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

[Xd85]

serious question here: what keeps the "market" from sustaining a short term view Q after Q after Q, moving goalposts as necessary. What keeps it from being irrational longer than investors are alive? (literally)

 

[Paul_SF]

People, when are we going to learn ?!?
Seriously!

Yeah, when???? Next quarter?

 

[SOULPEDL]

That’s because hedge funds know that institutional investors likely wont make a move to buy in big time until a mixture of the elements are confirmed/present:

- reaffirmed production/demand - Answered beginning of Jan

- reaffirm margin stability - Answered on earnings

- inflation still cooling and Fed rate hike halt - next week

- further PE compression to what the majority of what Wall St “thinks” Tesla should be valued at….based on low expectations of Tesla’s future prospects.

Likely going to need a combination of all of these elements for Tesla buying pressure to outweighs the shenanigans. Once that’s dynamic switches, you’re likely going to see a lot of hedge reverse their position to ride TSLA higher until it reaches a much higher valuation where they’ll reverse their position again to ride the stock back down some.

I'm lost @StarFoxisDown! Are we going up or down? Seems like you stated both.
So down to 150 then up, then down again? Or up first, then down to 150?
(Do you have a graph you could share? I only need the dates if you have a sec.)

OTOH, not to make fun, but anything is possible as they try to milk this cow every morning.

 

[StarFoxisDown!]

serious question here: what keeps the "market" from sustaining a short term view Q after Q after Q, moving goalposts as necessary. What keeps it from being irrational longer than investors are alive? (literally)

Valuation metrics. Forward PE in the mid 30’s right now. Likely will be in the mid to low 20’s after Q4 earnings. Will likely be in the mid to low teens after Q1 earnings. These shenanigans can only go on for so long until something breaks

 

[Stretch2727]

Have to say since I have saw nearly the exact text from multiple sources on Friday this is where PR department comes in. This is likely nearly word for word taken from a Ford PR statement sent to media outlets.

If you are a sophisticated investor you are not really using these PR statements to decide to invest.

 

[Drax7]

That’s because hedge funds know that institutional investors likely wont make a move to buy in big time until a mixture of the elements are confirmed/present:

- reaffirmed production/demand - Answered beginning of Jan

- reaffirm margin stability - Answered on earnings

- inflation still cooling and Fed rate hike halt - next week

- further PE compression to what the majority of what Wall St “thinks” Tesla should be valued at….based on low expectations of Tesla’s future prospects.

The PE compression dynamic changes dramatically with Q4’s earnings. It will lower the TTM PE and the Forward PE considerably. Q3, while we understand the headwinds to earnings, really failed at bringing the PE metrics down as much as I had hoped

Likely going to need a combination of all of these elements for Tesla buying pressure to outweighs the shenanigans. Once that’s dynamic switches, you’re likely going to see a lot of hedge reverse their position to ride TSLA higher until it reaches a much higher valuation where they’ll reverse their position again to ride the stock back down some.

Oct and November production and sales numbers are pretty reaffirming,
and fresh off the press. Hedge funds are not that smart.

 

[StealthP3D]

I REALLY doubt its just low Chinese demand. Tesla have a mission that involves selling as many cars as they can. If that meant dropping prices drastically there, they would do it. My bet is even more line upgrades, or retooling for structural pack/casting?

I strongly agree with this because history will show that Tesla will cut prices as needed to keep the sales matched to production.

The only rational conclusion is either that the production is temporarily reduced from record levels, probably due to supply issues, or it's a false rumor altogether. Considering that Tesla just beat record production numbers in China in November and is rapidly ramping two new factories on two different continents, I think it likely there is pressure being applied to their battery and/or raw material supply chains, perhaps the growth of their supply chain was temporarily disrupted by recent COVID shutdowns in other cities.

My best guess is, due to the above factors, Tesla is going to temporarily throttle Shanghai production to accommodate a temporary shortage of some critical component or raw material. They will use the slack time to improve production line flow and cost efficiency when material supply returns to growth again. It's like Elon said, "Manufacturing is hard".

Edit: I see that Tesla officials in China have said the rumor of production cuts is false. That means the most likely explanation is the rumor is false:

Tesla China denies media reports of output cut at Shanghai plant

Tesla on Monday said media reports which said its plant in Shanghai would cut December output of its Model Y were "untrue".

www.reuters.com

 

[StarFoxisDown!]

I'm lost @StarFoxisDown! Are we going up or down? Seems like you stated both.
So down to 150 then up, then down again? Or up first, then down to 150?
(Do you have a graph you could share? I only need the dates if you have a sec.)

OTOH, not to make fun, but anything is possible as they try to milk this cow every morning.

My point is that until we get the actual data that changes TSLA’s valuation metrics such as earnings, it’s a free for all on the stock.

Either hedge funds are going to drop the stock so low in the next 4 weeks that institutional investors will buy in heavy because of the cheap Forward PE or institutional investors buy in after Q4’s earnings which drop TSLAs towards PE down to the same metric

 

[StarFoxisDown!]

Oct and November production and sales numbers are pretty reaffirming,
and fresh off the press. Hedge funds are not that smart.

They’re just going to run the narrative of margins have collapsed and thus earnings from Q3 to Q4 are going to grow. Thus why I think the delivery number needs to come in at 450k to really force the issue

 

[Xd85]

Valuation metrics. Forward PE in the mid 30’s right now. Likely will be in the mid to low 20’s after Q4 earnings. Will likely be in the mid to low teens after Q1 earnings. These shenanigans can only go on for so long until something breaks

Seems like valuation metrics are never really accepted for what they are, and the interpretation (conveniently) shifts on every new piece of record breaking data.

 

[Prunesquallor]

What exactly would have been better if Rob hadn't 'warned' us that this, true or not, might be in play today when the market opened?

If you have a source that has a proven track record, yes, you should absolutely report on what that source says. Is it possible that that source in turn got played? Maybe, or maybe it had been planning this all along. But then nothing unsubstantiated should be discussed here. Good or bad.

I assume you then also want Rob (and others) not to mention anything positive that is unsubstantiated? Rob had more disclaimers before mentioning this than pretty much any reporting regarding anything I've ever heard. He talked for minutes about how he didn't know if this was correct or not. Isn't it enough that some of you are pounding on anyone bringing anything not positive to tmc? You want to do that to the whole internet? Oh wait, that´s actually directly against Elons intention with his other endeavors. That the same group of people here are very supportive of.

So to address your questions -

Well, your first question is pretty strange. How does information that is "true or not" benefit anyone?

"If you have a source that has a proven track record, yes, you should absolutely report on what that source says". No you should absolutely NOT. Journalists USED to be required to have multiple sources before publishing to avoid just this - a single source being intentionally or unintentionally incorrect and having this mainlined into reporting. Confirmation is vital. Then there is the amplification effect - Rob could easily have been considered one of Reuters' "sources with knowledge of the subject".

Yes, I would want Rob and others not to mention anything positive OR negative that is unsubstantiated. On this forum, we don’t let posters get away with claiming something because "someone I trust" told me so. We want at least one reference - we should probably want more.

 

[thx1139]

If you are a sophisticated investor you are not really using these PR statements to decide to invest.

Not my point at all. Point is that the media just spewed out the PR assuming what it says is accurate and sharing the tone. Ford's tone was positive even though vehicle sales were down, F150L were down month over month and Ford at the same time last year only offered 1 electric vehicle and this year had 3.

 

[T@oo]

So to address your questions -

Well, your first question is pretty strange. How does information that is "true or not" benefit anyone?

"If you have a source that has a proven track record, yes, you should absolutely report on what that source says". No you should absolutely NOT. Journalists USED to be required to have multiple sources before publishing to avoid just this - a single source being intentionally or unintentionally incorrect and having this mainlined into reporting. Confirmation is vital. Then there is the amplification effect - Rob could easily have been considered one of Reuters' "sources with knowledge of the subject".

Yes, I would want Rob and others not to mention anything positive OR negative that is unsubstantiated. On this forum, we don’t let posters get away with claiming something because "someone I trust" told me so. We want at least one reference - we should probably want more.

That's what meant earlier with that they HAVE to create content. New content. And exclusive. No time to double check, to hesitiate or even soemtimes think a minute about it. And yes, it's not just the patreon beggars, but all of media. And no, I don't have a solution ready. Need to fix my own life.

 

[SOULPEDL]

Valuation metrics. Forward PE in the mid 30’s right now. Likely will be in the mid to low 20’s after Q4 earnings. Will likely be in the mid to low teens after Q1 earnings. These shenanigans can only go on for so long until something breaks

I have zero credibility as an analyst (or a trader for that matter), but won't this new 20's PE fly in the face of all the other companies and expose many naked Kings? Or are they all toast and their time is coming? In that case, TSLA will take off eh?

 

[kbM3]

No. @Tony73 published a bunch of BS FUD with no legitimate arguments backing up any of it.

Assertions:

1. 1.7 kWh/mile is unproven and “speculation” until an “official spec sheet” comes out
2. We can’t be sure Tesla will actually achieve 500 miles within weight and cost limits
3. No factory exists for production at scale and Elon nevertheless was loose with language and misleadingly called this “start of production”

Math was shown, with physics calculations, deriving 1.7 kWh/mile based on Tesla’s claim of the drag coefficient and assuming typical coefficient of rolling resistance for a semi. Elon himself corroborated this claim yesterday. Yet @Troy73 proceeds to dismiss this as “speculation” until an “official” spec sheet is published and until we know the exact conditions under which 1.7 kWh was achieved. That’s pedantic at best, because Elon’s public comment literally is official because the CEO is by definition an officer of the corporation, because he said that Tesla is already doing it on routes in the real world, and because from day one Tesla in fact already has published official specs advertising “< 2 kWh/mile” so 1.7 kWh/mile is right within the approximate range implied by that.

Tesla has been testing the truck on public roads for at least five years. A recently as this past May, they stated that they expect it can carry at least as much max payload as a diesel truck. Tesla knew precisely the weight of the tractor when making that statement. To suggest that it’s “speculation” to believe the production version will meet that spec is to imply that Tesla somehow was either lying or that Tesla was wrong in the design and in the last six months unexpectedly needed to add a bunch of weight to the tractor yet they nevertheless proceeded with initial deliveries to paying customers and chose not to disclose this information to the public. That is technically possible, but extremely unlikely, because it would damage Tesla’s reputation and probably invite false advertisement lawsuits, and because the design was almost certainly close to being finalized in May because there’s a lead time for making the assembly line and setting up the supply chain and everything else. Continuing to post here about how it’s not a proven fact until someone other than Tesla demonstrates it is again pedantic at best. Obviously we have to take Tesla’s word for it, but it’s pretty reasonable to believe their claim unless given a compelling reason otherwise, and Tony never even attempted to provide one.

Going on and on about cost is also silly, because Tesla has literally hundreds of thousands of dollars of wiggle room from the initial list prices from 2017 to still make a strong business case for customers, and that’s true before the gigantic clean energy subsidies for the batteries and the commercial clean vehicle credits (roughly $80k total subsidy per truck sold in the US). This is basic arithmetic. Based on the claimed efficiency number, the long-range truck has a battery around 900 kWh. Even if the pack-level cost for 2170s is conservatively assumed to be $125/kWh before subsidy, that’s $113k for the battery. If we conservatively assume that the rest of the Tesla Semi costs the same as a diesel truck with maybe $10-15k conservatively factored out for not having a diesel powertrain, then that’s a roughly $100k upfront cost difference. Fuel savings alone will make up for that disadvantage in just a couple of years for the average truck duty cycle. The only significant question about cost is just how good the economics are, but it’s obviously superior to diesel on total cost of ownership by a wide margin.


Translation: “Tesla fraudulently advertised a key spec for this product in 2017 without actually knowing if they could achieve it within cost and payload constraints, and instead of providing math and evidence to back up this claim I will rather state that this is obviously true so as to signal my confidence.”



Here’s another vaguely defined claim, again with no supporting rationale, followed up by a thinly veiled insinuation that Elon deliberately misled us in choosing to characterize the event as a party kicking off “start of production”.

What does “at scale” mean, and how does @Tony73 purport to know anything about the production capacity of the Sparks factory despite there being, to my knowledge, zero publicly available information about the production line?

And even if the Sparks line is more of a pilot line with a bigger factory coming later, perhaps as an addendum to Giga Texas, who cares? That’s just more pedantry, considering that Tesla already disclosed on the Q3 call that they’re targeting a 50k annual rate in 2024, and have never said large scale production will occur in the next few months. When I worked at Boeing, I saw the 777X line get built and watched low-rate initial production begin ramping. When Boeing held a celebration kicking off manufacturing of planes that weren’t just test units and initial customer deliveries, nobody came around saying, “Well actually, that’s not real start of production; it doesn’t count until you’re making at least one plane per day.” If the company is building certified, legal products and selling them to customers, then that’s start of production by any reasonable definition.

IIIC I believe Tesla‘s 2024 goal, is to hit 50,000 deliveries. Not to hit a run rate of 50,000.

 

[-=buzz=-]

Again... I'm not sure where anybody suggested this was "necessary". Clearly you can drive downhill using just friction brakes when regen is unavailable due to SOC/temp issues. I've been doing it on my S for a decade now.

But now that the semi is here, there's some new factors to consider in dealing with 80,000+ lb gross vehicle weights... witness the first time Tesla has introduced clutches in the driveline. So, another significant new issue for semi drivers is the lack of being able to have any driveline braking when it's cold, forcing you to use friction brakes the entire downgrade. With 40+ tons rolling that might just be significant.

So yes... no part is the best part. I prefer that we don't have mechanical wear/failure points like clutches. But requirements dictate design. So, this discussion was about a potential requirement and possible solution.

Would there be cost and additional complexity? Sure, Would it be a useful tradeoff? Maybe. Would making it an option for a subset be worthwhile? I suspect for somebody who drives in Canada or many sections of the US during the winters, such a cold-weather package might be make a Tesla Semi a much more attractive (and safe) option.

Again, this subset-discussion is largely conjecture about how the issue could be addressed. As to if Tesla will do it and/or what the expense would be isn't something anybody else introduced.

1) they aren't using real clutches, more like dog-teeths that are engaged or not.

2) the whole regen topic is a speculative issue. And even if there is a possible issue, Tesla could just declare it in the manual.
Because:
This isn't a car, but a professional tool. If it's your job you're expected to handle your equipment according to its specifications..

 

[Drax7]

They’re just going to run the narrative of margins have collapsed and thus earnings from Q3 to Q4 are going to grow. Thus why I think the delivery number needs to come in at 450k to really force the issue

In my view, these are bots that sell headline news, no deep thinking and
reaffirmations.

Long term investors may be in a risk off mind set,
and don’t react to cheap stock prices until there is no risk, that is
quarterly data out and the fed approaches pivot.

 

[wipster]

<snip>

So here’s my early New Years’ resolution, starting now: I’m going to check this forum and the SP maximum of once each day, after market close. And with the time I’m going to save by that, I’m going to hug my wife and kids and try to be more productive.

I truly appreciate the input of everyone here. You are not the problem. I’m the problem, and I’m going to fix it.

I give it a day, maybe 2...

Done there, been that

 

[Stretch2727]

Not my point at all. Point is that the media just spewed out the PR assuming what it says is accurate and sharing the tone. Ford's tone was positive even though vehicle sales were down, F150L were down month over month and Ford at the same time last year only offered 1 electric vehicle and this year had 3.

I think you have made my point exactly. No smart investor is just looking at the PR statements.

 

[thx1139]

IIIC I believe Tesla‘s 2024 goal, is to hit 50,000 deliveries. Not to hit a run rate of 50,000.

My recall was they said run rate at end of 2023 was 50K