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

[brian45011]

Elon Musk and SEC reach agreement over Tesla CEO's use of Twitter
https://www.cnbc.com/2019/04/26/elon-musk-and-sec-reach-agreement-over-tesla-ceos-use-of-twitter.html?__source=iosappshare|com.apple.UIKit.activity.CopyToPasteboard

Beware the Mother Hubbard footnote:

Specifically, the proposed amendment provides that Defendant must seek pre-approval of any written communication that contains information regarding a list of specific topics. 1

1 This list is not intended to be an exhaustive list of topics that may be material for purposes of the federal securities laws. ​

 

[Late2theGame]

Has this analysis from Disruption Research explaining the non-GAAP net-loss based on 3 one-time items found any discussion here?
Disruption Research on Twitter
Found it very ... enlightening ... uplifting ... what's the word?

(Hard to keep up sometimes so I have to ask.)

 

[neroden]

So any old timer still in TSLA? How many did we lose on this round?

My main position looks temporarily down. But as you know I don't use margin loans.

Even my short puts, which are actually using margin as backing, are doing OK (the highest price for breakeven-at-expiration is $233.71, and the first expiration is June); I did a cash-neutral roll down and out a couple of weeks ago in anticipation of trouble. I am afraid I'm going to have to leverage up because this is too good.

The idea that solar technology/pricing wouldn't improve markedly during the twenty years of phases 2 and 3 to the extent most property owners, rather than renewing for an additional ten years, would tell SCTY (now Tesla) to "get that antiquated mess off my roof" always seemed like an inevitable outcome --yet lease/PPA extensions between years 20 an 30 were a major component of the financial "no brainer" justification for buying out SCTY. If removals rather than renewals ensue, phase 4 will not be monthly cash flow receipts but a profit/cash drain.

You have underestimated the "people are lazy" factor. Some people will want to remove the old panels; most will not. If I were to guess, I would guess that most will want to buy out the panels for scrap value. So not the rosy projections of SolarCity, but not a cash drain either, more of a cash out.

 

[EinSV]

So why is the market thinking that FSD is vaporware when they just came out of an investor event getting a ride using FSD?

Robo-Taxi in itself is a little bit sci-fi for people to wrap their heads around. But if FSD is working 95% of the time, then it's a pretty good must have feature that no other car manufactures can replicate. This alone should drive sells.

Tesla has adopted a different approach from the other leaders in the industry. Whether Tesla will succeed is anyone's guess. Investors should make their own assessment. My personal assessment is that Tesla has the best hardware in the industry, the best team in the industry and a very logical approach to solving the problem.

No guarantees but IMO anyone counting them out is a fool.

 

[Remus]

Good to know.

But going forward, it is best if this forum doesn't become too conceited about TSLA FSD. There's going to be a first mover advantage here and GM or Waymo will probably be first. Upon completion GM will probably partner with Uber. So TSLA will be fighting an upward battle to gain market share. ANd without a good cash flow, TSLA will lose the cash bleeding competition like Uber lost against DIDI in China.

Part of the reason why it is valued at 0. There's really no benefit at taking #3 market share in robotaxi.

It's, bluntly, naïve to judge self driving tech based on a couple of videos.

Waymo's geofenced, precise map approach is very hard to scale. Deploying in a new place is almost like starting from scratch. Limited training by a few cars in one place will definitely lead to over fitting of the model, making it almost useless in another area.

Waymo also uses simulation to compensate for lack of real would data. It introduce simulation bias and can not covered many real world scenarios. You should go watch Dr Karpathy's presentation, which talked about this in depth.

Apparently waymo also known about the limitations of the simulation, they actually built tricky roundabouts and other stuff in their test field to try to get "real". Like that is gonna scale.

First mover? Are you kidding?

 

[neroden]

Has this analysis from Disruption Research explaining the non-GAAP net-loss based on 3 one-time items found any discussion here?
Disruption Research on Twitter
Found it very ... enlightening ... uplifting ... what's the word?

(Hard to keep up sometimes so I have to ask.)

He's not wrong, but he's missing something major: Panasonic's cell bottleneck prevented Tesla from ramping up Model 3 production enough. There were supposed to be more Model 3s being sent overseas at the start of the quarter than there actually were; this would have compensated for the other effects.

Unwinding the wave means even more cash tied up in filling the overseas delivery pipeline. Cars in transit will be increasing by even larger numbers in Q2 than Q1, and probably by large numbers in Q3 as well. To balance this out they need to raise production even faster, so it's very important that the Panasonic cell bottleneck (and any other Fremont production bottlenecks) are resolved. On the conference call, they SAID they were resolved, and our resident institution says his sources say production is up, but who knows...

 

[Buddyroe]

Not a problem: I have thick skin.

But, keep in mind that when you make fun of those that sell (at what you presumed to be a low price), you may get made fun of for buying. Let's hope those who sold those shares to you, whom you made fun of, also had thick skin. Well, actually, they're probably pretty happy.

 

[Doggydogworld]

The source of the wave is transitioning assembly to produce the unique aspects of the exports - at full speed.

Not really. The source of the wave is Tesla's desire to drive in transit as close to zero as possible by the end of each quarter to make the numbers look good. The logistics of batching overseas production and shipments kind of made sense when they were much smaller, but at their current scale the wave is horrific for logistics, customer service and other important operating metrics. That's why they've promised to stop doing it for a year now.

But killing the wave means one quarter of depressed deliveries, revenue and profit. It also means elevated inventory and lower cash from that point on. That's why they keep putting it off.

 

[JusRelax]

Tesla has adopted a different approach from the other leaders in the industry. Whether Tesla will succeed is anyone's guess. Investors should make their own assessment. My personal assessment is that Tesla has the best hardware in the industry, the best team in the industry and a very logical approach to solving the problem.

No guarantees but IMO anyone counting them out is a fool.

I believe Tesla will be first, but actually they dont even need to be first in order to win. Even if it takes them 2 years longer than whoever gets there first, imagine what happens once they get there. With their ev efficiency, they are still able to out price anyone that gets there before them. I believe robotaxis will be all about who can offer the cheapest per mile price... who wins that once Tesla eventually makes it there?

Once again, I believe they will get there first though anyways so this is a moot point!

 

[brian45011]

Published materials can also include the earnings call, the recording of which is published on Tesla's website.

Conference call information appears to be subject to:

production numbers or sales or delivery numbers (whether actual, forecasted, or projected) that have not been previously published via pre-approved written communications issued by the Company (“Official Company Guidance”) or deviate from previously published Official Company Guidance;​

 

[neroden]

But killing the wave means one quarter of depressed deliveries, revenue and profit. It also means elevated inventory and lower cash from that point on. That's why they keep putting it off.

Well, elevated inventory and lower cash *reported at end of quarter* -- as pointed out, the wave actually massively elevated inventory and drops cash mid-quarter.

They should do most of the wave removal in a quarter when they massively increase production -- by *more* than the inventory increase. Assuming the Panasonic and other supplier bottlenecks are really addressed, Q2 2019 is a good choice, and there won't be a better one.

 

[EVNow]

Good to know.

But going forward, it is best if this forum doesn't become too conceited about TSLA FSD. There's going to be a first mover advantage here and GM or Waymo will probably be first. Upon completion GM will probably partner with Uber. So TSLA will be fighting an upward battle to gain market share. ANd without a good cash flow, TSLA will lose the cash bleeding competition like Uber lost against DIDI in China.

Part of the reason why it is valued at 0. There's really no benefit at taking #3 market share in robotaxi.

Actually the reason TSLA FSD is valued at zero is a little different.

Waymos and Cruises have been showing the demo for a few years now. Yet, they have not unveiled a robotaxi. So, now that Tesla demoed the FSD to investors now, they think it will be years before Tesla can release robotaxis.

There is also quite a bit of skepticism about robotaxi in general - whether it will ever be possible, mainly because of such slow progress by Waymo & Cruise.

It is possible Waymo & Cruise can release robotaxi in one city before Tesla. But, how fast can they release in others ? Afterall because of Lidar, their technology is worthless unless they achieve complete FSD. Ofcourse, there is the problem of test data for learning. They don't have 100k cars on the road in 4 continents.

For Tesla it is very different. Because this is how Tesla can do it ...
1. Keep releasing newer versions of FSD to the fleet and make the NN better & better. (Till oct '2020).
2. Get regulators to approve FSD without drivers or riders at low speeds. Stage the cars at various parking lots & let people include their cars in TN. When the rider calls, the car goes to the rider location and the rider will drive the car with the help of FSD that drives well 99% of the time. (Nov '2020 till regulators allow full FSD)
3. Full FSD in places regulators allow it (top urban areas)

Waymo & Cruise have to essentially wait till step 3 above to make any money - and they have confidence they have solved FSD (atleast for that geofenced area).

 

[BornToFly]

This drop has my stomach in knots. I have a lot of 2020 Calls that are WAY in the red right now. Down more than a years salary. I thought about selling them and taking the loss for taxes, but I think we can bounce over 20% in less than a month, and I don't want to lose out on the rebound, or lose on the tax break with a "wash sale" if we rebound in the next 30 days and I buy back in. So I'm totally and completely F*cked if we don't bounce back soon.

On the bright side, to help the cause, I just ordered a new P100DL today (with free Ludicrous) and sold my 2015 P85D in one day. So that is at least one more Model S delivery this quarter. The switch won't cost anything short term, as I had $22k left on my loan, and I sold my old car for $50k. So I can put down 20K down, pay off the loan, pay sales tax, and have a slightly lower monthly payment than I had previously.

 

[EVNow]

He can, just has to ask his lawyer to review it. Of course he might slip and this will all happen again

I find it appalling that - Musk hasn't come up with a simple app that sends his tweets for approval and gets published only after approval. A stand by lawyer can do it in seconds and EM won't even notice the delay.

 

[EVNow]

This drop has my stomach in knots. I have a lot of 2020 Calls that are WAY in the red right now. Down more than a years salary. I thought about selling them and taking the loss for taxes, but I think we can bounce over 20% in less than a month, and I don't want to lose out on the rebound, or lose on the tax break with a "wash sale" if we rebound in the next 30 days and I buy back in. So I'm totally and completely F*cked if we don't bounce back soon.

You are not alone

<not an advice>
I'm thinking of leveraging up i.e. move the calls to either higher OTM or earlier expiration. But not sure we have reached the bottom or how long it might take to come up - even with the SEC settlement.
</not an advice>

 

[dc_h]

It's kind of another Elonism of course, just this time not really stock price sensitive. Most floor and roof space added to a single unified building over the course of a given time period? I'd believe that. Say, they manage to build roof floor and walls to withstand typical Shanghai weather, covering 0.2 km² over say 12 months from placing the order, that's up there already probably. Although surely some smaller projects were done quicker.

It won’t be 12 months. They are somehow on track for 5 months. End of May to be roofed and clad.

 

[EnzoXYZ]

With all the doom and gloom today I just found something on Reddit that got me excited.

Tesla is opening a huge store and repair center on Golf road in Schaumburg Illinois. Golf road in Schaumburg is a car buying mecca of the NW Chicago suburbs. You can visit almost every type of car dealer within a couple of miles. Map with dealers:
Google Maps

Tesla will be just west of the Alfa Romeo dealer. I see this driving up sales in our area a lot. People going to test drive cars will stop by to test drive for the hell of it. I know from our experience once you do that, you are sold. Right now the Chicago locations aren't exactly convenient to get to.

Reddit thread on this location:
New Tesla Facility on Golf Road in Schaumburg, IL : teslamotors

Purchased for just over $13M:
Tesla (NASDAQ: TSLA) Service Center

@Curt Renz it’s time for you to get a Tesla. You can cut 30 minutes when visiting a service center.
This was a missing service center for many current and potential customers. Love the location. A physician that I work with comes south to the Westmont service center that I go to. He often complained how much out of way it is for him.

 

[scaesare]

Boston dynamics uses very little NN, most control logic hard coded. Hard to imagine, I know

This doesn't surprise me.

 

[RobStark]

True. But most car buyers don't follow stocks.

Yes, some do -- I'm not disputing that. But there are a lot of car buyers.

A good percentage of luxury car buyers at least casually follow business news.

"Another Yuge Loss for Tesla" headlines don't help demand.

 

[Fact Checking]

I find it appalling that - Musk hasn't come up with a simple app that sends his tweets for approval and gets published only after approval. A stand by lawyer can do it in seconds and EM won't even notice the delay.

The problem is that had they implemented that "automated review process" and had the lawyer made any mistake, even a minor one, regarding the extensive list of topics the original settlement required approval for, the SEC could still have sued Tesla for approving "inaccurate" information that "reasonably could contain information material to the Company". They could also have sued Elon for a wide range of topics that are only tangentially related to material information.

(It would also have been unconstitutional to restrict or even filter all of Elon's tweets, even if Elon agrees.)

The real problem was not Elon, but the ambiguous and broad "reasonably could contain information material to the Company" language of the settlement which favored the SEC and gave them a tool to spuriously attack either Elon or Tesla.

The "reasonably could contain information material to the Company" language is now gone from the settlement, and this is a major win, as it significantly restricts the SEC's ability to file frivolous motions. The 20 tweets the SEC listed as "problematic" in their motions? None require pre-approval now under the new rules AFAICS.

This provides a lot of clarity and restricts the range of topics Elon has to seek approval for, and I'd not be surprised if the judge also added a mandatory conflict resolution process before the SEC can file another contempt motion, to avoid the kind of weekend ambush they performed in February.

This modified settlement is exactly what Elon and Tesla needed and wanted.