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Bad day for TESLA stock

As a Tesla owner, I love my vehicle and have read all the good and bad articles out there. Sure, there will always be haters (most are uneducated pro-oil authors though). It was disappointing to watch the stock tumble today, but I saw it coming. For the past year, Elon has done amazing things, and I hope he continues to do more with Tesla. I think he has turned a bit into a dreamer recently and gotten off track with the Hyperloop proposal. I seriously love the idea, but I don't think it's realistic at all. It would cost too much money to develop and build. I wish he would stay focused on what's at hand. The only thing Tesla needs to do is what it is doing: build exceptional vehicles, increase production, start exporting, develop another two or three models (Gen 3 for those who want the less expensive car), increase R&D, reduce production costs (got to get those batteries at a better price) and continue building a national/international EV infrastructure (service & battery re-charging/exchange). It appears they are doing just that…and doing it quite well for a 10 year old ‘startup’. I don't particularly see the battery swap idea really taking off, and hope Tesla just sticks to 20-minute faster supercharging. That is genius technology and want to see it expand.

Still hoping for the best for Tesla and hope it roars back in to huge levels in stock someday. I've been so impressed with my Model S, I will
always want to own the newest vehicle they produce.

Just wait for Q2 earnings next week and it will jump back up again. Might be a good time to buy some more it's on sale!

Cheers!

This is exactly what I was thinking when I watched him talk about the Hyperloop. People will take him for a dreamer.

I am still with him because I can see his vision and I think the Hyperloop is a great idea and it is how the future of transportation will look like, but I would prefer if he would stop talking about it publicly until he has proven that Tesla can be profitable.

Unfortunately, visionaries wrapped up in their ideas are like this. He would need a partner with his feet firmly on the ground who would bring him down a notch when he is losing touch with reality.
I think he IS serious about everything, but he doesn't always make the impression.

The remark that "a cross between a Concorde, a rail gun, and an air hockey table," is genius. It means that he has discovered a new way to move public transit, but not everybody can see it that way.

I have invested into Tesla and Suncity, and I'm interested in making money and this was not helping.

There is also something else that could have caused the stock price to retreat.

http://finance.yahoo.com/news/tesla-motors-announces-date-second-1914100...

The date of announcement has been postponed two weeks and "it will contain a link to the second quarter 2013 Shareholder Letter"

Hmmm. Looks like a not too good news that needs an explanation????

I hope I am wrong.

The last time we got a shareholder letter like that it was good news. It started the squeeze.

I don't think the Hyperloop occupies much of Elon's mind, at the moment it doesn't seem to be more than a concept idea. It's just that people keep asking him about it.

Actually, as far as concepts that he has mentioned during his various interviews I am much more interest in the concept of an electrical semi sonic airplane, maybe an electric "jet plane"?

Anyways, it is clear that Elon is keeping his eye on the ball and that shouldn’t be a thing to worry investors.

As far as the stock price I also think it was a little over priced, though not by much and certainly not as low as 85. The metrics used to measure Tesla should be more in line with those used to valuate tech companies and not so much your run of the mill car company.

My two cents.

http://www.youtube.com/watch?v=8_lfxPI5ObM&feature=youtu.be

http://www.teslamotorsclub.com/entry.php/112-Teslive-2013

So far Tesla as done everything right. Model S won many awards, including from Consumer Reports. According to the videos, Tesla will continue improving the hardware and software of the car. Optimize design and manufacturing, reduce weight, increase range over time. Model S demand exceeds the production capacity and at this time production is limited by the supply chain... and it usually improves over time. Model X should do well too.

It is a manufacturing operations and Tesla manufactures most of the components in house. Takes huge amount of capital However, this business model has huge economies of scale. Tesla could produce 50,000 Model S with 2 shifts. Same with Model X, another 50,000 cars. Costs will fall and margins will increase. Then demand will increase, especially ubiquitous supercharger network.

Patrick Archambault, the GS analyst like any other analyst got an opinion. I doubt this guy ever test drove a Model S, let alone own one. Or visited the factory. He just comes up low ball cases, makes all kinds of assumptions. I think Tesla will disrupt the ICE economy.

Eva;
Elon has many times explicitly stated he will NOT be building the Hyperloop, he's too busy. Just offering his ideas and plans to whoever wants to take it on. It poses no up- or downside implications for TSLA.

AFAIK, the Q2 financials release was never announced as July 22 by TM, only forum rumor. So it is not a 2-week delay.

The rumor comes from an estimated projected release date that Yahoo Finance posts.

That is a source that needs to be taken with an ocean full of salt.

@dougarcher26, @EvaP

I agree and was thinking the same thing.
This 'Hyperloop' idea seems like a needless distraction. Does anyone doubt people will keep asking about it at least as much after publishing the blueprints?

Plus if you wont build it yourself why would you accept the liability someone else will try and have it crash?

In reality the hyperloop may not be distracting Elon from Tesla Motors, but it creates the impression in the minds of investors and money managers. I would heartily recommend that he cease public discussion of it until we've seen several quarters of significantly rising profits.

Regarding the earnings report date: it was not delayed. People were reading estimates made by those completely out of the loop, including NASDAQ. Those estimates have been for dates way to early every quarter for Tesla. A release date is not official until a company makes an announcement. They don't provide preliminary guesstimates of the dates the way that outsiders do. Tesla made the official announcement of the earnings report date an hour before the market close today, so it had little effect on the downdraft in share price.

Goldman Sachs is an excellent company for recommending mortgage-backed securities that almost bankrupted the United States of America. When the masses say sell, smart people buy. When looking at what it takes to put together a Tesla model S: a good quality frame, an excellent electric motor, tires an LCD screen, breaks and few other moving parts; I can't help but become amazed at what production cost per vehicle will decrease too.

I would imagine there is more profit per tesla vehicle then there is per internal combustion engine vehicle. The PBS documentary outlining the manufacturing process was fascinating in its use of robotic equipment to manufacture cars.

With the electric cars range no longer being an obstacle, and the development of a charging network that is reliable and available, with the continued rising cost of gasoline. People will begin to ask themselves where do I want to spend the money at the dealership or at the pump. I would rather buy a better car that looks cool than an economy car that costs me more money in maintenance and gas.

Electric cars are a product that makes sense. Tesla Motors is a company that will make many many many dollars.

Any idiot can see that.

Maybe Goldman Sachs should go back to selling mortgage backed securities.

Tesla's valuation is a high growth company/speculative stock in the sense that the majority of the valuation is dependent on what tesla will do in 5 to 20 years, which is hard to predict. I think Elon Musk is awesome and Tesla is awesome. I really hope they succeed, but it is really hard to value this company. If you are sure Elon will be the next Henry Ford, they I would buy more.

Check this out:

http://business.financialpost.com/2013/07/16/brakes-applied-to-u-s-auto-...

you have got to be kidding! This is not right!

Tesla Monster: I agree with your conclusions. Looking at P85, excluding the battery, the car should be cheaper to manufacture than a Honda Accord with an ICE. Yes, Al adds about $1,500-2,000, but the simple induction motor and drive train, etc have huge cost savings and enable a hi level of automation. The electronics will come down with Moore's Law. Once Tesla gets the design, manufacturing, supply chain optimized, the cost of the car - excluding the battery pack - should be less than $30,000 adjusted for size, etc. Even the battery pack cost estimated to be $25-30k will come down to around $20,000. Add it up with 25% gross margins and the ASP of the 85P should be around $62.5k. Same with Model X.

At those prices, Tesla will be able to sell 500,000 cars worldwide, especially with supercharger network... just with Model S and X. After all, it has the highest rating from Consumer Report and others. Expected to have low maintenance and fuel costs, which are significant in many parts of the world.

Even if I assume 250,000 Model S+X/year with ASP of $60k, revenues would be $15B. Gross margin at 25% would be $3.75B. Take out overhead and taxes, that leaves a net profit of $2B. With explosive sales, Gen III yet to come, the market will give a PE of 25-30, especially if it is disrupting the ICE market. Or disruptive battery technologies.

Anal-ists need to feel relevant, so they write stuff. If you buy Tesla stock you have to hold and be prepared for rides akin to the SpaceX pogo rocket. Up, hover, down to a hopefully soft landing, go up higher next time and so on. Buy and hold. Maybe you make lots of money or lose most of it. Better have the nerve for such things.

Look at Apple. Darn, only made a trillion dollars last quarter and some lucky sperm analyst thought it should be a trillion.1 so the stock tanks.

Future reduced battery pack cost is key to the mass market. Middle income families often prefer to spend $25k or less on their ride. If the Gen III starts at $35k, that is still too steep compared to a $22k Accord. A 200 mile range pack needs to be 50-60 kwh...Tesla needs to get pack cost under $10k to sell an affordable Gen 3. I think we are a long way from a $10k pack, which could stifle G3 sales.

Regardless, I'm buying more TSLA tomorrow, on sale you know.

Bubba2000,

So you think EV cars will be cheaper to produce because of their simpler drive train? I looked for article on relative manufacturing costs of ICE vs EV, but couldn't find any.

@Curt Renz

Given the still fragile state of the company, I think bring up the 'hyperloop' idea now is an act of irresponsibility and hubris.
Its easy to not think about it when things are going well but just statistically... shit happens. It is a bad sign for the future if the CEO is unfocused.

I even have a slight suspicion at the moment (mostly just relying on the media's notorious record of jumping into unchecked conclusions. And lazily quoting each other), that the current drop in stock value could have more to do with concerns over the 'hyperloop' remarks than a small paragraph from page 50-something of a Goldman-Sachs report.
Anyway, the timing is tempting...

(cont.)
To be fair, I think this is by no means only the fault of Elon Musk. I think anyone who would be constantly compared to a super-hero by fans and the media would eventually have less than sound risk management.

But please just try to imagine how would it look like for Akio Toyoda after Toyota's recalls and safety concerns if he would be seen constantly in the media persuing many fantastic and unrelated endevours like going to Mars, inventing a 5th mode of transport, an electric jet and so on...

Keep in mind that there is no such thing as 'zero margin of error'. In perspective, if you even have a 1:10000 chance of error on a car, with 20k on the road you should reasonably expect 1 – 2 of them poping up. You might have the safest car on the road it doesn't matter.

A distinction between a Tesla-type stock and many other stocks is quite simple: a majority of Tesla investors want result-driven profits, not the other way around. The results have been surpassed. Massive profits will come. Everyone here knows the value of the Tesla product. The problem is that folks in big financial institutions can cut the momentum of a company at the knees by having one, repeat, one, person peep his little "estimates" based on a company he doesn't even understand. Like a video posted in a comment about Teslive by another person above, the Tesla product requires non-linear thinking... thinking that the the big banking industry apparently lacks. Higher stock values mean higher investment capitals and higher ability for the company to ramp up production. Fundamentally, the financial momentum of Tesla is based on its social momentum. People want change! Thus, our responsibility is to reinforce this social momentum. No one can argue about why Tesla vehicles need to capture the market- just like no one can out-argue you on the merits of an apple computer or a google search. People that want change have the responsibility to act on that objective. The message needs to get out to every corner of the internet. We want Tesla on the streets! The momentum must rely on a Tesla social support base because that will make it stable and take it off the hands of numb-minded, finance babbling, analysts. Keeping the momentum for Tesla sets a precedent for other companies and other stocks that matter to us based on the values they represent. Just like the white house petition, the message needs to be clear: we defend Tesla.
Tesla's responsibility in this is to use as much capital as possible to ramp-up production and take advantage of the momentum to capture as much of the market as early as possible. Elon Musk must report new milestones constantly to establish a the acceleration of Tesla into the market share. We must demand this. They must deliver... Their production facilities are based on technology with wide-open doors... I am confident that they will deliver. We must deliver as well.

I agree with everything said, especially about the skewed view of the financial institutions. I especially dislike this kinds of people because they have stood in the way of progress many time in the past. Just remember the video "Who killed the electric car". Unfortunately, these people are a necessary evil.

Also, I agree with Ozee about the non-linear thinking of Elon. When I saw him I thought "finally somebody who is actually thinking while speaking and doesn't give us premeditated stuff". Unfortunately again, most people won't see it that way. I am still with the guy. Actually, I fell in love with Tesla twice. Once when I saw the first Tesla car, second time when I did research and read about the hyperloop. I have been toying with ideas like this myself, and I thought that this is the kind of guy I trust because he thinks the way I do.

I know, this is not the best reason to invest your money, but when I look at what he does, I can see where he is going and I can see the determination. I am only crossing my fingers that he won't screw up and won't jeopardize my investment :)

He wrote on Twitter about hyperloop that he dislikes patents except when necessary, and that scared me a little. I can't afford to lose much money and my mind says patent everything possible so you can charge other companies and make as much money for your shareholders as you can.....

But looks like the guy doesn't need my advice. He is doing just fine without me LOL

BTW, the stock is bouncing back. I wasn't really worried yesterday. I knew I would hang on to this even if it goes lower. Also, it looks like I was right. Yesterday they scared people into selling low and today the high volume shows that some institution(s) must have bought up a few million shares.

Hmm...I smell a rat (Goldman Sachs). Anybody want to bet that maybe some of GS's bigger clients were privy to GS's "announcement"? It would've been a good opportunity to sell call options...then buy them back on the cheap. I'm just saying...

Way oversold yesterday. By about 11 am today, big buy-in with about 1.30% of a whole day's average volume already. Anyone who loaded up again made out like a bandit.

@ghideg, I agree. I am new to investing, but I am not dumb ;)

According to GS's profile, what they do among others is giving financial advice. They must have advised some of their customers to buy as much cheap Tesla as they can before it goes up and stays up permanently.

@Brian H

Unfortunately, I don't have any more money I could spare, otherwise I would have bought some more yesterday.

Lol, conspiracy theorists of the world, unite.
Anyway, Tesla is in a position to do very well. There is a great debate on TMC (Tesla Motors Club) forum estimating the price of their pack. It somehow got stated as fact in the media that they are paying 400$ / kWh, when the real cost could very likely be closer to 200$ / kWh.
Here is an article on 'Green Car Reports' that sums it up:
http://www.greencarreports.com/news/1084682_what-goes-into-a-tesla-model...
That could be 5 – 10 years ahead of competition if estimates are correct.

While the technology side and overall strategy side seem bright, I keep to my thesis that the fact Elon is trying to do so many different things at once poses a real challenge that seems to be overlooked.

I know very little about investing but I do know we all have 24 hours a day (on earth, that is...).
Tesla managed to get where they are to a large degree because they are focused on making high quality electric cars. Well, competition is still out there and the 'focus' thing works both ways.

On an overall optimistic note, I think one way or another electric cars are here to stay and will arive probably way sooner than even the most bullish estimates. This is just about who will get them on the roads first. If you think California is pushing hard for EVs just take a look at the issues China is facing at the moment and their approach on this...

dz4;
+1
But you (like most people) can't seem to kick the idea Elon is trying to take or keep market share from other EV makers. Nothing could be further from the truth. He is trying to take market share from ICE makers and transfer it into EV-makers hands. If ICE makers are unable or unwilling to become EV makers, then they are fair game.

And he has specified that Tesla, SpaceX, and family already more than fill his time and he is not going to add the Hyperloop or anything else to it.

China has its own issues, prominently power generation. It made the Coda, but I don't see it being pushed domestically. Why not?

@Brian H
Last I looked it up, CODA no longer does cars. They are now an energy storage company.
Source:
http://cleantechnica.com/2013/07/07/coda-automotive-now-coda-energy/

But the main point is that the Chinese are really trying to push this forward.

Consider BAIC for example, a state owned enterprise making cars. They did JV with Daimler and Hyundai. They recently teamed up with 'SK Innovation', a large Korean energy company for batteries expecting a supply of 10k electric cars by mid 2014.
Source:
http://evworld.com/news.cfm?rssid=30774

They also want to buy assets from Fisker (before it goes bankrupt).
Source:
http://green.autoblog.com/2013/07/16/chinas-baic-looking-over-fisker-ass...

Will it work for them this time? Considering past record of Chinese electric car companies (BYD cars blowing up, for example), some skepticism is welcomed. I am sure however that within 10 years there will be a real move on adoption of EV's in China. And once it will start, it will be massive in momentum.

As for the 'hyperloop', time will tell. I have some doubts on the matter, but could be wrong. Wouldn't be the first time.

The US grid will cope easily. The Chinese, maybe not so much. If they keep up their one coal plant per week pace, maybe.


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