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

[mongo]

As I said in a previous post,

I'll wait for the DMV reports that come out this February.

I don't think Tesla drove 100 autonomous miles in 2018 (according to the legal definitions of autonomous driving).

Per the California reporting law, the use of a nag feature (like EAP has) removes the requirement to report driving. Thus, as long as FSD has that nag enabled, no Tesla FSD testing needs to be reported. The employees could report any inadvertent versus necessary disengagement to the test team via voice commands.
Having no one in the driver's seat is a PR thing. For testing, there is no harm in having a human there.

 

[Fact Checking]

It kind of has to happen *sometime*, though. I know automakers do this "earnings massage" swinging of inventory, but it's really inefficient and a drag on long-term cash flow and profits. (You have to size the entire delivery pipeline, including store employees and storage lots, for *peak* operations rather than *steady state* operations.)

Agreed, Model 3 and Model Y deliveries to China and Europe are going to become super smooth once the Chinese and European Gigafactories are in operation!

 

[gene]

I'm glad to have picked up 400 shares today. These are the exactly the kind of dips I wait for. The market does not open again until Tuesday. Hmmm...that's plenty of time for good news.

12/24/18 was not that long ago. I bought shares at $297 that day. Seems like a long time ago, but was only a bit more than 3 weeks ago. How quickly we get used to whatever the new share price happens to be.

 

[anthonyj]

Not sure if this was posted here, but short interest didn’t increase today. Lots of covering recently

Ihor Dusaniwsky on Twitter

 

[adiggs]

It kind of has to happen *sometime*, though. I know automakers do this "earnings massage" swinging of inventory, but it's really inefficient and a drag on long-term cash flow and profits. (You have to size the entire delivery pipeline, including store employees and storage lots, for *peak* operations rather than *steady state* operations.)

And you can reduce that peak sizing, if you design the overall system to operate in something more like a steady state rather than batches (which I know that you know).

The way I see it - if Tesla / Musk really do only care about the long term (and I more agree with that premise than not), then a logical extension from that is to ALSO report average working capital through a quarter, and/or average delivery days (days from "vehicle shipped to vehicle delivered"), or some other metric they have that they use and we can use to track working capital.

Something better than the working capital at a single arbitrary point in time that can also be easily gamed (namely, working capital as of the end of the quarter).


I realize it's gamesmanship that is practiced throughout this and other industries. It also looks to me like if Tesla explains their metric, and explains why they're focusing on keeping working capital efficient at all points in time rather than optimizing for single points in time every 90 days, that's an explanation that can then be tracked quarter to quarter AND that the long term shareholders of the company will buy into and support (the shareholders that I believe Musk cares about).

More broadly, I think that pretty much any company choice about how operations are run can be explained and supported by shareholders. The ones that disagree strongly will vote by selling, and the ones that agree will vote by buying. (Of course, assuming that the company is doing something that's smart from at least 1 point of view). For this reason, the company's current preference for optimizing operations around a single point in time that occurs 4 times a year (support from the rest of industry, easy to explain, number provided has the best visual appeal) can also be defended.

I think Tesla could change operations, explain the how and why, and the market would reward them for it. Maybe not immediately, but within 2 quarters. Especially if they showed how the optimization for the quarter end number caused the average working capital number for the quarter to be artificially high compared to an operations workflow geared towards smaller swings.

 

[sundaymorning]

I said the same thing to my wife today when I was driving as I lost 20k in Tesla equity..lol.
The product is just so damn good. This is coming from my previous car, a Jaguar XF supercharge. It's really magic how precise the car is. The driving experience is just so refined as if they have been doing this for hundreds of years.

I agree with this completely, I came from a 90k car and Tesla blows it out the water. I can’t wait for version 2 of model S/X, which I don’t anticipate coming online until early next year. I think the focus for Tesla in 2019 should be on model 3 and expanding its service/body centers.

The only thing we need for Tesla and the team to do now is to put those 35k versions into customer hands so we can accelerate this chatter.

 

[Singuy]

I'm glad to have picked up 400 shares today. These are the exactly the kind of dips I wait for. The market does not open again until Tuesday. Hmmm...that's plenty of time for good news.

12/24/18 was not that long ago. I bought shares at $297 that day. Seems like a long time ago, but was only a bit more than 3 weeks ago. How quickly we get used to whatever the new share price happens to be.

Yes, but with such a *sugar* macro, any massive green days like today becomes wasted. Tesla would have been a +3-4% day but instead we end up triggering the uptick rule..yet again...

If this letter came out next week, we would still crash 10%+ but at least we'll end up with a higher outcome vs today

 

[reddit_tl]

Yes, but with such a *sugar* macro, any massive green days like today becomes wasted. Tesla would have been a +3-4% day but instead we end up triggering the uptick rule..yet again...

If this letter came out next week, we would still crash 10%+ but at least we'll end up with a higher outcome vs today

TSLA often decouples with the broad market.

I wouldn't worry about it. Picked up some shares today. Getting ready to make some calls next week.

 

[Bet TSLA]

I'm going to go sell all of my assets

You still have assets?

 

[1101011]

...May is making the absolute worst possible decision, trying to hang onto power when she's lost confidence and lost supply...

Remind you of anyone else?

 

[Singuy]

TSLA often decouples with the broad market.

I wouldn't worry about it. Picked up some shares today. Getting ready to make some calls next week.

Not when it was green today on China trade

 

[RobStark]

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

It may become the UAW's strongest selling point to Tesla employees.

You need protection from Musk's Manic-depressive bi-polar unjustified arbitrary firing sprees.

At the end of the day it is not Musk's choice. Employees have the right to unionize.

 

[Remus]

It may become the UAW's strongest selling point to Tesla employees.

You need protection from Musk's Manic-depressive bi-polar unjustified arbitrary firing sprees.

At the end of the day it is not Musk's choice. Employees have the right to unionize.

What protection? What did they do when GM reduced shifts and eventually closed the plant?

 

[RobStark]

I estimate each of the above products/features can bring different levels of impact to the stock price (within 2 years):
FSD $930
Model Y $100
Semi $20
Truck $50
Roadster $30
Powerwall/pack $50
Solar Roof $5

You think the Roadster will bring in 50% more profits than the Semi?

Or are you placing a value on ephemeral goodwill and marketing value?

 

[RobStark]

What protection? What did they do when GM reduced shifts and eventually closed the plant?

Private sector Unions can't offer 100% protection from getting RIFed.

They regularly stop profitable companies from closing unprofitable factories or product lines.

And Unions regularly stop companies from firing low performing employees.

IF not for the UAW Nummi Fremont would have been closed 20 years beforehand. Among other factories.

And may have kept GM from bankruptcy. But employees care about their job in the present not the long term viability of their employer.

 

[KarenRei]

Macros, macros, macros...

Donald J. Trump on Twitter

Based on recent talk, it's expected he'll be declaring a national emergency. Which actually could be a good thing. If he does so, and then signs a bill to reopen the government (which the Senate has been sitting on), the House will immediately:

A) File suit in court (such an emergency is not expected to be upheld)

and..

B) Pass a resolution terminating the emergency under the National Emergency Act. The full Senate will be forced to vote on this resolution within six days (can't just be tabled), so everyone in the Senate will have to go on record supporting or opposing the emergency (which most are not keen to do).

In short, this could in relatively short order lead to the reopening of the government... IF he A) declares an emergency, and B) follows up by requesting a bill to reopen the government from the Senate, then signs it.

Reopening the government would be a massive macro boost.

 

[mongo]

Private sector Unions can't offer 100% protection from getting RIFed.

They regularly stop profitable companies from closing unprofitable factories or product lines.

And Unions regularly stop companies from firing low performing employees.

IF not for the UAW Nummi Fremont would have been closed 20 years beforehand. Among other factories.

And may have kept GM from bankruptcy. But employees care about their job in the present not the long term viability of their employer.

I think we were thrown off by thinking this was your statement to us, not the UAW's to workers:

You need protection from Musk's Manic-depressive bi-polar unjustified arbitrary firing sprees.

 

[EVNow]

B) Pass a resolution terminating the emergency under the National Emergency Act. The full senate will be forced to vote on this resolution within six days (can't just be tabled), so everyone in the senate will have to go on record supporting or opposing the emergency (which most are not keen to do).

And here is the fun part. Trump can veto this. Its untested as to whether that is legal. And Brett Kavanaugh will have the final say

OT : I'm all for national emergency declaration. What better way for President Sanders to implement Medicare for All and the new Green Deal in 2021 ? And, unlike the wall, they definitely are national emergencies.

 

[EVNow]

But employees care about their job in the present not the long term viability of their employer.

Unions are like Vaccines. Now that we have all got the accrued benefits of unions fighting for decent working conditions over decades, we can diss them.

 

[brian45011]

I think he wants to pay it off in cash.

Why then announce 50/50 cash and shares?