2017 Investor Roundtable:General Discussion

[RiverCard]

I am wholy confused now. The ABL has nothing to do with leasing. It's secured against inventory (mainly unsold finished goods). The warehouse facility is backed by leasing income.



Not really. I think you misunderstood my point. I will try to rephrase it. Currently, Tesla has a cash loss from operations (see the reconciled cash flow statement in the latest 10-Q). It needs to turn that around if it wants to get to positive cash flow. My concern is that various evolutions on the profit&loss side will not make Tesla turn around cash loss from operations before 2018Q1.

Take the used car program. True, you can't directly take losses realized there to the cash flow statement. Don't think I ever implied that. But if Tesla keeps buying cars for more than it sells on a structural basis (3 quarters in a row as we speak, with the gap growing) then it does impact cash flow eventually. My other remarks should be read in the same light.

Also your suggestion on studying the convenants is not helpfull. I did and came to a different conclusion. I am open to more clarification on the subject.

Rather than the covenants in the prospectus for the 8 year notes issued in August, isn't the more relevant negative covenant the one about "Indebtedness" in Section 10.04 of the ABL? The ABL lenders have security interests.

tsla-ex102_6.htm

Also, Tesla retains the residual value risk under both the Warehouse Line leases and 3rd party banking-affiliate leases (also the lessee's credit risk in the former).

 

[Snapdragon III]

This just means the ones going after status will get a self driving luxury CAAS from point A to point B instead of self driving regular CAAS. I say the young generation cares less about ownership. We dont own music, dvds, books etc. Owning and driving a car are hassles that need to be eliminated. But that is just IMHO.

I don't disagree that views of ownership may change dramatically. I don't think you can extend that to young people not caring about the experience/status implications when those same people are hiring transportation. Just because they don't own cars, does not necessarily mean that all transportation immediately moves to the absolute lowest cost/service level.

Ownership will not seem like such a hassle to young people as they age and start families. It is hard to appreciate the pain of using shared transportation with a couple of little kids if you have not experienced it first hand.

On the other hand, airlines would suggest that I am wrong, and our cheapness will doom us to terrible but super cheap transportation service.

 

[DurandalAI]

I don't disagree that views of ownership may change dramatically. I don't think you can extend that to young people not caring about the experience/status implications when those same people are hiring transportation. Just because they don't own cars, does not necessarily mean that all transportation immediately moves to the absolute lowest cost/service level.

Ownership will not seem like such a hassle to young people as they age and start families. It is hard to appreciate the pain of using shared transportation with a couple of little kids if you have not experienced it first hand.

On the other hand, airlines would suggest that I am wrong, and our cheapness will doom us to terrible but super cheap transportation service.

I think there is a difference between air travel and ground travel from the cheap vs luxury or at least comfortable perspective. Airfare is expensive, even at its cheapest. $300 flight per person to Las Vegas is cheap compared to some places, but expensive when you compare it to taking a car with 4 people dividing the fuel costs.
In the other hand, taking a luxury Uber might be $15-20 more than a standard Uber but you’re more inclined to do it due to the driver who doesn’t drive like a madman, and having nice seats, etc. When I traveled weekly, I would always take the Metro Car which would be a luxury vehicle with a driver that wasn’t high on drugs versus the yellow cabs which stank and made me want to shower afterwards, once I was done calming down from the ride. I think the upscale autonomous vehicles will have a large place alongside the super cheap autonomous systems. And don’t forget even public transport can go autonomous too, so even single person autonomous transport will be a step up.

Anyhow, just my thoughts. An extra $10-20 isn’t huge for ground transport upgrade, but the extra $400+ to upgrade to first class air travel often isn’t worth it because while you may have bigger more comfortable seats, the rest of the flying experience is still a drag in every way.

 

[dalalsid]

I don't disagree that views of ownership may change dramatically. I don't think you can extend that to young people not caring about the experience/status implications when those same people are hiring transportation. Just because they don't own cars, does not necessarily mean that all transportation immediately moves to the absolute lowest cost/service level.

Ownership will not seem like such a hassle to young people as they age and start families. It is hard to appreciate the pain of using shared transportation with a couple of little kids if you have not experienced it first hand.

On the other hand, airlines would suggest that I am wrong, and our cheapness will doom us to terrible but super cheap transportation service.

I'd like to know what the stats on millenials and number of kids they have are. Plus TAAS with self driving would be totally different than calling an Uber or a taxi. As long as it costs less than a car lease and I can have cars show up wherever I want based on my calendar, the pain will be highly reduced as soon as kids are out of car seats. But some statistics would let TAAS operators just have cars in the fleet with the right amount of car seats too. The only remaining convenience is last minute decision trips. It will take a long time to move people to 0 car ownership. But 1 car per family instead of 2 or 3 might be as soon as self driving is feasible.

 

[Svetlin]

Not sure if this has been posted already. Someone discovered a garage full of Model 3s.
Playa Vista Model 3 staging are

Reddit thread:
Playa Vista Model 3 staging are • r/teslamotors

 

[larmor]

Not sure if this has been posted already. Someone discovered a garage full of Model 3s.
Playa Vista Model 3 staging are

Reddit thread:
Playa Vista Model 3 staging are • r/teslamotors

When they make M3 in volumes, it will be hard to hide them, unlike phones or watches that can be shipped in boxes...

 

[RobStark]

Owning and driving a car are hassles that need to be eliminated. But that is just IMHO.

Waiting for a car and not having a car to store your stuff while out and about is a hastle to be avoided by those that can afford it.

Most people don't rent smart phones or televisions by the minute.

 

[TradingInvest]

In the latest RollingStone interview, Elon said the following about Tesla short sellers:

"They're jerks who want us to die", "They're constantly trying to make up false rumors and amplify any negative rumors. It's a really big incentive to lie and attack my integrity. It's really awful. It's......hurtful".

We all know it well. In the past, I have never seen a company being attacked so fiercely for so long. In 2012, Tesla was the most shorted stock on NASDAQ with 50% float shorted. Today Tesla is still the most shorted company in the entire US stock market with around 9 billion dollars on the short side plus unspecified amount in Options. Short sellers are doing all sorts of attacks to drag and defeat Tesla, so they can make money. I don't rule out some attacks from special interest such as oil industry. I feel the majority of the attacks are from short sellers.

As investors, let's make sure we do the right things so the shorts can't take advantage of our accounts. I never sell my investment position. My trading only buy low sell high, then add profit to the investment position, only to defeat the shorts.

 

[dalalsid]

Waiting for a car and not having a car to store your stuff while out and about is a hastle to be avoided by those that can afford it.

Most people don't rent smart phones or televisions by the minute.

I agree about the storing but waiting is going to be irrelevant with a self driving fleet that is driven by your calendar. Also having the ability to have the right sized car at the right time as part of a service seems pretty nice compared to owning a car. I'm sure most of us will want to still own one car but I think the rest can go. Also once you eliminate the driver, you also eliminate time duration restrictions. A cheaper zipcar that is already there when you need it.

 

[tander]

In the latest RollingStone interview, Elon said the following about Tesla short sellers:

"They're jerks who want us to die", "They're constantly trying to make up false rumors and amplify any negative rumors. It's a really big incentive to lie and attack my integrity. It's really awful. It's......hurtful".

We all know it well. In the past, I have never seen a company being attacked so fiercely for so long. In 2012, Tesla was the most shorted stock on NASDAQ with 50% float shorted. Today Tesla is still the most shorted company in the entire US stock market with around 9 billion dollars on the short side plus unspecified amount in Options. Short sellers are doing all sorts of attacks to drag and defeat Tesla, so they can make money. I don't rule out some attacks from special interest such as oil industry. I feel the majority of the attacks are from short sellers.

As investors, let's make sure we do the right things so the shorts can't take advantage of our accounts. I never sell my investment position. My trading only buy low sell high, then add profit to the investment position, only to defeat the shorts.

I like the general sentiment, but it might deserve a distinction; there are long term shorts that make false "attacks" to drive the price down, and there are shorter terms or even long terms that just see Tesla or the market in general decreasing for a while, or hedge their long position without "attacking" anything. The first is actually illegal if provable, the latter is just prudent investing. In the quote I think he's talking about people making false claims out of malice etc., not necessarily all short positions, or maybe even those that genuinely believe all the negative stuff and think they are doing a public service by repeating it.

 

[Curt Renz]

In the latest RollingStone interview, Elon said the following about Tesla short sellers:

"They're jerks who want us to die", "They're constantly trying to make up false rumors and amplify any negative rumors. It's a really big incentive to lie and attack my integrity. It's really awful. It's......hurtful".

We all know it well. In the past, I have never seen a company being attacked so fiercely for so long. In 2012, Tesla was the most shorted stock on NASDAQ with 50% float shorted. Today Tesla is still the most shorted company in the entire US stock market with around 9 billion dollars on the short side plus unspecified amount in Options. Short sellers are doing all sorts of attacks to drag and defeat Tesla, so they can make money. I don't rule out some attacks from special interest such as oil industry. I feel the majority of the attacks are from short sellers.

As investors, let's make sure we do the right things so the shorts can't take advantage of our accounts. I never sell my investment position. My trading only buy low sell high, then add profit to the investment position, only to defeat the shorts.

It sounds as though Elon may be intent on setting in motion another "Tsunami of Hurt" for short sellers.

 

[SunCatcher]

Tesla Semi is coming; making the bend...

Instagram post by Elon Musk • Nov 15, 2017 at 9:22pm UTC

 

[zmarty]

Elon Musk: Inventor's Plans for Outer Space, Cars, Finding Love - Rolling Stone

"I think being precise about the truth works. Truthful and precise. I try to tell people, 'You don't have to read between the lines with me. I'm saying the lines!'"

At the amount of word parsing this forum is doing I think he is not doing a good enough job.

I think he is very precise, but he hides a lot of things behind very carefully chosen words.

 

[TradingInvest]

If I were Tesla, I would create two reservation lines:

First line pays $100,000 none refundable deposit, so they can get the autonomous Semi early, sometime in 2019.

Second line pays $50,000 deposit (90% refundable), so they can get the autonomous Semi one or two years after the first group.

Everyone would go for the first line. This Semi unveil will transform Tesla.

 

[oneday]

If I were Tesla, I would create two reservation lines:

First line pays $100,000 none refundable deposit, so they can get the autonomous Semi early, sometime in 2019.

Second line pays $50,000 deposit (90% refundable), so they can get the autonomous Semi one or two years after the first group.

Everyone would go for the first line. This Semi unveil will transform Tesla.

I personally hope they don’t push the autonomous idea as hard. I certainly hope they don’t pre-sell the feature.

An electric truck with autopilot and the economics of an ev drivetrain should be enough to sell as many semi’s as they can produce.

They should therefore, work in the background on autonomous trucks but not have significant focus on it until it’s ready. Just my .02

 

[TradingInvest]

Shorting Tesla really sucks. First of all, the stock went from $17 to $300 in a few years, it doesn't drop as easily as shorts hoped, instead it has a huge risk for big squeeze. Short and hold just doesn't work on Tesla.

Many shorts claim they buy Puts to reduce the risk and amplify the gain. It sounds great.

Today I will give you one data point to show what their life is like:

On June 23, 2017 I sold TSLA $305 Puts, expiring Sep 17, average selling price $12.6
Today the price is around $1.7, I closed some. Will close all before the Semi unveil for near zero cost. Because I am willing to buy the stock, so I never worried that the short Puts might hurt me. I would happily convert to long shares if it dropped a lot more.

During these three months, Tesla stock dropped from $375 to $310. It's a short period of time, they picked almost the best time to buy Puts, the stock dropped fast as they expected, they still lost almost all the money.

If they didn't get the perfect timing, if the window is wider (more premium), they are basically impossible to make money by buying Puts.

They are in it for a lot of pain.

 

[TradingInvest]

I personally hope they don’t push the autonomous idea as hard. I certainly hope they don’t pre-sell the feature.

An electric truck with autopilot and the economics of an ev drivetrain should be enough to sell as many semi’s as they can produce.

They should therefore, work in the background on autonomous trucks but not have significant focus on it until it’s ready. Just my .02

I agree with you. But over the years I learned Elon Musk is not dumb, he knows what he is doing. let's relax and enjoy the show. Tomorrow night is the beginning of a new phase.

 

[SPadival]

In the latest RollingStone interview, Elon said the following about Tesla short sellers:

"They're jerks who want us to die", "They're constantly trying to make up false rumors and amplify any negative rumors. It's a really big incentive to lie and attack my integrity. It's really awful. It's......hurtful".
.

Speaking of Rolling Stone, the most famous writer on RS, Matt Taibbi has written an entire chapter on Jim Chanos in his book. I have posted this before - but worth repeating it again.

Google Books link to chapter on Jim Chanos and his dirty tricks

 

[tander]

If I were Tesla, I would create two reservation lines:

First line pays $100,000 none refundable deposit, so they can get the autonomous Semi early, sometime in 2019.

Second line pays $50,000 deposit (90% refundable), so they can get the autonomous Semi one or two years after the first group.

Everyone would go for the first line. This Semi unveil will transform Tesla.

If they already have a finished product, is there any reason why they couldn't have shopped them to shipping companies and already sold out or taken reservations? This reveal might just be for the general public couldn't it be?

I personally hope they don’t push the autonomous idea as hard. I certainly hope they don’t pre-sell the feature.

An electric truck with autopilot and the economics of an ev drivetrain should be enough to sell as many semi’s as they can produce.

They should therefore, work in the background on autonomous trucks but not have significant focus on it until it’s ready. Just my .02

It pretty much is ready isn't it? If they are expecting to be able to go coast to coast in the cars this year shouldn't that also apply to the trucks?

 

[EinSV]

Speaking of Rolling Stone, the most famous writer on RS, Matt Taibbi has written an entire chapter on Jim Chanos in his book. I have posted this before - but worth repeating it again.

Google Books link to chapter on Jim Chanos and his dirty tricks

Thanks for sharing. That is as bad or worse than some of the conspiracy theories people talk about here, documented with texts, emails, etc.