Short-Term TSLA Price Movements - 2016

[FredTMC]

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.

I agree that Elon probably thought this new guidance would be net positive for the SP. I believed that too. And I still do. We had four major analysts raise their PTs today. Only reason I think the stock sold off so hard is that his new guidance was so tremendously large. If he would've been more conservative with the new guidance, maybe the reaction today would've been positive. It's usually positive when you raise your guidance but this increase was apparently unbelievably huge.

 

[FredTMC]

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...

Thx. My view is they'll first build ONE (and only ONE) high volume assembly line for now. I think the single assembly line for Model 3 could do around 200k cars per year. This is only double the rate of the existing MS/MX line.

I'm looking for confirmation from someone knowledgeable about high volume auto manufacturing lines.

 

[Sancho]

In order to understand Elon's strategy you need to go into HIS shoes, not our short term (next few quarters investor) shoes.

The man is single-handedly willing into existence the disruptive transformation of both the automotive and energy industries. He faces gigantic forces of inertia. He must embrace the urgency of now to succeed. He must constantly put maximum pressure on employees, suppliers, contractors, etc. To do this he conciously risks not meeting deadlines and targets. He knows he'll get some egg on his face in the process, but he must keep the pressure on by constantly moving goal posts forward.

The good news for longer term investors is he has lots of lawyers and accountants that keep this in check, and it is inconceivable that there is not very solid basis now for all of his targets.

Some people will be skeptical of Musk beyond any rational evidence in his favor. But the majority of the market will believe more and more in his strategy as MX starts rolling and the Gigafactory and preproduction M3 makes progress.

 

[larmor]

Thx. My view is they'll first build ONE (and only ONE) high volume assembly line for now. I think the single assembly line for Model 3 could do around 200k cars per year. This is only double the rate of the existing MS/MX line.

I'm looking for confirmation from someone knowledgeable about high volume auto manufacturing lines.

Would it be conceivable that they all ready have a line made? Just sayin' since, past comments regarding M3 were that development was in parallel with MX...

 

[Jayjs20]

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

Are you still in at 214? I bailed at 213.45.

 

[The Blue Owl]

The man is single-handedly willing into existence the disruptive transformation of both the automotive and energy industries. He faces gigantic forces of inertia.

Don't forget the space industry. For those who care, SpaceX will conduct a new launch 9 hours from now. You can watch it here.

There will be another attempt to recover the first stage, even more difficult than the last one.

 

[Lessmog]

Are you still in at 214? I bailed at 213.45.

I'd have bought some few off you if my money had cleared. Waiting til tomorrow. Be watching Amateur hour closely.

 

[esk8mw]

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

No matter.

The idiot John Pettersen has just chimed in with a hit piece on Seeking Alpha! It does not matter what it says. There is no such thing as better buying signal than Peterson whining that the sky is falling - the very wrongest of the wrong TSLA Bears is never right! Ever!

I think you may be missing the point here. Elon tends to go against the grain/trends to do the impossible and overcome giant obstacles that people always told him he couldn't do. Issuing options is not in the same category. It's easy to issue options; they haven't fallen out of favor because they are difficult--they are out of favor because they are viewed as not providing as good of incentives as full value awards and investors want management to be properly incentivized - performance-based RSUs are the in thing right now.

The arguments against options as a tool to incentivize employees goes, like, triple for providing incentives to suppliers. They are imprecise and leveraged and could end up not providing any incentive at all (if options fall too far out of the money). If suppliers feel like they aren't getting paid (or paid enough), the results aren't good. There's also adverse accounting considerations that I don't fully understand, but basically options can be expensive to grant and look bad on your books, especially on volatile stocks.

 

[Johan]

I think we're past a point in time where Elon and his team believe they can control the stock price by what they announce or don't announce. Like I've said before, it's obvious that Elon wouldn't have taken Tesla public so early on if it hadn't been absolutely necessary in order to save the company in it's infancy. Tesla has been very a very, very capital hungry baby since infancy. And it's growing fast, much faster than all the other babies. Now it's like a kid in kindergarden, only way bigger than the other kids and way hungrier. Also it's one of the gifted kids, you know the type of kid who's parents is planning on letting it do the curriculum for 1st to 5th grade in one year, with a goal of entering university at the age of 12.

At this point in time the only reason Elon publically announces the new highly ambitious goals is because he wants commitment from suppliers and he wants to know everyone he and Tesla is dealing with that they are serious about ramping this fast. This was basically what he talked about 80% of the time on the call. He honestly couldn't care less if the stock price went up or down today - I truly believe that. But by putting these ambitious goals out there he's making sure that there mustn't be any doubt in anyone's mind what they are aiming for. Suppliers need to get on board or leave the train. The same goes for the capital markets: either you want to be on this train or not - don't have any illusions that this is a safe investment, a soon-to-pay a dividend stock. No, if you invenst in Tesla by buying TSLA on the open market, by buying a future secondary offering, by buying debt or if you make the future sucess of your business dependent on the sucess of Tesla you should know what you're getting yourself in to.

For those who play poker, maybe this analogy works: This is a high stakes no-limit Texas Hold 'Em game. Elon is sitting at the button (first-mover advantage and way above everyone else when it comes to unbiased cognitive ability). We've just played through the flop (3 car(d)s: Roadster, S and X), no one at the table has folded yet, there were some checks, Elon tried some cautious raises and got the others to call those. Now the turn car(d) comes on to the table (Model 3). What happend yesterday is Elon raised hard - not all in but a BIG raise (this is the extremely ambitious guidance he just put out). Either he's bluffing or the Model 3 card just give him one-helluva-hand. Which is it? Who will play? Who will fold?

 

[Bgarret]

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.

Funny, had read your post yesterday on following Tesla technicals and with RSI under 30, MACD divergence high and TSLA stock price out of channels low, thought you might be bellying up to the buffet. Try the Short Ribs....tasty.

 

[Lessmog]

Agreed, Johan. I think one subtle stick-and-carrot move quite late in the CC was when EM was asked "What about Hurdygurd*?" or some such, and he replied: "I'm not familiar with that name" -- and soon afterwards, iirc, confirmed that suppliers that could not supply would not be suppliers in future.

*Probably the door maker now in litigation for breach of contract?

 

[tanner]

Are you still in at 214? I bailed at 213.45.

Yes... Sadly a bit higher too when I thought that the new guidance AND the 3 analysts' upgrades (+ 1 maintain) would be well received.

 

[FredTMC]

Would it be conceivable that they all ready have a line made? Just sayin' since, past comments regarding M3 were that development was in parallel with MX...

No way. They need to build the line and all the tooling to make the car parts that go to the assembly line.

They would've discussed the new line on the ER/CC if it was already built. Would've been a material misrepresentation to not discuss its existence and the associated CapEx.

 

[MikeC]

The stock drops 5% and it turns into SeekingAlpha around here.

Everyone second-guessing Elon and knowing exactly what he should do to maximize the share price, so confident in their assertions despite having orders of magnitude less information than Elon has about the company and its situation. It's his job to guide the company for long-term success, not to compromise the company in order to avoid doing anything that might feed the bear narrative.

The stock price fell today despite a huge value increase to the company, if you believe the guidance. This is a gift to longs, I don't think people should be disappointed or angry about it.

 

[DrGuest]

Elon pointed out the problem of one analyst "reasoning by analogy" but most people don't get it. SP still reflects the limited vision most people still have and not the expanded vision that the Tesla Team has set as their new goal. Most people are reactive in what they do rather than having a clear vision of where they want to go in life. Time will tell ... and it will take time for people to see Tesla's vision unfold into reality. They forget that Elon has and will put everything he has into being successful and is not one to settle with failure or one to give up. He has degrees in Physics and Economics and is way smarter than most. I'll stay in and eventually watch support climb higher as people wake up to what Elon said, Tesla will be the most desirable manufacturing company to work for and will continue to lead the other car companies into the EV transition that is happening more everyday. Just my opinion.

 

[MitchJi]

Thx. My view is they'll first build ONE (and only ONE) high volume assembly line for now. I think the single assembly line for Model 3 could do around 200k cars per year. This is only double the rate of the existing MS/MX line.

I'm looking for confirmation from someone knowledgeable about high volume auto manufacturing lines.

BMW Mini have a line that outputs a mini every 70 seconds. That's about 50 per hour, or 1,000 per 20 hour day.

 

[Johan]

The stock drops 5% and it turns into SeekingAlpha around here.

Everyone second-guessing Elon and knowing exactly what he should do to maximize the share price, so confident in their assertions despite having orders of magnitude less information than Elon has about the company and its situation. It's his job to guide the company for long-term success, not to compromise the company in order to avoid doing anything that might feed the bear narrative.

The stock price fell today despite a huge value increase to the company, if you believe the guidance. This is a gift to longs, I don't think people should be disappointed or angry about it.

Very much agree Mike. By raising the stakes the way they just did the contrast between those who believe v.s. disbelieve increases, so that the already polarized stand points of longs v.s. shorts become even more diverging. To the point of people will soon be asking things like "are we living in the same universe"? "did we listen to the same statements"? "are we looking at the same numbers"? etc. The ongoing "debate" with regard to Tesla is going to be very heated going forward. If you thought there were strong opinions before, just wait...

As always, the proof will indeed be in the pudding. How many cars are being spat out of the factory next year? At the end of 2018? Are they selling like hot cakes and are they as superior when it comes the the feature/technology/price triangle as many of us here believe they will be? Exciting times to be alive, that's for sure.

 

[Jayjs20]

I know it's not really my place to say, given how new I am, but this is the Short-Term price movement thread. I don't think there's anyone who doubts that tesla will grow huge in the coming years, but it's understandable how people would feel it'll be rough for Tesla in the coming weeks/months.

 

[Julian Cox]

I think you may be missing the point here. Elon tends to go against the grain/trends to do the impossible and overcome giant obstacles that people always told him he couldn't do. Issuing options is not in the same category. It's easy to issue options; they haven't fallen out of favor because they are difficult--they are out of favor because they are viewed as not providing as good of incentives as full value awards and investors want management to be properly incentivized - performance-based RSUs are the in thing right now.

The arguments against options as a tool to incentivize employees goes, like, triple for providing incentives to suppliers. They are imprecise and leveraged and could end up not providing any incentive at all (if options fall too far out of the money). If suppliers feel like they aren't getting paid (or paid enough), the results aren't good. There's also adverse accounting considerations that I don't fully understand, but basically options can be expensive to grant and look bad on your books, especially on volatile stocks.

You make a fair point as a generality. Yet this is the short term TSLA price movements thread. Much more specific context (TSLA).

TSLA options on Model 3 ramp are not a generality. Take this option at $180-200. Don't screw up your bit of the M3 ramp. You just won the difference between $180-$200 and $500-600 times leverage. If you are late with your windscreen wipers, poof, half of your huge bonus pay day disappears, maybe all of it, plus you will probably never work again because you screwed up payday across 300 supplier campuses.

This is not a generally applicable concept. It is absolutely applicable to TSLA options and the cheapest and most powerful thing Musk could apply a little bit of equity to.

Do you get it? If not I give up. Dear wall. My name is Julian. I have been telling these people about this company and where the shares are heading. Then the shares do exactly what I say they will, over and over and over and over again without fail - trade long throught this don't trade long through that buy here sell there until the only possible way to lose money on TSLA this year is to disagree with what I have said in the slightest! And yet some of them don't think I know what I am talking about, which despite logical argument for people to check for themselves and a 100% flawless track record is really quite strange, what do you think wall?........ Julian you are talking to a wall therefore you are an idiot QED. Ah.

 

[dha]

I'm showing max pain at $230 for tomorrow's expiration. Anybody have thoughts on whether that may provide some short-term buttressing of share price?