Short-Term TSLA Price Movements - 2016

[Gerasimental]

Just speculation of course. But given most of the downward pressure has been a result of investor distaste for this merger would it not be more likely the share price spikes on someone having information the merger falls through?

I'm on a flight about to take off and sadly I've only hedged for a post merger dip and I own a ton of SCTY leaps and shares along with my tsla stock. A merger fail will hit me pretty hard. Yet, this theory seems more plausible to me. Again assuming this spike happens on the basis of someone knowing something.

I doubt this would cause an equivalent rally in SCTY. Rather this would be seen in a massive opening of the arb gap

 

[racer26]

So about these meetings:

Looks like SCTY up first at 1221 Chess Drive, Foster City, CA @ 11am PST
Then TSLA at 901 Page Ave, Fremont, CA @ 1pm PST

It takes 35-50 minutes to drive between the two depending on traffic. I have to believe that people like Elon and JB will be at both.

Based on that: I'd say the SCTY one is expected to last less than 1 hour. There is a link on investors.solarcity.com to a (audio only?) webcast of it.

Then the TSLA side looks like its going to have a video webcast at tesla.com/shareholdermeeting

 

[EinSV]

Excellent post EinSV! I haven't seen much discussion of Powerwall reservations but 100,000 seems optimistic to me. I have no doubt the demand will be there over time, but I've seen very little reporting on this by the media at large. Personally I would guess there are only about 10,000 to 20,000 Powerwall reservations right now.

Thanks @StapleGun!

Re Powerwall reservations I mainly put that in there as a placeholder but there was a fairly credible rumor that there were more than 100K Powerwall 1 reservations just in the US. I'll see if I can dig that up later.

I think 100K PW reservations is likely conservative but could be wrong ....

 

[NOLA_Mike]

Just speculation of course. But given most of the downward pressure has been a result of investor distaste for this merger would it not be more likely the share price spikes on someone having information the merger falls through?

I'm on a flight about to take off and sadly I've only hedged for a post merger dip and I own a ton of SCTY leaps and shares along with my tsla stock. A merger fail will hit me pretty hard. Yet, this theory seems more plausible to me. Again assuming this spike happens on the basis of someone knowing something.

I'm of the opinion that the "negative" of the merger happening is already priced in - it is the drop from $220 to $180. IMO, anticipation of a negative vote (failure of the merger) would, at this point, cause a large drop due to more uncertainty going forward. In addition, as @Gerasimental pointed out, an expected failure would likely result in the arbitrage opening up considerably - in fact, TSLA and SCTY are trading in lock step today.

I think the market thinks the merger is a done deal.

 

[everman]

Anyone else receive letters in the mail from Tesla via some third party wherein they state how desperately they have been trying to reach you and would you please call immediately so you can vote by phone re the SCTY deal?

I received two letters with that same message. I had only voted my shares a day or two before that, so I figured it was just sent before my votes were received. It seemed a little desperate. I am hoping they can announce something like a record breaking amount of retail investor voting percentage or something.

 

[bdy0627]

Be patient. If you're out then it's probably a wise idea to wait for a clear positive trend to develop. One positive day does not a trend make. If TSLA starts to run up, there will be plenty of positive days ahead when you can get back in. Losing out on the first 5 or 10% may be the best mistake you can make. Look at NVDA this year. If you weren't in at the very beginning, you would have been still very golden to get in after the positive trend developed.

 

[Papafox]

So far today, SCTY has pretty much been mirroring TSLA's moves. At the moment, SCTY is up 2.5% and TSLA is up 2.3%. Part of the reason for the good day is that the NASDAQ has been steadily climbing and is up 0.7%. I see no evidence so far that someone knows the fate of the SCTY/TSLA merger. Instead, I see worried short-sellers and longs on the sidelines who jump in and buy when TSLA is heading up (thus you see these near vertical climbs).

 

[Tenable]

I doubt this would cause an equivalent rally in SCTY. Rather this would be seen in a massive opening of the arb gap

A very fair point. I quite hope you are correct and the merger goes smoothly as we've all expected.

 

[tander]

My advice to Jay is to make a vow to never sell another share of Tesla for a loss.

SpaceX seeks U.S. approval for internet-via-satellite network

Wonder if there will be a connection with the spacex satellite program and tesla autopilot?

So about these meetings:

Looks like SCTY up first at 1221 Chess Drive, Foster City, CA @ 11am PST
Then TSLA at 901 Page Ave, Fremont, CA @ 1pm PST

It takes 35-50 minutes to drive between the two depending on traffic. I have to believe that people like Elon and JB will be at both.

Based on that: I'd say the SCTY one is expected to last less than 1 hour. There is a link on investors.solarcity.com to a (audio only?) webcast of it.

Then the TSLA side looks like its going to have a video webcast at tesla.com/shareholdermeeting

I really hope they don't delist SCTY today, might be interesting to see what it does tomorrow or in after hours after yes votes.

I'm of the opinion that the "negative" of the merger happening is already priced in - it is the drop from $220 to $180. IMO, anticipation of a negative vote (failure of the merger) would, at this point, cause a large drop due to more uncertainty going forward. In addition, as @Gerasimental pointed out, an expected failure would likely result in the arbitrage opening up considerably - in fact, TSLA and SCTY are trading in lock step today.

I think the market thinks the merger is a done deal.

I think you may be on to something. They might have setup a win win where TSLA goes up with a yes vote, and if there somehow is a no vote it still goes up. We'll see soon enough.

 

[racer26]

Wonder if there will be a connection with the spacex satellite program and tesla autopilot?


I really hope they don't delist SCTY today, might be interesting to see what it does tomorrow or in after hours after yes votes.

I think you may be on to something. They might have setup a win win where TSLA goes up with a yes vote, and if there somehow is a no vote it still goes up. We'll see soon enough.

I can't see any chance of SCTY being delisted today. Tomorrow maybe, more likely Monday or Tuesday - assuming that the vote is indeed the last of the conditions holding up closing of the merger.

Also, I strongly believe it would be insane to not connect Tesla cars (TN, anyone?) with the SpaceX network. Why pay AT&T or Verizon or whoever provides LTE coverage for the cars when you can pay SpaceX and keep the money in Musk Industries? There's also coverage issues with terrestrial cellular comms the cars have now - satellite based fixes that, if done correctly.

In fact, I think this might be why we're seeing permit applications for SpaceX to start launching this stuff - at Model 3 scale (or if not 3, then Y, Semi, Roadster2, minibus etc), it starts to become unsustainable (or at least giving up value unnecessarily) to continue buying an LTE subscription for every car. SpaceX gets permits now, starts launching their network early next year, and can have it operational in time for Model 3 launch?

 

[NOLA_Mike]

I think you may be on to something. They might have setup a win win where TSLA goes up with a yes vote, and if there somehow is a no vote it still goes up. We'll see soon enough.

I think at this point a "NO" vote would make both go down. TSLA would go down because it would be viewed as a major failure on Elon's part to read and understand the market and his investors.

Further, I think if TSLA/SCTY wasn't nearly certain of the outcome they would've postponed today's conference/vote until such time as they could marshall enough votes or call off the deal without the embarrassment of a "NO" vote by shareholders.

All my opinion of course.

 

[theschnell]

It's fine, everything's fine. It's not the selling part that loses me money. It's when I buy back in.

Just stay calm and wait for December rate hike.

No, buying high and selling low is by definition losing money. If you happen to be able to buy lower that's great, but you don't make money until the price subsequently goes up and you sell for more than you bought. You locked in a loss. No way around it. Hope the future is more rosy for you.

Edit: if it makes you feel any better, all my options expiring tomorrow are worthless...

 

[Value Ev]

Further, I think if TSLA/SCTY wasn't nearly certain of the outcome they would've postponed today's conference/vote until such time as they could marshall enough votes or call off the deal without the embarrassment of a "NO" vote by shareholders.
.

Do they have to release the vote totals at the meeting?
Of course, if they already got the votes from the major investors and they know that it is a yes, they can say so at them meeting.
If it is a no, I assume they could say that they are going to wait until they can tally all the votes including mail ins, etc.

 

[theschnell]

I just went to vote my shares. Oops, deadline was yesterday... Oh well, I represent the tiniest of rounding errors. Doubt my vote would make any difference at all.

 

[Irishjugg]

Define 'smart'. If you've been designing manufacturing lines for many years and the efficiency is still so low, were you really that smart in that field in the first place? Seriously, how can one guy spend a few nights at the end of a production line and have such an enormous epiphany about manufacturing (not his field) when all those that preceded him couldn't come up with anything significantly different for all those many years?

Smart: having or showing a quick-witted intelligence
Intelligence: the ability to acquire AND apply knowledge and skills

It has been said that one of the reasons successful entrepreneurs are so successful is that they think differently. They don't take the way things are too be the way they will always be and they are more than happy to be wrong and still try. Someone trying to improve a piece that only thinks about connecting the existing pieces in the best way without creating me pieces will do worse than someone without restrictions. It's just a state of mind thing.

 

[esk8mw]

I just went to vote my shares. Oops, deadline was yesterday... Oh well, I represent the tiniest of rounding errors. Doubt my vote would make any difference at all.

You can vote in person. Time to book a flight!

 

[tander]

Do they have to release the vote totals at the meeting?
Of course, if they already got the votes from the major investors and they know that it is a yes, they can say so at them meeting.
If it is a no, I assume they could say that they are going to wait until they can tally all the votes including mail ins, etc.

Last time I did the math the SCTY vote only needs the top 5 institutions to vote yes, and TSLA was the top 5-10, that's if every other vote is no, so unless there is some sort of coup taking place the votes should be pretty much locked up, corporations aren't democracies after all. Although strange things happen when people vote sometimes, it would be interesting to see what the final tallies are, my thought is they will release the tallies if the result is overwhelmingly in favor.

 

[Jayjs20]

No, buying high and selling low is by definition losing money. If you happen to be able to buy lower that's great, but you don't make money until the price subsequently goes up and you sell for more than you bought. You locked in a loss. No way around it. Hope the future is more rosy for you.

Edit: if it makes you feel any better, all my options expiring tomorrow are worthless...

It's more a matter of perspective than you think. For instance, in one of my better weeks, I was able to sell and buy back in and make a gain of $5.50. The total gain to myself from those trades, compared to just sitting on the stock, is the number of stocks x 5.5. Doing this also brings down my average price of shares. I made the mistake of buying in after the Ron Baron bump several months ago, putting my average share at about $228. Via buying and sell, I was able to bring it down to 205, a dollar or two at a time. Unfortunately, it's back up to 213 now due to the surprising movement from Q3 delivery and Q3 ER. Of course, today doesn't help either, but you take the good with the bad. At least it's not still 228.

 

[dennis]

Right now I don't know why you'd sell TSLA, makes no sense to me. Hold at least until M3 starts rolling, SP will head north at this time, almost certainly.

I've been thinking about what it will take to move the stock on a sustained upward trajectory. My conclusion is widespread analyst upgrades. Looking at Goldman Sachs as an example, they currently have a hold recommendation and a 6 month price target of $190. Here are their revenue estimates:

2016e - $7.1B
2017e - $9.5B
2018e - $13.5B

The 2016 estimate is consistent with Tesla delivering 25K cars in Q4 and a modest increase in TE revenue. So there's little room for an upside surprise there.

The 2017 estimate is very close to 4X Tesla's Q3 results. This would be reached if Tesla delivers 100K cars and $300M additional TE revenue. So there is no 2017 Model 3 revenue in Goldman's estimate. There is some chance of estimates being raised in 1H17 if Tesla can raise quarterly production and demand above 25K units and/or generate significant TE revenues. Otherwise upward momentum in 2017 hinges on the Model 3 ramp.

Things get really interesting in 2018. Goldman's $13.5B estimate is only 6.4B more than 2016. This hugely discounts Tesla's plans for both TE and M3, and once they hit volume production the 2018 estimates will need to go up significantly.

Bottom line: Some chance of upward estimate revisions in 1H17, but much more likely after M3 quantity shipments.

 

[koolkool]

Assuming a successful vote is announced tomorrow, how long would it be before SCTY stock is no longer available to trade?