TSLA Market Action: 2018 Investor Roundtable

[jhm]

I do suspect that MR will remain in the M3 for the long run. There is enough demand at that range level to boost profit by an extra $k. When the SR is introduced Tesla will likely not want to force buyer down from a MR to a SR by eliminating the choice. So the MR can remain as a way to help people to upgrade to highest value vehicle they want to buy.

Additionally the gap from a 220 mile range to 310 miles is quite a lot. It gives wannabe competitors an opportunity to offer something in the middle and cut into some of Tesla's sale. Retaining a 260 mile range vehicle in the mix effectively blocks that sort of competitive play.

So I think we'll be selling MR for a long time.

 

[RobStark]

This thread is like high school. Everybody is either ecstatic, depressed, or off topic. Thankfully some caring teachers are around, helping the lost.
The immigrant kids (like me) can learn a lot from the dropped breadcrumbs if wiki-google has the right answer.

Edit: added "off topic" thx @Joe F

Be careful.

Uppity foreign exchanged students get stuffed into lockers.

 

[S3XY]

But it can cause hesitation with buyers. "If we wait another week the LR could drop again". This weekly tweaking points to a confused pricing strategy. That is not the position of strength investors want to see.

And hesitating a week to possibly save $1,000 could result in you losing out on $3,750 of tax credit. So net net is likely no reduction in demand.

 

[bdy0627]

Old trick: their estimate is valid for about 12 hours only, when Tesla reports and "misses" Goldman's over the top estimate...

Yep, we will then get a 2nd quick downgrade, this time down to their favorite TSLA price target of $190. It's basically a 2 for 1 special. The key, of course, is their bearish projections bizarrely alongside expectations of a huge Q3 beat.

 

[bdy0627]

I'm so torn. Sell before close to not get after hours post earnings dump or actually wait and ride the post earnings jump to 310+.

Do some of both. With TSLA, it's wise to hedge your bets.

 

[Todd Burch]

I'm always wrong about this, but I expect a climb into the close.

 

[beachbum77]

In my case, limiting risk. Same reason I only have about $75k in TSLA. I'm building an (unconventional) house, whose final costs are at this point unknown. It's all how comfortable I am with the probability-weighed negative consequences (delayed schedule, delayed scope). TSLA is already incredibly volatile; amplifying its volatility pushes me into an unacceptably high risk bracket. Staying in stock is also comfortable in regards to the fact that while I know Tesla would have no issue taking actions that might screw over options holders, they're not as eager to do so with stockholders.

Were the house done, I'd probably be playing options like you. But that's too high of a risk profile for me at present. Which is a shame. That said, depending on how earnings go over the rest of the year and early next year, that strategy may shift. I do envy people who are in a financial position to be taking more risk with this stock. Such opportunities for large short-term profits are rare.

Karen, I can appreciate your position. Cannot believe I am saying this (since your intelligence level on a wide variety of topics never ceases to amaze me) but I think you need to do more reading on options.

Ex. You buy a share for $250. For $190 per contract, I bought November $350 calls and sold them for $275. On the latest drop I bought again at $152 per contract and sold some yesterday for $550 per contract. In the same time you made $50 or so, I pocketed a total profit of $483 per contract. At no time am I at risk of losing more than the value of the contract. And while I do buy in quantity you can buy as little as one contract at a time to test the waters.

I find many people believe that far out-of-the-money puts or calls are worthless. I recently posted the long activity in one of my accounts on this thread. When I can buy a contract for $.12 and sell it a few weeks later for $.84 that may not seem like a big gain until you realize each contract is for 100 shares of leverage.

Tesla has proven to be a pretty predictable play. The couple of surprises that netted us HUGE returns were the SEC lawsuit and the subsequent settlement. That Thurs/Friday/Monday action gave us record profits all on options contracts. The rise into earnings today was completely predictable. I follow this thread because sometimes little nuggets of info pop out that prove helpful. Dozens of eyes on a stock far outweigh what any one investor can dig up.

 

[KarenRei]

Elon has repeatedly said Tesla truck is an F Series competitor that can be used for heavy duty applications

And a base F-150 is only 30 centimetres longer than a Model X. Given that the bumper of a pickup usually sticks out about that much further behind the rear wheels than the bumper of a SUV behind its rear wheels, that's pretty much a match.

As for whether Y will be as big as X, that'll have to be a "let's agree to disagree" concept until the unveiling

Weight of cells does not matter but weight of chassis is very important?

Come on now. Are you really going to make me point out that I repeatedly pointed out that you get a far better lightness-bank-for-your-buck by cutting cell cost-per-kWh and redirecting money into reducing frame mass, than you do by increasing cell energy density? I was literally talking about how chassis mass reductions are the affordable way to keep costs down.

 

[ThereAre4Cars]

So the Nasdaq was at this price on May 8th, and Netflix is trading approximately its value then and Tesla closed at 302 that day. What's the plausibility that algos are basically just matching up stock prices with their prices at points of earlier index parity? I'm not much of a technical guy, and like thinking long-term but that seems to be what's happening. Tesla has been a real oddball stock this year though so I don't know how well this applies even if it works for some others.

 

[mltv]

There is a lot to be bullish on TSLA. at the same time, there are a lot other stocks out there just being discounted. All of these have to be taken into perspective even TSLA soundly beat estimate later today, SP may not go up as in a bullish market.

 

[ZachF]

Interesting food for thought:

Ford today is expected to report Q3 revenue of ~$34 billion.

Luv's model is expecting Q3 revenue of ~$6.8 billion, or 1/5th of Ford for Tesla. Q1 Tesla revenue was $3.4b, or 1/10th of Ford... So since the beginning of the year Tesla has increased revenue by the equivalent of 10% of Ford's revenue.

Ford's revenue is the same as it was in 1998.

 

[RobStark]

For one reason though, most manufacturers don't change their pricing like this at all.

Legacy OEMs regularly change cash back incentives and subsidized lease rates while keeping MSRP the same.

Not to mention kickbacks to dealers.

 

[beachbum77]

Btw., that big aggressive sale of 280k shares at 12:45 was interesting, it dropped the price from ~$297.5 to ~$292 immediately. This was roughly when the CR article came out.

Price recovered much of that drop within a few minutes.

Wondering what that was about:

• Last ditch attempt to manufacture a panic?
• Fat fingered trade?
• Margin call buy-in?

If only there was some regulatory body tasked with monitoring the health of the markets, watching out for Tesla investors...

How about just banking a profit and stepping to the sidelines when in doubt...

 

[tivoboy]

Legacy OEMs regularly change cash back incentives and subsidized lease rates while keeping MSRP the same.

Not to mention kickbacks to dealers.

Indeed.. as was posted in this post

TSLA Market Action: 2018 Investor Roundtable

 

[jhm]

The confusion is when you try to advertise the car to others. Hey, it starts at just $45k. Next day you're a liar. It almost like you now need to tell people "it starts at very low prices, please check the latest prices on the website".
I understand the reasons behind price changes. While there's shortage of supply, there's nothing to stop Tesla from raising the prices.

Sure, but Tesla does not advertise. Look, all sorts of business off sales and incentives from time to time. "Hurry now!!! These low prices won't last for long." Often this is the essential point of advertising. Nobody gets "confused" because Macy's has a sale. Nobody calls Macy's a "liar" when the sale comes to an end. The downside to that sort of advertising though is that it can train some customers to delay purchases to the next sale. But this is not at all what Tesla is doing. It is simply making a small adjustment to the price. This is not a discount offer or "sale," and Tesla is not going out of its way to advertise this.

 

[TheTalkingMule]

CNBC has finally found a reason to post something about Tesla.....

Tesla slips several spots in Consumer Reports reliability ranking

 

[JRP3]

Not really. If Y is the same length as X, 5,04m, then when you factor in that the bed would extend a bit further back on a pickup than the cabin extends on a SUV, it's very much in Ford F-Series range. Not like SuperCrew-length, but definitely your base F-150 (starts at 5,3m).

As for whether Y will be as big as X, that'll have to be a "let's agree to disagree" concept until the unveiling

That would seem similar to speculating that the Model 3 was going to be as big as the Model S. They already have a Model X, why would they make what is supposed to be a less expensive version the same size?

 

[Fact Checking]

How about just banking a profit and stepping to the sidelines when in doubt...

That trade lost about half a million dollars by selling in a dumb fashion (possibly more, as price was rebounding) - price immediately recovered. Even a simple VWAP sale would have netted much more.

So this was either a dumb sale, or a panicked sale, or price manipulation.

 

[erha]

I’m so excited for the market to close today! I hope they will kill it with the shareholder letter and q&a

 

[Yggdrasill]

Doesn't work that way, for the reasons I already laid out in detail. It only works in a world where the energy density increase occurs through magic with otherwise no other changes. In reality, to achieve any change in energy density, you have to use different materials and production processes. This instantaneously invalidates your hypothesis. As mentioned, for example, LiS requires more lithium per kWh, not less, due to its lower voltage.

Lithium is cheap.

You might come up with some super cell with crazy high energy density, but if the separator membrane is made out of platinum, well, your raw materials priced into a market where only spacecraft manufacturers and sheikhs can afford you. To retierate: your argument only works in a fictional world where energy density increases occur without anything else changing.

Or if you'd rather a real world example: look at how long it took li-ions to get cheaper than NiMHs per kWh, despite the much higher energy densities. Because - even ignoring the "starting from stage 0 with manufacturing" aspect - they went from nearly pure nickel electrodes to electrodes that used cobalt; from an aqueous electrolyte to a fluorinated organic one; from zero intercalated species to a relatively expensive one (lithium); and from a simple membrane to a much more complicated one.

I'll agree that if you improve the energy density by going for more costly materials, that can lead to a higher cost per kWh. (Though if you could double energy density, you could double raw material costs per cell and still come out ahead.) But not all improvements to energy density requires more expensive materials. Just look at Tesla/Panasonic. Pretty much all improvements to energy density over the past decade has reduced raw material costs per kWh. And the quest for higher energy density is something I sincerely hope Panasonic/Tesla will continue.

Only if they're defective. Lithium plating out in a NCA cell is a dangerous defect that battery designers always seek to avoid. It's one of the reasons you don't charge freezing batteries; that encourages lithium plating.

Okay, maybe not the best example, but if you look at say regular non-rechargeable lithium batteries, they contain metallic lithium. It's not as if they're exploding left and right.

As mentioned, you get a far better "lightness" bang for your buck by cutting cell prices in half and using that money to buy a more expensive, lighter chassis than you do from doubling cell energy densities.

Doubling energy density can halve cost, so you can take the savings from the reduced battery pack and spend those savings on a more expensive chassis, you could get an even better/lighter vehicle!