General Discussion: 2018 Investor Roundtable

[Words of HABIT]

Minor correction: 79 mos = 6.58 yrs

Average consumer time owning a specific car is not relevant. The lifetime use of the car is relevant.

Research by R.L. Polk says that the average age of a modern vehicle is 11.4 years, while the average length of time drivers keep a new vehicle is 71.4 months -- around 6 years.

 

[Johann Koeber]

Schroedenger is renaming his cat Tesla. Tesla is the best short bet, and the best long term investment in existence. Until Elon opens the earnings box in Q2 or 3, the stock will be a dead zero and a live hero. Who knows, maybe the box opens sooner.

I bet when we open the the box, not only will the cat be a live hero, but look at all the kittens.

 

[Remus]

Schroedenger is renaming his cat Tesla. Tesla is the best short bet, and the best long term investment in existence. Until Elon opens the earnings box in Q2 or 3, the stock will be a dead zero and a live hero. Who knows, maybe the box opens sooner.

That's why I only own shares and never on margin. but even when things go south TSLA won't be a dead zero, it would trigger a bidding war among Google, Apple and wealthy investors from China.

 

[Cosmacelf]

Gali on Bloomberg, about 4 minutes,

YouTuber Taunts Wall Street's Tesla Analysts

God, could those Bloomberg interviewers have been any more condescending? They were almost laughing at him. The joke's on Bloomberg though. This may indeed be the start of a sea change in quarterly conference calls. We can only hope.

 

[elasalle]

Self-driving cars are here – Andrew Ng – Medium

Drive.ai will offer a self-driving car service for public use in Frisco, Texas starting in July, 2018

 

[schonelucht]

Quarterly report is out. Anything worthwhile to discuss?

 

[MattEnth]

Quarterly report is out. Anything worthwhile to discuss?

Tried posting it in the other thread (still needs moderator approval), but reposting here...

• They delayed an 82.5M debt payment from February to August
• They have 30% of all cash overseas.
• They have -2.2B net working capital
• Their accounts payable (2.6B) is almost larger than their cash position (2.67B)
• They moved >50% of cash out of money market funds and into cash balance (around 930M still in money market, which is pretty close to customer deposits).
• They're planning 2.35B more in CapEx this year
• They amended their credit agreement to be able to lever Freemont
• Elon is personally approving every 1M+ expense
• They're cracking down on contractors
• They're being adversarial to their suppliers
• They have an upcoming company reorganization/restructure
• They've had significant turnover in their finance department in the months prior

This is a company in financial distress. It makes Elon's statement that they won't raise capital all the more stunning.

 

[Cosmacelf]

Self-driving cars are here – Andrew Ng – Medium

Drive.ai will offer a self-driving car service for public use in Frisco, Texas starting in July, 2018

This is the first self driving beta test and company that is worth a damn. These guys know what they are doing and are bringing a bunch of new ideas to the table as well.

 

[Todd Burch]

Tried posting it in the other thread (still needs moderator approval), but reposting here...

• They delayed an 82.5M debt payment from February to August
• They have 30% of all cash overseas.
• They have -2.2B net working capital
• Their accounts payable (2.6B) is almost larger than their cash position (2.67B)
• They moved >50% of cash out of money market funds and into cash balance (around 930M still in money market, which is pretty close to customer deposits).
• They're planning 2.35B more in CapEx this year
• They amended their credit agreement to be able to lever Freemont
• Elon is personally approving every 1M+ expense
• They're cracking down on contractors
• They're being adversarial to their suppliers
• They have an upcoming company reorganization/restructure
• They've had significant turnover in their finance department in the months prior

This is a company in financial distress. It makes Elon's statement that they won't raise capital all the more stunning.

And we're all shaking in our boots. (And posts here don't need moderator approval before they appear. That's another myth you seem to be pushing for some reason).

Mod: Some posts do require moderation. --ggr.

 

[strider]

Tried posting it in the other thread (still needs moderator approval), but reposting here...

• They delayed an 82.5M debt payment from February to August
• They have 30% of all cash overseas.
• They have -2.2B net working capital
• Their accounts payable (2.6B) is almost larger than their cash position (2.67B)
• They moved >50% of cash out of money market funds and into cash balance (around 930M still in money market, which is pretty close to customer deposits).
• They're planning 2.35B more in CapEx this year
• They amended their credit agreement to be able to lever Freemont
• Elon is personally approving every 1M+ expense
• They're cracking down on contractors
• They're being adversarial to their suppliers
• They have an upcoming company reorganization/restructure
• They've had significant turnover in their finance department in the months prior

This is a company in financial distress. It makes Elon's statement that they won't raise capital all the more stunning.

I don't have a dog in this fight - I'm neither long nor short TSLA.

Everything you say is correct (they are facts after all). But Tesla has been up against the wall before and come out of it. When you make big bets it tends to be a roller coaster ride. Look at Apple. They've been within a hair's breath of bankruptcy a few times now.

Luckily, the path forward is clear. They need to deliver Model 3's with very few defects. If they can do that they will pull it out. If they can't they will probably go into bankruptcy (re-org, not liquidation). I don't think Elon will sell the company. They'll go to court to buy time to get M3 production on schedule and get a bunch of debt converted into equity. It will be bad for equity holders but will allow the company to continue operating.

 

[sundaymorning]

Someone may already have pointed this out, but Dr. Jeff Dahn's research group has been working in partnership with Tesla for 2 years or more and after only a year claimed they had found a way to double the lifetime (cycles) of NMC cells.
Tesla battery researcher says they doubled lifetime of batteries in Tesla’s products 4 years ahead of time [Updated]

From this 1 year ago article:
"For the batteries in its vehicles, Tesla uses Nickel Cobalt Aluminum Oxide (NCA) and Dahn said that they are also working on this chemistry. " And:
"He added that considering Tesla’s use of aluminum in its chassis, there’s no reason why both the cars and the batteries couldn’t last 20 years."

Partnering with Dahn seemed to be a major coup by Tesla 2 years back. Developments seem to suggest this is proving out.

Explains why Elon and JB thinks the Semi can achieve 500-600 miles without a breakthrough, it’s already been tested and achieved according to Dahn’s research team. This is huge rehash of old news to support the Tesla Semi claims.

 

[Todd Burch]

And we're all shaking in our boots. (And posts here don't need moderator approval before they appear. That's another myth you seem to be pushing for some reason).

Mod: Some posts do require moderation. --ggr.

 

[ggr]

Luckily, the path forward is clear. They need to deliver Model 3's with very few defects. If they can do that they will pull it out.

I agree. Last night I drove my friend's new Model 3 (he ordered online, not previous owner). It's a great car. No identifiable manufacturing problems. He used to drive a Prius, and follows Tesla closely, but still was surprised at how wonderful the Model 3 is.

 

[TradingInvest]

Tried posting it in the other thread (still needs moderator approval), but reposting here...

• They delayed an 82.5M debt payment from February to August
• They have 30% of all cash overseas.
• They have -2.2B net working capital
• Their accounts payable (2.6B) is almost larger than their cash position (2.67B)
• They moved >50% of cash out of money market funds and into cash balance (around 930M still in money market, which is pretty close to customer deposits).
• They're planning 2.35B more in CapEx this year
• They amended their credit agreement to be able to lever Freemont
• Elon is personally approving every 1M+ expense
• They're cracking down on contractors
• They're being adversarial to their suppliers
• They have an upcoming company reorganization/restructure
• They've had significant turnover in their finance department in the months prior

This is a company in financial distress. It makes Elon's statement that they won't raise capital all the more stunning.

Sure, the company is in financial distress. What's your purpose of posting these here? To convince us to sell the stock? To be honest, this morning I added more shares and I am getting more funds to buy the stock. I am glad that Elon is buying shares at the same time.

You see one leaf, not the tree, let alone the whole forest. A relevant question, are you are good chess player?

 

[Iceman]

A relevant question, are you are good chess player?

Gambit/diversion/deflection/zwischenzug explanation incoming...

Btw... Throw in Zugzwang for good measure as its exactly what late covering will be.

 

[Cosmacelf]

Tried posting it in the other thread (still needs moderator approval), but reposting here...

• They delayed an 82.5M debt payment from February to August
• They have 30% of all cash overseas.
• They have -2.2B net working capital
• Their accounts payable (2.6B) is almost larger than their cash position (2.67B)
• They moved >50% of cash out of money market funds and into cash balance (around 930M still in money market, which is pretty close to customer deposits).
• They're planning 2.35B more in CapEx this year
• They amended their credit agreement to be able to lever Freemont
• Elon is personally approving every 1M+ expense
• They're cracking down on contractors
• They're being adversarial to their suppliers
• They have an upcoming company reorganization/restructure
• They've had significant turnover in their finance department in the months prior

This is a company in financial distress. It makes Elon's statement that they won't raise capital all the more stunning.

I don’t know why people on dumping on MattEnth for posting this. It is useful information. It clearly shows why the bond markets are closed for Tesla right now, and why shorters are shorting. It also shows why the analysts on the call were so incredulous that Elon wasn’t going to raise money.

Ironically, I’ve been in Elon’s position before, just on a much, much smaller scale. I had raised $6m in our first VC round and deployed the cash rather rapidly. Thing is, I could easily see that we were going to bottom out with about $1m in the bank but the VCs, being financial money men (read: couldn’t run a company if their life depended on it), argued for a quick $10m second round. We never touched that money. We went public and raised $72m. Never touched that money either. I wasn’t the CEO anymore by that point for that bit of essentially financial malpractice. The point is that the CEO has the best view of what the company is going to need.

Elon is not an idiot, nor is Deepak. I have very little doubt they will manage their way around what looks like a liquidity problem. It isn’t as if they don’t know about it...

 

[Waiting4M3]

I don’t know why people on dumping on MattEnth for posting this. It is useful information. It clearly shows why the bond markets are closed for Tesla right now, and why shorters are shorting. It also shows why the analysts on the call were so incredulous that Elon wasn’t going to raise money.

Ironically, I’ve been in Elon’s position before, just on a much, much smaller scale. I had raised $6m in our first VC round and deployed the cash rather rapidly. Thing is, I could easily see that we were going to bottom out with about $1m in the bank but the VCs, being financial money men (read: couldn’t run a company if their life depended on it), argued for a quick $10m second round. We never touched that money. We went public and raised $72m. Never touched that money either. I wasn’t the CEO anymore by that point for that bit of essentially financial malpractice. The point is that the CEO has the best view of what the company is going to need.

Elon is not an idiot, nor is Deepak. I have very little doubt they will manage their way around what looks like a liquidity problem. It isn’t as if they don’t know about it...

While I agree with most of what you said, @MattEnth did miss pretty bigly on his Q1 call.

• Tesla has still not hit a sustained 2.5k/week Model 3 rate, missing their Q1 target by over a month.
• Tesla will not firmly commit to 5k/week Model 3s by the end of Q2.
• Tesla will back down from their 10k/week year-end target. Musk's "zero worry" quote might be specifically mentioned.
• Tesla will push out the Semi target.
• Tesla will be pressed hard by investors for Model 3 conversion rate, take rate, and repair rates.
• Tesla will be down to under 2.4B in cash.
• Musk will back off his Q3/Q4 profitable tweet.

He missed on the biggest ticket items, M3 ramp, cash, and profitability.

He can go eat some crow.

P.S. He also wasn't aware that Tesla has already pushed out the 10k/wk target to 2019. For someone who's apparently so up on the fact, I find that hard to believe. I suspect some intentional twisting of facts.

 

[Skryll]

I agree. Last night I drove my friend's new Model 3 (he ordered online, not previous owner). It's a great car. No identifiable manufacturing problems. He used to drive a Prius, and follows Tesla closely, but still was surprised at how wonderful the Model 3 is.

Even Boxter drivers are surprised how wonderful the Model 3 is, based on who I gave test drives to, which were not the prius drivers Definitely triggered more than one reservation.

 

[Todd Burch]

I don’t know why people on dumping on MattEnth for posting this. It is useful information.

 

[mongo]

While I agree with most of what you said, @MattEnth did miss pretty bigly on his Q1 call.

He missed on the biggest ticket items, M3 ramp, cash, and profitability.

He can go eat some crow.

P.S. He also wasn't aware that Tesla has already pushed out the 10k/wk target to 2019. For someone who's apparently so up on the fact, I find that hard to believe. I suspect some intentional twisting of facts.

I don't know that they pushed out the Semi target. From my re-reading, they only said they were not focused on Semi sales/ reservation numbers. Open to correction.