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

[anthonyj]

Then why did you buy 50 shares?! You have to make up your mind.

I have 500 shares, the 50 was for a swing which I sold?

 

[Buddyroe]

China stuck Elon's Tesla with 25%-40% import tariffs and locked him out of Chinese EV incentives for years.

Elon complained to Trump he pays 25% tariff into China while Chinese cars pay 2.5% tariff coming into the USA. Elon said it was like competing in the Olympics while being forced to wear lead shoes.

After years of negotiations, a trade war, and agreeing to side deals like opening a R&D center in China and perhaps agreeing to buy cells from Chinese companies Tesla is being allowed to open its own factory in China.

Elon is a libertarian. Chinese Communist Party is exact opposite of that.

There are orders of magnitude more Chinese engineers immigrating to the USA than American engineers immigrating to China.

Way to go Rob - you're always ruining feel good, sensationalized moments with facts and rationalization!

There's no place for that on the investment board.

 

[avoigt]

Could be his car is in the first batch on sea now...


Kristof Lambrecht‏ @Kristof_1978
Tesla just called to schedule my Model 3 delivery for end of February.

#tesla #model3 #belgium

4:12 AM - 15 Jan 2019 from Kortrijk, België
Kristof Lambrecht on Twitter

 

[ReflexFunds]

My brother texted me the blog below by Bill Cunningham posted on Seeking Alpha.

I generally don't pay any attention to Seeking Alpha, and I'm extremely confident there's no such day of reckoning coming.

That said, given my brother specifically asked about whether there's anything concerning with this one, and given that quickly scanning Cunningham's previous SA blogs it doesn't seem like he just posts blatant obvious nonsense, I don't want to simply dismiss this blog... no day of reckoning I'm confident of, but, some considerable liability I've not been aware of, not impossible.

For me what he writes about gets into quite technical accounting details heavily involving Solar City financial arrangements ("Variable Interest Entitiies" according to Cunningham). To be honest, it would take me many hours to study up and try to answer my brother's question... and it might turn out that all that time was spent just to discover a more jargon filled version of typical Seeking Alpha gibberish bearish false narratives.

If there's anyone here who already has the knowledge base to just read this blog in a few minutes to determine if there's anything uncovered of substance in it, I'd really appreciate your opinion on it.

Tesla's Day Of VIE Reckoning Approaches - Tesla, Inc. (NASDAQ:TSLA) | Seeking Alpha

I haven't spent much time modelling VIEs as I don't think it's a significant issue, but my understanding broadly is that c.50-75% of cash raised from VIE partners is repaid in year one with tax credit proceeds. The rest is repaid out of solar lease cash flows over 5-30 years, but should only be 20-30% of lease cash flows maximum in any year. So with solar lease cash flows at around $400m, this should only be around $100m obligation. Additionally for the redeemable interests ($551m), i presume under some circumstances and after a certain time the partners can ask Tesla to buy out their stake early.

Tesla has $6.3bn net solar lease asset book value on balance sheet, of which $5.1bn is in VIEs. Contracted cash flows over 30 years is likely closer to $10bn and then Tesla will also expect significant continued cash flows after end of lease. NPV of this varies significantly with your discount rate assumptions and estimates for post lease cash flows.
Of this $6.3bn book value, $1.3bn is the equity share owned by third parties. Against the $6.3bn book value Tesla has $2.2bn of non recourse debt.

So while VIEs could be a drain of cash, particularly the redeemable ones, Tesla still has c.$1.2bn of solar assets outside of VIEs and continued new solar sales, both of which it can continue to raise money from. Tesla also still has a significant equity value in its solar portfolio (in the $bns) and its solar portfolio could be a significant source of cash if Tesla chose to sell the entire portfolio (which would also remove the $1.3bn VIEs liabilities and $2.2bn non recourse debt). I think Tesla may do this once it has cross-sold Powerwalls to a significant % of its roof portfolio customers.

Many of Cunningham's numbers and calculations are obviously wrong, but I haven't spent time to fully understand Tesla's numbers.

 

[durkie]

You're mixing calls for puts. When you sell a put, you've given someone else the right to sell a stock to you at a fixed price. In the US stock market, this can happen at any time.

At under 320, he'll be forced to buy the stock at $320 (even if the stock had dropped to under $300 that day). If the stock stays above $320 and rises to $400, he'll at least collect the put premium.

Writing a $400 put would ensure that he'd have to buy the stock at $400 at anytime between now and Feb 15th! Not a good move.

I think you two are agreeing with each other: if the price is just below 320, rdalcanto would be forced to buy shares, which is why Bet TSLA suggested buying the puts back at a few cents apiece near expiration (presumably far less than the premium you originally collected in selling them). But at least in this scenario you basically perfectly called the stock price movement and are leaving almost no money on the table.

The $400 scenario is riskier but I think operates on the idea that you are unlikely to be exercised with significant time value remaining on the option (even though it could technically happen at any time), and is even less likely to happen if the price is rising (why sell to me at 400 if you could potentially sell at 401 on the market?).

Definitely a long shot, but I think it was mostly a contrived example to illustrate how rdalcanto probably did a good trade with his 320 puts, or at least not as bad as he was thinking initially, since the "bad" alternative of a $400 SP requires much more risk/price volatility/ATH and is really just bad in an opportunity cost sense (you at least don't lose money, unlike the $250 case).

Check Bet TSLAs post history -- I think they understand the option market well

 

[Sudre]

Hence my "beyond the working range"

I had a heat pump in my last house. I guess it was okay for Texas weather generally but those couple of REALLY cold days in the winter you needed the "emergency heat" because basically that unit was useless for heat below freezing.

The are other units on the market that can go well below freezing, even without the superior CO2 tech, but I didn't realize that was something I needed to look out for when I had to replace my HVAC in that house ... live and learn (preferably from others' mistakes, not my own!).

I have a Daikin heat pump that has worked great at 5°f so far. I have not needed the heat strip backup yet. If you buy a cheap inexpensive system you get a poor quality product. Some heat pumps now work down to -5°f although not super efficient at those temps.

 

[mongo]

Coolant flow to the cabin runs through the pack:

If you want to heat the cabin with the compressor, you have to also heat the pack. But I suppose if you wanted pack heating you could do that via reversing heat pump flow flow (#6). Maybe if you wanted to minimize pack heating you could shut off the pack cooling blower (#12). But you certainly couldn't heat the cabin with the compressor while cooling the pack.

Still, it looks like it should be possible to heat both with the compressor, no? Hmm, if so, then shouldn't Model 3 be listed as having a reversible heat pump? I mean, there's a literal heat pump reversing valve...

ED: Also, since when does Model 3 have an "Auxiliary Electric Heater"? I thought they did away with that.... maybe this is just some low power thing and not a primary source of heat?

From the link, that pic is from Seeking Aliens 2016 May 15, over a year before the 3 was released.
I can safely say it is wrong.
There is so much there that does not line up with my understanding of the 3's setup. (Or thermal regulation in general)

Also, there is a heat pump thread on TMC (that has been beaten to death)...

 

[Reciprocity]

Your Favorite Short with another impressive article.

Volkswagen's Electricity Price Undercuts Tesla's Superchargers By 35% To 66% - Tesla, Inc. (NASDAQ:TSLA) | Seeking Alpha

Right off the bat, is he assuming a constant kW charge rate regardless of SoC? I love him.

That's great if it under cuts Tesla. Let consumers win with cheaper charging and free up supercharging capacity for every Tesla owner. But I am also sure he is wrong because frankly everything he has ever posted on SA has been wrong.

 

[lklundin]

Finally a sane analyst.

Tesla is ahead of automakers in 3 key categories, tech money manager says

Cathie Wood is not merely an analyst, her innovation fund consists of 10% TSLA so alone for that reason she would talk nicely about Tesla.

I am unsure about her assertion that Tesla's FSD will propel TSLA to 4k$ (in a few years?), but other than that she makes sense.

 

[Reciprocity]

I see. To clarify, sounds like these Solar City instruments are included in the roughly $5 billion or so of debt figure (don't remember the exact number) already widely referenced to as debt Tesla took on when they bought Solar City.

My impression is the guy blogging on SA is trying to confuse people into thinking he's found billion(s) of future Tesla liability virtually nobody was aware of, when in reality, nearly every article that has ever talked about Tesla's purchase of Solar City has noted this liability as it is part of the ~$5 billion in Solar City debt these articles so reliably mention.

fwiw, this paragraph from the SA blog apparently tricked me into thinking it might be some sort of buried liability, balance sheet gamesmanship, so I appreciate you're helping me shake off that misimpression.

"These transactions fall into a bit of a netherworld. Although they appear on Tesla's balance sheet, they are classified neither as debt nor as stockholders' equity. Instead, they are listed as "non-controlling interests" or "redeemable non-controlling interests" and are reported below the liability line in the equity section of the balance sheet."

They also conveniently leave out the fact that Solar City had revenue generating assets that pay out over 30+ years so much of the debt will be paid with that revenue. As noted before, much of the debt is leveraging that income today instead of waiting. Does anyone think the sun will stop shinning?

 

[lklundin]

In the Munich Tesla store I was told 0.17 € / kWh, i.e. 0.085 € / kWh @ 120 kW.

Those typos...

It would be helpful if a moderator can change the above nonsense to:

"In the Munich Tesla store I was told 0.17 € / minute, i.e. 0.085 € / kWh @ 120 kW." (done)

 

[lklundin]

Standard Southern California Edison Rates

So I guess all that talk about electricity being much more expensive in the EU than in the USA doesn't come from California.

(Here in Germany I pay 0.24 € / kWh, about 0.27$ / kWh).

PS. In addition to following @KarenRei's suggested and appreciated copy-editing, I just checked the US Supercharging prices. Those that are priced per kWh have a minimum of 0.21 $ - that's not actually cheap.

 

[KarenRei]

So I guess all that talk about electricity being much more expensive in the EU than in the USA doesn't come from California.

(Here in Germany I pay 0.24 € / kWh, about 0.27% / kWh).

0.27%?

 

[lklundin]

0.27%?

Thanks. Time for a coffee, I guess.

Btw, a colleague of mine just returned from Iceland.

She had gone to a bar, where they would ring a bell every time a person was born in Iceland. Apparently, there was no bell for when a person died.

 

[elasalle]

Machine Planet on Twitter
As you can in this photo taken at 12:13 PM, a lot of Telsas are still at the pier ..

+ To improve logistics/delivery, surely Tesla must use more than one port for EU/China deliveries? maybe some from East coast for Europe?

 

[KarenRei]

Machine Planet on Twitter
As you can in this photo taken at 12:13 PM, a lot of Telsas are still at the pier ..

+ To improve logistics/delivery, surely Tesla must use more than one port for EU/China deliveries? maybe some from East coast for Europe?

Duh Teslas continue to accumulate at the pier. Did they think that a single ship was going to take Tesla's entire allotment for Europe AND China for the year? They better get used to Teslas building up there; it's going to be happening for the foreseeable future. Or is the claim that because there's only 2k Model 3s on it that its a Potemkin Delivery? As if there's no other customers taking that route?

 

[Lessmog]

Thanks. Time for a coffee, I guess.

Btw, a colleague of mine just returned from Iceland.

She had gone to a bar, where they would ring a bell every time a person was born in Iceland. Apparently, there was no bell for when a person died.

Must be a toll-free zone ...

 

[BornToFly]

If your covered Calls turned bad last Friday, you could have closed those and sold this weeks covered Calls, all at the same time. You wouldn't have to take the loss. If you push out a few times, there is a good chance shorts will help you out once in a while.

That only works if you don't expect the SP to keep rising. As we get to the Q4 ER, I was worried I would never see 335 again....

 

[Hock1]

Not understanding you. If the stock price closes just under 320 on 2/15, you made a brilliant trade. You can buy back your puts for a few cents and you'll have made even more money than if you had bought the shares represented by those puts (presumably highly leveraged) plus the premium. Yum! What would make you look somewhat stupid is if it closes at 400 that day. Then you left $80+ per share on the table -- you should have written 400 puts rather than 320s, but at least you made a bunch of money. And, of course, you'll look really stupid (plus lose money) if it closes at $250.

Unless I am missing something here, if the price goes below $320 anytime from now until February 15, the owner of those puts can put their stock to the seller at $320 per share. That's $32,000 per put sold. If "a lot" of puts is 10, that's a $320,000 obligation, if "a lot" is 100, seller of the puts will have to come up with $3.2M.......I hope I have misconstrued something here.

 

[EVMeister]

Duh Teslas continue to accumulate at the pier. Did they think that a single ship was going to take Tesla's entire allotment for Europe AND China for the year? They better get used to Teslas building up there; it's going to be happening for the foreseeable future. Or is the claim that because there's only 2k Model 3s on it that its a Potemkin Delivery? As if there's no other customers taking that route?

There seems to be a short in their logic circuits.