2017 Investor Roundtable:General Discussion

[DragonWatch]

Just saw a story about another nation banning Fossile Fuel vehicles on BBC World News.

Instead of the US leading the charge, Ford and GM will have the world market dictating to them the transformation to EVs, placing a mega lift on the shoulders of Tesla. Me, I believe not only Tesla will continue to out shine, I believe they are the future.

Tesla will probably be the only shining light for this country for the next ten to fifteen years at a minimum.

Yeah, okay, I am a long horn bull

 

[22522]

I hadn't seen this graphic from UBS before. Wow. Certainly interesting. How many mistakes/assumptions can we find?

I see at least two obvious mistakes.

There are issues with the dates. They are using bin granularity by year when that approach is not needed, or helpful. The data is sparse enough to show month of introduction... This would eliminate some double dots...

Oh, and the date on the Model 3 is wrong... As is the range. Are these important? That is the X axis and the Y axis!

The diameter might be right.

Cramer was right about these guys.

 

[MXWing]

There are issues with the dates. They are using bin granularity by year when that approach is not needed. The data is sparse enough to show month of introduction. This would eliminate some double dots.

Oh, and the date on the Model 3 is wrong... As is the range. Are these important? That is the X axis and the Y axis!

The diameter might be right.

Cramer was right about these guys.

* Lucid Air car purchasable in 2019 really?
* The Y chart goes off screen when accounting for Tesla Super Chargers
* Tesla made a Model S/X 100?

This so terrible to look at. I'd short UBS if they made bets based off of their graphing skills.. arggg

 

[Buddyroe]

Nearly zero. But I don't think investors will care about Q2 results.

Oh boy. Not the "investors won't care" line again. I read the same exact thing just before the Q2 deliveries announcement and then saw a $60 slide in 3 days.

So excuse me if I don't put much "value" in what you post.

 

[Yuri_G]

I wonder if we get a bump from the reveal solely for the Model 3 range being much greater than 215 miles. It's baffling all of these analysts/news sites aren't extrapolating that the drag + battery on the 3 will easily put its range past the Bolt at the very least.

 

[MXWing]

Oh boy. Not the "investors won't care" line again. I read the same exact thing just before the Q2 deliveries announcement and then saw a $60 slide in 3 days.

So excuse me if I don't put much "value" in what you post.

Maybe not so much "investors won't care" but more so "investors won't be -surprised-"? No one can tell the future with certainty. If we were just looking exclusively at financials. puts would be a lock.

There's certain x factors like

- Are we already oversold off ATH mitigating a mass 'sell the news'?
- 2H and M3 Guidance keeps Tesla green after August 2nd.

 

[Ameliorate]

Go Brad Buss! buying 27,000 shares at 342 over the next....36 months? Can he wait until 2020 to execute all of these contracts? Always nice to have a director buying.
"Explanation of Responses:
(1) 1/36th of the shares granted shall become vested and exercisable as of each monthly anniversary from July 24, 2017, such that all shares subject to the Option shall be fully vested and exercisable by July 24, 2020. Pursuant to the issuer's Outside Director Compensation Policy, these equity awards were granted to the reporting person in connection with his commencement of service on the committees of the issuer's Board of Directors."
Tesla - Statement of Changes of Beneficial Ownership

 

[Buddyroe]

Maybe not so much "investors won't care" but more so "investors won't be -surprised-"? No one can tell the future with certainty. If we were just looking exclusively at financials. puts would be a lock.

There's certain x factors like

- Are we already oversold off ATH mitigating a mass 'sell the news'?
- 2H and M3 Guidance keeps Tesla green after August 2nd.

My only point is that investors care about EVERYTHING. Every bit of news (info) matters - especially earnings. It is naive to think otherwise.

 

[ValueAnalyst]

Tesla - Statement of Changes of Beneficial Ownership

I guess I'm not the only one loading up on TSLA.

27,000 shares?!?! Slow down there...

 

[Ameliorate]

Maybe not so much "investors won't care" but more so "investors won't be -surprised-"? No one can tell the future with certainty. If we were just looking exclusively at financials. puts would be a lock.

There's certain x factors like

- Are we already oversold off ATH mitigating a mass 'sell the news'?
- 2H and M3 Guidance keeps Tesla green after August 2nd.

Agree, I'm holding out to see the model 3 reveal before I decide my ultimate positions going into the ER. Currently wanting to close short term calls affected by ER increased IV and do not think it will drop >4% so I am doubtful about any protective puts being worth much after IV changes. Hold January and beyond positions.

@ValueAnalyst see my post above and the quote regarding 1/36th buys

 

[ValueAnalyst]

Oh boy. Not the "investors won't care" line again. I read the same exact thing just before the Q2 deliveries announcement and then saw a $60 slide in 3 days.

So excuse me if I don't put much "value" in what you post.

Big big big difference between a justifiable drop vs. coordinated manipulation. Also, there is no way to prove the recent drop was tied to deliveries. The way I think about it: it was simply used to pull down the SP.

But hey, thanks to the massive coordinated bear attack, I was able to convert some of my shares to LEAPs, increasing my exposure at ~$320, just before Model 3 ramp up. Just like I doubled down at $180 (you can go through my comments at SeekingAlpha from October and confirm, or Bill Maurer will tell you as he was keeping a closer tab on my purchases than I was, until the SP doubled from $180. Then he stopped). I did unfortunately miss the opportunity at $250 though...

What would I do without these bears? Can an investor ask for a better set up? An amazing company, changing the world, with multiple wide moats, multiple-year lead on competition, and a team of bears manipulating the SP down for me to load up. Is this heaven?

 

[vgrinshpun]

There were few members commenting on the lack of expected new information coming out of the Model 3 reveal. Aside from the potential for some surprise regarding the autonomy (very unlikely at this time imo) another hugely important and, I believe, widely overlooked spec that I personally dying to know is ... Model 3 weight. I expect it to be on par with the comparable premium compact sedans, which, if comes true, will be huge. This is key for two fundamental reasons.

1. Financially, the success of Model 3 will depend on ability of Tesla to get to the Model 3 cost of manufacturing reductions that they planned. The 20% reduction in weight of Model 3 over Model S is a key metric addressed by Elon many times. So getting to weight of less than 3,500 lbs for a base variant would be an indication/proof that Tesla indeed got there cost-wise and will bode very well for the company finances going forward.
   
   
2. In terms of competitiveness against performance peers, Model S had to overcome a several hundred pounds weight disadvantage. Model S performed this very challenging task admirably, competing very well against peers (low weight is paramount for overall dynamics of a car, including balance, handling, performance, etc.). Now just imagine what is possible if Model 3 completely closes the weight gap against the performance ICE peers. Although I doubt that Market will immediately care, this is going to be huge. If this indeed pans out, just watch for the accolades to start pouring in from the automotive media.

So I personally am really excited to see Model 3 weight to be revealed as part of the package that includes key specifications.

 

[Alketi]

* Lucid Air car purchasable in 2019 really?
* The Y chart goes off screen when accounting for Tesla Super Chargers
* Tesla made a Model S/X 100?

This so terrible to look at. I'd short UBS if they made bets based off of their graphing skills.. arggg

- They're also off by a year with the Model 3.
- They quoted the Model 3 minimum range
- They quoted the NEDC range (estimates even) for the European models and the EPA range for Teslas

 

[SteveG3]

There were few members commenting on the lack of expected new information coming out of the Model 3 reveal. Aside from the potential for some surprise regarding the autonomy (very unlikely at this time imo) another hugely important and, I believe, widely overlooked spec that I personally dying to know is ... Model 3 weight. I expect it to be on par with the comparable premium compact sedans, which, if comes true, will be huge. This is key for two fundamental reasons.

1. Financially, the success of Model 3 will depend on ability of Tesla to get to the Model 3 cost of manufacturing reductions that they planned. The 20% reduction in weight of Model 3 over Model S is a key metric addressed by Elon many times. So getting to weight of less than 3,500 lbs for a base variant would be an indication/proof that Tesla indeed got there cost-wise and will bode very well for the company finances going forward.
   
   
2. In terms of competitiveness against performance peers, Model S had to overcome a several hundred pounds weight disadvantage. Model S performed this very challenging task admirably, competing very well against peers (low weight is paramount for overall dynamics of a car, including balance, handling, performance, etc.). Now just imagine what is possible if Model 3 completely closes the weight gap against the performance ICE peers. Although I doubt that Market will immediately care, this is going to be huge. If this indeed pans out, just watch for the accolades to start pouring in from the automotive media.

So I personally am really excited to see Model 3 weight to be revealed as part of the package that includes key specifications.

I was also thinking about the weight in terms of performance vs the likes of 3 series, etc., this week.

As to costs- while weight reduction correlates to cost savings, a 20% weight reduction is not necessarily the benchmark. Yes, Elon spoke of a 20% smaller vehicle as a basic contributor to bringing down the cost to build the M3, I don't recall him referring to weight. What's more, Tesla has suggested more than once that the M3 would not use lightweight but expensive aluminum as much as the S/X. Perhaps other changes with the M3 will compensate for the added weight of steel vs aluminum in some places... but in the case of some aluminum traded for some steel, more weight=lower cost.

On a side note- wow, quite a milestone less than 48 hours away!

 

[Yggdrasill]

I hadn't seen this graphic from UBS before. Wow. Certainly interesting. How many mistakes/assumptions can we find?

I see at least two obvious mistakes.

Wow, quite inaccurate. I threw together a more accurate diagram for Tesla:

I was hoping to make a similar diagram as the UBS one, but an old version of open office couldn't do it.

 

[MXWing]

- They're also off by a year with the Model 3.
- They quoted the Model 3 minimum range
- They quoted the NEDC range (estimates even) for the European models and the EPA range for Teslas

They have no idea what they are doing. It's analytical malpractice to present data as is. A "concept car" qualifies as competition to a car you can buy today.....

At the minimum to remotely capture Tesla vs other EVs you need

- Price
- Range
- Autonomy functionality
- Charging Capacity / Charging Network
- Performance
- States/Service Centers Vehicle is for Sale (Crosses off Bolt, Q6, I-Pace, Lucid, EQ Benz, VW I.D)

Taken at face value - the M3 is "no match" for the Bolt and Ampera-E.

oh one last thing:

Need to clarify Mercedes B-Class ED as Mercedes B-Class (Tesla Drive)

 

[vgrinshpun]

I was also thinking about the weight in terms of performance vs the likes of 3 series, etc., this week.

As to costs- while weight reduction correlates to cost savings, a 20% weight reduction is not necessarily the benchmark. Yes, Elon spoke of a 20% smaller vehicle as a basic contributor to bringing down the cost to build the M3, I don't recall him referring to weight. What's more, Tesla has suggested more than once that the M3 would not use lightweight but expensive aluminum as much as the S/X. Perhaps other changes with the M3 will compensate for the added weight of steel vs aluminum in some places... but in the case of some aluminum traded for some steel, more weight=lower cost.

On a side note- wow, quite a milestone less than 48 hours away!

Elon specifically referred to **20% weight reduction** of Model 3 in reply to the question on margins during Q4 2015 ER call:

Jamie Albertine - Stifel, Nicolaus & Co., Inc.

Great. Thanks for taking the question. On the Model 3, if I may, just I think a lot of folks are trying to do work as it relates on the margin trajectory over time. And it's clearly going to be volume dependent and sort of timing around the launch, but I was wondering if you could help us understand, just given that it's a third of the transaction price of roughly your initial Model X deliveries, what are some of the efficiencies you're hoping that you can sort of draw upon, maybe beyond just sort of the battery reduction, battery cost reductions? What are you leveraging in the Model 3 from investments you've already made, and sort of the knowledge you have around sort of initial launch costs on the higher priced vehicles at this point?

Elon Reeve Musk - Chairman & Chief Executive Officer

Yeah, I think the way to think of the customers is really that the Model 3, being a sedan, is about 20% lighter than – and actually quite a bit less complex to manufacturer, than the Model S. Model S was really the first car we ever made ourselves. So, it was – we were designing to make it work, as opposed to designing it from ease of manufacturing, whereas the Model 3 is really designed for ease of manufacturing.

And then we expect through economies of scale and just general design improvements to get another 30% improvement. So that's where the 50% improvement comes relative to the Model S. So, it's a sort of 35K versus 70K of Model 3 versus Model S is the way to think about the difference.

 

[SwTslaGrl]

I'm collecting some data points

 

[JBRR]

Passed some time today reading online articles about amazon between year 1999-2000.

Scathing Report of Amazon Is a Must-Read for Stock Owners / Analyst builds powerful case against company
"
While stock analysts generally focus on the income statement, Suria concentrates on cash flow, a complicated analysis that most investors ignore.

"During the fourth quarter of last year, Amazon evolved from a virtual business to a real-world retailer," he writes. "While the operational characteristics of Amazon are not that different from an online retailer, they are a lot more distressed than even mediocre real-world retailers."

The "fundamental problem," he continues, "lies in the fact that Amazon does not generate positive net cash flow per unit of product it sells.""

Amazon.bomb
“"Once Wal-Mart decides to go after Amazon, there's no contest," declares Kurt Barnard, president of Barnard's Retail Trend Report. "Wal-Mart has resources Amazon can't even dream about.””

Amazon: Ponzi Scheme or Wal-Mart of the Web?

“It's possible that Bezos is wrong about the company's future ability to retain customers, and that the barriers to entry on the Web will always be so low that attaining Wal-Mart-like dominance will be impossible. But the strategy he's pursuing is the only way to find out if he's wrong. If he doesn't invest now, when customer acquisition is still relatively cheap and the Web, for all its explosion, is still relatively empty ground, then he won't have the chance to invest later. And in the end, if he fails, the whole thing will have cost less in terms of actual capital than most big companies spend on R&D in a single year. Given the potential rewards, that seems like a worthwhile tradeoff."


I don't know why I thought it was relevant to a tesla investing forum though..

 

[Yggdrasill]

Wow, quite inaccurate. I threw together a more accurate diagram for Tesla:

View attachment 237971

I was hoping to make a similar diagram as the UBS one, but an old version of open office couldn't do it.

I improved on it a bit: