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

[betstarship]

Just from some competition in the Dojo space:

"With its new exascale capability, researchers aim to simulate how stars explode, calculate the properties of subatomic particles, investigate new energy sources such as nuclear fusion and harness artificial intelligence to improve the diagnosis and prevention of disease, among many other research topics."

World’s Fastest Computer Breaks Into the Exascale

Scientists hope that the Frontier Supercomputer at the DOE’s Oak Ridge Lab will simulate and interpret events in the universe that currently defy analysis.

mindmatters.ai

'And while Frontier is indeed the fastest official supercomputer measured by scientists involved in the Top500 rankings, there are rumors China has developed at least two of its own exascale capable machines. If true, that would mark a blow to the U.S. security state which has forged an antagonistic relationship with Chinese supercomputer developers, even going as far as to place seven companies on a trade blacklist last year over alleged national security concerns."

 

[elasalle]

Apologies if this has been posted:

Twitter refuses Elon's bid

https://twitter.com/x/status/1578137050146131969

Do they want to take over x.com functionality
Create the new app/ functionality themselves

What drama..

 

[rallykeeper]

I've seen this mentioned before, but can someone point me to something that validates this? Which entities aren't allowed to buy below-investment-grade securities?

Seconding this question.

I'm still trying to find a large cap mutual fund (or any equity fund, really) that is explicitly prohibited from buying stocks of companies with below-investment grade issuer ratings (or senior debt ratings). Similarly, if anyone is aware of any indices or index funds that preclude admission of below-investment grade issuers, speak up.

We may not be able to know the extent to which active funds have internal risk rules that that limit or prohibit exposure to below-investment grade issuers, but I suppose the upgrade could free some of those managers at the margin.

A quick glance at the holdings of the largest growth funds would indicate that there aren't exactly avoiding TSLA, though. TSLA is literally the largest holding of the largest growth mutual fund sold in the United States (American Funds' $200b The Growth Fund of America) and is pretty widely held across all the larger managers and strategies.

 

[ZeApelido]

Apologies if this has been posted:

Twitter refuses Elon's bid

https://twitter.com/x/status/1578137050146131969

 

[wipster]

Do they want to take over x.com functionality
Create the new app themselves

First they'd have to determine what X.com's functionalities actually are! I think a lot of it is still in Elon's brain.

 

[MP3Mike]

Apologies if this has been posted:

Twitter refuses Elon's bid

https://twitter.com/x/status/1578137050146131969

It seems that the AP article that was based on has been updated: Judge delays Twitter trial, gives Musk time to seal buyout

A judge has delayed a looming trial between Twitter and Elon Musk, giving Musk more time to close his $44 billion deal to buy the company after months spent fighting to get out of it.

Chancellor Kathaleen St. Jude McCormick, head of the Delaware Chancery Court, said Thursday that Musk has until Oct. 28 to close the deal. A trial set for Oct. 17 will happen in November if he doesn’t, she said.

So the judge wants them to proceed with the purchase of Twitter, by 10/28. So now Twitter is the one saying no? I wouldn't think that would fly...

 

[Skryll]

Do they want to take over x.com functionality
Create the new app/ functionality themselves

What drama..

What they don't get is that Twitter without elons hiring and leadership force is not worth $44b on their own.

 

[Paul_SF]

Elon is playing his 4D chess? Probably… Hopefully…?

 

[TheTalkingMule]

"Stock futures inch lower ahead of Friday jobs report" (out of fear it'll be too good)

Up is down! Down is the new up!

 

[juanmedina]

Main article right on Fox News:

 

[Prunesquallor]

https://twitter.com/x/status/1578152308411547648

 

[2daMoon]

Main article right on Fox News: View attachment 860856

Why, oh why is there not a Facepalm option in the "Like" menu?

 

[M|S|M MYP]

Main article right on Fox News: View attachment 860856

Articles like this are not relevant unless.....the amount of gallons of water used to put out the fire are disclosed!!!

 

[Unpilot]

Main article right on Fox News: View attachment 860856

Exactly why I NEVER wash mine/s

 

[MountainRatMat]

Apologies if this has been posted:

Twitter refuses Elon's bid

https://twitter.com/x/status/1578137050146131969

 

[TheTalkingMule]

Just wanna slip this CNBC headline in before we restart the TWTR conversation.

How good is this? Welcome to 2007 Mercedes Benz. Looks like the have the beginnings of a master plan!

 

[geometro]

https://twitter.com/x/status/1578152308411547648

I don’t want plot twist… I want this to end. (Unpopular option, perhaps).

 

[kbM3]

I understand and agree with your points. Reducing price is also reducing GM% unless BoM magic happens. Let me put some big simplifications and some big ifs on the table to try and get a grasp of the problem/opportunity here. Before I try and run a scenario in my 10-year model lets first try to agree what it might look like. Here is a first sketch as I would appreciate comment.

HISTORY
1. The relevant BEV market is split 1/3 : 1/3 : 1/3 between USA, China, and Europe. (sorry about the little'uns, but I need to simplify)
2. It was only a few years ago that Tesla really had no competition in China, and only a couple of years ago that Tesla opened the Shanghai factory.
3. During the last 2-3 years Tesla has been raising prices by $10k-$15k and in the process has gone from maybe 20% GM to maybe 30% GM.
4. During those few years Tesla BEV competition in China have gone from only being viable in non-Tesla segments to becoming viable and competitve at lower prices in Tesla-segments. So it takes 2-3 years for China to build capacity faster than Tesla does, and to play sufficient catch-up in product terms, for 1/3 of the relevant market.
5. US and European competition really aren't making a difference and so are not directly interesting to this analysis.

PROJECTION
- The Chinese continue to build capacity faster than Tesla and they progressively push harder at exports to Europe and USA. Within 2-years they either fully into Europe (or USA) or halfway into both. Within 4-years they are fully into both (i.e. they can overbuild at the rate of 1/3 in two years). Ignore incentve programs as they will come and go.

6. Competition starts to bite into Tesla margins and so Tesla cuts prices as the excess demand is run off - the GM of 30% declines to 20% over the next 5-years, and that includes income from NoA and FSD in automotive.
7. But Tesla are then able to hold BoM costs stable and to maintain a prestige brand position with GM% then steady at 20%. (so still unusually good)
8. But this also has a numerical effect on Tesla caacity build in the later years, with the max capacity build rate becoming capped at 2m/yr due to competition effects. This would mean Tesla reaches max 16m/yr in 2030, not 20m/yr, i.e. this effect starts to cut in as the GM% stabilises, likely due to internal Tesla discipline.

- One point to notice is that I assume the Chinese also in effect practice price discipline. There is however nothing to prevent them continuing to overbuild capacity and wiping out the entire market. But my guess is China would back off, likely holding about 30-40m/yr of the global market in 2030. This would leave 16m/yr for Tesla and 24m-34m/yr for everybody else (assuming constant market of 80m/yr).
- Ignore RoboTaxi completely for this examination.

Any comments on this as I might run it at the weekend to explore the share price implications. ?

I always assumed the reasons Tesla was losing EV marketshare are not sustainable:

1) The Chinese EV companies are growing from a smaller base. As I understand it, Tesla is historically unprecedented in growing greater than 50% at their size. I would not imagine that the weighted average of all the Chinese electric vehicle companies can exceed that 50% growth rate going forward as they approach Tesla’s current scale. Some will go bankrupt and the ones who do not, will find it more and more difficult to keep that growth rate up as they get larger.

2) They are generally not cash flow positive.

 

[ZenRockGarden]

I don't think the cesspool that is Twitter could actually get worse...

Go visit 4Chan.

 

[JRP3]

Go visit 4Chan.

Or "Truth" Social.