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

[EinSV]

Geely's moving in on foreign markets (probably hit them in 2020-2021) and owns a bunch of well-known foreign brand names. 'Nuff said.

See Geely's method. I suppose the other companies will find it harder.

Also, other Chinese auto oems can probably take another card from Geely's playbook and pick up beaten down European/U.S. brands on the cheap over the next few years to speed up entry into European/U.S. markets.

(Edit: maybe this is what you are suggesting? Worth making more explicit in any case ....)

 

[SebastianR]

Alright the 300 held today at the bell. On a day like today that's also something.

 

[KarenRei]

I'm glad that the stock stayed weak all the way to the close. It increases the odds that I'll be able to pick up some cheap options on Monday (if they approve my margin application then) or Tuesday (assuming I get a 2-day settlement).

I discovered that today wasn't a total loss - I was still able to trade in my existing options, buying and selling them at will, so I sold my 15 Feb $330s on a downswing and then bought some (more highly leveraged) 22 Feb $350s (something I wanted to convert to) further down. I had some fun profiting on the volatility with the spare change in my account as well - made a few hundred dollars that way

 

[abasile]

After a buy that executed at 302, we're now back up to our high water mark in terms of TSLA shares owned. Perhaps this is a good time to take a break from closely following Tesla news and TMC, and just sit on our holdings for the long haul. No swing trading, no options, just simply hold the stock and appreciate our Tesla products.

 

[Mich]

23 million shares traded of the 170 million TSLA shares, and none of them from me nor Elon, nor Larry, nor lots of others. Couldn’t the rest decide whether to buy or sell, so they did both?

No. 23m shares traded today. We don't know how many shares where traded multiple times. I guess the number of actual shares are very low.

 

[MP3Mike]

I'm glad that the stock stayed weak all the way to the close. It increases the odds that I'll be able to pick up some cheap options on Monday (if they approve my margin application then) or Tuesday (assuming I get a 2-day settlement).

Monday is a holiday so you won't be getting anything then...

 

[anthonyj]

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.

I feel relatively safe putting in large amounts into TSLA. I really believe $250 is the hard floor where Elon’s buddies/institutions/smart people load the boat. I don’t know. Tesla’s swings made me so numb to unrealized losses and gains

 

[Fact Checking]

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

What's your current revenue estimate?

 

[lklundin]

Hyper bulls always run to FSD when desperate to maintain their confirmation bias of valuation

Let me take this opportunity to state that your wildly misleading and outright manipulative writing on SA means that the general sentiment here is that you are partly ridiculous and partly despicable.

Welcome to TMC.

 

[neroden]

BTW., I see this a change in strategy: in the past Elon was willing to use leveraged debt to bridge opex costs, to keep the reinvestment cycle and to keep employees on.

I believe the near-death experience with Tesla taught him that the answer to opex overruns is to cut opex - and labor costs are a big part of that, because not doing that risks a 100% workforce reduction... Even with the cuts Tesla's workforce has still grown over 20% over the last 12 months.

FWIW, anecdotal rumors are that the cuts are *not* in service. Which is good.

 

[KarenRei]

What's your current revenue estimate?

Also curious about their EPS estimate.

 

[anthonyj]

Cathie Wood buying a silly amount of shares. She knows where to buy from what I’ve seen

 

[neroden]

What is everyone’s play today?

I closed my higher-strike short puts expiring today (highest strike was $310) before they executed. (At a large profit, from harvesting time decay, though not quite as large as if they had expired.) Then I sold some longer-dated short puts with lower strike prices, because high volatility is a good time to do that.

 

[Rarity]

because debt repayments decrease free cash flow, but not profits. (Taking the loan didn't directly increase profits either so that's fair.)

Debt repayments don't impact free cash flow either. They do impact the cash flow, obviously.

 

[KarenRei]

Let me take this opportunity to state that your wildly misleading and outright manipulative writing on SA means that the general sentiment here is that you are partly ridiculous and partly despicable.

Welcome to TMC.

While I agree with this, I'll also say to Anton: If you're here not to troll, but to take part in a serious discussion, I'll actually welcome you here. You have a good start by not astroturfing (aka pretending to be a long when you're not, as some shorts do when they come here).

I pop over to SA and short Twitter feeds because I think it's important to know what the "other side" thinks, as a crosscheck on one's assumptions. Hopefully you do so as well. Obviously, 99,9% odds say that nobody here is going to change your mind, and the same odds say that you're not going to change ours. But so long as whenever you're here you take part in legitimate discussion of issues... then, hey, I say welcome to TMC.

 

[EVNow]

I feel relatively safe putting in large amounts into TSLA. I really believe $250 is the hard floor where Elon’s buddies/institutions/smart people load the boat. I don’t know. Tesla’s swings made me so numb to unrealized losses and gains

What I mean is - if you put large amounts of cash on options instead (like me) you can make a lot more. But then the timing has to work in your favor. Like it miraculously did today for me - wrote $315 calls that were worth $32 yesterday (my basis was $21), but expired today worthless.

Anyway, bought some calls today. Will buy rest next week. Now I'm buying April '19 calls to give enough time for SP to recover, in case it falls after ER.

But, I've to say, thankfully EM sent this letter. An unpleasant surprise in the ER would have sunk many of us.

 

[neroden]

So there's a chance that options delta hedging will create a big spike down on the open. That would trigger the short selling circuit and we could observe what genuine bearish investors think is the price bottom is.

Looks like you were right. Apparently the balance with a lot of genuine bears but few short-sellers is a floor at $300. This doesn't actually surprise me.

 

[Fact Checking]

Debt repayments don't impact free cash flow either. They do impact the cash flow, obviously.

Indeed - edited.

 

[Reciprocity]

Just occurred to me, this might be due to Q1 including some downtime for S/X production in order to make changes for the battery packs, and/or some hiccups already showing up in doing this.

I think they would have included some color on that, otherwise they nuked the stock from space for no apparent reason. This makes me think its less likely to be true. Timing for this has always been after Q2 due to timing of tax credit phase outs next step down. Instead of lowering prices this time, they give more value. They could indeed be doing some work each qtr to make this happen and thus you might still be correct to a degree. Cancel 75D, this pushes people to higher margin 100D and 3 AWD/P. All while lowering the total number of S/X they need to build. They can make 10k less per Year and get the same revenues from S/X, they can do 20k less if there is a spike in AWD/P orders to compensate for another 10k 75Ds. All back of napkin WAGs so dont @me.. I know im crazy already.

In short, I dont think Q1 is the right timing for refresh and I dont think they would have nuked the stock if they were ready to announce hat in 2 weeks during earnings. That does not mean they are not planning on exactly that, though at a later date. I also think there is a chance that they continue 100D on 18650 rebadged as LR (Long Range), and 120D+ badged as ELR, or Extremely Long Range.

I am not happy with the language but I respect that Elon is being honest. Sometime I wish he would slap a coat of sunshine on this crap. I guess I cant complain about not liking when politicians lie and be a hypocrite when im upset at Elon saying it like it is. I still wish Elon would have spun it a tiny bit more positive and yes, I realize that makes me a hypocrite but I am fine with that.

Good luck to all.

 

[generalenthu]

Indeed you are right, I forgot about that.

Instead of these imperfect ad-hoc estimates I'll defer to @ReflexFund's updated estimates which he provided today - the new numbers are Q4 profits of $177m and free cash flow of $990m:



Two wildcards I mentioned earlier are probably out of play for Q4:

• Tesla probably didn't squander their sizeable ZEV stockpile in Q4 (it might be a good rainy day fund starting end of next year when Trump will probably lose the election),
• They probably didn't recognize deferred revenue for the Autopilot milestones they reached in Q4

The payables factor is still a wildcard and could improve (or worsen) free cash flow in Q4.

The pessimistic view is they used them to offset the lower margin from Lemurs. And still ended a bit short from Q3.