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

[SO16]

It’s this type of groupthink that can be dangerous

I wish they were closing stores. I’d take the 3% off any day.

But if more sales are generated which means the company does better and so does TSLA, then I’d choose keeping the stores open. Unfortunately right now, I don’t know which is a better option.

 

[SO16]

The price increases that apply to each model are still open to speculation. Because they said price increases (except for the $35K Model 3) will be about 3% on average. So we can expect some deviation depending on model.

I wonder if the autopilot upgrades will go up.

 

[Leo9]

Any news premarket? Stock dropped a lot with significant volume.

 

[brian45011]

Any news premarket? Stock dropped a lot with significant volume.

Perhaps, ~50,000 share registered for the purchase of Central Valley Auto Transport Inc? Many of those shares will likely become part of the free float.

S-3ASR

 

[Fact Checking]

Perhaps, ~50,000 share registered for the purchase of Central Valley Auto Transport Inc? Many of those shares will likely become part of the free float.

S-3ASR

Yeah, from the SEC filing:

49,967 shares

"As part of Tesla’s ongoing logistics strategy to increase its vehicle transport capacity, reduce vehicle transportation time, and improve thetimeliness of scheduled deliveries, Tesla agreed to issue shares of Tesla’s common stock in connection with its acquisition of certain car-hauling trucksand trailers from Central Valley Auto Transport, Inc. (“Central Valley” or the “selling stockholder”), an automotive transport provider. We are registering these Tesla shares pursuant to registration rights granted to the selling stockholder in connection with the acquisition."​

So it's about ~$14m less capex in Q1 (?) at the price of 0.0294% dilution.

Any news premarket? Stock dropped a lot with significant volume.

The drop started at 8:33am, exactly when the S-3ASR filing news broke.

Bots or overly eager shorts sold about 30k shares in pre-market - price is back up meanwhile to where it started, on about half of that volume.

 

[mrdoubleb]

http://ir.tesla.com/static-files/77f338fd-cbef-403e-984d-51ec3a902946

New SEC S-3 form filed. If I read this right they bought some trucks and trailers for $14M and issued 50k shares to cover that.

 

[CorneliusXX]

Flying from Perth to Melbourne is not just cheaper, according to Google Maps the road trip is also a grueling, 36 hour, 3,500 km drive, with not much to see but a desert with an extremely hostile biome that wants to kill you 24/7?

It is also quite an experience to do once. The perfectly clear night sky, imposing cliffs of the great Australian bight, and unique feeling of isolation as you travel through the desert make it worth a visit.

 

[sweter]

I'm sorry Elon, I love you, I really do, but now you're just trolling.

While adjusting decisions like that is great and something I expect Silicon Valley tech startups to do all the time, communicating it in the way that you do is just blatantly stupid and irresponsible. You hurt your clients, you hurt your employees and you hurt your investors.

Imagine the headlines we would have had if you just made your internal due diligence properly about the stores you want to shut down and didn't announce outright the way you did. Imagine the SP we would have seen if the story was "Tesla finally releases $35k Model 3" and not "Tesla shuts down stores all over the world and fires employees in order to deliver their long-promised $35k Model 3".

I'm sorry, Elon, you're great, you're a genius, but nobody is a genius at everything they do. You need help, you need a COO or a CMO to handle this stuff for you. Last 2 weeks have been pure chaos and Tesla looks like a headless chicken running around trying to figure out what to do.

When you achieved profitability in Q3 2018 you wrote in your email that "Tesla has now become a real company". Please, start acting like one. You're no longer a startup. Your moves are admirable if you're a small agile startup trying to find their product market fit and figure out who its early adopters are. You are way beyond that point now. You're a grown up company.

It doesn't mean you should stop adjusting prices, stop being dynamic and agile. Not at all. But please, for the sake of everyone that loves you and for the sake of your mission, be responsible about what and how you communicate. Be responsible about the decisions you make and announce. If it only took two weeks to reverse your decision, why did you make it in the first place? Did you really have to lower the prices of all the cars so much?

I'm here with you for the long run and now that I have my Model 3 I'm not selling any shares until you scale up Semi at least, so I'm not too fussed about weekly fluctuations. But

Just Tesla being brilliant at getting free advertising and publicity, completely eliminating the need for paid advertising (the usual way of notifying customers of sale pricing).

Tesla instead spends their ad budget on Superchargers, benefiting customers and driving more purchases. Great strategy IMO.

GSP

Brilliant move by Tesla. Lowering prices -free advertising. Increasing prices, but not immediately - demand lever.

While at the same time setting performance goals for its employees and continuing lease negotiations.

You call it brilliant, I call it dumb luck. None of this was pre-planned. And if it was, then it's even worse than it looks.

Free advertising? Only if you agree with the rule that "it doesn't matter what they write about you, it only matters that they do write about you". I don't.

i take it they threw up a fancy new hit piece to drop price this much premarket?

Yes, Tesla themselves.

 

[mrdoubleb]

Yeah, from the SEC filing:

49,967 shares

"As part of Tesla’s ongoing logistics strategy to increase its vehicle transport capacity, reduce vehicle transportation time, and improve thetimeliness of scheduled deliveries, Tesla agreed to issue shares of Tesla’s common stock in connection with its acquisition of certain car-hauling trucksand trailers from Central Valley Auto Transport, Inc. (“Central Valley” or the “selling stockholder”), an automotive transport provider. We are registering these Tesla shares pursuant to registration rights granted to the selling stockholder in connection with the acquisition."​

So it's about ~$14m less capex in Q1 (?) at the price of 0.0294% dilution.

Wouldn`t you agree, that purchasing more trucks to deliver your goods to the customers is a sign of falling demand for your product?! /s

 

[scaesare]

Tesla "we'are closing stores". TMC: brilliant
Tesla "We'are not closing stores" TMC: "Outstanding move"

@Matias missing what actually happened...

Tesla- "We're selectively closing only some stores to maximize efficiency."

@Matias: mischaracterizes what actually happened... typical.

 

[davecolene0606]

Glad to see the 8k this morning with the clarification. Everyone has been going nuts since the original announcement which to me seemed to say that not so much that every store was physically closing, rather, that Tesla was returning to its original sales model which was George’s vision of info centers with online purchase.

When we bought our Signature in 2012 and MS60 in 2013, both transactions were entirely completed online including doc signing via docusign. All of the folks in the stores were from Apple or other fields entirely, none had any experience in auto dealerships other than the actual technicians. When the Boca Raton FL, store opened, there was an event for owners at the time to get feedback about the store and as a bit of a perk. I remember having a conversation with the region manager re a referral program. The discussion kept circling back to how to structure it so it wouldn’t be gamed and become meaningless.

We have seen “referrals” turn into sort of a wink wink nod nod automatic discount program rather than rewarding owners who actually took the time to demo/educate folks about Tesla resulting in another happy owner. This website banned referral codes on your ID stuff for just that reason. We see examples of folks getting to referral reward levels not as a result of 100’s of in person contacts, but by offering up there codes in mass media to as many eyes as they can garner as well as through getting into the system via hooking with internal personnel. This was not the intention of the program but what it was morphing into. Tesla stopped it.

Again, what we have seen happen is a more traditional “dealer” model complete with commissions and imperfect “incentive” programs (read referrals and volume bonuses) which were easily gamed by participants. The first time I saw Tesla begin to hire guys from the local BMW/Mercedes dealerships into sales and service, I really began to worry as they started bringing “dealer speak” into Tesla. This IMHO was starting to bring the sleaze factor of the auto dealer sales model into Tesla. Additionally, it was rewarding rule manipulation that adds unnecessary costs the SG&A. Elon has always disliked traditional sales techniques as he feels (and I agree) the a product should be in demand because of itself, not because some PR guy who took psych101 and learned how to mind f people said to “buy this great widget cuz it’ll make you great”.

Tesla began with the model of opening outlets to answer questions about a product that sold itself, period. As I said, it had begun to morph dangerously close to car dealer world. I think this clarification was again demonstrative of a willingness to be nimble, flexible and responsive to inputs from data and feedback. To be sure, it is NOT what a traditional company would do and it ruffles the feathers of the complacent and rewards those who can adapt and think outside the box. This is why Tesla has gotten where it has gotten!

This is a positive in that when one is making up a new way of doing things, one must be able to adapt very quickly to keep the things that are working and to jettison the one that are not all while preventing “conventional creep” from working its way into the model.

Glad to see the retrenching of the original Tesla sales model and the turn away from “dealer hell world”

Fire Away!

 

[Artful Dodger]

I don't think this is really the right conclusion. Tesla having the flexibility to choose between multiple companies for contracted cell manufacturing (to Tesla's specification) is a strong indication that Tesla (and not Panasonic) owns the key chemistry IP in its cells. Battery cell manufacturing isn't easy, but cell chemistry, module and pack assembly are the main competitive advantage. Several companies can manufacture cylindrical cells, but only Tesla knows how to affordably assemble cylindrical cells into modules and packs. This is why everyone else is stuck using pouch/prismatic cells.

Not only that, but Tesla patented their cell chemistry. Since Tesla has already opened all its patents for 'fair use' (use it but don't sue us), this is the best argument yet that Tesla is on the cusp on adopting new cell tech:

Patent Suggests Tesla Is On Cusp Of Battery Chemistry Breakthrough

• Lead time for competitors to adopt Tesla's old tech: some months to years.
• Lead time for Tesla to adopt new tech: less than that.

Moat secured. Rather, moat dug deeper and wider. Pace of innovation increased.

 

[Cartegena]

http://ir.tesla.com/static-files/77f338fd-cbef-403e-984d-51ec3a902946

New SEC S-3 form filed. If I read this right they bought some trucks and trailers for $14M and issued 50k shares to cover that.

So has Tesla dropped it's plan to build its own vehicle transporters?

 

[lascavarian]

Several companies can manufacture cylindrical cells, but only Tesla knows how to affordably assemble cylindrical cells into modules and packs. This is why everyone else is stuck using pouch/prismatic cells.

Interesting comments. I think we assumed differently regarding Tesla's cell spec. You considered chemistry (the formula - receipe) as a spec where I assumed a spec that defines a performance requirement. Make it any way you please but it must have these demonstrated performance characteristics defined by Tesla. This (if I have it) would be highly stimulative to process development and innovation in China.

I say this influenced by the thinking behind the recent $35k priced product. Tesla is designed to be profitable but that is part of a demonstration of a possible better future. Too many moats works against that better future. EM through Tesla stimulates like thinking and that is what more quickly brings about needed change.

I would speculate that there are many unrecognized uses for great cells but they have to be affordably available. J Rickard is developing uses for cells from recovered packs mostly due to constrained access and cost. Changing this sooner is better than later is one way of thinking.

The second comment I would make is that Tesla has no moat on affordable assembly when it comes to China. China will likely use labor differently from what happens in Fremont, CA and that is fine with Tesla - just meet the spec.

Again, I see this as a bit of a double win in that we longs will have a second source which is a warm feeling. And we may end up with a different process and that too is a warm feeling in that should some fault appear in the Tesla process, it may not appear in another independently developed process. More cells and more processes drives a virtuous circle of cost reduction and innovation - maybe.

Thanks for your comments.

 

[Fact Checking]

So has Tesla dropped it's plan to build its own vehicle transporters?

That idea either got discarded, of it it's a Semi based platform they'll need to get Semi production going first.

Gotta transport 500,000 new Model 3's with something meanwhile.

 

[jerry33]

So has Tesla dropped it's plan to build its own vehicle transporters?

I doubt it, but they aren't available today, these are.

 

[schonelucht]

Is there any reason for Tesla to pay a "mouse nuts" bill with shares instead of simple cash?

 

[StapleGun]

So it's about ~$14m less capex in Q1 (?) at the price of 0.0294% dilution.

Pretty uncommon for a company to issue shares to cover such a minimal expense though isn't it?

 

[EVMeister]

Is there any reason for Tesla to pay a "mouse nuts" bill with shares instead of simple cash?

Evidently so.

 

[Vitold]

I don't think this is really the right conclusion. Tesla having the flexibility to choose between multiple companies for contracted cell manufacturing (to Tesla's specification) is a strong indication that Tesla (and not Panasonic) owns the key chemistry IP in its cells. Battery cell manufacturing isn't easy, but cell chemistry, module and pack assembly are the main competitive advantage. Several companies can manufacture cylindrical cells, but only Tesla knows how to affordably assemble cylindrical cells into modules and packs. This is why everyone else is stuck using pouch/prismatic cells.

Do you really think that if Tesla would share their battery chemistry and processes with Chinese company after fighting for so long to have 100% ownership in China factory? I rather think that Tesla is going for 2nd tier, inexpensive battery option for the domestic market.