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

[neroden]

Maybe, but then can you explain why the stock didn't move on the tweet? Musk's 500k is 100 - 140k above the earnings report guidance. That is significant. You figure that the stock would move up sig on the news.

My explanation is that most investors can add 100K Model S+X to "350 to 500K" Model 3 and get 450 - 600K cars total, which is "around 500K".

I mean, that's what I did.

 

[Creekstalker]

I hear discussions about Gigafactory 1 (Sparks) and 3 (China), but nobody ever says much of anything about Gigafactory 2. That's in Buffalo, right? Seems like I saw a FUDDY piece awhile back about how not much is really happening over there.

I used to equate the term "Gigafactory" with battery production and assembling the packs but I don't think this is the case anymore. In China, they're going to buy the batteries outside but assemble the packs and cars in GF3, right?

If memory serves, the Buffalo Giga is more Tesla Energy related? Are they supply-constrained as well? Are they contributing to the bottom line or a drag on it? Does Tesla have enough cells to go around?

Forgive my ignorance/laziness, but if anybody has a link or two handy I'd love to read up on it since it doesn't seem to come up here a whole lot.

 

[RobStark]

from Tesla Direct Sales Map (US)

Shout Out to @Pluto

Fyi, just a clarification that the recent Electrek article here is inaccurate: Texas is trying to block Tesla from even servicing its cars in direct sale battle with car dealers

I've been tracking Texas' new bills and it appears that bill is one of two attempts by a first-stage manufacturer to be able to directly sell medium/heavy duty trucks (GVWR of 16k+ lbs) completed by the second stage manufacturer to consumers. The other bill (filed just two days before it) makes it clear what the intent is: Texas Legislature Online - 86(R) History for HB 2602

There is no provision in that bill preventing manufacturers to service vehicles, it only creates a new exception for selling and tries further clarifying what a dealership is (which is unnecessary since it's already defined at §2301.002(8), see below). For comparison, §2301.252 is what limits selling new vehicles to franchised dealerships and §2301.476 is what prevents manufacturers from owning a dealership.

Current Texas law: 2017 Texas Statutes :: OCCUPATIONS CODE :: TITLE 14 - REGULATION OF MOTOR VEHICLES AND TRANSPORTATION :: SUBTITLE A - REGULATIONS RELATED TO MOTOR VEHICLES :: CHAPTER 2301 - SALE OR LEASE OF MOTOR VEHICLES

 

[Antares Nebula]

When Rosner asked about the 350-500k, Musk said:
"Well, we need to bring the Shanghai factory online. I think that's the biggest driver for getting to 500K plus a year."
How does that "confirm" 500k production in 2019? Shanghai is an early stage construction site. Even by Tesla's optimistic guidance, total 2019 production there won't exceed 10-20k.

What you call a "double standard" is a difference in treatment between official written statements and back-and-forth with analysts during conference call Q&A. The death cult goes bananas when Musk says stuff like 100-200k Model 3s in 2H17, and keeps quoting him years later. Real market participants realize such spur-of-the-moment numbers are not reliable and do not represent guidance.

Again, you miss it. When Musk states "that's the biggest driver for getting to 500K plus a year", he is referring to Model 3 alone. The total range for Model 3 given by Musk above is 350-500. Take the midpoint, 425, and add conservatively 75k S,X, and that gives you 500k (as a midrange). The full range given in the CC, when taking into account 100k S,X is 350+100 to 500+100, or simply 450 to 600.

 

[neroden]

I think they might file a request to be relieved from the CD due to the SEC's bad faith in its negotiation and the mutual failure to agree on its terms. This would be an interesting tactics once the SEC suffered an initial defeat. Just an.idea

Query: would that reopen the ORIGINAL case? As I'm not a lawyer, that's something I don't know.

 

[dgodfrey]

He is not supposed to tweet anything that could be material. That tweet is a production number that is on the high end. All he had to do was get it pre approved. He's a public CEO of a public company, he can't just do what he wants if his Twitter account is an official communication channel. He created this issue due to his irresponsible 420 tweet.

Where have you been? Musk repeated the same numbers that were discussed in the CC 3 weeks earlier. How is that news or material?
If I tell what the high temperature in Cincinnati was yesterday, is that news or material?
What if Musk said that Tesla is selling the Standard Range Model 3 for $35k, is that material?
What if Musk tweets, Model Y base price will be $39k, is that material?
Just simply explain how repeating something that was already public knowledge could in any way be considered newsworthy, market moving, or material?
I swear, I think you know he's done nothing in violation but you just like being obstinate.

 

[tinm]

Where can I find this info?

Unclear why this is considered noteworthy. He routinely flies back and forth between Silicon Valley and usually Van Nuys Airport in the LA area. He's the CEO of a Silicon Valley company and a Hawthorne company. His home(s) are in Bel Air. He splits most of his time between SV and LA; days close to weekends tend to be SpaceX days; mid-week days tend to be Tesla days.

 

[neroden]

Vielen Dank! @lklundin

Since the last Int'l VINs were registered on March 6, we can estimate at least 3 days to produce this batch (allow 1 day to load the ship).

This analysis lends further credence to the theory that Tesla is now registering VINs just before production occurs (In this case perhaps just 2 days in advance).

This bodes ill for Bloomberg, who have already been shown to be retroactively covering up serious flaws in their estimates. Carsonight posted the screenshots on DISQUS: (combined+annotated below)

Bloomberg silently updated their 2018Q4 production 'estimates' on Jan 2nd, 2019 after Telsa announced actual results. The revision by Bloomberg was exactly 600 cars per week for the production rate during Q4, raising their production 'estimate' by 8,146 cars total for the quarter.

View attachment 388256

3 days later, Bloomberg then claimed on their website that their 'estimates' had been correct all along (see claim below). Of course, shortz and bears used the old, busted BB numbers throughout Q4 to drag on the SP, then just 3 days later Bloomberg tried to claim their numbers had been right all along:

View attachment 388263

Bloomberg never actually prints a single number for their estimate of 2018Q4 production, rather you have to compute that from Bloomberg's estimate for total production minus Tesla's previous production announcements:

Bloomberg's estimate for 2018Q4 production was (147,539 - 94,269) = 53,270. On their website, they write: "Bloomberg's forth-quarter estimate was off by less than 0.5 percent of Tesla's reported production."

In fact, Bloomberg's production estimate before the announcement was 13.2% below Telsa's actual production numbers as announced on Jan 2, 2019. Again, math is hard:

53,270 / 61,394 = 86.8%

Three days after Bloomberg retroactively edited their numbers, they claimed only a 0.5% error instead of admitting to the 13.2% error they actually achieved. HINT: it's no longer an estimate AFTER the numbers are announced. That's not a forecast, that's a HINDCAST, and they were still out by 281 Model 3s after they were given the results by Tesla.

Carsonight also notes that Bloomberg pulled the same trick with the 2018Q3 Model 3 production estimates, which is why he made before and after screenshots of the 2018Q4 estimates. You can bet that he (and others) will be watching carefully to see what Bloomberg does with its 2019Q1 estimates.

Its time we call out the financial media who are misrepresenting their data, and hiding their own role in the deceit.

Regards,
Lodger

You have screenshots. Send to SEC, please. This isn't strictly short-and-distort, but it is illegal market manipulation: Bloomberg is misleading market participants by claiming to be accurate when they're not, for purposes of making money themselves.

 

[dc_h]

The

I mean, I can see how that might be feasible in terms of selling a car without AC, but how will that save Tesla any money on making the car? IIRC, they use a single component to both cool the battery and the cabin.

German solution was a software limited batttery that could be upgraded after purchase. A 100 mile software limited car fro 44,999 Canadian.

 

[neroden]

For me to go long again I need to see actual margins,

By then it'll be too late to buy the stock cheap. That's why investors buy on *projected future* margins, sales, etc.

no store closures and no firing but hiring of employees.

Higher SG&A is a bad thing IMO. (I am upset by the retention of excess stores but I figure they'll correct it.)

Also I need to see sustainable model 3 demand which I'm not as confident of yet

OK, seriously!??!? That is the one thing which anyone seriously following the company would not be worrying about. Ever.

...plus decent margins on the short range $35k version

Again, by the time you find official data on the margins, it'll be too late to buy the stock cheap.

and a lessening of service and lack of parts complaints.

They're already down from last year. This, I follow on and off.

 

[Causalien]

I hear discussions about Gigafactory 1 (Sparks) and 3 (China), but nobody ever says much of anything about Gigafactory 2. That's in Buffalo, right? Seems like I saw a FUDDY piece awhile back about how not much is really happening over there.

I used to equate the term "Gigafactory" with battery production and assembling the packs but I don't think this is the case anymore. In China, they're going to buy the batteries outside but assemble the packs and cars in GF3, right?

If memory serves, the Buffalo Giga is more Tesla Energy related? Are they supply-constrained as well? Are they contributing to the bottom line or a drag on it? Does Tesla have enough cells to go around?

Forgive my ignorance/laziness, but if anybody has a link or two handy I'd love to read up on it since it doesn't seem to come up here a whole lot.

They are Solar City related. So solar roof mostly. Not sure what they plan on doing with the space because I doubt the solar roof production takes up the whole space. It's close to Detroit, so close to lots of car related companies and maybe suppliers based in the US. So I think it's a good location to be repurposed for truck and semi production. Elon said during Model Y unveil that they are going to start ramping up Tesla Energy so we will see Giga 2 getting filled up this year.

 

[Driver Dave]

wasn't having tweets reviewed ahead of time.

I'm pretty sure there is a difference between tweets and material tweets.

Material tweets are supposed to be reviewed.

If the SEC didn't really make it clear what or what not they considered material, that's their problem.

Elon tweeting a "see how far we've come" tweet is pretty much what everyone startup CEO does. And his numbers where definitely correct enough according to publicly released statements previously.

The SEC may have a strange fixation and problem with Elon, but they really picked the wrong tweet to prove what ever point they are trying to make.

With all the money involved needing Elon to fail from Oil, Auto, Dealers and Trump wild card in office, it is not so far fetched that at some point in the future, it will come out that there was a problem in the SEC that was driving all this nonsense.

Crazy yes, but it makes the most sense really.

 

[EVNow]

The Left should love Tesla because of renewable energy, and often they don’t because they don’t like Elon or they don’t want more cars of any kind or who knows.

I've described earlier, why the left doesn't like Musk. Also, why liberals don't like Musk.

TSLA Market Action: 2018 Investor Roundtable

 

[MP3Mike]

I hear discussions about Gigafactory 1 (Sparks) and 3 (China), but nobody ever says much of anything about Gigafactory 2. That's in Buffalo, right? Seems like I saw a FUDDY piece awhile back about how not much is really happening over there.

If memory serves, the Buffalo Giga is more Tesla Energy related? Are they supply-constrained as well? Are they contributing to the bottom line or a drag on it? Does Tesla have enough cells to go around?

GF2 is all about solar. No batteries/cars.

 

[MarcusMaximus]

We haven't seen the details to know if the limit is before, or after, options. If it is after options then Tesla selling a car for $44,999 wouldn't really help unless everyone wanted a black stripper version. If it is before options then there is some wiggle room.

Easy. All models sold with reverse “gear” disabled. $20k for software upgrade after sale to enable reverse “gear”.

 

[TNEVol]

If they simply lose with no penalty then I expect that they will immediately file a new contempt charge based on some other tweet that they chose more carefully to make sure its materiality is a tougher call. Do you think they would do this, and (whether or not you think they will), would the judge just go along with another show-cause order?

A loss would be completely demoralizing and would involve an interpretation by the Judge of the CD. A specious refilling would raise her wrath against the lawyers but she still has no authority to award damages against the SEC unless authorized by Congress. And I am not an expert in SEC law. The important thing to remember is you can't get damages against the government unless it agrees. Congress must authorize damages in a law.

 

[madodel]

I'm not a lawyer, but this much I do know: in cases like this, you don't sue the SEC, you sue the individuals at the SEC who overstepped the bounds of their government duties and powers. (Violating court rules by introducing new claims and evidence in a reply, not allowing 24 hours for a response, misquoting the very subject of their case in their own legal filing, etc. etc.) The legal theory here is that the government can do no wrong, but the officials can act outside the bounds of their actual government-appointed authority (for instance, by abusing their office for personal vendettas, commiting fraud on the courts, etc.)

Basically you have to prove that their actions were not based on their job duties, and their duties are generally construed very broadly so this sort of case is usually very hard. However, Musk's attorneys are building up this record, starting with the unreasonable "respond by the end of today, Sunday" request and continuing with the citations to the SEC's violation of district and circuit rules on pleadings. Misquoting the actual topic of the suit in a misleading way which favors the SEC is another damning point. Musk does have possibly the best lawyer for fighting the SEC that I could think of.

Follow the money.

 

[Causalien]

Maybe they know people don’t need an insentive to buy a Tesla. It’s already priced low enough. They just want to help out the poor saps that decide to buy a Bolt or a Leaf.

It's more like. They purposely left out BC. Nobody needs BC to win any election. And by setting it at the price they did, they know that the majority of ppl in BC cannot take advantage of it as expensive car is the norm here.

The part they miscalculate is the price. Slight currency valuation changes will be enough to make a Model 3 SR go past the threshold. And CAD to USA is at a pretty low point based on historic data so reversal is likely.

 

[MP3Mike]

German solution was a software limited batttery that could be upgraded after purchase.

No, that isn't what they did. They stripped out lots of software features like the backup camera, navigation, blind spot, internet radio, driver profiles, folding mirrors, homelink, etc. There was also a 20% performance reduction if I recall correctly.

So sure they could do that again, but with the S the margins were there to support stripped cars, I don't think they could sell the Model 3 SR like that and still break even, and people would order it. Eventually most would probably upgrade, but not all.

 

[anthonyj]

The margins on Q3 were just so good too. I don't know if we'll see anything that Good. I'd be more curious about their demand forecasts for m3 and like Ive said previously, their SR margins are critical. If those are good everything else will be even higher of course. (SR+, color options, white seats, etc)

Q3 was supposed to be poopy. Even Elon sent an email to all employees on the last day saying that Tesla was close to turning a profit. $300m profit secured.

See this guy? Master of bear traps (and bull traps apparently, lol). He smoked that weed on purpose, it was scripted. I have a friend who is an expert in body language and that is what she told me (serious). Why would he do this? Maybe a serious investor wanted in at a lower price. Elon can be Elon and nuke the SP without suspicion. The SP recovered quickly on that day too.

I believe the same is happening now. Someone may be accumulating as shorts/hedge funds dump their stock. Tesla/Elon have been suspiciously self destructive lately. Was it really needed to announce in January that Q1 would produce a tiny profit? That letter was filled with unnecessary drama and dropped the stock from $350 to $280 in days.