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

[mongo]

1. Your thesis is that Elon has significant amount of shares unnecessarily pledged? No, his financial advisers are wiser than that. His leverage ratio is closely watched by every single analyst and widely reported. They know the amount of shares pledged on the last day of the year is entered into public record. You better be sure they won't overstate it, if they can help it.
2. Others have misinterpreted the reports as being total while it just puts a lower floor on the amount of his loan. I pointed this out just a bit higher up.
3. I don't understand your rebuttal. Are you saying we can somehow confidently put a number of the amount of SpaceX stock owned by Elon that is open for pledging and also for how much the banks will value that as collateral?



It's the other way around : the amount of shares pledged follow the stock price. For example, by the end of 2013, he had pledged over 10M shares at $150/share. By the end of 2014, the stock price was $220 and the amount of shares pledged dropped to 7.5 million.

1. My thesis is that your 5 Billion number is derived based on assumptions and not a fact. Does having excessive shares pledged impact him financially? Are not lines of credit typically larger than the amount used?
   
2. And you are putting him at the upper bound of his loan at the upper end of the share price, any data to back that up?
3. It's not a rebuttal, it's an observation that saying one needed A to pay for B, yet used B to pay for A (A being TSLA and B being SpaceX), does not make a lot of sense. Pledging share of SpaceX to prop up a loan against shares of Tesla to cover the costs of SpaceX? If we do not have confident numbers then how is your 5 billion claim supported?

 

[JusRelax]

This consumer reports article on autopilot released today unfortunately is quite blatantly biased:

Tesla's Navigate on Autopilot Requires Significant Driver Intervention

While I agree with some of their gripes, the overall tone of the article is definitely biased. Seems like it's the cool thing to be biased against Tesla atm

 

[TheTalkingMule]

I think you are right, but what does free cash flow look ilke at those volumes?

Q4'18 Update Letter

 

[Tslynk67]

Some people went on about camera visibility after being told this OT discussion had to end. Their posts have been removed. Any more posts on this subject will be worth a two week vacation.

Mod

It's a tempting offer, would allow me some moments to actually talk to my wife and kids...

 

[stef]

Should run out of analysts soon.

Here comes the secret weapon
Tesla's Navigate on Autopilot Requires Significant Driver Intervention

 

[Tslynk67]

OK, chaps, I've decided I'm an analyst, so listen up!

My bull case for $TSLA is $4k - I didn't need to think about this too much, just agree with ARK, and even though it's a bit crazy, it is possible.

My bear case though, well the others have it totally wrong, $TSLA isn't going to zero, it's going negative, yeah, -$42, Musk will actually have to pay everyone money back!

Why? Nobody's going to ever buy a Tesla again, it's over, plus all the ones out there already will all catch fire and there'll be a big class-action = remember the "Optigrab" in The Jerk, well will be that all over again!

Where's Scooby when you need him?

 

[schonelucht]

1. My thesis is that your 5 Billion number is derived based on assumptions and not a fact. Does having excessive shares pledged impact him financially? Are not lines of credit typically larger than the amount used?
   
2. And you are putting him at the upper bound of his loan at the upper end of the share price, any data to back that up?
3. It's not a rebuttal, it's an observation that saying one needed A to pay for B, yet used B to pay for A (A being TSLA and B being SpaceX), does not make a lot of sense. Pledging share of SpaceX to prop up a loan against shares of Tesla to cover the costs of SpaceX? If we do not have confident numbers then how is your 5 billion claim supported?

1. This is not a line of credit. It's a collateral. And yes, having excessive shares pledged does impact him.
2. I never said that. All I said was that $507M is a lower bound and we can't know how much is debt is. Please quote exactly where I put his total loan close to the upper bound of $5B and I will apologize. If you can't, you apologize to me. Deal?
3. Again, I have ALWAYS specifically said that we cannot know if he has used B to pay for A. So same deal : if you can quote where I say that he must (I stress, must, not could) have used SpaceX (B) to pay for Tesla (A), I will apologize, if not you apologize to me.
The $4.5B number is straight out of TSLA proxy filings. It has NOTHING to do with SpaceX. Making it $5B is indeed my speculation. Remember if his loans are indeed 1/10 to his collateral. That means just $50M additional borrowing would do it. He already used $25M for participating in the equity raise alone.

 

[Tslynk67]

Slight change of subject to something a little more relevant in my opinion.
Sorry, headline misleading.
Battery Expert Jeff Dahn Raves About Tesla's New Battery Chemistry

Nice, but he's commenting on some military IP, not Tesla, unless I misunderstood?

 

[SPadival]

Yes, theoretically Elon might secretly owe Vladimir Putin two billion dollars and might have pledged all his remaining shares in Tesla and SpaceX to Vlad.

Wrong!! By process of elimination (see below the list of banks eliminated), I have determined that Elon has a $4.20 bil loan from a Netherlands bank called Schonty Bank.

Goldman Sachs & Co. LLC
Citigroup
BofA Merrill Lynch
Deutsche Bank
Morgan Stanley
Credit Suisse
Societe Generale
Wells Fargo

Source: Tesla Announces Offerings of Common Stock and Convertible Senior Notes | Tesla, Inc.

Goldman Sachs & Co. LLC and Citigroup are acting as lead joint book-running managers for the offering, with BofA Merrill Lynch, Deutsche Bank Securities, Morgan Stanley and Credit Suisse acting as additional book-running managers, and Societe Generale and Wells Fargo Securities acting as co-managers.

 

[Navin]

Short sellers are to blame for the drop in Tesla's stock, Bank of America claims

 

[Pras]

Short sellers are to blame for the drop in Tesla's stock, Bank of America claims

Thanks BoA for stating the obvious.

 

[ggr]

In 2013 they were a company showing up the industry with a ground breaking car that delivered to promises. Over the next 6 years, where might that take them? The car barely improved considering the steep progress in the BEV space. Management has been consistently missing nearly all guidances. Taking on debt, diluting stock, booking losses.

You're totally wrong about the car barely improving. Compare my Signature P85 to yesterday's 75D (not even the Raven version, or the recent price cut). The 75D wins in every possible way, performance wise, for just over half the price I paid. It also has lots of functionality that my P85 can't ever have, because no radar, no camera, no electric brakes, slower charge rate, blah blah. You also forget that my 2019 Signature P85 is a much better car now than the SigP85 I got in 2012. It has better navigation, hill hold, faster screen operation, fewer bugs, slightly better performance, guidelines in the reversing camera, remote controls have improved, ... I can't even remember a lot of the small improvements.

 

[Nathan]

Nice, but he's commenting on some military IP, not Tesla, unless I misunderstood?

Yes, you are right. That's why i put that the headline was misleading. Sorry about that.
Does remind me though that Tesla has someone like Jeff Dahn working on their battery chemistry,
which is a huge plus.

 

[ZsoZso]

How do disabled people drive when they can't wash their own car windows? There's rules for that. If safe, they drive slowly to a place where they can get help. If they can't drive safely, then they pull over and call for help. How do elderly people with night vision limitations keep their licenses? They drive during daylight hours:

IF DARK

DON'T DRIVE​

ELSE

CONTINUE​

It's not that complicated. You don't need to be Bobby Rahal to hold a basic driver's licence. There are grades of driver skills just like driver licences. The reasonable thing to do is put 'learner' type restrictions on early self-driving cars, and let them go out and learn. No night driving at first for example. No rain or winter conditions. There's still a huge swath of utility in that type of limited driving skill. But it won't get better without real-world miles.

Tesla's winning advantage will be the digital record of all driving events, especially the actions of other parties, during any accident investigation. They will have REAL evidence based learning opportunities, not the missed opporunities that most human drivers repeat now in court (at least the lucky ones). And their's is just individual trial and error learning. One person learned something.

Tesla FSD has FLEET LEARNING, and they have it right now.

Do you understand how exponential that makes the learning curve when a single event recorded by just one car in a fleet of millions can be rapidly distributed throughout the entire fleet?

FSD skill will grow exponentially with Fleet Learning. The SAE Self-Driving Levels themselves are insufficiently granular, and already form an obsolete rating system. Time to apply some more sensible, human-like categories and restrictions for FSD, so we can work on lifting those restrictions one by one. It's also time to get out on the road and get on with it.

Cheers!

Completely agree. Reaching SAE level 4 will be an amazing achievement and solves the vast majority of driving needs.
All I pointed out is that the current hardware "as is" will not be capable of SAE level 5. Pulling over and asking for assistance is a perfectly fine solution, but it is by definition level 4. That is all I was arguing. People keep claiming level 5 possible with current hardware are wrong. Plain and simple.

 

[mongo]

OT mongo rant wind down
tl;dr; If there is a basis for the 5.0 Billion besides your post theorizing a 0.5 increase from a 4.5 Billion requirement, I apologize.

1. This is not a line of credit. It's a collateral. And yes, having excessive shares pledged does impact him.
2. I never said that. All I said was that $507M is a lower bound and we can't know how much is debt is. Please quote exactly where I put his total loan close to the upper bound of $5B and I will apologize. If you can't, you apologize to me. Deal?
3. Again, I have ALWAYS specifically said that we cannot know if he has used B to pay for A. So same deal : if you can quote where I say that he must (I stress, must, not could) have used SpaceX (B) to pay for Tesla (A), I will apologize, if not you apologize to me.
The $4.5B number is straight out of TSLA proxy filings. It has NOTHING to do with SpaceX. Making it $5B is indeed my speculation. Remember if his loans are indeed 1/10 to his collateral. That means just $50M additional borrowing would do it. He already used $25M for participating in the equity raise alone.

1. If not a line of credit, then did he immediately spend all the money he received in his loan? If not, he has cash on hand which offset the need to bump from 4.5 Billion to 5 Billion. If yes, he is constantly pledging more shares as the loan increase (and less as share price goes up). Such a dynamic system seems inefficient.
   
2. You stated his required collateral may have increased to 5 Billion, which means his loan increased to require that, which means he has spent all the cash from the previous loan and needed to expand it 11%. My main issue is that you later claimed your assumed 5 Billion number as fact, that is the main issue I have. If there is data to support 5 B outside of your earlier post, I do apologize.
3. Again, if there is independent data, I apologize. I found it non-logical (but are financials always logical?)that the 5 billion was based on potentially needing money for SpaceX, and then suggesting that he was using SpaceX to back the Tesla loan.

 

[Unpilot]

Who thinks it's fun climbing out of the sub $200 hole every morning/S

 

[saniflash]

similar pattern to yesterday...some big buying action here right after open. yesterday 1M/5min and now on track for 1M/10mins

 

[MP3Mike]

NO.
At 4 miles per KWH it's
1000 miles / 4 = 250 kWH
5000 miles / 4 = 1250 kWH

if 10 cents kWH then $125 dollars for 5000 miles. It's peanuts.

Show me a Model X P100D that gets 4 miles per kWh. And yes the 1000 miles of Supercharging credit will drive you farther in a Model 3 than it does in a Model X.
​

I got an extra 0 in my number, but the 1000 miles = 400 kWh comes directly from Tesla.

My Tesla includes 400kWh of credits annually—how do those work?
Certain Model S and X vehicles ordered before November 2, 2018 include annual Supercharger credits of 400kWh, or roughly 1,000 miles.

So 5000 miles = 2000 kWhs. Tesla says that the average price is $0.28 so their lost revenue from that offer is ~$560. (Their cost might be less than that, but in some places it could be more.)

 

[EinSV]

Short sellers are to blame for the drop in Tesla's stock, Bank of America claims

In case folks don't click the link, there is this unexpected bit (from a Tesla bear no less):

Tesla’s recent stock price plunge is likely due to short sellers increasing their bets against the company, Bank of America told clients Wednesday.​

That’s also priming shares for a sharp move upward in a “short squeeze,” the bank predicted.

“Although far from taking a constructive view on TSLA (see below for more detail), it appears much of the pressure on the stock over the past few days/weeks has been driven by shorts pressing aggressively,” analyst John Murphy wrote.

“In our view, this could set up for a short squeeze in the coming days/weeks/months should deliveries, profits/losses, cash flow/burn come in even slightly better than draconian expectations, or should Musk introduce another business venture and/or longer-term financial target that once again gets bulls excited,” he added.
​

Not advice -- from what I have seen betting on TSLA short squeezes usually ends badly (2013 was an exception).

On the other hand, Tesla shorts have had a very strong tendency to "short the bottom" and very high short interest has generally preceded a sharp upturn. This time could be different of course.

​

 

[ggr]

1. This is not a line of credit. It's a collateral. And yes, having excessive shares pledged does impact him.

At least one of the loans is a line of credit. He doesn't get a new loan every month to meet his mortgage payments, he just writes a cheque against that account (probably auto-debit, but you know what I mean). And what was reported is what was currently drawn down from that (or those) loans, not whatever its (or their) limit was.