General Discussion: 2018 Investor Roundtable

[Unpilot]

As much as I want your theory to be correct, shere logic is speaking against this. It makes no sense.

He was planning to do a short squeeze of the century about 2 months ago and tweeted about his plans. 3 weeks later, he wanted to take Tesla private and we all know by today that his plan was a huge failure.

The current environment at Tesla is therefore a mixture between confusion and fear. What we've seen on the show when he smoked weed was a more or less broken, tired and depressed Elon Musk I have never seen before in other videos, where he still had energy and enthusiasm.

Let's sum it up:

- He failed to take Tesla private and so at a very high price (loosing both reputation and credibility), whatsover is the reason, he never made an actual proof that funding was indeed secure and the deal structure wasn't even clear nor on paper
- The FUD is huge on media, customer and shareholder site
- He got sued by various Class law action suits and the outcome is still unsure and might cause further fear, as his liquidity is wholly invested in Tesla and SpaceX
- There is a SEC investigation ongoing that might result in further action against him and/or Tesla
- The thai rescue diver story is pure negativity for his reputation as a CEO and Chairman of a public company, further depressing stock price
- We have seen a tired an depressed Elon Musk on the Joe Rogan show - Please compare prior interviews with him - you'll see the difference
- We've just seen two major directors leave Tesla (HR director and Chief accounting officer). Elon and the board decided to reorganize the responsabilities within the firm - a good step in the right direction but confirms the above mentioned points. There was just too much going on at Tesla.
- Whether Q3 2018 will be an outstanding quarter or not - we don't know yet and all is just guessing. The 2X delivered vehicles is a nice indicator but this does not mean that they will be actually profitable - and if they're not - this might lead to further pressure on the stock price as ceteris paribus all other things are already priced in the stock price as of today.

I suggest you change your name to "presume-much?"

 

[STARR X]

Why would EM want to 'help the shorts'? I feel that EM is a visionary/genius but that he is not 'crazy like a fox' when it comes to his personal life. His missteps personally recently are not 3D chess, just, IMO, mistakes in judgement. If he is trying to help the shorts and hurt the longs he is doing a good job. Even if the SP rockets with the Q3 deliveries/production numbers 40% from the current SP we are still below ATH.

Have a few less enemies?

 

[AlMc]

Have a few less enemies?

Doubt it. The real enemies and I suspect short supporters...the ones being disrupted (ICE makers, Big Oil, etc.)..... are not going away anytime soon.

 

[aubreymcfato]

Anyone who fell for the clickbait deserves to lose their shirt.

"Oh hey, the fundamentals of this company are rocking - production is soaring, margins are soaring, demand is huge, analysts say they can cheaply and readily double production, and they've already raised 1/3rd of the cost of the factory they plan to build in China that they only just recently announced. But the CEO took a whiff of a joint and said he doesn't like pot, and two of Tesla's two dozen people at the VP-or-higher level resigned recently, so SELL SELL SELL!"

I wouldn't be so harsh: the amount of FUD out there is unprecedented. Millions of people have been convinced that Musk is a pot-head, while you and me know that he just did one puff, not even inhaling!
This is why a place like this should be much more famous: among investors.
BTW, we should scale up moderation, or at least promote the Ignore button on every post.

 

[Matias]

What do you guys think about this: there are approximately 100 milj passenger cars sold in a year. If after 20 years they're all electric and Tesla has 10% market share, it is 10 milj cars sold in a year. Which is about the same what Toyota sells now. Toyota's market cap is 195 bil. Tesla's is 45 bil. So Toyota is 4.3 times bigger. If Tesla is after 20 years as big as Toyota is now, market cap would rise approximately 7,5% in a year. Which is not much more than what you get from stock market normally with distributed portfolio.

What am I missing? Tesla energy? Tesla has better margin than Toyota (difficult to say what margin is 20 years from now..)?

 

[Unpilot]

What do you guys think about this: there are approximately 100 milj passenger cars sold in a year. If after 20 years they're all electric and Tesla has 10% market share, it is 10 milj cars sold in a year. Which is about the same what Toyota sells now. Toyota's market cap is 195 bil. Tesla's is 45 bil. So Toyota is 4.3 times bigger. If Tesla is after 20 years as big as Toyota is now, market cap would rise approximately 7,5% in a year. Which is not much more than what you get from stock market normally with distributed portfolio.

What am I missing? Tesla energy? Tesla has better margin than Toyota (difficult to say what margin is 20 years from now..)?

I would say Tesla energy in all it's forms. Production (solar roof's) storage (battery's) The idea is a company that is leading in those areas has huge upside. Plus there are untapped areas for battery's use we don't know about with Tesla (Aircraft?) EM hinted about idea's for the Air conditioning market.

The main upside IMHO is the innovation factor. They (Tesla) are so innovative that other company's can't keep up.

 

[JRP3]

What am I missing? Tesla energy? Tesla has better margin than Toyota (difficult to say what margin is 20 years from now..)?

Yes and yes. Plus Tesla will likely continue to have higher ASPs than Toyota so 10% of a higher priced market segment.

 

[KarenRei]

What do you guys think about this: there are approximately 100 milj passenger cars sold in a year. If after 20 years they're all electric and Tesla has 10% market share, it is 10 milj cars sold in a year. Which is about the same what Toyota sells now. Toyota's market cap is 195 bil. Tesla's is 45 bil. So Toyota is 4.3 times bigger. If Tesla is after 20 years as big as Toyota is now, market cap would rise approximately 7,5% in a year. Which is not much more than what you get from stock market normally with distributed portfolio.

What am I missing? Tesla energy? Tesla has better margin than Toyota (difficult to say what margin is 20 years from now..)?

1) 20 years required for electrification? You're kidding, right?

2) The entire global auto market will be far larger in 20 years time regardless. Just think of where the developing world is headed in terms of car ownership.

3) In any major transition of an industry (electrification of cars definitely being one), the those who took too long to transition tend to die off and be gobbled up by those who got there first. This consolidation tends to increase the market share (and thus market cap) of the victors. So comparing to "Toyota's current market cap" (and ignoring #2) as if that's the largest a car manufacturer can become is a big red herring.

4) Tesla is far more vertically integrated than other automakers. Which means that they keep more of the profits for themselves, which means a higher market cap for a fixed amount of sales.

5) Tesla's margins are much higher than most of its competitors.

6) Cars, while currently the lion's share of Tesla's business, are just one of the massive markets they're tackling:

• Grid energy storage with batteries (to allow for ever-higher penetration of renewables) is a brand new emerging market that has an annual sales potential in the trillions of dollars down the road.
• Solar roofing, if they can get the cost down enough, could reinvent how most new homes in the world are built. And at the same time... it sells more energy storage products.
• Autonomy.. heck, some analysts argue for Tesla values in the thousands just from that alone
• Future product lines. Because come on, you know this is Musk. Just some of the more recently discussed ones include electric aircraft (we know he's been working on a design on the backburner for much of a decade and is itching to bring it into production), various home energy integration products (smart air conditioning that interfaces with Powerpacks to plan an optimal cooling strategy for rooms), and so forth.

If you want a sense of how undervalued Tesla is, Waymo was recently valued at $175B. And they have far fewer miles on their system, a far smaller dataset, have a far less scaleable system (vastly higher unit costs and energy consumption), etc, etc than Tesla. And yet Tesla, which has its autonomy products, in addition to making over half of the world's EV battery capacity and producing EVs so quickly that it makes its competitors figures look like they're missing a zero, is worth a quarter as much. That's just plain silly.

 

[Intl Professor]

After Elon posted the e-mail to employees and made it public, I'm starting to think the outrageous crap Elon has been doing lately is actually him doing a pre-victory lap.

Elon is a genius, and he's at a different level than all major CEO's. We know this, and he definitely knows this. Given the enormous difficulty of the tasks he's challenging (building a highly profitable mass produced EV), one can imagine the indignation he has been feeling for all the disrespect and stupidity of the shorts and media doubting him and talking smack about Tesla.

Elon is now highly fueled by this indignation to prove all the doubters want. What Elon wants is to be described, as written in his e-mail, a crazy "badass".

I suspect what he's doing is that he knows Q3 is going to be the most amazing quarter Tesla will ever have, and he's doing a "pre-victory lap". What I mean by that is that he's doing all these ridiculous stunts like smoking weed so that after Q3 earnings comes and Tesla kills it, and then Q4 earning does the final reaffirmation that Tesla has "completely turned around", Elon will be hailed and known as the CEO that smoked weed and did all these crazy stuff, AND defied all expectations and brought Tesla to crazy success. That's the ultimate "badass-ery" and will likely cause him to be treated as a meme God amongst young people that he wants to reach out to, while giving the ultimate middle finger to the shorts and the fake news media.

This is exactly the kind of boost that someone that has been tortured as much as Elon lately needs for recovery. And Elon loves doing this kind of stuff (which made him Iron Man a few years ago). This is all part of his pre-victory lap, setting up all the pieces to become a legend.

I agree in the behavior and partly your explanation. I don't think he is doing this deliberately. He's just relaxing a bit because Tesla is over the hump. Ockham's razor, again.

 

[Intl Professor]

Joined ignored list.
Congratulations!
... not

Stop. I've deleted a post as attack on member.

 

[Krugerrand]

We will see delivery/production numbers in early October and probably be able to model the financials prior to the ER/CC in late October/early November. There is an off chance that with the release of delivery/production numbers in about 3 weeks Deepak may also be able to know...and EM *could* share...reaffirmation of 'profit'.

I don’t think Elon would be able to keep it to himself. And I think he’ll want to tell the world anyway that Tesla did what he said they’d do. I think he’ll also want to fling a little pie after all that’s been going down lately.

I’m taking the ‘he’ll spill the beans’ bet.

 

[Krugerrand]

I wouldn't be so harsh: the amount of FUD out there is unprecedented. Millions of people have been convinced that Musk is a pot-head, while you and me know that he just did one puff, not even inhaling!
This is why a place like this should be much more famous: among investors.
BTW, we should scale up moderation, or at least promote the Ignore button on every post.

I would be harsh and here’s why. If as an adult you haven’t learned to verify before believing; you need to. Most of us learn this in highschool. And I’m just not talking about media. From any source; family, friends, coworkers. People love to tell stories about others, especially if it makes them feel better about themselves. People love to be judgemental. Anyone thinking/believing Elon is a pothead without having watched the entire podcast to come to their own conclusion, needs to be called out. If you watched it and truly think he smokes regularly, then you simply move to the ‘not the brightest light on the Christmas tree’ category.

 

[KarenRei]

Clearly they were led to believe that Musk is a hardcore pothead by him striking a curious look on his face and tilting his head to the side when Rogan lit up a blunt, and asking,

Musk: "So is that a joint?" (pause) "Or is that a cigar?" (squints eyes and stares quizzically at what is obviously a blunt, not a joint)
Rogan: "No. It's marijuana inside of a tobacco..."
Musk: "So it's like.. posh pot, tobacco-pot..?"
Rogan: "You've never had that?"
Musk: "Yeah I think I tried one once..." (squints eyes)
Rogan: "Come on man."
Musk: (Laugh)
Rogan: "You probably can't because of the stockholders, right?"
Musk: (Quizzical look) "I mean, it's legal, right?"
Rogan: "Totally legal."
Musk: "Okay." (Picks up blunt and stares at it like a curious scientist examining an alien species)
Rogan: "How does that work, do people get upset when you do certain things?"
(Musk sniffs the blunt curiously)
Rogan: "There's tobacco and marijuana in there."
(Musk puffs a bit into his mouth but doesn't inhale it, then exhales. Ponders the experience curiously. Then shrugs his shoulders, shakes his head no, then hands it back)

You know, like any hardcore pothead would do Just like the typical stoner conversation that followed where Musk talked about how he doesn't like pot because it interferes with his ability to accomplish things.

 

[j6Lpi429@3j]

This is the problem with modern journalism. Reporting sales numbers and how tesla is crushing it in terms of EV dominance is not as easily spun into clickbait as a picture of a billionaire smoking weed. That gets more clicks == money == attention. The vast majority of people reading about Tesla have the attention span of a goldfish. What amazes me is that so many investors also fall into that category, and end up shorting the stock without reading behind the clickbait headlines.

I can understand why. I have shares in about 30 companies, my knowledge of most of them is fairly slim, and I am vulnerable to clickbait headlines on them. Not so with Tesla or Amazon.
I'm happy to hold tesla stock for a long time at a theoretical loss. I know what's coming, and its obvious to anyone who can look at charts and has driven a tesla car.

 

[elasalle]

Any idea if Norway stats are low or expected? Tesla Registration Stats

 

[tander]

Elon said that the worst is still to come. Even if Tesla does overachieve all the guidance for Q3 they will just need to get going.

The market will try to spin the facts in negatives and we will see an entire new wave of unrelated FUD appear.

Operation, production, expansion and inventing will not be easier. The next hurdle will then be to repeat the success from Q3 in Q4.

Having said that, I doubt that there is any sense of victory with Elon. What he would describe as victory is if the entire industry is moving into sustainable energy and not if they made their Q3 numbers.

Lets not forget Elons objectives are long term goals. This may have been a won battle and Elon overseas that already as many others here but its just not more than that and the war is a long one...

Think about like this; the model 3 is a hit, Tesla is likely profitable, and part 1 of the masterplan is finally pretty much done. So smoking pot publicly at not caring what anyone thinks is kind of like chugging a beer after a marathon, it's not good for you but you've already crossed the finish line so who cares.

Why would EM want to 'help the shorts'? I feel that EM is a visionary/genius but that he is not 'crazy like a fox' when it comes to his personal life. His missteps personally recently are not 3D chess, just, IMO, mistakes in judgement. If he is trying to help the shorts and hurt the longs he is doing a good job. Even if the SP rockets with the Q3 deliveries/production numbers 40% from the current SP we are still below ATH.

Long term, bulls will be better off than bears. Short term this has not been a 'good look' for EM and therefor Tesla/TSLA.

On the bright side I believe the elevation of Jerome and others to positions of greater authority will prove to be very helpful. It may signal that EM can get a break from the day to day running of the company. He might even claim this was all part of the plan he laid out years ago where he could reduce his time/position at Tesla once the model 3 had ramped.

Tesla has gotten many free Super Bowl ads out of the tweets and pot smoking, crazy like a fox indeed. It's like Usain Bolt mooning everyone after winning a race. Nike would give him his own shoe line and a slogan about being free or something. Regarding q3 numbers... in 2013 they posted profits and the stock doubled in a week or two then it almost doubled again over the next few months. Not saying that is going to happen again but it sure seems like the water could be drawing back past the low tide line...

 

[Krugerrand]

This is the problem with modern journalism. Reporting sales numbers and how tesla is crushing it in terms of EV dominance is not as easily spun into clickbait as a picture of a billionaire smoking weed. That gets more clicks == money == attention. The vast majority of people reading about Tesla have the attention span of a goldfish. What amazes me is that so many investors also fall into that category, and end up shorting the stock without reading behind the clickbait headlines.

I can understand why. I have shares in about 30 companies, my knowledge of most of them is fairly slim, and I am vulnerable to clickbait headlines on them. Not so with Tesla or Amazon.
I'm happy to hold tesla stock for a long time at a theoretical loss. I know what's coming, and its obvious to anyone who can look at charts and has driven a tesla car.

No, the problem with modern journalism is that *we* reward them for their behavior, so they keep doing it. If *we* didn’t click the titles, if we didn’t assume or accept without question the headline and then spread it around like wildfire, if *we* demanded more from journalists then they’d be forced to be better.

*We* are lazier than a fat walrus sunning itself on a rock being handfed sea cucumbers. No incentive for journalists to try. Only a handful of people try their hardest and do their best unmotivated, all the time.

 

[Remus]

What do you guys think about this: there are approximately 100 milj passenger cars sold in a year. If after 20 years they're all electric and Tesla has 10% market share, it is 10 milj cars sold in a year. Which is about the same what Toyota sells now. Toyota's market cap is 195 bil. Tesla's is 45 bil. So Toyota is 4.3 times bigger. If Tesla is after 20 years as big as Toyota is now, market cap would rise approximately 7,5% in a year. Which is not much more than what you get from stock market normally with distributed portfolio.

What am I missing? Tesla energy? Tesla has better margin than Toyota (difficult to say what margin is 20 years from now..)?

If you believe the future of transportation is electric then that is a very pessimistic estimation even for the car side of the business only.

Tesla is the only one who doesn't have the ICE baggage. That is a lot of money waiting to be written off. With their current debt level, thin margins, some of them will be serious trouble.

And many car makers also play with the game of lease residue value. If you believe the future is electric, then the resale value for those off lease ICE cars will collapse. There will be casualties.

Tesla is the only automotive battery pack manufacturer with a great track record of battery life, we see more and more report about the battery packs holding extremely well near or exceeding 100,000 miles. Many of the "Tesla killers" used brick batteries with ineffective cooling, leading to fast degradation. This will cause the lease resale value of their EVs to collapse.

Other than Tesla The only company that maybe serious with battery pack design is Audi.

And on the way to electric the auto makers have to deal with revolt from their dealers.

If you consider all these, those 'deep pockets' competitors of Tesla, they are not so deep pocket after all. Their future is very murky. They have to weather all these uncertainty at the same time chase Tesla from behind. That is a daunting task, because Tesla's success is more or less a miracle by itself.

I seriously doubt there will be more than 10 big players left after the this storm of electrification.

We haven't even begin to cover other competitive edges including OTA and extremely fast customer feed back to improvement loop.

10% is to low.

Yes, there will be competition from China. But they are also far behind. There are EV taxi services in China. I used quite several of them in different cities. I talked with the drivers, common complaint is the speed of charging. After dig a little deeper, the real reason is the battery gets too hot they have to reduce the already miniscule current even more. It takes more than an hour to charge to 200 km in a hot day.

Tesla has its most dangerous time behind it, the problem of others automakers are yet to come.

 

[Mader Levap]

Someone can explain to me why half of people here are trying to find fancy explanation of Musk's behaviour? Pre-victory lap? 4d chess? Come on.

It is pretty obvious he smoked that pot knowing well how media will react - and not caring about that in the slighest. Nothing less, nothing more.

 

[Yggdrasill]

Any idea if Norway stats are low or expected? Tesla Registration Stats

They're definitely lower than Q2 and Q4 2017, but they might end up close to Q1. The last half of the last month of each quarter are usually quite busy, but who knows if that will be the case this month.

I think something like 1500 S/X per quarter may become the new norm as the S/X sees competition for the first time. But this also depends on the competition. The EQC seems quite lackluster, which may push some potential buyers into a Tesla. It will also be interesting to see the specs, pricing and availability of the e-tron. The i-Pace at least seems to be rolling out soonish.

Audi e-tron, Mercedes EQC, BMW iX3 and Jaguar i-Pace all have waiting lists for their cars, so it's not strange that this puts some buyers on the fence, waiting to see if any option is better for them than a Tesla. (Tesla should really also get their service wait times down, in some places it's 6+ months. No doubt it's affecting demand.)