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

[Fact Checking]

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") )

This settlement is basically a "consent decree", which is a contract turned into a court order.

A follow-up court order by the same judge automatically amends/clarifies/narrows/broadens the terms of the original settlement, regardless of whether it's favorable to Elon or the SEC.

And yes, the judge has wide discretion to narrow the settlement based on the law (including the Constitution), as long as it's not overturned on appeal. Broadening it is generally harder - i.e. adding terms the original parties didn't agree to, unless it's an actual sanction which is a result of a violation of the settlement's terms.

The latter broadening is what the SEC was trying to achieve, and my impression so far is that they'll get a surprise narrowing of the settlement instead. At this point the judge simply dismissing the contempt motion and not holding Elon in contempt would probably be considered a "win" by the SEC.

If they had any choice I'm sure they'd go back in time and not file this motion - them getting the facts wrong and misinterpreting the settlement in absurd ways is a serious tactical mistake that opened up the counter-attack.

Let's hope the judge agrees, and let's hope that in a few years Cheryl L. Crumpton, Supervisory Assistant Chief Litigation Counsel at U.S. Securities and Exchange Commission will be thinking of that motion as a low point of her legal career.

 

[Carl Raymond]

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 fortune to be starting 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 and 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.

Loved that anecdote where The Boring Company asked makers of the boring machine if the speed was thermally limited or limited by energy available, and they could not answer.

In other words, they had never pushed it beyond limits to see where it failed. That’s Musk all over. Find the physical limit, then work out how to extend it.

 

[bhtooefr]

Oh, another thing re: the "crossover" vs. "hatchback/wagon" debate...

In the US, the debate is framed in entirely different terms typically - "crossovers" vs. "sedans", with hatchbacks and wagons not even being considered. This is, I suspect, for historical reasons - in the 1970s and 1980s, American automakers were desperate to keep up with the Japanese automakers and Volkswagen, and made copycat hatchbacks that were for the most part terrible cars, positioned at the bottom of the market. As a result, hatchbacks picked up a stigma of being "cheap" cars that you didn't want to be caught dead in (unless you simply didn't care about status). I even remember in the 90s, some liftback hatches being marketed and styled as sedans with "hidden hatchback versatility" (so you weren't seen in a hatchback), and I also distinctly recall when buying my Prius that the salesperson pointed out the "more sedan-like styling".

Additionally, wagons had picked up the "unsexy family car" stigma that minivans are now saddled with - in fact, minivans were meant as an alternative to those unsexy family wagons.

So, Americans refuse to buy either of the more utilitarian car body styles in any kind of quantity... unless you jack it up a few inches, put body cladding on it, and call it a SUV, which is neither a (cheap) hatch or a (unsexy) wagon. And now, people who want a more practical car - even if they're willing to buy a wagon - are almost forced into crossovers as a result. (Hatches still exist in enough quantity that you could still just buy a hatch from most automakers if you really wanted one.)

In my case... if the Model Y is low enough (say, right on that 60" crossover/hatchback bubble), I'd consider one as my next car over a Model 3, because having a hatch is important to me. (I'd rather have something Model 3 height with a liftback hatch ala a Model S, though...)

 

[brian45011]

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.

Tesla, TSLA & the Investment World: the 2019 Investors' Roundtable

 

[anthonyj]

Bloomberg’s most insane hit piece ever. Can’t wait for Elon to buy them and delete them

When Elon Musk Tried to Destroy a Tesla Whistleblower
Bloomberg - Are you a robot?

 

[jbcarioca]

You saw the flak I took a few years back for saying that Full Self Driving wasn't coming any time soon. Of course, now everyone knows I was right...



(Emphasis mine.)

I think this is a very important point. Where Elon has considered precedent -- as with most of what SpaceX has done, where he researched the whole history of rocketry -- he's done great. Where he has failed to consider precedent -- as with the joke of "full self driving by 2016", or the idiotic cars-in-tunnels ideas -- he's done poorly.

Part of the scientific method is actually looking up what research has already been done. Often you want to try to *replicate* that research. But just ignoring it and going with your gut feeling is dumbassery.


...

It doesn't take long to do your homework. Looking up the rules on who could be stockholders in private companies... you know, it took me ten minutes. Musk didn't bother to do this before tweeting. This is dumb.
...

So I think this pinpoints Elon Musk's real weak point. He is prone to not doing his homework, and therefore making mistakes which are really obvious to anyone who has done their homework. When he does his homework, he's practically unstoppable.

(Most Wall Streeters don't do their homework either so they don't spot these.)

Yes. In addition, even when highly analytic people (including Nobel Prize winners) do carefully model the probability of outcomes they often then ignore the boundary conditions of their models, fomenting disaster in a very sophisticated way. Prime example Long Term Asset Management
Long-Term Capital Management (LTCM)

Elon has made this error several times, including the PayPal case. Unlike those others, when Elon realizes his error he quickly corrects himself and admits the error. Despite the justified criticism of his impulsiveness, he learns from his own mistakes. That is very rare, and perhaps is crucial to his continuing astonishing success.

The downside: it takes a very strong and well-prepared person to argue Elon out of a bad impulse. Ms. Shotwell has spoken to that issue. In some areas Elon seems to have largely avoided big errors. IMHO these have had strong, confident and competent people to prove the cases. Pretty clearly these include JB and Jerome.

There have not been equal qualities in evidence in customer service, parts distribution, sales and, probably, legal. Of course several of the most critical components needing improvement are those traditionally least susceptible to highly analytic proofs.

“Traditionally” is the crucial point. Predictive analytics in behavioral science and ‘the transportation problem’ have been advancing even more quickly than has been widely perceived. Frankly, these logistics and behavioral issues are vastly less sexy than are vehicle autonomy, interplanetary navigation and a few other topics. Tesla has had great difficulty applying these techniques to seemingly mundane customer service, production and distribution problems.

Were Elon capable of playing nicely with Jeff Bezos he might find out how to solve these problems. Amazon is case study number one fir how to make the most boring topics both exciting and soluble. Frankly, I think a strong dose of Amazon-think would rapidly cure the vast majority of serious Tesla problems. Then Elon could concentrate on the areas in which he is so wildly successful; solving seemingly-impossible problems. Amazon-think would let him escape the prison of mundane problems, the ones he cannot ‘outsmart’.

 

[KarenRei]

Bloomberg’s most insane hit piece ever. Can’t wait for Elon to buy them and delete them

When Elon Musk Tried to Destroy a Tesla Whistleblower
Bloomberg - Are you a robot?

It's so absurd that I've decided that the best strategy is just to ignore it.

 

[CaliBear1]

Ok, Karen lives in Iceland. I live in California. I'm sorry, her knowledge of NORTH(!) LA's geology is simply further proof that she is an AI. Her name is KarenAI, not KarenRei! I've been amassing evidence. This was my final proof!

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.

 

[mongo]

This settlement is basically a "consent decree", which is a contract turned into a court order.

A follow-up court order by the same judge automatically amends/clarifies/narrows/broadens the terms of the original settlement, regardless of whether it's favorable to Elon or the SEC.

And yes, the judge has wide discretion to narrow the settlement based on the law (including the Constitution), as long as it's not overturned on appeal. Broadening it is generally harder - i.e. adding terms the original parties didn't agree to, unless it's an actual sanction which is a result of a violation of the settlement's terms.

The latter broadening is what the SEC was trying to achieve, and my impression so far is that they'll get a surprise narrowing of the settlement instead. At this point the judge simply dismissing the contempt motion and not holding Elon in contempt would probably be considered a "win" by the SEC.

If they had any choice I'm sure they'd go back in time and not file this motion - them getting the facts wrong and misinterpreting the settlement in absurd ways is a serious tactical mistake that opened up the counter-attack.

Let's hope the judge agrees, and let's hope that in a few years Cheryl L. Crumpton, Supervisory Assistant Chief Litigation Counsel at U.S. Securities and Exchange Commission will be thinking of that motion as a low point of her legal career.

Ya, that was what I was wondering. Also wondering if the judge approved the original decree on the request of Tesla/ Elon to get it behind them, but wasn't really happy with it.

Sort of like the student who complains about the miss mark on their test and ends up getting a lower score due to the elimination of other errors in their favor...
A retrial without a trial.
(Yes, I am living on my own little world)

Loved that anecdote where The Boring Company asked makers of the boring machine if the speed was thermally limited or limited by energy available, and they could not answer.

In other words, they had never pushed it beyond limits to see where it failed. That’s Musk all over. Find the physical limit, then work out how to extend it.

To be fair to the TBM industry, you really don't want to discover the limits of your machine in operation...

 

[nursebee]

Meanwhile in Brussels... (yesterday of all days)

View attachment 385958

Why is the SEC car in Brussels?

 

[Fact Checking]

LOL, Morgan Stanley's Adam Jonas invents the 'dump and pump' scheme - after yesterday's "dump" downgrade today comes the "pump" phase:

Tesla (TSLA) Could See A Pop Around The Model Y CrossOver Event - Morgan Stanley

Morgan Stanley analyst Adam Jonas reiterated an Equalweight rating and $260.00 price target on Tesla (NASDAQ: TSLA) when it unveils its mid-sized crossover at a launch event this Thursday at 8pm Pacific time.

The analyst offered insight into 5 points for investors to consider:

1) It's likely to be both attractive and fast offering "best in class performance specifications with compelling design".

2) Timing is likely 2020 or 2021 but investors may expect end of year 2019.

3) It will likely cannibalize the existing lineup making it a double edged sword in that it could delay purchasing leading up to the launch.

4) The event is likely to be Model Y centric although the analyst thinks it is time for the existing lineup to be updated.

5) It is possible that this will be the time the company updates the market on Q1 deliveries.​

It's unlikely that the Model Y event will mention any financials such as Q1 deliveries, and how does Adam Jones explain that the Model 3 didn't cannibalize Model S sales while overall sedan sales were in a decline in the U.S.?

 

[SO16]

Bloomberg’s most insane hit piece ever. Can’t wait for Elon to buy them and delete them

When Elon Musk Tried to Destroy a Tesla Whistleblower
Bloomberg - Are you a robot?

The ones responsible would just scatter off to the next roach motel.

 

[mongo]

LOL, Morgan Stanley's Adam Jonas invents the 'dump and pump' scheme - after yesterday's "dump" downgrade today comes the "pump" phase:

Tesla (TSLA) Could See A Pop Around The Model Y CrossOver Event - Morgan Stanley

Morgan Stanley analyst Adam Jonas reiterated an Equalweight rating and $260.00 price target on Tesla (NASDAQ: TSLA) when it unveils its mid-sized crossover at a launch event this Thursday at 8pm Pacific time.

The analyst offered insight into 5 points for investors to consider:

1) It's likely to be both attractive and fast offering "best in class performance specifications with compelling design".

2) Timing is likely 2020 or 2021 but investors may expect end of year 2019.

3) It will likely cannibalize the existing lineup making it a double edged sword in that it could delay purchasing leading up to the launch.

4) The event is likely to be Model Y centric although the analyst thinks it is time for the existing lineup to be updated.

5) It is possible that this will be the time the company updates the market on Q1 deliveries.​

It's unlikely that the Model Y event will mention any financials such as Q1 deliveries, and how does Adam Jones explain that the Model 3 didn't cannibalize Model S sales while overall sedan sales were in a decline in the U.S.?

LOL indeed
6)

https://imgflip.com/i/2vxeiz

 

[KarenRei]

Ok, Karen lives in Iceland. I live in California. I'm sorry, her knowledge of NORTH(!) LA's geology is simply further proof that she is an AI. Her name is KarenAI, not KarenRei! I've been amassing evidence. This was my final proof!

What can I say, I like to read up on technical topics. It's what I was programmed to do.

ED: What I was BORN to do. Dang autocorrect :Þ

 

[humbaba]

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.

Well, just because there have always been crap journalists doesn't mean that the profession hasn't changed. It has. A lot. The polarizing intent that the OP referred to is certainly one change, but another I can think of off the top of my head is the gentleman's agreement -- the press were very nice about JFK and not exposing his less adorable characteristics (that were well known among journalists) to the public at large (just a starter in case some reader isn't aware: Dr. Feelgood).

Personally, I really dislike the polarizing influence of the media -- but I'm not at all sure that returning to the old ways is an improvement. It all depends upon one's perspective, and that can change from event to event, journalist to journalist. In the end, I think it is clear that journalism (at least as it is practiced) has changed significantly in just the last fifty years. Change can be good, it can be bad, and it can be a bit of both.

 

[brian45011]

In the case of TSLA, the lowest price in 90 days is an amazingly good offer...

I would assume the purchase would need to be held for some time, otherwise it would just be free money.

That's a mis-statement of the ESPP--it's 15% less than the lower of the closing price at the beginning and end of the 6 month trading period. (March-August and September-February)

 

[ggies07]

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.

What I have observed over the years is that Adam used to be a huge Tesla fan back in 2012-2014 and would ask far out questions on CCs that Elon and the company were not ready to reveal yet, but that are coming true today. So he was trying to be the analyst ahead of his time, got publicly denied over and over, and here we are today, Adam on the defense now.....

 

[Tslynk67]

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.

I've said this for a long time. They should be open about production and delivery numbers, because right now everything get spun to FUD.

 

[NicoV]

Yes, and this would also explain the sporadic deliveries in Benelux that @schonelucht reported: since there's only very few configurations offered, and a lot of software features which can be freely turned on/off, so Tesla can freely "swap" a Benelux delivery for a far-away delivery in Spain or France.

So when a customer confirms to take delivery in Southern France or Italy and there's two such cars that only differ in software features but otherwise have the exact same hardware configuration, they might bump a Benelux delivery down the queue and serve the farther away customer first. Note that the Benelux delivery is still guaranteed to happen, but a few weeks later.

This would explain the prohibition to talk VINs and ships (as you are not guaranteed them until the last minute), but I suspect not all sales staff understands that, plus:

• there might be cars that are unique hardware at this stage (some rare color and Performance)
• or very common configurations and free delivery capacity in Benelux and not enough orders far away to serve,
• or customers indicating schedule inflexibility, i.e. vacation in the last 2 weeks of March. Tesla would still prefer to deliver the car early than after March 31.

... and in these cases the car might be delivered in Benelux earlier already.

From the outside it would look chaotic, random, with unreliable communications - and this sucks for Benelux customers waiting for delivery - but I'd expect this to be smoothed out once Tesla can expend the capital to maintain a continuous logistics pipeline.

Pro tip: if you want the quickest Model 3 delivery then order the Performance model, 20" wheels, Pearl White color and white seats. Also indicate schedule inflexibility for the final 2 weeks of the quarter, but don't push your luck too much.

Or wait 2-3 more weeks for your dream configuration!

My car will be delivered in the Ghent SEC. That is the closest SEC to Zeebrugge. Less than an hour drive, even for a car carrier. A single car carrier can probably deliver 50 cars a day from Zeebrugge to Ghent, maybe double that if they can switch drivers. Maybe I should already block sunday 31 march in my calendar for a possible delivery.
The other service centers near Zeebrugge are a 1.5 or 2 hours drive away, so really, everything that’s still in Zeebrugge the last weekend of March will be dumped in Ghent.

 

[KarenRei]

My car will be delivered in the Ghent SEC. That is the closest SEC to Zeebrugge. Less than an hour drive, even for a car carrier. A single car carrier can probably deliver 50 cars a day from Zeebrugge to Ghent, maybe double that if they can switch drivers. Maybe I should already block sunday 31 march in my calendar for a possible delivery.
The other service centers near Zeebrugge are a 1.5 or 2 hours drive away, so really, everything that’s still in Zeebrugge the last weekend of March will be dumped in Ghent.

No no, what you don't understand is that there's no demand left in Europe, and everyone who wants a Tesla has already gotten one. The shorts assure me that this is a fact!

(They also tell me to ignore how much of Europe can't even order any variety at all yet, and how those who can can only order the two top trims.)