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

[pdq]

So I think if the judge had any inclination to rule against Elon, she'd have insisted on an evidentiary hearing and asked him. I find it hard to imagine any scenario in which she'd rule against Elon without taking his "intent" into account.

(Anyway, keep in mind that I'm a Tesla fan who is not a lawyer and that I could be wrong about this, and that court proceedings are often unpredictable. Also heads-up to @TNEVol who is a lawyer, who is much more cautious in his assessments of this case and who might disagree with me here.)

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Fact Check: further to your last paragraph above, be aware that every law is open to interpretation, and I've seen numerous instances where the defense attorney argues why something should be interpreted in a given manner base on case law, and seen the judge say "No, I don't agree".
There are 2 things that you always need to remember. First, it's never over until the fat lady sings. Second, is that you NEVER want to thumb your nose at a judge and not do what they say to the letter of the law, as there are 10 possible outcomes and 9 of them are bad to really bad.

 

[Fact Checking]

Wondering whether this source dried up as the reason or result of Fred turns to the dark side.

I see two main possibilities:

1. It dried up because the source had illegal access, which hole was plugged.
2. It dried up because the source didn't want to share Q1 data.

Had it only been a "retaliatory" action against Fred the source would have leaked it to some of the other EV news sites, right? But production leaks stopped entirely in Q1. (So far.)

Which is good in several ways - this means shorts have less information to prepare for the nullification of the Q1 results. Wall Street analysts also have less data to game FactSet "expectations".

 

[neroden]

Semi OT

US RR coal carload traffic is down 6.6% in the first 12 months of 2019 vs. 1.5% decline for all RR traffic including coal. Coal is 15.2% of the total. Progress. Not long ago BNSF CEO Matthew Rose was quoted as saying in 20 years coal traffic on US RR's will be "extinct". Unlike optimism I read in this forum, I suspect coal will still be used to make coke to make steel.

The method to avoid coal in steelmaking is known. One step has already been commercialized on a massive scale: the use of electric arc furnaces. They're cheaper than the Bessemer / basic oxygen processes so they've been taking over for decades. Because it costs a lot to build a new steel mill, a bunch of the old ones are still operating, but nobody's building new basic-oxygen-process steelmills, and they're the first to close when there's a downturn in demand. (Existing electric-arc-furnace is cheaper than existing basic-oxygen process, and new electric-arc-furnace is cheaper than new basic-oxygen-process, but new electric-arc-furnace may be more expensive than existing basic-oxygen-process.)

In order to feed electric arc furnaces with ore rather than recycled material, you need something called "direct reduced iron" (DRI). This is manufactured one of three ways: using coal to generate carbon monoxide, using natgas to generate carbon monoxide, or using hydrogen. The coal method is cheaper than the Bessemer / basic oxygen processes. The natgas method is cheaper than the coal method and has fewer issues with chemical contaminants, so it is slowly displacing the coal method. DRI plants using hydrogen are currently experimental-scale, but full-scale plants are being developed in Sweden and Australia and one other place as we speak.

 

[Tslynk67]

What happens to those small holders' MXWL shares if they sit on their hands and the deal closes? (Some may have bought MXWL as a part of a basket of high risk lottery tickets that would pay-off "bigly" if just a few survived, and are disappointed that their MXWL ticket is being pre-empted before the first numbered ball lands.)

Last time I looked, there were 10million shares shorted, these will need to be covered, so perhaps the SP will recover a bit from that

 

[Fact Checking]

Second, is that you NEVER want to thumb your nose at a judge and not do what they say to the letter of the law,

I presume here you are referring to Elon here? Elon followed both the letter and the spirit of the settlement contract and court order, if fact both he and Tesla did significantly more to comply than the settlement required.

The only reaction Elon's conduct should earn from the judge is approval.

I agree that it's not over until the court rules.

 

[humbaba]

Not they have not tried to make one, they have not put one on the market.

Well, technically they did put an EV version of the RAV4 on the market. But that flirtation simply underscores Toyota's unwillingness to produce EVs -- they were never made in meaningful volume. Interestingly, the second iteration used Tesla supplied drive trains.

Someone else may have a better idea if the RAV4 was an experiment to avoid buying ZEV or was otherwise a compliance vehicle. Certainly, Toyota is not preparing a solid state battery based EV for market (still not out of research stage) and there are zero indications they are preparing any other EV for market (on the contrary, they have stated solid state only). If they did it would be surprise for reasons already stated.

 

[neroden]

So how is Lyft at $25bn and Tesla at $48bn now?!?

Dumb money. I'd short Lyft if I were the shorting type (though Lyft may actually do OK; it's Uber which is guaranteed doomed, what with their "hide from the cops" app and program for covering up rapes).

 

[BioSehnsucht]

You are 100% right, I found this older article:

Tesla Model 3 control computers will reportedly be built by Pegatron Technology, says report

“The sources pointed out that Tesla used to manufacture its control computer in house and only procure motherboards from outside makers. However, since the company’s Model 3 is seeing much stronger demand, Tesla has decided to also outsource the control computer’s assembly.

Tesla originally outsourced its car-use motherboard orders mainly to Foxconn Electronics (Hon Hai Precision Industry) and Jabil, but has shifted its orders from Foxconn to Quanta and Pegatron, after Foxconn turned to cooperate with China-based players to develop electric vehicles (EV).”
​

I stand corrected!

Some weekend OT, just for the further education of anyone interested as to what goes into building such things (and to some extent why I reached the conclusion I did)

Tour of a PCB factory :

Tour of motherboard factory (PCBs come from elsewhere such as a place like the first video, here they get components placed & etc) :

Both of these sorts of processes are only really affordable at large scale, which is why on that argument alone I didn't think Tesla would produce boards in-house. Nothing technical is stopping Tesla from bringing it in house, but the scale required to do so cheaper than outsourcing wouldn't be there, not to mention getting the right people to run it, etc. Outsourcing it was the only obvious conclusion to me Outsourcing to the USA would be cheaper than insourcing most likely, and outsourcing to Asia definitely cheaper.

 

[Mokuzai]

Well, technically they did put an EV version of the RAV4 on the market.

Through a local EV group I know of somebody that owns a Rav4 EV. Few days ago he reported hitting 86,000 miles.

 

[Artful Dodger]

I haven't seen the note, but I presume they mean minimum of $1.5-2bn cash at quarter end to allow for intraquarter inventory build.

Haha no, they mean "we want our $2B equity raise (dammit) and we'll never give it up".

Cheers!

 

[neroden]

I agree that it's a concern and no thanks to FUDsters. A co-worker recently asked about how I can get my car serviced since Tesla is heading for bankruptcy.

Did you roll your eyes and tell him that Tesla is massively profitable and has billions of dollars in the bank and not to believe the disinformation?

 

[TradingInvest]

I think the take rate went up substantially as soon as "FSD" included a number of currently-functioning useful driver assist features, which it does now and didn't before. I mean, this makes sense, right?

I think that's one of reasons. Maybe EU buyers are less influenced by the FUD.

Looking at the $5k option, the first group of functions is already there, the second group is coming later this year. It makes sense to order now instead of buying later for $7k. In the past, when they talked about FSD, it sounded like who knows when it will be available. Many people decided to wait. Now it says these features are coming later this year, it seems they are confident they can get the features done soon. That would be a lot of fun even though it's not "sleep in the back seat" kind of FSD yet.

Full Self-Driving Capability

• Navigate on Autopilot: automatic driving from highway on-ramp to off-ramp including interchanges and overtaking slower cars.
• Autopark: both parallel and perpendicular spaces.
• Summon: your parked car will come find you anywhere in a parking lot. Really.

Coming later this year:

• Recognize and respond to traffic lights and stop signs.
• Automatic driving on city streets.

 

[neroden]

If they deal closes they get TSLA shares just like everyone else. That's why a lot of retail investors don't bother to tender, from experience they know the deal almost always closes anyway...

This time it ain't gonna close if they don't tender.

 

[tinm]

Apparently Lyft is worth 25 billion dollars and people can't even see Tesla could easily take over the entire ride hailing/sharing world in 2 or 3 years.

Realistically, it would take longer than that for Tesla if for no other reason than it's going to take 2-3 years for them to fix their internal and company/customer communications challenges, and that would absolutely be a prerequisite to competing successfully in the ride hailing/sharing market. Can you imagine if the Tesla of today launched a car sharing network tomorrow?

• "I tried to request a Tesla using the app but it's been three hours and it's getting dark and I'm starting to freeze alongside the road, so I went with Lyft instead, they were here in 5 minutes"
• "I put my Model 3 up on the network but I haven't gotten a response yet from my Network Specialist and it's been a week already"
• "I emailed support regarding getting paid for the last 90 days of usage of my Tesla Network car, and they say they have no record of it being on the network, and now I don't know what I'm going to do"

Ok maybe a little harsh. But not that harsh.

I'm all for the Tesla Network, don't get me wrong, but I am highly skeptical Tesla has the skills or competence to pull off a successful customer experience. The cars, fine. The network infrastructure, fine. But communications and customer experience? Tesla gotta fix itself or it would be facing a world of hurt.

 

[TradingInvest]

Wondering whether this source dried up as the reason or result of Fred turns to the dark side.

My speculation is VW or GM offered them substantial ads money. Those two firms combined have almost $10B marketing budget. Money talks.

 

[-=buzz=-]

Contrary to the prevailing view here on the board, both bear and bull analysts who spoke out in the last two weeks share the view that Tesla will miss the consensus Model 3 deliveries. It feels like a repeat of Q3, 2018.

How can Tesla miss the consensus if the consensus is, that Tesla will miss the consensus???
All those analyst ratings one week before delivery numbers or ER are pure BS. It's pure guessing. Every other moment in the whole year has more acurate data available to make an asumption on the state of the company!!

 

[humbaba]

Realistically, it would take longer than that for Tesla if for no other reason than it's going to take 2-3 years for them to fix their internal and company/customer communications challenges, and that would absolutely be a prerequisite to competing successfully in the ride hailing/sharing market. Can you imagine if the Tesla of today launched a car sharing network tomorrow?

• "I tried to request a Tesla using the app but it's been three hours and it's getting dark and I'm starting to freeze alongside the road, so I went with Lyft instead, they were here in 5 minutes"
• "I put my Model 3 up on the network but I haven't gotten a response yet from my Network Specialist and it's been a week already"
• "I emailed support regarding getting paid for the last 90 days of usage of my Tesla Network car, and they say they have no record of it being on the network, and now I don't know what I'm going to do"

Ok maybe a little harsh. But not that harsh.

I'm all for the Tesla Network, don't get me wrong, but I am highly skeptical Tesla has the skills or competence to pull off a successful customer experience. The cars, fine. The network infrastructure, fine. But communications and customer experience? Tesla gotta fix itself or it would be facing a world of hurt.

Well, if you mean a network where Tesla owners can participate -- yeah, I agree with you.

But if you mean developing the back-end for managing/scheduling/assigning cars to riders -- I don't think it would take 2-3 years. Given the "move fast/break things" mentality it would likely have a rough opening, but I think they could get it working in less than that time frame.

If you mean they cannot even develop a ride-hailing app -- no, I don't agree. That's the easy part: just a front-end really to the rest. Front-ends aren't that hard, its developing and scaling the backend that would be work.

The truly hard part is getting FSD to the point where it would work for ride hailing and no safety driver. That I don't see in 2-3 years, not a chance.

 

[S3XY]

**********************************************************************************
Fact Check: further to your last paragraph above, be aware that every law is open to interpretation, and I've seen numerous instances where the defense attorney argues why something should be interpreted in a given manner base on case law, and seen the judge say "No, I don't agree".
There are 2 things that you always need to remember. First, it's never over until the fat lady sings. Second, is that you NEVER want to thumb your nose at a judge and not do what they say to the letter of the law, as there are 10 possible outcomes and 9 of them are bad to really bad.

And number 3, Never go in against a Sicilian when death is on the line!

 

[ggr]

**********************************************************************************
Fact Check: further to your last paragraph above, be aware that every law is open to interpretation, and I've seen numerous instances where the defense attorney argues why something should be interpreted in a given manner base on case law, and seen the judge say "No, I don't agree".
There are 2 things that you always need to remember. First, it's never over until the fat lady sings. Second, is that you NEVER want to thumb your nose at a judge and not do what they say to the letter of the law, as there are 10 possible outcomes and 9 of them are bad to really bad.

I guess someone should point out that Elon didn't thumb his nose at the judge (even if you think he did thumb it at someone) because Elon, Tesla and the SEC negotiated a settlement. The most the judge did was approve that settlement, and it isn't clear that the judge even agreed with it in the first place.

 

[Chickenlittle]

How can Tesla miss the consensus if the consensus is, that Tesla will miss the consensus???
All those analyst ratings one week before delivery numbers or ER are pure BS. It's pure guessing. Every other moment in the whole year has more acurate data available to make an asumption on the state of the company!!

Shh don’t tell anyone