Short-Term TSLA Price Movements - 2016

[RobStark]

and there are no automotive contract manufacturers.

I would not be surprised if they buy a legacy manufacturer given their market cap. They could do this easily. Would give them a huge head start.

There are contract automotive manufactures in Europe. But they are small and largely booked. And Foxconn has made noises about manufacturing BEVs under contract.

If APPLE buys a legacy OEM they buy their obligations. Union contracts with retiree medical expenses plus Franchise Dealership obligations.

 

[austinEV]

This forum (not just this thread) has quite often 'guessed right' simply by throwing out ideas and discussing at length to see what sticks/rings true. Those right guesses have made a lot of people a lot of money. Determining the likelihood of Tesla presenting such a secondary balance sheet for the next ER - based on what's been happening for Model 3 and Elon's tweets and the resent Model 3 e-mail that people got - and how it would be perceived by the market could very well move riches from one person's pocket to another's. That's how.

+1. To pile on, we need to err on the side of free exchange of ideas. As Johan says "have a high ceiling". As such we should be fairly tolerant when someone posts some strange things. I have written in the past that I hope/speculate that the model X 90 packs are really software limited 100's. That is probably wrong, but interesting to me since it solves a tricky problem (rolling out 100's soon after selling X buyers 90 packs) and they have a history of doing this (selling 60's as 40's and shipping A/P HW secretly). Those posts would seem to deserve your fantasy hammer. But, if we aren't speculating about what-ifs what is the point of this thread?

And Johan's theory gets a 2 out of 10 on my "fantasy" scorecard. We permit WAY crazier stuff than that to pass without comment.

 

[Fallenone]

There's a flurry of stock assignment/option exercise to buy for upper management this week. I think they just ticked "Model 3 alpha prototype".

 

[Fallenone]

There's a flurry of stock assignment/option exercise to buy for upper management this week. I think they just ticked "Model 3 alpha prototype".

OK I think I got it wrong. For these upper management, there are only four milestones, Model X production vehicle, 100k vehicles produced in a trailing 12 months, Model 3 production vehicle, and annualized gross margin of 30% in any three years. Incentives for Model X production was vested last year. The three other milestones are all impossible to have been achieved now (except the extremely unlikelihood of Model 3 production vehicle). So I guess it's just upper management exercising the options they were vested for the Model X production vehicle. They did is at 249.92. At least it's not a bad sign.

 

[Stretch2727]

I believe Foxconn (spelling?) has announced it will make a car. Is this it?

There are contract automotive manufactures in Europe. But they are small and largely booked. And Foxconn has made noises about manufacturing BEVs under contract.

If APPLE buys a legacy OEM they buy their obligations. Union contracts with retiree medical expenses plus Franchise Dealership obligations.

Foxconn or legacy Auto it is a difficult road. Foxconn does not have experience with cars. Not even large automotive customers for electronics.

Good point about the legacy manufacturers being tied to the franchise dealerships. Apple will want to launch with large volume. It's not going to be easy.

Anyway, my point is I would not be focused on the design. I would start to worry if Apple somehow comes up with a doable manufacturing strategy. I don't see how they are going to do it. But with massive amounts of capital they may come up with something, but it likely will not earn the returns they enjoy today.

 

[jhm]

AudubonB. Having not received any such rebuke from you, I am going to hazard an expression of appreciation for acknowledging that your stated objectives and my own are identical in this matter.

It is very hard to add high value to a stock movement thread without calling something definitively, repeatedly and controversially over the disbelief of some and the wishes of others hoping to gain from an alternative outcome than serious analysis dictates.

It is not controversial to state that I know this subject to an unusual standard - and that on occasion I have been able to ascertain which way this stock is going to move with sufficient clarity to have risked my private name and public credibility on definitive actionable public stock price predictions set in the reasons why (note - not on my authority, but solely on the arguments presented for others to consider for themselves). Predictions that have to date proven accurate without exception. I did that for an extended period in 2013 and I have done it here this year.

It should also be uncontroversial that making such disclosures could result in personal repercussions in the case of error - a risk I have taken as a volunteer for nothing in return but to fulfill a desire to do a little good where I can to advance a cause that I care about - and if possible to learn something and to have a bit of intellectual fun in the process.

To date nobody reading a public message board containing one or more of these has ever lost money by paying attention, only by failing to do so. Many have gained considerably. Some to the point of thanking me personally in writing for pointing to the gains they used to fund their Model S. As a result I have a hard time accepting that I deserve to be lumped in the same category as those that feel the correct response to a reasoned argument is to attack and vilify the messenger - a Greek classical rhetorical fallacy in its own right along with argument from authority and the offense of swearing.

I understand that the easiest option to resolve a confrontation between a person acting in self defense and his assailant is to put all parties to the fracas on ice but it is rarely if ever the right thing to do. I hope and expect that this forum for its own sake will be able to maintain a standard of distinction between those addressing the merits of an argument from those engaged in personal attacks. Specifically to appreciate that the object of a serious ad-hominem attack (and I am talking serious false allegations here not playground stuff that I have been subjected to here on TMC) does not automatically assume the moral equivalence of his or her anonymous assailant under any circumstances and cannot be expected to be rendered defenseless by a presumptive gagging order if attacked either!

Today an anonymous assailant on TMC in a contrived effort to discredit, falsely accused me, Julian Cox, of having dishonestly passed myself off as a Hedge Fund manager for crying out loud! I can assure you that my complaint on that score has standing!

This is particularly important to me perhaps more so than others who can simply rename an account if they have behaved in a way they would prefer not to be associated with in public and in their daily life and work. I for one would hope in future not be required to do more than to hit the report button in defense should such an attack reoccur and I would like to be able to trust that this is indeed the case.

To my knowledge I have said nothing on these boards that I should be ashamed to stand up for besides a dumb and frankly immaterial typo of writing the word diameter instead of radius in the formula pi r squared h for the volume of a regular cylinder.

Your acknowledgement on that score would be most welcome. I have less than no desire to expend any further time *ever* discussing or defending "me" as opposed to discussing and where strictly appropriate defending TSLA either. Note that my previous on-topic comments today before getting attacked concerned essentially one six-week duration profit taking expectation on mild certainty, forecast of an April GF unveil spike, 2H SP forecast with reasons based in fundamentals, an opinion on a technical trading stance and some insight (not to my knowledge ever seen before anywhere on the Internet) into the very significant effect of residual value appreciation of the Tesla Model 3 following an expected update to full autonomy that is highly likely to be experienced by its initial owners and describes the presumptive primary content of the Model 3 Part 2 unveiling.

If on balance this is an acceptable voluntary value-add to the content often first if not exclusively available here it, would be nice to feel in return that I was both welcomed and safe to proceed in future and not to have to fear disrespect and / or comparison to the gross misconduct of certain anonymous third parties by the very moderators I would look to for such a welcome with such safeguards firmly attached. It is extremely arduous to make sense of a public stock and no effort at all to make stuff up and attack people and if the moderators here fall into the same trap of weighting baby and bathwater equally as happened with Seeking Alpha you're going to end up with mostly bilge and some meek kids that won't ever dare to speak up decisively for the Long case even when they should for fear of getting into a heated debate with an idiot and getting thrown out either individually or as a pair, whereby the supply of the anonymous and obstructive is boundless and the demonstrably informative and actionable - for free - is in vanishingly short supply to the retail investor.

Sincerely,

Julian Cox.

Julian, for the love of Tesla, can we please move on.

 

[Julian Cox]

I can see a possible approach for Apple to leverage its capital to succeed with an electric car that has little or nothing to do with automotive as usual or indeed clashing directly with Tesla - and it would be the ultimate horror story for ICE auto effectively squeezing the ICE auto industry from the bottom up while Tesla exerts pressure from the top down leaving the internal combustion engine no available niche in which it can compete on price.

This would involve a massive-scale direct to driverless full autonomy approach for city transportation extensively field-trialed with Chinese manufacturing in China and leveraged for speed of development by building a giant research fleet - or they could just skip that step with a Tesla Autopilot collaboration. This would alleviate any need for Apple to get sophisticated about delivering high acceleration or high speeds, terrific handling, great looks or anything owner-driver-centric at all.

Just some cool app-driven box on wheels that gets riders from any point A to any point B at legal speeds in and around a city at extremely low cost per mile with endless on-board electronic media and entertainment choices on stream leveraging Apple's dominance in that field to deliver a fun and interesting digital lifestyle experience for those that don't just want to chat or sleep - one that Google cannot compete with! Nothing fancy but an ideal way to get to work or go out to the mall or a night club that nothing can touch in that role on customer appeal or price.

This would simply be a way of delivering very cheap mileage without having to own a car or share a car with a random stranger that drives for a living - and for Apple it would be the kind of project that Foxconn and similar could readily deliver without Apple changing its business strategy as a software and engineering design house or having to get deeply into pushing the limits of expertise in heavy manufacturing or to get involved excessively with the limits of the physics of vehicles and batteries.

Such a project would be an ideal funding partner for the rapid deployment of additional Tesla Gigafactories and mass automated Supercharging facilities. There is no reason except perhaps misplaced pride for Apple not to adopt Tesla's standards on both counts and a perfect synergy for mutual benefit if they do where one need not impose any restrictions on the other's business and where it would make the most sense for Apple to present Tesla vehicles in its stores the world over too.

Assuming SpaceX does launch its 4000 satellite skynet OTA network in low Earth orbit using second and subsequent use rocket cores then a giant Apple fleet would naturally become a global data networking customer by default. Even in coincidence or in advance of that there is no reason why an Apple customer cannot hand-off to a Tesla for Interstate type trips or vice-versa for around town.

 

[Julian Cox]

Julian, for the love of Tesla, can we please move on.

I had - feel free to catch up

 

[RobStark]

Foxconn does not have experience with cars.

Neither did Tesla and Elon Musk not that long ago.

They have experience with electronics,electric motors and bending metal for appliances.

GM started Frigidaire because they felt core competencies were similar.

Then the Feds made them sell over anti-trust considerations.

 

[Todd Burch]

I have very little worry in the short term--or even in the medium term (next several years) about an Apple car seriously competing with Tesla. As others have pointed out, no battery manufacturing plant, no automotive manufacturing plant, no charging infrastructure, etc.

Without a battery plant, they either buy from existing battery suppliers (which means they won't be able to compete with Tesla's price using packs from the Gigafactory), or their production volume would have to be so small that they wouldn't seriously threaten market share.

Without an automotive plant, they have some real amount of time they'd need to ramp up before they could produce even a subset of Tesla's current production rate. Granted, they have tons of cash, but cash doesn't build or automate a car factory overnight.

Without fast charging infrastructure, their car is nothing more than a city car, which seriously limits its appeal to the car buying public. (Chevy Bolt, anyone?). And even with tons of cash on hand, you can't just build the equivalent of Tesla's Supercharger network overnight.

I just don't think this Apple car, if it turns out to be real, will be competing in Tesla's market space. As a result I don't see it truly threatening Telsa's stock price for years to come, if ever.

 

[Stretch2727]

I have very little worry in the short term--or even in the medium term (next several years) about an Apple car seriously competing with Tesla. As others have pointed out, no battery manufacturing plant, no automotive manufacturing plant, no charging infrastructure, etc.

Without a battery plant, they either buy from existing battery suppliers (which means they won't be able to compete with Tesla's price using packs from the Gigafactory), or their production volume would have to be so small that they wouldn't seriously threaten market share.

Without an automotive plant, they have some real amount of time they'd need to ramp up before they could produce even a subset of Tesla's current production rate. Granted, they have tons of cash, but cash doesn't build or automate a car factory overnight.

Without fast charging infrastructure, their car is nothing more than a city car, which seriously limits its appeal to the car buying public. (Chevy Bolt, anyone?). And even with tons of cash on hand, you can't just build the equivalent of Tesla's Supercharger network overnight.

I just don't think this Apple car, if it turns out to be real, will be competing in Tesla's market space. As a result I don't see it truly threatening Telsa's stock price for years to come, if ever.

Agreed. The Apple car "news" over the short to medium term will create some good buying opportunities. Long term let's see if they pull together a viable strategy or if they will complete directly with Tesla.

 

[MitchJi]

There are contract automotive manufactures in Europe. But they are small and largely booked. And Foxconn has made noises about manufacturing BEVs under contract.

If APPLE buys a legacy OEM they buy their obligations. Union contracts with retiree medical expenses plus Franchise Dealership obligations.

They could buy one or more factories and hire some of the workers. They could even pay someone to build a state of the art factory (no shortage of cash). Like the BMW Mini factory that makes a complete Mini every 70 seconds.

Foxconn or legacy Auto it is a difficult road. Foxconn does not have experience with cars. Not even large automotive customers for electronics.

Good point about the legacy manufacturers being tied to the franchise dealerships. Apple will want to launch with large volume. It's not going to be easy.

Anyway, my point is I would not be focused on the design. I would start to worry if Apple somehow comes up with a doable manufacturing strategy. I don't see how they are going to do it. But with massive amounts of capital they may come up with something, but it likely will not earn the returns they enjoy today.

I wouldn't worry about an Apple Car at all. If they manage to make something competitive with the M3 (somewhat unlikely) Tesla and Apple will both do extremely well. The M3 reveal clearly demonstrates that there's a huge market for compelling EV's. The companies that should be worried about competition from an Apple Car are the legacy manufacturers.

 

[30seconds]

Other than telsa Apple prob has biggest line on production battery capacity in the world. This is a huge advantage.

Apple could buy an automaker like Saab, Mazda or a Chinese manufacturer but we would still be looking at 3-5 years of factory rebuilding and employee training to approach where tesla is today.

Of course even if Apple joins the party Tesla is in the lead position for years to come.

 

[ggr]

Mitch, with all due respect some of us have been reading and posting in this thread (vintages of it) and sub forum since at least 2012. Summed up there are 10s of thousands of post. Of course some are going to be more valuable and memorable than others, but the sum of it all is the investor's section of the forum.

You may think "my" idea of Tesla presenting a "what if" balance sheet (sort of like how a political party in opposition might present a shadow budget) far fetched. Fair enough. I've come to the conclusion myself too that it would likely do more harm than good to Tesla, since those who understand TSLA don't need such an exercise and those who don't understand TSLA will use it to fuel FUD. That said please remember their artificial "free cash flow from core operations" metric they made up last ER. So maybe not that far fetched after all? Anyway, no need to discuss this particular thing any further. My point is just that we should keep a high ceiling in this section of the forum because a bit of open mindedness, creative thought and a free flowing exchange of ideas let's us explore new concepts that may or may not become important to us investors. This, and a quickness to report and interpret news, are the the only legs up we have on the bigger players.

Over the years there have been a number of posters who come on these threads and either keep posting about hourly $1 price increases or decreases with a "the sky is falling" attitude, those who come here selfishly trying to pick the brain of others "is it going upnorvdown, what do you think?" and then of course those who come to spew gall, disinformation and hatred. Luckily those users go away after a short while.

I sort of like the idea of a "what if" section of the quarterly report. It's what I would probably do. But...

We watch a lot of cooking shows. (I like cooking, and we own half a restaurant, but I can't say I'm actually any good.) One of the repeating themes of these shows is that if you present a dish that is "Duck two ways", you get dinged for any flaw in either of the two ways. "Your Duck Confit is great, but the duck breast is dry!" I think that presenting two options to be attacked is bad. And note, really, we're already in that situation: GAAP and non-GAAP. I really don't think they should present the "non-non-GAAP" option.

 

[erha]

Peabody Energy, the world's largest coal company, filed for bankruptcy. This is now the fifth US coal company to declare bankruptcy.

Why Peabody Energy, the world's largest coal company, just went bankrupt

 

[Causalien]

Foxconn or legacy Auto it is a difficult road. Foxconn does not have experience with cars. Not even large automotive customers for electronics.

Good point about the legacy manufacturers being tied to the franchise dealerships. Apple will want to launch with large volume. It's not going to be easy.

Anyway, my point is I would not be focused on the design. I would start to worry if Apple somehow comes up with a doable manufacturing strategy. I don't see how they are going to do it. But with massive amounts of capital they may come up with something, but it likely will not earn the returns they enjoy today.

Foxconn a.k.a. The chinese arm of Hong Hai has the implicit backing of two whole countries behind it and between those two countries you have suppliers that manufacture most of the auto parts of the world as well as the electronic parts for any gadgets you use.

 

[EinSV]

I don't understand the fascination with a potential Apple buyout/investment in Tesla. Apple introduced the iPhone in 2007 -- almost a decade ago -- and the iPad a few years later. It hasn't done anything noteworthy since, other than generate massive revenues and profits from those breakthroughs.

Tesla is now a far more innovative company, and its ability to generate new ideas and technology seems to be accelerating. Apple has little to offer Tesla except a checkbook, Tesla can find that elsewhere if necessary without losing what has made it so exceptional.

 

[mrdoubleb]

anyone with experience care to confirm if I read the bunch of SEC filings coming out last night correctly? Seems like 4-5 Tesla executives, incl. JB, bought large(ish) number of shares @250.

Good sign, right?

 

[mrdoubleb]

I don't understand the fascination with a potential Apple buyout/investment in Tesla. Apple introduced the iPhone in 2007 -- almost a decade ago -- and the iPad a few years later. It hasn't done anything noteworthy since, other than generate massive revenues and profits from those breakthroughs.

Tesla is now a far more innovative company, and its ability to generate new ideas and technology seems to be accelerating. Apple has little to offer Tesla except a checkbook, Tesla can find that elsewhere if necessary without losing what has made it so exceptional.

word to the wise: Beware with negative Apple comments on a Tesla forum. We are the minority here.

 

[mrdoubleb]

Other than telsa Apple prob has biggest line on production battery capacity in the world. This is a huge advantage.

Apple could buy an automaker like Saab, Mazda or a Chinese manufacturer but we would still be looking at 3-5 years of factory rebuilding and employee training to approach where tesla is today.

Of course even if Apple joins the party Tesla is in the lead position for years to come.

the quantity, geometry and chemical composition of cells that goes into those rose gold wonders could be worlds apart from what is needed to produce a million 200+ mile EVs.