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

[StarFoxisDown!]

Quite worried at the possibilities of how the Twitter pullout may play itself out in the Delaware courts. Ideal case, there's a negotiated breakup fee in the billion-dollar range and everyone just pretends the whole thing was a bad dream. That would be about as good as we can expect; the Twitter purchase was always a silly and unnecessary distraction for Musk, and on the surface I'm glad to see him change his mind on it.

What I'm worried about is that Twitter is able to force the sale to complete, and that Musk's financiers are at the same time somehow able to pull out of the deal, leaving him on the hook for a loss in the 15 billion dollar range due to the markets tanking right after the deal went through. That would be very bad for his ownership stakes in Tesla and SpaceX. Don't know enough of the judicial details to know if this is a likely scenario though.

Twitter's board has a huge incentive to force the sale, although it's not in Twitter's long-term interest to have an owner that doesn't want to own it. Twitter's shareholders do have such an interest though, since they stand to instantly gain ~30% of today's Twitter stock price.

The 1 billion dollar breakup fee is for external circumstances, it's not a "walk away if you change your mind" fee. Twitter seems to have a decent case here, and it will definitely play out in court.

Have fun stressing over a single court case that has forced the buyer to actually proceed with the buyout? Be sure to ignore every other court case where the buyer wasn’t forced to go through with the acquisition

I guess you’re also ignoring the dynamics and basis for the pull out are completely different. Might want to actually look into that one case that every Tesla bear/teslaq/media are going to use as a narrative first, on your own due diligence, before you start overly worrying that Elons gonna be forced to buy Twitter.

Also Elon can’t be “forced” to come up with an additional 15 billion to complete the deal when the deal was accepted on terms of certain funding conditions. If anything, the loss of funding from banks/private investors would give Elon a second justification to walking away

 

[Prunesquallor]

Some ill will might be legit if it is for things like moving the HQ from CA (that literally birthed Tesla) to TX (a state that is very unfriendly to the left and prohibits direct EV sales) because of taxes? Or because of covid policies? Either way not a lot of loyalty to a state whose high tax rates and spending and government controls (air pollution restrictions) were literally the basis for the creation of Tesla. Without CA and its very active govt there would be no Tesla. Period no if ands or buts. So yeah...there is some legit beef but it is not what seems to drive the really lib people crazy so go figure. He doesn't speak out against any of the TX politicians but slams the dems in CA. They are conducting a genocide in China but he does nothing but praise China. Yeah...there are some legit things to complain about.

Texas is very friendly to businesses building large labor-intensive infrastructure (taxes, regulations, etc). California not so much. California may be a good market for Tesla products, but it’s not such a good climate for production of those products. Loyalty does not extend to stifling growth.

Austin is a very liberal, diverse metro area (as is Houston, many are surprised to learn). Elon has stated that he thought it was one of the few locations the Bay Area workforce would be willing to relocate to.

edit: add the rare combination of large areas available for industrial development with a high-tech workforce and major university.

 

[nativewolf]

In fairness to @nativewolf, your post illustrates a good part of the problem. The market isn't even aware Tesla is a good 30-40% cheaper than the other nationwide installers, and 10-20% cheaper than most local installers. We want no sales.....but we also want some level of awareness.

He's got a point, there are major problems. They're just not problems you can reach out and solve like improving the drivetrain of an EV sedan or scaling a factory.

People see technology capable of solving problems sitting DIRECTLY ADJACENT to homeowners who desperately want the technology. It's super frustrating that we can't bridge that simple gap, but believe me there are reasons Elon can't just snap his fingers and make it all flow.

Well said. I can't even get a solution on my roof that pays back and looks good. That's the frustration. I think we need much more disruption, much more. Much faster. I think Tesla is the best hope but I see a dearth of management focus. I count on Tesla to disrupt.

 

[nativewolf]

Texas is very friendly to businesses building large labor-intensive infrastructure (taxes, regulations, etc). California not so much. California may be a good market for Tesla products, but it’s not such a good climate for production of those products. Loyalty does not extend to stifling growth.

Austin is a very liberal, diverse metro area (as is Houston, many are surprised to learn). Elon has stated that he thought it was one of the few locations the Bay Area workforce would be willing to relocate to.

And Tesla could never have started in TX. Never. It wasn't just that CA is a good place to sell Tesla products it was that it was the market maker. The CA govt created Tesla. The govt being an expression of the interest of the citizens of the state. They wanted alternative clean and sustainable solutions, the govt tried every which way to create them. Several of them worked and together they created the environment that fostered Tesla. 'There is some mythology that it was EM. It wasn't. It was CA and be it Tesla or another entity the basic idea that you could create a fast fun long range EV had been proven and that inspired EM and others. Tesla quickly sucked all the air out of the room and good for Tesla, it was a great combination but without the ecosystem you'd have never had Tesla.

 

[CorneliusXX]

I agree, but then it would probably help if he didn't publicly announce his intention to vote for actual fascist dystopians, who are the very opposite of socially liberal! I understand the idiot few on the left riled him into it, but this just serves to prove their point (in their eyes)

Not unreasonable, but at least to date Elon has advocated for the less fascistical (tm) members of the party from what I can tell. Just because he went republican doesn't mean that he went from hardcore left to hardcore right, more that for him the balance of preferences went from moderately left to moderately right within the framework of the 2 party system. The socially left beliefs are currently outweighed by some of the economic right beliefs - At least from my read of things.

 

[DriveMe]

2022 Annual Meeting drawing result is out:
received mine on 8:30pm Eastern

View attachment 826539​

I received one too! Found mine in the junk mail folder!

Very excited about this trip! Already booked the flights and the hotel in Austin. And I even have a Tesla Model 3 reserved at Hertz!

 

[ToTheStars]

Good on you sir! Since Tesla has figured out how to do something as innovative as the octovalve and refined a sales and service model for autos that scales from China to Australia to Canada to UK I would have hoped they could figure out energy. It has not scaled here in the USA and basically does not exist in other countries. There has been no effort or attention to disrupting and improving the market in the same way that Tesla has disrupted and improved the Auto side of things. I looked at Tesla solar panels out of curiosity and your strong recommendations. $37k for our house here in VA, 11.5 for the powerwall. Since we only use $200 a month of electricity I can't see how this pays back. I haven't asked for any solar panel quotes so I don't know if that's fair or not but there is no way that make sense in terms of payback.

48000/200/12=20 years, right? That isn't too bad for taking a part in accelerating the worlds transition to sustainable energy.

 

[mongo]

Ahh well that's interesting...so in Nov they were planning on an 8GWh run rate but were planning on using 2170s? I don't see it but that's interesting and thanks for that tidbit.

You're confusing/ conflating or being obtuse.
100GWh is the run rate (manufacturing capacity) for 4680 cell production.
Vehicle mix, including 2170, is a separate thing.
Tesla (TSLA) Q2 2021 Earnings Call Transcript | The Motley Fool

Andrew Baglino -- Senior Vice President, Powertrain and Energy Engineering


On the reliability side, as Elon mentioned, we have successfully validated performance and the lifetime durability of the 4680 cells produced in Kato, and we're continuing ongoing verification of that reliability. We're actually accruing over one million equivalent miles on our cells that we produce every month. In our testing activities, the focus on that is very clear. We want high-quality cells for all of our customers.



And yeah, we're just focused on the unlucky limiting steps in the facility. And with the engineers focused on those few steps remaining, we're going to break through as fast as possible.

Elon Musk -- Chief Executive Officer


Meantime, we have a massive amount of equipment on order and arriving, for the high-volume cell production in Austin and Berlin. But obviously, given what we've learned with the pilot plant, which is in Fremont, which is really quite a big plant by most standards, we will have to modify a bunch of that equipment. So it won't be able to start immediately. But it seems like -- Andrew, correct me if I'm wrong, but we think, most likely, we will hit an annualized rate of 100-gigawatt hours a year, sometime next year.

Andrew Baglino -- Senior Vice President, Powertrain and Energy Engineering



We'll have all the equipment installed to accomplish 100-gigawatt hours, and it's possible that by the end of the year, we will be at an annualized rate of 100-gigawatt hours by the end of the year.

Elon Musk -- Chief Executive Officer


Yeah, I mean my guess is more likely than not, above 50% of reaching 100-gigawatt hours a year by the end of next year on the annualized rate, something like that.

Andrew Baglino -- Senior Vice President, Powertrain and Energy Engineering



Yup.

 

[Prunesquallor]

And Tesla could never have started in TX. Never. It wasn't just that CA is a good place to sell Tesla products it was that it was the market maker. The CA govt created Tesla. The govt being an expression of the interest of the citizens of the state. They wanted alternative clean and sustainable solutions, the govt tried every which way to create them. Several of them worked and together they created the environment that fostered Tesla. 'There is some mythology that it was EM. It wasn't. It was CA and be it Tesla or another entity the basic idea that you could create a fast fun long range EV had been proven and that inspired EM and others. Tesla quickly sucked all the air out of the room and good for Tesla, it was a great combination but without the ecosystem you'd have never had Tesla.

I don’t disagree, but you questioned the move of HQ to Austin. I gave you the reasons why. (If you want, add to that an elected official publicly cursing Elon). Also, can you envision the Austin factory being built in CA? Keep in mind the immense tracts of land Tesla bought near the Giga. There are obviously very big plans for expansion of HQ and manufacturing there.

Tesla outgrew California.

 

[nativewolf]

Elon is trying to not pay the billion here. Twitter will sue to enforce the terms. Odds will grow that Elon pays the billion and walks away. But he could fight it

No he can't just pay a billion and walk. That's not how it was written. Twatter is suing to complete the deal and they have a very good case. EM has no data to estimate that Twatter is a bot storm. Since only Twatter has the data EM has no data to backup canceling the deal, ie EM has no idea how many bots are running the show at Twatter, only Twatter has the data so EM is just guessing. A guess won't get you out of a deal.

EM has Skadden on the deal side of things and they are very competent deal maker counsel but EM would be a terrible client (or a great one if you want billable hours). Simpson thatcher and Wilson sonsenie are Twitter counsel. Wilson because they are silicon valley and SImpson would be the smart Wall street $ counsel. I expect Simpson to bring in serious Delaware counsel to close a deal, not sure what deal Twitter really wants ? Maybe a multi billion dollar breakup fee or close the deal at the agreed upon price. Not sure.

The space between nothing and Twitter selling at the agreed upon price is $44 billion. Every dollar of that is negotiable as is every outcome (EM on board, EM just paying breakup fees in the multi billions, EM buying Twatter). For deal making counsel this is where things get fun and this is where the art of the deal is expressed. They'll be good stories about the next few months/years. One thing is for sure is that Twatter counseled up for this event weeks ago. They are presenting facts and doing so preemptively which indicates the board wants to force the sale. That's generally not a good sign for the opposing side of things.

 

[nativewolf]

You're confusing/ conflating or being obtuse.
100GWh is the run rate (manufacturing capacity) for 4680 cell production.
Vehicle mix, including 2170, is a separate thing.
Tesla (TSLA) Q2 2021 Earnings Call Transcript | The Motley Fool

No I get that. Not conflating. I don't see that if you can produce at 8GWh run rate for 4680 that you'd ever look to the 2170 products. However, maybe it is costs? Maybe the 2170 cells are so cheap?

 

[SarahsDad]

This Twitter thing might take a while - The LVMH/Tiffany acquisition was a somewhat similar situation that took over a year... and still went through.

A recent case where LVMH tried to back out a deal to buy Tiffany. They did end up getting a discounted price of $15.8B vs. the agreed upon $16.2B.

LVMH seals purchase of Tiffany after takeover fight

LVMH said it was installing new leadership at the US jeweller, including a son of its chief executive.

www.bbc.com

It's now a Harvard Case Study:

https://hls.harvard.edu/content/uploads/2021/04/LVMHs-Bid-for-Tiffany-Co.pdf

 

[nativewolf]

48000/200/12=20 years, right? That isn't too bad for taking a part in accelerating the worlds transition to sustainable energy.

Bad use of money. It makes much more sense to invest in a solar farm and get your power that way. 20 years is assuming no interest..if you assume a 5% rate of return the numbers are really bad.

 

[JRP3]

Yeah, it's wild. Elon is clearly socially liberal in nearly every metric yet there is a vocal minority on the left that treats him like he's some fascist dystopian monster. It's difficult to even see some level of reasonableness in their position.

That tells you something about Elon's messaging though, especially recently as was pointed out above.

 

[Paracelsus]

Some ill will might be legit if it is for things like moving the HQ from CA (that literally birthed Tesla) to TX (a state that is very unfriendly to the left and prohibits direct EV sales) because of taxes? Or because of covid policies? Either way not a lot of loyalty to a state whose high tax rates and spending and government controls (air pollution restrictions) were literally the basis for the creation of Tesla. Without CA and its very active govt there would be no Tesla. Period no if ands or buts. So yeah...there is some legit beef but it is not what seems to drive the really lib people crazy so go figure. He doesn't speak out against any of the TX politicians but slams the dems in CA. They are conducting a genocide in China but he does nothing but praise China. Yeah...there are some legit things to complain about.

Yes, I agree - it was because there was a very active govt at that time..........and because the Governor at that time that......that Tesla ended up in the Fremont plant instead of New Mexico. Not sure if you have simply forgotten some very important Tesla history, or if you might be trying to re-write Tesla history with too much emphasis (and perhaps a little Cognitive Dissonance) on the values you place on D's and R's.

Schwarzenegger seizes Tesla Motors plant for California​

Governator sings the body electric​

Lewis PageTue 1 Jul 2008 // 11:43 UTC

California governor Arnold Schwarzenegger - famed for his uncanny resemblance to an electric machine clad in an unrealistic fleshy cloak - has managed to ensure that noted electrical car company Tesla will base future manufacturing in areas under his rule.
Tesla Motors, maker of the well-known but troubled $100k Roadster battery supercar, had planned to produce more modestly-priced cars in New Mexico.
"To see this company build a plant in New Mexico drove me absolutely insane," Schwarzenegger said, quoted by Reuters. "My administration ... does not like to lose."
California managed to secure Tesla's new plant by offering a tax exemption on manufacturing equipment to zero-emissions vehicle builders. Tesla is presently headquartered in California, and has its design team there, but much of the assembly on the present Roadster is done in the UK by Lotus (its body is basically an Elise)..............

Schwarzenegger seizes Tesla Motors plant for California

Governator sings the body electric

www.theregister.com

and it was this same Governor that continued to be extremely active with advancing Tesla and the future of EV's throughout his term, and even in his most recent Super Bowl ad appearance

• ARNOLD SCHWARZENEGGER AND TESLA MOTORS ANNOUNCE THE PRODUCTION OF A 4-DOOR SEDAN​

  Print
  Governor Arnold Schwarzenegger announced his support for Tesla's next product, a 4-door, 5-passenger sedan which will be manufactured at a facility in the state of California.
  
  Previously, this vehicle was scheduled for production in Albuquerque, New Mexico. However, the company decided that it would be highly advantageous to build manufacturing facilities in close proximity to the engineering and R&D centers in San Carlos, California. Mr. Schwarzenegger had made it clear that he wanted to keep Tesla manufacturing in this West coast state...................This is excellent news for California. State authorities recently approved a new program that exempts new Zero-Emission Vehicle manufacturers from paying sales and use tax on the purchase of manufacturing equipment and will encourage ZEV manufacturing in California. Tesla will also be eligible for at least $1 million in Employment Training Panel Workforce Development Funds to train employees.

Arnold Schwarzenegger and Tesla Motors announce the production of a 4-door sedan | Car News | Auto123

Read this car news article from 2008-07-09. Arnold Schwarzenegger and Tesla Motors announce the production of a 4-door sedan

www.auto123.com

Fortunately the future of Renewables and the transition to a New Paradigm is based on the Levelized Cost of Energy and little else in the long run, and that is a battle that Solar, Wind, Storage, and EV's have already won. And it is Tesla that has positioned itself best for that victory - not D's or R's at this point. In fact it could be argued that the too many of the later are more concerned that the Old Paradigm of Grid and Energy owners can own the New Paradigm than they are with accelerating our path towards cleaner and CHEAPER energy sources.

 

[nativewolf]

I don’t disagree, but you questioned the move of HQ to Austin. I gave you the reasons why. (If you want, add to that an elected official publicly cursing Elon). Also, can you envision the Austin factory being built in CA? Keep in mind the immense tracts of land Tesla bought near the Giga. There are obviously very big plans for expansion of HQ and manufacturing there.

Tesla outgrew California.

Oh I think Austin was a good location for a factory. No doubt. It's moving the HQ that is going to chap the shorts of some folks in CA. I also think Tesla will find out, quickly, that CA followed them to Austin. We'll see how that ends up. I don't live in TX or CA so I have no dog. There was obviously some bad blood already before the move and before the politician said what she said. I don't know what it was but he'd already burned the bridge.

It's also the case that Ford and GM have a virtual unlimited ability to get Federal help to move to EVs now due to Tesla and the bad blood there. The irony being that Ford is not a liberal company by any stretch of the imagination. But hey we need every EV built so good on Tesla.

 

[nativewolf]

Yes, I agree - it was because there was a very active govt at that time..........and because the Governor at that time that......that Tesla ended up in the Fremont plant instead of New Mexico. Not sure if you have simply forgotten some very important Tesla history, or if you might be trying to re-write Tesla history with too much emphasis (and perhaps a little Cognitive Dissonance) on the values you place on D's and R's.

Schwarzenegger seizes Tesla Motors plant for California​

Governator sings the body electric​

Lewis PageTue 1 Jul 2008 // 11:43 UTC

California governor Arnold Schwarzenegger - famed for his uncanny resemblance to an electric machine clad in an unrealistic fleshy cloak - has managed to ensure that noted electrical car company Tesla will base future manufacturing in areas under his rule.
Tesla Motors, maker of the well-known but troubled $100k Roadster battery supercar, had planned to produce more modestly-priced cars in New Mexico.
"To see this company build a plant in New Mexico drove me absolutely insane," Schwarzenegger said, quoted by Reuters. "My administration ... does not like to lose."
California managed to secure Tesla's new plant by offering a tax exemption on manufacturing equipment to zero-emissions vehicle builders. Tesla is presently headquartered in California, and has its design team there, but much of the assembly on the present Roadster is done in the UK by Lotus (its body is basically an Elise)..............

Schwarzenegger seizes Tesla Motors plant for California

Governator sings the body electric

www.theregister.com

and it was this same Governor that continued to be extremely active with advancing Tesla and the future of EV's throughout his term, and even in his most recent Super Bowl ad appearance

• ARNOLD SCHWARZENEGGER AND TESLA MOTORS ANNOUNCE THE PRODUCTION OF A 4-DOOR SEDAN​

  Print
  Governor Arnold Schwarzenegger announced his support for Tesla's next product, a 4-door, 5-passenger sedan which will be manufactured at a facility in the state of California.
  
  Previously, this vehicle was scheduled for production in Albuquerque, New Mexico. However, the company decided that it would be highly advantageous to build manufacturing facilities in close proximity to the engineering and R&D centers in San Carlos, California. Mr. Schwarzenegger had made it clear that he wanted to keep Tesla manufacturing in this West coast state...................This is excellent news for California. State authorities recently approved a new program that exempts new Zero-Emission Vehicle manufacturers from paying sales and use tax on the purchase of manufacturing equipment and will encourage ZEV manufacturing in California. Tesla will also be eligible for at least $1 million in Employment Training Panel Workforce Development Funds to train employees.

Arnold Schwarzenegger and Tesla Motors announce the production of a 4-door sedan | Car News | Auto123

Read this car news article from 2008-07-09. Arnold Schwarzenegger and Tesla Motors announce the production of a 4-door sedan

www.auto123.com

Neat. I actually wasn't even talking about the move to Freemont I was talking about the work 5, 10 , 40 years earlier where CA was challenged to respond to the degradation of the environment. I also don't think Mr. Schwarzenegger is easy to bucket as a dem or rep. Also the family I grew up in helped create Jesse Helms as a political entity. In terms of the politics of the republicans I used to know the good bad and ugly down to how they drank coffee. The new republicans party- right wing fundamental christian sorts are a mystery to me.

 

[Krugerrand]

Technical analysis is reassuring by trying to explain unexpected human emotional behaviour in complex charts, candle sticks and moving averages.

It is interesting for traders glued to their screen constantly 3-4 hours to find momentum in the buying of a stock for someone who want to get in and out of a stock and have a 70% probability of making small amount of money with 5-6 indicators. However it requires patience, diligence and a lot of time. A lot of qualities I lack.

90% of traders lose money. I think 90% are better with buy n hold.

It’s the wrong behavior to be trying to analyze. It’s not irrationality that’s going on, it’s lying, deception, manipulation.

The biggest motivator in the context of the market is to steal as much money as possible. There are a few other motivations like hatred, envy.

 

[nativewolf]

https://twitter.com/x/status/1545526087089696768

Not really. This is Delaware chancery. Very different discovery and the only facts that are going to be relevant (and thus discoverable) are going to be whether or not EM can prove how many bots there are. That's really it. EM has to prove that Twitter has a bunch of bots. Twitter does not have to prove that they don't. EM did a gunslinger deal and may pay the gunslinger price. OTOH maybe he just pays a couple of billion and walks away twitting to the world. Every option is open.

 

[nativewolf]

I invested in AAPL 21 years ago when the common stories were that Apple was going bankrupt any day now (sound familiar?). Then it was Steve Jobs was dying. Every time that little chestnut was trotted out AAPL tanked. It got so predictable that after a while people just ignored it. Then Jobs actually died and it had negligible impact on the SP. People die. That's a fact of life. Tesla, like Apple back then has lots of products in the pipeline. It will survive. That said I don't want anything bad to happen to Elon, but I do want them to have a successor plan in place, ala Apple.

This is such an important point. Apple has thrived after innovation slowed or ended.