2017 Investor Roundtable:General Discussion

[Zaxxon]

Hopefully you all will permit me one admittedly well off-topic post, as I think it's of interest to many here. When considering the setbacks and challenges encountered by a company trying to do what most think is extremely unlikely or impossible, consider how quickly things can 'skyrocket' forward once those challenges are defeated.

We already consider SpaceX first-stage landings to be routine, but it wasn't that long ago that...

I think that Tesla is fast approaching a similar-to-SpaceX's-current point at which we look back and wonder how anyone ever thought they weren't going to succeed.

 

[esk8mw]

Not entirely sure about this, but I wouldn't be surprised if the Tesla Semi event was pushed out by one month in-part because 3Q17 deliveries are solid.

This could be viewed any number of ways. In the past, when I've tried to read these types of tea leaves (with a bull bias, obviously) I've been wrong. To me, here's the various ways you can interpret this:

Bull
- Q3 deliveries are solid, no need to have the Semi reveal to prop up the SP
- Q3 earnings are solid, Elon is lining up catalysts to stick it to shorts

Bear
- Q3 earnings are weak, they moved the Semi reveal near earnings to soften the blow
- Semi is late and they need more time to prepare
- M3 ramp is going poorly and Elon needs to focus energy there

Neutral
- there's simply a scheduling conflict with the original reveal date due to the Australia TE project

After following Tesla for quite some time, I lean towards the neutral explanation. It's usually the boring explanation in my experience.

As a side note, I do expect Q3 deliveries to be solid, FWIW.

 

[bdy0627]

If Semi looks so phenomenal I might get myself one. Not sure what would I use it for but still ....
Maybe as a moving house?

Yeah, you never know when you might get the urge to tow a diesel semi up a hill...

 

[ValueAnalyst]

This could be viewed any number of ways. In the past, when I've tried to read these types of tea leaves (with a bull bias, obviously) I've been wrong. To me, here's the various ways you can interpret this:

Bull
- Q3 deliveries are solid, no need to have the Semi reveal to prop up the SP
- Q3 earnings are solid, Elon is lining up catalysts to stick it to shorts

Bear
- Q3 earnings are weak, they moved the Semi reveal near earnings to soften the blow
- Semi is late and they need more time to prepare
- M3 ramp is going poorly and Elon needs to focus energy there

Neutral
- there's simply a scheduling conflict with the original reveal date due to the Australia TE project

After following Tesla for quite some time, I lean towards the neutral explanation. It's usually the boring explanation in my experience.

As a side note, I do expect Q3 deliveries to be solid, FWIW.

Thank you; this is a good and complete list. I'm leaning on the bullish interpretation in-part because of unrelated unofficial data that point to solid Model X demand in 3Q17.

 

[AlMc]

Since there is much speculation as to the 'why' the Semi reveal has been moved I will add one more (@esk8mw ) has good ones:

Since the event appears to be in Hawthorne *maybe* another month of tunneling gets them to a point where the Semi can enter the completed tunnel at one end and *reveal* itself as it comes out of the tunnel at Hawthorne.

More likely, the occam's razor explanation is the Australian Battery Farm reveal caused it.

 

[ggr]

No... even though written long ago, Aesop was quite prescient: It's a story about a fox who posts on a global computer networking forum and denigrates positive things because they didn't benefit him.

The purely coincidental parallel to TMC on the modern-day internet is really quite remarkable.

Bonus Trivia: The term "sour grapes" comes from that fable because in it the method a forum would use to provide session persistence to a user was called a "grape" (rather than today's "cookie"), and if you posted in a negative manner for too long and got a reputation, it was said your "grapes were sour".

Also, trolls live under bridges, and have trouble reaching grapes too. And cookies found under bridges aren't usually the tasty kind.

 

[Reciprocity]

Since there is much speculation as to the 'why' the Semi reveal has been moved I will add one more (@esk8mw ) has good ones:

Since the event appears to be in Hawthorne *maybe* another month of tunneling gets them to a point where the Semi can enter the completed tunnel at one end and *reveal* itself as it comes out of the tunnel at Hawthorne.

More likely, the occam's razor explanation is the Australian Battery Farm reveal caused it.

S barely fits in that tunnel, there is no way a Class 8 semi will fit. You dont need a semi for the tunnels, you just load up the sleds with perfectly fitted containers.

 

[mrdoubleb]

This could be viewed any number of ways. In the past, when I've tried to read these types of tea leaves (with a bull bias, obviously) I've been wrong. To me, here's the various ways you can interpret this:

Bull
- Q3 deliveries are solid, no need to have the Semi reveal to prop up the SP
- Q3 earnings are solid, Elon is lining up catalysts to stick it to shorts

Bear
- Q3 earnings are weak, they moved the Semi reveal near earnings to soften the blow
- Semi is late and they need more time to prepare
- M3 ramp is going poorly and Elon needs to focus energy there

Neutral
- there's simply a scheduling conflict with the original reveal date due to the Australia TE project

After following Tesla for quite some time, I lean towards the neutral explanation. It's usually the boring explanation in my experience.

As a side note, I do expect Q3 deliveries to be solid, FWIW.

Thank you, sir, you've saved me a whole bunch of typing. Couldn't agree more.

 

[Dwdnjck]

So when is the Semi event?

September 56th.

 

[Krugerrand]

You made me think of this.....

Yep, that about sums it up.

 

[FredTMC]

I watched the Adam Jonas CNBC clip from an hour ago.

I still don't understand why AJ is saying he's Equal Weight because "EV Competition" will heat up.

Really?! When? 2020? I assume they'll be some offerings by then but in Volume?! I don't think so.

AND, needs to be equal or better than a Tesla.
I don't see BIG sales volume of EVs happening anytime soon.

Requires:

1). batteries in volume with low cost

AND

2) competitive cars to tesla's offerings

Help me understand.

 

[ValueAnalyst]

I watched the Adam Jonas CNBC clip from an hour ago.

I still don't understand why AJ is saying he's Equal Weight because "EV Competition" will heat up.

Really?! When? 2020? I assume they'll be some offerings by then but in Volume?! I don't think so.

AND, needs to be equal or better than a Tesla.
I don't see BIG sales volume of EVs happening anytime soon.

Requires:

1). batteries in volume with low cost

AND

2) competitive cars to tesla's offerings

Help me understand.

He says on Tesla Semi in the video: "From a Tesla perspective though... with a $60 billion market cap... we give them about a 10% [market share?] in some of our scenarios in the U.S. market, it adds about $5 to the stock price."

I think he's either mathematically challenged...

... or Morgan Stanley has hedge fund clients who are caught short TSLA.

I'll let you pick the explanation, but one can clearly tell from his speech patterns that he's very conflicted.

 

[DurandalAI]

I'm just a dumb TSLA long, but I was pondering on those dumber shorts... If the current market cap is $62.6B, and there is the typical $9-10B in shorting going on, but let's say that $5B of shorting was removed. Would we expect an 8% increase in SP due to this, or would the reaction be larger than just adding that 8% to the market cap? Or is there some multiplier that's attached to it? Now that's all assuming the shorts can get rid of their positions in an orderly fashion.

TLDR; Is there a calculable correlation between SP and shorts exiting their positions?

 

[ValueAnalyst]

I'm just a dumb TSLA long, but I was pondering on those dumber shorts... If the current market cap is $62.6B, and there is the typical $9-10B in shorting going on, but let's say that $5B of shorting was removed. Would we expect an 8% increase in SP due to this, or would the reaction be larger than just adding that 8% to the market cap? Or is there some multiplier that's attached to it? Now that's all assuming the shorts can get rid of their positions in an orderly fashion.

TLDR; Is there a calculable correlation between SP and shorts exiting their positions?

There is no calculable correlation. There are many moving parts in a short squeeze that change continuously.

 

[racer26]

I watched the Adam Jonas CNBC clip from an hour ago.

I still don't understand why AJ is saying he's Equal Weight because "EV Competition" will heat up.

Really?! When? 2020? I assume they'll be some offerings by then but in Volume?! I don't think so.

AND, needs to be equal or better than a Tesla.
I don't see BIG sales volume of EVs happening anytime soon.

Requires:

1). batteries in volume with low cost

AND

2) competitive cars to tesla's offerings

Help me understand.

He's sandbagging. Because he already looks ridiculously bullish compared to the rest of WS analysts, and if he presented the real bull case, he'd get laughed out of the room.

Until Tesla demonstrably proves that >2k Model 3 will be delivered in 2017, and that TE is > 0.

 

[racer26]

I'm just a dumb TSLA long, but I was pondering on those dumber shorts... If the current market cap is $62.6B, and there is the typical $9-10B in shorting going on, but let's say that $5B of shorting was removed. Would we expect an 8% increase in SP due to this, or would the reaction be larger than just adding that 8% to the market cap? Or is there some multiplier that's attached to it? Now that's all assuming the shorts can get rid of their positions in an orderly fashion.

TLDR; Is there a calculable correlation between SP and shorts exiting their positions?

There is no calculable correlation. There are many moving parts in a short squeeze that change continuously.

Buying 8% of the shares back would tend to move the price more than 8%, because you're buying them from longs, who presumably don't want to sell unless they get what they determine to be a 'good price'. Some are stronger than others. Many longs believe Tesla's value is off by somewhere in the neighborhood of an order of magnitude, so they're not likely to sell. Also, the momentum makes other sorts of momentum and technical traders pile on and amplify the movements. Its a really complex thing.

Suffice it to say that in the average day about 5M shares change hands. Those volumes move it by the $4-5 or so it moves in an average day. News or other things asymmetrically loading the demand will change the price.

 

[ValueAnalyst]

Buying 8% of the shares back would tend to move the price more than 8%, because you're buying them from longs, who presumably don't want to sell unless they get what they determine to be a 'good price'. Some are stronger than others. Many longs believe Tesla's value is off by somewhere in the neighborhood of an order of magnitude, so they're not likely to sell. Also, the momentum makes other sorts of momentum and technical traders pile on and amplify the movements. Its a really complex thing.

Suffice it to say that in the average day about 5M shares change hands. Those volumes move it by the $4-5 or so it moves in an average day. News or other things asymmetrically loading the demand will change the price.

This is not a given. He may also be buying them from new shorts. He may be buying them from longs who now have a different opportunity.

I agree that, if there's a short squeeze in TSLA, it will likely be a lot more than 8% (more than 100% if you ask me), but his question was if there is a mathematically sound correlation, and the answer to that question is a sound no.

 

[austinEV]

Not entirely sure about this, but I wouldn't be surprised if the Tesla Semi event was pushed out by one month in-part because 3Q17 deliveries are solid.

Not to be Beary McBearface but I keep hearing this. What is the logic for good Q3 deliveries (if they are good) pushing out the semi unveil?

I watched the Adam Jonas CNBC clip from an hour ago.


I still don't understand why AJ is saying he's Equal Weight because "EV Competition" will heat up.

Really?! When? 2020? I assume they'll be some offerings by then but in Volume?! I don't think so.

AND, needs to be equal or better than a Tesla.
I don't see BIG sales volume of EVs happening anytime soon.

Requires:

1). batteries in volume with low cost

AND

2) competitive cars to tesla's offerings

Help me understand.

He's sandbagging. Because he already looks ridiculously bullish compared to the rest of WS analysts, and if he presented the real bull case, he'd get laughed out of the room.

Until Tesla demonstrably proves that >2k Model 3 will be delivered in 2017, and that TE is > 0.

This is correct. He doesn't need to go out on a limb and be super Bullish since he can claim victory for Tesla sucess and be off the hook if it goes badly. If there was someone else to the Bullish side of him he might feel pressure to be more accurate, until then he can position himself as bullish but hedge everything. Just playing it safe for his career.

 

[sundaymorning]

Since there is much speculation as to the 'why' the Semi reveal has been moved I will add one more (@esk8mw ) has good ones:

Since the event appears to be in Hawthorne *maybe* another month of tunneling gets them to a point where the Semi can enter the completed tunnel at one end and *reveal* itself as it comes out of the tunnel at Hawthorne.

More likely, the occam's razor explanation is the Australian Battery Farm reveal caused it.

Based on past Elon interviews regarding tunneling, I feel the probability of a Semi fitting through a boring company tunnel is almost zero%. The reason for this is cost, Elon has stated that he plans to build these tunnels at a cost advantage when compared to other tunnel builders. The only way he can do this is to build these tunnels smaller than the average size.

 

[austinEV]

Based on past Elon interviews regarding tunneling, I feel the probability of a Semi fitting through a boring company tunnel is almost zero%. The reason for this is cost, Elon has stated that he plans to build these tunnels at a cost advantage when compared to other tunnel builders. The only way he can do this is to build these tunnels smaller than the average size.

I wish it would dawn on him that it is just optimal to make tunnels for shipping items. If cost goes down with the square of the diameter then just build a cargo network. That would be safer and would ALSO releive traffic since a ton of traffic is stuff moving around with human chauffeurs.