2017 Investor Roundtable: TSLA Market Action

[DurandalAI]

There are going to be a lot of Tesla Semi "news articles" over the next month.

If you are a publishing editor, including the term "Tesla Semi" in your headline is going to get you clicks. Be prepared for garbage articles between now and then.

I think Tesla did an amazing job keeping things secret about the Model 3 prior to the reveals, and they are probably doing just as well on the Semi.

Unless you qualify an article as "quality," saying "garbage articles" is redundant when it comes to articles about Tesla (or as a whole, for that matter)

I personally think the biggest secret on the Tesla Semi is how they present it, so I'm looking forward to a Semi presentation where one pulls up with a trailer of Model 3s or something similar. Some showmanship, along with probably Supercharging v3...

 

[ValueAnalyst]

I think there's less skepticism baked into the SP these days. While our lackluster cheerleader AJ might be super conservative on his estimates, I think that initial skepticism by the FUDBears with items like, "Model 3 won't launch on time," has now been moved to "Model 3 won't ramp like they hope," is less believable by most. While the more rational bears might think Model 3 ramp will be slower than 5,000/week by the end of the year, I would think that most of the reasonable ones do believe it will happen.
That's why I don't expect quite as big of a jump up, unless people are really surprised, and I don't think they're going to be extraordinarily surprised. But hey, what do I know, it's all just WAGs from me. I'm still standing by my WAG from many moons ago that 30,000 Model 3 vehicles will ship in 2017.

Thank you for sharing your views.

I believe your line of thinking assumes the current SP already incorporates management's ramp guidance. I don't believe this is true.

Therefore I expect successful execution (i.e. on-time and profitable) to move SP substantially by year-end.

 

[DragonWatch]

Someone inquired about "should Tesla be concerned about cheaper Chinese batteries" if I got the question correct. I scanned back thru the comments, but it is too early in my morning and Autopilot is dominating all the fun, so I did not find the actual question.

Assuming I am correct, then my perspective is to look at what is or has happened to the leaf and Bolt/volt. The infrastructure must be there or it will fail regardless of the price and word of mouth will dictate its success or failure. If they piggy back off the Superchargers, will the chargers be too high powered and eventually burn out the battery early?

So far no auto manufacturer has taken EVs really, really seriously; hence newbee competition without a strong heart. Even recent touts are potentially fake news aimed at marketing their old tried and true ICE vehicles. They have discovered that they sat on the pot too long reading last century news and discovered that their smoking cigars clouded their mind and their ride just left with a new blond. Look at Toyota and the Prius, great success, but they never truly turned their back on fossil fuels. They are only now touting that they want to enter the true EV market. As someone else beat me to this thought, despite their name brand (anyone of them), they are still late to the party and their girlfriend is dancing with a new partner. If a big name auto manufacturer uses a cheap battery platform they run the risk of tarnishing their brand, if not crashing it. And, by the time they get to market it will be second fiddle to Tesla's name and superior quality. That leaves even newer auto manufacturers than Tesla to enter the market, and that is anything less than a sure bet.

People, regardless of intellectual standing will buy the golf carts and will buy them repeatedly just look at the political environment. Buying a bill of goods; only leaves you with the bill. Just like golf it is a fading sport.

Another green day please My wife recently commented on an old song playing in our MX about the grass being greener on the other side before she met me. I guess she has learned to overlook the weeds and brown spots created by the dogs; did I mention our old age? Tesla is like a well aged wine ~ right? Do they make green wine?

 

[Reciprocity]

here's an excerpt from that link above:

EM: "Yeah, I'm not too familiar with what the various (31:01) levels mean, but I can tell you just what it will translate to in the initial Autopilot. The – we don't want to set the expectation that it's – that you can just basically pay no attention to what the car is doing, we do want to set the expectation that it's much like the Autopilot in a plane where you turn the Autopilot on in a plane but there's still some expectation that the pilot will pay attention to what the plane is doing and weren't sort of go to sleep or disappear from the cockpit. So we do want to set that expectation with consumers."

there's always been the argument/analogy that Tesla's autopilot is like an airplane's autopilot. He's on the record for saying this... right there in that transcript... and even stating: "So we do want to set that expectation with consumers"... But it's well known that flight crews do NOT keep their hands on the "wheel" while under autopilot.

so how the hell was the death of that guy in Florida NOT at least somewhat the responsibility of Tesla?... because he was told to leave his hands on the wheel?... I agree... he probably was... in the legal version of the story... but he was also told the Tesla marketing version of the story by Elon himself.

I dont know if your lack of being understand what is being said or what happened in Florida, but the guy in Florida was proven to ignore several warnings for several minutes before he paid the price. EM clearly states you would need to pay attention. I dont understand what you are not getting. Had the Floridian actually paid attention, he would have lived. It is as simple as that.

Assuming you are correct that everyone thinks autopilot means you can just read a book or climb into the back seat, I think you would see massive amounts of carnage of the roads, but because you dont, then your argument is as pointless as responding to your argument.

 

[myusername]

I dont know if your lack of being understand what is being said or what happened in Florida, but the guy in Florida was proven to ignore several warnings for several minutes before he paid the price. EM clearly states you would need to pay attention. I dont understand what you are not getting. Had the Floridian actually paid attention, he would have lived. It is as simple as that.

Assuming you are correct that everyone thinks autopilot means you can just read a book or climb into the back seat, I think you would see massive amounts of carnage of the roads, but because you dont, then your argument is as pointless as responding to your argument.

my argument is that people in reality driving the car ARE aware that it is NOT like the autopilot of an airplane... but Elon clearly stated "we do want to set that expectation with consumers"

why is that Reciprocity?

 

[EinSV]

Thank you for sharing your views.

I believe your line of thinking assumes the current SP already incorporates management's ramp guidance. I don't believe this is true.

Therefore I expect successful execution (i.e. on-time and profitable) to move SP substantially by year-end.

I wanted to echo this. If the market believed that Tesla would be producing 500K Model 3's/year at the end of 2018 with a 25% gross margin, IMO virtually every buy side and sell side analyst would have to radically change their valuation models.

Also, the vast majority of shorts are betting against Tesla succeeding on production, margins or both. There is currently over $10 billion in short interest. If short interest were to drop to "normal" levels that would cause the available shares to shrink drastically and should have the same effect on SP as a ~$10B stock buyback.

 

[Todd Burch]

my argument is that people in reality driving the car ARE aware that it is NOT like the autopilot of an airplane... but Elon clearly stated "we do want to set that expectation with consumers"

why is that Reciprocity?

What is your basis for this? I am a pilot. Used to fly jets in the USAF. And I absolutely see how this is described as Autopilot, and totally get the analogy.

You invented some arbitrary rule that equivocates autopilot to meaning "you can keep your hands off" and since pilots don't have to keep their hands on the yoke/control stick, but Tesla AP "encourages" you to, it's not autopilot. Bull. For the record, I keep my hands off the wheel when on autopilot unless there are cars or obstructions near me, but really the analogy is this:

In both aircraft autopilot and Tesla autopilot, the mundane acts of flying (driving) and the motor skill demands for keeping the aircraft attitude, heading, altitude, and airspeed (staying in lane and at set speed) are dramatically relieved. But even on typical autopilot systems, significant turbulence can throw the system out of whack. The plane can still crash into another plane or a mountain. Etc. Etc. So the analogy is only lost on morons or people with blinders on.

And your authority on aircraft autopilot systems is based on?....

 

[jbcarioca]

Since the topic is market action, we ought to keep in mind that any large purchases or sales, whether shares or derivatives, leveraged or not, will move a market.
TSLA Key Statistics | Tesla, Inc. Stock - Yahoo Finance
Take a quick look at the Yahoo statistics linked here.
With ~60% institutional holding, >20% insiders, there is only 20% left to contribute the typical trading activity. Then there are the famous shorts, usually 25-30% of shares.
That is a superb recipe for extreme volatility. That is exactly what the thread is about.
The rumors, as we all know, are the lifeblood of short-termism.

Most of us on this thread tend to discuss real tangible evidence of Tesla performance as clues to market action. In my view we miss the point when we do so. Very little intra-day action has to do with anything so fundamental as actual company performance. Most of it is related to rational technical issues but much more depends on rumor, innuendo, and 'talking head' pronouncements.

Assuming this seems accurate, if superficial, it seems we mostly are aiming for some bits of truthful good news that will overwhelm the noise and make shares rise. That, statistically, is analogous to geophysics problems, in which 'noise' is far louder than 'good signal' thus making seismology as much art as science.

Excuse me if I'm running on. I'm hoping we might make this thread more about daily activity, charts and volatility indicators (with some causal rumors tossed in of course) rather than anything that smacks of longer term real value.

Maybe that is a foolish thought. I offend as much as anybody n this respect.

 

[vgrinshpun]

Yes, I think you are right. The non-recourse also wasn't dated from Nov 2013.

Still, the interest expense doesn't seem to vary that much from the bond interest. Even at the top end, it's a $4M / year difference, less than mousenuts. That's not a reason to give up $350M in funding early during the period of the biggest capital expense for the company?

Well, this is one, excessively negative way to look at this. What I see is Tesla seizing opportunity. They wanted to raise $1.5B through this bond offering. It turns out that it was oversubscribed, at a favorable interest rate. So why not to refinance higher interest debt, while pushing the payments out for 8 years? Aside from savings in interest (which you considered), it is also an improvement in cash flow now, when it is needed most. Note that Tesla drew $300M more than originally planned, which pretty much covers extinguished Solar City debt of $325.3M

This Tesla decision is a no brainer, fish jumping into the boat...

 

[jbcarioca]

What is your basis for this? ...

And your authority on aircraft autopilot systems is based on?....

Answered in PM

 

[ValueAnalyst]

I wanted to echo this. If the market believed that Tesla would be producing 500K Model 3's/year at the end of 2018 with a 25% gross margin, IMO virtually every buy side and sell side analyst would have to radically change their valuation models.

Also, the vast majority of shorts are betting against Tesla succeeding on production, margins or both. There is currently over $10 billion in short interest. If short interest were to drop to "normal" levels that would cause the available shares to shrink drastically and should have the same effect on SP as a ~$10B stock buyback.

Your second paragraph.. I had never thought about it that way, but it makes perfect sense. Absolutely perfect.

 

[Reciprocity]

my argument is that people in reality driving the car ARE aware that it is NOT like the autopilot of an airplane... but Elon clearly stated "we do want to set that expectation with consumers"

why is that Reciprocity?

Do you really think that the average consumer listens to or reads those transcripts? Who are you trying to convince. No one thinks its a car that will drive itself without paying attention. Expectations for those people are set the instant they enable it and it says you must have your hands on the wheel and pay attention. I dont have a clue as to what you are arguing. If you are arguing that somehow the wrong expectations have been set and people are riding around in death machines as they ignore what is going on around them, then you are wrong. You keep thinking that things Elon says are codified into everyone brains when in fact 1/10th of 1% of Tesla owners know anything about what Elon says in any real detail and those people understand when he says you have to pay attention, that you have to pay attention. Even if its called autopilot, which for aircraft, you have to pay attention. Because when you dont pay attention, you run into the side of Semi and kill yourself. Just to be clear, Autopilot in the car is exactly like Autopilot in the plane from the point of view of the pilot who must continue to pay attention as those he is still flying and be ready to take over instantly, not after a few minutes and after he puts his book down, but instantly.

Do you own a Tesla, have you ever test drove one? I would suggest that if you are going to invest with the idea that the company will fail, that you should really try it out first. Even if you are just a paid shill, maybe you can make some real money by investing the money earned while shilling for shorts on TSLA stock and buy your very own AP2 car. I hear there is a less expensive car coming out soon.

 

[vgrinshpun]

Answered in PM

Hmm... Watch your language..?

 

[myusername]

Do you really think that the average consumer listens to or reads those transcripts? Who are you trying to convince. No one thinks its a car that will drive itself without paying attention. Expectations for those people are set the instant they enable it and it says you must have your hands on the wheel and pay attention. I dont have a clue as to what you are arguing. If you are arguing that somehow the wrong expectations have been set and people are riding around in death machines as they ignore what is going on around them, then you are wrong. You keep thinking that things Elon says are codified into everyone brains when in fact 1/10th of 1% of Tesla owners know anything about what Elon says in any real detail and those people understand when he says you have to pay attention, that you have to pay attention. Even if its called autopilot, which for aircraft, you have to pay attention. Because when you dont pay attention, you run into the side of Semi and kill yourself. Just to be clear, Autopilot in the car is exactly like Autopilot in the plane from the point of view of the pilot who must continue to pay attention as those he is still flying and be ready to take over instantly, not after a few minutes and after he puts his book down, but instantly.

Do you own a Tesla, have you ever test drove one? I would suggest that if you are going to invest with the idea that the company will fail, that you should really try it out first. Even if you are just a paid shill, maybe you can make some real money by investing the money earned while shilling for shorts on TSLA stock and buy your very own AP2 car. I hear there is a less expensive car coming out soon.

YES... YOU ARE THE CONSUMER... TESLA RETAIL SHAREHOLDERS ARE THE CONSUMERS OF TESLA VEHICLES.

dude... i've been arguing this since the moment Elon made those statements in 2015... Level 5 automation is NOT just around the corner... and the fact that SHAREHOLDERS continue to believe this after years of being mislead otherwise is bizarre.

 

[ValueAnalyst]

We may see a lot of capping today. Especially at $355.

@Papafox agree?

 

[Reciprocity]

YES... YOU ARE THE CONSUMER... TESLA RETAIL SHAREHOLDERS ARE THE CONSUMERS OF TESLA VEHICLES.

dude... i've been arguing this since the moment Elon made those statements in 2015... Level 5 automation is NOT just around the corner... and the fact that SHAREHOLDERS continue to believe this after years of being mislead otherwise is bizarre.

NO ONE CARES WHAT YOU ARE ARGUING. TESLA DOES NOT HAVE TO DELIVER ANYTHING UNTIL ITS LEGAL AND CLEARED BY REGULATORS. CAN YOU FIND ME THE LAWS THAT DEFINE THE RULES AROUND LEVEL5 AUTONOMY? UNTIL THEN, IT DOES NOT MATTER. DOES ALL CAPS MAKE YOU UNDERSTAND?

My point is that Tesla could have a level 5 autonomy capable system right now and there is nothing they could do with it. They must wait for regulators to define clearly what the laws are requirements are. Until then, you and I and no one outside of Tesla has a clue as to what they do or do not have. We have a year old video which is the only thing they have shown. They have no reason to show anything until they need to. The next show and tell is set for Nov.-Dec. time frame with the cross country trip. Until then, I have no clue what you expect. Do you think the company should shutter its windows and lock up the factory because they do not have full Autonomy today or should they wait for regulators?

 

[elasalle]

All this FUD seeping into TMC,
who you gonna call - FUD BUSTERS

 

[Pug]

NO ONE CARES WHAT YOU ARE ARGUING. TESLA DOES NOT HAVE TO DELIVER ANYTHING UNTIL ITS LEGAL AND CLEARED BY REGULATORS. CAN YOU FIND ME THE LAWS THAT DEFINE THE RULES AROUND LEVEL5 AUTONOMY? UNTIL THEN, IT DOES NOT MATTER. DOES ALL CAPS MAKE YOU UNDERSTAND?

Caps will not make him understand. Nothing will. I just put myusername as first and only on my ignore list and would suggest everyone to do the same. He's obviously trolling, and he's not worth the effort.

 

[myusername]

NO ONE CARES WHAT YOU ARE ARGUING. TESLA DOES NOT HAVE TO DELIVER ANYTHING UNTIL ITS LEGAL AND CLEARED BY REGULATORS. CAN YOU FIND ME THE LAWS THAT DEFINE THE RULES AROUND LEVEL5 AUTONOMY? UNTIL THEN, IT DOES NOT MATTER. DOES ALL CAPS MAKE YOU UNDERSTAND?

My point is that Tesla could have a level 5 autonomy capable system right now and there is nothing they could do with it. They must wait for regulators to define clearly what the laws are requirements are. Until then, you and I and no one outside of Tesla has a clue as to what they do or do not have. We have a year old video which is the only thing they have shown. They have no reason to show anything until they need to. The next show and tell is set for Nov.-Dec. time frame with the cross country trip. Until then, I have no clue what you expect. Do you think the company should shutter its windows and lock up the factory because they do not have full Autonomy today or should they wait for regulators?

no... they couldn't... that's my point. AP2 is not like autopilot in an airplane... Tesla Network is not reality and will not be. Tesla delivered 30 cars to employees and called it a "release"... flooded the "airwaves" with pumping headlines... got the cash... then radio silence... Tesla longs believe the story that is constantly proven false... shorts sit and wait... with jaws dropped that it's possible this has gone on this long.

 

[davecolene0606]

exactly... at every given moment tesla is about to do something in 6 to 18 months... 24 months later... we get funny jokes like this... so where's our "Autopilot in a plane" car right now?

It would probably do you well to read the posts of,the gentlemen involved in the fatal accident. He was a true early adopter and after reading all of his contributions to TMC you will,understand that he was intimately aware of AP1 and it limitations and capabilities.

Once again, poor and incomplete research and insight lead to your continued short motivated strategy.