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

[EVNow]

Looks like Fred's also caught a bit of FUD with his "nervous" reporting of Tesla cutting 150 people from its global recruiting team. He said initially that this was half the team, but now updated to 1/3rd, suggesting 300 recruitment employees remaining.

Tesla added 11.5k net employees in 2018. Including 4k cut in June-18 and likely 1-5k other churn through the year, this was likely 17-20k gross employees hired in 2018.

In 2019 Tesla needs to add staff in service and communications, but some of these can likely be transferred from sales roles. GF3 recruitment will likely need its own China based team. Given Y hiring will likely not need to ramp up until late in the year (or early 2020), I don't see how Tesla hiring requirements are going to be anywhere near so high in 2019. So reduction in recruitment staff seems an obvious place to turn given the current focus on SG&A efficiencies.

This is the reason, I think, a lot of tech firms have contract staff do the recruiting. Afterall the recruiting needs go up and down depending on various factors.

Tesla should seriously consider what their full time positions and their # should be. It doesn't make sense to hire full time employees and retrench them as often as they seem to do. They are clearly hiring full time "permanent" employees for positions that are not permanent. They should instead contract out a lot of positions that are not likely permanent.

This will be good all around - contractors know their positions are not permanent, so when the contract ends they are not bitter. Tesla won't have a lot of retrenchment costs. It is also much faster to get contract positions filled. There is less overhead with contract positions too.

 

[Curt Renz]

Only to have it spun by the media/shorts that this is proof of falling demand.

The ideal would be to hold off on advertising until production capacity can handle the resulting increase in demand. If that leads to FUD inspiring a share price dip, it should be quite brief and a buying opportunity. The initial ads should be educational rather than bombastic.

 

[brian45011]

Let's try out your suggestion and do that:

• "Tesla admits to shocking drop in upcoming reservations count."
• "Tesla PR officials outline worrying expectations of reservation cliff."
• "Tesla walking back bold reservation claims."
• "In attempt to save face, Tesla plays down reservation numbers."
• "Tesla hitting air pocket of reservations."
• "Clouds gathering over Tesla's once formidable reservation lead."
• "Can Tesla ever surpass Porsche's 20,000 pre-orders?"

Any other questions about why it might not be a good idea for Tesla PR to attempt to "manage" a dominantly hostile media that is acting in bad faith and over which Tesla has very little influence?

Fair enough. The profession of journalism died at the end of the last century. Today's practitioners are mostly indolent, polarized propagandists willing to file/publish whatever angle they are fed, without bothering to consider, let alone, cite contrary perspectives

We can disagree as to whether competent PR specialists could influence (not "manage") the few remaining neutral reporters trying to maintain objectivity and/or assist those sympathetic to Elon's mission. I think it's a missed opportunity, you seem to think it would be futile, Either way, we will all know during the next two weeks how comparisons of reservations between 2016 and 2019 will be portrayed in the "media".

 

[JRP3]

That sub 80B opinion is we can all listen a bit more to efforts at constructive criticism and not treat everyone like a troll.

The post to which I was referring suggested that Tesla is not an investable company/should not be listed for trading, hence my logical response. People talking nonsense is not constructive criticism.

 

[Remus]

This.

Needless to say this forum is concerned about near term movements in the share price; sadly, this concern can be stronger than concern over the rate at which Tesla grows.

Elon no longer concerns himself with the stock price. His focus is on growth, which has been successfully decoupled from capital raises. He figures that by focusing on growth, the share price sorts itself out eventually, and he'd be right.

Some suggest that more funding can provide faster growth. Elon has refuted this. Again he's right - growth is limited by other factors, such as the rate at which knowledge can be passed to new staff - poor customer service is one symptom of growing too fast - the person on the other end of the communication is simply green, still learning the ropes. Tesla is growing at a phenomenal rate. Patience.

Here's the thing. To move the share price, one has to convince more than half the market that the stock is undervalued, it's like winning an election, you need to sway the slow adopters, people set in their ways. To sell cars, you only need to convince the select group of people who will go to the web site and place an order. They are already keen. The latter does not require mass market advertising - viral advertising, youtube, family and friend networks, twitter, forums like this, reveal nights such as Thursday, they all work too. And like viruses, there's a critical mass where they hit epidemic proportions. At the rate Model 3 is selling, that point is near.

If you read a 'pro advertising' comment, please consider if the motivation is growth, or near term share price. The former will take care of the latter soon enough.

I have no strong opinion on this but I understand many advocates of advertisement. The rationale is to pay the media thugs, not only for stock price, but for demand too, since they heard so many times that people don't consider Tesla cars due to the negative coverages. Especially when the recent development let even the bulls begin to doubt the continued demand.

 

[EVNow]

Did someone post this already ?

How can the tech world and wall street have such diametrically opposite opinion about Musk ?

LARRY PAGE: I Would Rather Give My Billions To Elon Musk Than Charity

Google CEO Larry Page has an unusual idea about what should happen to his billions should he die.

Instead of giving it to a philanthropic organization, he'd rather hand over his cash to Elon Musk, the founder of Tesla, SpaceX, and SolarCity.

ps : Apparently this is from 2014.

 

[ItsNotAboutTheMoney]

Did someone post this already ?

How can the tech world and wall street have such diametrically opposite opinion about Musk ?

LARRY PAGE: I Would Rather Give My Billions To Elon Musk Than Charity

Probably: it's from 2014!

I remember somebody mentioning it to Elon Musk in an interview. His interest was definitely piqued by that.

 

[Remus]

Fair enough. The profession of journalism died at the end of the last century. Today's practitioners are mostly indolent, polarized propagandists willing to file/publish whatever angle they are fed, without bothering to consider, let alone, cite contrary perspectives

We can disagree as to whether competent PR specialists could influence (not "manage") the few remaining neutral reporters trying to maintain objectivity and/or assist those sympathetic to Elon's mission. I think it's a missed opportunity, you seem to think it would be futile, Either way, we will all know during the next two weeks how comparisons of reservations between 2016 and 2019 will be portrayed in the "media".

Can't help but notice this sounds like "today's kids...."

I think from the beginning "heroes" among journalist pride themselves of revealing the bad guys, taking on some big target or some powerful evil. This seems never changed. How many people pride themselves for writing pieces praising something or someone?

 

[EVNow]

Needless to say this forum is concerned about near term movements in the share price; sadly, this concern can be stronger than concern over the rate at which Tesla grows.

Elon no longer concerns himself with the stock price. His focus is on growth, which has been successfully decoupled from capital raises. He figures that by focusing on growth, the share price sorts itself out eventually, and he'd be right.

Not sure why we see this often - anyone who pays part of the wages to their employees through stock options are concerned about stock price. Just hear what Musk said on the Recode podcast. When SP is up, employees are in good mood and when its down, they are in bad mood. I remember a few years back when Steve Balmer of Microsoft was obsessed with the stock price and why it was stuck in 20s. Microsoft obviously wasn't trying to raise capital.

BTW, I've a simple idea how Tesla can help with short term SP. Just publish monthly delivery numbers. The entire reason for the nervousness of the market now is it is not clear what the demand is. Monthly delivery numbers take lot of the uncertainty away. They should also publish past monthly numbers, so people can figure out the seasonality etc.

They can start with this Q1 - on April 1st, no joke, publish monthly numbers for all past years, including this year. Then, every month just publish the worldwide delivery number.

 

[ktrivedi70]

I think it would be nice to have some ads, but what you could get for $10M?

GM spent something over $3 BILLION in advertizing last year.
Ford etc somewhat less but still in the billions
Smallest one I found was Subaru at $431 Million
A single ad on popular TV shows starts at $200k and rockets up in to the millions, for. a. single. ad.

Maybe there is a creative way to get something useful for $10M or under annually, I dunno, but sure sounds like a non-starter to consider hundreds of millions. And none of this makes sense if demand is really way ahead of supply in the foreseeable future.

Some of this info comes from a site with a paywall, but here is a page from BI that includes some auto ad numbers:
These are the 10 companies that spend the most on advertising

Here is the paywall site:
Topic: Automotive Advertising

If that list is accurate then Elon’s companies (Tesla and SpaceX via StarLink) are putting 6 out of those 10 at risk. But there’s no way that would affect media coverage right? RIGHT??

 

[mickificki]

I walked the parking lot of 99 Ranch market in Mountain View, CA the other day. I kid you not, counted 3 Model 3, one Model S, and 5 (!) Model X! I texted my wife who was in Seattle this weekend and she said she has to yet see a Tesla car there.

It’s a completely different world outside of the Bay Area, it just shows the potential elsewhere in the US and how ridiculous the MS argument of “Tesla hit a demand air pocket” is.

Completely agree re: no Tesla’s in the Seattle area as compared to California. Very stark contrast (was up there couple weeks ago). Imo the model Y dual motor will completely overtake the many Subaru foresters we saw up north. Same with the Tesla pickup. Washington people love their pickups and subies!

 

[Carl Raymond]

I have no strong opinion on this but I understand many advocates of advertisement. The rationale is to pay the media thugs, not only for stock price, but for demand too, since they heard so many times that people don't consider Tesla cars due to the negative coverages. Especially when the recent development let even the bulls begin to doubt the continued demand.

Presumes that there is a demand problem. Two ways to solve such a problem. One is to convince people the cars are worth more (advertising). The other is to make it cheaper to make the cars, make more cars, and reduce the price. I prefer the latter. It results in fewer tailpipes. Have no doubt that the SR will sell on product strength alone. Have no doubt that there is margin in it.

 

[EVNow]

Probably: it's from 2014!

I remember somebody mentioning it to Elon Musk in an interview. His interest was definitely piqued by that.

LOL. Not sure why it resurfaced on twitter today !

Sampath Pakkala on Twitter

 

[AudubonB]

Gracious, what a day.

This is going to be difficult for most to believe, but within today's barrage of posts there actually WERE a few WORTHWHILE ones.
But the S/N ratio was so horrific that it is unlikely many saw or read these.

So.....

For the {wait.......Nope. Haven't that many digits} ...th time, EVERYONE: READ your ridiculous chatter BEFORE you hit the "Post" button. If the answer to "What would Lord Vetinari think?" is not a happy one, then vaporize your inanity...or repetition...or rude and crude blatherings, sit on your hands for a bit, and have a re-think.

This was a pathetic day for this thread. Shame on just about everyone.

 

[Opus BC fan]

A recent dog walk in the neighborhood (all two blocks) allowed me to note five Toyota RAV4s of very recent vintage.

I'll be most interested in comparing the characteristics of these guys to the Model Y: dimensions, pricing, amenities.

A Toyota RAV4 and Tesla, where have I heard that before?

 

[mickificki]

Gracious, what a day.

This is going to be difficult for most to believe, but within today's barrage of posts there actually WERE a few WORTHWHILE ones.
But the S/N ratio was so horrific that it is unlikely many saw or read these.

So.....

For the {wait.......Nope. Haven't that many digits} ...th time, EVERYONE: READ your ridiculous chatter BEFORE you hit the "Post" button. If the answer to "What would Lord Vetinari think?" is not a happy one, then vaporize your inanity...or repetition...or rude and crude blatherings, sit on your hands for a bit, and have a re-think.

This was a pathetic day for this thread. Shame on just about everyone.

 

[Nocturnal]

Now I'm imagining a pool of truckers bitten by the EV bug. "What? You want me to haul in a crappy ICE? No way mate. What do you think this is, bush week?"

From what I can tell, Truckers don't fit the stereotype a lot of the time. They are professionals so anything that makes their lives easier is appreciated. I can definitely see this happening.

 

[EVNow]

Fair enough. The profession of journalism died at the end of the last century. Today's practitioners are mostly indolent, polarized propagandists willing to file/publish whatever angle they are fed, without bothering to consider, let alone, cite contrary perspectives

LOL. I think we have had a lot of discussions about this. Soft focus puff pieces on Hitler or Osama Bin Laden, don't sound like "professional journalism" to me.

 

[Carl Raymond]

Not sure why we see this often - anyone who pays part of the wages to their employees through stock options are concerned about stock price. Just hear what Musk said on the Recode podcast. When SP is up, employees are in good mood and when its down, they are in bad mood. I remember a few years back when Steve Balmer of Microsoft was obsessed with the stock price and why it was stuck in 20s. Microsoft obviously wasn't trying to raise capital.

BTW, I've a simple idea how Tesla can help with short term SP. Just publish monthly delivery numbers. The entire reason for the nervousness of the market now is it is not clear what the demand is. Monthly delivery numbers take lot of the uncertainty away. They should also publish past monthly numbers, so people can figure out the seasonality etc.

They can start with this Q1 - on April 1st, no joke, publish monthly numbers for all past years, including this year. Then, every month just publish the worldwide delivery number.

Fixable with one internal email, with words to the effect of "look long - share price growth will follow revenue growth".

The problem with becoming an open book is there will inevitably be times when a closed book would be better.

 

[AlMc]

Gracious, what a day.

This is going to be difficult for most to believe, but within today's barrage of posts there actually WERE a few WORTHWHILE ones.
But the S/N ratio was so horrific that it is unlikely many saw or read these.

So.....

For the {wait.......Nope. Haven't that many digits} ...th time, EVERYONE: READ your ridiculous chatter BEFORE you hit the "Post" button. If the answer to "What would Lord Vetinari think?" is not a happy one, then vaporize your inanity...or repetition...or rude and crude blatherings, sit on your hands for a bit, and have a re-think.

This was a pathetic day for this thread. Shame on just about everyone.

We don't need bears/FUDsters here anymore to keep investors away from this thread. Just carry on the way we are going and many investors will flee elsewhere.