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

[Chickenlittle]

I suspect that part of lower projection of profit in q1 maybe related to cpu replacents to ultimately allow FSD. Those who purchased FSD when buying the car will get it for free. I believe that is why they took FSD option out of configurator. Those cars produced after q1 will have the new cpu and not require the replacement. The “old cpu” cost represent waste

 

[Anton W]

Welcome to the forum.

While it is very valuable to hear all sides of the story to avoid confirmation bias, what you said is simply not true as there has been prolonged and heated arguments between bulls about FSD.

Thanks. That is true, which is why I classified them as hyperbulls, not simply bulls

 

[BOBTHEJOCKEY]

Not a big SC profit in Az. it seems.
I pay $.11 per KW Hour at home. Meanwhile, I get 100+mi charge in 20 minutes for $3.50 in Az. (Cortez Junction).
Approx $0.11 * 120Kw * .33 hrs = $4.35 is the should cost at 0% profits. So Supercharger is cheaper??? Or maybe I wasn't getting 120Kw at the time, but I've seen $3.50 several times now. Rates do go up fast if I try to squeeze the last 1/4 tank though.

Maybe it's just all state taxes in NY and Ca. I was shocked at the SC costs on my trip to CA!

Price of electricity here practically pays for the car!

The stock is down today. The headlines read something like this "Tesla

Not a big SC profit in Az. it seems.
I pay $.11 per KW Hour at home. Meanwhile, I get 100+mi charge in 20 minutes for $3.50 in Az. (Cortez Junction).
Approx $0.11 * 120Kw * .33 hrs = $4.35 is the should cost at 0% profits. So Supercharger is cheaper??? Or maybe I wasn't getting 120Kw at the time, but I've seen $3.50 several times now. Rates do go up fast if I try to squeeze the last 1/4 tank though.

Maybe it's just all state taxes in NY and Ca. I was shocked at the SC costs on my trip to CA!

Price of electricity here practically pays for the car!

Tesla stock is down today. The headlines reads "Tesla fires 7% percent of it's labor force in order to ramp up production of Model 3". Makes no sense. If you look at their website they have over a 10000 job openings.

 

[humbaba]

I'm hoping TSLA will recover somewhat towards the end of the day. This drop is probably banked by the shorts that TSLA can't turn a good profit for 6+ months. I think this news isn't enough to have TSLA sink down towards the low end of $300 for long term. Too bad we won't be able to see $400+ for an extended time period.

Yeah, if $TSLA goes >$400 for an extended period without significant short covering before hand the cost of holding their positions would, I have to think, become untenable.

But if there is overall covering leading up to $400 then shorts will have lots of money to put into shorting at, and above, $400. Honestly, the only way I see for $TSLA to escape short manipulation is either:

1. shorts somehow lose interest (hard to credit when the smart ones make bank off of the volatility and are likely playing both sides), OR
2. prices rises sharply enough for long enough to simply force them out of the stock and the pain of the loss keeps them out in the future

But here my inner pessimism insists that there is a contingent of shorts who have realized that $TSLA has significant volatility that they can amplify and they aren't really making money by betting on Tesla going bankwupt, but on convincing the gullible to sell low and buy high so that they can constantly leach money by swing trading.

 

[Remus]

Were missing this insane melt-up in the major indices because of this memo -.- I seriously think Elon is laying out a massive bear trap

I have a theory that Elon was obsessed with shorts mid last year was that they make it very expensive for Tesla to raise capital when Tesla was bleeding money like hell.

He does not seem to care about stock price any more.

 

[Unpilot]

Thanks. That is true, which is why I classified them as hyperbulls, not simply bulls

Interesting name....seems vaguely familiar...

 

[Anton W]

"I also want to emphasize that we are making this hard decision now so that we never have to do this again."

Are we at war with Eurasia or Eastasia?

 

[KarenRei]

Without the EU dropping the backstop in some way, there are no other options that will work IMO. Can't see anything getting sorted by end Jan.

No conclusion will be reached on 29 Jan, but debate (and if I'm not mistaken, voting) on the amendments to May's deal will occur on that date, which will set the path the UK will take next. Including a vote on whether to hold a second referendum. The notion of which should either become reality, or die, on that date. If such a vote were to fail, odds of a hard brexit jump greatly. Both outcomes help clarify where things are headed. Any other amendments or deals would also offer clarity as to what the future holds.

It's possible that all that comes out of the 29th is just more chaos and brinksmanship. But it is a date that could reduce the current "chaos level" by having the UK return back to some specific path or another - whatever that might be. And a reduction in chaos is good for markets.

 

[sundaymorning]

I agree, lower Q4 profit was likely due to a combination of:

1. Higher MR/lower AWD model 3 sales mix leading to lower ASP and lower Model 3 gross margins.
2. Larger impact from S/X price cuts in China
3. No ZEV credit income
4. Larger expansion of SG&A and R&D (possibly accelerating hiring in China?)
5. Lower price per GHG regulatory credit sales
6. Possibly higher base model 3 production cost than forecast.
7. Higher service business losses.
8. Stock comp

Q4 cash flow should still be up on Q3.

I now have Q4 net income $177m. EBITDA $890m. Free cash flow $990m. Increase in cash balance $684m.

Dont forget Tesla also bought a vehicle delivery service company.

 

[Remus]

It would be illegal.

while I agree that he may not be bluffing, I don't see why it is illegal here. the statement contains no exact numbers and most of them are fuzzy forward looking.

 

[Cherry Wine]

Catching up on one hell of a morning. Wishing best of luck to those Tesla employees who were / will be let go.

I was anticipating Q4 to be about equal or slightly better than Q3, so this news is a bit of a head scratcher.

Yes, same. The models around here were showing ~$3.50 EPS, so this caught me by surprise. You win some, you lose some, I guess.

I took neroden's advice a while back and started selling calls. Today is a great day to buy them back, so refreshing to have time on my side in the Option game.

Couldn't agree more. Selling options is like being the casino -- every now and then someone hits a jackpot, but over the long run...well, you know the saying.

i think for both bears and bulls, there is an innate desire to concoct hidden agendas when Musk makes official pronouncements like this.

For me, that means there is a voice in the back of my head trying to get me to hope that he's deliberately downplaying expectations to 1) soften the blow i na show of empathy for those he's just fired and 2) try to get out of the cycle of Tesla achieving the near-impossible only to have pundits go on TV and announce the results as "disappointing" or a "miss".

however, having said that, i think it's safer to recognize one's own bias, and instead of inferring too much, simply take the memo at face value and assume he's not misrepresenting the truth in his own estimation at this time.

Sage advice. I've seen too much inference among some folks here. Not every retweet and like is a hidden message -- best to stick to evidence-based decision making. And it never hurts to view Tesla through a bearish, fact-based lens. I've said many times - bullish echo chambers do not do their participants any good.

It was about 6 months ago that 9% were layed off and yet massive growth in productivity. I do not believe this is a bad day. Musk has to be pragmatic and keep the company lean. As production ramps up and becomes more routine they can get by with fewer employees. In 6 months they managed to add 30K employees and when new product comes on line they can quickly do this. With new lines most likely coming in giga factory, they would need the jobs in Nevada not Fremont. This is probably one reason why he avoids union. To allow flexibility. Is anyone surprised by lower margin with base model price? They could continue with the high end model3 line up but not continue the type of growth he wants. It’s interesting that no comment on cash flow

You are not living up to your moniker.

1) Am I the only one impressed with how flat the stock is trading today on such news and such volume? Amazingly consistent so far. Wouldn't have called this.

2) As annoyed as I am to discover that IB lies about one's settled cash (thus preventing me from exploiting today's lows for anything more than a lottery ticket at best), I'm amazed at how well (inadvertently) I timed my stock sell: $327,11, vs. today's high of $327,13. So it certainly gives me some potential to still turn a profit if stock stays depressed through Tuesday.

Do you have a margin account? That can help with settlement issues.

I agree, lower Q4 profit was likely due to a combination of:

1. Higher MR/lower AWD model 3 sales mix leading to lower ASP and lower Model 3 gross margins.
2. Larger impact from S/X price cuts in China
3. No ZEV credit income
4. Larger expansion of SG&A and R&D (possibly accelerating hiring in China?)
5. Lower price per GHG regulatory credit sales
6. Possibly higher base model 3 production cost than forecast.
7. Higher service business losses.
8. Stock comp

Q4 cash flow should still be up on Q3.

I now have Q4 net income $177m. EBITDA $890m. Free cash flow $990m. Increase in cash balance $684m.

How does this affect your EPS forecast?

 

[BOBTHEJOCKEY]

For me the picture looks something like this:

1) Model Y unveiled ~15th March - likelihood 75%
Likelihood that this goes viral on a different scale to M3 and sells all other Teslas - 75%
2) Major refresh to S/X at the same event - likelihood 60%
Likelihood of a 2170 120D acting as a major sales lightning rod - 60%
3) Model 3 SR available from the same event with better than advertised specs - likelihood 50%
Likelihood that Tesla can't build enough during 2019 and going well into 2020 - 100% (without referrals)
4) Pickup unveiled at same event - 20%
You get the picture...
5) FSD / HW3 updates - 60%
6) Roadster / Semi updates - 40%
7) Solar roof / energy updates - 40%
8) SpaceX updates - 10%
The Model Y unveil event could be on a different level if Elon decides to:

Elon has become quite grown up on Twitter - absolutely agree that he is preparing to unleash the hounds! He will want to express himself in a whole new way. Enter "The King" (Appeals to my British sense of identity...) A leader that will finally start getting on top of world issues - starting with the Climate.

Great day to buy on BOGUS 7% layoff issues. Their website careers section says the have posting for at least 1000 jobs.

 

[thx1139]

Great day to buy on BOGUS 7% layoff issues. Their website careers section says the have posting for at least 1000 jobs.

They let go of 9% last June, yet employment increased by 30% last year.

This is called getting rid of poor performers.

Will headcount be up YoY December 31 2019? Yes.

 

[gene]

Couldn't resist. Bought 200 more shares at $314.40. With 6 years trading TSLA, these 10% drops usually go back up at least a bit the next trading day. If not, no worries, I'll just add these shares to my long term shares since 2012.

 

[KarenRei]

These things are just inherently going to happen as the production process gets refined. Example: paint shop reportedly uncorked in mid December, having a far lower rework rate than previously. Great! But what happens to all of the people who were doing the rework?

Maybe you have other jobs for them that match their skillset.
Maybe you don't.

Same thing applies pretty much across the entire production process.

 

[EVNow]

Thanks. That is true, which is why I classified them as hyperbulls, not simply bulls

Would you classify yourself as a GM hyperbull ? You were such a backer of Volt, too. What happened ?

 

[aubreymcfato]

Unpopular opinion, but I think we are going to drop to around $315 before ER. Something smells funky. Institutions want our cheap shares

What did you know!?!

 

[Zextraterrestrial]

Layoffs are a good thing! super buying opportunity here.
look at it this way, All of the robots work just as hard as each other and have the same productivity but they can't do all of the jobs / the 'fluffer bots' were laid off...
Many employees were hired to do the jobs robots can't do efficiently but 7% of these employees are not as good as the robots or at least their peers... laid off.
completely a positive thing

 

[Cohiba]

This is not cutting down on resources, it’s shifting the skillset. They adapt as they grow.

 

[shlokavica22]

Btw, Indexes ~1.5% up. One can wonder what number of the calls that bravely died today would have been profitable, if Elon's message waited till Monday.