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

[jeewee3000]

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.

That's why continental European law gives no power to precedents, good or bad: one judge is just one person that cannot speak for the entire justice system.

 

[Carl Raymond]

Does anyone watch broadcast TV any more? Certainly few that matter...

Weekday midday news. Friday night Gardening Australia. Sunday night Vera.
*not an advice*

 

[dw4ngg]

Maybe VW is laying off the top 7,000 managers?

correction - my source tells me top 7,000 executive managers

 

[Sean Wagner]

...
She just couldn't accept the fact that the car didn't have an engine. This is not a dumb person by the way. She is a 20 year teacher with 3 degrees.

This is the kind of stuff we have to battle.

Dan

Book smart.

Yes, but you won't get her to buy an EV that way. I'm very grateful for this episode being retold here. The vast majority of people, and even current hybrid owners I've talked to, simply know little about Tesla except the FUD. More professional, quick thinking public relations, and a little effort towards supplying less of a gigantic target for clickbait would go
a
very
long
way.

 

[Cobbler]

Meanwhile in Brussels...

No respect from Elon for this model S
Saw my first model 3 passing by in the streets last week in my town near Brussels. Was a black m3 AWD.

 

[Dan Detweiler]

Book smart.

Actually she is a very intelligent lady and a fantastic teacher. She just doesn't know any better and all she hears is the BS. The experience really kind of shocked me.

Dan

 

[ReflexFunds]

Solihull.

Presumably, Jaguar Land Rover UK made cars will lose sales in Europe with a 10% tariff freeing up space in Solihull.

And with a price advantage in the UK vs German electric CUVs presumably Jaguar will sell more I Pace in the UK.

Jaguar doesn't manufacture the I-Pace so I don't think they can just move production to the UK.
Magna manufacturers the car, LG Chem supplies the battery pack. I don't know who makes the motors or other powertrain components, but I wouldn't be surprised if that was all outsourced too.

 

[mongo]

OK, guys, let's be clear on this: all guidance since last July or so has been that Q1 will be more or less breakeven on a GAAP basis. Does it really *matter* whether it's slightly above the line or slightly below it ? Either way free cash flow should be positive.

Will it be FCF positive even with the bond repayment?

Edit:FCF is not what I thought it was, thanks @Fact Checking

OT Boring:

In public transport, there are a bunch of things which people try over and over again which always fail -- they're *standard mistakes*. Musk is making the standard mistakes there because of not doing his homework. He is getting rightly ridiculed. He doesn't need to be making these mistakes. There's a lot of opportunity to make better, faster, cheaper public transport -- just don't repeat mistakes.

Las Vegas would beg to differ on the usefulness of the Boring Company. Traditional systems would distupt the use of the area durung construction.
Elon Musk's Boring Company is Building a Loop for Las Vegas | Digital Trends

Her ruling yesterday (adding two more rounds of filings and adding an evidentiary hearing before the contempt hearing) suggests that she wants to approach this case methodologically and broadly.

A broad case is absolutely not what the SEC wanted: they wanted a quick ruling holding Elon in contempt, then they wanted sanctions ... (I expect the SEC's reply brief to attempt to narrow the case back on various procedural grounds.)

So, would this open the possibility of amending amending the original settlement? (Similar to one side saying the wrong thing and allowing the other to address issues that would otherwise be out of bounds (say for instance SEC harm to stockholders v.s. "the tweet's") )

 

[Fact Checking]

No respect from Elon for this model S

Not so sure - the plate is SEC-964, and 26 U.S. Code § 964 starts with:

26 U.S. Code § 964 - Miscellaneous provisions

a) Earnings and profits​

Lots of respect from Elon for that.

 

[Fact Checking]

Will it be FCF positive even with the bond repayment?

Debt repayments have no effect on revenue, profits and Free Cash Flow (FCF):

Free Cash Flow - FCF

What is Free Cash Flow - FCF

"Free cash flow represents the cash a company generates after cash outflows to support operations and maintain its capital assets. Unlike earnings or net income, free cash flow is a measure of profitability that excludes the non-cash expenses of the income statement and includes spending on equipment and assets as well as changes in working capital."

"Interest payments are excluded from the generally accepted definition of free cash flow."​

Even interest payments are excluded - let alone repayments of the principal amount.

Debt repayments do change the composition of the balance sheet and reduce cash flow of course.

 

[brian45011]

Lets talk procedure first. The Judge has offered both parties the opportunity for an evidentiary hearing.

If there is an evidentiary hearing would it be by dueling affidavits or involve live testimony from witnesses under oath? If the latter, I suspect the witness list would include Elon, the Designated Securities/Disclosure Counsel, possibly the former General Counsel, and a parade of barnacles led by Dr. Noe. Also, would the testimony be the traditional direct and cross-examination like in trials or would the Judge do all the questioning in a federal motion hearing?

The longer this drags on the bigger distraction it becomes not just to Elon but to institutional holders.

 

[saniflash]

just bought FSD for ~2,100 USD. couldn't resist

 

[bhtooefr]

I'm still not getting it. Is it that the crossover has a smaller third-row window, less cargo space, and less practicality? :looks puzzled:

A crossover is a SUV built on a car platform.

They tend to have a more upright seating position than a car, more ground clearance and suspension travel than a car, are more likely to have available AWD, and typically have more rugged styling than their hatchback, station wagon, and minivan counterparts. (The larger ones also tend to have a lower roof than their minivan counterparts.)

The US has a legal definition used to determine whether a vehicle is a sport utility vehicle (that some of these vehicles marketed as "crossovers" fail to meet, but most do), based on being "capable of off-highway operation", which is determined by it either having 4WD (including AWD) or over 6000 lbs GVWR, and it meeting four out of five criteria based on ground clearance and angles. (There is also a "small sport utility vehicle" class for vehicles that are 2WD and under 6000 lbs GVWR, but meet the other criteria... but unlike the other sport utility vehicles, they're legally considered cars.)

Myself, I look at the height as a clue, as well. If it's under 60" tall, it's probably just a hatchback/wagon that's had ruggedized styling, even if it's being marketed as a crossover (this is a common trend in the "subcompact" crossovers popular nowadays, especially those from luxury marques). If it's over 65" tall, and it isn't a van, it's probably a "real" crossover. In between... could be a tall hatch (think vehicles like the Honda Fit and Ford C-Max) or wagon (think the Toyota Prius v), could be a small crossover (things like the Kia Niro and Hyundai Kona).

(And the heuristics for "van" often include things like "does it have a short nose" and "does it have sliding doors".)

This is also why some people call the Model X a minivan. It doesn't have the ruggedized styling of most crossovers, and it does have a short nose and, while not sliding, weird doors. However, it doesn't have the shape of a minivan in the third row (for aero reasons), but it's following a trend in luxury crossovers that are marketed as "sport utility coupes" by their predominantly German manufacturers. (This is compounded by a trend in automotive enthusiast spaces, to call three-row crossovers "denial minivans" or similar - they're being used as a minivan, their owners would often have been better served by a minivan, but minivans have an "unsexy" stigma where crossovers somehow don't, so they buy a crossover.)

Also, smaller crossovers tend to have a tall hatchback form factor (that is, with a small rear cargo area), whereas larger crossovers sometimes have more of a tall wagon form factor (often with a third row in the cargo area).

 

[Pras]

Totally off topic but 1) I am really good at being totally off topic and 2) the markets aren't open yet.

Geo-fenced auto folding mirrors are the absolute bomb! (It's the little things in life.)

Not quite so off topic. Little improvements like this on a regular basis are one of the biggest draws to Tesla. How do we get non Tesla owners to understand this? The amount of misinformation is amazing. Case in point...I was talking with a colleague yesterday while I was in my car in the parking lot. We got to talking about the car and she made the comment "Yeah, but electric cars a really slow, right?" I was flabergasted. I told her to get in the car. After a few launches with her squeeling she says, "What does this thing have, a V8?" She just couldn't accept the fact that the car didn't have an engine. This is not a dumb person by the way. She is a 20 year teacher with 3 degrees.

This is the kind of stuff we have to battle.

Dan

I was thinking the same. Yesterday I summoned my car in my town parking lot and a person walking next had a shocking look in his eyes. I will do this more now just to get people to notice this next generation car.

I live in a NJ suburb where most cars parked in the town parking lot are premium cars (Bmw 3 series would be in bottom percentile). I wish there is a roadshow or campaign to educate my neighbors about Tesla cars.

 

[Fact Checking]

Not quite so off topic. Little improvements like this on a regular basis are one of the biggest draws to Tesla. How do we get non Tesla owners to understand this? The amount of misinformation is amazing. Case in point...I was talking with a colleague yesterday while I was in my car in the parking lot. We got to talking about the car and she made the comment "Yeah, but electric cars a really slow, right?" I was flabergasted. I told her to get in the car. After a few launches with her squeeling she says, "What does this thing have, a V8?" She just couldn't accept the fact that the car didn't have an engine. This is not a dumb person by the way. She is a 20 year teacher with 3 degrees.

This is the kind of stuff we have to battle.

Note that somewhat counter-intuitively this kind of disinformation is the best kind of FUD, because it is so easy to falsify via real-life Tesla experience, which experience 95% of U.S. car buyers haven't had yet.

A new Tesla customer is literally just a friendly owner and a test drive away from being born, and if this kind of dumb disinformation is falsified then most of the other, harder to disprove or less clear-cut pieces of FUD get discredited as well, by association. (At least for the vast majority of people who don't have an emotional dislike of EVs. This is why arguing against ICE enthusiasts on their forums is so counter-productive. Let them stay ignorant of Tesla and let's not polarize them.)

These kinds of anecdotes are IMO actually a major piece of Tesla's long term growth story: if these people were banging on the doors of ICE-makers they'd be making more and better EVs. By spreading easily dispelled disinformation they are creating an easy to tap supply of demand for Tesla - who can grow unopposed into the vacuum of the new EV market at their own pace.

I'd suggest to be patient, positive and understanding when meeting such disinformation "in the field".

 

[mrdoubleb]

just bought FSD for ~2,100 USD. couldn't resist

I know i live in a bubble, but I see many messages like that on twitter and here as well. Here is hoping this could turn Q1 around. If it does that would be a big surprise to the markets.

 

[Fact Checking]

Also, smaller crossovers tend to have a tall hatchback form factor (that is, with a small rear cargo area), whereas larger crossovers sometimes have more of a tall wagon form factor (often with a third row in the cargo area).

Very nice description, I'd also add that in a world where there are literally hundreds of major car models from dozens of major carmakers with almost unlimited design freedom the question of 'crossover SUV' isn't a question of rigid definition: all these cars are on an ever evolving multi-dimensional spectrum of form factors, utility and aesthetic elements, in an attempt to try to serve a given demographic at a given price point.

There's some crossovers in Europe you could mistake for a hatchback and vice versa.

The Model Y will be:

• a smaller SUV based on the Model 3 battery pack and component platforms with 76% sharing between the Model 3 and the Model Y,
• the Model Y will have most of the utility and ergonomic advantages and most of the same design language as the Model X, while reserving premium features and a size advantage for the Model X,
  
• the Model Y will generally be described as a "crossover SUV" due to its smaller size and general design language.

 

[brian45011]

I'm not sure SEC disagrees. They may have brought this case in order to lose, but warn Elon, before he screws up something bad.

I am sometimes naive in a sense that I believe in good intents in others, so be it...

And honestly, Elon needs warning. I could have gone as far as 'gag order' instead of 'warning'. ...

This has become testosterone fight: .

There is no percentage for any publicly-traded company to be in constant war with a regulator which has a say in its destiny. Hopefully, the judge will call respective counsels into her chambers and tell them to craft a resolution that both can live with (and Elon will internalize that resolution).

 

[KarenRei]

Las Vegas would beg to differ on the usefulness of the Boring Company. Traditional systems would distupt the use of the area durung construction.
Elon Musk's Boring Company is Building a Loop for Las Vegas | Digital Trends

Agreed. I think Musk has already proven his ability to tunnel quickly and cheaply. Yeah, they didn't have a chance to smooth out the first tunnel's pavers before unveiling, but is there anyone who actually thinks that's a legitimate challenge?

They're fortunate to be doing proof-of-concept work in Los Angeles. Los Angeles's geology, particularly the north side of the city, is particularly diverse and complicated. Bedrock depth varies greatly. Sometimes the sediment on top is pure, sometimes it's full of boulders. The water table varies greatly, and seasonally. There's pockets of oil and gas in certain places in town. Etc. Basically, if they can prove that they can tunnel effectively across LA, in all the various conditions and substrates, they can do it anywhere.

 

[EVMeister]

Saw 3 x Tesla Model S on my way to work. A short (20 minute) commute in the North East of England. A black, a red and a blue. I'm seeing them more often around here, some privately owned and others taxi. I look forward to seeing Model 3s in the mix.