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

[hoang51]

Running away with profits is never foolish, just sub-optimal!

If timing is right, it would be optimal, especially for those who bought on margin. I for one fall in that camp. I unloaded all my margin TSLA shares earlier today for a decent profit and plan to buy back in later at a discount. The margin loan eats into the gains if holding the large amount of shares over time if TSLA trades sideways. But my cash bought TSLA shares are going nowhere. They're gold and won't be sold anytime soon.

 

[Bobfitz1]

Not to rain on anyone's parade, but it has been my opinion for long, that building additional factories is not simply a money problem. Sure, a couple billion in the bank helps, but Tesla is still a relatively small company with limited human resources. Right now they are building 2 factories in parallel. How many in-house experts do you think they have that can recycle their GF1 and Shanghai factory building experience?

So let's say they build the shell, the most trivial par of the whole exercise. Now they need to tool the factory, select, hire and train staff and start pilot production. Still doesn't sound too scary?! No problem, now they need to ramp from 100 cars a week to 7000 a week and need to put experienced people in charge of that who have already done the same at Fremont or Shanghai.

So at some point their limit will be experienced, battle-proven in-house staff when it comes to building or expanding factories at the same time.

Building a new factory and bringing it up to design production is a complex task in all the ways you outline. However I believe the major engineering challenge is building the various lines to manufacture a given model the first time. That is where your very best engineering talent is needed. Replicating an already worked out M3 or MY line is not (IMO) the same level of difficulty. It isn't cookie cutter because Tesla always seeks to improve a model line with any new innovations ready to implement. Look at how fast they have managed to ramp M3 in Shanghai and over the next few quarters the same with MY. The in-house experts are mentoring and supervising the newer generation of top class engineers who will be working to iron out difficulties ramping Berlin and Texas manufacturing lines. Plus some of the innovations like giga castings ultimately reduce the overall complexity of the revised lines for M3 and MY.
The super experienced engineer limitation is a limiting factor to how many new model lines can be figured out in a given period of time more than a limit on ramping factories to build more of models already brought to high production rates.

 

[Hytra]

At the market, so they are giving the underwriters a mandate to sell 5b$ worth of shares in the open market at their discretion. Last offering was same approach, and it all got sold within 1 trading day I believe.

If they also sold all in one trading day this time, could they do another offering next week?

 

[jbcarioca]

Sadly, there are more of these people than I believe most in this thread acknowledge.

My FIL has a sizeable position in TSLA, and I've been arguing with him for the past 2 weeks to not even consider selling any of it and tired to explain very hard why (hats off to those in this thread providing that reasoning). So far it has worked, but I am 100% certain that without the information here, he would have already bailed out of his position and been happy with his gains. There probably is a fair bit of that going around right now.

Some time ago I disclosed here that I had sold a few shares. I ddi that in order to establish a cash reserve adequate to ensure that all my cash needs could be met without either borrowing or liquidating other investments. Of course, had I kept those shares I have more wealth today. Frankly I don't need more wealth as much as I need absolute peace of mind.

Many of us think such attitudes are short-sighted. However, adequate cash reserves is fundamental to sound financial management. I had put capital gains ahead of that prudence for some time, assuming I could always generate more cash. Now I am no longer generating outside income. Ergo, much larger cash reserves.

It is always prudent to realize that financial management is quite different depending on ones sources and quantities of reserves and earned income.

 

[TheTalkingMule]

Having taken a step back, and with the benefit of my morning tea, this raise makes a lot of sense. Just as much sense as the "share price will get hammered" comments from Elon previously. Both IMO are designed to temper run away markets and avoid a massive spike and equally massive sell-off post inclusion.

A couple of weeks ago my assumption was we'd enter the buying window at $650 and run up from there. With SP at $669 overnight, we were obviously way ahead of that schedule. Now maybe we end the week at $650 and avoid something bad. Perhaps fanboy logic, but if this didn't happen....where the hell do you go from a $670 open today?

 

[ZeApelido]

15 Billion? Maybe LG Chem cell spinoff? Maybe Indonesia?

OMG Tesla is going to buy Indonesia!!!

 

[FrankSG]

I wonder if this raise could end up being the starting bell of the real S&P buying. I wonder if, now that there is finally some liquidity and somebody willing to sell some shares (Tesla), eager buyers will jump on the opportunity to scoop up these shares, and if it might simply continue after all the shares of the offering have been scooped up.

 

[Artful Dodger]

+$23 to -$18 in 5 minutes. Crazy.

So, -5.91% drop in SP for a 0.845% dilution of equity (~8M shares).

Buyers are such clever bots... Sellers? Not so much!

Cheers!

 

[wnorris]

I wonder if this raise could end up being the starting bell of the real S&P buying. I wonder if, now that there is finally some liquidity and somebody willing to sell some shares (Tesla), eager buyers will jump on the opportunity to scoop up these shares, and if it might simply continue after all the shares of the offering have been scooped up.

Yes, there was clearly an excess of buyers yesterday and earlier this morning. It will be interesting to see if the buying continues at the same scale. If so, we likely will see a morning dip and a pick-up from there.

 

[Todd Burch]

I wonder if this raise could end up being the starting bell of the real S&P buying. I wonder if, now that there is finally some liquidity and somebody willing to sell some shares (Tesla), eager buyers will jump on the opportunity to scoop up these shares, and if it might simply continue after all the shares of the offering have been scooped up.

I like this theory. Let's watch how volumes develop today.

 

[AudubonB]

OMG Tesla is going to buy Indonesia!!!

Well, that takes 17,508 islands off the market.

 

[Artful Dodger]

This is perfect. Many were worried they would go for a big raise to help inclusion.

Indeed, this reduces uncertainty (it was obvious Tesla should do a raise, but for how much?)

5B at this level is nothing, but now uncertainty is gone and this is still nowhere near enough to help S&P.

Yes, and it actually raises TSLA's Mkt Cap by ~1% while setting up Tesla to exit 2020 with $20B cash on hand.

Let me say that again, clearly: Tesla will exit the PANDEMIC year of 2020 with TWICE as much cash as their long-term debt.

Moody's, are you listening?

Cheers!

 

[TheTalkingMule]

Quantumscape popping 16% this morning. These guys will get bought for $1.5B in 2021/22 IMO. They're doing a great job of just doing "Tesla stuff" like a battery tech day.

One of the big legacy idiots will pay for them just so they can look more comparable to Tesla. Whoever does can almost certainly bank on a 10% SP pop and it'll be one of those purchases that pays for itself day 1.

 

[GOVA]

The thing is, as far as I know, Elon Musk has not shown much empathy about the jump in inequality, and he has only jokes to tell on this matter (as far as I know). He may deserve his control of the companies he leads, but his lack of concern for an gianormous problem will probably worsen (at some point, the rise in inequality destroy the fabric of society). This threathens all his enterprises so he'd better show some empathy and try to be constructive on that front (instead of just making jokes about Sanders).

Just imagine where we all would be if Elon and Tesla employees worked 35 hours a week.

 

[TheTalkingMule]

I was awake at 6, guess I shoulda bought at $620. Can't buy options in premarket, can you?

 

[FS_FRA]

The tension's kiling me ....

 

[jhm]

Factory as a product ... dwell on it.

Factory as a dwelling ... sleep on it.

 

[Artful Dodger]

Here is today's TSLA Tech chart as of 09:30 EST: (Note: Upper-BB at Market Opening was $675.95)

Cheers!

 

[Todd Burch]

The tension's kiling me ....

That calls for an engineer's joke:

 

[Todd Burch]

OK. We'll be green by lunchtime or earlier.

Edit: Maybe within an hour of open?