Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[wtlloyd]

This makes sense on many levels @elasalle - to include that Tesla uses JPMorgan Chase to finance new vehicles (which I found a bit shocking when we purchased our Plaid).

Plenty of comments over the years on TMC regarding JPMorgan’s ‘analysis’ of Tesla and it’s stock price, and of course JPMorgan’s consistent presence in the news regarding it’s ranking as one of the top fossil fuel lenders worldwide should be reason enough for Tesla to justify furthering its efforts towards a more sustainable planet by providing its own lending. And if ‘inflation proofing’ some of their assets was still a priority, Tesla could arguably do so much more securely with a lending program instead of purchasing Bitcoin, particularly with lending rates that are now much higher than in recent years.

The world’s biggest banks have pumped trillions into fossil fuel projects in the past 5 years

The four biggest offenders were all American banks.

www.vox.com

Tesla says JPMorgan is suing the car maker because the bank's top executives hate Elon Musk | Business Insider India

JPMorgan sued Tesla for $162 million last year, alleging breach of contract. Tesla says JPM executives' "animus" towards Elon Musk is really to blame.

www.businessinsider.in

That's why I got pre-approval at my credit union yesterday, instead of selecting "Tesla" financing. I do some banking at Chase, but regard them as f-heads of the first order and don't keep much money there.
Looks like I may be cancelling return flights next week and picking up a MY here in SoCal, driving back home instead of flying. Fun!

 

[wtlloyd]

That part is actually not new. It's is a reiteration of a statement Elon made on an earnings call back in about 2018. The question from an analyst was would Tesla favor volume over profitability. Elon said in that case, Tesla would favor higher volume over higher profits.

This is consistent with the Mission and will crush the competition (who will be sorry they came to Mudville).

EDIT: It was Elon's reply to a question from Toni Sacconaghi on the 2018 Q4 Earnings Call (transcript below)

Tesla, Inc. (TSLA) CEO Elon Musk on Q4 2018 Results - Earnings Call Transcript | Seeking Alpha

Toni Sacconaghi

Okay. And as you think about 2019, you talked about sort of scenarios for demand and how you plan to roll out the intermediate range and then ultimately the standard range. What is - if you do have to make a trade-off on volume or profitability during the course of the year, meaning to get the volume you need or you think you can deliver, you have to go to lower margins or vice versa, where's the trade-off? Is - are units produced most important to you? Or is delivering the 25% gross margin more important? So if you have a chance to deliver 450,000 or 500,000 cars but they'll be more standard editions and gross margins will end the year at 20%, is that - are you willing to make that trade-off?​

​

Elon Musk

My guess is it ends up being sort of about the 6.5 [does together] where if there's a given amount of free cash flow, you sort of decide - you decide to achieve that with a smaller production or smaller volume of cars or at a higher margin or large volume cars at a smaller margin. I think we're already towards the second. We're going to make more cars at a lower margin, but I think it's more or less a flat rate.​

I remember him saying in an Earnings Call in response to a question (maybe this one, further on) " Like, we don't want to be very profitable, like maybe 1% or 2% profitable"

 

[@heist80]

just to put things in perspective Tesla still has 10X the market cap of Ford and GM at this time, even after the stock has been tanking on a daily basis. the market cap is around 400B!!! GM and F are around 40B. this means Tesla stock can drop another 85% and still be a larger company. Also if you look at P/E ratio its at 38, while F and GM are single digits. point being Tesla stock is still incredibly overvalued vs. its automaker peers. now the question becomes will the super charger network really make that much of a difference? seems like the other automakers are figuring out ways to make the supercharger network obsolete anyway with larger batteries and faster charging options.

 

[UncaNed]

​

When you're weary​

Feeling small​

When tears are in your eyes​

I'll dry them all​

I'm on your side​

​

Oh, when times get rough​

And friends just can't be found​

Like a bridge over troubled water​

I will lay me down​

​

Like a bridge over troubled water​

I will lay me down.​

...and always look on the bright side of life.

 

[Ohmster]

Single and multiple data points. Take from it what you will. Tesla and TSLA

Was at the local Service Center on Tuesday as a result of a flat tire (again!). Guy walks in, says ‘Heard about the discount (prior to the ~7k), is there a Model Y you guys can sell me today?’ Sure, let me check that for you.

On the other hand, 4 employees were all pissed about where TSLA was. Said their options were pretty much worthless. They weren’t convinced that the ESPP balanced that out.

 

[Artful Dodger]

I remember him saying in an Earnings Call in response to a question (maybe this one, further on) " Like, we don't want to be very profitable, like maybe 1% or 2% profitable"

Indeed, that was the previous optimal way for a growth company to ensure max investment goes into growth, by minimizing their tax burden.

I think the calculus has changed going forward with the 15% minimum corporate tax. I think @mongo explaned it well, there may be some way to reduce taxes with battery production credits due to the IRA, but I'm not clear on the details.

At any rate, I do expect Tesla to now target 15% taxable income rather than the previous optimum of 1-2%.

Cheers!

 

[Hock1]

Stein’s Law “If something cannot go on forever, it will stop"

According to a WSJ article this morning, shorts are up $15 billion in 2022. What they didn’t say was how much of that gain was still in short positions.

Sounds like Andrew Left left and made out. I wonder if all of those short realize that they’ll have to cover the shares they sold short and there won’t be that many available at these low prices.

They may or may not "have to" cover. Bernie didn't:

Madoff’s Crime of Staying Naked Short

Even now, very few people recognize what actually took place in the great collapse of 2008. The media and so-called experts have provided a steady narrative regarding how it was a natural implosion…

globaleconomicwarfare.com

 

[juanmedina]

This seems irresponsible:

 

[CHGolferJim]

I don't see us anywhere near a 2008 scenario now and frankly I think Elon is suffering from PTSD induced by that earlier struggle.

Agree, but I think it’s good he’s preparing for the worst case, so he and the company can pivot if 2023 rolls out not too badly. Seems to me very possible we only have an earnings recession (with less effect on Tesla than others) and not 6 months of negative GDP.

 

[SunCatcher]

My auto wipers suck and are dangerous.

(starts stopwatch).

Push right steering wheel scroll button, and say "Turn off wipers"

You're welcome. Tesla Service Department (AKA Attentive & Courteous Tesla Customer)

Wait time for service = 45 minutes.

 

[EVWatcher]

Energy prices are up from $0.03 a kwh to over $3 a kwh this morning in Houston. My power wall and probably many other discharged to the grid at peak. Prices are still up but down from the peak and the power wall is back in storm watch mode and recharging from the grid. From what I can see tesla is probably paying more than they are charging me for a kWh by quite a bit atm but when the sun gets a little higher and the solar kicks in if prices stay the same the will start working in the opposite direction.

I think this storm could be a very good proof of concept for tesla. Not sure how it will affect the financials. I’d assume almost not at all. But I could be wrong. 1000% price spike in power is a lot.

Edit: looks like prices to charge my battery again from the grid have dropped back to $0.30 a kWh from $2.40 while I was posting.

It’ll be interesting to see if tesla is able to take any credit for preventing more widespread outages.

 

[CHGolferJim]

Yesterday I converted some stock to 2025 Jan 140 calls thinking we were at the bottom around 138.

Now we dropped to 125 and Elon on twitter spaces is implying we could get to a situation where margins are zero or negative in a bad recession.

Now I wish I just stayed in stock but if I switch back I’ll take a net hit. I also am wondering if I should just sell the calls and keep some cash instead of buying back stock in case things get worse. Or just keep the calls ?!

Any thoughts? Not advice ofcourse…

Not advise: you could enter GTC limit orders to sell at your net purchase cost, then wait for it, might happen faster than you think. Some people are buying these as a play on boffo 4th Qtr.

 

[bkp_duke]

Single and multiple data points. Take from it what you will. Tesla and TSLA

Was at the local Service Center on Tuesday as a result of a flat tire (again!). Guy walks in, says ‘Heard about the discount (prior to the ~7k), is there a Model Y you guys can sell me today?’ Sure, let me check that for you.

On the other hand, 4 employees were all pissed about where TSLA was. Said their options were pretty much worthless. They weren’t convinced that the ESPP balanced that out.

THIS!

This is why having at least a LITTLE BIT of inventory on hand is a good thing. Walk-in buyers.

Sure, we don't want the lots with anything "stale", but a large % of buyers even for cars are impulse buyers (they had a wreck, they had a major failure, they got a year-end bonus, etc.)

 

[StealthP3D]

Can we say there is at least ONE lost sale from Elon's twitter adventurism? You would agree with this. How about two sales? Three? So on and so forth.

No, I can't say that because we can only look at total sales. And Elon and his teams, under the guidance of Elon, created every last one of them.

Pretty hard for me to blame Elon for sales that he created. The Model Y is poised to become the best-selling car in history. Elon did that, not you.

 

[mongo]

Indeed, that was the previous optimal way for a growth company to ensure max investment goes into growth, by minimizing their tax burden.

I think the calculus has changed going forward with the 15% minimum corporate tax. I think @mongo explaned it well, there may be some way to reduce taxes with battery production credits due to the IRA, but I'm not clear on the details.

At any rate, I do expect Tesla to now target 15% taxable income rather than the previous optimum of 1-2%.

Cheers!

It's 15% tax on global “adjusted financial statement income”. Shanghai is already at 15% corporate tax through 2023. Berlin is a tad over 15%.
So the big impact is what adjustments are made to income vs "adjusted taxable income" and @The Accountant is much better at these details.

I don't think it means Tesla needs 15% taxable income though, that would be 12.75% post tax. (Deductions, credits, and such excluded).

 

[Unpilot]

A lump of coal for you...and you....and you.

You know who you are.

 

[tslagreen]

Does the color red go away after Christmas?? Santa sucks this year.

 

[Nocturnal]

A lump of coal for you...and you....and you.

You know who you are.

I wish. Coal is up.

 

[nativewolf]

True, but when you manage spacex, tesla, the boring company and neuralink, you have information on order flow, average selling prices, and commodity prices across multiple industries and almost every country.
He has a LOT of real world, high level data to look at. Probably more than the average newspaper economics hack. And he has it real-time.

That means bunk in terms of understanding macroeconomics. The CEOs of every car company in the top 10 have that same data, they have had it in every major recession. The Fed has that data. The trading houses like Glencore and Mitsu have oceans of more data. They have real economists and still get it wrong. Exposure to too much data doesn't always help.

 

[Mengy]

Dang, no relief on the downward spiral today! From $127 to $122 in minutes and still falling!!!



I thought the PCE data this morning was positive?