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Devils advocating...from someone who shorted TSLA

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They loose money.

Look at the cash flow. Also, look at cash levels - capital actions.
That would seem to be assuming that their investments are required and not optional. After all, they have nearly a half-billion in the bank. Holding onto it would say that there is no investment in the business they can make that returns better ROI than the ~2% they'd get from keeping the money in the long term cash equivalent investments.

As a mature company trying to maintain a product line but not expecting rapid growth in products, perhaps that might be true. You're doing the normal R&D every year to replace the models you currently have, and you're expecting growth rates in the 5-10% range. But as a company trying to grow their product line (1 car -> 2 cars right now, 3 cars later), and looking for growth rates more in the 50-100% range, I would expect them to be spending money on R&D faster than it's coming in.

Another investment they're making is in the supercharger network. The number of superchargers they need is going to be a function of the number of cars the sell, and it looks like they're trying to get ahead of that curve right now... but perhaps if you worked at it you could make a case that the costs of the superchargers bring down the margin of the cars to an unsustainable level. That would be a more valid case to make than "They're investing the money they have to grow the business, and therefore they must not have a valid business", which is the case you're currently making.
 
Ken Olson, apparently also said, 'UNIX is nothing but snake oil'. I have a lot of respect for Mr. Olson and his company was pioneer and far ahead of its time in many ways, most notably the clustering concept, networking and OS partitioning, but the head in the sand attitude of his advisers and perhaps himself, saw the PC & UNIX train go by.
 
LOL. Realist's relentless stream of highly selective data points and beside-the-point considerations reminds me of a Tesla-skeptic who used to troll the Norwegian Tesla investor's thread. His last posts were from May 3rd (translated):

time for a new short position up here in the stratosphere :-D ... 2900 @ 55.56 is an OK start.
and
trading is trading, so around 10% profits is a good target this time around as well. [...] USD 20 is coming sooner or later - the question is only when :-D

Has been very quiet since...

Tipping my hat to Realist for reporting taking losses. The guy behind the posts above was claiming to be making tons of money on his trading - until this post where he was asked to post his position up front...
 
So I wonder, are the TSLA shorts the other entrenched car makers longs? Or is this purely about the SEC filings?

Or is it technical in any way? Are there any shorts out there who believe that other car makers can catch up to TSLA electrically prior to Gen III as an example?

While the TSLA longs realize the inherent risks in starting a new electric car company it would seem that current short thinking is focusing on the somewhat minor tactical details (read back in this thread for instance) rather than the strategic master plan (is this still a secret?) which shows a trend/trajectory of success (stock price aside; cars are selling).

So what gives? I find that the most compelling short story I've heard so far is very speculative and subjective in nature. Now if you could point to something that has legs like reverse engineering of the 18650 pack design with a chassis that is stiffer, lighter and costs less from a startup backed by large private equity then we might have something to discuss. Since that is not happening and is most likely the most fundamental part of TM's lead then I ask the shorts: Why are you short TSLA?
 
Realist is necessary so we aren't all floating in the clouds.
If you look at his arguments and read it pretending that the stocks are sliding down from 100 to 50. They will ring true. The only thing standing between Realist's argument sounding right and wrong is Elon's ability to execute... IMO

Agree with most of your post but I'm not sure that Elon has real ability to execute; I find him a great visionary but he's also good at finding and motivating people to execute the ideas.
 
You have to be kidding. This is either his third or fourth company, all of which have been run away successes. Even if he is more on the visonary side his ability to execute is extraordinary. He has done this with all different teams after all.

The valley is full of visionary types and has more than a handful of people that can really execute. By pure results (this is execution after all) you have to put elon on top of both. Who else executes better?
 
You have to be kidding. This is either his third or fourth company, all of which have been run away successes. Even if he is more on the visonary side his ability to execute is extraordinary. He has done this with all different teams after all.

The valley is full of visionary types and has more than a handful of people that can really execute. By pure results (this is execution after all) you have to put elon on top of both. Who else executes better?

+1

Empowering other employees to take on a ton of responsibility is execution on Elon's part, as is making all of the tough decisions (and making them right).
 
Since that is not happening and is most likely the most fundamental part of TM's lead then I ask the shorts: Why are you short TSLA?

Valuation.

Tesla is at 17$ Billion dollars. 500k cars each year at a 25% margin would seem reasonable for such a price. But that is impossible. You cannot achieve such a margin AND volume. Even Porsche is far away from that. There is too much overcapacity in that space.

I did get back into the short at 150,59 by the way. Unfortunately it's only a quarter of the former position.
 
Valuation.

Tesla is at 17$ Billion dollars. 500k cars each year at a 25% margin would seem reasonable for such a price. But that is impossible. You cannot achieve such a margin AND volume. Even Porsche is far away from that. There is too much overcapacity in that space.

I did get back into the short at 150,59 by the way. Unfortunately it's only a quarter of the former position.

What is your price target? Looks like you're having a great day with a 5% profit already.
 
Valuation.

Tesla is at 17$ Billion dollars. 500k cars each year at a 25% margin would seem reasonable for such a price. But that is impossible. You cannot achieve such a margin AND volume. Even Porsche is far away from that. There is too much overcapacity in that space.

I did get back into the short at 150,59 by the way. Unfortunately it's only a quarter of the former position.


Since TSLA is in its growing stage, it deserves a much higher multiplier then the old car companies, so it needs much less then 500k cars to justify its current market cap.

Today's dip is probably due to people questioning the company's growth.

The good news is that the growth is supply constrained. As soon as Tesla solves the supply problems, the stock will move up rapidly. Your short position may lose again. I will bet on this.

Elon said that it will take up to 6 months to solve the supply problems. If there is any news about moving production of some pieces in-house, or making partnerships with suppliers or something like that, the stock will go up. This news may happen long before the promised 6 months end, maybe even this month.
 
Since TSLA is in its growing stage, it deserves a much higher multiplier then the old car companies, so it needs much less then 500k cars to justify its current market cap.

Today's dip is probably due to people questioning the company's growth.

The good news is that the growth is supply constrained. As soon as Tesla solves the supply problems, the stock will move up rapidly. Your short position may lose again. I will bet on this.

Elon said that it will take up to 6 months to solve the supply problems. If there is any news about moving production of some pieces in-house, or making partnerships with suppliers or something like that, the stock will go up. This news may happen long before the promised 6 months end, maybe even this month.

Yeah, watch out if Tesla announces a battery supply agreement with Samsung.
 
Since TSLA is in its growing stage, it deserves a much higher multiplier then the old car companies, so it needs much less then 500k cars to justify its current market cap.

Today's dip is probably due to people questioning the company's growth.

The good news is that the growth is supply constrained. As soon as Tesla solves the supply problems, the stock will move up rapidly. Your short position may lose again. I will bet on this.

Elon said that it will take up to 6 months to solve the supply problems. If there is any news about moving production of some pieces in-house, or making partnerships with suppliers or something like that, the stock will go up. This news may happen long before the promised 6 months end, maybe even this month.

Just to play devils advocate for a minute....

Tesla multiples are already much higher than most other car companies and if you look outside P/E and consider price-to-sales or price-to-book then it's already off the charts despite Elon repeatedly pointing out production constraints so investors should be seeing potential pushing further out. There are those who say that Tesla is over-valued right now, there are shorts who say that it's one move from collapse, and there are believers who see Tesla as one ramp-up away from massive profitability. I'm long, but I do feel that TSLA is somewhat over-priced right now which is why I expect TSLA to remain a volatile stock for some time as both longs and shorts see opportunities to make money; I also expect that in the medium term both will make money at different times.

(Before anyone jumps on me - I own two Tesla's and have a Sig deposit on a third, so I am long with my purchases as well as with my stock)
 
Just to play devils advocate for a minute....

Tesla multiples are already much higher than most other car companies and if you look outside P/E and consider price-to-sales or price-to-book then it's already off the charts despite Elon repeatedly pointing out production constraints so investors should be seeing potential pushing further out. There are those who say that Tesla is over-valued right now, there are shorts who say that it's one move from collapse, and there are believers who see Tesla as one ramp-up away from massive profitability. I'm long, but I do feel that TSLA is somewhat over-priced right now which is why I expect TSLA to remain a volatile stock for some time as both longs and shorts see opportunities to make money; I also expect that in the medium term both will make money at different times.

(Before anyone jumps on me - I own two Tesla's and have a Sig deposit on a third, so I am long with my purchases as well as with my stock)


Sure TSLA is very overpriced if you base your valuation on the current production. But it's a cult stock. So the current production does not matter. The only thing that matters is a shining growth image. If this image gets cloudy, the stock drops. If it shines, the stock keeps going up and it at least double from the current position. Just my speculations.
 
Is there any company ever in history to deserve a valuation like TSLA currently holds? And do you believe in multipliers?

Valuation.

Tesla is at 17$ Billion dollars. 500k cars each year at a 25% margin would seem reasonable for such a price. But that is impossible. You cannot achieve such a margin AND volume. Even Porsche is far away from that. There is too much overcapacity in that space.

I did get back into the short at 150,59 by the way. Unfortunately it's only a quarter of the former position.