Short-Term TSLA Price Movements - 2016

[electracity]

Seriously though, i think this is something even the honest bears totally miss. Google/Page was willing to bailout/aquire a much much worse off tesla years ago in something like a 10+ billion dollar deal (buy company plus infuse billions for gigafactory and M3 and keep Musk in charge!). I think it is fair to assume Musk still has that Ace card up his sleeve, and Tesla is far more successful today then back then when the model S ramp was having trouble and good reviews had yet to pour in.

What is the SP when this bailout occurs? $5?

I think you are confusing "bears" with the seekingalpha types who think Tesla is some sort of scam.

I would like to see the capital budget for how Tesla plans to get to a million cars. "Alien Dreadnaught" is Musk only available answer when the reality is that Tesla should have four new factories under construction today.

 

[3Victoria]

More factories are likely in the cards ... but EM would be criticized if he suggested such a thing now. Best to get the 3s in pruduction first. Duplicating the line should then be easy.

Re M. Spiegel -- I use him as a bell weather ... whatever he says, I go the opposite way ... has been working so far ;-)

 

[SBenson]

FYI, Full text of Musk email to employees is published on the Bloomberg Terminal today afternoon.

I don't see it on the website though, so can't link it.

This is a key paragraph (which seem to be a big discussion point in this thread):

"I thought it was important to write you a note directly to let you know how critical this quarter is. The third quarter will be our last chance to show investors that Tesla can be at least slightly positive cash flow and profitable before the Model 3 reaches full production. Once we get to Q4, Model 3 capital expenditures force us into a negative position until Model 3 reaches full production. That won’t be until late next year."

 

[Drivin]

Neither of those named are politicians as such, right? Talking heads on tv more like. I have heard about them (not much good) but I never watch American tv. Broken clocks in the wrong time zone?

Of course they have much clout due to their platform, but they are not elected. We might be thankful for their support, if that's what it is. Perhaps they could press those silent Republicans a bit harder?

1. The original comment was about Republicans being negative, not politicians.
2. Beck, O'Reilly and others can have a lot more influence on politics than some local politician or even State politician. They have a big audience.

 

[viKtor slamet]

I just went all in, which means the stock will likely be down further (always the case whenever I buy stock). Just a warning to all of you
But I believe in the long run, it will be higher

 

[3Victoria]

But but ... you're supposed to warn us before you make a move! ;-)

 

[Turing]

I am. I believe the situation has changed since then given where Tesla and Google are currently positioned on autonomous driving. I also believe my opinion is in the minority on this board.

This doesn't really make sense to me. If google thinks Tesla is a real competitor on autonomous driving then taking a chunk of Tesla is a way to hedge its bet on the technology. Why have one horse in the race when you can have two? And Tesla's approach is quite different, which also makes it a reasonable hedge. They also have other things that make them common allies, both are important CA companies to mention one, the strong personal relationship between Musk and Page, ect. Apple is another likely CA suitor with deep pockets.

 

[Lessmog]

More factories are likely in the cards ... but EM would be criticized if he suggested such a thing now. Best to get the 3s in pruduction first. Duplicating the line should then be easy.

Re M. Spiegel -- I use him as a bell weather ... whatever he says, I go the opposite way ... has been working so far ;-)

Spiegel means mirror. So, everything looks like its opposite. Stands to reason, really.

 

[drinkerofkoolaid]

Very interesting SolarCity options activity. I think this might be part of the reason SolarCity is having trouble rallying.

I suspect far too many people believe there are four outcomes for SolarCity.

1) The merger happens at the aggreed upon ratio and SolarCity rallies to ~$25+

2) The ratio is reduced to reflect the volatility in the stock price. (I think this is very unlikely because Tesla would have to pay a very big penalty to SolarCity for changing the deal.

3) Elon and others parties take SolarCity private with the help of Bank of America, Fidelity, and/or possibly others, such as Google or Apple. SolarCity is then placed in a holding company alongside Tesla. This allows SolarCity to act as a part of "Tesla parent company" without becoming a part of Tesla Motors.

4) The merger doesn't happen, SolarCity goes bankrupt, and Tesla buys all parts that relate to why the Tesla-SolarCity merger makes a lot of sense.
(I think this is very unlikely. This would delay a lot of things Tesla and SolarCity wants to accomplish, would create a lot of very angry SolarCity customers and employees, and other parties would be able to bid on SolarCity. Also, it would hurt SolarCity and Tesla's brand and Elon's reputation. Also, it would become political fiasco going into a very significant election.)

The options market does not appear to be pricing in the merger happening, or appears to be pricing in it happening at a much lower ratio.

I think the offer explicitly states SolarCity options will be converted to Tesla options, with all fractional options being cashed out. In theory, SolarCity options should be about equal to Tesla options , accounting for the ratio, however there is a 10-30% difference depending on the options.

Question: If my SolarCity stock is down, am I able to realize the loss without triggering the wash sale rule if I've bought and or sold Tesla stock within 30 days of when the conversion takes place?

 

[vgrinshpun]

FYI, Full text of Musk email to employees is published on the Bloomberg Terminal today afternoon.

I don't see it on the website though, so can't link it.

This is a key paragraph (which seem to be a big discussion point in this thread):

"I thought it was important to write you a note directly to let you know how critical this quarter is. The third quarter will be our last chance to show investors that Tesla can be at least slightly positive cash flow and profitable before the Model 3 reaches full production. Once we get to Q4, Model 3 capital expenditures force us into a negative position until Model 3 reaches full production. That won’t be until late next year."

Thank you for posting this.

Q.E.D - #1 from my post up thread.

 

[Turing]

What is the SP when this bailout occurs? $5?

Funny. The acquisition deal should be worth at least twice what the bailout deal (11 billion) google was eagerly willing to pay for Tesla in 2013 with little to no revenue and its first production volume car struggling to ramp and the gigafactory being just a plot of land in the desert. That makes the realistic worst case scenario floor on tesla 22 billion imo.

 

[racer26]

re: Google/Tesla

I don't see why Brin/Page should view it any differently today than they did in 2013. Both companies were working on autonomous technology then (though Tesla's hadn't yet been brought to market, I'm sure Brin/Page knew about it due to their friendship with Elon).

That being said, I don't see a good reason for a Google sponsored buyout. What for? Tesla is doing just fine on its own.

 

[Turing]

re: Google/Tesla

I don't see why Brin/Page should view it any differently today than they did in 2013. Both companies were working on autonomous technology then (though Tesla's hadn't yet been brought to market, I'm sure Brin/Page knew about it due to their friendship with Elon).

That being said, I don't see a good reason for a Google sponsored buyout. What for? Tesla is doing just fine on its own.

Yeah, i mean i brought up the point as something the 'Tesla has potential to go bankrupt and collapse' people totally miss. We have already seen strong evidence re: the leaking of google's offered acquisition of Tesla in 2013 before Musk walked away from it. Hence, the acquisition / worse case scenario floor under Tesla is probably a lot stronger than many/most assume.

 

[Seesaw]

Very interesting SolarCity options activity. I think this might be part of the reason SolarCity is having trouble rallying.

I suspect far too many people believe there are four outcomes for SolarCity.

1) The merger happens at the aggreed upon ratio and SolarCity rallies to ~$25+

2) The ratio is reduced to reflect the volatility in the stock price. (I think this is very unlikely because Tesla would have to pay a very big penalty to SolarCity for changing the deal.

3) Elon and others parties take SolarCity private with the help of Bank of America, Fidelity, and/or possibly others, such as Google or Apple. SolarCity is then placed in a holding company alongside Tesla. This allows SolarCity to act as a part of "Tesla parent company" without becoming a part of Tesla Motors.

4) The merger doesn't happen, SolarCity goes bankrupt, and Tesla buys all parts that relate to why the Tesla-SolarCity merger makes a lot of sense.
(I think this is very unlikely. This would delay a lot of things Tesla and SolarCity wants to accomplish, would create a lot of very angry SolarCity customers and employees, and other parties would be able to bid on SolarCity. Also, it would hurt SolarCity and Tesla's brand and Elon's reputation. Also, it would become political fiasco going into a very significant election.)

The options market does not appear to be pricing in the merger happening, or appears to be pricing in it happening at a much lower ratio.

I think the offer explicitly states SolarCity options will be converted to Tesla options, with all fractional options being cashed out. In theory, SolarCity options should be about equal to Tesla options , accounting for the ratio, however there is a 10-30% difference depending on the options.

Question: If my SolarCity stock is down, am I able to realize the loss without triggering the wash sale rule if I've bought and or sold Tesla stock within 30 days of when the conversion takes place?

I wonder if that also means TSLA SP hasn't fully priced in the merger occurring as well?

 

[MitchJi]

Yeah, i mean i brought up the point as something the 'Tesla has potential to go bankrupt and collapse' people totally miss.

You mean in addition to the fact that it's almost impossible?

 

[racer26]

You mean in addition to the fact that it's almost impossible?

I dislike using superlatives. Anything could happen, but I generally agree. There is basically no way that I can see TSLA going bankrupt and to $0. As mentioned - there is a sizable chance of Google backstopping it before that ever happened. Additionally, the equity markets seem quite happy to keep feeding cash into TSLA to get it to Model 3. After all, Model 3 represents the end of the original business plan for how TSLA would get to profitability -- it wasn't supposed to make profit yet, so nobody should be surprised that it doesn't.

Now; if we get to the other side of a Model 3 launch, and demand collapses, THEN I could see TSLA in a real bind. Before that? Nah.

 

[Intl Professor]

Now; if we get to the other side of a Model 3 launch, and demand collapses, THEN I could see TSLA in a real bind. Before that? Nah.

And that imo is exceedingly unlikely. The next model will be an ugly fully autonomous vehicle for one or two passengers, level 5 according to SAE, for gadding about town. (4 passengers you say, ok—picky, picky.)

 

[Seesaw]

You mean in addition to the fact that it's almost impossible?

There are some intensive capital requirements at the moment with gigafactory and soon the Buffalo solar plant.

I'm worried cost of borrowing will increase with SolarCity. It will cost 2.6 billion to acquire, and bring with it 3.4 billion in debt - worst its a cash eater.

I do not see synergies in the short term with SC. A sales force will still be needed to visit homes for the purposes of quoting the systems. In fact I see the need for an enlarged sales base to justify the new solar panel plant and keep it at capacity.

I also see the car market being fickle and as the current Teslas start to age and potential new competitors arrive, it can cause more competitive pressures. Obviously Model 3 is a game changer though.

On the whole the product is where companies are built and lost and Tesla has no problems here!! Especially with its performance and autopilot

 

[winfield100]

Now; if we get to the other side of a Model 3 launch, and demand collapses, THEN I could see TSLA in a real bind. Before that? Nah.

i would suggest you personally go the a local National Drive Electric Week (starting this weekend) National Drive Electric Week 2016
and a local National Solar Home Tour The 2016 National Solar Tour (both USA, sorry and apologies to elsewheres) to guage wants and desires of EV's and demand for long range and short range EV's

 

[NOLA_Mike]

I continue to be surprised by the increasing "spread" between the price of $TSLA and $SCTY.

The market obviously does not believe this deal will go through under its current terms.

EDIT: Based on market and price action, I am nervous about it going through as well. I just wonder what I don't know versus what the big boy traders do know. It'll be interesting to see Elon maneuver through this.