2017 Investor Roundtable: TSLA Market Action

[vgrinshpun]

Guys, please remind me how many Model 3 deliveries are expected by the analysts (and assumed in their models)?

All ***TMC*** eyes will be on model 3 numbers.

Investing community as a whole IMO will be thoroughly impressed by several hundred cars built on the production line, with clear confirmation from Tesla that a further ramp is under way.

 

[dc_h]

Obviously good MS/MX numbers are nice. But all eyes will be on the model 3 numbers.

Model 3 numbers matter mostly in regard to ramping, not totals. If they produce 1500 but only delivery 750, only hard core or paid skeptics will communicate that as a problem. If they deliver over 1000 and signal production at or over 1500, it will be very interesting to see how the market responds. The key for M3 is signs that they are speeding up the assembly line and eliminating manual tasks.
If S/X deliveries are good, over 26,000, Model 3 is 1000 deliveries, and Tesla restates target for 5000 weekly by December, I would expect some skeptics would give in and buy and some shorts without deep pockets, would be forced to liquidate. Any two of those options would likely push us higher, but all three would be a perfect short-storm.

 

[dc_h]

Guys, please remind me how many Model 3 deliveries are expected by the analysts (and assumed in their models)?

All ***TMC*** eyes will be on model 3 numbers.

Investing community as a whole IMO will be thoroughly impressed by several hundred cars built on the production line, with clear confirmation from Tesla that a further ramp is under way.

I don't think they have a clear or signaled expectation. 1500 produced. They could deliver just about all of them, or half, depending one where the employees are located.

 

[vgrinshpun]

Watch at 1:00 mark - perception: "delays" vs "rounding errors on timeline". This conversation was about Semi reveal, but IMO applies to the ramp up of Model 3. Week or two delay in ramp is a rounding error IMO.

Tesla entering $25B-$30B market in the US with electric semi-truck: Oppenheimer's Colin Rusch

 

[EinSV]

Watch at 1:00 mark - perception: "delays" vs "rounding errors on timeline". This conversation was about Semi reveal, but IMO applies to the ramp up of Model 3. Week or two delay in ramp is a rounding error IMO.

Tesla entering $25B-$30B market in the US with electric semi-truck: Oppenheimer's Colin Rusch

That seems right to me.

And on the subject of the Semi itself I liked the last bit -- Cummins and Daimler's new truck product announcements validate Tesla's approach and "this technology is where a big portion of the hauling market is going to end up over the next 5-10 years."

 

[geneclean55]

Model 3 numbers matter mostly in regard to ramping, not totals. If they produce 1500 but only delivery 750, only hard core or paid skeptics will communicate that as a problem. If they deliver over 1000 and signal production at or over 1500, it will be very interesting to see how the market responds. The key for M3 is signs that they are speeding up the assembly line and eliminating manual tasks.
If S/X deliveries are good, over 26,000, Model 3 is 1000 deliveries, and Tesla restates target for 5000 weekly by December, I would expect some skeptics would give in and buy and some shorts without deep pockets, would be forced to liquidate. Any two of those options would likely push us higher, but all three would be a perfect short-storm.

I dont think anyone will be concerned with low delivery numbers. But I assume Tesla will release production numbers also? I can pretty much guarantee that a sentence or two will be devoted to explaining the large number of cars made during the last week of September.

 

[D-egg-O]

Don't forget about those pesky "in transit" numbers.

 

[austinEV]

Don't forget about those pesky "in transit" numbers.

It is an interesting though experiment: Since the commitment is 1500 made, not necessarily delivered... there is some wiggle room there. If, for instance, they had 2000 cars in QA waiting on the sun visors, they might say they have made them. And we would never know based on vin counting.

 

[techmaven]

We definitely need to keep an eye on this, but it worth keeping couple of things in mind:

• The guidance was about production, not deliveries, so observing (or not) certain VINs in the wild is a lagging indicator. For a heavily back loaded production/deliveries an absence of certain VINs at this time is not that alarming.
• I do not believe that market will have a fit for production turning out to be less than 1500 cars. I think producing several hundred cars with Tesla assurances on accelerating ramp will be sufficient.

While I wholeheartedly agree, we won't have a read on that until at least Tesla's delivery numbers. If the stock was at a lower level, I wouldn't be as concerned.

It could also be that Tesla is doing a mini-delivery regional allocation, where further away deliveries are being prioritized over CA deliveries for this week and next week is all CA in order to maximize the delivery numbers for Q3.

At the moment, we don't have China numbers for S/X. The European numbers in the first two months were a bit off, but the U.S. numbers were very strong. The wildcard, as usual, is China. A poor-ish S/X quarter can be completely ignored in favor of good Model 3 production news. Similarly, a good S/X quarter can be drowned out by bad Model 3 production news. I suspect the actual number of Model 3's built in September is relatively immaterial if there is evidence, whether by Tesla or by crowd sourced VIN counting that production of Model 3's is in a good place. If S/X deliveries are decent, then the quarterly report is likely pretty good since hopefully there shouldn't be any more Tesla Solar big negative charges.

Therefore, my concern is for the next two weeks ahead of delivery numbers, and then delivery numbers themselves has its own event risk. For example, if we only see VIN 5xx next week, how is the market going to react? In the very short term, we seem to be still on an upswing on sympathy with NVDA. I'm not so sure we are even here based on Tesla specific news other than the general sense that Tesla is really building Model 3's. I have to take the assumption that smart money is examining the VINs and delivery evidence just like we are doing.

 

[neroden]

Congrats.

Frankly, on days like this, I'm a little annoyed that I'm only 200% into TSLA. I think on the next dip, I'll push it to 300%.

Leverage, it is dangerous. You don't want to be margin-called. (If you're leveraging with 2019 in-the-money LEAPS, then you don't risk being margin called, of course.) Going down to 33% equity means... well, it means if you reach 25% equity due to a dip, you get margin-called. On the other hand, if you continuously have money coming in from a job, you can leverage up when you see a buying opportunity, and then use your income to deleverage continuously.

 

[neroden]

Nice! I'm close to doubling my 202.94 average basis for all my buys.

I need some cash for a RE purchase soon but I'm leaning towards a HELOC to leave all my TSLA alone. How crazy is that!

Consider borrowing against your stock. Talk to your broker about a "pledged asset line". Compare the rate to the rate you get by borrowing against your home. (There's also less paperwork.)

 

[neroden]

Congratulations! Welcome to the club.

My initial purchase in January 2013 was at $37.89. That's now a 10-bagger.

In a November 2016 tweet a short seller dared me to double down. I did at $184.52. That's become a 2-bagger.

It's sad that the best short sellers can expect is the stock going to $0.00 and a 1-bagger.

Well, technically, a *successful* short-seller only has to post collateral equal to 102% of the value of the stock they short-sell, and they get 100% of the value in cash when they initially short-sell. So if you were a genius short-seller and called it exactly right, you could post 2% of the short position, and if the stock rocketed straight down to zero, you'd keep the 102%, on an investment of 2%, which is a 51-bagger. Of course this is acheived entirely using leverage, and with enough leverage you can turn anything into a 100-bagger. The downside is simply that if as a pure short-seller you guess wrong, you declare bankruptcy. Wise short-sellers therefore have to spend a lot of money on various forms insurance, basically, which cuts their maximum possible gain a lot.

 

[neroden]

Consider borrowing against your stock. Talk to your broker about a "pledged asset line". Compare the rate to the rate you get by borrowing against your home. (There's also less paperwork.)

Caveat: this is only likely to be a good deal if your stock is worth significantly more than your house (as is the case for me).

 

[austinEV]

Caveat: this is only likely to be a good deal if your stock is worth significantly more than your house (as is the case for me).

May need a pledged asset line thread... What about those of us that have everything in IRA (mostly) and Roth(the rest) IRAs? I understand that pledged assets cannot be in retirement accounts. But if I pull it out and pay the big bill, then I defeat the purpose of getting a loan.

 

[neroden]

May need a pledged asset line thread... What about those of us that have everything in IRA (mostly) and Roth(the rest) IRAs? I understand that pledged assets cannot be in retirement accounts. But if I pull it out and pay the big bill, then I defeat the purpose of getting a loan.

Oh, yeah, if all your money's in an IRA, forget it. You simply can't borrow against IRAs at all. (This is in order to make sure they're available for retirement, so it makes sense.)

 

[myusername]

have a look at this post:

2017 Investor Roundtable: TSLA Market Action

in that post you'll see my description of the +/- $20 range off "The Line"... and look where it got rejected today... will it finally break out of this to the upside?... or will it return to the line?... we'll see.

 

[SBenson]

have a look at this post:

2017 Investor Roundtable: TSLA Market Action

in that post you'll see my description of the +/- $20 range off "The Line"... and look where it got rejected today... will it finally break out of this to the upside?... or will it return to the line?... we'll see.

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Let's say if Tesla were to reach $1T market cap. Will you still consider it some sort of bot manipulation of stock price?

How about $500Bil?

$200Bil?

$100Bil?

Basically at what market cap level do you think it seezes being SP manipulation vs real? At some level it has to, right?

Related question. In your view, is this phenomenon unique to TSLA? Why is it?

 

[vgrinshpun]

Another talk of symmetrical triangle, classic break-out. Breakout PT - $500. Happy trading...

Trading Nation: Tesla hits record high

 

[generalenthu]

Consider borrowing against your stock. Talk to your broker about a "pledged asset line". Compare the rate to the rate you get by borrowing against your home. (There's also less paperwork.)

Will these be less than the margin loan rates at say IB? Or is it about low rate and still retaining the mortgage interest deduction?

If you have investment income, you can offset that against margin interest, effectively getting the tax benefit. No?

 

[doctoxics]

Please correct me if wrong, but aren't we expecting a production rate of 1,500 Model 3 cars per month (50 per day or ~375/week) by the end of September. This is not the same as 1,500 per month. 1,000 produced in Q3 might be a good number.