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

[Prunesquallor]

I may be speaking too soon, but hats off to the folks figuring that the big boys needed a week of repositioning after P&D. Also to the TA channel-breakers.

 

[Pezpunk]

whoa, a week of malaise followed by a steady rise? who could have seen that coming after a blowout delivery report?

i mean other than me after Q4 2019:

this delivery report is great, and it's better than wall street currently realizes. It's going to sink in over the next week or so, though. Expect steady rise as the realization that that Tesla is going to be profitable again this quarter sinks in, and that with the China factory coming online and the German one breaking ground, the "demand cliff" does indeed exist, but we're standing in its valley, not at its peak.

and Q1 2020:

public service announcement for everyone: the last two quarters, both major beats like this one, have followed a similar pattern -- huge after-hours spike, then it gets completely eliminated the next day, then the stock goes bananas over the following few weeks as the information is absorbed and the misinformation and FUD are gradually dismissed by the general market.

and Q2 2020:

spoiler alert: if this is anything like the last three quarters (and i think it will be) then the stock will be flat or even slightly down tomorrow from today's AH high as the bears and shorts make their best attempts to spin this report in a negative light, downplay the profit, claim it's all based in fraud, it was a "one time thing" (for the third quarter in a row...) and so on. they do it every time. 'just wait for the 10k, it's all fake, the other shoe is going to drop soon", etc etc.

Gradually, though, reality will set in and the stock will continue to rise well above $1000 over the course of the next few weeks. [note this was pre-split]

and Q3 2020:

this price action looks familiar, where have i seen it before? oh yeah:

that's from July 22nd. the following trading day was negative. The stock was up 65% within a month.

and a week ago:

it's typically taken a week or two for the market to get out of denial mode after blowout quarterly numbers. the pattern's been the same every time for the last year or so -- big runup in the after-hours immediately following the report (which we didn't get this time due to Easter break), followed by an almost total walkdown over the next day, followed by a week or two of malaise, followed eventually by a strong linear runup as the obvious becomes increasingly difficult to deny.

 

[juanmedina]

Any idea when IV will start to climb?

 

[TheTalkingMule]

Congrats on your calls man! Your stubbornness and gut paid off haha

Hopefully this is a week long continual melt up so you can really hit gold.

My buy/sell option execution has been for but it's going well thanks! Probably should've just bought shares at $530 or whatever it hit. A few more weeks of this and we'll all be taking golden showers!

(apologies for my favorite TSLA blastoff joke)

I'm still of the opinion we needed to form a hedge fund shop here a couple years back. I mean, who's gonna play the rise of sustainability and the death of oil better than TMC posters? Think of all the fun to be had naming ETFs.

FOIL
GOEM
FUGJ

 

[MP3Mike]

If it's the case the Tesla can build their own lines without Panasonic, why not go ahead and do it at GF1?

• They don't know how to yet. (They still haven't finished/proven their pilot line in Fremont.)
• They already have two, or possibly three, other cell factories in progress.
• Their engineers don't want to move to Reno/Sparks.
• Limited availability of labor.
• Limited availability of housing.
• Limited availability of water.

 

[LiveLong&Profit]

Get the feeling is all about Panasonic.

As I recall a few things went wrong with the overall Giga Nevada timeline, but yeah, my guess it also mostly Pana.
Major thing, Pana seemed hesitant to really commit the needed resources. To really and truly "ganbarimasu".

Perhaps they didn't really believe that Elon could ramp the 3 as fast as he planned. Pana was burned badly back in the 90's by another partnership that nearly killed them - they still have trauma scars. Foot-dragging can be a survival strategy.
Perhaps getting top-level engineers and line-workers, specialist from Japan to relocate not only in the US, but in the middle of nowhere was also harder than anticipated. I don't think I offend anyone by saying that Asian and Japanese culture puts high value re. face and status: Yes, having a glamorous assignment abroad is great for your status and career. But relocating to work for a then obscure and fledgling auto company, making electric cars - in a place no one heard about? Not so much.
Also practical problems: Where do you send your kids to a good international school in Sparks? Where are the high-school afternoon university preparation classes (juku) and the Saturday Japanese language catch-up course to be found? OK then - bringing the kids is not an option.
And the wife factor? Japanese education has many fine merits, but re. English, it is focused on reading and writing. Spoken English is not a priority. How is the wife going to feel about living in an American city (or village) like Sparks?

So the overall analysis would indicate that you get mostly non-senior engineers, without kids.
Trouble is that the Japanese business and organizational culture highly values both experience and also seniority. How do the more junior employees get the senior leadership back in Japan to really understand Tesla and Elon Musk?
(The engineers that did relocate scoffed about the American labor, who were not really, in their view, up to par.)

It would therefore seem that getting Giga Nevada to run like a well-oiled machine was always destined to be a challenge.

Fast forward to the 3 ramp.
For many months Pana produced steady amounts of 3 batteries only to see them stockpiled unused, while Tesla battled having robots packed too tightly, the infamous flufferbot, and all the other myriad of problems that the ramp entailed. Imagine how the perhaps culturally more risk adverse Japanese engineers and managers must have felt. Were they mentally packing their suitcases and booking planes for Narita Tokyo?

Then suddenly, like a magician pulling not a mere rabbit, but a freaking kangaroo out of his hat, and after much personal and company pain, Elon made the ramp work - and actually ramp faster than many thought possible at the time.
At this point, Pana might have thought:

• "WOW - they made it after all!"
• "Wow, this crazy EV car thing might actually work. Maybe Toyota and our other Keiretsu friends back in Japan are wrong?"
• "This is going to be huge => We better get paid!

Perhaps Pana then compounded their first mistake by trying to pressure Elon into cutting a better deal. Remember the first year after 3 had the initial ramp? Tesla solved their internal bottlenecks, and quickly used their stockpiled battery packs, but now Pana couldn't ramp nearly as fast. After all the pain Tesla and Elon went through, that must have been galling.
Perhaps Elons patience wore thin, and the decided to plaid speed the internal battery production strategy back then.
Because as we have now learned, after Battery Day and acc. to other sources dripping tiny bits of intel, it turns out that Tesla has been pursuing a broad and deep strategy re. a multitude of battery related production technologies as early as ~2012.
Maybe competitors moved more slowly than anticipated, maybe Tesla found more areas where they could optimize processes than thought originally.
The big hedge worked spectacularly: BD was amazing. And now Tesla has the financial resources to do this in a credible way, both re. cash flow and cash on hand.

In conclusion:
Pana always had me worried: So very clear that Pana was the biggest strategic risk.
Had big oil used all their billions to straight up buy Pana instead of playing shorting games, Tesla could have been in real trouble. Fortunately, after BD, that risk is nullified.
And Pana only have themselves to thank for becoming a junior player in the battery field (if above conjectures have any merit)
It also follows, that Panas American branch is not worth so much anymore due to decreased strategic value. It would make sense to sell it. Too bad Tesla needs it way less than 3 years ago. Saving grace for Pana is that a lot of companies are moving into the EV space, so I guess they can get a fair price for it.

TLDR:
Giga Nevada was the right idea for its time: it put Tesla on the map, and forced Pana to become semi-serious. It was a huge bet, that worked.
Then unfortunately Pana dragged their feet and/or tried to strong-arm Elon. With foreseeable consequences.
Now, Giga Nevada is not so important anymore. So Tesla pivoted away from it. I see it being closed down in ~5 years - or sold.

 

[EVMeister]

A few more weeks of this and we'll all be taking golden showers!

I prefer showering with water, but each to their own.

 

[lafrisbee]

< just an ant...an ant intoxicated from slurping the sweet tea so casually appearing on the grass around him...
Spring, and Picnic season has begun

All the Ants are making nice with each other on warm Spring days with sweet tea-covered leaves and crumbs falling from the sky...

 

[H Mak]

Finally convinced myself... M3P, red with white interior. Goal is to track it as much as possible.
View attachment 653465

Nice one! It's comforting to know that some people on here are still buying cars as well as shares

 

[Krugerrand]

I'm guessing part of the original reasoning behind the location was due to proximity of lithium deposits but perhaps further investigation determined it was better to simply buy the lithium on the open market. It could have been a rare misstep by Tesla management but will likely turn out to have been a good investment in the long run. If this theory has some truth to it, it would make sense that we never knew the rational because mineral rights and contracts would have to be locked up before Tesla could disclose the reasoning.

I think we need to remember when GigaNevada was decided on. The landscape for Tesla was MUCH different. I very clearly remember the world laughing at Tesla. There were claims from regular posters here that it couldn’t be done, was going to cost upwards of 20B and a whole list of reasons it was a bad idea.

People regularly forget that nothing about the world is static, least of all Elon’s companies. The plans for GigaNevada back *then* have received dozens of firmware changes.

Tesla appears to have generally moved on from GigaNevada. That doesn’t make it a bad choice. It was the exactly perfect choice at the time. Now, something else is the perfect choice.

 

[Krugerrand]

MotorTrend Best Compact Luxury Sedans to Buy in 2021
I think it is important to note the cars the Tesla Model 3 beat out for top 1 spot. An impressive beat. As an owner of a Model 3, I've known this all along that Tesla makes the best cars in the World. Period.
1. Tesla Model 3 (BEV)
2. Audi A4 (ICE)
3. Genesis G70 (ICE)
4. Volvo S60 (ICE with plug-in hybrid option)
5.Alfa Romeo Giulia (ICE)
6. Mercedes-Benz C-Class (ICE)
7. BMW 3-Series (ICE)
8. Acura TLX (ICE)
9. Cadillac CT5 (ICE)
10. Lexus IS (ICE)
11. Infinity Q50 (ICE)

It’s so weird since Tesla doesn’t actually make *luxury* vehicles - so I’ve been told.

 

[elasalle]

Insight: Once ‘green’ plug-in hybrid cars suddenly look like dinosaurs in Europe

Remember when plug-in hybrid cars were the go-to technology for the climate-conscious driver? Turns out, they're not good for the environment, according to some experts, and they could be phased out by carmakers in the face of tougher European rules.

www.reuters.com

Draft green finance regulations would ban manufacturers from labelling them as “sustainable investments” beyond 2025, potentially deterring investors. Meanwhile planned rules on emissions of pollutants like nitrogen oxides could increase the cost of producing these cars.

EU incumbents were hell bent on counting PHEVs as EV's, not any more ...

 

[thx1139]

Thanks for that article Rob. Scrolling through the article, the pictures of the interior reminded me that "the best part is no part" . Have a look for yourself:

View attachment 653475

I truly love the simplicity of my Model 3's interior. I even find the prior to refresh Model S interior to be too cluttered. A simple wrap on my centre console to eliminate the fingerprints and it's perfect.

And thanks Motor Trend for the article. In a world of FUDdy articles that seem to be driven by an agenda I must give MT credit for being mostly fair and unbiased to Tesla all these years, in spite of no advertising revenues being doled out to them by Tesla. That counts for something in my book.

To so many luxury means more parts. I paid more money I want more parts is the mindset.

 

[MABMAB]

Finally convinced myself... M3P, red with white interior. Goal is to track it as much as possible.
View attachment 653465

Now, throw another hunnerd at a Cybertruck reservation

 

[Todd Burch]

Looks like the MMs don't want us to push past $740 today for fear that things will get out of control. Hopefully buying pressure keeps up.

Given that the pushdowns keep getting bought, I think we might push above $740 soon.

 

[jerry33]

So the overall analysis would indicate that you get mostly non-senior engineers, without kids.
Trouble is that the Japanese business and organizational culture highly values both experience and also seniority. How do the more junior employees get the senior leadership back in Japan to really understand Tesla and Elon Musk?

In corporate Japan you generally have two career choices. Move up the corporate ladder by staying in Japan or have a better lifestyle by doing the five year foreign work. (For foreign normal to stay five years in a country, go back to Japan for a year or two and then do another five year stint in some other country. Repeat this throughout your working career.) Those that stay in Japan won't have any more of a clue than the senior leadership, and they're the ones that get listened to the most.

 

[LiveLong&Profit]

That would be in line with past TSLA action, yes. I remember many people saying that when Tesla becomes a multi billion market cap company and is included in the SP500 etc. it will become predictable profitable and boring entertaining to invest in TSLA...

FTFY

 

[ByeByeJohnny]

I think we need to remember when GigaNevada was decided on. The landscape for Tesla was MUCH different. I very clearly remember the world laughing at Tesla. There were claims from regular posters here that it couldn’t be done, was going to cost upwards of 20B and a whole list of reasons it was a bad idea.

People regularly forget that nothing about the world is static, least of all Elon’s companies. The plans for GigaNevada back *then* have received dozens of firmware changes.

Tesla appears to have generally moved on from GigaNevada. That doesn’t make it a bad choice. It was the exactly perfect choice at the time. Now, something else is the perfect choice.

This. Without Panasonic there to build up the battery production and have it ready when needed I think the model 3 ramp up would have been a real threat to the company, not just to the shareholders risking dilution when Tesla could have been seeking financing at at bad valuation.

Yes, seems unlikely we'll see Giga Nevada get built out much further. Unless they find some other use for the location.

 

[jerry33]

Meanwhile planned rules on emissions of pollutants like nitrogen oxides could increase the cost of producing these cars.

Right, you would need some expensive engineers to figure out how to cheat the emissions testing.

 

[jeewee3000]

Looks like the MMs don't want us to push past $740 today for fear that things will get out of control. Hopefully buying pressure keeps up.

Given that the pushdowns keep getting bought, I think we might push above $740 soon.

To add to this: the dips keep getting bought on relatively little volume. Whoever is buying is accumulating, it seems, and doesn't want the stock price to spike too much.

This bodes well for the days ahead leading up to the ER.