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

[larmor]

Regarding recent market re(action) is a new Shortsville Times headline: Tesla to build car factory from ground up in less than a year in China, mission remains confused build cars or build factories...

I think that might have been then something else, building the factory in China in less than one year. In the recent era, impossible things seem easy or expected due to wide availability of phones communications and ad-sourced/funded internet platforms. However building a car factory from the ground up is actually a thing, a hard thing, and is going to happen. And no one has to click on an advertisment for campbells soup (or whatever ad happens to be at the bottom of the web page) to make it happen or for the company to be profitable...

 

[voip-ninja]

My sense is that since the 3 was a "bet the company" product this year will allow more diversity in what they do. Most of the work on the Y is already done and it will be a relatively easy ramp.

Um, okay. How do you know that most of the work is done?

If it was that easy they wouldn't be saying that deliveries will start late next year. Unless I missed it they also didn't say where it was going to be assembled.

70% parts in common sounds like a lot, but it's probably similar to most other sedan->CUV products and even extremely experienced manufacturers struggle getting those out quickly.

You can speculate it's an "easy ramp" but Tesla has never in their history had an easy ramp of a new product.

 

[sundaymorning]

Look, this is the way it is. It's the way it has been for years now with this company. It has gotten worse lately but it is no different. Positive news will NEVER cause any significant rise in stock price as long as short interest sees an opportunity to make money. They can manipulate the market at will. They have proven it time and time again. The SEC will certainly not do anything to stop it. They have made that crystal clear. So why is anybody surprised by today's stock price? They are loving this.

If you are long...stay long.
If you are short...keep riding the BS train as long as you can.

If you are Tesla...keep doing the things that you know will allow you to succeed in the long run. They have finally reached the point where they are not nearly as dependent on the market for capital so try to turn a blind eye to it all and keep going.

Yes, it's frustrating. Infuriating really, but it certainly is not unexpected.

Dan

And if you’re the SEC, keep trying to make a name for yourself by being in the headlines with Elon.

 

[goinfraftw]

After last night's call and looking at this Tesla revenue and stock growth chart:

Tesla Revenue 2009-2018 | TSLA

...99% sure I'm going to sell TWLO stock today (that went up 500% over the past year) and re-invest even further into TSLA for the next growth stage. My main points:

1. TE ramp-up makes this a technology company and not a car company, IMO. Multiples should change.
2. Going from 100k cars delivered to 1M in 2 years is absurd and doesn't make sense in the stock price (which has been yo-yo-ing for 2 years)
3. Model Y does 2x to its addressable market
4. Cost of battery chemistry is going down significantly as well
5. Tesla has the makings of a market leader in cars and energy.

This is all very absurd to be typing out.

 

[Nocturnal]

Um, okay. If it was that easy they wouldn't be saying that deliveries will start late next year. Unless I missed it they also didn't say where it was going to be assembled.

70% parts in common sounds like a lot, but it's probably similar to most other sedan->CUV products.

You can speculate it's an "easy ramp" but Tesla has never in their history had an easy ramp of a new product.

*relative to the 3

They don't need to build new seats, new interior pieces (mostly), new drive train etc. and yeah, that 75% number is probably similar to other companies such as the Camry-Highlander. But that's why companies do that. Yes, "easy" is very much an overstatement, but it should be far easier for many reasons.

 

[voip-ninja]

*relative to the 3

They don't need to build new seats, new interior pieces (mostly), new drive train etc. and yeah, that 75% number is probably similar to other companies such as the Camry-Highlander. But that's why companies do that. Yes, "easy" is very much an overstatement, but it should be far easier for many reasons.

The car has an entirely new unit body and will require all new press equipment to do the panels, etc., unless they are outsourcing it. Fabrication investment is still going to cost a ton for this car.

I'm not going to dispute that it should be easier... but we have to consider Tesla's reality. Elon appears to be in the mode of hoarding cash in order to pay for the line expansion needed for Model Y using Tesla capital instead of financing. This, in my opinion, is a risky move, guess we'll see. I say it's risky because any delay to Tesla increasing the # of products they have on offer is risky. CUV is #1 selling car class in America and it is gaining market share in every market I am aware of.

I understand how pissed he is being beholden to financiers in order to get his plans executed but right now Tesla needs to accelerate even more rapidly than they are, think about how fast they could have Y out if they had a massive cash infusion NOW.

Think about where Amazon would be today if 10 years ago Bezos had stopped taking cash infusions.

 

[YasB]

If you think Tesla is a shorting opportunity then the Model Y unveil was a major source of wildcards for 2019: Elon could have announced much earlier Model Y production than expected, or could have made some other surprise announcement with a big effect on valuation and the stock price.

Meh ... get out of my head and leave my thoughts alone! That was exactly what i was thinking earlier this week, when i closed my position and bought back most of it this morning. :-D

I like the look of the Model Y btw. Imho, it's better looking than the 3.

The narrative “there must be a demand problem” is the main reason the stock is depressed.

I think that is the case, if you combine it with lower growth expectations. For most of my fellow bears, who are not in the bankruptcy camp, it is a question of sustained demand vs. margins. A lot of us suspect that demand, once the backlog is completely gone, is not enough to support high enough prices to achieve above industry average margins. Without that and slower than expected growth, valuation multiples may come down faster than the company is growing, which should be enough for the stock price to decline a bit more.

 

[scaesare]

EXACTLY!!!

I swear the Model S is the single greatest car...uh...product ever built. But it's been downhill for Tesla since then.

Change blows.

Choices too!

 

[jhm]

"Deposits".... Money up-front...

Or, in this case, "Processing costs"...
Everybody that buys early still gets to pay full price, in addition to the $2500 spent last night....

Peter Roselle on Twitter

View attachment 386649

I think this means your $2500 Pre-Order fee is forfeited if you return your delivered Model Y within 7 days. You can get a full refund on the pre-order fee if you cancel prior to delivery. After delivery you can get a full refund on the vehicle payment, but not on the pre-order fee. That is how I am reading this. Do others have a different interpretation?

BTW, I do think that this is perfectly reasonable, as Tesla does in fact incur a lot of cost for fulfilling a delivery and has a valid need to recover that cost. Without this sort of provision, they'd simply have to sell the Model Y at a higher price, forcing actual buyers to cross-subsidize a post-delivery refund of the pre-order fee.

Edit. The next to last sentence does make it clear that the pre-order fee will be credit to the purchase of the vehicle upon delivery. So this does not add to the price. But it does seem a little ambiguous to me how that credit is treated in the event that the buyer returns the vehicle within 7 days.

 

[Paracelsus]

I am ready to take a guess at what the "one more thing" is. When Elon showed the picture of the Chinese GF last night, didn't he state that this is what it would look like "at the end of this year"? And there are at least 25 or 26 Tesla semis moving freight out front in the picture. Either the China GF will be producing Tesla semis (China could easily be a bigger market for the semi than the US anyways), or they will be available from another source by then. And the original production date for the Tesla Semi was 2019. This would certainly make Elon laugh and giggle like a school kid with a secret all evening. Especially after parking the semi in the audience. If they were to begin production of any vehicle without an 'announcement' then Shorts and SEC would pile on once again, screaming 'unfair'. Now Elon can simply say "I showed you the damn picture and told you that it would happen by the end of this year".

 

[elasalle]

Added Jan 21s 300s calls..

 

[bdy0627]

They should have revealed the Y like they did the 3 with multiple colors and better lighting. It was really hard to see the Y.

Yeah, almost like they didn't really want to focus on it. The event seemed more like a Tesla advertisement than a Y reveal. Perhaps that's what Tesla needed right now given all of the new owners that have come on board over the last year.

 

[voip-ninja]

After last night's call and looking at this Tesla revenue and stock growth chart:

Tesla Revenue 2009-2018 | TSLA

...99% sure I'm going to sell TWLO stock today (that went up 500% over the past year) and re-invest even further into TSLA for the next growth stage. My main points:

1. TE ramp-up makes this a technology company and not a car company, IMO. Multiples should change.
2. Going from 100k cars delivered to 1M in 2 years is absurd and doesn't make sense in the stock price (which has been yo-yo-ing for 2 years)
3. Model Y does 2x to its addressable market
4. Cost of battery chemistry is going down significantly as well
5. Tesla has the makings of a market leader in cars and energy.

This is all very absurd to be typing out.

Absurd? Tesla has a market cap nearly that of GM and they sell less than 4% of what GM does annually in units.

Yes, the technology is amazing but they seem to continue to struggle with execution.

You are annoyed the stock is depressed and yo-yo'ing but you have to look at the yo-yo coming out of the Tesla boardroom with yo-yo of model pricing, feature pricing, store closings, etc.

 

[winfield100]

and here in Kansas wind power is steadily growing as well. Elon also said he wants SCs to have their own solar arrays.

Drive Interstate 40 from Tucumcari, New Mexico east for about ==> 40-50 _miles_ and try to count the 1,000’s of giant wind turbines and realize this is only _one_ wind farm of many. It’s happening all around you.
Road trip!!!!

 

[ReflexFunds]

The car has an entirely new unit body and will require all new press equipment to do the panels, etc., unless they are outsourcing it. Fabrication investment is still going to cost a ton for this car.

I'm not going to dispute that it should be easier... but we have to consider Tesla's reality. Elon appears to be in the mode of hoarding cash in order to pay for the line expansion needed for Model Y using Tesla capital instead of financing. This, in my opinion, is a risky move, guess we'll see.

I understand how pissed he is being beholden to financiers in order to get his plans executed but right now Tesla needs to accelerate even more rapidly than they are, think about how fast they could have Y out if they had a massive cash infusion NOW.

I doubt extra cash would accelerate the timeline. Tesla has cash already and would raise more if they need it. Most likely the main bottleneck will be the speed suppliers can ramp up - other companies are less agile than Tesla. Another potential bottleneck is speed of hiring at GF1, which I also doubt could be accelerated with more cash. Grohmann could be another bottleneck if its resources are currently allocated to GF3.
My guess is that Tesla is aiming for 7k per week Y production by summer 2020, but doesn't want to give this guidance because they know there are always risks of delays.

 

[SO16]

Absurd? Tesla has a market cap nearly that of GM and they sell less than 4% of what GM does annually in units.

Yes, the technology is amazing but they seem to continue to struggle with execution.

You are annoyed the stock is depressed and yo-yo'ing but you have to look at the yo-yo coming out of the Tesla boardroom with yo-yo of model pricing, feature pricing, store closings, etc.

Is Tesla just a car company?

 

[Chocochip]

My sense is that since the 3 was a "bet the company" product this year will allow more diversity in what they do. Most of the work on the Y is already done and it will be a relatively easy ramp.

Yeah, that's why I'm carefully optimistic on the energy products finally getting their day in the sun (see what I did there?).

However, let's not forget that, aside from the Y, this year they have to focus heavily on:

• GF 3 in Shanghai
• the Semi
• the pickup truck, which will be revealed this summer - not sure how much CapEx that will take this year
• possibly a Model S / X refresh (OH NO HE DIDN'T!!!)

 

[voip-ninja]

I doubt extra cash would accelerate the timeline. Tesla has cash already and would raise more if they need it. Most likely the main bottleneck will be the speed suppliers can ramp up - other companies are less agile than Tesla. Another potential bottleneck is speed of hiring at GF1, which I also doubt could be accelerated with more cash. Grohmann could be another bottleneck if its resources are currently allocated to GF3.
My guess is that Tesla is aiming for 7k per week Y production by summer 2020, but doesn't want to give this guidance because they know there are always risks of delays.

Massive investment always seems to accelerate delivery. My proof? Apollo program.

 

[goinfraftw]

Absurd? Tesla has a market cap nearly that of GM and they sell less than 4% of what GM does annually in units.

Yes, the technology is amazing but they seem to continue to struggle with execution.

You are annoyed the stock is depressed and yo-yo'ing but you have to look at the yo-yo coming out of the Tesla boardroom with yo-yo of model pricing, feature pricing, store closings, etc.

I understand what you're saying, but based on fundamentals of the business...the valuation of the company is not matching actual. I'd really love to know what market cap Wall Street has put on EV's, in general. Tesla is the market leader when it comes to EV and Solar/Battery adoption. So, it should equate to 30-50% of the market in terms of stock price.

 

[jhm]

You know there is more text than just the yellow highlights right? The pre-order payment counts towards the order price, obviously...

Yes, this is made clear in the next to last sentence.