Short-Term TSLA Price Movements - 2016

[dennis]

Sometimes the analysts write notes targeting the current share price and come up with the assumptions to support them. It is a conservative way to describe a flat SP. As many have noted there are very conservative assumptions in his model which gives him room to claim the upside if Tesla delivers under the "bull" case.

I believe that Jonas is a bull on the stock. But we know he had a buy on the stock right before the last secondary offering and put his clients into it at $215. Then Elon tanked the share price with the SCTY acquisition. Jonas won't put a Buy recommendation on the stock again until those clients are back in the black.

In order to support his neutral recommendation he has to back into his current price target. He won't put the contribution from Mobility at zero since that is his thing. But TE, Solar and M3 are the biggest current unknowns so he sets them at or near zero and voila $242.

But he is still a bull.

 

[Ovulation]

When you listen to Jonas in this video you almost convince yourself that someone like Apple will buy Tesla and integrate the self driving cars in their ecosystem, at the moment Tesla has probably not enough production capacity and proven manufacturing excellence to be a worthy takeover candidate. It's not a coincidence that Apple looked into the automobile industry, there is so much money to be made in the future, when you don't sell cars ratheryou will sell miles and time.

 

[MitchJi]

So, interesting. This is an expensive in the money ~136 strike tesla option, but since it is an option for 11 shares instead of the normal 100 it is mini-sized, only about $630 per contract instead of the ~$5700 the equivalent TSLA option would sell for. Bite size options with iffy liquidity.

The lower prices might help liquidity.

So essentially it all boils down to the M3 timeline being met and TE coming out of the blue. That`s the "stake" they are interested in - a couple of ERs with some small profit is a nice bonus but not a deal breaker.

Not exactly. It all boils down to income and the the risk associated with being forced to raise capital. Two problems with that are the only increase in income he includes is the M3 and he claims he thinks it's going to be ~15 months late,

 

[CorneliusXX]

Yes he does get few things. The question is WTF is he doing and why... Especially since he is clearly NOT clueless.

Given Tesla's track record of producing vehicles it is not unreasonable to assume they will be late with the M3 - The X was extremely late and took even longer to reach expected production levels. Additionally, it seems that EM's strategy to get the most from his employees is to set unrealistic deadlines. If I were a disinterested party then it makes sense to bake in some delays, but because I get a semi when thinking about Tesla I assume everything will be on time until it isn't.

 

[MitchJi]

Given Tesla's track record of producing vehicles it is not unreasonable to assume they will be late with the M3 - The X was extremely late and took even longer to reach expected production levels. Additionally, it seems that EM's strategy to get the most from his employees is to set unrealistic deadlines.

It's only reasonable if you reason by analogy, rather than first principles.

 

[traxila]

Given Tesla's track record of producing vehicles it is not unreasonable to assume they will be late with the M3 - The X was extremely late and took even longer to reach expected production levels. Additionally, it seems that EM's strategy to get the most from his employees is to set unrealistic deadlines. If I were a disinterested party then it makes sense to bake in some delays, but because I get a semi when thinking about Tesla I assume everything will be on time until it isn't.

The X got kicked to the curb for very good reasons. They had serious issues with the S that they had to address immediately or risk an imminent drop in demand. TSLA also needed to monetize the platform they had already sunk money into. It was a deliberate decision. It was a smart decision. When they went on to the X again they bit off more than they could chew. That was an error - already acknowledged. The combination of these two led to the severe X delay.

Now it is quite the opposite. The 3 must be launched as soon as possible to secure the company's future. The design decisions, we have been told, have been specifically made with ease of manufacture in mind. The analyst here is either lowballing with the aim of accumulation or, as others have suggested, is in the position where saying anything else could jeopardize his job.

It is put up or shut up time and I think EM is very aware of this, furthermore he has been PROACTIVELY aware of this for at least 12 months. I think we have a great shot at hitting targets. The oven was pre warmed and this should not be a half baked operation.

 

[sundaymorning]

Im used to ignoring AJ at this point, he likes drawing attention to himself in order to keep his name circulating. This is similar to what big auto sometimes do when they announce a product and try to drag Tesla's brand along with them (ahem.. Bolt..).

Let's see, when was the last time AJ was right on Tesla? From raising his PT to $350 a year ago (when MX wasn't even on the road), to dropping his PT when X is being delivered in large quantities (seems a bit contradictory).. let's put it this way, if he knew what the heck he was doing, he wouldn't be working for anyone but himself.

My feeling is that the $245 PT speaks volumes considering it doesn't include TE and M3 being on time. It's also in my opinion that AJ doesn't understand TE, he's a car guy. He works with simple numbers 1million, 2 billion, 3 billion, etc.. But when you add in KWh, he's a lost a puppy.

 

[larmor]

The X got kicked to the curb for very good reasons. They had serious issues with the S that they had to address immediately or risk an imminent drop in demand. TSLA also needed to monetize the platform they had already sunk money into. It was a deliberate decision. It was a smart decision. When they went on to the X again they bit off more than they could chew. That was an error - already acknowledged. The combination of these two led to the severe X delay.

Now it is quite the opposite. The 3 must be launched as soon as possible to secure the company's future. The design decisions, we have been told, have been specifically made with ease of manufacture in mind. The analyst here is either lowballing with the aim of accumulation or, as others have suggested, is in the position where saying anything else could jeopardize his job.

It is put up or shut up time and I think EM is very aware of this, furthermore he has been PROACTIVELY aware of this for at least 12 months. I think we have a great shot at hitting targets. The oven was pre warmed and this should not be a half baked operation.

I think TM learned alot from the MS/MX/roadster process. To the point, they even mentioned that the MS is a hard car to build, and they know that M3 has to go together easily. I don't think (in my opinion only) there is any risk in M3 production.

They are talking about improving factory efficiency, while competitors are working around zev and cafe...

 

[vgrinshpun]

Given Tesla's track record of producing vehicles it is not unreasonable to assume they will be late with the M3 - The X was extremely late and took even longer to reach expected production levels. Additionally, it seems that EM's strategy to get the most from his employees is to set unrealistic deadlines. If I were a disinterested party then it makes sense to bake in some delays, but because I get a semi when thinking about Tesla I assume everything will be on time until it isn't.

The difference between Tesla's approach to MX and M3 was beaten to death, with detailed discussions. In summary, Tesla did not need to produce MX, they approached it as a halo vehicle, designing it in a way they did because they had plenty of time (due to success of MS) and (they thought) they can do it. With all the downfalls of this approach, it IS a halo vehicle, invaluable for the brand recognision, notwithstanding all the problems, real and perceived. IMO they did ultimately achieved the goal of contributing to the brand recognition and allure - and at least 400K reservations for M3 based on very sketchy information is a testament for this achievement. It boils down to reservation for a TESLA at $35K.

They do not need convince people that Tesla has most innovative automotive business any more. It is an accepted fact. With M3 platform, they need to get to 10x of the volume of MS, and the main target throughout the design is its manufacturability and capital efficiency (increased volume brings capital in, instead of capital being required to scale up). Unlike MX, the schedule is paramount because of the GF which belongs not to a supplier but to Tesla, and will be producing huge volume of batteries that must go into cars. Being late with M3 in its consequences just can't be compared with being late with MX.

So analogy IMO is just not there. There are clear risks with Tesla execution of M3 program, but I do not think you can glean anything by this comparison.

The problem is, that although all of the above IMO is a reality, not everybody investing in Tesla is recognizing/acknowledging it. I personally think that anybody looking into this analogy is divorced from reality of what's happening at Tesla. The sad part is that if majority of investors are adopting this analogy, they are creating another reality - related to the SP. So we have two divorced universes: reality of M3 program at Tesla vs. reality of market perception of it and what it means for the SP.

 

[Turing]

Given Tesla's track record of producing vehicles it is not unreasonable to assume they will be late with the M3 - The X was extremely late and took even longer to reach expected production levels.

But wasn't the model S basically on time if you count the one year out prediction/guidance on the model S?

 

[dandurston]

Has anyone received money for their odd number of SCTY shares that didn't convert to TSLA? I should have $100 or so coming but having seen anything yet.

Schwab finally converted the SCTY shares over to TSLA and omg forgot I had some super high SCTY that's now equivalent to $400!! Bumped my TSLA average by 10 bucks.

Lol anyone with higher equivalents??

I was super fortunate/lucky with SCTY. I first bought in at $77 but managed to buy at the dips and sell at the peaks on the way down to $20, so I ended up about 1% green after 2.5 years. My timing was actually spectacular but I was only buying and selling ~25% of my holdings. So my TSLA average didn't change more than mouse nuts.

 

[CorneliusXX]

It's only reasonable if you reason by analogy, rather than first principles.

That depend's on your first principles. Almost by definition people outside the company are reasoning on at least one level of abstraction.

I think there is a good shot at the vehicle being on time given the comments coming from Tesla, but that's all it is - a second hand account of the topic.

 

[brian45011]

I still don't understand how this works. As far as I understood the federal EV credit needs to be applied at the year the car rolls and can't be carried forward. Yet Tesla has no federal corporate tax liabilities since it doesn't make money. So is Tesla just eating the $7500? That can't be true at all. Who benefits from the tax credit and how?

The credit can only be claimed by the tax filer who first titled the car and only in that (first-titled) year. Unless something sub rosa is occurring with how Tesla directly leased cars are first titled, no one will get the benefit of the credit. IRS regs require each EV manufacturer to report quarterly the number of qualifying cars made. Only Ford's, Daimler's, and BMW's reports are publicized. IRC 30D – Plug-In Electric Drive Motor Vehicle Credit Quarterly Sales I suspect Tesla and other EV makers have requested confidential treatment (which IMO is a foolish mis-application of the statute requiring confidentiality about tax returns) .

Good point. Was this true too when Tesla wasn't doing direct leases?

Tesla began direct leases to business owners in 2Q14, expanding several quarters later to private owners (where they make less financial sense--no tax write-off of lease payments) In early 2014 Tesla was flush with cash proceeds of about $2.2 billion from the 2019/2021 note offerings so the early leases were financed internally. As Tesla consumed that cash to fund operations and CapEx, they started using the "Warehouse" credit lines to earn a little interest arbitrage on the direct leases. Leases by "banking affiliates" are out right sales but subject to residual value guarantees by Tesla. Until 3Q16, leasing was not broken out separately on the Income Statement.

 

[MartinAustin]

It's not worrisome to me. It's a deliberate act.

Pull the video surveillance and arrest them.
I'd love to find out their motivation.

Hopefully it's industrial espionage. That goes to recent storylines.
More likely it's just some wacko

Worrisome because superchargers are sitting targets for a campaign. Regular attacks at superchargers would scare new buyers away. Are there any groups or individuals who probably feel like destroying superchargers would be a way to slow Tesla down? You bet!

I am actually surprised that superchargers have not already been targeted in larger numbers before, by burglars, carjackers, or plain fossil-fuel supporter-nuts.

They definitely do not come with video surveillance, but it would be a good idea and probably cheap.

I very much hope this is an isolated incident.

TSLA holding around $195... my hunch says this is as far as it's going to get today.

 

[jgillispie]

Has anyone received money for their odd number of SCTY shares that didn't convert to TSLA? I should have $100 or so coming but having seen anything yet.

I think it will take a bit of time to process. My ARM Holdings stocks that cashed out took ~2 weeks from the buyout.

 

[mickificki]

Has anyone received money for their odd number of SCTY shares that didn't convert to TSLA? I should have $100 or so coming but having seen anything yet.



I was super fortunate/lucky with SCTY. I first bought in at $77 but managed to buy at the dips and sell at the peaks on the way down to $20, so I ended up about 1% green after 2.5 years. My timing was actually spectacular but I was only buying and selling ~25% of my holdings. So my TSLA average didn't change more than mouse nuts.

chatted with schwab rep and they said it could take a day or so, or even after the long thanksgiving weekend.

 

[Alketi]

The problem is, that although all of the above IMO is a reality, not everybody investing in Tesla is recognizing/acknowledging it. I personally think that anybody looking into this analogy is divorced from reality of what's happening at Tesla. The sad part is that if majority of investors are adopting this analogy, they are creating another reality - related to the SP. So we have two divorced universes: reality of M3 program at Tesla vs. reality of market perception of it and what it means for the SP.

Couldn't have said it any better.

To echo what some others have noted, this report is insanely bullish from Jonas.

$242 price target ASSUMING --

- Model 3 will be up to a year and a half LATE
- ZERO value from SCTY
- ZERO value from Tesla Energy

And, as discussed, I doubt he has any insider knowledge regarding Tesla's production ramp. What's more likely is that his conservative/pessimistic view is based off past production issues with S/X.

If I were a conspiracy type I'd believe MS was accumulating now despite their Equal-Weight rating and preparing for a future upgrade on any hint of positive news about TE or Model 3 production.

 

[MP3Mike]

Has anyone received money for their odd number of SCTY shares that didn't convert to TSLA? I should have $100 or so coming but having seen anything yet.

I have from my shares at Pershing.

 

[NOLA_Mike]

Of course the headline over at Seeking Acknowledgment Approval Alfalfa is:

Solar City deal offers "zero value" for Tesla - Morgan Stanley

 

[Turing]

Worrisome because superchargers are sitting targets for a campaign. Regular attacks at superchargers would scare new buyers away. Are there any groups or individuals who probably feel like destroying superchargers would be a way to slow Tesla down? You bet!

I am actually surprised that superchargers have not already been targeted in larger numbers before, by burglars, carjackers, or plain fossil-fuel supporter-nuts.

They definitely do not come with video surveillance, but it would be a good idea and probably cheap.

I very much hope this is an isolated incident.

TSLA holding around $195... my hunch says this is as far as it's going to get today.

These sort of attacks could easily backfire and embolden more support for Tesla, as the opposition plays dirty, especially in blue states, where most of its sales come from in the US. Security cameras are pretty cheap nowadays, should start adding them.