If gross margins stay healthy, will Wall Street give Tesla $$ for many years?

[jelloslug]

2 words: Jim Chanos

I have been following this guy for several years. Most consider him the best short seller ever and I do.

Some of the calls that be made:
- Valeant healthcare: the stock was $200 a year ago, now it is $20 and heading to bankruptcy. Valeant healthcare is a horrible company which purchased great companies, fired R&D and increased medication prices by 8-10 x. Chanos disclosed his short position on Valeant when the stock was $100. I was considering shorting it when it was $200 following his advice I am so mad I did not do it.

- Enron: this is how he got famous for. He called it before anyone else.

- The solar collapse of 3 - 4 years ago. Stocks like first solar went down by 90 percent. He called it. I remember seeing him on tv talking about it all the time before the collapse happened.

Some other calls: HP, Caterpillar (which I actually shorted and made some money on it following his advice).. And solar city.

Did he make some bad calls? Probably but the vast majority of the time he is spot on. He is so spot on now that every time he says something the market immediately follows.

So why do I bring up Chanos? Because he has been shorting tesla. He has been spot on SolarCity in my opinion. Does he make a good case for tesla? I don't know.

To summarize his views on tesla. He is very concerned by
- the high number of high level executives leaving
- the negative cash flows
- the purchase of SolarCity.
- the volume projections which to his mind are impossible to achieve.

Is he going to be right? I don't know. Would I buy the stock when this guy is short? I won't. That said there are a lot of people shorting the stock so it may have a lot of upside in case of a short squeeze.

Your guys will hate me but I am contemplating taking a short position on Tesla so that if the 3 is massively delayed I will have a nice deposit for the S and don't have to wait for the 3

Trust me I would much rather lose money on the short and have my 3 delivered on time.. But the s is so much money for us..

When did he short TSLA?

 

[Alketi]

Well, we're less than 24 hours away from the Master Plan part 2 (due Sunday) ...

IMO, Tesla's trajectory depends entirely on the Model 3.

If they:

• Deliver it on time
• Deliver it in the quantities promised
• Make it profitably
• Stack it with next generation technology (AP 2.0)
• Have it perform as expected

Then, it will effectively be the most incredible free marketing campaign the likes of which have never been seen in any industry by any product, and that includes the original iPhone. I think you'll have to go back to the very first cars ever built for a rough equivalent.

The Model 3 will start with the same impact as the Model S, except now all the YouTube videos and lunch-time rides and family test drives will be done in a car that is affordable by anyone with a decent job. Nobody buys a Model S and goes back to ICE. Nobody will buy a Model 3 and go back to ICE, and everyone who rides in a Model 3 will rethink everything they thought they knew about electric cars.

The upside of Tesla is literally the combination of General Motors and Exxon in their prime. There's never been a company in history trying to do what they're attempting -- and at the same time, they have a 3-5 year lead on everyone else and a better plan.

The downside is that they need to deliver to their promises and their plans and execute flawlessly, as they're playing in some of the most capital intensive businesses around, and slippages will result in more stock offerings or outstanding debt.

In case you haven't guessed, my money is on Tesla.