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

[RobStark]

I don't think it makes sense to make anything in the UK anymore? Brexit kinda makes the UK an ecnomic island. That's why Germany got the gigafactory. edit - more reasoning: I think it's easy enough to make 1 production section at a factory occasionally kick out RHD models rather than ships between India Australia and UK. One of the main factors for this was payment terms and selling the car before needing to pay the suppliers. Shipping from India to UK is like 20 days on the water. Even from India to Australia is 14 days. That would be a massive waste of capital tied up on the ocean in transit. It would almost be better to just not sell to the UK than to ship from India.

1) The UK didn't get the first European GF because it doesn't have easy shipping throughout Europe. That is why American made cars disembark in Belgium not the UK.

2) If there is one union worse than the United Auto Workers it is Unite the Union.

 

[Artful Dodger]

Distinct design queues from Mini and Porsche Mexican Hairless and Pug on the exterior styling.

FTFY.

Think I'll stick with cats just the same...

Cheers!

 

[Artful Dodger]

Surprise, surprise - large orders going in and getting pulled each time TSLA tries to run today. Seems very easy to play this game on lower volume days. SEC where are you? Oh wait, I guess all their resources are being used to monitor Elon's Tweets.

Interesting. Tell us everything you know about “spoofing”.

TIA.

 

[AZRI11]

Karen correcting Dana Hull "Journalist" https://twitter.com/enn_nafnlaus/status/1313583107094859782?s=19

 

[Artful Dodger]

After-action Report: Tue, Oct 06, 2020: (Full-Day's Trading)

Headline: "Macros Kneecap TSLA on Low Volume Day"

Traded: $20,572,180,469.08 ($20.57B)
Volume: 49,224,024
VWAP: $417.93

Close: $413.98 / VWAP: 99.01%
TSLA closed BELOW today's Avg SP

Mkt Cap: TSLA / TM = $385.75B / $182.283B = 211.62%​

TSLA 1-mth Moving Avg Market Cap: $384.03
TSLA 6-mth Moving Avg Market Cap: $251.02
Nota Bene: 3rd tranche of CEO comp. unlocked as of Fri, Sep 04, 2020

'Short' Report:

FINRA Volume / Total NASDAQ Vol = 55.2% (56th Percentile rank FINRA Reporting)
FINRA Short/Total Volume = 40.9% (44th Percentile rank Shorting)
FINRA Short Exempt Volume was 0.43% of Short Volume (44th Percentile Rank)​

Comment: "TSLA runs purple while Wall St. exhales "

View all Lodger's After-Action Reports

Cheers!

 

[RobStark]

MyBookie Takes Bets On Which Electric Pickup Truck Will Arrive First

MyBookie just released the current odds on its electric pickup truck betting scheme. Not surprisingly, the Rivian R1T holds the top spot with +150 odds. It's closely followed by the Tesla Cybertruck, which is at +200. The remainder of the list is as follows:

• Lordstown Endurance +300
• Ford F-150 Electric +350
• GMC Hummer EV +450
• Bollinger B2 +500
• Nikola Badger +1,000

 

[MC3OZ]

I don't think it makes sense to make anything in the UK anymore? Brexit kinda makes the UK an ecnomic island. That's why Germany got the gigafactory. edit - more reasoning: I think it's easy enough to make 1 production section at a factory occasionally kick out RHD models rather than ships between India Australia and UK. One of the main factors for this was payment terms and selling the car before needing to pay the suppliers. Shipping from India to UK is like 20 days on the water. Even from India to Australia is 14 days. That would be a massive waste of capital tied up on the ocean in transit. It would almost be better to just not sell to the UK than to ship from India.

Keep in mind what Tesla initially builds in the UK might be more like Kato Rd than GF Shanghai.

Say one line for 20 GWh of energy storage cells is built.

The considerations are::-

• Raw materials for 20 GWh of energy storage cells.
• Parts needed to turn 20 GWh of cells into Powerwalls, Powerpacks and Megapacks.
• Local market for 20 GWh of energy storage.

In India, Australia and the UK, I think there is an annual market for at least 20 GWh of energy storage. Megapacks need a lot of cells.

India and Australia have the additional advantage than some of the raw materials may be able to be sourced locally, that is more of a stretch in the UK, but Africa is not far away, and there is a fair chance it has raw materials.

 

[Prunesquallor]

MyBookie Takes Bets On Which Electric Pickup Truck Will Arrive First

MyBookie just released the current odds on its electric pickup truck betting scheme. Not surprisingly, the Rivian R1T holds the top spot with +150 odds. It's closely followed by the Tesla Cybertruck, which is at +200. The remainder of the list is as follows:

• Lordstown Endurance +300
• Ford F-150 Electric +350
• GMC Hummer EV +450
• Bollinger B2 +500
• Nikola Badger +1,000

I have a garbage-disposal trade named “Badger”. I can’t get that out of my mind.

 

[mblakele]

Keep in mind what Tesla initially builds in the UK might be more like Kato Rd than GF Shanghai.

Say one line for 20 GWh of energy storage cells is built.

The considerations are::-

• Raw materials for 20 GWh of energy storage cells.
• Parts needed to turn 20 GWh of cells into Powerwalls, Powerpacks and Megapacks.
• Local market for 20 GWh of energy storage.

In India, Australia and the UK, I think there is an annual market for at least 20 GWh of energy storage. Megapacks need a lot of cells.

India and Australia have the additional advantage than some of the raw materials may be able to be sourced locally, that is more of a stretch in the UK, but Africa is not far away, and there is a fair chance it has raw materials.

Local lithium might be on its way:

Cornish miners hope to profit from the shift to electric cars

[...]

Two companies with different approaches are investing. Cornish Lithium plans to extract the metal from brine it will retrieve by drilling wells. It is building a pilot plant a short walk from Wheal Clifford that will be ready within 18 months, says Jeremy Wrathall, its boss. British Lithium, a competitor, says it will get its product by crunching up rocks from a quarry it wants to dig outside St Austell. Roderick Smith, the company’s chairman, says that hole will be “big but not gigantic”, in an area that has already been scarred by china-clay works. Both teams talk of starting commercial production in three to five years.

[...]​

There’s more in the article, but I don’t want to quote it beyond reasonable length for fair-use.

 

[Thumper]

MyBookie Takes Bets On Which Electric Pickup Truck Will Arrive First

MyBookie just released the current odds on its electric pickup truck betting scheme. Not surprisingly, the Rivian R1T holds the top spot with +150 odds. It's closely followed by the Tesla Cybertruck, which is at +200. The remainder of the list is as follows:

• Lordstown Endurance +300
• Ford F-150 Electric +350
• GMC Hummer EV +450
• Bollinger B2 +500
• Nikola Badger +1,000

y
A better question would be: Which truck will be first to deliver 50,000?

 

[Thekiwi]

somewhat OT but it's interesting how Bloomberg TV have started to cover the SpaceX launches live. Sentiment change.

I think the more likely reason is they want to catch any RUD live, and immediately turn it in to Tesla related FUD.

RUD-FUD.

 

[Artful Dodger]

The only thing I’m worried about for Q3 ER is the potential impact of Elon’s compensation package.

There is a big enough pool in the GAAP Valuation Allowance (VA) to cover all TWELVE of Elon's tranches, not just the 2 from 2020Q2:

Some key points:
- SG&A includes $190m for Elon's Performance Award; this may be understated by about $60-$80m. It depends on how Tesla determines probability of additional milestone achievements. I believe I have the most likely scenario in my estimates.
- There is a potential GAAP upside from a tax benefit of $1.4B to $1.6B if Tesla unwinds some of their Deferred Tax Valuation Allowance. I am assuming this will happen in Q4 but may come in Q3.

Uh, you haven't been reading the WSJ, have you?

Hint: its FUD.

Cheers!

 

[The Accountant]

There is a big enough pool in the GAAP Valuation Allowance (VA) to cover all TWELVE of Elon's tranches, not just the 2 from 2020Q2:

Some supportng commentary:
Tesla has certified 3 Operational Milestones as achieved (the green) and 2 Operational Milestones as probable (yellow). The $4.5B of Adj EBITDA will be achieved this Q3 (it will become green). For additional tranches to be expensed, more milestones would need to be considered probable.
I expect the $6b and $8b EBITDA to be considered probable shortly (I think in Q4).
Here is the argument:
If expenses for Tranches 6 & 7 hit the P&L because the $6B and $8B are probable, then we will see the Tax Benefit of $1.4B- $1.6B as well. The requirement for reconizing the tax benefit is that "It is more likely than not" that Tesla will be profitable going forward. If $6b and $8b are probable for the CEO award, it means it is more likely than not that Tesla will be profitable.

I can't see recording expenses for Tranches 6 & 7 without taking the tax benefit at the same time.

 

[AudubonB]

~~~Would anyone care to guess why TWENTY NINE posts just got deleted? Hint: the only reason it wasn't more is because I stopped going further back.
AND....some that did contain even a scintilla of market-related material got the axe, too - because lipstick on a pig does not alter its pigness.
PS: You may care to guess...but keep it to yourself. Zero response is necessary.~~~

 

[Oil4AsphaultOnly]

Not an entirely positive article, but still decent from seekingalpha:

This all gets me to perhaps my biggest prediction for the Q3 report, and that is that Tesla will report tremendous gross margins. With ASPs likely helped by dollar weakness along with significantly higher total production, I think lower credit sales will be offset here. My guess is that management was upset by the negative coverage of Q2 results being heavily overshadowed by credit sales, and that it wants to produce a GAAP profit without these sales in Q3. Tesla likely wants to give the S&P 500 committee something to think about, since it now has been passed over twice for inclusion. I'll have more on what I think a possible profit would look like as we get closer to the earnings report.

Tesla: Q3 Numbers Spark Questions (NASDAQ:TSLA) | Seeking Alpha

What's wild about that "not an entirely positive article" is that the author, Bill Maurer, is a TSLA permabear!

 

[Artful Dodger]

Some supportng commentary:
Tesla has certified 3 Operational Milestones as achieved (the green) and 2 Operational Milestones as probable (yellow). The $4.5B of Adj EBITDA will be achieved this Q3 (it will become green). For additional tranches to be expensed, more milestones would need to be considered probable.

Indeed. And let's not forget this statement from Tesla's 2019 10-K which now looms large:

Here, I'm referring specifically to Tesla's 2019 10-K (Feb 9, 2020) on deferred tax allowances / Valuation Allowance (VA) for the non-US portion of Tesla's business: (pg 114)

• "We continue to monitor the realizability of the U.S. deferred tax assets taking into account multiple factors, including the results of operations and magnitude of excess tax deductions for stock-based compensation."

Clearly Tesla has been thinking for some time about how they will deploy their deferred tax assets. It's quite possible that Tesla may cover the entire expense of Elon's CEO stock grants with the Valuation Allowance (now $1.95B)

Cheers!

 

[Beltsbear]

y
A better question would be: Which truck will be first to deliver 50,000?

Yes, but I even think Tesla will be the first to deliver 5000. Rivian, if they do go first, will probably only be making 100 a week for a while.

 

[dc_h]

Keep in mind what Tesla initially builds in the UK might be more like Kato Rd than GF Shanghai.

Say one line for 20 GWh of energy storage cells is built.

The considerations are::-

• Raw materials for 20 GWh of energy storage cells.
• Parts needed to turn 20 GWh of cells into Powerwalls, Powerpacks and Megapacks.
• Local market for 20 GWh of energy storage.

In India, Australia and the UK, I think there is an annual market for at least 20 GWh of energy storage. Megapacks need a lot of cells.

India and Australia have the additional advantage than some of the raw materials may be able to be sourced locally, that is more of a stretch in the UK, but Africa is not far away, and there is a fair chance it has raw materials.

The India battery storage market should be 50-100GWh annually. Over reliant on coal an unreliable. Tesla could focus first on urban grid stability and work out to providing widespread software controlled grid stability. That could support wind and solar, kill coal and reduce prices. I do think they could build a model 3 and Y line in India, in 2022, after getting a TE plant built first. With the casting machine the capex for a 50,000 to 100,000 car line is cut by at least 1/3. They sell a good amount of Audi 4 and BMW 3 class cars today. Get started and then build a model 2 class car in 2023.
Tesla is reducing the cost to build each new plant. That will make smaller market plants possible.

Late 2021 initial TE plant for 10 GWh.
early 2022 Model 3/Y plant for 100,000 cars
.

 

[Singuy]

If we see some out of left field positive price action tomorrow for green energy stocks or China stocks, then I think they are pricing in Biden's win. Recent poll numbers are no joke with up to a 16 point lead from polls taken after Trump's coronavirus. All the reddish swing states are favoring Biden, while the bluish swing states have Biden at double digits.

 

[kanweg]

I expect things to remain choppy. Trump did contract a perfect excuse to lose, but didn’t use it. He’ll continue to fight. Once the lead starts reducing, that may create its own momentum. And MMs like choppy.

As to India, personally I wouldn’t drive anything without an exoskeleton there. No worries about the car getting dinged by some careless people. I don’t think it needs to be fast, just nimble enough to handle the busy traffic.