Short-Term TSLA Price Movements - 2016

[Yggdrasill]

My money is on at least 23k cars delivered. Elon's focus on driving this quarters numbers as high as possible may even mean 25k delivered.

I said to my wife in ~May that October would probably be the best month for selling off some TSLA to finance some home improvements, and I think that my prediction will turn out to be correct. Earlier in the year I thought we'd see 300 USD per share this year, but now I have my doubts. I'd be pretty happy with revisiting 260+.

 

[GoTslaGo]

I think it has to do with "fast refueling". Elon made a play to get 9 for the model S by calling the battery swap fast refueling. However CARB did not except it since no station existed at the time and it currently is not widely available. One could also argue that hydrogen refueling is also not widely available.

Thanks for the information. So I was curious how CARB defined "fast refueling" and googled it:

https://www.arb.ca.gov/regact/2013/zev2013/zevfsoroal.pdf

Page 11:

8. Comment: Issues with the fast fueling proposal by staff because it excludes plugin electric vehicles. And it does so in two ways by eliminating the opportunity for battery swap in the future and also by restricting the time to recharge to ten minutes rather than 15 (for Type III vehicles) and by saying that the battery or the fuel cell battery has to be 95 percent charged in 15 minutes. For fast charging for electric vehicles, that would destroy the battery. We would like to see the Board and staff consider making sure that the amendment is not exclusive. So we need to make sure that both fuel cell vehicles and battery electric vehicles get the fast fueling credits. (CalETC) Agency

Response: Comments noted. The fast refueling definition was established to most closely resemble the fast refueling and essentially unlimited daily range experienced with conventional internal combustion engine vehicles. As such, fast charging capable BEVs that take 20 to 30 minutes to regain 80- percent of the vehicle’s range do not closely mimic the fueling and range experience of conventional vehicles. See response to Comment 6.

(response by CARB)

So CARB expects the battery to be charged to 95% in 15 minutes to qualify as "fast refueling" and more than doubles the ZEV credit on this one point alone. So even if Tesla creates a 200kWh battery which can give you 600 mile range on a single charge (I'm doubling a very conservative estimate of the 100kWh battery) and can give you 480 miles or so in 20-30 minutes (80%) it still would only be worth 4 not 9. That 480 miles of course is more than the full capacity of most ICE.

Methinks CARB needs to rethink their definition. As CalETC stated, it explicitly biases the process against BEVs since it is a percentage, and not an absolute. As battery tech improves, they should start looking at the mileage and equivalency and revisit this definition.

 

[GoTslaGo]

Because the system is, unfortunately, rigged.

Elon recently expressed his frustration with watering down CARB requirements.

Wow are you right! Just researched it and posted my thoughts...

 

[schonelucht]

Thanks for the continued discussion on ZEV credits. I added $50M in my earnings model for this quarter for them so it particularly interests me. This recent report claims that all major manufacturers have banked enough credits for the foreseeable future. It works out 4 different scenarios for California (by far the largest ZEV credit market) and the earliest (additional) Tesla credits would be needed by OEMs is 2020.

Based on the most recent information available, the supply of banked ZEV credits across the industry is sufficient to meet the manufacturers' entire California ZEV obligation from 2016 through most of 2020

That still leaves an opening for Tesla to sell some since I guess some of the credits have been banked by Tesla. But it seems reasonable to discount the credits quite a bit from previous years.

 

[Seesaw]

With the SolarCity go shop clause finishing on the 12th will we have confirmation of the merger then?

 

[NOLA_Mike]

With the SolarCity go shop clause finishing on the 12th will we have confirmation of the merger then?

I don't think we'll have "confirmation" until after the results of shareholder voting and the date of that hasn't yet been announced. Maybe we'll get a "record date" and vote date announcement after the "go shop" period...

 

[ZsoZso]

I was on vacation for 10 days and did not follow this thread and now I am behind like 100 pages, while the TSLA price went from 220+ area to sub-200. Could anybody give me a short run-down of what caused this 10+% drop ?
Thanks!

 

[PaulusdB]

Initially, yes. Every Tesla employee I have met is passionate about their mission and conscientious (and also smarter than the average bear - there's a reason everyone wants to work for Tesla, and Tesla can be/is selective - not perfect, but much, much better than average). So yes, if they're driving the car and notice something isn't quite right, I would expect them to report it and support problem determination and resolution better than the average customer.
Not sure what your point is about VIN and anonymity.

I agree that Tesla employees could provide better feedback than average customers, of course. My doubts stem from the experience here on TMC. You don't get 'likes' (or previously 'rep') for just criticism or the occasional bear argument, here. And we're the fans. So I can imagine the reputation that employees DON'T want to get amongst their peers, the superfans. (Anonymity could be a solution, but there's no anonymous reporting on your VIN.)

 

[Runarbt]

I was on vacation for 10 days and did not follow this thread and now I am behind like 100 pages, while the TSLA price went from 220+ area to sub-200. Could anybody give me a short run-down of what caused this 10+% drop ?
Thanks!

More shares available to short, extra push down.

 

[winfield100]

Totally separately, has anyone been following the Google sheets data? Q3 Model S deliveries look good. But mix looks to have shifted substantially to 60/60D. Doesn't this suggest that average pricing will be way down?

link please

 

[vgrinshpun]

There is additional supply of shares available to short at Fidelity this morning - 54,691, with interest going down from 13% in the beginning of last week and 11.5% at the end of the week to 10.5% today.

 

[MitchJi]

More shares available to short, extra push down.

Really?!

It had more to do with the FUD Storm that erupted over the facts that in the SEC disclosure for the SCTY merger it was revealed that Teslais planning to raise money, largely triggered by the need to repay 400-500 million .

 

[Seesaw]

There is additional supply of shares available to short at Fidelity this morning - 54,691, with interest going down from 13% in the beginning of last week and 11.5% at the end of the week to 10.5% today.

Forgive my ignorance. I wonder if that's due to shorts covering which has freed up the shares, or whether more is being made available

 

[vgrinshpun]

Forgive my ignorance. I wonder if that's due to shorts covering which has freed up the shares, or whether more is being made available

You might be onto something here. According to this note, the reduction in the interest for both SCTY and TSLA is due to short covering.

 

[Cosmacelf]

You can blame shorts for the price drop but that begs the question, why are they shorting? It's like saying the price dropped because too many people sold their shares. Well duh.

I think the soft share price is due to the market's realization/fear about how much equity Tesla will have to raise. To grab a rough order of magnitude cash requirement, you can't raise $1B relatively quickly from retail investors. You need institutional investors to step up. Institutions were blindsided by the Solarcity acquisition, and by the need for a raise less than 8 months after the last one. The latest Tesla filing last week didn't help. And Elon and the Rive brothers needing to borrow money to buy the $120M Solarcity bonds also is scary, that's proof that institutional investors are closing their doors on them.

 

[Krugerrand]

I agree that Tesla employees could provide better feedback than average customers, of course. My doubts stem from the experience here on TMC. You don't get 'likes' (or previously 'rep') for just criticism or the occasional bear argument, here. And we're the fans. So I can imagine the reputation that employees DON'T want to get amongst their peers, the superfans. (Anonymity could be a solution, but there's no anonymous reporting on your VIN.)

Not the same. Employees make a living by the company doing well. The company does well; eg. selling lots of cars, customers being happy and telling potential customers how great the car is, etc. It would be counter productive for employees to not report issues only for them to be found by customers.

 

[PaulusdB]

Not the same. Employees make a living by the company doing well. The company does well; eg. selling lots of cars, customers being happy and telling potential customers how great the car is, etc. It would be counter productive for employees to not report issues only for them to be found by customers.

Rationally, yes. But emotionally in a confined group, no.

 

[MonroeSS]

Anyone dumb enough to short a stock like TSLA or SCTY deserves to be taken to the cleaners. You don't look at fundamentals and short a stock, that doesn't trade on fundamentals to begin with. A single tweet and they lose 20% or more. Elon Musk could write a blog post that he will build a hyperloop to deliver 45,000,000 cars a day from Fremont to every house in the world and the stock will be up 600% in 30 minutes. No less believable than saying 500,000 cumulative deliveries by 2018. He knows his audience.

I predict within 2 years every outstanding share will be owned by core supporters as the weaker longs are slowly weeded out. Then there will be 0 shares sold and the price will be $6000+ a share irrespective of what is going on with the company.

 

[Cosmacelf]

I'm not trying to be mister doom and gloom here, but just want to point out something that some people seem to be missing. The equity markets are not an infinite piggy bank for entrepreneurs. Tesla has been able to raise whatever cash it needed in the past really quickly, so the temptation is to think that this will continue. But if conditions change, like a stock market sell off (October is looming and the whole market looks frothy right now), or Tesla deciding to saddle itself with another money losing business (Solarcity), then it is possible it won't be able to raise money at an acceptable valuation. We know the equity markets were closed to Solarcity already.

You know what happens when companies run out of cash? Yeah, it's the leading cause of bankruptcy (that's a joke, it's effectively the only cause of bankruptcy). Now Tesla has options if it can't raise enough equity, including ditching the Solarcity deal, stopping store build outs, ramping the gigafactory and Model 3 slower. Each of these move hurts Tesla in the medium term. It isn't likely to actually run out of money, but it is very possible it's breakneck speed of execution could be hampered.

And we won't know how all this plays out for another few months since it is clear that Tesla won't try to raise money until after the merger shareholder vote and after Q3 results. Meanwhile, there is fear, uncertainty, and doubt.

 

[doggusfluffy]

Rationally, yes. But emotionally in a confined group, no.

I don't think the culture at Tesla would support your theory. Continual improvement is the mantra and finding a "bug" or flaw would surely be rewarded rather than chastised...in my opinion. I think I remember Elon mentioned they structure a bonus system based on a similar theory rewarding employee initiative.