Short-Term TSLA Price Movements - 2013

[Noble Ninja]

1) http://www.motorauthority.com/news/...-for-another-35000-cars-with-factory-upgrades

2) http://autos.yahoo.com/news/tesla-add-production-capacity-35-000-more-electric-143010700.html

TESLA MOTORS:
- gets tax break of $34.7 million
- gets factory upgrades for 35,000 cars and potentially 112 new permanent jobs
- Model X planned to be introduced by late 2014
- Model E could debut as soon as Detroit Auto Show 2015

 

[bonaire]

Here's a view on the last two days.

If I were a fund manager, I would already know the reservation totals at Tesla. Something like $140M at end of Q3.
Then I would see the 9700 model X reservations up at a computed (here on TMC) total of $87M give or take.
The remaining (if all $2500) is that 21000 or so reservations remain to be delivered (give or take a thousand) since the reservations were just about matching deliveries at the end of Q3.

So, with the news of a new $500M order written to practically double car production, what they see there is some added risk. With only 21K reservations on the books, the risk is if production doubles, reservations decline substantially. What is not known is how Tesla does with low reservations remaining.

However, if the machinery is to build the 9700 Model X units on reservation, that is also a bit troubling since 500M / 9700 = $51,000 per vehicle.
Many news agencies looked at GM's "initial investment" in the Chevy Volt as a reason they were saying it cost "$100,000 to build each one". This $500M investment to build cars needs to be factored into the depreciation lifespan of the money spent.

What do fund managers do with the new information about the equipment? The company has been treated as a Tech company with little impetus put into the CapEx and OpEx issues that come into play as growth occurs. When money is spent building out a new type of company, it can lead to a change in how an investor views a company, including a fund manager holding a few million shares in trust for their customers.

What turns it around is some news from China. And since regular reservation rates from other regions like N.A. and EU are now hidden from view to the investor, broadcasting China reservation tallies may or may not occur. We do know that HK reservations is a few hundred, at least, by now and that may be re-broadcast but it is generally meaningless on its own.

 

[RobotGrease]

Remaining hope for an uptrend:

 

[Causalien]

Yeah, when you notice a manufactured hit. It's wirth the risk to place the opposing bid. Most of you spotted it, but by now. i'd say you are veterans at spotting something like that. There isn't a huge influx of starry eyed newbies to affect this time though.

A few interesting observations. The bot is gone from today, or I couldn't find it at 10:30am whent it was always present no matter the rise and fall. The pattern at 10am looks like it now. Will wait a few days for confirmation.

The price action two days ago is my focus at the moment. My gut feeling is that someone got a piece of leaked news and I am waiting for the news to show up.

 

[FluxCap]

Just because I couldn't find mention of this elsewhere here (apologies if I missed something):

California grants Tesla $34.7 million tax break to boost production - Autoblog

Cheers,
Flux

 

[Julian Cox]

Todays news: Some dried up old fud about something that did not happen.

Nobody would go long on something so flimsy.

 

[Noble Ninja]

FIVE new Superchargers along Wisconsin major interstate, with first one opening in the next few weeks:

http://www.valuewalk.com/2013/12/tesla-motors-inc-tsla-expands-supercharger-network-wisconsin/

 

[mershaw2001]

How does the 34 million dollar tax break affect earnings? If i recall, tesla is coming in just at even or just above even each quarter, and 34 million extra dollars would end up pushing their eps higher.
Or, will the 500 million that they are spending on equipment be counted against them? How does this work?

 

[GenIIIBuyer]

Cap-ex cost is amortized over the useful life of the investment. Probably 5-10 years in this case. So the 1/20th to 1/40th of the cost hits the Income Statement each quarter.

Being sales-tax free just saves sales tax on the price of the total cap-ex cost.

 

[bonaire]

Cap-ex cost is amortized over the useful life of the investment. Probably 5-10 years in this case. So the 1/20th to 1/40th of the cost hits the Income Statement each quarter.

Being sales-tax free just saves sales tax on the price of the total cap-ex cost.

Looks simple - only 50-60 pages to read through: http://www.irs.gov/pub/irs-pdf/p946.pdf

 

[sleepyhead]

Looks simple - only 50-60 pages to read through: http://www.irs.gov/pub/irs-pdf/p946.pdf

It's actually very simple and GenIIIBuyer just explained it above. I am not sure about the 5-10 year amortization period he mentioned but he described exactly how the savings will flow into the income statement.

 

[stoebs]

Will it even show up on the income statement, or is it just an expense that never gets incurred now? Meaning they bought $500M worth of equipment for $500M, instead of paying $500M plus $34M in sales tax. So the extra $34M expense is left out of the amortization. I'm not sure I'm clearly getting my question across. Any help out there?

 

[ggr]

Absolutely love that one.
Doesn't the music during the video create a feeling of "... couldn't we have done any better?!"
Sorry for spamming this Short Term Thread but as the stock went down a litte more here is some distraction
Nissan LEAF Polar Bear TV Commercial by Windsor Nissan New Jersey - YouTube

Oups, bought some more at 103,38€

Polar bears are really cute, until you actually meet one.

 

[sleepyhead]

I am going to ask for the third time today to please stop quoting things I say out of context.

The last person who quoted me (on the previous page of this thread) didn't even bother to quote a full sentence out of context; not to mention a whole paragraph or whole post. Instead he took a sentence and cut off the beginning of it as well as the end of it and only left a couple of words from the middle that are completely out of context and 100% miss the point that I was trying to convey. The quoted words out of context actually sound like the exact opposite of what I was trying to convey.

This is getting ridiculous people! Stop the madness.

edit: Thanks for removing the out of context quote.

- - - Updated - - -

Will it even show up on the income statement, or is it just an expense that never gets incurred now? Meaning they bought $500M worth of equipment for $500M, instead of paying $500M plus $34M in sales tax. So the extra $34M expense is left out of the amortization. I'm not sure I'm clearly getting my question across. Any help out there?

It will show up in the form of lower COGS, which will lead to higher gross, which leads to higher EPS. It might be worth $0.01 EPS per quarter give or take if it is amortized over 5 years. If amortized over 20 years then about $0.002 EPS or so.

Nothing to write home about. The bigger deal is that the company doesn't have to raise the extra $34m today, or spend its own cash.

 

[sleepyhead]

Just bringing the internationality back into context, US is not 99% of the world It's not even 99% of Tesla drive base anymore and in EU everyone has a 240V outlet in their garage

Anyway I'd say that it's getting just pointless arguing as I'd say that it's likely anything else could have triggered the fire not necessarily an EV and yes this is more a news on proper electrician not about EVs, but because Tesla name could be dragged into it through a mile of mud it's suddenly newsworthy. And all of the TSLA headlines for today are about the garage fire. *sigh*.

Are they 50 amp rated, ready to draw 10+kW of power?

 

[stoebs]

It will show up in the form of lower COGS, which will lead to higher gross, which leads to higher EPS. It might be worth $0.01 EPS per quarter give or take if it is amortized over 5 years. If amortized over 20 years then about $0.002 EPS or so.

Nothing to write home about. The bigger deal is that the company doesn't have to raise the extra $34m today, or spend its own cash.

Thanks for the clarification!

 

[SteveG3]

from a San Jose Mercury News article, Tesla pulled no punches in its response to Reuters,

"The company called the Reuters report "misleading," adding: "It appears that their objective was simply to find some way to put the words 'fire' and 'Tesla' in the same headline. The journalists and editors who created the story have patently ignored hundreds of deaths and thousands of serious injuries unequivocally caused by gasoline car fires, instead choosing to write about a garage fire where there were no injuries and the cause was clearly not the car.""

 

[Raffy.Roma]

from a San Jose Mercury News article, Tesla pulled no punches in its response to Reuters,

"The company called the Reuters report "misleading," adding: "It appears that their objective was simply to find some way to put the words 'fire' and 'Tesla' in the same headline. The journalists and editors who created the story have patently ignored hundreds of deaths and thousands of serious injuries unequivocally caused by gasoline car fires, instead choosing to write about a garage fire where there were no injuries and the cause was clearly not the car.""

I live in Italy and for this reason I don't know much about the USA but from what I read to me it looks very evident that in the USA there is a big political crashing about the matter of "driving electric" and the TSLA stock problems are related to this political crashing.
Am I wrong?

 

[SteveG3]

I live in Italy and for this reason I don't know much about the USA but from what I read to me it looks very evident that in the USA there is a big political crashing about the matter of "driving electric" and the TSLA stock problems are related to this political crashing.
Am I wrong?

Raffy yes... politics in the larger sense of politics and money. This influences some of the media coverage, for example, several once widely respected publications now owned by Rupert Murdoch.

On top of this is media attraction to sensationalism. This worked in Tesla's favor in the Spring with Tesla's rush of announcements. Of course, not so helpful lately. Hard to imagine Elon criticizing the media not having a bit of a backlash, hopefully short-lived. Don't get me wrong though, I love that Elon calls it as he sees it.

 

[Raffy.Roma]

@SteveG3

I am sorry for what is happening. Hope that the situation will improve soon. I am not saying it for the stock but because I think that such a good automaker like Tesla giving us the chance to have electric cars whose quality is comparable or even better with respect to big ICE automakers (like BMW and Mercedes for instance) should be succesfull.