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

[Ulmo]

Volatile year for Tesla headcount, this latest cut takes them back to the level prior to the June-18 cut. It looks like 7k net employees were hired in 2H18.

Tesla employees:
Dec31-17: 37.5k
June-18: 46k
June-18 post cut: 42k
Oct-18: 45k
Dec31-18: 49k
Jan-19 post cut: 46k

Hiring is easy. The real talent is in firing the right people. Firing people is where you build your quality employees, not hiring people. --paraphrased from Scott Adams.

If true, then a regular churn mill for hire-fire cycles which, besides other factors (cash flow, profitability, price points of products, etc.), allows them to sift and sort who they want and who they don't want is a good thing for the company in a healthy company. Question is if it's selective or random, and if the company is healthy enough for such enhancements to count. They must be doing something right considering they keep selling cars. Commuting these days I usually have one Tesla Model 3 one car length away from me constantly -- there's that many of them.

While I agree that it's (obviously) not good news, I disagree regarding the headcount: they grew the headcount by 30% last year alone - so reducing that by 7% is still 23% headcount growth while revenue doubled.

That would be a net of hiring 23% more employees which would be better employees than just straight hiring 23% more employees without firing anyone. The trimmings are good: over-hire during ramps when you don't know exactly how things will go then fire the least good employees is a great way to grow rather than just taking whomever you get once in smaller amounts and sticking with them forever, never expanding workforce for temporary higher needs, and thus keeping excess workforce.

 

[Sudre]

I am sure the Bears are going to say the early ER is because they didn't take the time to get the numbers right. If you are just going to cook the books anyway, might as well heat them up in the microwave rather than the slow cooker.

Either that or they will say the ER is early because Elon is actually going to announce bankruptcy during the call.

 

[anthonyj]

Now, that creates some cognitive dissonance.

An early $TSLA ER is bullish and hints at good results, as was the argument of many when early Q3 results were announced.

But we were just told Q4 is less than Q3 and something unknown is to happen in Q1 to wipe out profits. That last part is worrying me in the sense that it can negatively affect the sentiment going into Q4 ER and after. Can something nice be said about Q1?

Sure, something very nice can be said about Q1. # of EU orders would be one. Another would be the refresh of S/X and margin increase. Another is FSD announcement and early Model Y reveal

Edit: and on the more tinfoilly hat side, Mercedes partnership for vans or SpaceX merger

 

[EVNow]

About the layoffs (not firing) - I'll repeat what I said about SpaceX layoffs.

It's much, much better to layoff people when the labor market is good, than when it is bad. All those who got laid off in 2008 in various companies found it really hard to get another job. That won't be the case now (though not sure how it works out for manufacturing jobs in CA).

 

[reddit_tl]

Wow - Tuesday is going to be crazy.

Won't be surprised if the SP climbs up quickly or if there are wild swings.

We have the govt shutdown (and emergency declaration) and now this announcement. Besides, 3 day weekend is probably long enough for the market to forget all about the Friday letter. I've barely started buying calls for Q4 ER

What are your guesses for market action on Tuesday ? High, Low & closing price ? We should start a poll.

BTW, after ER will also be wild. We already have the bad news out of the way - but Wall St will still declare a "miss".

same boat. Just picked some shares and didn't make calls.

however, i won't count good entry points out next week just yet.

 

[M3Rider]

Yes, slightly. I was expecting on 6th - with the date announced on 23rd. I think Tesla was compelled to make an earlier announcement because of today's price action - and the fact that entire Feb's SP is taken into account for conversion decision of March bonds.

That "compelled" part was entirely of their own doing. Surely they could word things differently, like "in light of upcoming challenges we're taking proactive steps, including in Q1 that can result in temporary reduction in profits, but much greater positive effect going forward..."
Surely you can spin anything positively if you want to.

Maybe the issue is they didn't want to sound too optimistic to the employees being let go and knew that they can't make 2 different statements to the employees and the media/investors, b/c employee email would be leaked anyway and raise questions on inconsistencies media-wide.

So, they still have a chance to improve this during ER letter/call by explaining how Q1+ will benefit from actions they are taking now.(I mean besides staff reduction)

 

[mongo]

I think Elon plagiarized Yogi Berra.

Half of plagiarism is mostly sincere flattery.

But I don't see this quote on the top 50 list.
The 50 greatest Yogi Berra quotes

 

[Words of HABIT]

Tips on getting through TMC investment thread: Ignore all posters except your favourites.

Observation: From all the photos/videos of Shanghai, the amount of air pollution is significant. China needs Tesla.

The competition: The Major Auto Manufacturers (and new start-ups) will all have to go through the heavy EV investments that Tesla is going through now. Elon's employee letter only shows how difficult it is. So far many others have talked about EV investments, but none have committed. Where are their Gigafactories?

My perspective: No Bull likes this drop from $350 to $300 within a few hours. Nonetheless, I'm still a strong believer in Tesla and its mission. TSLA will turn higher. The long story is still well intact. IMHO there is still no better place to keep my investments than with Tesla.

The real loss: For those of you who lost paper money today, please note where the real loss lies. My sympathies to those Tesla employees who have given it their all to reach for the stars, however who will be let go from Tesla due to this reorganization. May you overcome this setback, take your experiences and move on to other great ventures and wishing you and your families a bright, healthly and prosperous new year. Thanks for making my M3. Lov'n my M3.

 

[myt-e-s-l-a]

In for a trade - Sold Credit PUT spread trade @ 315/310

closed out this trade @ eod for a profit

 

[reddit_tl]

Tips on getting through TMC investment thread: Ignore all posters except your favourites.

Observation: From all the photos/videos of Shanghai, the amount of air pollution is significant. China needs Tesla.

The competition: The Major Auto Manufacturers (and new start-ups) will all have to go through the heavy EV investments that Tesla is going through now. Elon's employee letter only shows how difficult it is. So far many others have talked about EV investments, but none have committed. Where are their Gigafactories?

My perspective: No Bull likes this drop from $350 to $300 within a few hours. Nonetheless, I'm still a strong believer in Tesla and its mission. TSLA will turn higher. The long story is still well intact. IMHO there is still no better place to keep my investments than with Tesla.

The real loss: For those of you who lost paper money today, please note where the real loss lies. My sympathies to those Tesla employees who have given it their all to reach for the stars, however who will be let go from Tesla due to this reorganization. May you overcome this setback, take your experiences and move on to other great ventures and wishing you and your families a bright, healthly and prosperous new year. Thanks for making my M3. Lov'n my M3.

On the observation part: recently went to Hawthorne to check out SpaceX and TSLA design studio. The pollution in LA was quite awful. LA definitely needs more Tesla particularly SR M3!

 

[KarenRei]

Yes, slightly. I was expecting on 6th - with the date announced on 23rd.

30 Jan. is over two weeks earlier than the mean for Q4 ER dates. Not "slightly" - "very"

Q4 ERs tend to come later than other quarters, since they're year-end.

 

[shrspeedblade]

By my count this is about the 8th major drop I've "experienced" since starting to invest in Tesla. Prior to this, I'd only ever bought funds in a 401k, etc.

I can't decide if I now have nerves of steel or I'm emotionally scarred for life!
(Made a small buy at 306, very little dry powder right now.)

 

[Remus]

Well.... if you ignore a decade ago and the fact that taxpayers lost over 11 billion on a bailout.

Nice work making out of context quote!

We were talking about "protection" UAW is supposed to give to members and I was only trying to point out UAW failed to prevent a currently profitable GM from firing all of em

 

[myt-e-s-l-a]

By my count this is about the 8th major drop I've "experienced" since starting to invest in Tesla. Prior to this, I'd only ever bought funds in a 401k, etc.

I can't decide if I now have nerves of steel or I'm emotionally scarred for life!
(Made a small buy at 306, very little dry powder right now.)

If this is your 8th experience, you should be experienced to make an investment decision ?

 

[SO16]

Nice work making out of context quote!

We were talking about "protection" UAW is supposed to give to members and I was only trying to point out UAW failed to prevent a currently profitable GM from firing all of em

I quoted your entire post. But ok.... whatever. The UAW has turned into more of a hinderance than a help these days. The UAW didn’t help in 2008 and they didn’t help with the latest closure announcement.

 

[neroden]

Remind you of anyone else?

Yeah. The number of world leaders who are acting like this seems to be increasing. I've studied a lot of history, and unfortunately this time period is most similar politically to the lead-up to World War I, in which there were lots of vastly stupid leaders doing vastly stupid things, often with great unpopularity and great stubbornness.

Of the countries which entered World War I, many didn't even exist afterwards and many others had revolutions or total replacement of government.

A couple of decades before WWI, looking at the increasingly unstable geopolitical situation, a British writer invented the "ancient Chinese curse", "May you live in interesting times". Here we are.

 

[abasile]

Bad Headline. Looks like a fairer way of pricing than before.

After all if the costs differ, shouldn't their price differ as well ?

Yes, Fred's headline was a bit drastic.

To some degree, perhaps this may address the objection expressed by @neroden as to Supercharging being just as expensive in rural Upstate New York as in NYC.

I just hope that this increase in Supercharger profitability funds a mass Supercharger expansion. The goal was to make the expansion self-funding. Hopefully this will do it.

Really hard to say. Has anyone made an effort to create a detailed cost model for a Supercharger station?

 

[neroden]

Why then announce 50/50 cash and shares?

Tesla's budgeted to pay off the bond face value in cash. If the stock price was way over the face value, paying it off in cash might be too much for their budget. 50/50 means they don't exceed their budgeted cash outlay unless the stock hits $720, which probably seemed safely high. Makes sense if you think of it from a budgeting point of view: Tesla stock is extremely volatile; if it's low they know they have to pay out $920 million; if it's high they don't want to pay out more than that.

They probably could have done something more specific like saying they would pay off the face value in cash and the rest in bonds but I think they didn't wanna do the math, frankly

 

[neroden]

Obviously it'd have to be three ways, because there's three options now - Hard Brexit, No Brexit, and May's Deal. A vote can be arranged in four different ways -

1) All three choices at once
2) Hard Brexit? If not... No Brexit or May's Deal?
3) No Brexit? If not... Hard Brexit or May's Deal?
4) May's Deal? If not.... No Brexit or Hard Brexit?

One option has to be chosen. Whether the public or parliament does it. And inaction is a choice of Hard Brexit.

The correct way to organize the vote is Approval Voting.

Vote for As Many As You Approve Of:
-- No-Deal Brexit
-- May's Deal
-- "Norway Solution"
-- Stay in the EU

Whichever is most popular wins. I bet some people would vote against all of them

Unfortunately they'll probably run the referendum wrong; most politicians do not understand why you need to use approval voting for this sort of thing. (Reason: it gets you the most popular result.)

 

[MP3Mike]

Here in upstate NY, I pay 12 cents/kwh for 100% renewable electricity. Tesla's Supercharger pricing is wildly overpriced by comparison, totally uncompetitive at 24 cents/kwh -- TWICE what you'd pay at home. Stupidly excessive price-gouging levels.

@neroden How are things now with the new price changes? Did upstate NY prices go down at all? (Or is it just cheaper than New York City now?)