General Discussion: 2018 Investor Roundtable

[22522]

They've been working on software platooning for over 50 years, and at this point are settling for having a carlength between every two pods in a platoon, and still haven't solved it reliably at scale. Hardware coupling just works, and it's cheap too. (Why use Flufferbot if you don't have to?)

I think you are onto something. With self propelled entities, there might be room for light mechanical coupling for control, while letting the loads still be carried by the normal suspension and drive train elements. This allows for regenerative braking distributed in the normal way while keeping connective loads from summing as the train gets longer.

Examples are:

1) the lead follow connection with (world champion) Swedish Lindy Hop follows. They move precisely with very light loads through connection points.

2) Mother puppy discipline. Here are some photos of a mom teaching a pup not to play "bite and run:"

Notice that the pup survived from this later image.

A dog walking on a slack leash is another example of light mechanical coupling of self propelled vehicles.

If you consider the recent Tesla Model 3 rear bumper cover disconnects... Tesla might be working on this.

I agree that double density on highways and at stops, with vehicles that can independently choose any pick up or drop off destination at the sparsely populated end will be very good for Tesla stockholders.

And agree with Tesla that all the control compliance can be built into the rear bumper cover if dual motor model 3s are used. Guessing that inductive motors have more instant torque, but have not really thought that through. Bumper cover compliance and torque response of the vehicle are related.

 

[JRP3]

What?

 

[AWDtsla]

I think you are onto something. With self propelled entities, there might be room for light mechanical coupling for control, while letting the loads still be carried by the normal suspension and drive train elements. This allows for regenerative braking distributed in the normal way while keeping connective loads from summing as the train gets longer.

WTF guys. Look, each sled has high precision electric power and navigational control, they can control distance with high precision. However benchmark track or tunnel it rides in presently has a duty cycle of something like 5%. Imagine an actual subway train that arrives every 5 minutes and stops for 15 seconds at a time. It is TOTALLY unnecessary for each sled to be at minimum distance to each other, in fact wait time decreases per passenger if the subway departs every 15 seconds instead of every 5 minutes. People might actually want to use the service, wow! The more sleds that run back to back, the larger and more expensive each station needs to be without causing TRAFFIC.

Given the idea is to make many small and cheap tunnels, trying to achieve 100% duty cycle on a given track is unnecessary and unwanted.

This is a feature not a bug.

 

[MartinAustin]

From CNBC -

Ford is recalling approximately 50,000 120V convenience charge cords that are used on several of its 2012-2015 electric vehicles, that includes the Focus, the Fusion and the C-Max.

Ford says those cables could cause fires in non-dedicated electrical outlets.

The company says it is aware of four fires related to the recall (though no injuries).

 

[22522]

WTF guys. Look, each sled has high precision electric power and navigational control, they can control distance with high precision. However benchmark track or tunnel it rides in presently has a duty cycle of something like 5%. Imagine an actual subway train that arrives every 5 minutes and stops for 15 seconds at a time. It is TOTALLY unnecessary for each sled to be at minimum distance to each other, in fact wait time decreases per passenger if the subway departs every 15 seconds instead of every 5 minutes. People might actually want to use the service, wow! The more sleds that run back to back, the larger and more expensive each station needs to be without causing TRAFFIC.

Given the idea is to make many small and cheap tunnels, trying to achieve 100% duty cycle on a given track is unnecessary and unwanted.

This is a feature not a bug.

I think you are in the boring company thread...

Are you proposing a moving walkway in the loading zone so that cars can index forward while people are exiting?

The exiting time constant will cause traffic backups at the high density destination -
i have not thought very much about this - so I may be wrong.

 

[neroden]

WTF guys. Look, each sled has high precision electric power and navigational control, they can control distance with high precision. However benchmark track or tunnel it rides in presently has a duty cycle of something like 5%. Imagine an actual subway train that arrives every 5 minutes and stops for 15 seconds at a time. It is TOTALLY unnecessary for each sled to be at minimum distance to each other, in fact wait time decreases per passenger if the subway departs every 15 seconds instead of every 5 minutes. People might actually want to use the service, wow! The more sleds that run back to back, the larger and more expensive each station needs to be without causing TRAFFIC.

Given the idea is to make many small and cheap tunnels, trying to achieve 100% duty cycle on a given track is unnecessary and unwanted.

This is a feature not a bug.

Now you're actually trying to argue that underutilization of tunnel infrastruture is desirable. This is ridiculous. Particularly from a cost-effectiveness perspective.

I'm done with talking to you about this.

 

[AWDtsla]

Now you're actually trying to argue that underutilization of tunnel infrastruture is desirable. This is ridiculous. Particularly from a cost-effectiveness perspective.

You don't understand utilization, or you could have something to say about my 5% figure above. It would be trivial to double that figure even with large gaps between cars.

 

[TradingInvest]

I hope someone with knowledge in this area can help me out:

If the privatization deal closes in March 2019 @$420, what will happen to the 2020 $500 LEAPS?

1. Those out of money 2020 LEAPS will drop to zero. I believe this is normally how it works for a LBO deal.

2. Those LEAPS will stay in effect and people still can trade and even exercise them upon expiration date. I definitely don't want my shares to be called away 10 months AFTER privatization.

Which case is likely to happen? Maybe Tesla will issue a Q&A to address questions?

 

[Ellec]

I hope someone with knowledge in this area can help me out:

If the privatization deal closes in March 2019 @$420, what will happen to the 2020 $500 LEAPS?

1. Those out of money 2020 LEAPS will drop to zero. I believe this is normally how it works for a LBO deal.

2. Those LEAPS will stay in effect and people still can trade and even exercise them upon expiration date. I definitely don't want my shares to be called away 10 months AFTER privatization.

Which case is likely to happen? Maybe Tesla will issue a Q&A to address questions?

They go to zero, however, it's looking more likely a big capital raise will be favoured instead of going private. Much easier for Tesla to execute especially after Q3/Q4 profits. Raising will put to bed any arguments about cash shortages and with the profitability of the Model 3 the last short argument is gone. Also means they can probably fund the Model Y/Pickup and another GF.

 

[winfield100]

I hope someone with knowledge in this area can help me out:

If the privatization deal closes in March 2019 @$420, what will happen to the 2020 $500 LEAPS?

1. Those out of money 2020 LEAPS will drop to zero. I believe this is normally how it works for a LBO deal.

2. Those LEAPS will stay in effect and people still can trade and even exercise them upon expiration date. I definitely don't want my shares to be called away 10 months AFTER privatization.

Which case is likely to happen? Maybe Tesla will issue a Q&A to address questions?

stop and think a moment.
Can you answer your own question, or does it become moot,
if you stop and close out esoteric trades, trying to eek out miniscule gains at the risk of being left behind, simply holding actual shares, what then?
You are either in or out, no complex "but what if this weird configuration occurs?"
Why not just convert your Leaps back to simple shares, after all you _do_(?) own the underlyng shares, right?
What if there is an announcement real soon now "owners of record as of some random time in the past are in, others maybe" or whatever the folks structuring it say.
Me, I own shares, not margined, not sold short according to my broker.
I like the validation of the ARKK Lady of $4,000/share in 5 years (2023-2024) which is oddly around the time frame of the _first_ Earth -> Mars run, SO whom will be the FIRST ticker in the Mars Stock exchange? since SpaceX is kinda closely allied with Musk..... and woudn't you like a few shares of that company.........Since they have a permanent facility on another planet......
I hope ths is not too off topic, but it's my take on the next 20-40 years of the Market in Tesla and Musk companies

 

[tander]

I hope someone with knowledge in this area can help me out:

If the privatization deal closes in March 2019 @$420, what will happen to the 2020 $500 LEAPS?

1. Those out of money 2020 LEAPS will drop to zero. I believe this is normally how it works for a LBO deal.

2. Those LEAPS will stay in effect and people still can trade and even exercise them upon expiration date. I definitely don't want my shares to be called away 10 months AFTER privatization.

Which case is likely to happen? Maybe Tesla will issue a Q&A to address questions?

Somebody in one of the threads said they knew and iirc the expiration date basically gets changed to the delisting date or thereabouts, so you probably lose out on some of the premium regardless, but you might still do well depending on stock price. But I'm not sure if I really had my head wrapped around it either so I might try and look it up or talk with someone at CBO or something just to make sure. I was going to look up what happened with Dell options when they went private but it might be a case by case thing. I guess if you really want to hold long-term options there are those 2025? convertible bonds although I'm not sure what kind of premium those would price out to or if you can easily buy them.

 

[MikeC]

They go to zero, however, it's looking more likely a big capital raise will be favoured instead of going private. Much easier for Tesla to execute especially after Q3/Q4 profits. Raising will put to bed any arguments about cash shortages and with the profitability of the Model 3 the last short argument is gone. Also means they can probably fund the Model Y/Pickup and another GF.

I saw a Gasparino tweet mention this, but it would be the exact opposite of Elon's stated goals. Where else are you seeing this theory?

 

[Menifeer]

Many have expressed the belief that a large portion of the current stockholders plan to stay with Tesla if/when it goes private. If that's the case, what's the logic of setting the buyout price at $420?

The "true-believer" stockholders should be sufficient to pass any "go private" vote (after all, we're led to believe they are very long-term holders), regardless of the price being offered to those who want out. Why reward those who want out by handing them a significant windfall?

A buyout a lower price would be easier to finance and should attract greater investor interest.

 

[Boomer19]

I hope someone with knowledge in this area can help me out:

If the privatization deal closes in March 2019 @$420, what will happen to the 2020 $500 LEAPS?

1. Those out of money 2020 LEAPS will drop to zero. I believe this is normally how it works for a LBO deal.

2. Those LEAPS will stay in effect and people still can trade and even exercise them upon expiration date. I definitely don't want my shares to be called away 10 months AFTER privatization.

Which case is likely to happen? Maybe Tesla will issue a Q&A to address questions?

once the corporate action goes effective:
1) out of money options (calls above, puts below - w/ respect to the deal price/valuation) with expiration after the deals effective date, will be rendered worthless

2) they will be removed from exchanges/clearing house (OCC) when the stock is delisted.
they do not carry from TSLA to the underlying private shares (TSLAP)

i think it’s also risky to assume $420 is the # at this point. we don’t know if that number will be agreed upon. elon clearly stated that was a premium to the price after trading day after earnings ann. major shareholders (all, but the majors have the pull) argue valuation higher, while the PE investors will want a discount to share price when the deal is commenced. who knows where price will be then...

 

[JRP3]

A buyout a lower price would be easier to finance and should attract greater investor interest.

Except for all those investors, including some large funds, which cannot invest in private companies.

 

[elasalle]

Dear Elon: An Open Letter Against Taking Tesla Private - ARK Investment Management

 

[elasalle]

If Tesla goes private, obviously it no longer can be part of S&P.
Retail investors aside, I think some big funds will also be against the privatization deal, if their funds themselves cannot participate/hold private stocks?

 

[tander]

I saw a Gasparino tweet mention this, but it would be the exact opposite of Elon's stated goals. Where else are you seeing this theory?

As I understand it Musk is talking about common stock, not LEAPS or monthly options which are derivative instruments. Next question is if it would be detrimental to vesting employee stock options.

once the corporate action goes effective:
1) out of money options (calls above, puts below - w/ respect to the deal price/valuation) with expiration after the deals effective date, will be rendered worthless

2) they will be removed from exchanges/clearing house (OCC) when the stock is delisted.
they do not carry from TSLA to the underlying private shares (TSLAP)

i think it’s also risky to assume $420 is the # at this point. we don’t know if that number will be agreed upon. elon clearly stated that was a premium to the price after trading day after earnings ann. major shareholders (all, but the majors have the pull) argue valuation higher, while the PE investors will want a discount to share price when the deal is commenced. who knows where price will be then...

IMO 420 is probably the first bidding price, and it's hard to imagine the Saudi fund being the only one that will put it's name in the hat so it seems like the price could be above 420. But then again maybe Musk will just decide to take it private at like 150 if they aren't profitable in q3. More info will come.

 

[immunogold]

The Zoox Board just fired co-founder Tim Kentley-Klay. No reason given at this time.

 

[JRP3]

Dear Elon: An Open Letter Against Taking Tesla Private - ARK Investment Management

According to ARK Invest’s research, Tesla should be valued somewhere between $700 and $4,000 per share  in five years.1  Taking Tesla private today at $420 per share would undervalue it greatly, depriving many investors of the opportunity to participate in its success. In our view, given the right investment time horizon, TSLA is a deep value stock today.

Our $4,000 price target assumes that Tesla evolves from a hardware manufacturer with 19% gross margins to a company generating most of its profits from Mobility-as-a-Service (MaaS), a business that we believe will enjoy 80% gross margins.

MaaS is not going to be a thing 5 years from now. Maybe in 10.

A number of her other arguments are rather nonsensical. Very poor showing if this is representative of her work.