TSLA Market Action: 2018 Investor Roundtable

[moonfresh]

I’ve seen a lot of strange TSLA price action over the years, but Tesla meeting their 5k week/goal for Model 3 production and then TSLA losing basically 55 points from pre-market yesterday to close today has got to be one of the strangest.

Yeah...how can some of the few negatives overshadow 7k cars a week? Unbelievable.

 

[dakh]

Yeah, I'm not getting your point. You seem to be saying that the price goes up with anticipation. Then when this anticipation is satisfied, the price goes back down to pre-anticipation levels. This pretty much negates that thing that was anticipated ever had any value to the stock.

We've just witnessed a 55% sequential growth in unit sales quarter over quarter. And yet $310 is just barely above where it stood 3 months ago. Anticipation of growth does not account for the fact that unprecedented growth has occurred and that much of the uncertainty of the expectation 3 months ago has been resolved. It just seems me that the 55% sequential growth ought to be worth more than 20%, at least worth 10% growth in valuation. That puts us in range of $330 to $360 conservatively.

BTW, it seems that bear have been having a field day picking at the 7 day run rate. This is easily a diversion from market recognizing the huge sequential growth that Tesla has in fact delivered. Perhaps by the time the ER comes out more conservative minded investors will recognize that the fundamentals are shifty in a dramatic way. But for now we are tangled up in "factory gate" and "burst rates".

55% sequential growth is actually a disappointment vs. $380 valuation from last year since that growth should have happened half a year ago. So valuation is back to $300-ish which is fair. This valuation is based on anticipation of future potential, so it's a market consensus on how Tesla will progress. Growth is already baked into the valuation. The question is only of the first derivative, does today's reality exceed or underperform the consensus valuation from yesterday?

What I am saying is the stock went up in anticipation of not yet known but possible good news that folks guessed are coming based on Musk's behavior (like China GF with good financial backing). When that didn't materialize it went back to baseline.

 

[wipster]

Some good news that is overlooked is that this means that the (automated!) non GA4 Model 3 lines were responsible for 80% of the output, and increasing. Meaning that Tesla still sees lots of speedup opportunities in those lines. GA4 seems more and more of a quick and dirty temporary way to increase production (and thus margin) without dropping output when improvements to the non GA4 lines are made.
All the fuss about GA4 will be irrelevant, what we should really look at is the progress on the automated GA lines.

Edit: with Elon ‘alien dreadnought’ statements, does anybody really think that a manual GA line is a permanent thing?

It's possible based on how impressed Elon was with this structure as stated in his tweet. Perhaps not in it's current configuration, but in some manner as they do own it now (probably) making it another tool to use when required. I wish people would stop calling it a tent because it's anything but. Many companies use these as permanent installations for various usages; just check out their website, you'll be impressed.

Regardless of whether they do or they don't however, I truly hope that during the next few quarters, Tesla focuses on sustainablity with an emphasis on quality. Start out at say 4,000 a week and then when they're comfortable at that rate, increase it by 10% every 2 to 3 weeks until they reach 10,000. Focus on slow increasing sustainability and cash and GAAP profitability and the SP will follow.

The real crunch in going to be in the gigafactories because of the rapidly growing need for Powerpak 2's for all the projects they already are and will soon be working on. Thank goodness that Panasonic is stepping up to the plate to help out. The street is really ignoring that profit stream right now, but the potential and soon to be reality will be huge!

Regardless of the games the short people are playing right now, the future for the company and it's SP looks bright. That's why I'm a long, Tesla is changing the world and Edison can't steal the credit this time.

 

[gora321]

I rode my bicycle yesterday. If someone had told me that SP would deep I would still rode my bicycle.

 

[bpjod]

Thanks

Your welcome. Earned myself my first two disagrees! Now I've finally achieved at least one of every kind. Who would've thunk I'd earn them trying too help someone out though?
Maybe it's MID, maybe it's MANDATORY. maybe it should be MMMD. Regardless, I think you get the point!
There ought to be a sticky somewhere around here listing all the acronyms used so us neophytes stand a chance at keeping up.

 

[wipster]

Your welcome. Earned myself my first two disagrees! Now I've finally achieved at least one of every kind. Who would've thunk I'd earn them trying too help someone out though?
Maybe it's MID, maybe it's MANDATORY. maybe it should be MMMD. Regardless, I think you get the point!
There ought to be a sticky somewhere around here listing all the acronyms used so us neophytes stand a chance at keeping up.

Actually I think it should be MFD (and use your imagination for that one).

 

[lklundin]

55% sequential growth is actually a disappointment vs. $380 valuation from last year since that growth should have happened half a year ago. So valuation is back to $300-ish which is fair. This valuation is based on anticipation of future potential, so it's a market consensus on how Tesla will progress. Growth is already baked into the valuation. The question is only of the first derivative, does today's reality exceed or underperform the consensus valuation from yesterday?

What I am saying is the stock went up in anticipation of not yet known but possible good news that folks guessed are coming based on Musk's behavior (like China GF with good financial backing). When that didn't materialize it went back to baseline.

My problem with that reasoning and why I believe that Tesla is currently undervalued, is that the uncertainty on the execution of that growth just got smaller. It is one thing to base a stock price on future potential, but to then see a significant step of that execution completed lessens the uncertainty on the future potential.

I hope we can agree that buying the stock now for the same price as what it was 8 months ago, is much better given
the positive developments in the meantime.

So I would say that yesterday's price drop is a signal to buy.

 

[Earlian]

What is MMD, please? One of the biggest challenges of this forum is all the abbreviations.

MMD = Mid-Morning Dip

Mandatory

Mid

Thanks

Your welcome. Earned myself my first two disagrees! Now I've finally achieved at least one of every kind. Who would've thunk I'd earn them trying too help someone out though?
Maybe it's MID, maybe it's MANDATORY. maybe it should be MMMD. Regardless, I think you get the point!
There ought to be a sticky somewhere around here listing all the acronyms used so us neophytes stand a chance at keeping up.

Actually I think it should be MFD (and use your imagination for that one).

It’s funny that even on the most dedicated Tesla Forum, we (me too) use acronyms* and don’t consider that it could have been a lot easier to simply write the word, because here are constantly new members coming up, that simply can’t understand the acronym (also if there was a sticky, that most wouldn’t learn before entering).

*Acronyms can seriously suck

Maybe in some future, a good software algorithm for the board, can simply write listed acronyms in full? Or it can lead via link to the matching word in the glossary. (Like those Wikipedia links inside an Wiki-article)

 

[sundaymorning]

The EU is reportedly considering international talks to cut car tariffs

Let’s hope the world is able to hash things out.

 

[lklundin]

The EU is reportedly considering international talks to cut car tariffs

Let’s hope the world is able to hash things out.

Several media outlets mention how these tariffs will hurt automakers like Tesla - but the thing is that due to timing of the US tax credit expiration, Tesla already has good reason to minimize their exports for the remainder of the year. So in six months when Tesla has reason to step up their exports, sensible people may already have fixed these nonsensical tariffs, without any real loss to Tesla.

 

[YasB]

My problem with that reasoning and why I believe that Tesla is currently undervalued, is that the uncertainty on the execution of that growth just got smaller. It is one thing to base a stock price on future potential, but to then see a significant step of that execution completed lessens the uncertainty on the future potential.

Wait a second ... that's completely NOT what has happened during the last 12 months. Just take a look at what the bullish story was, when the stock reached it's ATH. At least for me, the last year looks more like this ...

 

[Earlian]

Added micro amount of kamikaze-calls 415 7/20/2018, just in case.

#ofcourseistillloveyou

I wish all American members happy holidays !

(Don’t do this! Not an advice! My 90% is normal stock)

 

[Starno]

55% sequential growth is actually a disappointment vs. $380 valuation from last year since that growth should have happened half a year ago. So valuation is back to $300-ish which is fair. This valuation is based on anticipation of future potential, so it's a market consensus on how Tesla will progress. Growth is already baked into the valuation. The question is only of the first derivative, does today's reality exceed or underperform the consensus valuation from yesterday?

What I am saying is the stock went up in anticipation of not yet known but possible good news that folks guessed are coming based on Musk's behavior (like China GF with good financial backing). When that didn't materialize it went back to baseline.

Idk, why did Elon thought it would provoke a " short burn of the century " then ?

Either something is missing that will come out in the next few days or he just f*** up his promise once again.

 

[Yggdrasill]

Idk, why did Elon thought it would provoke a " short burn of the century " then ?

Either something is missing that will come out in the next few days or he just f*** up his promise once again.

He didn't promise a short burn.

 

[Compton]

Either something is missing that will come out in the next few days or he just f*** up his promise once again.

The "**** up" theory is certainly a valid alternative but he gave the "tsunami of hurt" comment ~8 months before anything was observed on the metaphorical beach. For comparison, the "short burn of the century" comment was made 2 months ago.

The "short position explodes" comment was made ~2.5 weeks ago and predicted to take place in ~3 weeks. Don't know if the "burn" and "explosion" are part of the same event. We should know in 1 week maybe, 6-8 months definitely

 

[mongo]

If I were American or living in the USA I would already long time AFP have sent a simpel freedom of Information request to the IRS.

It's been attempted, and failed.

How do you know if you qualify for the full federal tax credit at purchase time? | Tesla

Frank99 | March 23, 2018

Neither Tesla nor Nissan allow their quarterly reports to be made public. I filed a FOIA request to get the data about six months ago, but was denied.
I don't think we're gonna know anything more (at least officially) until they actually cross the 200,000 mark.

Which is a follow up from:
How do you know you qualify for the tax credit? | Tesla

 

[Boomer19]

Yes the wild card has always been Elon's Twitter antics. I notice he's been awfully quiet after Sunday though. Maybe he really thought that 5k a week was enough to trigger a short squeeze. If so then I think it's time for someone to take his Twitter privileges away, because it's over and it's time to stop tweeting.

yes. he needs to curb the twtr nonsense. defend not taunt. especially if you don’t understand how the market works, which in this case, he severely underestimated his opponent. which i find really troubling, if not even puzzling/hard to believe.
he got owned by the establishment in this round of the fight. i hope to be proven wrong, but he’s the goat right now...

the tactics are textbook
https://teslamotorsclub.com/tmc/attachments/fairfax-pdf.310679/

as described here;
Elon Musk vs. Short sellers

maybe elon should read it. i assumed someone close to him has already filled him in on what he’s up against, but maybe not. it’s high time someone does.
leaks, negative media, analyst attacks, moles, sabotage, false reports, on and on. they’ll stop at nothing. and we’re all paying for it together.

 

[mongo]

yes. he needs to curb the twtr nonsense. defend not taunt. especially if you don’t understand how the market works, which in this case, he severely underestimated his opponent. which i find really troubling, if not even puzzling/hard to believe.
he got owned by the establishment in this round of the fight. i hope to be proven wrong, but he’s the goat right now...

the tactics are textbook
https://teslamotorsclub.com/tmc/attachments/fairfax-pdf.310679/

as described here;
Elon Musk vs. Short sellers

maybe elon should read it. i assumed someone close to him has already filled him in on what he’s up against, but maybe not. it’s high time someone does.
leaks, negative media, analyst attacks, moles, sabotage, false reports, on and on. they’ll stop at nothing. and we’re all paying for it together.

• Elon bought more TSLA at $300 (and 340?)
  
• SP is still above the low end
• The good news report came out early (faster than usual and before the trading holiday)
  
• SP did exactly the same thing as the last fourth of July
  
• Shorts just sold a lot of shares to achieve that movement (increasing the % short)
  
• Elon is predicting a short burn of large proportion in a time frame that has not expired

And you think he doesn't know what he is doing??

P.S.
We are paying nothing (unless we sell). I didn't have to spend long days at the plant, those that did are the ones sacrificing for Tesla's success.

 

[dc_h]

55% sequential growth is actually a disappointment vs. $380 valuation from last year since that growth should have happened half a year ago. So valuation is back to $300-ish which is fair. This valuation is based on anticipation of future potential, so it's a market consensus on how Tesla will progress. Growth is already baked into the valuation. The question is only of the first derivative, does today's reality exceed or underperform the consensus valuation from yesterday?

What I am saying is the stock went up in anticipation of not yet known but possible good news that folks guessed are coming based on Musk's behavior (like China GF with good financial backing). When that didn't materialize it went back to baseline.

I think the price discount, versus last year, is more due to financial market access and risk assessment based on Chanos and co success sellling the Tesla bear narrative. Wall Street should want to raise another 5 billion to fund the next plant and maintain 100% plus growth, but the TSLAQ story has enough traction to impact the bond market. Getting to free cash flow and profit sooner may be best long term anyhow. Tesla will be better positioned for a potential downturn and is relearning some of their early scrappiness that got them a nearly free Fremont plant. Elon and team will make the company short proof, and steady, if small profits and continued growth will eventually break them, if there isn’t something big happening soon.

 

[brian45011]

If I were American or living in the USA I would already long time AFP have sent a simpel freedom of Information request to the IRS.

AFP?

In August 2016 I filed form 3949-A Information Referral and had a telephone conversation with Patrick Kirwan, the lawyer who authored IRS Notice 2009-89. Stonewalled!

Not sure how it works in other countries, but in the US FOIA/Open Record requests are a waste of time and an exercise in frustration. Lazy bureaucrats are paranoid that someone might be looking over their shoulder and use every device possible to defeat the intent of those statutes.