Short-Term TSLA Price Movements - 2015

[schonelucht]

Thanks, stealthology. That's pretty impressive that in Nov 2012 they were targeting a Q3 2015 delivery date for the Model X. I think the generalast perception is that Tesla keeps pushing this back again and again, when the reality is that they have been on track for Q3 for about 2 years.

Either it's a typo or stealthology is badly informed. Frankly, the timeline of the model X slipping should be so well known for Tesla investors that I am surprised that a prolific poster and investor like yourself wasn't aware of these facts. Therefore a short timeline to get you up to speed : the model X was announced early 2012 with a target release date of end of 2013. One year on, that estimate slipped to late 2014 and by 2014 their new target became spring 2015. As everyone knows, they missed that deadline as well, pushed for summer 2015, then third quarter 2015 and now finally '3-4 months from now'.

We also see more clearly that the rationale for that date was to expand manufacturing capabilities to handle high production of both Models S and X. So in Nov 2015 we'll be in a much better position to appreciate the planning and execution on long range positioning of the company.

No, the official rationale to slip to 2014 from 2013 was indeed to increase manufacturing capacity for model S instead. Since then, stated reason has always been to 'get it right', 'make sure every detail is perfect' etc.

 

[Drax7]

The suv without AWD dual motors would have been a nonstarter, that only came about late 2014, just like we hope the
increased battery size that might be required for the X , and that came about with the 70d model earlier this year.

The sequence of improvements necessary that precede the SUV are partly the reason for the delay .

 

[CALGARYARSENAL]

I'm no computer but I sometimes wonder if the bots are working. I mean, there is HUGE support at 250.00 and if TSLA starts to rally even a bit it generally takes off, so why not simply push it higher and squeeze?

 

[froggy]

Pretty subtle price action for the past couple of days following annual investor meeting. I thought the investor meeting could push TSLA higher but I think with no earth shattering news it will trade in the 240-265 range until Q2 delivery report. Anybody see any catalysts prior to Q2 delivery report in early July? Thinking about writing some covered calls but over the past 2 years of doing so I'm wary of the unexpected positive catalyst or micro-short squeeze. Just curious to others' price sentiments for the next 2 weeks.

 

[uselesslogin]

Pretty subtle price action for the past couple of days following annual investor meeting. I thought the investor meeting could push TSLA higher but I think with no earth shattering news it will trade in the 240-265 range until Q2 delivery report. Anybody see any catalysts prior to Q2 delivery report in early July? Thinking about writing some covered calls but over the past 2 years of doing so I'm wary of the unexpected positive catalyst or micro-short squeeze. Just curious to others' price sentiments for the next 2 weeks.

If it were easy to know when to sell calls I'd be doing it all the time. That being said I don't expect any catalyst from Tesla until Q2 sales numbers in July.

 

[wishing_for_S]

Pretty subtle price action for the past couple of days following annual investor meeting. I thought the investor meeting could push TSLA higher but I think with no earth shattering news it will trade in the 240-265 range until Q2 delivery report. Anybody see any catalysts prior to Q2 delivery report in early July? Thinking about writing some covered calls but over the past 2 years of doing so I'm wary of the unexpected positive catalyst or micro-short squeeze. Just curious to others' price sentiments for the next 2 weeks.

I thought being able to configure you Model X online in July would be a small catalyst since it means we would get to see all the features available for the Model X, but it's not likely to push the stock to an all time high. The quarterly deliveries will likely be released before that is available anyway.

 

[surfside]

Pretty subtle price action for the past couple of days following annual investor meeting. I thought the investor meeting could push TSLA higher but I think with no earth shattering news it will trade in the 240-265 range until Q2 delivery report. Anybody see any catalysts prior to Q2 delivery report in early July? Thinking about writing some covered calls but over the past 2 years of doing so I'm wary of the unexpected positive catalyst or micro-short squeeze. Just curious to others' price sentiments for the next 2 weeks.

the biggest near term catalyst (in my mind at least) will be the release of delivery numbers for Q2 within 3 days of the the end of june...

[edit -- looks like we all posted the same thing re: 2Q delivery numbers]

surfside

 

[sub]

Pretty subtle price action for the past couple of days following annual investor meeting. I thought the investor meeting could push TSLA higher but I think with no earth shattering news it will trade in the 240-265 range until Q2 delivery report. Anybody see any catalysts prior to Q2 delivery report in early July? Thinking about writing some covered calls but over the past 2 years of doing so I'm wary of the unexpected positive catalyst or micro-short squeeze. Just curious to others' price sentiments for the next 2 weeks.

sell some medium term ITM puts instead, gives you some safety if you include some earnings and x release dates.

 

[jhm]

Either it's a typo or stealthology is badly informed. Frankly, the timeline of the model X slipping should be so well known for Tesla investors that I am surprised that a prolific poster and investor like yourself wasn't aware of these facts. Therefore a short timeline to get you up to speed : the model X was announced early 2012 with a target release date of end of 2013. One year on, that estimate slipped to late 2014 and by 2014 their new target became spring 2015. As everyone knows, they missed that deadline as well, pushed for summer 2015, then third quarter 2015 and now finally '3-4 months from now'.



No, the official rationale to slip to 2014 from 2013 was indeed to increase manufacturing capacity for model S instead. Since then, stated reason has always been to 'get it right', 'make sure every detail is perfect' etc.

Thanks for the correction with links, schonelucht. Perhaps, stealthology mean Nov 2014 and can give us a link to his source.

In any case, a lot of careful planning is required to keep a company growing at Tesla speed.

- - - Updated - - -

I'm no computer but I sometimes wonder if the bots are working. I mean, there is HUGE support at 250.00 and if TSLA starts to rally even a bit it generally takes off, so why not simply push it higher and squeeze?

My thinking is that TSLA is a much better long-term investment than a short term momentum play. It seems we would need a herd of momentum bulls to force a squeeze, but ironically this would feed clan of beara who would enter new short positions at a premature ATH. So provoking a squeeze would only serve to make the stock more volatile. I'd be fine with waiting until January for a new ATH.

 

[stealthology]

Could you provide a source for this? It was unfortunately before my Teslaholism.. all I know is in mid 2013 they said it would be early 2014, then it was subsequently always about 3 quarters away.

Switching gears - this morning CLSA says TSLA mgmt "expressed confidence" in MX timing and MS demand in a factory tour. They are more comfortable with 2H outlook and boosting their underperform PT from $220 to $250.

My apologies. Meant to say Nov 2014, not Nov 2012.

 

[doggusfluffy]

I thought being able to configure you Model X online in July would be a small catalyst since it means we would get to see all the features available for the Model X, but it's not likely to push the stock to an all time high. The quarterly deliveries will likely be released before that is available anyway.

Wouldn't they likely do an unveiling and deliver the signatures (or possibly a small fleet) before later going live with the design studio?

 

[eepic]

Wouldn't they likely do an unveiling and deliver the signatures (or possibly a small fleet) before later going live with the design studio?

They would probably deliver the Founder's series when showing the live design studio, which I believe are all senior personnel/execs at Tesla who would already be under NDA to configure early.

And maybe bonnie's too

 

[emupilot]

Wouldn't they likely do an unveiling and deliver the signatures (or possibly a small fleet) before later going live with the design studio?

I am increasingly skeptical of a Model X production reveal in July. It sounds like they will deliver a few token vehicles in late September, so they would wait until early September for the reveal event. That leaves us with the Q2 production numbers in the beginning of July and the Q2 report in early August (and the run-up to the report) as potential near-term catalysts.

 

[mrdoubleb]

I am increasingly skeptical of a Model X production reveal in July. It sounds like they will deliver a few token vehicles in late September, so they would wait until early September for the reveal event. That leaves us with the Q2 production numbers in the beginning of July and the Q2 report in early August (and the run-up to the report) as potential near-term catalysts.

Well, Elon said during the q1 cc that the design studio will go live in July - and we haven't heard otherwise since. It would be pretty stupid to take the studio live without any big reveal event. First, it would be a major missed opporunity to get lots of free press. Second, once the studio is live, all the features and the final look are for everyone to see, so what's the point of hiding the car? Also, asking 20k people to finalize orders without having even driven or seen the car is a pretty big ask. I know, some of you "hard core" signature holders would still commit, but still.

So I have a pretty hard time believing they'd take the studio live and not do a reveal. I think when Elon said back last year, that they will not show the car before the first deliveries, he did not mean it that literally. What he must have meant was that they will not do a reveal several months ahead of production start - but it would be kinda hard to configure a car on a blacked out screen with features replaced by *****.

 

[stealthology]

I have a couple questions at the end of this post. I'll be referring to some of the tidbits below.

From Shareholder Meeting (this past week)

• We’re bringing up the next S/X body production line, which has a lot more automation/greater flexibility; should be able to do 3x more in body line than the current body line. Not the whole factory, but at least this element in vehicle production, we will have ~3x increase in capability.
• New castings/machining center opened in Lathrop, near Stockton, will produce many parts which will go into Model S; allows us to expand vehicle capacity in Fremont and allocate more space for vehicle final assembly.

From Q1 call this past May:

• Will ramp up quite heavily in Q4, if ramp up goes well, volume essentially doubles in Q4 depending. Maybe even 2x other quarters.
• We're trying to compress the time from the X's first delivery to significant volume to 2 or 3 months, at most.
• We could easily do first deliveries in Aug, but then, we'd have door handle issues like with the S; want to iron everything out, then deliver at high volume. Make sure the first 3-400 cars are good.
• A captive fleet of several hundred vehicles would be created for ironing out all issues. Going from small # cars to 1,000/wk pretty fast.
• Important Consideration: from this point forward, we’re going to be optimizing for optimal efficiency of the company as opposed to specific quarters. In past we’ve had to scramble at end of quarters, at detriment of customer experience; not the right thing for us. We’re going to be operating for more steady state efficiency; that means quarterly fluctuations could be a little higher, but in the long term it will be better.

From Q4 call this past February:

• X design is done, just a question of tooling and supply chain now.
• Over 30 beta X's were built and are testing. In March, we'll build & test a small fleet, will be very close to production design.
• In late summer, we plan to begin Model X body production in our new robotic body assembly shop that will run in parallel with current Model S shop. Shortly thereafter, we plan start painting S & X in new paint facility in Fremont.

I know none of us really want to hear the quote above about optimizing for efficiency vs. specific quarters, but I would think he's referring to the uncertainty of when exactly the X ramp occurs; personally, I'm not worried about Q2 #'s.

Questions I have are:

• Is Tesla capable of seriously upping their S production in Q3 & Q4? Seems like they either have to do that, or step it up with X production to meet their 55K goal. I'm a little confused since at the shareholder meeting they said they are "bringing up the next S/X body production line with ~3x capacity increase", which leads me to think they're creating a new body line for S, which I would think lets them produce at much higher #'s. This past February though, they said the new X body production line will run in parallel with current Model S shop.
• Last month, when Musk referred to the "3-400 cars which will be used to iron everything out before delivering at high volume", are these signature customer cars, or are these cars being tested internally by Tesla? I want to say these are the first customer signature cars, but I want to make sure since Elon mentioned last Feb that they "will build and test a small fleet in March".

 

[Yuri_G]

Well, Elon said during the q1 cc that the design studio will go live in July - and we haven't heard otherwise since. It would be pretty stupid to take the studio live without any big reveal event. First, it would be a major missed opporunity to get lots of free press. Second, once the studio is live, all the features and the final look are for everyone to see, so what's the point of hiding the car? Also, asking 20k people to finalize orders without having even driven or seen the car is a pretty big ask. I know, some of you "hard core" signature holders would still commit, but still.

So I have a pretty hard time believing they'd take the studio live and not do a reveal. I think when Elon said back last year, that they will not show the car before the first deliveries, he did not mean it that literally. What he must have meant was that they will not do a reveal several months ahead of production start - but it would be kinda hard to configure a car on a blacked out screen with features replaced by *****.

I believe he stated that there would be no reveal during the Q4 earnings call in February. Not last year. The X does not need free press, it's going to be supply constrained well into 2016. Plus given that it is the follow up to a hugely successful first try, it will get press no matter what.

 

[austinEV]

I believe he stated that there would be no reveal during the Q4 earnings call in February. Not last year. The X does not need free press, it's going to be supply constrained well into 2016. Plus given that it is the follow up to a hugely successful first try, it will get press no matter what.

I think he feels burned by public reveal parties. They work hard sharing an objectively amazing thing, and the stock plummets and the commentariat are upset that they only showed the amazing, expected thing, and not magic beans.

 

[BoerumHill]

I think he feels burned by public reveal parties. They work hard sharing an objectively amazing thing, and the stock plummets and the commentariat are upset that they only showed the amazing, expected thing, and not magic beans.

It's neither here nor there - bottom line, there will be no reveal party - but I don't think that's it at all. Elon is not wired that way ("well, fine, we'll just skip it next time!") I think it speaks to his über logical worldview, in which advertising and marketing has almost no place. He actually believes all advertising is deceptive. He firmly believes the cars will sell themselves because they're the best engineered vehicle on the planet. Its as if no advertising and minimal marketing/PR somehow reinforces how important integrity is to him. "We do absolutely nothing to convince or persuade anyone. We succeed based on what we built and nothing else."

 

[AudubonB]

"We do absolutely nothing to convince or persuade anyone. We succeed based on what we built and nothing else."

Good and apposite words, Boerum, but I cannot tell from the context: is this a known quote from Tesla/Mr Musk or is it your paraphrase of its/his attitude & belief structure?

 

[Lump]

Senior secured asset-based revolving credit facility of up to $500.0 million
Form 8-K / Current Report

On June 10, 2015 (the “Closing Date”), Tesla Motors, Inc. (the “Company”) and its subsidiary Tesla Motors Netherlands B.V. (“Tesla B.V.” and together with the Company, collectively, the “Borrowers”), entered into an ABL Credit Agreement (the “Credit Agreement”) with Deutsche Bank, Bank of America, Goldman Sachs, JPMorgan Chase, Morgan Stanley, Wells Fargo and Credit Suisse. The Credit Agreement provides for a senior secured asset-based revolving credit facility of up to $500.0 million (the “Credit Facility”), which the Borrowers may draw upon from time to time. The Company may increase the total commitments under the Credit Facility by up to an additional $250.0 million, subject to certain conditions, potentially increasing the Credit Facility to up to $750.0 million. In addition, the Credit Agreement provides for a $100.0 million letter of credit subfacility and a $40.0 million swingline loan subfacility. The proceeds of the loans under the Credit Agreement may be used for working capital and general corporate purposes. The Credit Facility terminates, and all outstanding loans become due and payable, on June 10, 2020. There were no amounts outstanding under the Credit Facility as of the Closing Date.
Availability under the Credit Facility will be based upon periodic borrowing base certifications valuing certain of the Borrowers’ inventory, accounts receivable and equipment, as reduced by certain reserves. Outstanding borrowings accrue interest at floating rates plus an applicable margin of 1.0% for LIBOR rate loans, and 0.0% for base rate loans. The commitment fee payable on the unused portion of the Credit Facility equals 0.25% per annum based on utilization of the Credit Facility.