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

[bkp_duke]

Bill's still a punk. I wonder if ppl have forgotten how much of a douche he was back in his prime. Don't let the gray hair fool ya.

Young Bill Gates Was an Angry Office Bully

He looked for a chance in every meeting to yell at his employees.

www.gq.com

How would Elon know Bill's short position? If Bill shorted when TSLA was 900, it would not be 1.5-2B to close it out, he would be making a ton still.

 

[thesmokingman]

How would Elon know Bill's short position? If Bill shorted when TSLA was 900, it would not be 1.5-2B to close it out, he would be making a ton still.

Iirc musk confronted him and asked him about it.

 

[Prunesquallor]

"We have free night-time electricity rates?"

Tell us more, could be a great fit in many areas!

TXU Energy Media & Press Releases | Latest News & Insights

With an A+ rating from the Better Business Bureau and the top retail electricity provider, get more information about TXU Energy on our Media Newsroom page.

www.txu.com

Only in TX I reckon.

 

[bkp_duke]

Iirc musk confronted him and asked him about it.

Sure, we saw those shared texts. But it 500M would just be the buy-in for some puts, doesn't mean Elon knew the details about what those puts were, when they were opened. Those details make all the difference in terms of how much the position is worth now and would cost Bill to close out.

 

[Bet TSLA]

I can't recall the last time Max Pain did come into play, seems to bear no relevance these days, contrary to exactly the same as the past. I think it's because macro forces are having more of an effect for the last 6 months

Fixed that for you. Macro forces, yeah! People who believe in TA can come up with reasons for everything.

I voted in the poll, despite having approximately zero $TSLA shares - but the $value of my portfolio essentially came from 6 years HODLing and a bit of $TSLA options trading more recently, so I think it still counts!

No, no it doesn't. You have what you have, not what you might once have had. But I'm sure the pollster took into account that many people would be lying about how much they own.

Note that I'm keen to buy back into $TSLA again, but I'm waiting for $500, yes, might never happen, but who knows...

After the split maybe.

 

[OrthoSurg]

Yeah, the key reason I am comfortable with full margin right now is that I think there’s almost 100% probability that Tesla’s earnings in the next two years just on car hardware with the existing, proven S3XY lineup + Cybertruck will be a profound wake-up call for the market, so I have exploited the drop to load up on LEAPS. My earnings estimates for 2023 and 2024 are more than triple Wall Street’s.

I expect Q2 ‘24 to have around 1M vehicle deliveries after Shanghai, Berlin and Austin have had two years to ramp. Cybertruck, Roadster and next-gen Ys will have incredible margins.

Company-wide gross profit per vehicle will be $20-25k, up from $17k last quarter. It sounds crazy but the trend is obvious if you look at the financials with ZEV credits excluded to show core profitability:

	Gross Profit per Vehicle	Gross Margin	OpEx as Percentage of Gross Profit
Q1 2021	$ 10.1	22.0%	87%
Q2 2021	$ 12.6	25.8%	62%
Q3 2021	$ 14.1	28.8%	49%
Q4 2021	$ 14.8	29.2%	49%
Q1 2022	$ 15.7	30.0%	38%

ZEV credits usually add about $1k bonus per car on average.

With rising demand, improving mix and predictable cost reductions on the horizon it is reasonable to expect the margin improvements to continue if not accelerate. Tesla has been posting these results with one hand tied behind its back and none of the benefits of the new factories in a time when the entire car industry is going down in flames.

Simple linear extrapolation using the average increase of $1.4k per quarter across 8 quarters is $11.2k increase expected which goes to $15.7k + $1k ZEV + $11.2k = ~$28k gross profit per car by Q2 ‘24. If the trend accelerates from its rate in the last 5 quarters, gross profit per car could tickle $30k. High trim Cybertrucks, refresh S&X, new model Ys, and more Shanghai could easily drown out lower-margin sales on Model 3 and Fremont Y. For instance: if you sell a Berlin Y for $70k and it costs $38k to make, that’s $32k gross profit. Sell a quad-motor Cybertruck for $90k at $50k cost, that’s $40k profit.

Let’s go with the original more conservative estimates of the profit trend slowing down:

• 1M cars * $20-25k gross profit = $20-25B gross auto profit in one quarter
• $80-100B annualized
• Net income of ~$50-75 per share annualized and still growing fast!

Even at only 50x P/E ratio that puts TSLA at $2,500-$3,750. If the crazy earnings results increase market optimism push TSLA’s P/E back to 100, it’s $5,000-$7,500. Not by 2030; by Q2 2024, without an FSD miracle and with upside on delivery volume, insurance, and energy. Even casual TSLA traders can recognize that the Tesla bull narrative is a lot more believable once Tesla is making way more money than Toyota ever has, with 40%+ gross margin and unstoppable exponential growth still happening amidst multiple highly publicized bankruptcies and/or bailouts for competitors.

For my current trading strategy, this is where LEAPS come in. LEAPS above $1500 have dropped like 20x while the stock has only dropped 0.5x. If and when the stock price goes back up I’ll have far more portfolio value when it returns to ATH than I had originally and then it can go to Mars if we blow past $3,000.

For example, a 16 Jun 2023 $1800 call is going for $28 right now. TSLA at $2000 is a 5th percentile outcome in my opinion by the expiration date, which would give 6x ROI for that option, more than double the stock gains. $3000 is my 50th percentile guess for a whopping 42x ROI, 10x better than the stock.

This is just my thoughts, not investment advice.

Totally agree with you on the exceptional performance of the company. However there is always the possibility of a wallstreet perceived black swan event happening couple months before those LEAPS expiration. There are many things we can think of that couple make the SP collapse on fear, uncertainty and doubt.

I think going all in full leveraged on stock like TSLA has less risk of losing money than investing unleveraged money into RIVN or LCID. But like they say, only invest in the stock market money you are ready to lose.

 

[Gigapress]

Totally agree with you on the exceptional performance of the company. However there is always the possibility of a wallstreet perceived black swan event happening couple months before those LEAPS expiration. There are many things we can think of that couple make the SP collapse on fear, uncertainty and doubt.

I think going all in full leveraged on stock like TSLA has less risk of losing money than investing unleveraged money into RIVN or LCID.

The earnings expectations make me more confident about the black swan scenario.

I still have 65% of my current portfolio value in regular shares. The low-end Q2 ‘24 scenario of $50 EPS annualized would still mean a stock price of $1,500 even with a doomsday 30 P/E ratio. If that situation happened:

1. My remaining shares would’ve appreciated 100%, which would cover the 35% LEAP losses three times over
2. Some on my 2023 LEAPS would’ve probably closed out in the money before the black swan caused a short term crash in 2024
3. I would be even more bullish about TSLA than I am today, so I’d sell half my stock to buy new LEAPS to surf the wave from relentlessly increasing profits

If it all crashes and burns and I lose everything then the worst case scenario is that I get another engineering job and pour savings into investing aggressively for the expected upswing. I’m 27 with no dependents and frugal habits so I can afford the risk. What I can’t afford is to let the opportunity pass me by and to pull out of the fight for a sustainable energy future and safer roads.

The alpha is coming sooner or later. Reality can’t be ignored forever. We had 16 years of losing money. Now we’re making money and it’s a lot less hypothetical.

 

[The Accountant]

Yeah, the key reason I am comfortable with full margin right now is that I think there’s almost 100% probability that Tesla’s earnings in the next two years just on car hardware with the existing, proven S3XY lineup + Cybertruck will be a profound wake-up call for the market, so I have exploited the drop to load up on LEAPS. My earnings estimates for 2023 and 2024 are more than triple Wall Street’s.

I expect Q2 ‘24 to have around 1M vehicle deliveries after Shanghai, Berlin and Austin have had two years to ramp. Cybertruck, Roadster and next-gen Ys will have incredible margins.

Company-wide gross profit per vehicle will be $20-25k, up from $17k last quarter. It sounds crazy but the trend is obvious if you look at the financials with ZEV credits excluded to show core profitability:

	Gross Profit per Vehicle	Gross Margin	OpEx as Percentage of Gross Profit
Q1 2021	$ 10.1	22.0%	87%
Q2 2021	$ 12.6	25.8%	62%
Q3 2021	$ 14.1	28.8%	49%
Q4 2021	$ 14.8	29.2%	49%
Q1 2022	$ 15.7	30.0%	38%

ZEV credits usually add about $1k bonus per car on average.

With rising demand, improving mix and predictable cost reductions on the horizon it is reasonable to expect the margin improvements to continue if not accelerate. Tesla has been posting these results with one hand tied behind its back and none of the benefits of the new factories in a time when the entire car industry is going down in flames.

Simple linear extrapolation using the average increase of $1.4k per quarter across 8 quarters is $11.2k increase expected which goes to $15.7k + $1k ZEV + $11.2k = ~$28k gross profit per car by Q2 ‘24. If the trend accelerates from its rate in the last 5 quarters, gross profit per car could tickle $30k. High-trim Cybertrucks, refreshed S&X, new model Ys, and more Shanghai could easily drown out lower-margin sales on Model 3 and Fremont Y. For instance: if you sell a Berlin Y for $70k and it costs $38k to make, that’s $32k gross profit. Sell a quad-motor Cybertruck for $90k at $50k cost, that’s $40k profit.

Let’s go with the original more conservative estimates of the profit trend slowing down:

• 1M cars * $20-25k gross profit = $20-25B gross auto profit in one quarter
• $80-100B annualized
• Net income of ~$50-75 per share annualized and still growing fast!

Even at only 50x P/E ratio that puts TSLA at $2,500-$3,750. If the crazy earnings results cause market optimism to push TSLA’s P/E back to 100, it’s $5,000-$7,500. Not by 2030; by Q2 2024, without an FSD miracle and with upside on delivery volume, insurance, and energy. Even casual TSLA traders can recognize that the Tesla bull narrative is a lot more believable once Tesla is making way more money than Toyota ever has, with 40%+ gross margin and unstoppable exponential growth still happening amidst multiple highly publicized bankruptcies and/or bailouts for competitors.

For my current trading strategy, this is where LEAPS come in. LEAPS above $1500 have dropped like 20x while the stock has only dropped 0.5x. If and when the stock price goes back up I’ll have far more portfolio value when it returns to ATH than I had originally and then it can go to Mars if we blow past $3,000.

For example, a 16 Jun 2023 $1800 call is going for $28 right now. TSLA at $2000 is a 5th percentile outcome in my opinion by the expiration date, which would give 6x ROI for that option, more than double the stock gains. $3000 is my 50th percentile guess for a whopping 42x ROI, 10x better than the stock.

This is just my thoughts, not investment advice.

Agree. The valuation on auto alone will be enormous.
This is what many people get wrong. They think that one needs to assume grandiose scenarios for FSD, Robotaxi, Energy, etc to justify a high valuation for Tesla. What they fail to see is that Tesla has rewritten the rules for auto design, manufacturing and distribution. Tesla is not your father's auto company (Ford, GM, VW), with inefficient production methods, high number of parts, poor tech, a costly dealership network, wasted R&D and fat SG&A costs.
With a First Principles approach, Tesla has made auto manufacturing SEXY again (was it ever sexy?).

Then you add FSD, Robotaxi, Energy, Insurance (and perhaps a new financing arm) and the valuations arrive at something never before seen in any industry.
Buckle your chin strap . . . .this is going to be an awesome ride.

 

[capster]

Agree. The valuation on auto alone will be enormous.
…
Then you add FSD, Robotaxi, Energy, Insurance (and perhaps a new financing arm) and the valuations arrive at something never before seen in any industry.
Buckle your chin strap . . . .this is going to be an awesome ride.

You forgot the Attack Lawyers. They’re going to be a profit center.

 

[Silent Ludicrosy]

FSD beta 10.12 is rolling out to the non-YouTubers now.

 

[SunCatcher]

Not in 2011, but at least 3/4 years ago. I think further back than that I said it, but don’t recall exactly. I claim no maths involved, pure instinct.

One of the first spine tingler times was way back when Elon got mad because the OEMs weren’t responding in the manner he thought they would. He was in Europe (I think Norway or the Netherlands, but might have been Germany - someone here will remember where) and he said (paraphrased) - ‘we’ll force them to make EVs or we’ll put them out of business’.

I also had another inkling when he first mentioned Tesla would have their own battery factory if someone else didn’t do it soon. I also remember he had to say that publicly three/four times before anyone picked up on it and then as usual he was mocked. The TMC board was full of posters claiming it couldn’t be done, a factory would cost upwards of $20B (yeah, you know who you are, and I know you still lurk here - how’s it feel being so wrong all these years?).

So, yeah. My gut says bigger than anyone can really wrap their brain around because it would mean a complete upheaval of the world as we know it. #epiconaginormousscale.

There are many, MANY early examples out there showing a younger Elon Musk doing his best to educate the public as well as governmental bodies large and small, in regards to renewable energy possibilities and changing the way things have always been done. He has paid his dues more than any human being I can think of, towards making this world a better place. History will show him to be THE foremost thinker of our times BAR NONE. And the legacy powers that stand in his way are of greater magnitude and immovability than anyone has ever faced. But ever onwards he moves, with his intentions of changing things for the better. So much Respect.

 

[The Accountant]

Remember when the bears claimed that Tesla loses money on every car they make?
Well in Q1, they had an EBIT* Margin of 19.2%; higher than any other auto manufacturer.

Twitter Source

*EBIT is Earnings before Interest and Taxes (very similar to Operating Profit)

 

[Cosmacelf]

The next series of factories will presumably be announced in the next year or so.

Elon said this year.

Have you somehow forgotten about Elon time?

 

[Ratanpara]

 

[Ratanpara]

Is he canceling Twitter deal ?

 

[Pezpunk]

No.

 

[StarFoxisDown!]

All these folks talking about bringing others into this thread and advertising in the NYT?

Shhhhhhhh

Can you imagine the amount of whining and complaining from newbies when TSLA does it’s annual 25-50% drop????


Dear lord I couldn’t live through that much annoyance

 

[Gigapress]

Whenever - whenEVER - I find a post that is noteworthy, and another participant has not already enunciated that which I find commendable, I comment on it. I do not use lazy tags like “Like!” “Funny!””Disagree” and so forth - mindless drivel that is Twitterworthy. Nor - as already bombed into submission by another Mod - a “+1” and so forth.

Now, @Gigapress is correct in that there are many frustrations with this platform. The administrators are aware not only of most or all of them, but a myriad of other glitches and hair-pullers to which only they are privy.

Two solutions that immediately come to mind regarding the points he brought up:

1. ”…more than half the space of a short comment”. Well, find more to write about - high quality writing, of course - thereby increasing the numerator. As Gertrude Stein told Hemingway “Remarks are not literature”.

2. Stop using those lazy-tag icons. SAY what it is with which you disagree.

A general principle of UI design is that when human nature and the UI combine for suboptimal result, the UI is the easier factor to change.

 

[StarFoxisDown!]

Agree. The valuation on auto alone will be enormous.
This is what many people get wrong. They think that one needs to assume grandiose scenarios for FSD, Robotaxi, Energy, etc to justify a high valuation for Tesla. What they fail to see is that Tesla has rewritten the rules for auto design, manufacturing and distribution. Tesla is not your father's auto company (Ford, GM, VW), with inefficient production methods, high number of parts, poor tech, a costly dealership network, wasted R&D and fat SG&A costs.
With a First Principles approach, Tesla has made auto manufacturing SEXY again (was it ever sexy?).

Then you add FSD, Robotaxi, Energy, Insurance (and perhaps a new financing arm) and the valuations arrive at something never before seen in any industry.
Buckle your chin strap . . . .this is going to be an awesome ride.

By far the most annoying thing about arguing valuation is the “Tesla is a auto maker” as an excuse.

Take away all labels and just look at gross margin, operating margin, net income, revenue/earnings growth, etc…. And I guarantee you most people wouldn’t be able to distinguish Tesla from Nvidia or Apple or AMD.

In fact….that’s how I usually finish the debate with someone that questions Tesla’s valuatio. It never, and I mean never, fails to stump the person

 

[thesmokingman]

By far the most annoying thing about arguing valuation is the “Tesla is a auto maker” as an excuse.

Take away all labels and just look at gross margin, operating margin, net income, revenue/earnings growth, etc…. And I guarantee you most people wouldn’t be able to distinguish Tesla from Nvidia or Apple or AMD.

In fact….that’s how I usually finish the debate with someone that questions Tesla’s valuatio. It never, and I mean never, fails to stump the person

Concur. The thing that's amazing to me is that those companies are the cream of the crop and Tesla is right there with them. Hell I'd even go as far as to say Tesla is tackling the much harder terrain compared to the chips. An interesting tidbit is that the top engineers from those companies trade positions all the time. Take Jim Keller who led the team at AMD back in the 90s that gave us the K7/K8 cpus that demolished Intel and AMDx64 instruction set that we all use today, its that ubiquitous. He then went to Apple, where he led them to their first ARM cpu win. Keller then went back to AMD leading the team to design the Zen cpu architecture that would later end up in Teslas. But wait, Keller actually lands at Tesla after the Zen cpu, and helps Tesla with their Neural Network design after which headed to Intel for a brief stint. lol, somehow this turned into a post about Jim Keller.... but yea cool lil meandering point about the people that connect these companies and their trajectories.

I didn't mention Nvidia, but between AMD, Nvidia, and Intel they poach engineers and people on the regular.