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

[2daMoon]

I think Elon is rolling that dice or has knowledge that he won't be able to raise the capital to complete the purchase. So offering the full price basically moved the ball to get out from this with "just" a 1Bn price tag.

• Is he still hoping bank financing gives him an out? In his letter to Twitter, Musk says he will do the deal “pending receipt of the proceeds of the debt financing.” (Per the terms of the deal, if the bank financing falls apart, he needs to pay only a $1 billion breakup fee.) The banks have already committed to their $12.5 billion — as long as a deal happens by April 2023. Is Musk hoping they try to back out?
• Could Twitter stop Musk from using the banks as an out? One route would be to ask the judge to have the banks say in writing that they remain committed to funding the bid. The company could also ask Musk for a letter saying that he is unaware of any conditions that could impede the deal closing.
• Do the banks wish they had an out? The leveraged loan market, which Musk is partly relying upon, has weakened in recent months. If the Citrix deal is any indication, the banks lending to Musk, led by Morgan Stanley, could be sitting on big lending losses. Note: They cannot change the terms of their lending agreement.

There is so much promise with his idea for X.com that I'd be willing to suffer his selling enough TSLA shares to make the purchase.

The TSLA pain would only be temporary as there would be no lasting effect on Tesla, which is just beginning to roll. The share price would recover.

He could borrow against his TSLA shares as well, without affecting the SP.

Lastly, there are bound to be other investors who would claw their way to the front of the line to get a piece of this.

 

[Nocturnal]

I think Elon is rolling that dice or has knowledge that he won't be able to raise the capital to complete the purchase. So offering the full price basically moved the ball to get out from this with "just" a 1Bn price tag.

He keeps talking about the value to his plans that Twitter provides. I suppose he might be required to claim he full intends to make the deal happen.

 

[StarFoxisDown!]

I think Elon is rolling that dice or has knowledge that he won't be able to raise the capital to complete the purchase. So offering the full price basically moved the ball to get out from this with "just" a 1Bn price tag.

• Is he still hoping bank financing gives him an out? In his letter to Twitter, Musk says he will do the deal “pending receipt of the proceeds of the debt financing.” (Per the terms of the deal, if the bank financing falls apart, he needs to pay only a $1 billion breakup fee.) The banks have already committed to their $12.5 billion — as long as a deal happens by April 2023. Is Musk hoping they try to back out?
• Could Twitter stop Musk from using the banks as an out? One route would be to ask the judge to have the banks say in writing that they remain committed to funding the bid. The company could also ask Musk for a letter saying that he is unaware of any conditions that could impede the deal closing.
• Do the banks wish they had an out? The leveraged loan market, which Musk is partly relying upon, has weakened in recent months. If the Citrix deal is any indication, the banks lending to Musk, led by Morgan Stanley, could be sitting on big lending losses. Note: They cannot change the terms of their lending agreement.

I actually thought this move since announcement Elon wants to continue with the buyout is Elon putting the weight/pressure on the banks to follow through in hopes they can't/won't. It gives Elon the out he needs while just pony'ing up 1 billion.

The trial circus though has me a bit worried that he could be forced to go through with it and fund it all himself. The logical part of me says though that the terms of the original deal are very clear........if funding from the banks falls through Elon can walk away

 

[larmor]

So essentially, that headline is a big whole nothing burger.

Because as soon as Elon/Twitter agree to move forward with the buyout, they'll file to have the court case dismissed.

Or maybe twitter board is trying to figure out how elon plans to make money on twitter and just do it themselves. At least that's what a bot told me.

 

[Paul_SF]

OT:

I look forward to get this soon:

https://twitter.com/x/status/1574897832095408128

 

[Gigapress]

The demand concern is from China, not the U.S.

This poster wrote a pretty informative piece on the situation in China where the 3/Y competitors are fiercely trying to take marketshare under cutting Tesla on price while adding more stuff.

So it's not a huge concern since 20M cars are sold in China/year and all this competition including Tesla accounts for like 5% of sales. There are plenty of cake for everyone. However I do believe people are looking at this wrong and sees the competition as a bad thing. The competition is actually giving us insight into how much they have to do just to push their cars out for revenue. All of these companies beside BYD are not making a profit. And BYD is only making a 3% profit margin while Tesla is like 5x of this(probably 8x if Tesla just sold cars in China with the gigafactory). So yes these cars are adding 5 screens, Nvidia chips, foot massagers, whatever...while Tesla is taking out sensors and doing gigacasting. Seems like there's only one company here trying to be profitable while the others are bleeding investor's cash.

https://www.reddit.com/r/teslainvestorsclub/comments/xvlbeq

Wow I had no idea this many models have been coming out in China this quarter.

I am thinking the same thing on this being not a real long-term concern though because these companies are heavily subsidized and still losing money. I hope they make it. Adding features and luxury materials without worrying about cost is not very impressive by itself. We'll have to see, but I don't see how anyone can possibly compete on cost at feature parity without gigacastings and structural battery packs, among other things only Tesla has.

Do you think this rush to push low-priced fancy models on the market is related to the Chinese minister last year who said there's too many Chinese EV makers and the government is looking to consolidate the industry? I'm wondering if maybe these companies are competing in the short term in order to make the cut.

 

[Prunesquallor]

I read this as funding secured.

To me, the *and* means that unless the equity partners don't come through (which is unlikely I'd say with Elon's track record), he has all the funds he needs. Therefore that second sale was cautionary...as Elon said, to avoid an emergency sale. Therefore, if all equity partners come through and the sale completes, then hasn't Elon got a few $B sitting there doing not a lot...

I know what I'd be doing with that money at these prices!

Bitcoin!!

 

[Singuy]

Wow I had no idea this many models have been coming out in China this quarter.

I am thinking the same thing on this being not a real long-term concern though because these companies are heavily subsidized and still losing money. I hope they make it. Adding features and luxury materials without worrying about cost is not very impressive by itself. We'll have to see, but I don't see how anyone can possibly compete on cost at feature parity without gigacastings and structural battery packs, among other things only Tesla has.

Do you think this rush to push low-priced fancy models on the market is related to the Chinese minister last year who said there's too many Chinese EV makers and the government is looking to consolidate the industry? I'm wondering if maybe these companies are competing in the short term in order to make the cut.

Not sure, however this "race to the bottom" type of business model is just a common style of doing business in China. It's almost like business blitzkrieg. Those wishing to have any kind of margin will get slashed by someone willing to do it faster and cheaper.

I remember back in the days we used to have Chinese restaurants where you sit down and order off a menu...then the buffet came and took them out, then the China Star #1 took the buffets out. What we have now is this tiny margin business where a fairly labor intensive and complex meal can be had for 4.99, while the Japanese go full upscale and charge people 150/head for a few pieces of fish.

 

[PeterJA]

...But RTs remain a lot more than "months" away....

I said "completion of FSD," not robotaxis. Of course the former will enable the latter, but I expect FSD will reach Level 4 and decimate sales of non-Tesla cars well before Tesla Network arrives, since robotaxis will require additional software, backend hardware, possibly infrastructure for charging and cleaning, and pilot releases in limited areas.

Indeed, the decimation of sales of non-self-driving cars may be starting already. I added FSD to my Model 3 order last summer after watching its rate of progress on YouTube.

...those in the beta seem to mostly agree on this point (myself included)....

The first Dojo Exapod won't even be operational for months yet (Q1 2023 was the announced target at AI Day 2), let alone the whole 7-pod cluster they plan.

Neither of us knows whether beta-testers "mostly agree" that FSD completion is years away. I've seen videos of its performance in highly complex traffic with zero interventions, while you and others report that it still makes mistakes. But regardless of the majority opinion, such opinions are irrelevant. Beta-testers don't know what is happening inside Tesla's AI skunkworks, such as experiments with the unified software stack and all the capabilities of new Dojo hardware and software. Also, FSD is clearly improving exponentially, while human intuition expects change to be linear. As illustrated by the legend of the inventor of chess and the emperor of China, exponential change is counterintuitive.

I'm far from an expert on AI, but I've been watching videos by this expert. He keeps marveling at the rate of progress in the AI field, including language models like GPT-3, image generators like DALL-E 2, and now a video generator from Meta. He says the progress is exponential. Tesla said at AI Day 2 that they are using a "language" model for lane prediction. I'm not sure what that even means, but I'm sure Tesla is on the cutting edge of this exponentially progressing field.

If the first Dojo Exapod is operational in a few months, FSD might be complete enough to rock the auto market in a few months plus one or two. That's the nature of exponential change when it reaches the "knee of the curve." Tesla said their new AI tools will speed up progress by orders of magnitude. Of course nobody knows for sure, but don't forget my favorite quote from Ray Kurzweil about exponential changes: When they reach that knee, they "explode with unrelenting fury."

 

[MABMAB]

I trust that after the current period of concern and conjecture that there will be another?

 

[Discoducky]

Please tell me there are no adjustable rate auto loans or auto loan backed securities and their associated derivatives...

https://twitter.com/x/status/1577769967453319168

 

[CorneliusXX]

Please tell me there are no adjustable rate auto loans or auto loan backed securities and their associated derivatives...

https://twitter.com/x/status/1577769967453319168

All the dodgy stuff you expect is hiding in auto loans - giant buried fees, tenors that are far too long, collateral not worth the loan balance, excessive rates, etc.

The market isn't large enough to kick off an equivalent GFC like mortgages were in '08, and because you can repo and sell a vehicle much faster than a house the effects wash out pretty quickly.

 

[TheTalkingMule]

Whatever the hell the universe is up to is certainly coming to a head.

No need to point out the looming earning deluge yet again, or the half dozen things overhanging the stock price that desperately wants to make Tesla the most valuable company in the world.

Central banks around the world, put in place a century ago for whatever nefarious reasons, now need to decide how to finally unwind the chaos of the Great Recession while exiting a pandemic and not destroying the world while they're at it.

The Saudis this week are holding Putin and their other conspirators together trying to prop up oil prices as the wider universe begins to realize demand for their product peaked in 2019. No big deal, just a full reversal of nearly all wealth concentration in human history.

I wonder if we'll live through all this to St Paddy's Day? Oh yeah, we may also be kicking off the nuclear apocalypse that ends human civilization.

 

[Nocturnal]

Please tell me there are no adjustable rate auto loans or auto loan backed securities and their associated derivatives...

https://twitter.com/x/status/1577769967453319168

No, we just have a few large domestic companies who have massive debt backed by the value of used vehicles and we are looking at a time period of diminished value of said vehicles due to interest rates and threat from EV adoption at the same time those companies will have a harder time borrowing if needed.

 

[Krugerrand]

I am not asking to run Twitter, but thanks for the red herring. Do you have any more false argument styles to present?

Then I must assume your posts are nothing more than an opinion based on no real world experience in any associated social professions and thus lack value making my earlier point stand as them being irrelevant. Thanks for clarifying.

 

[Flehmenlips]

But Elon's lack of skill in using social media does NOT equate to an inability to successfully lead Twitter. The two are not analogous.

I don’t follow some of these thoughts. Elon’s skill in using social media is world class. He is masterful , witty, irreverent, fascinating, thought provoking, insightful, kind, profound, hilarious, disruptive, fearless, bold, sharp, cutting, concise and precise. How is this a problem? It seems that his tendency to wear his heart on his sleeve and communicate unvarnished, unpopular truths makes many folks very uncomfortable. In my opinion being pushed out of one’s comfort zone is healthy and useful. I f’in love, respect, admire and aspire to emulate his social “skillz”.

 

[Bet TSLA]

New Elon podcast with Peter Diamandis. Haven't listened yet, but thought I'd share.

How to Save the World with Elon Musk

Sounds interesting and in line with the mission!

I listened so you won't have to. It's over a year old. The XPRIZE carbon removal prize unveil. Nothing new. Almost nothing about Tesla. On the other hand, it's probably more worthwhile than listening to the various YouTube clowns people are talking about today.

 

[Usain]

Super cool if this happens so quickly, but it is the gov...

"The White House could handle the approval as soon as the end of next week, the sources said."

I had to do some digging to find what this is about. The Teslarati article (taken from Reuters) doesn't do a very good job at explaining the implications.

But after reading just a bit about the existing program, what I glean is that this will be yet another huge mandate to pay Tesla for doing what it was going to do anyway. Tesla will will be able to sell RINs (credits) to oil refiners who don't use enough renewables in their fuel blends. Tesla may also earn RINs for its charging infrastructure.

It's always been deliciously ironic that the dirty, polluting ICE manufacturers have to pay Tesla. But now the fossil fuel industry has to pay Tesla as well.

Add to that the EV tax credits, battery manufacturing credits, and maybe soon, lithium refining credits. I'm just blown away by how much the new laws and regulations are favoring Tesla to the tune of billions and billions of dollars.

Tesla is becoming a huge vaccum cleaner that sucks money from everything it touches.

 

[printf42]

Very informative and it is great (yes, competition is good for Tesla) to see all these new models available and shipping. And the details are great as well, but very hard to tell, from the objective perspective of a Chinese buyer, how these all stack up against one another.

Does anyone know of a matrix that compares the relevant specs of these? I'm going to guess that Tesla China is on top of this and has a working matrix to price accordingly as well as develop features accordingly, but it would be great to see if any are actually beating Tesla in any area with some features.

There are YouTube channels reviewing Chinese EVs, you can watch those and get a pretty good idea yourself.
One channel I watched before:

Spoiler: Not saying this is the best, but it’s the only English speaking one I know of.

Don’t believe the BS that because there are more models on the market, suddenly Chinese customers are only considering Chinese brands now.

“Oh, wait till GM releases 35 new EV models in the US, Tesla market share will crash there too.”
-says you-know-who.

 

[StarFoxisDown!]

I had to do some digging to find what this is about. The Teslarati article (taken from Reuters) doesn't do a very good job at explaining the implications.

But after reading just a bit about the existing program, what I glean is that this will be yet another huge mandate to pay Tesla for doing what it was going to do anyway. Tesla will will be able to sell RINs (credits) to oil refiners who don't use enough renewables in their fuel blends. Tesla may also earn RINs for its charging infrastructure.

It's always been deliciously ironic that the dirty, polluting ICE manufacturers have to pay Tesla. But now the fossil fuel industry has to pay Tesla as well.

Add to that the EV tax credits, battery manufacturing credits, and maybe soon, lithium refining credits. I'm just blown away by how much the new laws and regulations are favoring Tesla to the tune of billions and billions of dollars.

Tesla is becoming a huge vaccum cleaner that sucks money from everything it touches.

Gotta love how 12 months ago, there was a pretty decent % of TMC's that were worried/convinced Tesla would somehow be excluded from any subsidies.

Fast forward to today and not only does Tesla get the subsidies, but they're one of, if not the only one, that will get vast majority of the subsidies and that the fossil fuel industry could be paying some of these subsidies.

Now if only all the predictions of TSLA share price were more spot on from a year ago..............