2017 Investor Roundtable: TSLA Market Action

[dennis]

Stores are silly in a model 3 world. Notice that they did not say Service Centers. I think you nailed it, you need more service centers and have a small amount of showroom floor and have a place inside to do hand overs for new S/X sales. They should just probably deliver Model 3 and people can just watch the videos in their driveway. Now if the stores sold solar as well, that could be a negative for the TE side of the business.

Given that the cars have a long reservation list and the solar roof has a long reservation list and the Powerwalls and Powerpacks have long reservation lists, stores are probably not a good use of Tesla's cash at this time. Bluntly.

I suppose with Model S sales plateauing there is some need for some stores... but you get my point. When you have long backlogs, stores are not a priority.

There is no need for stores to sell the Model 3. The 400,000 reservationists have already been "sold" on the idea and simply need a local service center for receiving the car.

Questions can be answered by phone or online with Tesla headquarters in California.

Future Model 3 prospects can test drive a friend's car or test drive one at a service center, then order or ask questions by phone or online.

Now that the initial upscale buyers have been introduced to Models S & X in malls, those stores are not really needed anymore. Later S & X customers can simply go through the same procedures described above for Model 3 prospects.

Welcome to the 21st century!

Indeed. Other than friends' cars, I imagine that Tesla service centers eventually will be the place for test drives. Questions can be answered there, or by phone or online with California headquarters. If a car is being custom ordered, it's a quite different procedure from test driving the actual car one might buy from a dealership's inventory.

It's becoming more and more obvious how outdated the franchised dealership model has become. If the only local connection is a service center, state laws disallowing Tesla stores may be circumvented. I wouldn't be surprised if eventually all automakers attempt to follow the Tesla model for online sales and local service. Bye bye franchised dealerships. Welcome to the 21st century!

I couldn't disagree more. People on this board forget that 98% of the car buying public is completely naive about EV's, and especially about charging. I'm noticing an increasing number of non-EV savvy friends and acquaintances showing interest in Tesla. The Tesla stores provide a credible source for answers and evangelism. And what about the G&A leverage on the TE side we were expecting to get by replacing the SolarCity sales folks at Home Depot with product specialists at Tesla stores?

It is way too soon to assume that the bulk of potential buyers only need info from friends, neighbors and the internet to make a Tesla purchase decision IMO.

 

[Krugerrand]

I simply can not resist. Those are not mouse nuts.

 

[dennis]

Weird, because the number itself is another disappointment. Not sure how that would raise the stock.

You have pointed out that Tesla is moving more and more towards selling from inventory rather than custom orders. Therefore wouldn't you expect the "vehicles in transit to customers" number to decline?

 

[vgrinshpun]

I simply can not resist. Those are not mouse nuts.

Probably fake...

 

[dw4ngg]

MX and MS demand is still high, just not enough buyers with the cash - my common sense test.

I want an MS but can't justify forking over $90k at this point in my life.

M3 will kill it.

What TSLA needs to focus on next is ensuring the ecosystem is in place to lock in customers as lifers.

 

[MartinAustin]

 

[justdoit]

View attachment 234752 This guy who is a market maker and one of the 50 richest people in America is short tesla. There is no market manipulation (wink wink).

Can you please share the link to this article?

 

[SunCatcher]

As Mick Jagger would say; "Elon Wants it Painted Black".

Gorgeous!

 

[jhm]

Did someone say, Paint it black?

 

[RobStark]

Ira Ehrenpreis had rights to 1st car as he was 1st to place a full deposit, but gave those rights to me as my 46th bday present. Tks Ira!

Hey Elon, reservations are non-transferable!

 

[generalenthu]

Did someone say, Paint it black?

Wonder why Elon chose such a dark song for the self driving demo video.

May be he was sad after all, seeing this as the inevitable first step as AI takes over the world.

 

[D-egg-O]

Remember all the bears screaming the Model 3 would never launch on time? Suck it.

 

[RobStark]

Wonder why Elon chose such a dark song for the self driving demo video.

May be he was sad after all, seeing this as the inevitable first step as AI takes over the world.

"In the red" in business means losing money.

"In the black" means making money.

Model 3-Full Self Drive is the inflection point for Tesla from losing to making money.

 

[MitchJi]

R
Elon's tweeted picture, must be sn 1:

 

[erthquake]

Wonder why Elon chose such a dark song for the self driving demo video.

May be he was sad after all, seeing this as the inevitable first step as AI takes over the world.

Indeed. That song was played in an episode of Westworld.

 

[NicoV]

Indeed. That song was played in an episode of Westworld.

That was the most epic cover of paint it black ever. It was incredibly well matched to that scene.

 

[neroden]

Treat the synthetic long like actually buying stock. It takes some discipline, because it feels like you're taking a core stock position and getting paid $200 to do it.

So I did this back when you could actually get paid to do it... i.e. an at-the-money put sold for MORE than the cost of an at-the-money call. (This happens reliably when short-sellers are paying people a lot to borrow stock, through securities-lending-fully-paid.)

(As I said, I ended up bailing out of it early, taking the loss, and buying stock outright because I didn't want to deal with Internal Revenue Code section 1260.)

But this arbitrage hasn't been available recently from what I can tell. Am I missing something?
The formula for detecting arbitrage is
(current stock price) > (strike price) + (ask for calls) - (bid for puts).

Which strikes and expirations should I be looking at? I wasn't seeing it at any strike.

 

[neroden]

I am leaning towards the thesis that it was a carefully orchestrated bear raid, which is illegal. There is no free lunch. So, what did it cost them? More short positions?

Well, if they were smart, they covered their shorts at the bottom of the raid and gained substantially by doing so. They would have had to open up even more short positions on the way down, but they would have profited from those. They got other people to sell out, who have probably lost out, but in some sense anyone who gets fooled by that nonsense news deserves it.

The "no free lunch" is that they might actually get arrested. It seems unlikely though, since the SEC has been AWOL for years now.

We won't find out whether they actually covered their short positions for almost a month. If short interest is down, then they successfully got out of the bear raid. If it's actually up again... then yeesh there are some fools out there! But we won't know for a while.

P.S. They were in a very bad position with their shorting. If they actually *did* cover their short positions, then the bear raid offered them the chance to cut their losses substantially (possibly making the difference between millionaires and being bankrupt), and the risk is that they go to prison. From what I know of Wall Street types, many might voluntarily take that risk.

 

[schonelucht]

You have pointed out that Tesla is moving more and more towards selling from inventory rather than custom orders. Therefore wouldn't you expect the "vehicles in transit to customers" number to decline?

I don't think I have pointed that out? I have pointed out that Tesla's inventory is growing but I don't know either way if Tesla is moving towards sales from inventory. Regardless, my point here is that it is dissappointing because it is not consistent with a production issue that has been resolved (100kWh model). If that were the case, I would have expected production at full tilt and many outstanding orders becoming ready for delivery.

 

[neroden]

The account value swings with 5,000 shares can be extreme!

*cough cough* Yeah, you just gotta ignore the week-to-week quarter-million-dollar fluctuations.

My portfolio is a lot larger than it was a few years ago (largely thanks to Tesla). This means that the same percentage swings are a lot bigger in absolute numbers. It's surprisingly hard to adjust psychologically, even though I'm used to ignoring swings in volatile stocks. I know, not even first world problems, more like 1%er problems... I try not to think of the difference in how much money would go to my favorite charity...