Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[Right_Said_Fred]

Timber! tsla below $310. doesnt look good for next week with MLK holiday.
When a stock loses ~37 points, "downgrades are coming!" (GOT saying)

Daily stock movements and downgrades/upgrades are unrelated.

 

[jhm]

Good information and interpretation in this post, but unless there is something that I’m completely misunderstanding, the fatal problem of your concluding paragraph is that, within most states in the US, Tesla very likely would be prohibited from so acting unless they restructured themselves as a utility...with all the very unfortunate baggage that entails.
I haven’t a clue as to whether your proposal could occur in non-US markets.

PURPA in the US establishes that a non-utility can be an independent power producer (IPP) and participate in wholesale power markets. Independent Power Producer - Wikipedia

 

[Causalien]

Stock hasn't fallen enough dispite the already big drop. Cash is still on hold.

So the only question mark I have aboit the statement is: why is Q1 barely making profit? It is a quarter with 100% fully loaded model 3 so far. So profitability should be better than q3 2018. Is the repayment of the loan eating into profit? Didn't think it factors into eps.

 

[uselesslogin]

Did anyone notice that Bored Elon Musk tweeted:

A dictionary, but a version where everyone agrees the words mean the same thing.

Without speculating on whether that is Elon or not I liked that came out today when everyone is obsessing over the words in his email.

 

[SOULPEDL]

Smart enough not to growl at me, I bet.

I'll leave it up for a while and let you know...

 

[reddit_tl]

dudes, here's my take on the lay-off and statement from tesla:
1. without the news, I expected the price to come down anyway. of course, i am talking about short-term. now it is coming down in a hurry.
2. letting about 3000 contractors/temp worker go further confirms the production issue is over and quite likely the productivity has been improving. elon does it now probably in considering the holiday season. in other words, this move is not out of desperation, rather it's inevitable but flexible.
3. the q4 profit down from q3 is not good news for sure. the reason is more important. is it because of margin reduction? increase cost in r&d, logistics, service etc? much lower asp? based on the p&d numbers, the cash flow will be good. if the lower profit is due mainly to r&d, logistics and service expansion, i would add another giant thumb up for elon. this is the way to go. i would love to hear that andrej's team is expanding wildly and development team for Y and truck is also expanding.
4. stock price will not stop here in my opinion. testing 300 is almost certain to happen in the following couple of weeks. i actually wired some cash to trading accounts to get ready for this.
5. this didn't change anything for the long-term prospect. this is just a wild SP short term event. play the short-term volatility with care and know the risks.

 

[Xpert]

After review of the past 8 pages of comments, I don't believe anyone has asked the obvious question...

Why did he announce this now, just 2 weeks before ER? Why not wait for ER?

IMO, some really good news is about to come out in ER and they don't want it buried by this.



Disagree, employees need this to stay and he needs a solid pop this quarter for convertible notes. He knows they are trying to cut this off so he has to pay in cash vs stocks. Folks, this is all about making sure SP get's back well above $360.

And again, as some have said, it's more about cash flow. Possibly a bear trap as well. SP might even go lower before Feb to catch even more bears.

This is actually negative to me - $Tsla is now much less likely to surpass $360 which means they cannot convert some of the upcoming debt as they wanted. More pressure on capital, less $ for shanghai.

 

[SOULPEDL]

This is actually negative to me - $Tsla is now much less likely to surpass $360 which means they cannot convert some of the upcoming debt as they wanted. More pressure on capital, less $ for shanghai.

So you're calling Elon an idiot? Then why now and not in 2 weeks? He was almost there already.

 

[myt-e-s-l-a]

Daily stock movements and downgrades/upgrades are unrelated.

Maybe, But this violent price action + Elons letter today on profitability in the short term might be the catalyst for a downgrade. If not imminently, likely after Feb 5th ER

 

[shlokavica22]

Yes, that's the bottom line, but not a reason for such a long, persistent SP at high volume. The fewer the number of parties that are responsible for the majority of the volume, the easier a steady-state is to establish.

IMHO.

Steady state would suggest that both parties agree on the valuation. We don't want that.
We want big whales rushing forward seizing the opportunity to get more stock, recognizing the overreaction. The fact indexes are >1% up only adds to the conclusion that waiting is probably the best move right now.

Just to be clear btw- my perspective is from the point of view of option speculator. Long term stock hold doesn't matter that much- we all know where TSLA will eventually end up, so $20 plus/minus are not that crucial.

 

[BOBTHEJOCKEY]

I took notice that days after announcing layoffs at SpaceX, Elon Musk also announced that 7% of its full-time workforce would be let go at Tesla as well. Tesla grew by 30% last year, which is more than can be supported.

1000 job openings not 10,000

 

[CuriousSunbird]

I think the main thing the market doesn’t like or understand from the letter was,

“This quarter [Q1] as with Q3, shipment of higher priced Model 3 variants (this time to Europe and Asia) will hopefully allow us, with great difficulty, effort and some luck, to target a tiny profit.”

Layoffs could of been shrugged off, even might of sent the stock up. Q4 not as good as Q3, some minor selling. Why, though, great difficulty, effort and luck for (maybe) a tiny profit this quarter? Kind of clashes with where we thought the company is for no apparent reason.

Just occurred to me, this might be due to Q1 including some downtime for S/X production in order to make changes for the battery packs, and/or some hiccups already showing up in doing this.

This would be consistent with Tesla not giving a reason for the “tiny profit” guidance ... they do not want consumers to know the S/X offerings are being upgraded. It would seem there would need to be a pretty good reason to not include some sort of explanation with what was a considerable downgrade of expectations for Q1 and was ambiguous about future quarters being impacted as well.

Of course, there’s also the dropping of the 75 kWh S/X we already know about which already hinted that they are about to upgrade the offerings.

I think the biggest issue is that this seems to settle the demand issue - at least for North America. Is there sufficient consistent (not pull forward) demand for M3s at a price where Tesla can make a sustainable profit? Musk says no - at least not without pushing down costs and increasing volume at the same time.

 

[Right_Said_Fred]

Maybe, But this violent price action + Elons letter today on profitability in the short term might be the catalyst for a downgrade. If not imminently, likely after Feb 5th ER

Sure, the letter on profitability can cause downgrades. Stock volatility is not a factor though.

 

[aubreymcfato]

I didn't read it all, but this is my question:
why Elon did not wait a week for this news?
He would have hurt the shorts with all the puts expiring worthless today... instead he hurt the (gambling) longs, probably pissing off some major investor who wrote those puts.
I don't know nothing, but it seems bad timing and self-inflicted.
There is something I don't understand?

PS: of course, I'm sorry for the people who got fired, but doing it today doesn't do them any good.
Next monday after burning the shorts would have been better.

 

[thx1139]

I think the main thing the market doesn’t like or understand from the letter was,

“This quarter [Q1] as with Q3, shipment of higher priced Model 3 variants (this time to Europe and Asia) will hopefully allow us, with great difficulty, effort and some luck, to target a tiny profit.”

Layoffs could of been shrugged off, even might of sent the stock up. Q4 not as good as Q3, some minor selling. Why, though, great difficulty, effort and luck for (maybe) a tiny profit this quarter? Kind of clashes with where we thought the company is for no apparent reason.

Just occurred to me, this might be due to Q1 including some downtime for S/X production in order to make changes for the battery packs, and/or some hiccups already showing up in doing this.

This would be consistent with Tesla not giving a reason for the “tiny profit” guidance ... they do not want consumers to know the S/X offerings are being upgraded. It would seem there would need to be a pretty good reason to not include some sort of explanation with what was a considerable downgrade of expectations for Q1 and was ambiguous about future quarters being impacted as well.

Of course, there’s also the dropping of the 75 kWh S/X we already know about which already hinted that they are about to upgrade the offerings.

When the letter is to employees and the major announcement that would concern the employees most is 7% layoffs you dont say the situation is a bed or roses.

So you take a downbeat tone and then do better then what you claim and state they all executed the plan in the future.

 

[TheTalkingMule]

I didn't read it all, but this is my question:
why Elon did not wait a week for this news?
He would have hurt the shorts with all the puts expiring worthless today... instead he hurt the (gambling) longs, probably pissing off some major investor who wrote those puts.
I don't know nothing, but it seems bad timing and self-inflicted.
There is something I don't understand?

PS: of course, I'm sorry for the people who got fired, but doing it today doesn't do them any good.
Next monday after burning the shorts would have been better.

Don't let short sellers dictate what you do with your business. When someone's getting eliminated, the propert hing to do is notify them on the earliest Friday possible after the decision's been made.

This is a free buying opportunity, gamblers will always get stung both shorts and longs.

 

[SteveG3]

When the letter is to employees and the major announcement that would concern the employees most is 7% layoffs you dont say the situation is a bed or roses.

So you take a downbeat tone and then do better then what you claim and state they all executed the plan in the future.

I get that... but the tiny profit, maybe, bit... I just don’t see Tesla/Elon going that far with the downbeat unless it’s pretty much a lock that Q1 won’t be nearly as good as Q3 or Q4.

 

[Joe F]

Anybody have a feel for how many were hired in local stores for the delivery push Q3/Q4? Seems they might not be needed now and are (EDIT: might be) included in the last in first out layoff.

 

[DurandalAI]

Unfortunately, and I know I’ve said this many times, Tesla is a swing trade stock. It trades on short term sentiment. It crawls up 15% and dives 15% constantly
One day it will break out. But it will take something big

I used to camp on TSLA, but now I swing trade it with exception to my core holdings. To do otherwise, you miss out on too much in the way of gains...

 

[Xpert]

I guess looking at NVDA's action today will somewhat negate this disappointment

My $ went from $tsla to $nvda. Their new chips are great! I think it will go much higher. Good place to park $tsla fund for now.