2017 Investor Roundtable:General Discussion

[luvb2b]

it's not a certainty that they post a beat, it's my best guess based on the available information.

...we are getting ready to post a pretty large beat vs. analyst expectations...

 

[Crowded Mind]

I am really disappointed not seeing master robots installing the production line robots!

Someone had to take the photos!

 

[Bgarret]

To clarify, I am not expecting exactly a 2013esque 1000% rally. The short interest then was substantially higher(50%?), and also the narrative then was going from "going bankrupt" to "profitable and viable". Even a massive earnings beat now would not present that kind of shock to the market. Currently, I feel there are much less people betting on "zero" outside the Spiegels of the world. The most prominent short thesis now is "overvalued", and that doesn't really change even with a profitable quarter.

My point was more that, in the current state of the market, the earnings will more likely be interpreted positively as opposed to with skepticism, so directionally higher. As for my own bets, I don't really do short term options unless it is for hedging, I have to be conservative because I trade "other people's money". Although over the last few months I've gone from equal weight invested to heavily invested to now leveraged invested with DITM 2018/2019 calls.

The statement "but the short interest is not nearly the same as 2013" gets repeated often, and I'm not sure that is accurate. Couple of points.

Short interest in March 2013 and Today is about 31 million shares.
Number of shares outstanding has grown from 124 million to 161 million.

From Yahoo Finance....current short interest as percent of float is 38.34%.
Estimated short interest in Mar 2013 - about 44%.
TSLA Key Statistics | Tesla, Inc. Stock - Yahoo Finance

Total $ of short interest in 2013= 31million x $75/share = ~ $2.3 Billion
Total $ of short interest in 2107 = 31 million x $313/ share = ~ $9.6 Billion

In 2013, Daimler and Toyota owned about 10% of Tesla, which they sold over the next 6 months.
In 2017, Tencent just disclosed accumulation a 5% share, unlikely to sell any time soon.
Many of the shareholders in 2013 were momentum traders or just trying to make quick profits.
Many of the shareholders in 2017 are looking to buy into the "next big growth story".

To be sure, I hate calling for a squeeze, because that flavor of hopium leads longs down a Zhelko-like rollercoaster. But, if there is a surprise, there will be 100% underwater, desperate, highly leveraged shorts facing a "Stairway to Heaven" with no parachute. It is, and should be, illegal to shout fire in crowded theatre, but Elon may be about to rain ️ On the shorts sad parade.

 

[luvb2b]

i resemble that remark. i have done very well with gold over the years, including one of my first big options trades coming out of the bank of england's gold sale back in 1999. and i bought one of the first 10k model s.

In response to David Einhorn's - he of the Greenlight Capital 1.3% hedge fund return in the first qtr, - snarky comment that "the market has regained enthusiasm for profitless companies (i.e. Tesla) that aren’t at risk of paying taxes," why would anyone listen to this boob?
I get that if you look at companies, or anything for that matter, in a vacuum, that that logic would make sense. Why invest in a company that isn't profitable? Duh? Conversely, why would you invest in a company, say GM as he has, that has slow, minimal growth? He also invests in gold, which is fine (I have for a short time in the past), but gold traders, if I can stereotype (see douche Peter Schiff), in my view tend to be a conservative, risk-averse, build the bunker type of mentality that would consider driving a Tesla akin to driving a Vespa through the streets of Dallas. I get that many Tesla investors, such as myself, sometimes overemphasize the Tesla product while downplaying the stock flaws, but many of us have seen and lived the Tesla story for several years, both in the financial product and the car, and have seen first hand how the convergence of the idea and reality has reaped sweet rewards.

 

[FredTMC]

Fred, could you post other pictures?

It is interesting that whatever line this is, it will seem to have *two* separate parallel "tunnels", not just one. May be it is modular in that the production capacity can be increased not only by increasing speed of the line, but also adding parallel "tunnel(s)".

Last two below.

 

[neroden]

The reason why airplanes are safe is because they have airports that regulate and direct landing/takeoff. Without a special landing or takeoff operator or zone, flying cars will be too impractical. Unless AI totally takes over.

FWIW, I envision Lilium basically selling into the helicopter market and replacing gas-powered helicopters. Nothing more. This is still a huge market, though.

 

[neroden]

You really think you knew about the weakness in service centers before the Tesla owners and fanatics on this forum? Really? You think too highly of yourself if you think you've ever brought up an issue which most of us haven't already considered.

Hell, I was bitching about the shortage of service centers to JRP3 back in *2013*.

 

[neroden]

Does anyone have revenue estimates for Tesla Energy (or just the stationary battery segment) for the next three to five years?

I can't annualize it. The market is just getting started. We know that they had about $800 million worth of instant pre-reservations, of which about $650 million was the Powerpack and the balance was the Powerwall. But I don't know what that ends up annualizing to -- that just gives us the "pent-up" demand, basically.

For now they're production limited, so...

 

[neroden]

it's not a certainty that they post a beat, it's my best guess based on the available information.

If it were a certainty, every analyst would know about it and it wouldn't be a beat.

 

[FredTMC]

I'm sure there is no way that all those robots can possibly build more cars than the old human lines from the old Nummi plant.... The shorts are right - no way Tesla can build more than 500,000 cars in the Fremont plant, even if they make the plant bigger (which they are). I better sell all my shares and start shorting!

We don't know if these "white pedestals" are:

A). Body-in-white Weld Line
OR
B) Final Assembly line

My best guest is "A" (BIW Weld line) because there's YELLOW plexiglass in one photo that has the white pedestals and the man in frame

I believe this plexiglass is an eye shield from the welding.

Also, "A" is largely completely automated for S & X.

Whereas "B" doesn't have nearly as many. It's mainly "human" based final assembly for S/X
The robots attached the Roof and tires but not much else.

It's certainly likely the "final assembly" is more automated for M3 than S/X.
But, as I said, I think we are seeing Robotic Body-in-white line.

 

[neroden]

The service center situation is slightly worrisome. The number of service centers required rises almost linearly with the number of Teslas out there, except Model 3's probably only need something like half as much time as the service centers. So, you need a lot more service centers, but maybe not quite as many as one might think.

One catch with your calculations is that Tesla obviously doesn't have enough service centers already.

I personally like a different model. My theory is that once you've gotten geographic distribution of service centers (which Tesla does not have), you don't need to build *more* service centers, though they do need to *enlarge* some of them. So step one is to double the number of service centers to provide basic US geographic coverage. Then, for each new country, a large number of additional service centers are needed, for geographic coverage. After that, it merely becomes a question of how *big* to make the service centers, which has economies of scale.

 

[neroden]

I think we may find that the relationship between fleet and number of service centers is much less than linear as initial service center expansion might be more about geographic coverage than supporting number of cars. They may just add more people to existing service centers going forward and add new centers at a relatively slower rate vs. number of cars added to fleet. I could've worded that better but hope that makes sense.

I think this makes sense but Tesla isn't anywhere close to having minimal geographic coverage yet. They need to double the number of service centers in the US to get geographic coverage.

To make a point I've made before, we need one in central or western NY.

 

[AudubonB]

7.5 weeks to install 467 robots?

No problem! All Mr Kukaman has to do is put together one.

And then say: "Robot! Get to work!"



Ain't Neuralink great?


On edit: Rats - vgrinshpun beat me to it

 

[neroden]

At any rate, I'm not yet convinced that autonomy is going to be the goldmine predicted by Jonas and others, and it's not affecting my investment decisions. Auto manufacturing and Tesla energy are reason enough to be very bullish for me.

This. Autonomy can be worth 0 as long as it isn't causing people to buy other cars instead of Teslas. The value is in the electric car manufacturing and the battery manufacturing.

I'd like to remind people that fully autonomous trains have been solved technology since the 1970s and we're still not using them, mostly. Fully autonomous cars? Don't make me laugh -- they'll be banned PDQ the first time one kills someone, and it will happen, even if it's a freak accident. This is why *everyone* including Tesla is instead offering more and more "driver assist features" and requiring the driver to be ready to take control at any time.

 

[Snapdragon III]

We don't know if these "white pedestals" are:

A). Body-in-white Weld Line
OR
B) Final Assembly line

My best guest is "A" (BIW Weld line) because there's YELLOW plexiglass in one photo that has the white pedestals and the man in frame

I believe this plexiglass is an eye shield from the welding.

Also, "A" is largely completely automated for S & X.

Whereas "B" doesn't have nearly as many. It's mainly "human" based final assembly for S/X
The robots attached the Roof and tires but not much else.

It's certainly likely the "final assembly" is more automated for M3 than S/X.
But, as I said, I think we are seeing Robotic Body-in-white line.

You may be right, but, to me that yellow shield looks like a portable vinyl weld shield that is mounted on a light steel tubing frame. These are used often in construction for protecting other construction workers. I suspect that is there due to some welding they were doing in setting up the robots, not the final function of the robots.

 

[neroden]

Has anyone done any work around the theoretical limit of Gigafactory 1 output?

For example, can Tesla ramp it up to 10-20 million cars per year just by adding lines and speeding them up?

What is the limiting factor?

The Sparks municipal water supply? The number of people willing to live and work in the Reno area? I mean, there's insane amounts of room to expand the building.

If they found a large empty parcel in, say, *Chicago*, with a huge municipal water supply and essentially unlimited numbers of workers, I don't see any limits other than consumer demand.

 

[erthquake]

I am eagerly anticipating the Electrek article currently underway

It's up.

Tesla receives massive shipment of robots for Model 3 production line – first pictures

 

[neroden]

Anyone know why Goldman is reiterating its sell rating once a week? Especially in the face of all the high-quality large institutional buys/adds in 4Q17? This is highly unusual. Could they have written a large portion of the calls?

We don't know, but I suspect Goldman is the counterparty on many of Tesla's "hedges" related to the convertibles (which are very similar to calls economically).

 

[neroden]

Dang, videos like this scare the crap out of me. While the statistics still show the rate of fires in Tesla are very low, seeing a car burn into NOTHING, while the ICE counterpart is still largely intact

Aluminum bodies. It's a lot harder to burn steel than to burn aluminum, basically.

Tesla cars that catch on fire almost always burn completely with nothing like but a frame when the fire is extinguished.

It's the aluminum body. Betcha an aluminum F150 would do the same thing.

 

[neroden]

Hello everyone. Longtime lurker here (also TSLA and Model S 75D owner) who's been impressed with the conversations in these investment forums. Just one interesting observation/question. The most reasoned, well thought out, reality-based bear arguments seem to be brought up by the bulls. Those arguments make me temper my feelings for TSLA to more reasonable levels. That's a good thing.
And the most poorly thought out, anecdotal, fact-twisty arguments are brought up by the true bears (2 in particular), which, paradoxically, make me overly optimistic about TSLA. Am I alone in this?

No. Every time I realize how many idiot negative views there are I think "When people stop believing this nonsense, the stock will go up"...