With the end of quarter 1 (Q1) 2018 nearly here — the time period by which Tesla CEO Elon Musk had most recently projected 2,500 Model 3 electric cars would be produced a week — it seems like it would be interesting to speculate a bit about the intersection of Model 3 production figures, investor and short-seller expectations, and company stock prices.
In particular, besides merely querying those reading this about Tesla Model 3 production rate predictions circa the end of Q1 2018, or about their predictions regarding future stock prices, what I’d like to ask those reading this is: How exactly will Tesla Model 3 production ramp rates; the exceeding or missing of stated targets; and/or company spin affect Tesla’s stock price in the days following the Q1 2018 conference call?
I’m guessing here that there’s quite a lot of variance amongst Tesla observers in these regards, despite the probable assumption by many people that falling below the projected Model 3 ramp rate will mean that the company is in “trouble.”
Would falling a bit below the goal of producing 2,500 Model 3 units a week by the end of Quarter 1 make an impact on the Tesla stock price? If so, how much of one? Does it not matter much either way, as there are no major hurdles to reaching mass production before the end of 2018?
Is all of the drama simply the result of short-seller desperation to unload losing positions? Is much of the company’s stock held by long-term investors who don’t care too much about the minutiae of financials reports? Are serious investors spooked and pulling out?
Since I’m asking for reader feedback here about those questions, I’ll go ahead and offer my take as well.
Will missing the Model 3 production aim of 2,500 units a week by the end of Q1 affect stock prices much? Somewhat, depending on how much the goal is missed by. The potential dip in question would be filled within just a few months time, though, after Model 3 production numbers clear the 4,000–5,000 units a week threshold.
Would a potential Model 3 production target miss not matter much either way as long as late 2018 mass production goals are still met? That’s my take.
Is most of the Tesla-related drama seen in the news manufactured by a mix of short sellers and hype men that know that conflict and spectacle grab the most eyeballs and/or trigger overreaction? Yes.
Do those who hold Tesla stock with long-term performance in mind care about the minutiae of financials reports? No.
Are the majority of Tesla’s shareholders in it for the long haul? Yes.
What will Tesla’s stock price be at the end of 2018? ~$400/share.
Those are just some random questions that I came up with on the spot. Come up with your own if so desired. The idea is simply to get a sample of the range of different takes with regard to the intersection of Tesla stock prices and quarterly financials/production reports.
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