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

[SpudLime]

Is there unlimited demand for any product currently available on the market today?

Water?


Elon cant catch a break. He gets slammed for being aggressive / optimistic. Then he gets slammed for being pessimistic.

I do enjoy the deep dives into the myriad of topics OT and OT. Elon is doing what he has always done. Trim the fat, move the needle, and the shorts be dammed.

 

[UncaNed]

Or they want to halve demand for Model S/X so that they can repurpose the old Model S line for something new.

What was the ratio between 75KWH and 100KWH?

 

[MarcusMaximus]

They still don't seem to have any cars testing on live roads today.

We’ve seen a leak already that shows this is false.

 

[Fact Checking]

I may not be interpreting this correctly but on the last earning call, Elon said they should be profitable in all future quarters, except perhaps when there is a large dept repayment due.

No, he was talking about free cash flow there. Debt repayments do not decrease profits.

He couldn't possibly know it back then whether they'd have at least $920m of free cash flow in Q1.

Here's the exact wording from the August 1 conference call:

Elon Reeve Musk - Tesla, Inc.:

"I feel comfortable achieving a GAAP income positive and cash flow positive quarter every quarter from here on out. That's a – there may be occasional quarters, where we pay back a big loan or something, where there may be just because we paid back a big loan. But absent that, it would be cash flow positive."​

So basically their Q3 and Q4 free cash flow was fluctuating around 1 billion dollars and Q1 will probably be similar - so 6-9 months in advance he clearly couldn't promise it in advance that they are going to be FCFP for all eternity.

 

[SOULPEDL]

Wondering if I'll get my next buy price at $285 next 2 weeks? I do think I got today's low anyway. (Notice I've been adjusting down, good thing today!)
Too bad on my $364 sell in there for weeks, got close! These cycles are happening fast, $365 in 3 weeks.
Isn't this fun!

 

[EVNow]

Comically predictable price action. Unbelievable but believable. Can’t wait for it to pop to $350 next week and dump again to $300 and so on. Man people are making sick money swinging this thing both directions

The unpredictable part is the timing. That's why its not that easy to make money. May be if you just stick to swing trading stocks, instead of options, its easier - but then you are making small amounts of money by putting in a lot of cash.

 

[Singuy]

Water?


Elon cant catch a break. He gets slammed for being aggressive / optimistic. Then he gets slammed for being pessimistic.

I do enjoy the deep dives into the myriad of topics OT and OT. Elon is doing what he has always done. Trim the fat, move the needle, and the shorts be dammed.

He is not being pessimistic but realistic. Lets say it takes 3 weeks to ship and unpack 20k cars. And lets assume Tesla would have delivered 5k cars a week in the U.S (or once shipment and deliverers are balanced in Europe) any given quarter except for this one, 750million-900 million dollars are not being made in Q1 due to the 3 week lag. This time you can't get back and it's mandatory unless just forget about the world market. This loss in revenue is just a one time deal once shipment and deliveries are balanced.

Elon wouldn't even be talking about this if Model 3s can teleport to Europe.

 

[printf42]

Elon to his 420 gang:
Dudes, that’ all I can do for you for now, quick finish up your plates, ER coming soon.


Now seriouse question, what’s the 4% Q3 profit he mentioned? Is it profit/revenue? But that’s about 4.5% wasn’t it?
So now we know Q4 is lower, but does that mean the percentage is lower or net number is lower?

 

[UncaNed]

The last 10 minutes of today's game will be very interesting. How much more SP damage will be accomplished with the uptick rule in place?
I'm gonna go microwave some popcorn

Edit: added "more"

More popcorn or more damage?

 

[Xpert]

So then what's the reason for doing it early? Your earlier argument was that he made the SP less likely to pass $360. Mine is that he made it MORE likely, unless he's that stupid.
The weed thing was a good move long term - next gen and free marketing about "Tesla makes an EV?."
We clearly have different strategies here. I buy and hold long, play a little on the ups/downs.
Buying some today, and more next week... unless I hear a better explanation?

I think reason he announced negative news early is due to the layoff Simple as that. I’m not buying the idea of 4D chess others think he plays.
If you are a buy and hold person then “buy a little today then more next week” wouldn’t be a bad idea. I personally will wait until next wednesday after the uptick is over (?) before i move some nvdia and other $ back to tsla. I am expecting it to hit below $300 next week without further news.

 

[sundaymorning]

Stock hasn't fallen enough dispite the already big drop. Cash is still on hold.

So the only question mark I have aboit the statement is: why is Q1 barely making profit? It is a quarter with 100% fully loaded model 3 so far. So profitability should be better than q3 2018. Is the repayment of the loan eating into profit? Didn't think it factors into eps.

The notes/bonds are due in March. Elon has mentioned this during the 3rd Q CC, despite us paying off the $700 convertible bonds, Tesla should still be slightly positive. This, to me is a bullish signal.

I think he wants to pay it off in cash.

 

[Fact Checking]

750million-900 million dollars are not being made in Q1 due to the 3 week lag.

Note that this argument is making the implicit assumption that they'll be shipping cars to the EU and China up until the end of the quarter.

Instead they could be redirecting the final month's Model 3 production to the U.S. again.

So basically Tesla can allocate Q1 Model 3 production the following way:

• In January and February Fremont is making mostly EU and Chinese versions: AWD and Performance trims.
• In March Fremont is switched back to U.S. and Canada production - it will work down the backlog it accumulated in the first 2 months plus March demand as well.
• Delivery delays to Florida are down to only 11 days - so more than 2 weeks of production can be made for the east coast and Texas.
  
• At the end of March Fremont will produce cars for west coast deliveries.
• On the final 1-2 days they do Bay Area same-day deliveries.

This strategy gives about 60% of the quarter's production for EU and China, and leaving the remaining ~35% for North America.

This way they could achieve similar results to Q3 - with the difference that cash flow will be burdened by the $920m repayment.

 

[Anton W]

That's false:

• FSD based on HW3 could come in Q1 or Q2 - this also unlocks deferred revenue of past FSD purchases - over half a billion dollars of profit.
• Shanghai Gigafactory will begin production this year, in the fastest growing EV market in the world.
• Gigafactory is ramping up as fast as they can, which will reduce the ridiculously long Tesla Storage order book.
• Further ramp-up of the Model 3 and efficiency improvements.
• Seasonally slow European sales will further accelerate.

Lots of potential areas of growth. Don't be misled by Elon's tone in the email - he was mainly addressing employees who just got laid off.

Are you claiming full self driving could be delivered this or next quarter? Or just that some features of the FSD product (like advanced summon), will be delivered?

 

[SteveG3]

Hard time deciding to buy now or next Tuesday.

why not split your money into two piles and buy half today?

 

[avoigt]

Can't wait for the moment we see Semis delivering cars....

https://www.linkedin.com/in/jeromeguillen/detail/recent-activity/

Gerome Guillen

Aircraft carrier?

 

[Singuy]

Note that this argument is making an implicit assumption that they'll be shipping cars to the EU and China up until the end of the quarter.

Instead they could be redirecting the final month's Model 3 production to the U.S. again. Problem solved.

What do you mean redirecting the final month's model 3 production to the U.S again? How will that make up for the lost revenue from initial batch of shipments?

U.S deliverers from now till say Feb will be 1000/week vs the usual 6k/week because 5k of cars are being loaded onto a boat. So you'll have 3-4 weeks of U.S making 1000/week deliveries while Europe makes 0. This is time you can't get back until end of q1 and starting q2 since you have lets say 2x the amount of delivery centers making deliveries (US + Europe), putting it at 10k/week for 3-4 weeks and then stabilize down to whatever production is. If you stop delivering to Europe besides the initial batch than you'll have this yo yo revenue every quarter so shipments must be split accordingly.

 

[avoigt]

Smart people realize when an opportunity shows up...


Verified account 2m2 minutes ago
Got a little more of that Tesla stock too. $TSLA
Ross Gerber on Twitter

 

[Fact Checking]

Are you claiming full self driving could be delivered this or next quarter? Or just that some features of the FSD product (like advanced summon), will be delivered?

I definitely think they'll stage it in phases and will do it carefully, as they were doing it with AutoPilot:

• "Vision based speed limit recognition"
  
• "Autonomous stop sign recognition"
• "Autonomous traffic light recognition"
  
• "Autonomous left turn, right turn"
• "Valet Mode" - where the car goes and parks itself autonomously.
• etc.

As they have said it in the Q3 conference call, the new, much more sophisticated neural networks are ready and are working well, they are waiting for the new hardware, the Tesla AI chip based HW 3.0 platform.

 

[SOULPEDL]

The notes/bonds are due in March. Elon has mentioned this during the 3rd Q CC, that despite us paying off the convertible bonds, Tesla should still be slightly positive. This, to me is a bullish signal.

I think he wants to pay it off in cash.

Interesting thought... wouldn't he prefer to pay in stock and use cash to grow faster? But if he could pay in cash AND still have a slight profit, that's still good news for the outlook. My guess is as much in stock but still keep the Q1 profitable (but tiny IOW).

Bloomberg thinking it's going to be a mix.
Bloomberg - Are you a robot?

I'm sticking with my theory so that stock is highest in March. Can he pay it early?

 

[sundaymorning]

I think the biggest issue is that this seems to settle the demand issue - at least for North America. Is there sufficient consistent (not pull forward) demand for M3s at a price where Tesla can make a sustainable profit? Musk says no - at least not without pushing down costs and increasing volume at the same time.

We are profitable now with the majority of production being the mid range model. Elon is looking forward 6 months from now, when the lower range model comes out, which is why the Tesla team needs to tighten its belt and work extremely hard without making mistakes like they did in 2018. I rather him act vigilant in this manner than running around dating movie stars.

When the Model S came out, the questions about demand and profits were raised for the lower models, we ended up dropping the 40kwh, replacing it with the 90, then dropped the 60, replacing it with the 100. Somewhere in between dropping those models, tens of thousands of 40s and 60s were made with profits showing in a couple quarters.