I really don't think we can have any meaningful conclusion based on this data. I think we talked about this before. They were assembling TE products by hand at the empty GF shell in Q2 and Q3. I remember somebody specifically mentioning this after the GF opening event. We've seen this with cars - margins are low before production reached certain scale. I am sure that as soon as ramp is meaningful, they will list TE as a separate line item. I believe they are coy about it because situation is so sensitive: they have so much lower cost that by charging going market rate the margins are astronomical.
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I really don't think we can have any meaningful conclusion based on this data. I think we talked about this before. They were assembling TE products by hand at the empty GF shell in Q2 and Q3. I remember somebody specifically mentioning this after the GF opening event. We've seen this with cars - margins are low before production reached certain scale. I am sure that as soon as ramp is meaningful, they will list TE as a separate line item. I believe they are coy about it because situation is so sensitive: they have so much lower cost that by charging going market rate the margins are astronomical.
The big five are all for the merger based on several statements by Elon. One of the institutional holders which is against the acquisition, Goldman Sachs did sell and it DID show in Q2 data, by 50.42%.
On the discussion of creative shorting, there's much that can be done if one has enough financial resources to steer a large stock such as TSLA. I have seen low-volume days when 50,000-100,000 shares could drop the SP by several dollars (I counted the shares traded per minute in each of the downward jabs).
For a really big player, though, capping a rise can actually be quite profitable if one is successful. If you can sell enough shares at the right time to keep a stock such as TSLA from topping 214 and then help it get started on a downward trajectory, algobots, weak longs, and other shorts can do the rest and pull the SP down quite a bit, like we saw today. Then the big seller does a slow buy over the next day or two, reloads, and is ready to do it again. If you're buying at 203 and you sold at 213, it's quite profitable and you can do it again and again without going too deep in short exposure.
Most of us longs have our core holding of shares and then some trading money for moving in and out. I think the big shorts have their core positions and their trading shares, which are bought and sold in a fashion that supports the core position and often is profitable.
For a really big player, though, capping a rise can actually be quite profitable if one is successful. If you can sell enough shares at the right time to keep a stock such as TSLA from topping 214 and then help it get started on a downward trajectory, algobots, weak longs, and other shorts can do the rest and pull the SP down quite a bit, like we saw today. Then the big seller does a slow buy over the next day or two, reloads, and is ready to do it again. If you're buying at 203 and you sold at 213, it's quite profitable and you can do it again and again without going too deep in short exposure.
Most of us longs have our core holding of shares and then some trading money for moving in and out. I think the big shorts have their core positions and their trading shares, which are bought and sold in a fashion that supports the core position and often is profitable.
And the technical risks have also been limited already:
- new autopilot already present on X/S
- new inverter already present on new powerwall/pack (just announced)
- new battery production producing powerpack cells this quarter
There is very little technical risk left in Model 3.
dandurston
Member
Electrek had an article on PowerPack 2 a few weeks ago. The 2x increase in energy density is mostly because there's a lot less air inside. They load trays of batteries inside the powerpack box and now the trays are much closer together. This is the main cause of the double of energy density. The cells themselves are probably similar.
Zhelko Dimic
Careful bull
Agreed on risk/reward. There are few people that hold Tesla stock because of my passion. I've been wrestling with decision to withdraw my recommendation last couple of months - but that's hard considering they would be slightly negative after holding for more than a year. Tesla was the surest thing for me, I could see path to the Victory. I'm not so certain anymore.
My main concern is that I don't trust I know bounds of what Musk may do. His decision to pursue SCTY is outside of realm of what other smart and appreciated CEO would do, so Musk has become an enigma to me. Is he losing touch with reality? If not now, will he lose it in the future? Both Edison and Nikola Tesla screwed up businesses/money they had - perhaps super smart and high powered individuals have greater chance of losing touch with reality.
I didn't describe above to beat on Musk. In describing how I feel about him, I offer potential explanation how other investors may see him, and what's different this time.
larmor
Active Member
I think the disconnect occurs since many solar companies in the past 5 to 10 years have not fared well. Saving the earth while a good mission statement for a company cannot keep it running. However, if one were able to alter or adjust the basics of solar-- ie costs and/hence efficiency this would change the balance sheet for solar enterprises.
Zhelko Dimic
Careful bull
He pissed off WS because he proposed merger one month after raising couple billion $
Investment banks lined up large clients and sold them the secondary offering, and shortly after had to handle angry calls from clients that were underwater TSLA SP.
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Zhelko Dimic
Careful bull
Disconnect occurs because SCTY existed before merger, and being part of Elon's empire I looked into it. If I liked it, I could have invested in it.
I decided that I actively dislike SCTY, and I don't get why is Musk forcing us down this path.
This is the path that affected SP, many dislike it, and these were very predictable consequences.
Musk leading us down this path without strong reason I can understand, is what makes Musk an enigma for me, unknown, unknowable. And that makes me want to limit my exposure. Perhaps I'm not the only one.
You are not the only one, as I have reduced my exposure to Tesla due to SCTY - which bugs me as I truly believe in Tesla.
Losing touch isnt hard - Elon didnt even know that Teslas were being discounted, even though every man and his dog seemed to be talking about it.
I firmly believe that SolarCity will be a massive mistake. I take no satisfaction from my prognosis, and I really hope I am wrong. The news that Panasonic is now supplying the solar tech makes me wonder what is the point. Fortunately people a lot smarter than me hold the opposite view.
I was against the merger at first, but I've come around and I'm for it now. My reasoning is as follows:
1. Tesla needs a sales channel for the Tesla Energy products. Tesla could just have sold them to any installer willing to pay, but this means that Tesla can't control the point of sale. This means it's significantly harder to adjust demand levers according to Teslas needs, and furthermore, the Tesla Energy products might not be sold correctly - potentially leading to lower than possible demand, dissatisfied customers and similar consequences. This is similar to how Tesla doesn't want to sell cars through dealers - if you don't own the point of sale, you are at the mercy of the middleman.
2. Solar installations will continue to be a growing market going forward. This de-risks Solar City substantially. I don't think installing solar panels will add to the upside of Tesla massively, but it should be completely workable for Solar City to add *some* value. The fact that they don't produce the panels themselves means they are pretty safe when it comes to changing tech. If China starts pouring out solar panels at 0.01 USD/W, Solar City can just buy those and install them.
3. Using the buffalo plant for *premium* solar panels (and solar roofs) can work just fine. We are now where solar has reached a sufficiently low price point to open the market for premum products. Looks and efficiency matters to some customers, not just dollars and cents. Of course, the price delta between the mass-market stuff and the premium products still shouldn't be too large, because pricing is still an issue, but I think Tesla/Solar City can pull it off.
You could say that about literally any industry. If Apple decided there was money in gold mining, banking, fine art collection etc. What you have confirmed is that money can be exchanged for goods and services.
RobStark
Well-Known Member
Chinese manufactures currently pay 24%-51% anti-dumping duties in the US. If they tried selling for .01 USD/W I guarantee you anti-dumping duties will increase. Plus they need to pay for trans-Pacific shipping.
Most people that buy solar panels care about ethics and the environment. What is the point of installing solar panels made using dirty coal electricity with slave labor that dumps dangerous chemicals into Chinese rivers then ships across the Pacific using dirty diesel or worse fuel?
Tesla Panasonic will be producing panels/roofs in a free factory using cheap hydro electricity using ~650 employees at this "Gigafactory." With such low labor intensity, even at American Buffalo NY labor rates spread over a GW of panels, the labor cost advantage of Chinese manufactures can't be that great if there is one at all.
Gerardf
Active Member
And as Apple has just proven, it takes (much) more than trowing money at it to build up a car manufacturing company. Having multi-Billion $ budgets helps, but is not decisive. It takes more, much more. Google must have realized that as well, Tesla accomplished many amazing things already.
For the same reason I am very skeptical about some of the new names announcing "Tesla-killer" EV's. (FF, NextEV, Lucid etc, etc). I expect them all to come to ask the market for money. Few (if any) wills till be there in 5 years.
Even GM, F, BMW, VW might well be underestimating the many hurdles to overcome to bring EV's to mass market.
Only 650 workers? That sounds very low, what will be the output?
For people wondering about recent price action: TSLA is currently heavily manipulated via the TSLA/SCTY arbitrage trade for 3 months already. For bears it's almost risk free way to short the stock. Don't expect any major moves in the stock until the arbitrage trade is gone. Nor ratings of analysts nor any news matter at this time. TSLA is currently caught in pure technical trading mostly done by Algos and will naturally always be pulled back to 190-200 range no matter what.
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All accounting is an approximation of reality that facilitates making comparisons (period-to-period, similar companies, etc.) consistently.
There is an opportunity cost for those zero-basis RSUs and discounted ESPP shares. If an equivalent number of shares were sold in a follow-on offering, it would provide more cash to the corporate treasury in order to fund CapEX and repay debt.
Shares available for shorting at Fidelity seem to be replenished - 707,497 pre-market open today. Interest at a low 1%
I've loved every minute of driving my Model S. BUT, when my wife lets me drive her Model X, afterwards I'm moody when I go back to my Model S. There is something magical about how such a big car can handle so well.
Which makes me believe that I will likely trade my Model S in for a Model 3, even though it's smaller. The Model 3 will be a third generation product from some of the best automotive designers and engineers on the planet.
Size matters, but it's not the only thing that matters.
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