Short-Term TSLA Price Movements - 2015

[RobStark]

Honestly, sounds more like sour grapes to me and far from the real confidence I know Elon for : welcoming others into his market because he knows his vision and his team will be able to take advantage of the growing market.

Sour grapes comes from losers. Tesla has hired more Apple employees and more senior employees than the reverse.

The biggest coup is Doug Field Tesla VP of Vehicle Programs.

Vice President of Mac Hardware Engineering at Apple. Doug led the development of many new products at Apple including the latest MacBook Air, MacBook Pro, and iMac,

CTO of Segway

Development Engineer at Ford

Masters in Mechanical Engineering from MIT.

 

[Newb]

Just bought some more shares - TSLA has just touched the equivalent of about $220 USD in Frankfurt (194,75 EUR at tradegateexchange). Couldn't resist.

 

[Larken]

Seems like the downward pressure is continuing for TSLA.

Breaking News - The Fly

Tesla downgraded to Underweight from Equal Weight at Barclays
Barclays analyst Brian Johnson downgraded Tesla Motors (TSLA) to Underweight saying the stock may be "challenged in the months ahead" with negative data points emerging. The Model X rollout did not bring a rise in shares while "several factors" could push margins below current consensus estimates, Jouhnson tells investors in a research note. The analyst believes the "slow" Model X ramp supports his view that Tesla will "significantly miss" its 2015 delivery guidance. He cut his price target for shares to $180 from $190. While bulls on the stock view Tesla as the next Ford (F), "crossing the chasm" into mainstream car production is "harder than it looks," Johnson argues. Underweight is his firm's equivalent of a sell rating. Shares of the electric carmaker closed yesterday down $5.24 to $226.72.

 

[Scott Ales]

A bit of a bright spot for me every day now even though we're still sliding.

My options are now so far out of the money there aren't any trades to estimate my losses! And for them to drop another 75% would take a move to $120 or so I guess. Meaning, no more $10k-15k day losses.

I personally can't help but presume all these analysts had an inside track to this downtrend. How do all of them align so well with their offerings within a couple days? That, along with the outward expression from Elon about Apple only taking "Fired" ex-employees, to me there is validation that this could be much worse than we're expecting. That's not the type of response I expect from a confident CEO. Not that I blame him though. Lastly, the MX launch statements about how they should not have made the car so complicated seems to be a pure setup for this being the beginning of the downtrend, not the buy-in point. I went all in on the Friday before the MX launch. As the slide began I know my self well enough that if I had nothing invested and this trend began the day after the launch I would have bought at $242 and for sure at $230. And if I hadn't been so incredibly bullish I would have taken one or two Put cover positions but those also would have been cashed by now. So, my suffering is over now. Ahhh....

In all sincerity, this experience for me has been extremely beneficial. Over the last 9 months I consistently watched my puts (insurance) dwindle away to nothing. This was the first time I went all in without covering myself! For the rest of my investing career I will have the benefit of the lessons learned over these past few weeks. With our current stake at 5% of our net worth, it's not chump change but it's also not life altering. I can still walk past 10th story windows with ease. And with 1/3 of the positions expiring Jan. 2017 there is plenty of time for the fundamentals to replenish all of it and then some. So in all, I am keenly interested and still very excited to enjoy the evolution of this amazing company. And cannot wait to get our MX!!

Here is my configuration: P90D with Ludicrous Speed upgrade, Red Multi-coat ext. White int., 2 seat second row, dark grey 21" Turbine Wheels, Gloss Wood accents. :wink:

 

[jhm]

I'd point out that $203 and $226 are the minimum and 5th percentile sentiment price levels respectively according to my BFPT methodology. This is the level at which every long feels like an an incompetent fool for holding on so long and every short is thinking Harvard should give them an honorary doctorate in asshat trading. So basically we are quite near the bottom.

The fundamentals have not deteriorated, so this bearish price movement is shear sentiment, a crisis of confidence. So with longterm business development intact, my annual BFPT stands at $355. It is difficult to predict when confidence will return, but it is possible to lock in shares while sentiment is extremely low.

Best of luck to us all, James

 

[aznt1217]

Seems like the downward pressure is continuing for TSLA.

Breaking News - The Fly

Tesla downgraded to Underweight from Equal Weight at Barclays
Barclays analyst Brian Johnson downgraded Tesla Motors (TSLA) to Underweight saying the stock may be "challenged in the months ahead" with negative data points emerging. The Model X rollout did not bring a rise in shares while "several factors" could push margins below current consensus estimates, Jouhnson tells investors in a research note. The analyst believes the "slow" Model X ramp supports his view that Tesla will "significantly miss" its 2015 delivery guidance. He cut his price target for shares to $180 from $190. While bulls on the stock view Tesla as the next Ford (F), "crossing the chasm" into mainstream car production is "harder than it looks," Johnson argues. Underweight is his firm's equivalent of a sell rating. Shares of the electric carmaker closed yesterday down $5.24 to $226.72.

Lol OK so its a CYA downgrade to top off the final quarter

 

[pGo]

Here is another evidence that doesn't give more confidence in the X ramp.

Model X towing 5,000 up mountain passes at the speed limit? - Page 2

Regarding the cooling system of the X, Tesla rep said this: ""That is a very good question. At this point we are working on the specs and the cooling systems abilities. Stay tuned and we will have more information before the end of the year."

Edit: more details. Apparently, if you want to have 5K towing capacity, you must choose 20" wheels. With 22", towing is limited to 3.5K. How are sigs configuring currently when Tesla is holding back the important details or are yet to figure out technical aspect of it.

 

[Lump]

Tesla Motors, Inc. (NASDAQ:TSLA) - Tesla Downgraded By Barclays On Model X 'Reality Check' | Benzinga
Benzinga has a few more comments from the Barclays downgrade.

Johnson believes that the stock is currently overvalued and is not accounting for the challenges and risks associated with the company’s aim to transform into a mass-market OEM.

With negative datapoints emerging, Johnson expects the stock to remain challenges in the coming months.
First, the Model X rollout did not provide the expected “technical boost.”
“Launch events typically generate a run-up into the event, with some payback after. Yet last week’s X launch failed to boost the shares – indicating a lack of 'story'-driven buying support,” the Barclays report explained.
Johnson expects several factors to drive Tesla Motors’ margins below the current consensus forecasts, such as a slow production ramp and engineering difficulties leading to manufacturing hurdles.
The disappointing Model X launch also points towards the company meaningfully missing the 2015 delivery guidance. If the Model X ramp continues to be slow in 2016, “there may be little offset from Model S,” Johnson stated, while adding that “the slow X ramp calls into question whether Model 3 will launch on time.”
The Q4 and 2016 gross margin estimates have been lowered.

More comments...
Slow ramp pf X brings into question whether Model 3 will launch on time (raising doubts of Tesla becoming mass market OEM).
Tesla Energy, risk of slow ramp & increased competitive threats imply that upside from Tesla Energy may be limited despite early costs benifits.

 

[aznt1217]

Here is another evidence that doesn't give more confidence in the X ramp.

Model X towing 5,000 up mountain passes at the speed limit? - Page 2

Regarding the cooling system of the X, Tesla rep said this: ""That is a very good question. At this point we are working on the specs and the cooling systems abilities. Stay tuned and we will have more information before the end of the year."

Edit: more details. Apparently, if you want to have 5K towing capacity, you must choose 20" wheels. With 22", towing is limited to 3.5K. How are sigs configuring currently when Tesla is holding back the important details or are yet to figure out technical aspect of it.

OK...and? Weren't the first Model X SIG deliveries slated for November? Doesnt Tesla continuously tweak their cars? I'm struggling to understand how this implies X ramp is bad

 

[pGo]

OK...and? Weren't the first Model X SIG deliveries slated for November? Doesnt Tesla continuously tweak their cars? I'm struggling to understand how this implies X ramp is bad

Please share details if you know if the X SIG deliveries are slated for November.

I didn't see the towing capacity as a tweaking of the car. It has to do with bigger and better cooling system which may require architecture change. If X is being delivered, I would think they have such critical information available for SIG holders to make informed decision before they finalize their cars. Obviously, many don't care about towing and will go ahead, but from Tesla's point of view, what is troubling is they don't have technical details to share with people who are configuring the cars. This does not give me enough confidence about the ramp.

 

[Scott Ales]

I'm seriously considering to dump my Jan. and March 16s and buy back Jan 17s. Any thoughts?

 

[uselesslogin]

More comments...
Slow ramp pf X brings into question whether Model 3 will launch on time

This is one bearish argument I completely accept.

 

[vgrinshpun]

With the current plan of delivering, at best, NA Signature MX in 2015, the goal of 50K delivered MS/MX seemed to be increasingly unlikely. The problem is that new BIW line is being used for slow ram-up of MX. The "old" BIW line which is producing MS was maxed out at 1100-1200 cars, with OT (as compared to a standard 2 shift operation). In reality, in terms of an average output, I think that existing line is maxed out at 1100 cars per week.

So, taking 12 working weeks/quarter (given the history), maximum production of MX seem to be limited to 13,200 cars. Even if we assume that all these cars will be delivered, the total MS/MX deliveries in Q4 are likely going to be limited to a maximum of 14,500 cars, resulting in a substantial 2,500 cars miss as compared with minimum guidance of 50K cars.

Theoretically, of course, it is possible to pull the rabbit out of the hat by may be not producing MX on the new BIW line, freeing it to produce MS, and then switching back to producing MX, but this will require tuning of the new BIW line, they can't just use new BIW for 4 weeks producing MS at a rate of 1,000 cars/week. The only way this can possibly work IMO, if they decide not to deliver any MX this year, and try to run existing BIW line at a steady 1,000 cars/week, while also ramping MS production on the new BIW line. This scenario, however, would produce noticeable drop is the estimated MS delivery times, which so far is not the case, with estimated delivery times actually increasing in the last several weeks.

So I am not very optimistic regarding the Q3 earnings call. I think that Tesla will need to share their outlook for Q4, and they will most likely lower it to perhaps 14,000 cars, with 2015 guidance lowered by about 3K cars to 47K.

The issues with this MX ramp up are relatively mundane in a bigger scheme of things, but given that this is a short term thread, I suspect, with all the shorting activity and hysteria ignited by constant bear crescendo, I am afraid that visiting sub $200 is not out of the question.

The long term outlook remains very good, but I would advise caution in the short to medium term.

 

[emupilot]

Elon has stated that the limiting factors for Model X production is the supply of windshields and second row seats. So unfortunately the rate of Model X production ramp-up is out Tesla's control right now.

 

[The Blue Owl]

This is one bearish argument I completely accept.

It's a reasonable argument.

I think at least some of Tesla's "creativity" when it comes to deadlines has to do with them having the playing field exclusively to themselves for now. The minute another automaker releases an EV approaching 200 miles of range at a $40k-$50k price, they will have to wake up. The Model X is a marvellous machine, and given the market it targets the vast amount of engineering effort will probably (hopefully) pay off. But they can't afford to over-engineer the Model 3, especially if GM manages to launch their Bolt before Tesla. And they absolutely can't afford to launch it 2 years late.

A while ago I said that one hypothetical risk for Tesla is if top lieutenants cannot effectively push back against Elon's reality distortion field when required. Given Elon himself stated he may have been overly ambitious with the Model X, I am wondering how much buy-in he actually had from his team, and how much got done because he simply said so. I hope credible competition materializes soon. It focuses the mind.

 

[Krugerrand]

This is one bearish argument I completely accept.

It is a bearish argument but I give it no more credence than: Coffee bean plants die of unknown disease making the price of peanut butter rise 500%.

The ramp of X and 3 are not tied together. What is tied together is the progress of Gigafactory and the launch of 3. Don't get distracted.

 

[davecolene0606]

Barclay's, really? and whew what a giant statement! $190.00 to $180.00. Those guys have been right all the time, right!? Maybe Barclays hired John Lovallo? Now there's a guy who provided his clients with SOLID advice!

They of course clearly discussed Tesla Energy, the order back logs the history of Tesla shorts, right? So they really see the truth here.... and we should all act on their clearly superior insight and knowledge.

Does anybody know the third quarter production numbers yet? Are we positive that the delivery pipeline is not
primed like never before?

 

[DarrenHD]

It is a bearish argument but I give it no more credence than: Coffee bean plants die of unknown disease making the price of peanut butter rise 500%.

The ramp of X and 3 are not tied together. What is tied together is the progress of Gigafactory and the launch of 3. Don't get distracted.

Also, one would think that the Model 3 will be a much easier car to manufacture than the X. At least there is no reason why that couldn't be the case.

Now, will Elon go over the top with designing it and putting in some features that make it difficult? It's quite possible. But if you make it like a scaled down Model S it _should_ be relatively easy for Tesla, considering their experience with the S, and now the X will be well established (it already is with the S). I think the goal of 500K cars per year by 2020 is entirely possible.

 

[Lump]

With the current plan of delivering, at best, NA Signature MX in 2015, the goal of 50K delivered MS/MX seemed to be increasingly unlikely. The problem is that new BIW line is being used for slow ram-up of MX. The "old" BIW line which is producing MS was maxed out at 1100-1200 cars, with OT (as compared to a standard 2 shift operation). In reality, in terms of an average output, I think that existing line is maxed out at 1100 cars per week.

So, taking 12 working weeks/quarter (given the history), maximum production of MX seem to be limited to 13,200 cars. Even if we assume that all these cars will be delivered, the total MS/MX deliveries in Q4 are likely going to be limited to a maximum of 14,500 cars, resulting in a substantial 2,500 cars miss as compared with minimum guidance of 50K cars.

Theoretically, of course, it is possible to pull the rabbit out of the hat by may be not producing MX on the new BIW line, freeing it to produce MS, and then switching back to producing MX, but this will require tuning of the new BIW line, they can't just use new BIW for 4 weeks producing MS at a rate of 1,000 cars/week. The only way this can possibly work IMO, if they decide not to deliver any MX this year, and try to run existing BIW line at a steady 1,000 cars/week, while also ramping MS production on the new BIW line. This scenario, however, would produce noticeable drop is the estimated MS delivery times, which so far is not the case, with estimated delivery times actually increasing in the last several weeks.

So I am not very optimistic regarding the Q3 earnings call. I think that Tesla will need to share their outlook for Q4, and they will most likely lower it to perhaps 14,000 cars, with 2015 guidance lowered by about 3K cars to 47K.

The issues with this MX ramp up are relatively mundane in a bigger scheme of things, but given that this is a short term thread, I suspect, with all the shorting activity and hysteria ignited by constant bear crescendo, I am afraid that visiting sub $200 is not out of the question.

The long term outlook remains very good, but I would advise caution in the short to medium term.

Probably the best post in the last 50 pages.

 

[aznt1217]

Please share details if you know if the X SIG deliveries are slated for November.

I didn't see the towing capacity as a tweaking of the car. It has to do with bigger and better cooling system which may require architecture change. If X is being delivered, I would think they have such critical information available for SIG holders to make informed decision before they finalize their cars. Obviously, many don't care about towing and will go ahead, but from Tesla's point of view, what is troubling is they don't have technical details to share with people who are configuring the cars. This does not give me enough confidence about the ramp.

Hm thought I saw it in somebody's config screenshot. I guess I read the image wrong.

Judging from what I read about the towing capacity change in the other thread... it's not a huge deal because it seems tire related and just a aspect of physics. We don't know for sure that they didn't have this information before. Perhaps they didn't print it because it wasn't asked until later, kind of like how the captains chairs weren't added until later (I suspect people asked for this option).

Even so, alluding to my post yesterday, even if X had a slow ramp they can just make more Model S vehicles, yes it's not the wisest thing for the consumer but in terms of financials it's way better.

- - - Updated - - -

Barclay's, really? and whew what a giant statement! $190.00 to $180.00. Those guys have been right all the time, right!? Maybe Barclays hired John Lovallo? Now there's a guy who provided his clients with SOLID advice!

They of course clearly discussed Tesla Energy, the order back logs the history of Tesla shorts, right? So they really see the truth here.... and we should all act on their clearly superior insight and knowledge.

Does anybody know the third quarter production numbers yet? Are we positive that the delivery pipeline is not
primed like never before?

View attachment 97248

It's like back in the day when people lowered their price targets from 65.00 to 60.00 or some sillyness like that. The signal there is, I'm still doing my job but honestly have no idea what to price the company at. Production numbers haven't been released, we'll get those in the next earnings letter.