2017 Investor Roundtable: TSLA Market Action

[Curt Renz]

Why do they hate him so much?

Tesla does no advertising which is the lifeblood of the newspaper business. In Los Angeles auto dealerships are particularly big advertisers in newspapers. There is a notorious New York short seller of Tesla who has learned that the Los Angles Times acts on his tips. Elon does live in Los Angeles; perhaps he failed to salute a Times reporter.

Meanwhile, the UAW has been creating propaganda in its attempt to unionize Tesla. Most of the media have been ignoring what appears to be a questionable UAW campaign, but a few need the clicks and can be counted on to spread whatever is handed to them.

 

[KLC13]

Not sure if this was mentioned, but Tesla released a MS vs M3 chart that gives great details about the M3.

So Tesla does seem to be in a pickle on how to get customers to decide between M3 and MS. As a M3 reservation holder, the M3 numbers look pretty good to me, and even if I had the $$'s to buy the MS, I would probably go for the M3.

This may not seem like an issue for established auto like BMW and Daimler (3 series vs 7 series), but for Tesla, it seems like this MS vs M3 choice is tough. Im curious to see how the SP responds as more and more M3 info starts coming out

 

[geneclean55]

What happened to futures market in the past couple hours?

 

[22522]

The fundamental issue is that rideshare cannot handle the commuting market.

A bus from the airport used to cost 68 cents. That is pretty hard to beat.

Rideshare can collapse the commuting traffic if occupancy goes up.

Because cars can be more granular on pick up and drop off, they should have less trouble filling all the seats than bigger boxes.

If cars are designed to cater to customers, and are as quiet as Carnegie Hall, with peers picked based on shared interests (clubs on wheels) they should beat busses. Here is what I think the car that drives high occupancy during commutes should offer. It is designed around a Tesla Chassis in a gallery - so it is completely feasible:
https://www.researchgate.net/public..._Light_Truck_-_A_Modern_Take_on_a_Narrow_Wake

So if vehicles are designed to entice passengers as described here, ride share can handle commuting traffic.

 

[RobStark]

Elon's hometown bus fare.

==========================================================================================================
Beginning Monday, September 15,2014 Metro will implement new fare changes that will include for the first time a two-hour period of free transfers on Metro's bus and rail system when using a stored value TAP (Transit Access Pass) card to pay for the base fare. The fare changes, following extensive public hearings and Board approval last May, will raise the price of the base cash fare from $1.50 to $1.75, the Day Pass from $5 to $7, the weekly pass from $20 to $25 and the monthly pass from $75 to $100.

Students K-12 monthly passes sold for $24 and student cash fare of $1 remain unchanged. Students wanting to take advantage of the new two-hour window of free one way transfers will need to use a stored value TAP card. College/Vocational monthly passes increase from $36 to $43 and Senior/Disabled monthly passes increase from $14 to $20 with the cash fare changing from $0.55 cents to$0 .75 cents. The cost of a Day Pass for Senior/Disabled will be $2.50.

Metro Fare Changes Offering Free 2-Hour Transfers Starts September 15; No Change in Student K-12 Fares; Reduced Fare Programs Offered

 

[Snapdragon III]

If ride autonomous ride share services can screen out homeless people looking for a place to pass out, pee their pants, and sexually harass women, and gangster thugs looking for a place to practice their freestyle rapping, they will do just fine competing against busses. Problems #1-10 of public transport are all the other people you have to be packed in with since it is a public service and they can't turn people away.

 

[vgrinshpun]

Interesting data, but can you tell me where on the Fidelity website you find such data? I've been digging around in the myriad of pages and I can't find how to dig it out. Thanks!

There are couple of ways to get this data. I am compiling this data based on random snap shots of the Fidelity trading screen. Go to Trade, choose TSLA as a symbol, choose Sell Short as an action. The availability of shares to short and the interest is displayed after that. There is no need to complete the trade to see this information displayed on the trading screen. You will be asked to agree to the short selling agreement before system allows you to see this info.

I believe that the time when this information is available depends on your status with Fidelity. For active traders this information is live (not delayed). The earliest I can see this info on trading days is starting at 8:00am

 

[1kEE]

There may be an effort on the short side to get people to write calls that they can buy and use later to cover their short positions during a squeeze.

This is obviously pure speculation, but I wouldn't put it past them.

I doubt anyone that owns enough stock to be able to write a meaningful number of calls will take advice like that seriously....

The "completely safe" comment, especially referring to writing calls that are already in the money, kinda discredits the writer! I will write covered calls but only at strikes well out of the money, and it still makes me nervous! I did 320 and 325 (sold on open Monday this week), let's see what happens... shares were bought Wed last week so even if I loose the shares I'll be OK.

 

[baudwalk]

When you go to place a trade, you can select 'sell short' and it will automatically tell you how many shares are available to short.

I have never sold shares short and wouldn't have thought to look for the data that way. Thanks. I think the info should be on the research summary page, but that's me. Oh well. It't a huge website and despite years on board I'm still learning.

 

[baudwalk]

There are couple of ways to get this data. I am compiling this data based on random snap shots of the Fidelity trading screen. Go to Trade, choose TSLA as a symbol, choose Sell Short as an action. The availability of shares to short and the interest is displayed after that. There is no need to complete the trade to see this information displayed on the trading screen. You will be asked to agree to the short selling agreement before system allows you to see this info.

I believe that the time when this information is available depends on your status with Fidelity. For active traders this information is live (not delayed). The earliest I can see this info on trading days is starting at 8:00am

And thank you for your comprehensive reply. Your additional information suggests as an active trader I can look on the separate ATP app as well. I'll do and see what it looks like. I wish the website help/search was more comprehensive but I was told that different Fidelity internal groups are reponsible for different sections of the website. Cohesion is a bit difficult and I have taken to making my HTML5 index page to point to interior somewhat hidden pages to make things easier for me. Thanks again.

 

[Skryll]

Leave it to the LA Times to go he low road.

Slaughterhouses and sawmills had better safety records than Tesla

Their hatred for Elon and Tesla is long, and wide and deep.

Is it personal or is it just a case of 'whose bread I eat whose song I sing'

 

[Skryll]

Not sure if this was mentioned, but Tesla released a MS vs M3 chart that gives great details about the M3.

So Tesla does seem to be in a pickle on how to get customers to decide between M3 and MS. As a M3 reservation holder, the M3 numbers look pretty good to me, and even if I had the $$'s to buy the MS, I would probably go for the M3.

This may not seem like an issue for established auto like BMW and Daimler (3 series vs 7 series), but for Tesla, it seems like this MS vs M3 choice is tough. Im curious to see how the SP responds as more and more M3 info starts coming out

It doesnt actually matter, because if you are able to buy the S and go for the 3 to get a smaller car with similar features at a lower price, then you will likely option the model 3 out to >25% margin anyways, bigger battery, ludicrous if it exists, fully autonomous, dual motor for awd etcpp

 

[gene]

It doesnt actually matter, because if you are able to buy the S and go for the 3 to get a smaller car with similar features at a lower price, then you will likely option the model 3 out to >25% margin anyways, bigger battery, ludicrous if it exists, fully autonomous, dual motor for awd etcpp

That's a good point, you are likely to spend your budget either way. Not everyone, but possibly most people.

 

[NicoV]

Musk's straight-up wrong about this. There's no question about this; he's simply wrong.

It's even easier to make buses autonomous than cars (it's a fixed route, so a lot of the difficult corner cases can be eliminated). The economies of scale from a large vehicle mean that they'll have lower cost of operations per rider than any autonomous 4-door sedan rideshare. On top of that, most bus agencies are public and subsidized by tax dollars, while the supposed autonomous ride-share is supposedly going to be a for-profit operation. There's no way.

I suppose Musk might envision people lending out their otherwise-parked cars at below their average costs, but that does absolutely nothing for rush hour, which is where buses are most heavily used *anyway*. During rush hour, Uber's "surge pricing" has already made it quite clear how much more expensive ride share will be than taking the (fixed price) bus.

I'm not saying there isn't a niche for this business -- lots of people take taxis and Uber even though they're a lot more expensive than a bus -- but "cheaper than the bus" is bullshit.

(I've probably mentioned before that the situation is even more extreme if you look at an autonomous train like Vancouver Skytrain)

If he means "cheaper than a bus with a driver", well, maybe, but that's not really relevant, is it?

I think Elon really meant 'cheaper than the current price of a bus ticket'. Add to that the convenience of getting picked up and dropped off where you want (and the comfort of not hoving to deal with other passengers) and nobody will want to take te bus anymore.

I agree that a bus service may be cheaper to operate on a price per person per km basis, but that is only the case in the corner case of an extremely high use traject. If you eliminate the cost of the bus driver, you still have the fixed cost of largely empty busses driving on those trajects on non peak times. If you want to compete with the convenience of being picked up and dropped of where you want when you want, you need more trajects, which will only increase the cost of a bus service.

Some reasoning from first principles: In my country, the entire train system is electric. The marginal cost of train service is largely the electricity use. I once calculated it (from numbers in the yearly report of the train company), and the electricity use per personkilometer is in the same ballpark as a Model S driven by just one person with no passengers. There is no way public transport (at least the public transport organized in the current way with fixed routes and schedules and relatively large vehicles) will be able to compete on price with automated cars even when elminating the driver cost factor.

Please note that there are other ways to organize public transport. In my country, the state controlled bus company is legally obliged to provide a minimum of mobility service even in rural areas with relatively little traffic. In the past this was done with bus lines that were running without passengers in non-peak hours. Nowadays they run a 'call bus' service: small buses, that only do their schedule traject if somebody calls to say that they will need the sevice. I can see public transport evolving to such a kind of service. But public transport as we know it will disappear except from the most densely used trajects.

 

[DragonWatch]

Here is some pie in the sky for you. . . Tesla's reward for hitting its targets could be a stock surge past $500, says analyst

FYI ~ Monday my son-in-law saw a full truck load of new Tesla's enroute north on I5 near FT Lewis, WA. Wednesday my wife spotted a full truck load of Tesla's heading north on I5 around Tacoma. Have no idea where the trucks were headed, but there is a couple of options ~ Seattle or on up to Canada with a slight chance of sliding over to Spoken. The first time my spies or people that feel sorry for my bullish thinking on Tesla, have reported this much activity ~ period. I would like a popup message on my screen when an MS or MX are in sight. Spotted a red S while driving to the lake this evening and we both waved

FYI ~ While not the manufacturing plant, I have talked to four employees recently and I have yet to detect underlying work frustration. I have worked through long term extreme pressure on a much smaller scale by far, and during that timeframe I also had to deal with borderline mutiny, not pleasant by any means. I would like to say I have not seen any bad signs outside the manufacturing side of things at Tesla. I am also aware of legal documents now days prohibiting an employee from speaking out. Please note that these are my observations and not an invited analysts by any means.

FYI ~ I read not to long ago Elon's statement to his employees about how he wants them to work for the company long term and be able to move up the corporate ladder. In print, it was picture perfect. The proof is in the pudding so to say. If he can orchestrate that plan the way he manages everything else, then as an investor that is what I want to see. FYI ~ A few years back Costco was raked over the coals because they treated their employees like humans. I do not know the facts in Tesla's case, and they are under my watchful eye. Tesla has been under the gun for years and Elon, IMHO, has always worked on improving problems directly as they occur. I need to see more than the LA Times story.

These are my casual observations and assessments which should not be taken too seriously

 

[ValueAnalyst]

I doubt anyone that owns enough stock to be able to write a meaningful number of calls will take advice like that seriously....

I used to think that way too, that retail investors are too small to move the market, but if retail investors are so unimportant, then why are they spending tens of milions of dollars on this campaign? Why are they writing dozens of hit pieces on SeekingAlpha every week? There's a team ~10 contributors who respond literally every single positive comment (and each Tesla article gets 1,000+ comments and tens of thousands of views) in order to create doubt. Why?

There's gotta be a reason.

 

[SebastianR]

The analogy with electric cars is difficult. What's an "ICE car compatibilty layer" -- the BMW i3's gasoline generator maybe?

I really love this idea. But don't think you need to go to the level of secrecy and I liked the other points mentioned by @anticitizen13.7, too:

The point is not to have a "secret" moat but to have a moat that unfolds its true power only in hindsight. From where I sit, I think that Tesla has at least 3 of these moats right now.

1) First one is the Gigafactory (no other car maker seems to have that, which means that once electric cars scale beyond single digits market shares all of them have nothing to scale production).
2) The Supercharger network: No other car will be able to travel as well as Tesla can do that. Remember how long Verizon leveraged their superior network? That's gonna be Tesla. With the difference that Teslas can charge at any Supercharges + every other charger that any Bolt can charge on. This like a Verizon phone being able to talk on the Verizon network + on any AT&T etc. network.
3) Autonomy: By the time the software is ready for autonomy they will have tens of thousands of autonomy capable cars on the road already. Frankly, even if the Mercedes E-Class would be as good as the Tesla Autopilot, they couldn't develop a network of autonomous car sharing cars at the speed of Tesla.

Especially 3) I see as crucial. In 2019 and following Tesla will have thousands of full-autonomy capable "young but used" cars dropping out of leasing contracts that would be a cheap and powerful way to bolster the Tesla Network in big cities such as NYC/SFO/LA etc. Best ist, all of this is in plain sight. And no many competitors seem to make moves to narrow these moats.

 

[Willuknight]

I see fb and amzn but what the heck do you see in NFLx?

I'll attempt an answer. Netflix is literally eating cables lunch. For a long time, the big networks have had exclusive control over what shows get made, what get continued and what people have to pay. Netflix is now in a position where they don't just have a massive back catalog, but they can go and make brand new content, appealing to markets that were never catered to before.

Traditional cable companies only cares about viewers to sell adverts but Netflix cares about viewers to sell their story to.

Netflix is another great example of an industry distrupter, exactly like Tesla, iPhone and iTunes.

 

[22522]

I'll attempt an answer. Netflix is literally eating cables lunch. For a long time, the big networks have had exclusive control over what shows get made, what get continued and what people have to pay. Netflix is now in a position where they don't just have a massive back catalog, but they can go and make brand new content, appealing to markets that were never catered to before.

Traditional cable companies only cares about viewers to sell adverts but Netflix cares about viewers to sell their story to.

Netflix is another great example of an industry distrupter, exactly like Tesla, iPhone and iTunes.

Does Amazon eat Netflix?

 

[Willuknight]

Does Amazon eat Netflix?

It's kinda difficult products . Amazon will never produce their own original content, but Netflix might get Amazon to distribute physical media, while physical media is still a thing. Argument could be made for either way.

Personally I'd forgo the money from selling physical media in exchange for tying people to my platform, but humans are so used to owning things it might be too late to get rid of box sets entirely.