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

[neroden]

OT

I can personally attest to the fact that Fred makes significant edits to his stories without noting the correction history in the article, and without crediting the person who pointed out the (significant, story-changing) mistake in the original article. [Which was me fact checking him, in at least one case. ]

I can personally attest to this too, with the added aspect that Fred proceeded to shadowban me for pointing out the correction.

I believe Karen can personally attest to something similar.

So if I was Fred I wouldn't be throwing stones in his glass house of journalistic ethics...

I think Fred might still be smarting from the fact that two weeks ago CleanTechnica, InsideEV, Teslarati and other EV news-sites were invited to that private conference call with Elon and were allowed to ask questions (@ZachSachan asked a couple of good ones!), but not Electrek.

 

[neroden]

OT

3 lawyers. 4 opinions. Always.

Reminds me of this:

If you put two economists in a room, you get two opinions, unless one of them is Lord Keynes, in which case you get three opinions.

- Winston Churchill

 

[Carl Raymond]

I expect prestige ICE sedans will be the first to fall. Here’s why.

The school strike movement begun by Greta Thunberg is gaining momentum. The message is getting out that there *is* an enhanced greenhouse effect crisis and we need to act fast.

Driving any new ICE sedan priced more than $35K signals to all and sundry that the driver *chose* to ignore the plea of the school children. Effectively the same as tattooing “heartless bastard” on one’s forehead.

A year from now, ditto for SUVs.

Project Loveday outline:

Model 3 SR pulls up in front of house. Two kids get out carrying placards, having been to a school strike. The driver says to one, “proud of you kids, pick you up at 5 OK”. The child addressed resembles the driver, so it’s clear the kids are friends, one invited over to play.

Father of the other child is in the drive, puffing his chest, standing before his new luxury ICEV. Excitedly he says to his child “Well, what do you think? Isn’t she epic?”

The child looks to the tailpipe, then exchanges a knowing look with friend, eyes fall to the ground.

“Yeah Dad, epic.”

Kids walk off.

Shot of original Model 3 driver, driving silently, checking weather report. Fade.

 

[neroden]

Regarding Musk's recent Twitter activity:

In retrospect, lower price shouldn’t have been offered. Was done so because some simply couldn’t afford it. Prices revert to normal on Monday.

This is confirming that the mission comes first. Musk wants to make sure all the people who can't afford the cars and can't afford self-driving features can get them. His instinct is to sell everything as cheaply as possible in order to get cars in more people's hands.

In fact, it makes sense to charge what the market will bear so that Tesla has more cash to expand faster... but that's not Musk's instinct, because he's driven by the mission, not by profits.

I think this is very, very hard for most of Wall Street to understand -- which is why they're misinterpreting everything that's happening lately. They're obsessed with profits, so they assume that Musk is too.

The idea that he released the $35K car now, as soon as he possibly could, *because he wants to keep his promise the reservation holders who have been waiting for it*, is just alien to the profits-uber-alles mentality on Wall Street. So they can't imagine that that's why he did it. They can't imagine sacrificing profits to get the cars in the hands of loyal customers -- even though that's what Tesla has been doing all along.

THIS misunderstanding will persist forever. Wall Street will never understand a company which has a goal which comes before profits.

 

[neroden]

So don't be awed too much by how great this document looks. I read it in about 5 minutes, it just says:
-tweet immaterial;
-didn't harm stock price; (SEC's tweet did!)
-SEC misreads the settlement with Tesla/Musk.

The rest is legal mumbo jumbo and can be skipped. The judge will too.

That's about right. I'd say there's one more thing there: "SEC's interpretation of the settlement would set a bad precedent", which is a warning to the judge to wake up, there's something hinky going on.

Doesn't always wake up the judges. I saw a case where the judge set a *very* bad precedent which made a particular type of tax fraud legal in Pennsylvania, and was notified of it in the brief, but never woke up.

 

[neroden]

OT

Technically, everything you write is automatically copyrighted, with or without a notice, and is illegal to reproduce.

That's current Supreme Court precedent, yes; there's strong, strong, strong evidence that this entire line of copyright law is unconstitutional. The Supreme Court precedents deciding this are bad law, and they'll be overturned sooner or later.

Whether it's illegal or not depends on whether you define illegal by the text of the Congressionally passed law (probably illegal), the current Supreme Court precedents (probably illegal), what the Constitution says (definitely legal ), or what the courts are willing to actually punish you for (probably legal, because lower-level judges don't like to punish people for normal activity which they do themselves)

Yes, there's violations en masse every day. Including the very concept of an email forward, for example.

 

[sundaymorning]

A pre-emptive strike attempt by Morgan Stanley with a note about “what to watch for with the Model Y unveil”. In other words: he’s saying to his clients: don’t believe what you are going to see. This guy Adam Jonas is really pathetic.

Be prepared for a short term ‘pop’ that may not last, he writes

1. Will it be beautiful and fast? Probably and yes, he thinks

2. When will it launch? Some investors heard end of 2019, MS of course believes very late 2020 or early 2021 with only slow ramp to start
(Note a sloppy mistake in this paragraph where he writes Model 3 launching instead of Model Y)

3. Could it cannibalize Model 3, S, X? He believes very likely, and also that the excitement from the unveil will put pressure on near term results

4. Will there be a teaser? (E.g. one more thing...) He thinks no

5. Will Elon update the market on Q1 deliveries? Not sure but he should, according to Adam Jonas, who adds that he’s seen a clear negative sentiment amongst the large community that is trying to figure out Q1 deliveries

There you have it, MS believes we are all incompetent

It’s clear that MS and Adam Jonas has been on a mission to bring Tesla’s valuation down lately. He’s asked again and again and again about raising capital. Even when Elon said no several times he went on to say Tesla will raise in the 3rd Q.

The note he published this morning was clearly a means to stop Tesla from breaking $290-$300 as it was sitting above $290 yesterday. I question the timing of his note this morning, why now? Why not wait and see what happens at the reveal before publishing a downgrade. I’ve lost respect for this guy ever since he asked/begged Elon to raise capital on the CC. It was clear what he wanted, a hefty commission...

 

[JustAaronnoraA]

Did anyone notice the update today @ BB Model 3 tracker? According to them, we are @ 5829/w now. Take that and add it to ~2000/w SX, are we reaching max Fremont output? I read somewhere that they can only squeeze out around 8k there, thought??

 

[neroden]

Click on the link for China sales. It appears their growth there makes up for the drop off in the US.

BMW seems to have brand cachet in China. All ICE sales in China are down; BMW seems to be cannibalizing some of them. Tesla's taking more.

 

[RobStark]

Did anyone notice the update today @ BB Model 3 tracker? According to them, we are @ 5829/w now. Take that and add it to ~2000/w SX, are we reaching max Fredmont output? I read somewhere that they can only squeeze out around 8k there, thought??

Elon said Fremont can't build more than 8k MODEL 3s per Week without spending significant CapEx.

Going from 6k to 8k per week requires minimal CapEx.

Recently has pulled back from making 2k S/X per week to 1600-1800 and let go some employees working on S/X lines.

 

[neroden]

I don't own or run a business, so I don't have the visceral relationship that you have. But this dynamic - I have a hard time understanding how others don't see this.

Can anybody identify any other product, in any other market, at any price point, of any kind or quality (there's literally no restriction in this question) that has the kind of demand for it that Tesla has for its cars?

Water?

 

[kyzhk]

It’s clear that MS and Adam Jonas has been on a mission to bring Tesla’s valuation down lately. He’s asked again and again and again about raising capital. Even when Elon said no several times he went on to say Tesla will raise in the 3rd Q.

The note he published this morning was clearly a means to stop Tesla from breaking $290-$300 as it was sitting above $290 yesterday. I question the timing of his note this morning, why now? Why not wait and see what happens at the reveal before publishing a downgrade. I’ve lost respect for this guy ever since he asked/begged Elon to raise capital on the CC. It was clear what he wanted, a hefty commission...

Could you explain how driving the stock price down would force Tesla raise capital, if this is his goal?

 

[MP3Mike]

Water?

Nah, that doesn't count as there is a lot of money spent trying to sell water.

 

[neroden]

A list of points (but only mention two or three at most in the letter) would be helpful to many.

The key point is "I'm a reasonable investor and this tweet wasn't new information in my opinion"

 

[anthonyj]

Did anyone notice the update today @ BB Model 3 tracker? According to them, we are @ 5829/w now. Take that and add it to ~2000/w SX, are we reaching max Fredmont output? I read somewhere that they can only squeeze out around 8k there, thought??

Actually, it’s 5829 on a 13 week average. If you look closely at the green bars for the past few weeks, production is between 7000-8000 just for Model 3. If the BB tracker is accurate, then that is mega bullish. It would confirm that Tesla is selling everything they make, they wouldn’t keep pumping up production volume if they aren’t selling through.

 

[Remus]

Regarding Musk's recent Twitter activity:


This is confirming that the mission comes first. Musk wants to make sure all the people who can't afford the cars and can't afford self-driving features can get them. His instinct is to sell everything as cheaply as possible in order to get cars in more people's hands.

In fact, it makes sense to charge what the market will bear so that Tesla has more cash to expand faster... but that's not Musk's instinct, because he's driven by the mission, not by profits.

I think this is very, very hard for most of Wall Street to understand -- which is why they're misinterpreting everything that's happening lately. They're obsessed with profits, so they assume that Musk is too.

The idea that he released the $35K car now, as soon as he possibly could, *because he wants to keep his promise the reservation holders who have been waiting for it*, is just alien to the profits-uber-alles mentality on Wall Street. So they can't imagine that that's why he did it. They can't imagine sacrificing profits to get the cars in the hands of loyal customers -- even though that's what Tesla has been doing all along.

THIS misunderstanding will persist forever. Wall Street will never understand a company which has a goal which comes before profits.

Can't agree more. Another reason the stock price will stay low for at least several years, until the pickup, the semi and a couple of other models, then competitors begin to fail, one by one.

I think the q1 report will lift the stock price a little when people realize things are not that bad at all. But I don't think it will rise significantly.

 

[JustAaronnoraA]

Elon said Fremont can't build more than 8k MODEL 3s per Week without spending significant CapEx.

Going from 6k to 8k per week requires minimal CapEx.

Recently has pulled back from making 2k S/X per week to 1600-1800 and let go some employees working on S/X lines.

Even with CapEx spending, are there room to expand there? and I dont mean tents.

What if and this is a big IF, Fremont will solely do Model 3 and Lathrop would take the SX duties, that would help out tremendously. That Lathrop building is a big mystery and nobody ask EM anything about it.

 

[Causalien]

But, instead of advertising on TV - just make ads and put it on Tesla youtube channel. Musk can tweet them out and try to make them go viral.

Just web ads would be better than any TV ad.

Ya true. But I'd like to see the bidding process open up to Tesla fans. Public participation allowed and have the contest run on Youtube and the top 10 video with the most likes gets select into the bidding process along with the big media's bids (they get to hide their entry since there's probably lots of lawyer and IP law involved).

 

[neroden]

OT

Seriously? Show me another country with the demonstrated innovative capacity of the USA ever.

Ancient Athens.

The Roman Empire.

Also, the Abbasid Caliphate, which developed algebra -- nothing the US has ever developed even compares in significance to that one invention. (And it's not just al-Khwarismi -- the Golden Age of Islamic Science made huge developments.)

Next question? I'm tired of American exceptionalism and ahistoricism. There has been a period where the US was the country where innovators want to be -- particularly the 19th century US. Look back further, there were others with more capacity for innovation. Britain was where it was at in the 18th century.

China, maybe? We’ll see.

Right now? China is definitely making a play for the status of "country where innovators want to be". They may succeed or not.

History shows that cultures that scaled around the need to manage water tend towards hierarchy and stasis both of which innovation threatens. (OT: Presumably History departments in the West don’t teach this anymore; what with their current preoccupation with teaching weepy navel-gazing and never-ever-ever drawing a "judgemental" conclusion except regarding Western "oppressors." Sad to see some of these departments shut down, but that is what happens when you fail your subject, your students and your country for a generation.)

I see that you don't understand history and know nothing about History departments, which are far more rigorous now than they were when you learned your cod-history (which has been discredited, FYI).

(You're inaccurately using a stereotype which came out of *anthropology* departments to describe history departments, FYI.)

 

[JustAaronnoraA]

Actually, it’s 5829 on a 13 week average. If you look closely at the green bars for the past few weeks, production is between 7000-8000 just for Model 3. If the BB tracker is accurate, then that is mega bullish. It would confirm that Tesla is selling everything they make, they wouldn’t keep pumping up production volume if they aren’t selling through.

I saw that also and BB trackers had been on a conservative estimates lately so very bullish also for me. Im just concern about producing them in volume for the next Q2 as a clear path for profit/+EPS. We already know that margins on SR is very thin so volume is crucial to achieve profit.