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

[StarFoxisDown!]

They said in Q2 they would have shutdowns in October for upgrades...



Which boosted production more than transportation could handle...

So, if Tesla announces something they know it gets spun, and if Tesla doesn't announce something they couldn't know, it gets spun...

I guess I should clarify on that point, the disappointment in production came from the combination of Berlin/Austin being rather slow and Shanghai not getting to the new production rates as quickly as expected (they're there now). Tesla came in the expectation from analyst on production.......but as I mentioned before, Tesla get's held to an unfair standard. It is what it is

 

[SN_8]

Either you have a crystal ball or your methods and metrics seem pretty darn accurate.

Would you mind sharing how you were able to give us this valuable information?

Asking for a friend who wants to put his life savings into Nikola.

I concur. And if he can share 4 days earlier, even better.

 

[StarFoxisDown!]

Lower ASP got me on my prediction. Didn't see that coming. Q4 might be hard to predict as well...for ASP.

Looking back in hindsight, there were some clues as to ASP coming in lower. Main one being because of the way Shanghai operations restarted, more Model 3 was produced at the new higher rate than Model Y was. So 3 made up more of the mix. This dynamic is being resolved though in Q4 and it's very apparent in the registration data in Europe so far. Also, with Berlin/Austin contributing more much this quarter verses Q3, their production will boost ASP much more in Q4.....or at the least keep ASP stable.

As mentioned in a few posts now, I'm expecting big margin improvement. Mostly from amortization/depreciation being spread across more vehicles from Berlin/Austin/Shanghai than in Q3 but also because Tesla will get to enjoy the lower cost of goods and logistics that were dropping through Q3 (and still dropping in Q4) for an entire quarter.

 

[Artful Dodger]

Berlin and Austin at GM neutral

Not sure why you list this as a Q4 catalyst. Zach told us on the Q2 Conf. Call that Berlin was already profitable at production rates achieved in Q2.

Perhaps you're referring to a switch at Giga Texas? That likely happened already when the production at Austin exeeded 2K/wk in early Oct.

Cheers!

 

[elasalle]

Ship #17.
Franco's list also has 2 ships to UAE, Japan? that are not part of the total count
vedaprime has 4 for AUS, 4 for NZ(not sure of overlap)
mr. Miserable thread has 2 scheduled S/X plaid from baltimore to EU as possibilities ...(not in Franco's list yet) ....

 

[Skryll]

2) I think Q4 numbers will be bad because lots in the US will want to defer deliveries until 2023 for the tax credit. It's a pretty big difference in cost. "Oh you'll be moved to back of the line!" For $7500 difference in a recession (and shrinking wait times), who cares?

I disagree with 2) because
- the value of the locked-in price and position in the queue vs new price with $7500 incentive and getting into the back of the line now subject to a stampede of incentivized buyers, is not going to be that big of an advantage, if at all.
- plenty of buyers in the more than $300k/yr joint income range have no benefit of waiting

On the other hand, some used teslas may become available cheaper now that Silicon Valley layoffs have started across multiple tech companies.

 

[MC3OZ]

Well it depends. The cash pile Tesla has is pretty huge and getting even bigger. I dont think anybody thinks Tesla should blow all its savings on a buyback, but even a $1billion buyback would be welcome. What is the current cash stockpile Tesla has this moment?
And frankly, it would be more sensible for them to buy some TSLA at these prices than Bitcoin...

Yes, an inflation hedge that actually works.

I am sure that the board will make a sensible conservative decision.

 

[StarFoxisDown!]

1) Honestly, I think "the wave" is a cover narrative for short term demand pockets, mainly China, that they need to figure out how to redistribute supply to other countries. And eventually when/where to enable price cuts to stimulate demand.

2) I think Q4 numbers will be bad because lots in the US will want to defer deliveries until 2023 for the tax credit. It's a pretty big difference in cost. "Oh you'll be moved to back of the line!" For $7500 difference in a recession (and shrinking wait times), who cares?

3) Tesla needs to do a better job of forward guidance like you said.

4) Q1 2023 is going to be spectacular, and I'm fully onboard with the Berkeshire conspiracy theory around Tesla lol.

1) I don't think it matters whether it was because Tesla didn't want to pay expedited logistics costs or if it was because it appeared unlikely that Tesla would be able to sell all cars produced in Sept to the local China market. Tesla did the thing that was the best choice financially.

2) This topic has been debated many times before. There are multiple things to counter that worry - A) Tesla isn't allowing reservation holders to push their date, they lose their spots and their reservation pricing B) The income caps take out a certain % of buyers and allows any buyers over that income cap to jump the line if people just straight up cancel their reservation C) Tesla can announce a price increase as soon as they get guidance from the government combined with a small incentive to take delivery by end of year and there will be plenty of new buyers will to take that

3) Ditto

4) While I don't necessarily buy into Berkeshire buying in right now, if the stock were to still be sub 200 after Q4's earnings, I 100% think they would be buying in big time.

 

[M|S|M MYP]

Either you have a crystal ball or your methods and metrics seem pretty darn accurate.

Would you mind sharing how you were able to give us this valuable information?

Asking for a friend who wants to put his life savings into Nikola.

look up 'options max pain' and read up on that, it will provide you valuable information. Sometimes, it works and sometimes it does not

 

[traxila]

Short sellers are slow learners.

Yes, they have suffered this year.

 

[winfield100]

Either you have a crystal ball or your methods and metrics seem pretty darn accurate.

Would you mind sharing how you were able to give us this valuable information?

Asking for a friend who wants to put his life savings into Nikola.

you need an "ah ha" moment
(Also, read Papa Fox's daily commentary, quite valuable insights)

 

[Artful Dodger]

if he can share 4 days earlier, even better

Papafox shares yesterday's Options Open Interest chart every day: (this is no secret)

Papafox | Postings

 

[MC3OZ]

Yes, they have suffered this year.

I have seen the movie before, I know how it ends.

Most of the the movie is spent wondering if there will be a happy ending. Hollywood always delivers, but anexity is contagious.

 

[EVMeister]

Closing above $180 was a bullish sign... Because I said so.

 

[unk45]

Depends on the sizing. If you have 6b free cash flow, spending 1b on scooping up ridiculously undervalued shares while keeping 5b for rainy days may be a good investment, also to send a signal about how you value your own trajectory.

People who have lived through past recessions tend to be quite risk-averse about capital adequacy. Despite the Tesla cash reserves that seem excessive to some, the prospect of major supplier disruption is very high, as is shipping instability. Because Tesla is also making major new investments that should not be deferred, it is simply foolhardy to assume all that cash flow will continue to accumulate unabated. Despite undervalued shares, doing a buyback does reduce cash irrevocably.

Think back only to 2008 as major banks went broke including the largest ones, so forced mergers provided cosmetic cover. Bank of America had a forced merger into Nations Bank. Merrill Lynch added to the new behemoth. The list goes on.

Many of us have serious myopia and assume Tesla is immune to the coming challenges. It is NOT. Luckily Tesla financial management has been very conservative so will be unlikely to answer the call to irresponsible liquidity reduction just when it might most be needed.

"...if you have 6b free cash flow..." is indeed the point. If developments in Europe and much of Asia flow exceptions...if the Ukraine war continues beyond the next six months... if trade tensions between China, the EU, the US are exacerbated... That wonderful free cash flow could quite quickly reduce.

Please, please don't pressure Tesla to reduce the cash cushion just as we are entering very challenging times. Were that to be done I would understand Tesla is abandoning the very prudence that has allowed the success we have seem. That would be one of the very few things that would make me sell all my shares.

I find it to be appalling that many of us are ignoring all the financial management discipline that has allowed Tesla to thrive. Paying back debt has been wise.

I've had to help liquidate too many major companies which followed such follies just as the good times stopped rolling. Those who want to do it should ignore those of us who have seen the perils first hand. Obviously you know better because you've never had to cope with disaster.
I apologize for my stridency. I do not apologize for the opinion.

 

[FSDtester#1]

Papafox shares yesterday's Options Open Interest chart every day: (this is no secret)

Papafox | Postings

Thank you for the link. Very helpful and put on my watch list.

@Curt Renz called the closing sp today at 1 pm...

Are we sure he doesn't have a crystal ball??

 

[WattsHappening]

@ZeApelido is forced to work a second job as a sad, old male dancer in a dilapidated Las Vegas hotel.

Wall Street: for the love of God and humanity, please don't let this happen.

 

[GrimRe]

Not sure why you list this as a Q4 catalyst. Zach told us on the Q2 Conf. Call that Berlin was already profitable at production rates achieved in Q2.

Perhaps you're referring to a switch at Giga Texas? That likely happened already when the production at Austin exeeded 2K/wk in early Oct.

Cheers!

Yea I'm referring to both combined being GM neutral, slightly positive. The fact that that two ginormous factories ramping wasn't backed out of a relatively lower GM in Q3 is mind boggling. What Tesla have achieved by ramping up Berlin and Texas while still having positive FCF and only slightly degraded margins is quite simply stunning. Meanwhile VW are cancelling plans for a single factory as it would be too onerous from a cash flow perspective.

 

[BornToFly]

Papafox shares yesterday's Options Open Interest chart every day: (this is no secret)

Papafox | Postings

Max Pain today was 195….

 

[glhs272]

I disagree with 2) because
- the value of the locked-in price and position in the queue vs new price with $7500 incentive and getting into the back of the line now subject to a stampede of incentivized buyers, is not going to be that big of an advantage, if at all.
- plenty of buyers in the more than $300k/yr joint income range have no benefit of waiting

On the other hand, some used teslas may become available cheaper now that Silicon Valley layoffs have started across multiple tech companies.

For what it's worth, I ordered a Model Y on July 28th, after it seemed that the new tax credit was a sure thing. At the time estimated delivery was April 2023. Now Tesla's expected delivery is showing December of this year. Today's price is the same as what my original order is. So there is a large incentive to cancel my order and re-order after the turn of the year. I would only be out my $250 deposit. But... I really could use the car now.