2017 Investor Roundtable:General Discussion

[luvb2b]

i agree with you and @neroden. solarcity is hard to comprehend. but i think it's valuable to understand it, especially if it can contribute a meaningful amount of profit this quarter.

it seems to be more than i can handle. clearly there's lots of confusion around it even here.

so i called in the heavy artillery.

i hired a consultant. a group that does.a lot of work for hedge funds and has on staff a bright individual who had a long career at one of the big private equity firms.

let's see what they report back.

If we are going to have an extended discussion of the labyrinthine intricacies of SolarCity accounting, I may have to give myself a frontal lobotomy with a power drill. Please, for the love all that it good, take it somewhere else. We do not need splatters of blood and greymatter on smartphones.

 

[Bgarret]

Of course not. Even when it finally arrives here in Australia next year (penalized because we drive on the correct side of the road). We don't have good lease options here. So i might take a loan and buy.

Just because it's right...doesn't mean that it's Right...and the follow up, just because it's Left, doesn't mean that it's wrong. If you know what I mean.

 

[Bgarret]

i agree with you and @neroden. solarcity is hard to comprehend. but i think it's valuable to understand it, especially if it can contribute a meaningful amount of profit this quarter.

it seems to be more than i can handle. clearly there's lots of confusion around it even here.

so i called in the heavy artillery.

i hired a consultant. a group that does.a lot of work for hedge funds and has on staff a bright individual who had a long career at one of the big private equity firms.

let's see what they report back.

Damn it's nice to have you back. To be perfectly honest, you helped me pay for a 2 year sabbatical in NYC. Please bring the heavy artillery, the kitchen sink and the wisdom to know the difference between them.

 

[FredTMC]

Just FYI, model 3 sighting posted on Reddit.

Model 3 sighting near Tesla HQ • r/teslamotors

It was nice to see that black Model3 on the roads around Tesla HQ.

I presume it was the exact same RC car that Elon showed via his tweet.

What WOULD get me more excited is for sightings of more Model 3s on the road in different colors. Love some verification that tesla is producing a number of these RC cars. 10s of them please...

 

[Curt Renz]

 

[jhm]

That's pretty fair commentary. I like that Tesla gets framed as a technology company and not just an automaker.

 

[jhm]

i agree with you and @neroden. solarcity is hard to comprehend. but i think it's valuable to understand it, especially if it can contribute a meaningful amount of profit this quarter.

it seems to be more than i can handle. clearly there's lots of confusion around it even here.

so i called in the heavy artillery.

i hired a consultant. a group that does.a lot of work for hedge funds and has on staff a bright individual who had a long career at one of the big private equity firms.

let's see what they report back.

It's good that you are seeking professional help. Don't expect to understand it or to be able to communicate it to others. At a minimum it will cause competent CPAs to drink heavily. Worse can happen to the rest of us. It is dark, very dark.

You have all been warned. I am absolutely serious. The best we can hope for is nonmateriality of things that would drive one to certain madness.

You have all been warned.

 

[Waiting4M3]

I couldn't imagine selling shares to buy a model 3 (I have 2 reserved), talk about opportunity costs!

Good point, I'd take out a loan

 

[sundaymorning]

Don't we get some sort of TE product/pricing/ordering announcement this week, or is it this month?

 

[austinEV]

that data doesn't give you buy to cover or purchase information either. it only addresses supply of shares to short at two brokers which can change for several reasons other than covering and shorting.

the only way I know to get to net shorting is from the bimonthly short interest reports.

My inexpert opinion the the shorting info: Maybe the daily tea-leaf reading is astrology. But, I think they would be good first indicators that something *was* different. Interest rates go up. then way up. Then no shares available +high interest rates. Then you have a dryships/VW thing going on.

 

[3Victoria]

That's pretty fair commentary. I like that Tesla gets framed as a technology company and not just an automaker.

But they recommended investing in GM!

 

[schonelucht]

Don't we get some sort of TE product/pricing/ordering announcement this week, or is it this month?

At the earliest in the shareholder letter. No date is set but I suspect somewhere end of April.

 

[mmd]

Numbers for Europe are coming in, and this time I can really be proud of my country: 670 for March !!! For a total of 1023 for the quarter . For comparison: Best Q so far was Sep 2016 with 377 cars. 2016 total was 1908, so Q1 17 had more than half of 2016 total!!

Thanks for the data point. Any specific reason for this big jump? Did Tesla just become eligible for incentives in Germany? IIRC, the automakers pay 40% of the incentive in Germany. Did Tesla announce it is participating in this program now?
Secondly, are these registrations by end customers? TIA.

The way Tesla deliveries go up and down every quarter, I think Q2 will be 22k-23k, to meet the lower end of H1 guidance. Model S 60 percentage could also be high in both Q1 and Q2, due to this being discontinued on April 17. Q1 goal appears to be to burn the shorts and give Tencent some profit boost. I mean, explain the extremely rounded delivery count of 25000

BTW, anyone knows why Denmark is stuck at a perfect 0 for Jan & Feb in the excel sheet? Is it because we don't have data? Or may be Tesla is shipping to Denmark only once a quarter in the last month? After the stellar 2738 in 2015, Denmark market has completely vanished without supporting incentives. In 2016, S&X added up to only 176. I think, we will see a similar effect in Hong Kong soon.
Tesla Europe Registration Stats

 

[NicoV]

I was just thinking about the value of self driving technology. In 5-10 years, every auto manufacturer will have self driving, making it almost worthless after that point. The value is in the next 5 years. Tesla should sell its technology to share with another automaker now. Based on Mobileye, Tesla can make Billions which would help fund the next Gigafactory, without having to dilute shares, or pay interest on loans/bonds.

This silently makes the assumption that self driving is easy to achieve. I'm sceptical that Tesla will achieve this in the next 5 years (based on experience of AP1), I'm even more sceptical that regular car companies will be able to achieve this.

 

[Intl Professor]

This silently makes the assumption that self driving is easy to achieve. I'm sceptical that Tesla will achieve this in the next 5 years (based on experience of AP1), I'm even more sceptical that regular car companies will be able to achieve this.

I agree about traditional companies. But Tesla has the advantage and might just succeed.

Take a look at the original test drive video on the Nvidia site about their early self-driving concept paper. I believe it was called "Dave." I'm about to go to bed now so can't take the time to dig it up. Will in the morning. If I remember correctly they had two or three forward looking cameras only, no radar, probably gps but I'm not sure. They taught it to drive within 100 miles of experience, or so. Number crunching capability probably what Tesla has with their PX-2 plus backup at home. How many more cameras, ultra sound, radar that can already interpolate at least one car beyond, gps, and thousands of cars driving millions of miles.... I think they can make it soon. But as you can guess, I ain't an AI guru. (IAAAG, for short.)

 

[mmd]

Storage in store: battery pipeline reaches 3.4 GW in Q1, reports IHS Markit
(Quoting only parts due to copyright concern. Follow link for complete story)

Latest data from market analysts IHS Markit reveals a utility-scale global battery storage pipeline of 3.4 GW – a figure double that of last year and a growth that can trace its roots to rising demand in China and Asia.
..
For the first time ever, Asian demand – driven by China and a growing thirst for storage in India – stands at more than one-third of the global pipeline. IHS Markit forecasts these countries, as well as South Korea, to continue to increase demand drastically over the next few years.

In contrast, the pipeline in the EMEA region only grew by 30 MW during the quarter, which represents a significant slowdown on Q4 2016, when projects announced at the U.K.’s capacity auction helped boost the region’s utility-scale storage pipeline by more than 400 MW.

Further contraction was also recorded in the Americas as project completions exceeded announcements. Most notably, the bringing online of more than 100 MW of storage capacity in California in early 2017 ate into the pipeline. This energetic start to the year was largely down to South California Edison and San Diego Gas and Electric responding to the damaging Aliso Canyon gas leak that had restricted the availability of gas peaker plants to provide peak-time power, IHS Markit said.

 

[jeewee3000]

Didn't know where to post this so I'll add it to the general topic:

Belgian newspaper DeStandaard posted an article on why the stock of French car company Peugeot is dirt cheap right now and worth a massive buy. Main reasoning "stock ATH 10 years ago was more than twice what the stock price is now".

Terrible how main-stream analysts mislead their readers into buying stock of dying companies.

EDIT: won't link 'cause of a paywall.

 

[larmor]

Storage in store: battery pipeline reaches 3.4 GW in Q1, reports IHS Markit
(Quoting only parts due to copyright concern. Follow link for complete story)

I think I just heard the market say oops for not being able to see future revenue streams and profits from grid scale battery storage. So back to just in time valuation....

 

[virtuesoft]

Adam Jonas from Morgan Stanley has released another note this morning. I don't have the full note but I have seen some quotes...

"A significant portion of our $305 price target can be accounted for by the value of Tesla Mobility, an on-demand and highly automated transportation service we anticipate to be launched at low volume in 2018."

 

[luvb2b]

if anyone has a possibility to pm me the most recent goldman or morgan stanley notes would appreciate it.

Tesla, most valued US automaker

i know most of us know why this is the case, but my note to those concerned about reports of tesla being more valuable than ford and gm:
these are half-truths.
tesla's equity is more valuable than ford and gm's equity. yes.
however remember the equity is "last in line", equity holders get value after creditors have been paid. ford and gm, they have a lot of liabilities - 208 billion for ford, 177 billion for gm. tesla has only 16.7 billion in liabilities. adding liabilities + market cap of equity you can see tesla's market value of equity could triple and the overall value of the company would still be less than gm and ford.
but that doesn't make for sensationalist headlines!

Interest rates go up. then way up. Then no shares available +high interest rates. Then you have a dryships/VW thing going on.

i agree, borrowing costs are a valuable indicator. lack of shares to borrow is a valuable indicator. the rest of the intraday machinations of who borrowed what and covered what are not my cup of tea. i find usually when there are no shares to borrow it is often the best time to sell/short because that's when the price is moving on the back of forced covering (which is typically not sustainable movement).

Damn it's nice to have you back. To be perfectly honest, you helped me pay for a 2 year sabbatical in NYC. Please bring the heavy artillery, the kitchen sink and the wisdom to know the difference between them.

thanks so much for this note. at one time i had kept somewhere the little pile of notes from all the people that had benefited from my posts at that time. some great stories that make me feel warm and fuzzy. here's one of my personal favorites (*note i think he meant "done a super deed here"):
"I really appreciate all your posts luv, I know you have a lot of emails to read thru, but you have don't a supper deed hear, they will be a special place for people like you in the after life......... my mom just retired, and now I can take good care of her as she was a great mom to me while I was growing up with no farther, she worked 2 jobs.......... I am a little sappy so have a wonderful time knowing you helped teach people to trade"

@luvb2b Hope this helps in your Q1 estimating... On the Q4 2016 ER call, it looks like the sale referred to in this Electrek article (announced in late December) was apparently not booked in Q4.."

I'm confident there are others here that are more capable of answering this in greater depth, but here's a shot: The outsized ($150 million) in profit was from the one-time sale of bundled solar leases in Q4 2016 (Tesla’s SolarCity sells $241 million equity in its solar portfolio). There may be more of these in the future, but there was no similar sale for Q1 2017.
"

@steve3 thanks very much. it helps a lot to know there's not a large one time gain on sale stuffed in there on top of the one time silevo reserve release as @Bgarret and others had surmised.