2017 Investor Roundtable:General Discussion

[Bet TSLA]

I tried, but nothing else fit your insistence that people are being forced to work at Tesla. It's as if you believe they are being pulled out of their beds in the middle of the night only to have a gun pointed at their heads to sign a job contract there. It's a bizarre idea.

Well, I can see why you would be put out if I said that, but I didn't. And despite my repeating that I didn't say that, you continue to insist that I did. That's pretty much a textbook example of obdurate non-comprehension. Please try harder.

Meanwhile, for sane people, let me repeat that there seems to be no choice for Tesla employees. If they want to work for Tesla they are forced to gamble on the stock price. There is no option to say "just give it to me in salary". Most people working for Tesla on the production line will never have invested in the stock market, won't understand it, and certainly won't trust it. It would be okay if the attitude were to treat the stock market gamble as worth nothing, with only upside. But Elon changes that when he starts talking about the stock options as a valuable part of the compensation package. It creates expectations. This is a very bad idea. It will just create ill will if the stock doesn't regularly go up. Why do that?

 

[racer26]

There is little evidence that the mobileye/Tesla approach to low bandwidth mapping works sufficiently to enable full self drive. There is also no evidence that Tesla has sufficient IP and knowledge in this area after breaking up with Mobileye.

Google and probably other have "rolled up their sleeves" and taken the adult approach to this hard problem. Musk and Uber have looked for shortcuts.

Installing inexpensive hardware *BEFORE* a computer science problem has been solved by expensive hardware and sensors is extremely risky.

I couldn't disagree more.

What senses do you use when driving? Primarily your eyes, and to a lesser extent your ears.

What field of view do your eyes have?

What sensors does the car have? What field of view do they have?

The car has more accurate data and more of it available to it than you do when driving. You don't have eyes in the back of your head, or the ability to see through precipitation. This means that the only part of the problem is turning that data into driving inputs to the controls of the car. It is a software problem. The car has the hardware to do a better job than a human. The only room for argument here is on believing the software can be developed to that point.

Characterizing Musk's first principles approach to the minimum set of sensors required to achieve better-than-human driving performance as similar in ANY way to Uber's conspiracy to steal Waymo's LiDAR technology for their own gain is disingenuous to say the least.

 

[Jonathan Hewitt]

Uh oh guys, not only do we have the GS downgrade today but Honda has agreed to enter the EV race (kicking and screaming). Their first entrant will have the same range as the 2011 LEAF at a worse price. Elon may have been proven right once again that EVs are the future but now Tesla is doomed!! Don't worry, I know this "Clarity EV" seems extremely compelling but they won't get me as a customer as they refused to fix my Honda Civic hybrid battery even though it was under warranty. I even told them I would never buy a Honda again as a result but eh, I'm just one person.

Honda’s all-electric Clarity EV will have 80-mile of range and start at ‘about $35,000’

 

[JBRR]

Actually, the vast majority of companies have an anti-hedging policy in place, meaning you can't short the company stock, buy puts or trade in other market-based derivatives (e.g., call options).

That doesn't mean you couldn't find some other appropriate hedge in the market (e.g., shorting the Nasdaq or something), but employees most likely cannot short TSLA or use TSLA options to hedge.

Oh, right. It not as easy then. But surely there is a market - are you not allowed to borrow against your options either? Or go to a secondary market?

 

[Tslynk67]

Uh oh guys, not only do we have the GS downgrade today but Honda has agreed to enter the EV race (kicking and screaming). Their first entrant will have the same range as the 2011 LEAF at a worse price. Elon may have been proven right once again that EVs are the future but now Tesla is doomed!! Don't worry, I know this "Clarity EV" seems extremely compelling but they won't get me as a customer as they refused to fix my Honda Civic hybrid battery even though it was under warranty. I even told them I would never buy a Honda again as a result but eh, I'm just one person.

Honda’s all-electric Clarity EV will have 80-mile of range and start at ‘about $35,000’

Shame about the range and the price, but unlike the Leaf it must be quite sexy looking. Oh crap, wait...

 

[jhm]

Uh oh guys, not only do we have the GS downgrade today but Honda has agreed to enter the EV race (kicking and screaming). Their first entrant will have the same range as the 2011 LEAF at a worse price. Elon may have been proven right once again that EVs are the future but now Tesla is doomed!! Don't worry, I know this "Clarity EV" seems extremely compelling but they won't get me as a customer as they refused to fix my Honda Civic hybrid battery even though it was under warranty. I even told them I would never buy a Honda again as a result but eh, I'm just one person.

Honda’s all-electric Clarity EV will have 80-mile of range and start at ‘about $35,000’

When do they start taking reservations? I can't wait!!! Watch out Model 3! This is a real Tesla Killrrrrrr!!!!! !

 

[madodel]

When do they start taking reservations? I can't wait!!! Watch out Model 3! This is a real Tesla Killrrrrrr!!!!! !

Smeigle probably has a reservation for one already. Going to pay for it with all the $10 checks his grandmother sen him for his birthday.

 

[kenliles]

Yes, but the 'bots' don't care. GS has many herd mentality followers.
The games that are played on WS just amaze me, and they should not

1) learning moment: For a long range investor- the value of a cash investment layer just went up- and it had nothing to do with interest rate or inflation...

2) Note for analysis of things moving forward:
"
Panasonic [] transferred all of its holdings in Tesla [] to its U.S. unit in a strategy designed to help strengthen its battery relationship with the company.

The transfer involved about 1.42M shares moving over to New Jersey-based Panasonic Corporation of North America, according to Bloomberg.
"
Panasonic moves Tesla shares over to U.S. unit - Panasonic Corp. ADR (OTCMKTS:PCRFY) | Seeking Alpha

 

[esk8mw]

Oh, right. It not as easy then. But surely there is a market - are you not allowed to borrow against your options either? Or go to a secondary market?

Most companies actually have anti-pledging policies too, to avoid people borrowing against company stock. Clearly Tesla does not have a blanket ban on this as Elon borrows against his holdings, but I bet his permission is granted on a one-off basis by the Board and the remainder of Tesla employees are restricted from pledging shares or options.

Also, stock options are generally not transferable and therefore are not marketable.

 

[Fallenone]

I think that all investors should watch the video in this post:
FIRMWARE UPDATE! AP2 Local road driving...and holy crap

The entire thread is useful. I understand the bad position Tesla is in with Mobileye and I'm not sure there was any good solution there. But at the very least I question their judgement in releasing local roads at this time. Highway driving is still limited to 50 mph so I feel they should have got that up to speed and working well first. Either way these videos look real bad to me and I don't remember anything this bad with AP1.

This is far worse than I thought last year when they announced AP2.0. At that time my thought was they devolved a function and raised the price. I thought even with TSLA timeline they should be on parity by now but this is no better than the Mercedes Benz "self driving" we laughed at last year. My initial thoughts were the new AP would need to be totally retrained with all the new inputs (minus high precious maps if they have it) just as any neural network I know of. But Sterling Anderson came out and say almost all of the old data can be used, which I was pretty sceptical. Glad he's gone now.

AP2.0 could be the second worst execution so far, following X. At this rate, I'm not confident they can book the revenue this Q.

 

[jhm]

Audi Exec Claims e-Tron SUV Will Represent “First Real Premium Manufacturer Doing A Premium Electric SUV”

Audi e-Tron, the perineal Tesla Killrrrrr!!!!! !! !

“The first real premium manufacturer doing a premium electric SUV.” Oh, behave!!

 

[Oil4AsphaultOnly]

Mostly Elon was spot on in responding to UAW "concerns". But the part regarding total compensation is kind of BS. People don't want to gamble with their salary. The right value to be placed upon stock options is some complicated Black-Scholes formula, but for somebody living on their paycheck the right value is zero. Sure it might be lucrative eventually, but it also might be nothing. Not to be counted on.

If Elon's so sure it's a good bet, he should put the options in a company account and just pay people more. But he doesn't want to do that, he wants everybody to be invested in the success of the company, which is understandable. But I don't think it's achievable this way. Forcing people to be part of his gamble will alienate many. Just paying people more will make everybody happy and motivated not to lose their job.

No, it doesn't. Equity is what motivates people, otherwise it's just another _job_. I assure you that anyone who just wants to do their job will not be motivated to go above and beyond, and will grow tired of the grueling pace that Elon expects. The only motivation for that kind of expectation is equity. That's how silicon valley attracts and retains talent.

If you're with a company that can afford to pay a good salary/wage without relying on equity as a carrot, then congratulations, your company is one of the 900-lbs gorillas that those start-ups are trying to disrupt. The company might be able to retain some key talented staff, but by and large, it will also carry quite a bit of dead-weight (moderately productive staff).

And as Kruggerand pointed out, including stock options as compensation, isn't gambling, since the employee isn't out any money as long as he/she doesn't exercise those options (they won't expire until years later or if the employee leaves the company). At worst, it's like saying at the time of employment - "your base salary will be $X, and every year we'll give you a bunch of lottery tickets that may or may not have any value". It's an employment perk that the employee doesn't have to risk anything for.

 

[Bet TSLA]

At worst, it's like saying at the time of employment - "your base salary will be $X, and every year we'll give you a bunch of lottery tickets that may or may not have any value". It's an employment perk that the employee doesn't have to risk anything for.

Yup. Until the moment when Elon goes on record using the lottery winnings in salary comparisons and saying that lottery winnings will continue. That is what is irresponsible and misleading, especially when you are talking to people who've never dealt with equity participation before.

 

[larmor]

Audi Exec Claims e-Tron SUV Will Represent “First Real Premium Manufacturer Doing A Premium Electric SUV”

Audi e-Tron, the perineal Tesla Killrrrrr!!!!! !! !

“The first real premium manufacturer doing a premium electric SUV.” Oh, behave!!

e-Sigh...

 

[FredTMC]

Yes, but the 'bots' don't care. GS has many herd mentality followers. ,Speculation> Wonder if EM got wind of this 'downgrade' on Friday and put out the teaser about something happening with SpaceX?

The games that are played on WS just amaze me, and they should not

It'll be funny and not terribly surprising if GS has a piece of the coming cap raise.

 

[neroden]

There is little evidence that the mobileye/Tesla approach to low bandwidth mapping works sufficiently to enable full self drive.

There is little evidence that anyone can do full self driving. Ever.

All Tesla has to do, from a market point of view, is stay ahead of the competition on driver-assist features. Google isn't even competition, it's doing blue-sky research.

 

[neroden]

1) learning moment: For a long range investor- the value of a cash investment layer just went up- and it had nothing to do with interest rate or inflation...

2) Note for analysis of things moving forward:
"
Panasonic [] transferred all of its holdings in Tesla [] to its U.S. unit in a strategy designed to help strengthen its battery relationship with the company.

The transfer involved about 1.42M shares moving over to New Jersey-based Panasonic Corporation of North America, according to Bloomberg.
"
Panasonic moves Tesla shares over to U.S. unit - Panasonic Corp. ADR (OTCMKTS:PCRFY) | Seeking Alpha

That's a very interesting move. I don't exactly see why they would do that, but I'm sure there's some reason.

One possible reason: If there is a partial merger coming, expect it to involve the American subsidiary and not the whole of Panasonic.

 

[Matias]

http://jalopnik.com/watch-tesla-autopilot-2-0-drive-like-a-drunk-old-man-1792785936

 

[electracity]

There is little evidence that anyone can do full self driving. Ever.

All Tesla has to do, from a market point of view, is stay ahead of the competition on driver-assist features. Google isn't even competition, it's doing blue-sky research.

I think by 2020ish we will see small scale level 4 with the "driver" being remote to the vehicle. These vehicles will be slow speed and simply pull over or stop when confused. Unless Musk is crazy, that is what Tesla Network is really aimed at.

I agree with you on Tesla's positioning. Their competitive advantage in the private car competition is to have the most updatable driver assist system. The big boys simply can't tolerate that risk and don't have the skills to manage such a system.

The short term risk to Tesla is that they are now in about last place in the self driving car competition. That takes some luster off the glow.

 

[jhm]

That's a very interesting move. I don't exactly see why they would do that, but I'm sure there's some reason.

One possible reason: If there is a partial merger coming, expect it to involve the American subsidiary and not the whole of Panasonic.

Interesting idea, but I'm a little confused. If Panasonic was going to sell its American subsidiary to Tesla, why would it send it's Tesla shares to the subsidiary? It seems that, to buy it, Tesla would be paying the parent company in Tesla shares for the subsidiary.

I wonder if Panasonic NA might need to use the Tesla shares as collateral for securing US financing for the Gigafactory.