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Indeed, Jonas seemed to go out of his way to invent nonsensical negatives, while maintaining his Overweight rating and $320 price target, and still providing words of praise. It's truly bizarre. Earlier I suggested that he may be trying to please someone. DJ Frustration considered the possibility of Jonas' knowledge of a production delay following the retooling. If the latter, that would be a quite short term consideration, since I suppose during the retooling newly arriving battery cells would have been assembled into packs and other incoming parts would have been stockpiled in anticipation of a production ramp up. Let's keep in mind that TSLA shares are primarily valued based on future potential and not quarterly concerns.
Of course today's comments from Jonas could have been a setup for certain parties to get in at a low price. It also make shares and options more attractive to potential new employees that Tesla Motors is attempting to entice, which I imagine could have been behind Elon's share price comments. Elon may have felt confident to answer as he did due to his certainty that the share price would eventually be much higher.
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everman
Member
bought 10k$ calls on tesla. i like this dip
There's some mention of the Mar'15 $215 ITM, which ones are you looking at?
chickensevil
Active Member
So I was really holding my breath there for a little while, cause we broke 10%... isn't that normally a trigger point for most people to sell? I am really glad there seems to be pressure holding here, at the moment. This has been crazy to watch unfold.
This has been a major amplification of the broader market, just go look at FB and AMZN if you want to see a nice comparison. We are just getting beat up far more than others...
This has been a major amplification of the broader market, just go look at FB and AMZN if you want to see a nice comparison. We are just getting beat up far more than others...
Seems like the overall market is being killed today, but the note from AJ this morning seems all too perfectly timed, possibly paid off by FUD-masters, especially when he had been generally bullish and the note reads like he's trying to bring down the stock while simultaneously trying not to lose his own credibility by including some bullish comments here and there. Ultimately, it comes off as contradicting and loses credibility anyways.
The current low of the day is $249, which is near the 50-MA, so we should get good support here.
The current low of the day is $249, which is near the 50-MA, so we should get good support here.
I'll add another option, "E" - Adam Jonas is only a TSLA 1.5 believer (note: referring to my 3 trajectories of TSLA 1.0, 2.0, 3.0).
Adam Jonas really doesn't think Tesla will sell "millions" of cars every year even like a Honda, BMW or even GM/Ford, etc. In other words, he doesn't believe in the TSLA 2.0 or TSLA 3.0 outcome.
He thinks that Tesla will sell 1 million cars/year by 2027/2028. That's the potential he sees in terms of scale. He does believe that Tesla will have high margins, play a significant role in autonomous driving, and also probably sell stationary storage. But for cars, he doesn't see Tesla as a company that can sell 5 million cars/year or more by 2028. In fact, he doesn't even see Tesla selling 2 million cars/year by 2028.
Here's a chart from his Feb 25, 2014 report:
If you look at the trajectory he forecasts, he's sees Tesla selling 371k cars in 2020... and then ramping to just 800k cars in 2025. 800k cars by 2025 would require Tesla to open just one more large factory and one more gigafactory (in addition to the Nevada one) in the next 11 years (from now until 2025).
I think Adam Jonas comes across as a TSLA 2.0 or TSLA 3.0 bull because of his enthusiasm. But I think perhaps he's an emotional guy (just my conjecture). And he gets easily excited by what Tesla is doing and he really likes Elon as a CEO/visionary.
I think the stranger event was Adam Jonas giving a $325 price target in the first place back in February. That's a $40 billion market cap.
In today's note he says:
He says they view "Tesla as a niche player, not a mass manufacturer." Then, why give a $40 billion market cap price target back in Feb 2014?!?
I wonder if he got caught up in the excitement of Tesla's gigafactory announcement back then, autonomous driving, and stationary storage potential. And all of that excitement led him to make a stretch projection of $40 billion market cap, even though he really sees Tesla as a "niche" player in the market (ie., 1 million cars/year in 2027-2028).
So, all this leads me to think of Adam Jonas as:
1. He's a TSLA 1.5 believer and shouldn't be confused as a TSLA 2.0 or TSLA 3.0 believer (see my posts on the three trajectories in my megapost if you don't know what I'm referring to here)
2. He got emotional with his initial $325 price target and maybe somehow regrets it, and thus took this opportunity to express some of his doubts of Tesla as a mass manufacturer.
3. As TSLA's price increases, he will likely be more of a liability to TSLA shareholders as he expresses even more doubts as a TSLA 1.5 believer (unless of course he changes his mind). However, when/if TSLA is in a depressed state, he could be an asset as an exuberant 1.5 believer who can see some potential (although not as a mass manufacturer) of Tesla even in dark times.
chickensevil
Active Member
Wow, DaveT, that was great! I think you might be on to something. I don't think I remember seeing his projected car sales and yes, that would be a really slow ramp. So the 325 really doesn't make sense... unless by them doing much more than that 325 would be low balled and thus is should be worth more? I mean if he is coming up with 325 based on that data from Feb, then really we have a much clearer picture here and it should easily be worth a lot more.
I think he stretched his numbers to come up with his $325 price target ($40 billion market cap) based off of his 15 year projections. If Tesla only sells 1 million cars in 2017, why would I want to pay $40 billion for them today? Sure, he justifies it with his DCF calculations as such but I think it's a stretch.
IMHO I think he was caught up in the emotional moment and wanted to put out a stellar report (back in February) with a stellar price target that would make a big statement.
I think it's crazy that we're seeing so much volume! What would be helpful this week is that announcement Elon was talking about... and those "hidden R&D" expenses we don't know about...
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I thought the key driver of his report was stationary packs and the Gigafactory. Not so much the cars.
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I thought the key driver of his report was stationary packs and the Gigafactory. Not so much the cars.
What's also interesting is that Adam Jonas could have revised his future projections (ie., raised his 2027-2028 sales numbers to 2 million at least). But instead, he chose not to. It just shows that he's firmly rooted in his TSLA 1.5 beliefs (at least for now) and not willing to change.
There also have been more evidence that Tesla is preparing for more than one gigafactory and eventually an Asia and Europe factory in 3-4 years, so that should have given him then hint that Tesla is planning for a much more dramatic expansion than the 371k units/year in 2020 to 1 million in 2027 that he predicted in February. Again, he could have raised those 2027/2028 numbers based off the recent events/evidence from February, but he chose not to and to re-affirm his 2027/2028 forecasts.
There also have been more evidence that Tesla is preparing for more than one gigafactory and eventually an Asia and Europe factory in 3-4 years, so that should have given him then hint that Tesla is planning for a much more dramatic expansion than the 371k units/year in 2020 to 1 million in 2027 that he predicted in February. Again, he could have raised those 2027/2028 numbers based off the recent events/evidence from February, but he chose not to and to re-affirm his 2027/2028 forecasts.
I think the only thing we really learned today is that Jonas is willing to put his name on some whacky stuff.
He's repeatedly called Tesla the most important automaker in the world, as he did again today, yet today had the niche automaker comment.
As I recall the report he put out in February that spiked the stock about $50 had a massive price target raise on the potential of the grid storage/home&business backup battery business. Off of memory, I think he basically said, two trillion dollar industries where Tesla has tremendous opportunity. Without access to the report, I got the impression he thought the energy industry opportunity was as large as the auto industry opportunity.
DaveT thanks for those additional excerpts, I think the new comment you included about ICE improvements to come and "Moore's Law can help liberate BTUs too" rivals his suggestion that in 15 years nobody may be buying cars anymore as everything may transform to autodriving fleets.
I think he actually gets Tesla. I suspect the 370K cars in 2020, etc, is him being conservative. He probably expects Tesla will hit 500K, but wants to leave a cushion if they fall a year or so behind schedule.
He's repeatedly called Tesla the most important automaker in the world, as he did again today, yet today had the niche automaker comment.
As I recall the report he put out in February that spiked the stock about $50 had a massive price target raise on the potential of the grid storage/home&business backup battery business. Off of memory, I think he basically said, two trillion dollar industries where Tesla has tremendous opportunity. Without access to the report, I got the impression he thought the energy industry opportunity was as large as the auto industry opportunity.
DaveT thanks for those additional excerpts, I think the new comment you included about ICE improvements to come and "Moore's Law can help liberate BTUs too" rivals his suggestion that in 15 years nobody may be buying cars anymore as everything may transform to autodriving fleets.
I think he actually gets Tesla. I suspect the 370K cars in 2020, etc, is him being conservative. He probably expects Tesla will hit 500K, but wants to leave a cushion if they fall a year or so behind schedule.
The bulk of his valuation forecasts was based on vehicles sales projections. From his Feb 25th report:
JRP3
Hyperactive Member
Sounds good, I bought back the shares I sold at 288 at 252 today. Plus some extras :smile:
Indeed, many investors set a stop loss limit at 10% down from the purchase price. That can lead to a domino effect amplifying a day's down move. But there may not have been a great many people who bought near the recent highs. I would think that most TSLA investors must still be well into profit territory. It's the weak longs and day traders who are temporarily trapped by this effect.
The so-called momentum stocks are generally quite liquid. The selling of them today may lend some credence to the notion that institutions are raising cash to be certain they have enough funds to purchase their allocations of the Alibaba IPO later this week. They often sell their IPO shares to retail investors as soon as allowable.
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I'm starting to think that those two statements aren't contradictory in Adam Jonas' mind.
I think he really does think of Tesla as niche manufacturer (ie., 1 million cars in 2027-2028). But that Tesla is on the cutting edge of technology that will be adopted by other manufacturers (ie., battery tech, battery production, autonomous driving, etc). In other words, he loves the innovation at Tesla and thinks it's super significant and important, but he still sees Tesla as a company that will be limited in their manufacturing output.
Maybe he really think the future is hybrid. I think a lot of us assume that he thinks the future is electric, but I'm starting to think that this was our mistaken assumption.
Actually I'm starting to think/realize that he doesn't get Tesla. I think he views Tesla as a novel new company making interesting and significant advancements. He's excited that a new auto company is being birthed and grown. He really likes Elon. He likes how Tesla innovates. He's skeptical and cynical about other car companies. But he still sees Tesla's future as very limited. He thinks other auto companies will catch up and perhaps he sees hybrids as compelling.
His 1 million cars/year by 2027-2028 shows a lot. And his refusal to update those numbers since Feb also shows a lot of his conviction that he is standing by those numbers.
He's a true TSLA 1.5 believer.
chickensevil
Active Member
Well looking back over history. Today has not been the worst day by far. We have definately faced larger drops (percentage wise) than even the peak of today's drop of close to 11%. It is painful to watch your stock value drop by 23$ but hopefully most people here who are holding shares didn't panic at 249~ cause I know everyone in the office here got all excited at the stock price today thinking it was going to be the end of days, or some such. (Since I am the one that owns the Tesla and actively trade the stock it tends to be a topic of discussion around the office. Especially when I keep the stock quote up all day and see it in the corner of my screen doing crazy things, I can't help but tell someone else... but sometimes they help keep me level headed from doing something totally stupid, so I don't mind!)
Indeed:
The Supreme Judicial Court unanimously ruled Monday that the association and two dealers who sought block Tesla —Herb Connolly Chevrolet and Fisker Norwood — didn’t have legal standing to bring the case. In its decision, the court said it would be “anomalous” to find in the state law cited by the dealers association “a lone provision giving dealers protection against competition from an unaffiliated manufacturer.”
http://wwlp.com/2014/09/15/court-tesla-can-sell-cars-directly-to-ma-consumers/
http://www.xconomy.com/boston/2014/...op-tesla-from-selling-direct-to-ma-consumers/
http://www.bostonglobe.com/metro/20...car-dealers/tFMtsQT4Ta4LI3RgcrOJOP/story.html
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Dave, my sense is otherwise (I think he does get it, and I don't think he believes much of what was put out in his name today), but, of course this is not something I can know. (fwiw, my sense of AJ getting it comes foremost from his 2011 report with quite a sweeping vision that helped me see what Tesla could be ( first link here, Tesla Motors Club - Enthusiasts & Owners Forum)
I don't know what AJ believes, I do know he pumped the stock when Elon needed the capital raise & we all applauded & called him a genius, Elon tried to lower expectations but many didn't want to listen so AJ gets the wink...its not that complicated the way I see it.
Remember the pump? http://www.zerohedge.com/news/2014-02-26/morgan-stanley-underwrites-tsla-convertible-offering-day-after-100-stock-price-upgra
Remember the pump? http://www.zerohedge.com/news/2014-02-26/morgan-stanley-underwrites-tsla-convertible-offering-day-after-100-stock-price-upgra
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