Short-Term TSLA Price Movements - 2015

[30seconds]

The greatest minds in FUDdom have poured over Tesla's 10-K for thousands of hours and the best they can dredge up is a slightly elevated finished goods inventory. Apparently, this is an awesome annual report. The last thing the bears want to do is to point out that revenue grew by only 60%, that gross margin is stuck at 26%, or that Tesla has become an employer creating over 10,500 fulltime jobs.

So if they cant attack us on the big issues, the best they can do is distract us with triffling details. The bears got no game.

Why should we let our own descussion be led the framing of FUD? Their tactic is to distract us with inconsequential detail, and we fall for it.

The only thing I am worried/ exploring now is the company's capital structure & balance sheet as it relates to funding needed to get to Gen3. It looks like 2015 demand for Model S is in the 40-50k range and I would expect that Model X demand for 2016 to be similar. Can Tesla produce (and deliver!) 75-85k cars next year? Will this create enough cash flow to finance GF and Gen3? How much cash will the company have at the end of 2015? 2016? The cash burn in 2014 was much larger than I expected, but now they have a WW infrastructure for stores, service centers and superchargers that will be able to be shared by Model S, Model X and Gen3 vehicles.

The cash component is important b/c that is in the hands of the equity / debt markets. The company has some additional levers (securitization / sale of leases) to raise additional $$. However based on SG&A burn, GF commitments and R&D how well can the company handle a setback? How quickly could they respond to an unexpected drop in demand or significant production delays? Seems that they are not very dependent on Model X for 2015 numbers but if deliveries don't start in earnest until late late 2015, then the risk profile in 2016 is raised as hiccups in 2016 Model X production/ deliveries will impact cash needed for GF and Gen3 (guessing here).

 

[jhm]

The only thing I am worried/ exploring now is the company's capital structure & balance sheet as it relates to funding needed to get to Gen3. It looks like 2015 demand for Model S is in the 40-50k range and I would expect that Model X demand for 2016 to be similar. Can Tesla produce (and deliver!) 75-85k cars next year? Will this create enough cash flow to finance GF and Gen3? How much cash will the company have at the end of 2015? 2016? The cash burn in 2014 was much larger than I expected, but now they have a WW infrastructure for stores, service centers and superchargers that will be able to be shared by Model S, Model X and Gen3 vehicles.

The cash component is important b/c that is in the hands of the equity / debt markets. The company has some additional levers (securitization / sale of leases) to raise additional $$. However based on SG&A burn, GF commitments and R&D how well can the company handle a setback? How quickly could they respond to an unexpected drop in demand or significant production delays? Seems that they are not very dependent on Model X for 2015 numbers but if deliveries don't start in earnest until late late 2015, then the risk profile in 2016 is raised as hiccups in 2016 Model X production/ deliveries will impact cash needed for GF and Gen3 (guessing here).

Keep in mind that Tesla is financing customer leases because it has surplus cash on hand and wants to earn a few points more than money market rates. Essentially, Tesla can't burn money fast enough, where cash burn means finding more productive uses for cash that holding it in a bank account. So I am not worried. When the time comes banks can easily step in to provide lease financing for customers. I believe Musk is committed to longterm self-funded growth and will manage cash flow very carefully. As long as Tesla is providing direct lease financing, it's got sufficient cash for higher return investments.

 

[chickensevil]

Ford is reported to be announcing a 200-mile mass market car this year, aiming at the Model 3/Bolt market.
Ford will reportedly announce an electric car with 200-mile-plus range this year | The Verge

I realize you just moved some posts Robert, sorry if this falls in similar territory, but it's net new information and much more likely to be headline relevant IMO.

I am actually surprised all these companies have been scared enough into at least announcing cars that will hit within the mid-point price range *before* Tesla can make theirs hit the streets. But overall I am happy. Mission almost accomplished

 

[SteveG3]

The only thing I am worried/ exploring now is the company's capital structure & balance sheet as it relates to funding needed to get to Gen3. It looks like 2015 demand for Model S is in the 40-50k range and I would expect that Model X demand for 2016 to be similar. Can Tesla produce (and deliver!) 75-85k cars next year? Will this create enough cash flow to finance GF and Gen3? How much cash will the company have at the end of 2015? 2016? The cash burn in 2014 was much larger than I expected, but now they have a WW infrastructure for stores, service centers and superchargers that will be able to be shared by Model S, Model X and Gen3 vehicles.

The cash component is important b/c that is in the hands of the equity / debt markets. The company has some additional levers (securitization / sale of leases) to raise additional $$. However based on SG&A burn, GF commitments and R&D how well can the company handle a setback? How quickly could they respond to an unexpected drop in demand or significant production delays? Seems that they are not very dependent on Model X for 2015 numbers but if deliveries don't start in earnest until late late 2015, then the risk profile in 2016 is raised as hiccups in 2016 Model X production/ deliveries will impact cash needed for GF and Gen3 (guessing here).

30seconds, I think it is worth remembering that Tesla's original global annual sales expectation for the S and X combined was 35K. That was the cash generator Tesla was looking to use in 2013 to pay for the development of the Model 3. If IRRC, at the time Tesla seemed to indicate another cap raise to do this would be more about accelerating the Model 3 launch than a necessity. While Tesla has added on the GF project, Tesla's planned share of GF funding (~$2 billion), was raised in the secondary last winter.

I'm not trying to say it's unimportant to try to map out how Tesla can fund it's growth (I'm quite curious about how much 2020-2025 growth is realistic based on available funds), I'm just saying from a big picture view, I think there is quite a large buffer to funding their ~2020 goal of maxing out Fremont's 500K vehicle capacity.

 

[hirox]

Steve jurvetson bought $776,113 worth of tesla stock. Was this to keep the value of the stock up or are insiders buying stock common?

http://www.insidertradingwire.com/s...f-tsla-tesla-motors-inc-form4-insidertrading/

 

[AlMc]

While I disagree with some of jhm's analysis on financing, he's dedicated quite a bit of time posting to this subforum. I think it's only fair to reserve criticism on poor moderating until we see evidence of such.

And I fully support the view that bearish opinions should be encouraged here - I don't think jhm's post intended to mean otherwise, rather that the media's (not TMC) discussion has been steered by scraps pulled in the 10K the last few days.

Totally agree. We do need to debunk ( and I wish TM would do more of this itself...Mr. Reyes???) the bear FUD but I also believe that we need to be objective about TM/TSLA. We can also get too caught up in pushing the Bull argument.

TM is doing great things and had a tremendous run in 2013 and early/mid 2014. Since then it has had some growing pains (ramping production) that EM indicated would be the greatest challenge. We are all hoping that they have learned and can adjust to the point that we do see hundreds of thousands model3 coming off the assembly line(s), powered by multiple GFactories.....but that is a big challenge.

 

[maoing]

http://insideevs.com/monthly-plug-in-sales-scorecard/

US sales 2250 in Jan. & Feb. Using 50% estimation for US market share, so TM delivery # could be around 4500 in Jan. & Feb. In order to meet or beat 9500 guidance, at least 5000 to go in March.

 

[pGo]

So let's talk about production challenges. Tesla did a few things today to work on this issue.

- Removed dual charger option (still available as a retrofit through service centers)
- Removed black roof option (unless body color is black)
- Increased some paint price
- Interior trim price increased a bit
- Next-gen seats now available for all battery options

what else? Looks like the factory will run a bit faster with a bit less options. Tesla needs to do more of this as they find most common configurations.

 

[maoing]

+ 1. We need more balanced voice in this forum sometimes to alert investors that TSLA sp has run ahead of fundamental and it's time to be very cautious or blah blah. Bullish only voice will hurt in many occasions especially for such volatile stock, for example the most recent ER bet.

Totally agree. We do need to debunk ( and I wish TM would do more of this itself...Mr. Reyes???) the bear FUD but I also believe that we need to be objective about TM/TSLA. We can also get too caught up in pushing the Bull argument.

TM is doing great things and had a tremendous run in 2013 and early/mid 2014. Since then it has had some growing pains (ramping production) that EM indicated would be the greatest challenge. We are all hoping that they have learned and can adjust to the point that we do see hundreds of thousands model3 coming off the assembly line(s), powered by multiple GFactories.....but that is a big challenge.

 

[AlMc]

http://insideevs.com/monthly-plug-in-sales-scorecard/

US sales 2250 in Jan. & Feb. Using 50% estimation for US market share, so TM delivery # could be around 4500 in Jan. & Feb. In order to meet or beat 9500 guidance, at least 5000 to go in March.

Based on the EV 2014 chart TM did 3,500 'sales' in the US in Dec 2014 and that was with some transportation problems leaving over 1,000 vehicles not delivered. So, I think they can make the 9,500 number. I am actually quite confident they will make 9,500 in Q1 and as you know I have become fairly cautious based on the last two quarterly 'near or real misses'.

 

[maoing]

I'm also more optimistic about Q1 ER and as you know I was very bearish on Q4 ER. But more clear picture should be available 1 month from now. In between I would be cautious for TSLA price action, not only because of failed post ER rally, but also general market is due on a small pullback at least any time from now.

Based on the EV 2014 chart TM did 3,500 'sales' in the US in Dec 2014 and that was with some transportation problems leaving over 1,000 vehicles not delivered. So, I think they can make the 9,500 number. I am actually quite confident they will make 9,500 in Q1 and as you know I have become fairly cautious based on the last two quarterly 'near or real misses'.

 

[RobStark]

+ 1. We need more balanced voice in this forum sometimes to alert investors that TSLA sp has run ahead of fundamental

Tesla has blown way past the fundamentals a long time ago.

Stock price is based on sentiment about the future.

Not whether guidance is met or net by a few thousand units last quarter.

It is about whether Tesla will sell 100k units in 2020 or 500k units.

Whether Tesla will sell 200k units in 2025 or 2M units.

Each quarter, based on performance, perception may change about company performance 5-10 years from now.

 

[AlMc]

Tesla has blown way past the fundamentals a long time ago.

Stock price is based on sentiment about the future.

Not whether guidance is met or net by a few thousand units last quarter.

It is about whether Tesla will sell 100k units in 2020 or 500k units.

Whether Tesla will sell 200k units in 2025 or 2M units.

Each quarter, based on performance, perception may change about company performance 5-10 years from now.

Rob, I agree that in the 'long term' you are correct and the core stock holdings will do well in the long term. I consider myself, like many other people here, to be a 'hybrid' investor. I try to increase my wealth with not only my long term holding but by doing some short term trading. So, I am concerned about quarterly misses by a few hundred or thousand vehicles as TSLA at this point in the company's life is affected by those shorter term issues.

 

[jhm]

So let's talk about production challenges. Tesla did a few things today to work on this issue.

- Removed dual charger option (still available as a retrofit through service centers)
- Removed black roof option (unless body color is black)
- Increased some paint price
- Interior trim price increased a bit
- Next-gen seats now available for all battery options

what else? Looks like the factory will run a bit faster with a bit less options. Tesla needs to do more of this as they find most common configurations.

That sounds like the right direction. I am a little puzzled about removing the dual charger option. Does that mean dual chargers are now standard on all vehicles or not available for any vehicle?

 

[FANGO]

http://insideevs.com/monthly-plug-in-sales-scorecard/

US sales 2250 in Jan. & Feb. Using 50% estimation for US market share, so TM delivery # could be around 4500 in Jan. & Feb. In order to meet or beat 9500 guidance, at least 5000 to go in March.

These numbers are always estimates. Tesla doesn't release monthly sales.

- - - Updated - - -

That sounds like the right direction. I am a little puzzled about removing the dual charger option. Does that mean dual chargers are now standard on all vehicles or not available for any vehicle?

Dual chargers are an option with a low take rate and very little necessity for most customers. Many of the people who get them just do it because they want to add every option, or because they think it will make supercharging faster or were told that by an inaccurate employee or something (it won't). It's also tough to add a power source high enough amperage to take advantage of the dual chargers - you need a 100A panel at home, and people just don't usually have that much amperage to spare.

If it's still available as a retrofit, then those people who really need it can get it. But there's very few who do.

That said I'm not sure how much money or efficiency this will save, or how harmful it was having that option available, but it was certainly one of the more superfluous options.

 

[EldestOyster]

I think the idea is that after a few pages discussing the same item over and over, just think twice about "me too" posts and restating the same points. Because we have other things to discuss. And that would apply to many topics. I do appreciate the posts calling our attention to trouble factors; after all, it's my money at stake here...

...As long as I have the mic here, I wanted to share my amusement over that remark about Tesla being a "risky business". Really? I'm taking a chance when I invest in this company? I'm going to have to reread the fine print! The guy who wrote that in his article should pull his money out and limit his investments to only risk-free instruments. (I'm told that sarcasm doesn't convey well in print...that was a little bit, right there. BTW the gap between the joke teller and the guy who didn't get it is called "sarchasm").

 

[roblab]

That said I'm not sure how much money or efficiency this will save, or how harmful it was having that option available, but it was certainly one of the more superfluous options.

Now, probably more superfluous.

Two and a half years ago, there were no superchargers, no mention of superchargers, no idea of superchargers. Driving anywhere over 300 miles meant you had to know what chargers and outlets were available. My wife and I drove to Canada in October 2012, a month after getting our car. We did a lot of driving, still do, and the routes we take don't have superchargers (Like southern Oregon, Bend to Boise). They still don't have Coeur d' Alene supercharger up. Like I say, depends on where you are going.

As to value, it only took once stuck in the desert at a truck stop for 6 hours while we charged on one inverter. If you drive your car anywhere outside of your home town, sooner or later you're going to wish you had a second inverter. If you drive your car like it's a second choice, and, if you have any questions, you just take the gasser, you won't need a second inverter. The Model S is our only car, and we charge from the 40 (OK, 30, now) amp outlet. No fast charging needed at home overnight, but on the road, as I said, it can be a good thing.

I'd rather have it than have to change my route or my plans due to slow charging.

 

[maoing]

Sunday, you just simply overlooked all my logical arguments and repeat your own arguments again and again. It's no fun, isn't it?

Please check your own post history:

http://www.teslamotorsclub.com/show...-Motors-(TSLA)?p=921512&viewfull=1#post921512

Very nice read. Timing the market is impossible to me, especially with the short term capital gains and wash rule affecting our decisions.

http://www.teslamotorsclub.com/show...Movements-2015?p=921494&viewfull=1#post921494

The good thing about my long position is that I don't need to worry about my own question. I just sit and watch the movements, it's fun seeing the day to day rise fall rise...

http://www.teslamotorsclub.com/show...Movements-2015?p=922439&viewfull=1#post922439

I sold off some positions and rebought after a $4 drop, the money was insignificant but allowed me to load up on a slightly cheaper price.

This is public forum and every people has right to express investment opinion. I'm not trying to convice anyone here and I'm not going to be convinced by any post here. I made my own judgement and calls. Until this point of 2015, it's a rough time for all TSLA long investors, personally I lost big for my option account. But with proper cautious strategy and protection, my core share account is green YTD and I didn't lose money through ER. That's it!

Some amusing posts before Q4 ER if we looked back:

http://www.teslamotorsclub.com/show...Trading-Strategies/page11?p=903834#post903834

Ok, I'm glad you are not holding puts or shorting, it has proved to be a grave mistake in the past more often than not.

http://www.teslamotorsclub.com/show...-Technical-Analysis/page7?p=896495#post896495

Maoing, I hope you are not going to do this, but are you contemplating selling your shares before ER?

http://www.teslamotorsclub.com/show...uation-and-outlook/page90?p=904030#post904030

The resignation isn't good news, but China's been largely priced in and you are still ignoring a large unknown, which is guidance.

-1. Bear arguments are always welcome here, Elon makes them all the time and we discuss them accordingly. But when longs refute those arguments only to hear the same "demand blues" brought up again, and again and again..then we simply ask bears to provide a different angle. Stating "I am not easily convinced" after several others have chimed in isn't very useful, if you're not convinced, place your bet and move on...I've heard the same bearish tune for years now without any real evidence, and reciting the same song only gets others irritated.


The most recent ER bet was a bet on gut and some vague news, if it were a sure shot all bears would of walked away with millions... I personally placed 90% of my bet on TSLA and not on a previous ER, and as a long my stocks are currently Down from what it was, but so what? My intuition allowed me to play both sides by going extra long on leaps while warning others to hedge. It's never smart to bet 100% unless you can afford to lose the dough. Short term play is basically gambling and if one frequented this forum enough one should understand that by now. If someone here shorted, or bought puts recently--congrats on the gamble! But don't tell us "I told you so" bc if you were 100% sure then I know you could've bet more money. While TSLA did retreat, it's nowhere near the amount that some bears were predicting how much lower TSLA would've could've should've fallen. It's very easy to see which bears are genuine and which are here to spread you know what...

 

[drinkerofkoolaid]

Interesting video about TAG Heuer's relationship with Tesla.

Odyssey of Pioneers - TAG Heuer Tesla Roadster - YouTube

[url]http://www.roadandtrack.com/new-cars/news/a510/tag-heuer-tesla-team-up-to-make-a-special-green-electric-sports-car-9376/
[/URL]

 

[Fanatic]

I think it's funny how some investors seem to think that tsla is building up inventory of cars. It's quite hard when all the choices you can make makes that it's a few million combinations, some fewer after the latest slimming of the online store but still. some analyst don't have a clue what tesla is about.