2017 Investor Roundtable: TSLA Market Action

[geneclean55]

Pretty interesting. Only about 2M net shares covered from 2/28-6/15, when the SP went up 50 percent from $249.99 to $375.34.

Almost all of the 2M shares covered were between 6/1 and 6/15 so covering has likely had some impact in those two weeks (maybe flat since then). Lots of short fuel to speed things along if buying pressure keeps up and the SP continues to rise.

Unfortunate that we only get the 2 week timeframe snapshots. Sounds like S3 data is worth following though when he decides to tweet on TSLA.

 

[EinSV]

Unfortunate that we only get the 2 week timeframe snapshots. Sounds like S3 data is worth following though when he decides to tweet on TSLA.

It is too bad timely short info from Nasdaq is not made publicly available but does look the Ihor's data has been pretty good recently. Surprised the Markit data was not more reliable but thanks @SBenson for the updates.

 

[kbM3]

As a heavy user of the "i" button, I have to ask: Have any of those intelligent shorts' valid concerns changed your investment strategy? I'm here for information about the cars, the company and the stock, as well as to participate in the community. I just don't want to spend my time reading carbon-industry-funded psy-ops.

The only information I have seen from shorts that has seemed valid is that Tesla's gross margin is not as impressive as it seems because it does not include R&D like other manufacturer's calculations. Also their SG&A is very high.

Perhaps other more financially savvy posters can chime in on this.

 

[22522]

The only information I have seen from shorts that has seemed valid is that Tesla's gross margin is not as impressive as it seems because it does not include R&D like other manufacturer's calculations. Also their SG&A is very high.

Perhaps other more financially savvy posters can chime in on this.

I think that only companies that take customers for granted are allowed to apply (capitalize) R&D the way car companies do.

For everyone else it is a speculative expense (because customers cannot be taken for granted).

 

[myusername]

Pretty interesting. Only about 2M net shares covered from 2/28-6/15, when the SP went up 50 percent -- from $249.99 to $375.34.

Almost all of the 2M shares covered were between 6/1 and 6/15 so covering has likely had some impact in those two weeks (maybe flat since then based on Ibor's tweet.) Lots of short fuel to speed things along if buying pressure keeps up.

what's another coincidence is the not so explosive numbers you also see from 13Fs... it's not like there's a lot of buying either... hmmm... wonder what it could be that makes the stock go up 80% in 6 months if it's not buying and not short covering.

 

[Lump]

I think SpaceX screwed up yesterday with thier 1st stage recovery because it just landed in my pool

 

[Ameliorate]

what's another coincidence is the not so explosive numbers you also see from 13Fs... it's not like there's a lot of buying either... hmmm... wonder what it could be that makes the stock go up 80% in 6 months if it's not buying and not short covering.

That's an interesting image. Looks like about 100% of shares outstanding are accounted for on the first page? The remaining 37 pages and us little guys hold the short float? Tencent wanted to beat Baidu and other giants. This really is on the edge isn't it.

 

[mmd]

The only information I have seen from shorts that has seemed valid is that Tesla's gross margin is not as impressive as it seems because it does not include R&D like other manufacturer's calculations. Also their SG&A is very high.

Perhaps other more financially savvy posters can chime in on this.

You are also missing the fact that other car makers sell to dealers at ~90% of MSRP, while Tesla books that 10% in its own gross margin.
Subtract 10% from Tesla's gross margin for a fair comparison.
So, if Tesla GM is 23%, it is really13% when comparing to others.

 

[racer26]

That's an interesting image. Looks like about 100% of shares outstanding are accounted for on the first page? The remaining 37 pages and us little guys hold the short float? Tencent wanted to beat Baidu and other giants. This really is on the edge isn't it. View attachment 232910

Especially since it's doubtful tencent stopped acquiring at 5.44% in March.

 

[geneclean55]

Sugar! We got mmd/myusername double trouble goin on right now.

 

[racer26]

You are also missing the fact that other car makers sell to dealers at ~90% of MSRP, while Tesla books that 10% in its own gross margin.
Subtract 10% from Tesla's gross margin for a fair comparison.
So, if Tesla GM is 23%, it is really13% when comparing to others.

Except no, because that's exactly what the dealer network costs the others. Tesla pays for their distribution network in higher SG&A.

Is 10% higher margins enough to justify the expense of a corporate network of stores? I'm betting it probably is.

 

[geneclean55]

Great catch. Looks like Abu Dhabi National Energy Co. has been accumulating right alongside Tencent. They are hovering at 4.86%, just below disclosure threshold. Wonder if they will go over now...would be another nice validation.

That seems to be an old holding. They sold in 2012. Should have held tho.

 

[kbM3]

You are also missing the fact that other car makers sell to dealers at ~90% of MSRP, while Tesla books that 10% in its own gross margin.
Subtract 10% from Tesla's gross margin for a fair comparison.
So, if Tesla GM is 23%, it is really13% when comparing to others.

As I understand it, wouldn't that be included already in the SG&A I mentioned above?

 

[myusername]

Especially since it's doubtful tencent stopped acquiring at 5.44% in March.

wasn't the majority of Tencent's purchase not in the open market?... and wasn't it heavily discounted?... 8.2 million shares for $1.8b?

 

[Bgarret]

Unfortunate that we only get the 2 week timeframe snapshots. Sounds like S3 data is worth following though when he decides to tweet on TSLA.

Yep...my bust. Old news.

Abu Dhabi sells small Tesla Motors stake

 

[Ameliorate]

wasn't the majority of Tencent's purchase not in the open market?... and wasn't it heavily discounted?... 8.2 million shares for $1.8b?

I mean..they did most of the buying from 180-240 if I recall, which would be discounted from todays price...a discount at the time of purchase? really?

 

[myusername]

I mean..they did most of the buying from 180-240 if I recall, which would be discounted from todays price...a discount at the time of purchase? really?

nope... Tencent did not exist in the 13Fs prior to Q1... Jan 3 TSLA SP was $218.

"According to a filing, the Chinese firm scooped up 8,167,544 shares for around $1.7 billion ...... The purchase was arranged on March 17, and those now-Tencent-owned shares are worth around $2.2 billion at current market value."

Chinese internet giant Tencent buys 5% of Tesla

March 17, TSLA SP: $261

8.167B shares for $1.7B = ~$210/share.

and you guys were like "Yey!"

 

[mmd]

As I understand it, wouldn't that be included already in the SG&A I mentioned above?

Yeah, except the SG&A is not incuded in cost of goods sold (COGS) and not part of gross margin calculation. So it is not apples to apples gross margin comparison against other automakers. Please check the quarterly letters sometimes, Here is from Q4 2016.


From Page 3:

From page 7:
$435M/$2284M = 19.05 % gross margin. SG&A has been clubbed in Opex, to artificially inflate the gross margin.
If even half of the SG&A was cost of operating the stores & service centers ( I suspect more) and subtracted from gross profits, the gross margin will be < 10% easily.

 

[Zhelko Dimic]

nope... Tencent did not exist in the 13Fs prior to Q1... Jan 3 TSLA SP was $218.

"According to a filing, the Chinese firm scooped up 8,167,544 shares for around $1.7 billion ...... The purchase was arranged on March 17, and those now-Tencent-owned shares are worth around $2.2 billion at current market value."

Chinese internet giant Tencent buys 5% of Tesla

March 17, TSLA SP: $261

8.167B shares for $1.7B = ~$210/share.

and you guys were like "Yey!"

You really are uninformed about Tesla eh?
Quoting incorrect article doesn't make it correct - I remember reading this article at the time and thinking "there is no real journalism anymore, these internet hacks can screw up even the simplest pieces of information".
Yup, I read EVERYTHING about Tesla - I'm watching that basket with all my eggs really carefully...

 

[ValueAnalyst]

The only information I have seen from shorts that has seemed valid is that Tesla's gross margin is not as impressive as it seems because it does not include R&D like other manufacturer's calculations. Also their SG&A is very high.

Perhaps other more financially savvy posters can chime in on this.

What have Ford and GM researched and developed in the last century?

You don't need to be "financially savvy" to see the FUD for what it is.

Just open your eyes.