Short-Term TSLA Price Movements - 2016

[FANGO]

This does give valuable insight: Truly, Elon is just trying to get as many cars on the road as fast as possible.

I mean, that's literally been the message from day one, so I don't see why anyone would think it's ever going to be anything different. That's why I invested, that's why most of us should have invested, so what's the problem?

I have no idea why everyone turned so suddenly (well, I do, it's because the stock went down for no good reason), but that ER was great and the call was even better. The stock market is extremely wrong on this one. It was wrong when it was only up 4% in AH yesterday, too. Maybe it will keep being wrong, I don't know. But it's definitely wrong.

edit: yes, I agree that Elon needs to learn to stop overpromising. But this was all still great news, even discounted by 50% (which is way worse of a discount than I expect).

 

[techmaven]

The long term is brighter... but the market trusts Tesla less at the moment. It needs a reminder of Tesla awesomeness. The question is when would that arrive?

 

[austinEV]

I wouldn't say I was furious at this ER, but I was certainly puzzled as to why Elon and Tesla would over-promise to the point where under-delivery is likely.

When I read the "500k units in 2018 rather than 2020" I was in disbelief. Getting Model 3 to production ready status by mid-2017 is doable from an engineering perspective. Getting the production lines, and particularly the Gigafactory running at that level by 2018 just doesn't make sense to me. The Gigafactory will be 1/7th complete soon, and start producing cells and packs at the end of this year. Is the next 7/8ths really going to be done by 2018?

Well, the shareholder meeting is soon. I hope someone asks serious questions about all of this, although from a historical perspective we are likely to hear a lot of inane questions that do nothing but waste time.

Right, even if you thought that you can do 500k by 2018 instead of 2020, why say so? There is no angle whatsoever. Elon, learn to have INTERNAL meetings with your employees. You don't have to issue goals via Earnings Reports.

[Bear hat] What if Elon was actually trying to goose up the price to announce a cap raise soon? Like he thought that by announcing ambitious pull-ins that would cause a run on the shares? [/bear hat]

If so, poorly concieved.

 

[mikevbf]

People have puzzled for a while where the Model X fits in Tesla's grand plan. Initially, I believe it was to keep demand up while waiting for the giga factory and mass market vehicle to come to fruition. But given how successfully the Model S has driven demand all by itself, I would prepose a new place for the Model X in the grand plan, a kind of hindsight role.

The Model X difficulties in manufacturing gives me greater confidence in the execution of the Model 3 not less. The Model X has served as a way for Tesla to take lessons learned from design without enough regard to manufacturing to a hyper focus on how to tie design and manufacturing much much more tightly. Because of this both execution and margins are going to be much higher than a new company that was less focussed on this angle.

Given the above and that during the conference call Elon said they were prepared to make in house any parts that were not delivered on a timely basis, I am optimistic about Tesla achieving the accelerated schedule. Worse case, Tesla misses it by a half a year and are still a year and a half ahead of previous plans.

 

[anticitizen13.7]

I have no idea why everyone turned so suddenly (well, I do, it's because the stock went down for no good reason), but that ER was great and the call was even better. The stock market is extremely wrong on this one. It was wrong when it was only up 4% in AH yesterday, too. Maybe it will keep being wrong, I don't know. But it's definitely wrong.

edit: yes, I agree that Elon needs to learn to stop overpromising. But this was all still great news, even discounted by 50% (which is way worse of a discount than I expect).

It is my experience that the vast majority of people need stability and security in their investments. The market's negative reaction is precisely because so much of the "good news" from yesterday's call is all highly speculative.

Looking at the news and twitter, most of what I see is screaming headlines and fear.

Elon is an unusual person in that he is willing to risk everything. He does not appear to have the same fear reflex as your average investor. That is something he needs to take into account in these presentations.

 

[hockeythug]

Thankfully Tesla so far has stayed out of this whole Takata airbag recall debacle.

 

[austinEV]

It is my experience that the vast majority of people need stability and security in their investments. The market's negative reaction is precisely because so much of the "good news" from yesterday's call is all highly speculative.

Looking at the news and twitter, most of what I see is screaming headlines and fear.

Elon is an unusual person in that he is willing to risk everything. He does not appear to have the same fear reflex as your average investor. That is something he needs to take into account in these presentations.

This is exactly it. If you look at all of the nice things in the ER they are in the far future and speculative, at a cost that will come soon. Why be in the stock right now? Better to be in Q2 of 2017 when all the awesome M3 stuff starts to happen. Between now and then it looks like more-of-the-same, quarterly negative EPS, shipments barely making guidance, etc. meanwhile you are exposed to a thousand black swans that could come up (A new model X issue, GF issue, model 3 delays, cash crunches, market downturn). What's the upside? They have officially played their best possible hand for many quarters. (Exception: Actually producing good financials this year. I think we need to sharpen our pencils, Vgrinspun style, and see if that is in the works).

The whole message here plays to their weakness: That TM is all sizzle, not enough steak. After SEEMING to get that last quarter, they just turned the Sizzle up to 11, while quietly reducing the near term steak (FCF) in the bargain. smh

 

[30seconds]

Not the suppliers. The actual teams of people working on Tesla's project at supplier locations. As stated on EC - Musk is meeting them personally. What I have said makes perfect sense. If you can't understand this please don't haze those that can - and would benefit from understandjng this point. It's significant.

Julian - I have personally entered into performance based compensation for workers at contract manufacturing organizations. So thank you, but I do have experience with both cash and option based arrangements. For multiple reasons, including a variety of legal ones, Telsa will need the cooperation of the supplier as the employees there are not Tesla employees.

If you have direct relevant experience I think we would all benefit from understanding. I think this board would also benefit from you replying to ideas, and not to the participants.

 

[lango]

From what you say about industry fashion and trends then I think one can practically guarantee Musk will do this.

You can not guarantee anything because the whole thing is unlikely. Heavy mature risk-averse industries don't use stock based compensations for other people than high-up management. It is a startup thing, not industrial. Maybe it is much more common in US even among mature industry which I doubt, but Tesla are not going to use only US suppliers.

EU Countries have been discussing changes to tax laws to make it more common as some of the recognize the problem. From what I heard about Japan and other parts in Asia like China it is not common there either outside of startups. So the employee contracts and the culture at suppliers prevents this from happening, which was my point from the start.

So, no Tesla can't pay a large part of the project managers at suppliers with stock options, and then eskw8 also said it was not possible legally without changes and yet you still say you can guarantee it.

I think a bonus to the suppliers are on the table and let's say it was Tesla stock based (which it won't be for most if not all of them). But even in that case just a subset of the suppliers would agree to those terms and it is not wise to exclude the other suppliers based on that restriction. And even if all this happened to think that Elon deliberately pushed the share price down because of this is very far out.

 

[generalenthu]

It is my experience that the vast majority of people need stability and security in their investments. The market's negative reaction is precisely because so much of the "good news" from yesterday's call is all highly speculative.

Looking at the news and twitter, most of what I see is screaming headlines and fear.

Elon is an unusual person in that he is willing to risk everything. He does not appear to have the same fear reflex as your average investor. That is something he needs to take into account in these presentations.

The anecdote that comes to mind is that as a child Elon stopped being afraid of darkness because he realized darkness is just absence of electromagnetic waves in the visual spectrum. Normal people do not think like that.

But you cannot realize greatness without thinking outside the box and as investors, we need to understand the vision and not be afraid like the naysayers.

 

[Bgarret]

It seems like much of the analysis and hand-wringing over yesterday's announcement has been predicated on Elon Musk being suddenly struck dumb or being not quite up to the moment's challenge - thereby fumbling an opportunity to squeeze and raise (or in the Bear's estimation, exposing the soft underbelly of Tesla to more rapid cash burn and eventual removal to the trash bin of history along with Solyndra and Tucker).

Elon just intentionally moved the goal of accelerating sustainable electric transportation ahead by 2 years - (see Bloomberg's Tom Randall: Tesla's Wild New Forecast Changes the Trajectory of an Entire Industry)
Something must be making Elon extremely confident. He could have easily rested on the next 3 quarters of FCF and gently announced a revised goal of 500k cars by 2019 sometime in the fall. The move to accelerate wasn't done out of fear - that would have signaled a slow down, not a moon shot.

I don't think the move is to give 50-75k more people access to the $7500 federal tax incentive. I don't think it was from fear of losing any number of deposits. I think there is something in the cards he is not showing that is giving him confidence to move up the schedule and increase the risk to Tesla....hopefully it is not hubris.

I don't think he would risk Tesla lightly - Elon thought Tesla would spur auto manufacturers to more rapidly adopt electric cars. He provided the carrot of patents and proof of concept. No one has stepped up. I hope we are about to see the stick. I would stay tuned.

As for John Peterson writing - a bullish signal - right Joel?

 

[BobSk]

I finished my share purchase. From now on, I do two things:
1. Keep adding when I get more cash. The lower the better.
2. Watch Tesla grow. I do think Tesla is on solid footing and will become the largest company in the world.

 

[drinkerofkoolaid]

to make it clear the Model 3 will be ready for mass production by the end of 2017. Any analyst who is questioning the feasibility of Elon's 500,000 vehicle target, is basically saying they think Elon is lying. Tesla isn't producing 500,000 vehicles today because there isn't presently global demand anywhere near 500,000 (Model S+X). Once the Model 3 is being produced, global demand will certainly exceed 500,000 vehicles and Tesla has made it clear Tesla can certainly produce 500,000 vehicles, and that the only constraints will be supplier delays. The constraints and learning curve Tesla experienced with the Model X don't exist with the Model 3. Elon mentioned this multiple times.

 

[Muaddid]

Something must be making Elon extremely confident.

I hope, as right now the scenario looks less like DTU and more like DTFTU - Down Then Flat (for a long time!) Then Up...

 

[The Blue Owl]

Any analyst who is questioning the feasibility of Elon's 500,000 vehicle target, is basically saying they think Elon is lying.

Or they just don't believe it can be done, and they think Elon is just being Elon, which is to say he is too optimistic.

 

[aznt1217]

good thing we don't need to wait THAT long for the next tid bit of news given that we have a Shareholder meeting in a couple weeks.

 

[hockeythug]

to make it clear the Model 3 will be ready for mass production by the end of 2017. Any analyst who is questioning the feasibility of Elon's 500,000 vehicle target, is basically saying they think Elon is lying. Tesla isn't producing 500,000 vehicles today because there isn't presently global demand anywhere near 500,000 (Model S+X). Once the Model 3 is being produced, global demand will certainly exceed 500,000 vehicles and Tesla has made it clear Tesla can certainly produce 500,000 vehicles, and that the only constraints will be supplier delays. The constraints and learning curve Tesla experienced with the Model X don't exist with the Model 3. Elon mentioned this multiple times.

For a company that has still yet to execute anything on time I can see why the analysts have their doubts.

 

[tanner]

any hope of reclaiming mid 220s or think we'll contest low 200s?

 

[larmor]

I hope, as right now the scenario looks less like DTU and more like DTFTU - Down Then Flat (for a long time!) Then Up...

Presumably TM has a line that can produce 50k to 100k cars a year, so for M3 they are now just going to repeat the process with 3-5 lines, instead of 1-2 lines to start out and hence the goal of 2018 is not unachievable. Just a matter of a few more robots and more spools of metal...

 

[30seconds]

anyways tesla may not need to raise until after the Q2 financials. so they have another quarter to show improved financials