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

[BornToFly]

I guess the only point the shorts are going to have now is there will be no more vehicles for Tesla to announce after this year. If Elon can't get the fan boys to hype/buy the stock up after a reveal every now and then Tesla is surely going to go bankwupt.

and here comes the Tesla minivan.... LOL

Oh, nothing kills SEXY like a minivan!

 

[Fact Checking]

But consider that the Q4 earnings represent a snapshot taken at a time when inventories are as optimized as possible. Shortly after Q4 they started producing cars for Europe and China. If they had 25k Model 3s in transit/inventory between those on ships/and in the US waiting to be delivered then at a 40k cost per unit that would be 1B dollars in working capital.

So 3.685 - 920 - 1000 means Tesla could be down to 1.765 B in working capital right now. That's a little less than half what the Q4 report snapshot showed.

@ReflexFunds might want to correct me with more accurate figures, but I believe early quarter production actually generates cash from three sources:

• For about 60 days (two months) there's "payables expansion": about $20k of cash per unit generated between the delay between parts are paid to manufacturers and customer payments which are often early. (Revenue and profit is only registered on delivery, of course.)
• End of 2018 had peak "accounts receivable" at over $900m of cash Tesla is owed but not paid yet. Much of this money arrived in January and February.
• According to the very reliable Alpha Hat GPS tracking estimate Tesla delivered 11.5k units in the slowest month, January, in the U.S. alone. Assuming 23k total Jan+Feb and a few thousand in Europe, China and RoW generated full customer payments worth up to around $2b, while many of the payables are not due yet.

I.e. it's entirely plausible that Tesla has over $2.5b cash right now, maybe more than $3b, despite the $920m bond payment.

Also note that:

• Tesla has a number of deep credit lines they can draw upon, which lines of credit are meant to bridge temporary (quarterly) fluctuations in cash.
• Definition of GAAP "working capital" is distorted and skewed against Tesla: a $60k Model 3 on a ship to Europe is accounted at 70% value only ($42k) - while the real probabilistic cash value with Tesla's delivery take rate of 99%+ is $59.4k+. So calculating Tesla working capital with GAAP metrics is pretty meaningless.

 

[JustAaronnoraA]

Anyone thinks that a "one more thing" @ model Y unveils maybe a Tesla+Daimler Sprinter???? $TSLA on March 15 will go bonkers.

 

[Antares Nebula]

Poor, poor CNBC option traders, buying puts last Friday. That's 4 times in less than a year where they've been wrong, along with all the sheeple that followed their advice.

Shorts will bend the knee. So say we all!

 

[wipster]

Just running with the 10% bigger comment. We don't know to which dimensions Musk refers, but just for comparison on width/length:

Model 3: 72.8"W x 184.8"L
Model Y at 10% bigger: 80.1" x 203.3"L
Model X: 89.4"W x 198.3"L

Toyota Highlander: 76"W x 193"L
Honda Pilot: 79"W x 197"L
Audi Q7: 78"x200"

Those are all 3-row SUVs. I doubt the Y will be as long as the X, but there's clearly room for a 3rd row at 10% larger than the 3.

10% larger probably doesn't apply to each dimension. I would think it would more than likely apply to the overall volume of the vehicle. I can definitely see it being a bit taller and a bit longer, but 10% in all three dimensions would make it huge.

 

[JustAaronnoraA]

Shorts will bend the knee. So say we all!

Then ride our dragons and f*ck us... = $TSLA 10% down on Monday

 

[MarcusMaximus]

I think the timing of the latest demand lever pulls is no coincidence with the bond repayment. They seem to be strategic moves to ensure Tesla's cash position remains healthy after the bond repayment.

1. All those new Model 3s orders all start with a $2500 deposit.
2. Tesla announced availability of FSD (Including HW3 upgrade) to existing EAP purchasers for $2000.
3. Now we see Model Y reveal coming. I know some speculated Tesla won't take deposits. I think they will.

I know the consensus here is that Tesla has plenty of cash as evidenced by their Q4 update letter: There they stated they had $3.685B in cash. (http://ir.tesla.com/static-files/0b913415-467d-4c0d-be4c-9225c2cb0ae0)

But consider that the Q4 earnings represent a snapshot taken at a time when inventories are as optimized as possible. Shortly after Q4 they started producing cars for Europe and China. If they had 25k Model 3s in transit/inventory between those on ships/and in the US waiting to be delivered then at a 40k cost per unit that would be 1B dollars in working capital.

So 3.685 - 920 - 1000 means Tesla could be down to 1.765 B in working capital right now. That's a little less than half what the Q4 report snapshot showed.

I'm also still smarting from the store closure announcement and I think it's related to the capital issue. I'm probably sounding like a broken record now but I feel like Tesla should have raised capital earlier when they had the chance instead. That would he given them the leeway for instance to offer the 35k Model 3 without such draconian cuts that I think will be a drag in their efforts to reach a new customer base.

You’re assuming they’ve sold exactly 0 vehicles of any type since Jan 1?

 

[kyzhk]

Just running with the 10% bigger comment. We don't know to which dimensions Musk refers, but just for comparison on width/length:

Model 3: 72.8"W x 184.8"L
Model Y at 10% bigger: 80.1" x 203.3"L
Model X: 89.4"W x 198.3"L

Toyota Highlander: 76"W x 193"L
Honda Pilot: 79"W x 197"L
Audi Q7: 78"x200"

Those are all 3-row SUVs. I doubt the Y will be as long as the X, but there's clearly room for a 3rd row at 10% larger than the 3.

Would have to disagree here. 10% is probably in volume rather in dimension... If it was 10% larger in each dimension the volume would be 1.1^3 = ~ 33% larger.

 

[Remus]

Just running with the 10% bigger comment. We don't know to which dimensions Musk refers, but just for comparison on width/length:

Model 3: 72.8"W x 184.8"L
Model Y at 10% bigger: 80.1" x 203.3"L
Model X: 89.4"W x 198.3"L

Toyota Highlander: 76"W x 193"L
Honda Pilot: 79"W x 197"L
Audi Q7: 78"x200"

Those are all 3-row SUVs. I doubt the Y will be as long as the X, but there's clearly room for a 3rd row at 10% larger than the 3.

10% in volume does not translate to 10% in both width and length

 

[capster]

Correction: a terrible chill has just blown through the C-suite chambers of Munich, Stuttgart, Ingolstadt, Wolfsburg, Detroit, Dearborn, Auburn Hills, Göteborg, Tokyo, Turin, Seoul, Yokohama, Paris, Hamamatsu, Fuchū and Whitley.

Don’t forget New York, London and Frankfurt

 

[KarenRei]

It is ambiguous, but I do think he means roughly 10% in all dimensions (aka ~33% more volume). 10% more volume wouldn't really be much of a SUV. 10% more in all dimensions puts it in a hugely desirable size category.

Another possibility would be 10% more mass (corresponding to Musk's claim that the vehicle will cost 10% more due to its greater size). That would correspond to maybe 20-40% more volume, depending on the ratio of components that don't scale with size (such as the battery pack), those that scale linearly with size (for example, a driveshaft), and those that scale with respect to size squared (for example, the body shell).

Either way, I think about a third more volume sounds like a reasonable expectation.

 

[azaz]

So we expecting this to be BMW X1 size or X3 size?

 

[printf42]

It is ambiguous, but I do think he means roughly 10% in all dimensions (aka ~33% more volume). 10% more volume wouldn't really be much of a SUV. 10% more in all dimensions puts it in a hugely desirable size category.

I will take the middle ground, being an engineer at heart, when Elon talk about a car being bigger he’s always talking about the cross section area, which directly correlates to drag and efficiency.

So, I will say 5% taller and wider, unknown length since that doesn’t matter.(arguably longer could be better, to control turbulence)

 

[Mobius484]

OT-
Just got back from international family road trip int the Tesla for some hot springs, and saw the news. First time I’ve been away from my phone.
- Model Y/V3. First instinct is Elon just threw the full Monty. Bear trap sprung. I Will do some reading here, and dip into the twittersphere and get caught up. Tinfoil hat theory/4D chess game Elon is playing is coming to conclusion. Rocket loaded, launch sequence in progress......

 

[HG Wells]

So do I SHORT just before or after the model Y reveal ?

Short Ford or GM ?

 

[AlMc]

I will be extremely happy (and paper richer) if this starts a long expected/talked about short squeeze/capitulation but I have been around Tesla/TSLA too long to believe that Monday will definitely be a 'green' day.

Don't count your TSLA pops before they happen

 

[Mobius484]

Poor, poor CNBC option traders, buying puts last Friday. That's 4 times in less than a year where they've been wrong, along with all the sheeple that followed their advice.

Shorts will bend the knee. So say we all!

I tried to warn them.....

 

[JustAaronnoraA]

It is ambiguous, but I do think he means roughly 10% in all dimensions (aka ~33% more volume). 10% more volume wouldn't really be much of a SUV. 10% more in all dimensions puts it in a hugely desirable size category.

Another possibility would be 10% more mass (corresponding to Musk's claim that the vehicle will cost 10% more due to its greater size). That would correspond to maybe 20-40% more volume, depending on the ratio of components that don't scale with size (such as the battery pack), those that scale linearly with size (for example, a driveshaft), and those that scale with respect to size squared (for example, the body shell).

Either way, I think about a third more volume sounds like a reasonable expectation.

Do we have a comparable figures between the S & X to see what Elon might be suggesting? I think we are looking at the same jump.

 

[pz1975]

I will be extremely happy (and paper richer) if this starts a long expected/talked about short squeeze/capitulation but I have been around Tesla/TSLA too long to believe that Monday will definitely be a 'green' day.

Don't count your TSLA pops before they happen

I expect a typical TSLA pop and fade tomorrow. Get to $308 or so and then close at $301.

 

[Zaxxon]

10% larger probably doesn't apply to each dimension. I would think it would more than likely apply to the overall volume of the vehicle. I can definitely see it being a bit taller and a bit longer, but 10% in all three dimensions would make it huge.

Would have to disagree here. 10% is probably in volume rather in dimension... If it was 10% larger in each dimension the volume would be 1.1^3 = ~ 33% larger.

10% in volume does not translate to 10% in both width and length

I will take the middle ground, being an engineer at heart, when Elon talk about a car being bigger he’s always talking about the cross section area, which directly correlates to drag and efficiency.

So, I will say 5% taller and wider, unknown length since that doesn’t matter.(arguably longer could be better, to control turbulence)

I agree. I was just spitballing. Interestingly, to reach the W/L figures of medium 3-row SUVs only requires about 5% greater W/L. I would bet that's what we'll see.