2017 Investor Roundtable:General Discussion

[DurandalAI]

Billboard Campaign Urges Tesla CEO To Cut Ties With Trump

That's juvenile, sticking your head in the sand business. Honestly, just because you don't agree with someone's policies doesn't mean that you should refuse to interact or negotiate with them. You can't have any input if you recuse yourself from speaking. More likely just another short-seller smear campaign as opposed to people with genuine interest.

 

[sdtslafan]

For anyone that missed the Google hangout

Techmaven is money.

He's getting the consolidation he asked for. Now we wait for Delivery numbers in early April. Spring loaded.

 

[techmaven]

Techmaven is money.

He's getting the consolidation he asked for. Now we wait for Delivery numbers in early April. Spring loaded.

Once caution is that at the time, we didn't know the length of shutdown in Q1. As a result, we have to re-calculate the delivery numbers. It could still be fantastic due to the very large overhang from Q4. But we don't know the resulting speed and just how much Tesla was able to produce before the shutdown.

 

[sdtslafan]

Once caution is that at the time, we didn't know the length of shutdown in Q1. As a result, we have to re-calculate the delivery numbers. It could still be fantastic due to the very large overhang from Q4. But we don't know the resulting speed and just how much Tesla was able to produce before the shutdown.

Thanks techmaven, yes that is an important caveat.

Do we know the exact length of the shutdown?

I know Tesla stated that it should not impact delivery numbers but of course this needs to be taken with a grain of salt based on history.

Even if the numbers are low, say 22,000 for Q1, achieving the low end of 1H 17 guidance (47,000) seems reasonable particularly given strong orders as mentioned in most recent shareholder letter.

 

[aubreymcfato]

New MKBHD video, but this times of Lucid Air

My notes:
* Lucid Air is aiming at the luxury market, working on the interiors (which is a know issue for some high end customers of Teslas)
* interesting bit about the back seat, which are very cool and look very expensive. Others said in this forum the idea is to have a expensive car for really rich people who will not even drive it (also, autopilot and ride-hailing).
* glass roof. Tesla has his own glass, and we'll probably see very similar features as in this car, maybe in the Model 3 reveal part three. Lucid it's still behind with the shown prototype, in which the "opacity button" didn't work.

 

[dc_h]

Billboard Campaign Urges Tesla CEO To Cut Ties With Trump

Who's going to plant the bugs if Elon quits?

 

[FredTMC]

Nice bounce off $242 an hour ago.

Nice day for a Cap Raise...

 

[SteveG3]

Bertel Schmitt's attempted smear piece in Forbe's today arguably established him as the leader in what we could call "balsey FUD."

In response to a competing automaker's survey finding the #1 most likely car brand Model 3 reservation holders would buy if the Model 3 is not available is a Toyota, rather than a BMW, Schmitt writes a concern troll piece that Tesla is in trouble with these consumers accustom to Toyota reliability. It is valid to point to past reliability issues, and it seems reasonable these mass market buyers will be less tolerant of issues than S and X buyers. However, look at the giant elephant in the room Bertel tries to swift boat: the data is bullishly suggesting the Model 3/Y potential market may be several times larger than that of its targeted BMW 3 series counterpart. Consider this other piece of data from the study: only 37% of the Mod3 owners had household incomes over $100,000, whereas 63% of BMW owners do. While not having read Bertel's "balsey FUD" directly (read about it in a San Jose Mercury News piece), I'm pretty confident Bertel did not mention that piece of data.

Link to Mercury News article

The average Tesla Model 3 buyer may be more average than you think

Would be great to see a piece from Fred on this in Elektrek that discusses the elephant in the room Bertel omitted.

 

[SteveG3]

Nice bounce off $242 an hour ago.

Nice day for a Cap Raise...

Heard several analysts the past few days speculating raise will be more like mid-year. Makes sense to me as Tesla could have several substantial product reveals to show between now and then.

 

[FredTMC]

Heard several analysts the past few days speculating raise will be more like mid-year. Makes sense to me as Tesla could have several substantial product reveals to show between now and then.

I hear ya. BUT, with history as a guide, all the previous cap raises occurred within 2 weeks of the ER.

 

[hobbes]

I hear ya. BUT, with history as a guide, all the previous cap raises occurred within 2 weeks of the ER.

No more ERs coming this year ?

 

[esk8mw]

I agree that the overhang will mitigate Q1 production issues somewhat, but I also think there will be a (possibly even greater) Q1 overhang. Note that the shutdown occurred probably right after overseas cars were produced for the quarter, so I expect no issues with China/Euro overhang there unless there's some sort of unforeseen shipping/Tilburg issue.

However, the shutdown occurred right in the prime of North American production allocation for Q1. I think there will be significant overhang for Canadian and East Coast deliveries as the factory will have a tough time producing and delivering such cars in under a month. Local deliveries should be fine (depending on how they decide to maximize deliveries in a short window) but I think overall there will be a massive amount of North American cars in transit at the EOQ.

Here's an example exactly tracking my prediction. 2017 VIN Model X Order and Delivery

Canadian order, scheduled for Feb production and Q1 delivery, gets bumped to April due to Feb shutdown. I hope there's not too many like this, or that alternatively they are bumping orders like this in favor of NA orders they can fulfill in March.

 

[AlMc]

I hear ya. BUT, with history as a guide, all the previous cap raises occurred within 2 weeks of the ER.

No more ERs coming this year ?

I see a cap raise 'soon'. The other scenario would be IF EM is waiting to see if delivery news for Q1 is great OR waiting to see if Q1 ER has the potential to be great.

IIRC the last cap raise they waited too long (IMO). We were all hoping for a cap raise at a healthy SP and it dropped, then the cap raise came.

 

[cziegler]

From CNBC: Trump hosted a meeting with bankers today and directed his cabinet staff to deregulate the banks within 6 months. CNBC featured a banker (didn't get her name), that implicitly called for the return of stated income loans and claimed that 'professional bankers don't need to be regulated to be compelled to ensure they loan money to people who will be able to repay the loan'. For those of us that have followed Tesla from the early days, the banking crisis of 08 was darn near fatal (or so I was told) - Anyone have a feel for this direction, will it fly? Can we really trust that bankers will perform the proper diligence and if not, how long until this blows-up the economy again? Lastly, if the economy has a major contraction, how will it affect Tesla?

 

[erthquake]

Heard several analysts the past few days speculating raise will be more like mid-year. Makes sense to me as Tesla could have several substantial product reveals to show between now and then.

And if Telsa is confident those announcements will raise the SP, doesn't it make sense to delay the raise until right before production starts? My understanding is that it's not the purchase/install of the production lines that will bring cash reserves to the edge. It's when the terms are due for the initial part orders that the cash infusion will be helpful. Or am I off base?

 

[Green Pete]

From CNBC: Trump hosted a meeting with bankers today and directed his cabinet staff to deregulate the banks within 6 months. CNBC featured a banker (didn't get her name), that implicitly called for the return of stated income loans and claimed that 'professional bankers don't need to be regulated to be compelled to ensure they loan money to people who will be able to repay the loan'. For those of us that have followed Tesla from the early days, the banking crisis of 08 was darn near fatal (or so I was told) - Anyone have a feel for this direction, will it fly? Can we really trust that bankers will perform the proper diligence and if not, how long until this blows-up the economy again? Lastly, if the economy has a major contraction, how will it affect Tesla?

If the Tesla network gets up and running I feel like a recession would actually benefit them. People would be into the cars because the taxi function could negate payments, and tesla would still be selling cars/making a profit on the taxis.

That being said I think the self-driving cab business is a first to market scenario unless car companies get together and make a shared platform where you can request cars from various manufacturers.

 

[Lump]

From CNBC: Trump hosted a meeting with bankers today and directed his cabinet staff to deregulate the banks within 6 months. CNBC featured a banker (didn't get her name), that implicitly called for the return of stated income loans and claimed that 'professional bankers don't need to be regulated to be compelled to ensure they loan money to people who will be able to repay the loan'. For those of us that have followed Tesla from the early days, the banking crisis of 08 was darn near fatal (or so I was told) - Anyone have a feel for this direction, will it fly? Can we really trust that bankers will perform the proper diligence and if not, how long until this blows-up the economy again? Lastly, if the economy has a major contraction, how will it affect Tesla?

Hmmm, really?

Here is the interview
Community bank CEO: We are the primary funder of small businesses

 

[FredTMC]

No more ERs coming this year ?

Sure... and the stock could be trading at substantially lower levels by then... its already rolled off 30 points. Market overall is looking "topped"

If I were Tesla, I wouldn't wait. What possible reason to wait?

 

[SteveG3]

Sure... and the stock could be trading at substantially lower levels by then... its already rolled off 30 points. Market overall is looking "topped"

If I were Tesla, I wouldn't wait. What possible reason to wait?

By no means saying the risk/reward choice is obvious, but, they may be waiting for next part of Model 3 reveal, which could include news of substantial SuperCharging rate improvement (among other potentially exciting improvements), semi-truck, new urban transport vehicle teased, potentially a particularly large TE project in the works, quite possible very favorable arrangement with state, province, etc., landing GF3, 4, 5(?), Tesla Network details, or other not even hinted at to date. I think it's worth noting that in the earnings call we just had, Elon actually declined to answer one product question by saying (paraphrasing) ~we need to keep some good news dry powder for future announcements~

I agree, the whole market could also selloff precipitously, and none of those items on the list might turn out more positive than what such a selloff does to share prices.

My point is, isn't there more than one option worth considering as to the timing of a secondary?

 

[RobStark]

landing GF3, 4, 5(?),

Unless they announce GF3,4,5 fully financed by 3rd party they should wait til after the cap raise to announce any future GF.

Wall Street will only seem more CapEx, more "cash burning" but not future Revenue growth. And a corresponding drop in the SP.