The Blue Owl
Endangerous Herbivore
Institutional ownership of TSLA went back down to 61% a few days ago (from 63%), according to Google Finance.
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I was going to say the stock closed at $240 on March 18th. How could you have a buy rating when you think the stock will go down by 20% in 12 months?
Yes, my mistake, I was looking at the Street Insider analyst rating summary table, which listed previous recommendation as Buy, but I guess they do not update the recommendation on a new note, just on a new full report. So the previously listed "buy" was for a previously issued report:
Analyst Ratings for Tesla Motors (TSLA)
RationalOptimist
Member
So far the market not seeing it my way, though maybe today's fall as much caused by the general tech sell-off. The GS report was first time I'd seen 700/wk production number confirmed. That strikes me as big. That's already at 35k annual rate, and 35k is their guidance for the year. Hello, it's only April !
I'm seeing heavy chatter on twitter feed from some hedge fund managers I follow of institutional de-risking, i.e. movement away from perceived momo and growth stocks to perceived safe havens, including blue chips ironically. This is also largely about Putin right now.
It would be nice for TSLA to begin trading on news related to the company, but that is not happening right now.
I'm seeing that we are getting "branded" as a "high-flying 2013 momentum stock" and that there is "rotation" away from these. I don't like this branding, but I don't control the press. Supposedly investors are rotating to "value" stocks. What those are, I don't know, because all I see in my tickers is red. I see people cashing out on fear, whether misplaced or not.
U.S. Stocks Drop as Tech Selloff Resumes; Treasuries Rise - Bloomberg
It would be nice for TSLA to begin trading on news related to the company, but that is not happening right now.
I'm seeing that we are getting "branded" as a "high-flying 2013 momentum stock" and that there is "rotation" away from these. I don't like this branding, but I don't control the press. Supposedly investors are rotating to "value" stocks. What those are, I don't know, because all I see in my tickers is red. I see people cashing out on fear, whether misplaced or not.
U.S. Stocks Drop as Tech Selloff Resumes; Treasuries Rise - Bloomberg
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My conjecture is that they'll be back in plenty of time for ER, because greed will win out.
Let me make wild guess for the production rate ramp up in 2014 to reach 1000/week at end of the year? I believe it starts from 600/week from beginning of the year.
End of Q1: 700/week
End of Q2: 800/week
End of Q3: 900/week
End of Q4: 1000/week
If the ramp up can be extrapolated linearly, then it'll be averaged 850/week, let's count 50 weeks only, the total production in 2014 will be 42.5K. It's not a surprise though, as Elon guided >= 35K, 20% over delivery is possible. Maybe I'm too optimistic
End of Q1: 700/week
End of Q2: 800/week
End of Q3: 900/week
End of Q4: 1000/week
If the ramp up can be extrapolated linearly, then it'll be averaged 850/week, let's count 50 weeks only, the total production in 2014 will be 42.5K. It's not a surprise though, as Elon guided >= 35K, 20% over delivery is possible. Maybe I'm too optimistic
I just posted in the Q1 thread some rough speculation figures on Q1 2014 deliveries based on the 700 cars/week number noted in this morning's GS report.
2014 1 QTR predictions/results - Page 15
2014 1 QTR predictions/results - Page 15
bryonsdad, while traders have definitely accentuated moves up and down on Tesla (i.e. $265 last month, $120 after the fires), I do think Tesla's move over the past few years is much more about fundamentals than traders and momentum. Think of Tesla like a biotech. Basically, between the fall 2012/spring of 2013 they went from substantial risk of going bust to having their first significant drug, the Model S approved by the FDA followed quickly by stellar write ups in the New England Journal of Medicine (i.e. Consumer Reports, Motor Trend...), leading to rapid strong uptake by physicians (sales to date far outpacing what Tesla was suggesting in 2012). In the 9 months since, they've entered the European market and they are on the cusp of entering China. They've also got this drug slated for approval in a second indication with an equally big market to the first indication in 6-9 months, that being the Model X on the Model S/X platform. Finally, they have a derivative compound, the Gen III platform, which is in Phase 3 testing, and has a far larger addressable market, roughly 10X, than the first drug they've passed. The company has shared very encouraging data on trials to date on this Gen III drug, and it has a very high probability of approval circa 2017.
Small biotechs riding completely on their first drugs approval can and do go up 2 or 3X on FDA approval. Expanding into the EU and Asia, is likely going to expand Tesla's revenues 3X. A biotech whose first and only drug gets approval in a second indication with an equally large market can double. Whey you look at the magnitude of these events, Tesla's 7X move from $30 to $210 is a value move, not "momo." Tesla's revenue growth from 2011 through today and what's projected the next 3 and 5 years also parallel a biotech winner.
while it's worth noting the "momo" tag given Tesla (and as I said there is a small aspect of the move for which this is accurate), and realizing Tesla is likely to go down more than average in a sharp selloff, ultimately, the move since 2012 has been based on fundamentals, and if there is such a selloff, Tesla's fundamental value will lead to a rebound in TSLA that will simply not be seen by any stocks it is currently being lumped in with whose recent gains were predominantly "momo" based.
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Anyone questioning the demand for Tesla in China should take a look on Chinese forums. Most of the comments about Tesla are extremely positive. In some areas of China, EV's are receiving $20,000-$40,000 in incentives. In China, many mid range imported ICE vehicles cost $50,000- 70,000. If it's announced that Tesla is able to qualify for incentives, I will be very surprised if China doesn't see a trend similar to what is happening in Norway, and end up being Tesla's largest market by the end of next year.
Tesla Motors could probably partner with someone like BYD or KNDI. KNDI is building massive garages/towers for charging electric vehicles. Does anyone know if the towers being built by KNDI are compatible with other Electric Vehicles?
On top of this, China is spending hundreds of billions on solar, and grid infrastructure. It would make a lot of sense for the Chinese government to basically hand Tesla a free factory, much in the way that Apple was basically given a free factory when Apple began producing the iPhone.
"For technology companies, the cost of labor is minimal compared with the expense of buying parts and managing supply chains that bring together components and services from hundreds of companies. For Mr. Cook, the focus on Asia “came down to two things,” said one former high-ranking Apple executive. Factories in Asia “can scale up and down faster” and “Asian supply chains have surpassed what’s in the U.S.”
http://www.nytimes.com/2012/01/22/business/apple-america-and-a-squeezed-middle-class.html
Wouldn't it make a lot of sense for Tesla to have a Gigafactory in the United States, China, and Europe?
On top of this, China is spending hundreds of billions on solar, and grid infrastructure. It would make a lot of sense for the Chinese government to basically hand Tesla a free factory, much in the way that Apple was basically given a free factory when Apple began producing the iPhone.
"For technology companies, the cost of labor is minimal compared with the expense of buying parts and managing supply chains that bring together components and services from hundreds of companies. For Mr. Cook, the focus on Asia “came down to two things,” said one former high-ranking Apple executive. Factories in Asia “can scale up and down faster” and “Asian supply chains have surpassed what’s in the U.S.”
http://www.nytimes.com/2012/01/22/business/apple-america-and-a-squeezed-middle-class.html
Wouldn't it make a lot of sense for Tesla to have a Gigafactory in the United States, China, and Europe?
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Hi Curt
you must have some contacts at Goldman Sachs....I hope.
if you do, can find out if this quote is accurate?
"The Models S build out is progressing well at a production rate of about 700 cars per week, "
that number (700/wk) seems too close to someone just taking the Guidance number of 35,000 and dividing it by 50-52 weeks.
DaveT expressed similar concern on another thread.
Sorry, going to disagree with you all on the China manufacturing aspect. It is NOT, I repeat NOT advantageous for a Giga factory to be in China (for now at least). Whether or not the Model S qualifies for incentive won't change demand much. Most who can afford it will buy it on pure merit and price comparison to its competitors that cost 3-4x as much.
Yes, typically China requires a partnership for various incentives. But Tesla is in a REALLY good position because China is working on it's image in regards to pollution so I'm pretty confident that they'll give some incentives to Tesla. Also, we're production constrained at the moment so it's not going to be a situation where if incentives are offered demand would skyrocket because... It would be irrelevant.
Yes, typically China requires a partnership for various incentives. But Tesla is in a REALLY good position because China is working on it's image in regards to pollution so I'm pretty confident that they'll give some incentives to Tesla. Also, we're production constrained at the moment so it's not going to be a situation where if incentives are offered demand would skyrocket because... It would be irrelevant.
I agree 100% with this. China is not going to roll over. Yes, there will be demand there, but don't expect the Chinese government to actually help Tesla without getting something in return. I have little doubt that one reason why other foreign luxury cars are priced as high as they are in China is because of the bribes, I mean partnership payments, they make. Apparently Tesla isn't going to play that game (they have no margin to do so), so they won't find their path easy. In addition, Tesla has some very significant IP they want to protect and China has a well deserved reputation for stealing whatever IP they can. I think I also read somewhere that potential Beijing Tesla owners must enter into the standard lottery to get a car permit? No EV exception for Tesla?
While SOME foreign demand has been strong (witness tiny Norway), other foreign demand has been tepid. Too early to say on China, but Elon made a big deal about Germany. They built out a significant Supercharger network IN FRONT of demand in Germany, and so far, their German sales have been disappointing.
This all won't matter if the rest of the world continues to pick up the order slack, but Elon may find worldwide sales patterns to be a bit different than he had imagined.
I don't quite agree with this view. Sure, demand in Germany might be a little less than expected for now, in the long run I am not worried at all regarding demand in Germany. However, when it comes to the Supercharger build out it had to be this way. Even if Tesla didn't sell a single car in Germany they still have to build out the superchargers because other European owners drive through Germany, and that's the whole point of the Supercharger network. Germany is very much the heart of Europe. Think of Europe as the states of America. You have to blanket all states regardless,
Oh, I wasn't knocking the German Supercharger strategy, what you said makes sense. But be careful of your "eventually they will sell in Germany". Eventually we will all be dead . Germany has unique problems for Tesla. They have very, very good home grown car manufacturers, who the Germans must be proud of. It has got to be part of their identity. It must be difficult indeed for a typical German to think a country that makes Chryslers, Cobalts and Pintos to even be capable of making a car to rival their car makers.
. Germany has unique problems for Tesla. They have very, very good home grown car manufacturers, who the Germans must be proud of. It has got to be part of their identity. It must be difficult indeed for a typical German to think a country that makes Chryslers, Cobalts and Pintos to even be capable of making a car to rival their car makers.- Status
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