 at day, the Model 3, in production for 9 months, is about to be built at a higher rate.

(yes numbers slightly off)

 

[Jayjs20]

It'll be interesting to see if we're heading strange back up, like post Solar City acquisition announcement, or if we're going into a head and shoulders pattern first, like in early December of 2016.

 

[Waiting4M3]

This morning's news has turned the entire weekend around. Prior to this I think many longs were wondering what Tesla will end the quarter at, afraid that the shorts know something that they don't. Now I think the shoe is on the other foot. At the very least, Tesla is at 200+/day steady rate going into the last week in March, which is 2x what they exited Q4 at (if you believe the Q4 exit steady rate was 700, many believe it to be lower). Another quarter like this and they're pretty close to cash flow neutral. This also leaves room for even more upside surprise.The shorts are the ones waiting for the other shoe to drop on Monday, could Tesla have actually achieved 300/day for the entire week, could it be even higher at the end of the week? (I seem to be obsessed with shoes in this post) I can't wait for Monday

 

[Zhelko Dimic]

If you follow the Model 3 lot pictures thread over in the Model 3 subforum (you should if an investor), it looks like there's a dramatic uptick in truck loading activity from that lot. Most pictures and reports from various times of the day indicate about 10 semis loading and hauling away cars at any one time.

Latest report is there were tons of trucks even late at night.

I have a feeling that even though total delivery numbers for Q1 will be lower than most of us expected, they will be close to or will exceed the 2,500/wk number exiting Q1.

I think market may not be expecting this (especially due to the lag of the Bloomberg tracker), and there will be a big correction upward. Today is the last day to get in. If you want easy money, buy today.

Just a hunch and I could be wrong of course, but I base this on truck activity relative to levels we saw at that lot earlier this month.

I'm feeling pretty good about profits coming consistently within about a quarter. Whether Tesla decides to go spend that for further expansion is another thing, but it's starting to look like Tesla is now back on track.

Deliveries have definitely picked up:

But deliveries are lagging indicator. VIN assignments as a proxy for production show that volume from around Mar 20 didn't continue strongly. Hence, there are still production line tweaks going on, and production is not on the solid ground.

 

[UnknownSoldier]

Let's take a moment here to look at a forest.
S has been in production a little under 6 years. X for a little over two.
At 300 at day, the Model 3, in production for 9 months, is about to be built at a higher rate.

(yes numbers slightly off)

This would be fine if Elon hadn't promised we would be at 10,000 cars a week already or whatever the original forecast was.

The problem isn't the actual run rate, which really is ramping up. The problem is Elon's impossible promises which everyone takes seriously and also the fact that he doesn't seem to have left any room for error in terms of the amount of cash on hand his company is holding to see them through the period where they are ramping up and burning cash and not yet cash flow positive.

Elon set these expectations and people are reacting negatively because they are nowhere near the expectations. He's the CEO of a publicly traded company with shareholders. The same shareholders, mind you, who just approved a compensation package which might be worth $50 to $200 billion if the company is successful beyond anyone's wildest dreams. He needs to learn how to be honest with his shareholders and set realistic expectations and make honest production forecasts. I'm not asking for a lot here, am I?

 

[Tenable]

More bad news:

Option_Sniper on Twitter

 

[Iceman]

More bad news:

Option_Sniper on Twitter

How is that bad?