2017 Investor Roundtable: TSLA Market Action

[MitchJi]

Some Chinese Gigafactory thoughts:
1. Why do people think that that would cause the SP to go up? Did the Nevada Gigafactory cause the SP to go up or to stagnate for years? When the Nevada Gigafactory is proven to be a cash coww it will have that effect but in the meantime I'm not convinced.

2. The financing will be huge. They could get a great investor from institutions divesting,or they could do a cap raise or borrow the money from the market.

3. The terms with the government will be huge. Not only tarrifs, but land and buildings costs etc.

In other words I think that high fives are premature for options buyers.

 

[Turing]

(leaving aside all macro action in below discussion)

Consider this: TSLA has a market cap of about 55Bil and enterprise value of about 63Bil. Does Tesla deserve that kind of valuation just based on S/X and a few side projects? Of course not.

The valuation fully assumes that there will be Model 3 volume production and sales at some point (soon). So why should valuation go up merely based on fact that 'some point' has arrived? I don't know. That expectation is just TMC bubble in my view. People expect it to happen only because everybody else here expects it to happen.

Model 3 isn't a binary outcome for the market. How long does it take to get to 1k/wk? 2k/wk production and so on, what will the initial quality and other consumer reactions be to the first few thousand?

 

[vgrinshpun]

Anyone notice the TA guys only speak when the stock is doing well. When all the magical charts and trend lines predicting big upside turn out to be a bust, they all go back into hiding until the next run. When the stock hit $360, they were all predicting a breakout and the exact opposite has happened.

 

[kenliles]

Question is - what is that ‘potential’

Ability to make and sell EVs at volume?

-or-

Ability to make (& grow) profits by making and selling EVs at volume?

It’s clearly the latter, which requires the former.
But to properly contextualize, the same question must be applied to both warring parties, as yet not applied by the market IMO:

The market’s (TSLA)reward of this disruption, adds its dynamic with the existing (ICE)industry-
For which the latter is (falsely)assumed but the former must be proven.
Those are today’s valuations.
The interwoven interplay between the disruptor and the existing industry, only fully blooms in favor of the disruptor (with commensurate SP rewards) when:
For the disruptor, the former becomes clear, with the latter assumed
AND
For the industry, the former now in doubt, putting the assumption of the latter at risk.
This is the inflection point of all distructive disruption. It ebbs and flows leading up to this point, which I believe is still a year away. Tesla has not yet proven the former to the satisfaction of CORE industry market.

M3 (with follow on products and GFs in process) will do that, and concurrently threaten the false assumption of the latter for ICE. That’s when full forward P/Es and valuations will be applied to TSLA. IMHO

 

[RobStark]

Some Chinese Gigafactory thoughts:
1. Why do people think that that would cause the SP to go up? Did the Nevada Gigafactory cause the SP to go up or to stagnate for years? When the Nevada Gigafactory is proven to be a cash coww it will have that effect but in the meantime I'm not convinced.

Unlike Nevada, the Chinese GF will also produce cars. If in the free trade zone, then this Chinese GF will also likely export to the rest of Asia,Australia, and New Zealand.

 

[RobStark]

I suspect that Tesla is holding out for elimination of the tariff, as a condition for building a factory in China. I would not be surprised if that is granted.

I would be shocked if Tariff is eliminated. It would undermine the JVs in the rest of China, and giving legitimate gripes to the home countries of all the automakers that signed JVs with Chinese companies

Maybe reduced some, not eliminated.

 

[larmor]

Anyone notice the TA guys only speak when the stock is doing well. When all the magical charts and trend lines predicting big upside turn out to be a bust, they all go back into hiding until the next run. When the stock hit $360, they were all predicting a breakout and the exact opposite has happened.

$360 is just a speed bump on the way to true market valuation- when the market places value on building and selling cars to the world's largest middle class, providing a new micro utility system for home and industrial, and using data to make the driving experience safer not to sell whatever you clicked on in the last minute...

 

[DurandalAI]

I’m having a super crappy morning, which usually is a contrarian indicator for what the stock price will be, so I’m looking for a 3% bump today.

Boy was I wrong. Day didn’t get any better, either. Lol

 

[Starno]

Boy was I wrong. Day didn’t get any better, either. Lol

It sounded too good (or easy) to be true ....

 

[myusername]

$360 is just a speed bump on the way to true market valuation- when the market places value on building and selling cars to the world's largest middle class, providing a new micro utility system for home and industrial, and using data to make the driving experience safer not to sell whatever you clicked on in the last minute...

yes... if you blindly total up all the hypothetical businesses that Elon has baked into TSLA stock... then yes... this is a powerhouse stock/company... but... this "micro utility system" you speak of... where is it?... we're greater than 2 years out from Elon's prediction of $billions in revenue by now... and the data you speak of... are you talking about AP1 data?.. or AP2 data?... or AP2.5 data?... because whatever data existed in the past has not been useful going forward into newer revisions... isn't there talk of Tesla dropping NVidia now?... so throw out AP1-2.x data and start fresh with AP3.0?... and "selling cars to the world's largest middle class"... this is based on what?... a hearsay report from WSJ that Tesla didn't even confirm?... btw... all the other auto manufacturers already sell cars to this market segment... they're already positioned.

TSLA remains extremely overvalued when accounting for risk and probability of the extreme success already baked in... at a ridiculous factor.

 

[anticitizen13.7]

Quite a fade here

TSLA was at 385 in June, then crashed down to 308, and was back up to 385 in September. I suspect that the current downturn is simply random movement within a range.

 

[larmor]

yes... if you blindly total up all the hypothetical businesses that Elon has baked into TSLA stock... then yes... this is a powerhouse stock/company... but... this "micro utility system" you speak of... where is it?... we're greater than 2 years out from Elon's prediction of $billions in revenue by now... and the data you speak of... are you talking about AP1 data?.. or AP2 data?... or AP2.5 data?... because whatever data existed in the past has not been useful going forward into newer revisions... isn't there talk of Tesla dropping NVidia now?... so throw out AP1-2.x data and start fresh with AP3.0?... and "selling cars to the world's largest middle class"... this is based on what?... a hearsay report from WSJ that Tesla didn't even confirm?... btw... all the other auto manufacturers already sell cars to this market segment... they're already positioned.

TSLA remains extremely overvalued when accounting for risk and probability of the extreme success already baked in... at a ridiculous factor.

None of the click bait articles will provide insight to a multi-B company with tooling, manufacturing, and B-plan's almost assuredly laid out and planned for the upcoming three to four years plus.

Supposedly telsa magically-within days to a week put up SC's in large cities in China to make headlines on clickbait.

Its what you don't hear about that should worry the tesla doubters. Excuse me, i have to run to the gas station to recharge my phone.

 

[anticitizen13.7]

yes... if you blindly total up all the hypothetical businesses that Elon has baked into TSLA stock...

then yes... this is a powerhouse stock/company... but... this "micro utility system" you speak of... where is it?... we're greater than 2 years out from Elon's prediction of $billions in revenue by now... and the data you speak of... are you talking about AP1 data?.. or AP2 data?... or AP2.5 data?... because whatever data existed in the past has not been useful going forward into newer revisions... isn't there talk of Tesla dropping NVidia now?... so throw out AP1-2.x data and start fresh with AP3.0?... and "selling cars to the world's largest middle class"... this is based on what?... a hearsay report from WSJ that Tesla didn't even confirm?... btw... all the other auto manufacturers already sell cars to this market segment... they're already positioned.

TSLA remains extremely overvalued when accounting for risk and probability of the extreme success already baked in... at a ridiculous factor.

If you want “value” stocks, seriously, you are wasting your time here.

Why can’t you accept that this is just a gigantic bet that people are willing to take?

 

[tander]

Some Chinese Gigafactory thoughts:
1. Why do people think that that would cause the SP to go up? Did the Nevada Gigafactory cause the SP to go up or to stagnate for years? When the Nevada Gigafactory is proven to be a cash coww it will have that effect but in the meantime I'm not convinced.

2. The financing will be huge. They could get a great investor from institutions divesting,or they could do a cap raise or borrow the money from the market.

3. The terms with the government will be huge. Not only tarrifs, but land and buildings costs etc.

In other words I think that high fives are premature for options buyers.

1. China is the largest car market in the world, bigger than the US since 2013? With a factory Tesla could really get a foothold there, and if they can somehow get around the tariffs it would probably turn into Tesla's biggest market. Plus part of why it would send the price down is because of the cost, but if they had a partner or multiple partners footing the bill it could go the other way...
2. It wouldn't be surprising if they do a cap raise and have partners, that could go either way depending on the terms.
3. Not for sure. China has maybe the greatest need to "go green" of anywhere and Tesla is a leader in that, and there is a possibility they could get around the tariffs, they could have years ago if willing to take a Chinese partner.

 

[Thumper]

so throw out AP1-2.x data and start fresh with AP3.0?...

There is zero evidence that changing hardware invalidates the data collected up to that point. You just made that up.

 

[myusername]

If you want “value” stocks, seriously, you are wasting your time here.

Why can’t you accept that this is just a gigantic bet that people are willing to take?

i'm totally on board with that rationalization... i was responding to "$360 is just a speed bump on the way to true market valuation"

 

[myusername]

There is zero evidence that changing hardware invalidates the data collected up to that point. You just made that up.

AP2 was a total regression from AP1.

 

[EVCollies]

Some Chinese Gigafactory thoughts:
1. Why do people think that that would cause the SP to go up? Did the Nevada Gigafactory cause the SP to go up or to stagnate for years? When the Nevada Gigafactory is proven to be a cash coww it will have that effect but in the meantime I'm not convinced.

2. The financing will be huge. They could get a great investor from institutions divesting,or they could do a cap raise or borrow the money from the market.

3. The terms with the government will be huge. Not only tarrifs, but land and buildings costs etc.

In other words I think that high fives are premature for options buyers.

When Giga 2 (China) comes online, I'm betting Tesla has five consumer vehicles (SEXY and a Smart Car equivalent) and the Semi line (long haul, short haul and local delivery)

 

[2virgule5]

AP2 was a total regression from AP1.

It certainly was when it launched, this is no longer the case when you look beyond the initial negative noise, there is this much to learn when you look at user's feedback from the latest releases. Once again late to deliver yes. In the meantime, still waiting for the magical AP killer from other manufacturers, where could I buy one?

 

[BornToFly]

I was wondering who in the heck you guys were all talking to. I clicked on "show ignored content," and I see that myusername is back now that the SP is down a little. Almost as predictable as GS $5 downgrades when the stock climbs....