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

[mongo]

Or, he just screwed up with over the top hyperbole.

What hyperbole?

It is important to bear in mind that we lost $700 million in the first quarter this year, which is over $200 million per month. Investors nonetheless were supportive of our efforts and agreed to give us $2.4 billion (our net proceeds) to show that we can be financially sustainable.

That is a lot of money, but actually only gives us approximately ten months at the first-quarter burn rate to achieve breakeven.

2.4 billion / (700 million / 3 months) = 10.3

When making hundreds of thousands of cars, battery packs and solar systems, even a ten cent savings could be worth over $50,000 a year. There are over 10,000 unique parts and processes at Tesla, so making small improvements across the board has a giant cumulative impact.

500,000 vehicles * $0.10 savings = $50,000

That is why, going forward, all expenses of any kind anywhere in the world, including parts, salary, travel expenses, rent, literally every payment that leaves our bank account must be reviewed, confirmed as critical and the top of every page of outgoing payments signed by our CFO.

I will personally review and sign every 10th page.

Assuming that does not include individual paychecks, it seems possible.

Please examine closely every expense where responsibility is, or probably should be, assigned to your group. If in doubt, assume it is on your plate, so that we don’t have anything slip through the cracks.

This will take at least a few weeks to get right. Please don’t worry if it isn’t correct at first.

Looks non-hyperbolic, no threats of immediate termination for not getting it perfect right away.

This is hardcore, but it is the only way for Tesla to become financially sustainable and succeed in our goal of helping make the world environmentally sustainable.

This is the only potential hyperbole I see, this not hardcore, this is smart business. Hardcore would be 25% cuts across the board and no spends on anything.

This is a smart person heading off a common problem:

Why do 70 percent of lottery winners end up bankrupt? - cleveland.com

Here's why lottery winners go broke

 

[anon]

It's curious that they are putting so much effort into games, now porting Unreal and Unity engines. I wonder if this could be preparation for an app store? A few novelty games included at no extra charge seemed reasonable - it's an extra talking point, something else to attract attention to the cars. However, to me it is surprising that they are putting a lot of ongoing effort into adding many more games without some kind of financial return.

Perhaps it's all part of the self-driving strategy - people would likely spend a lot more time playing with the screen if there was no need to pay attention to the road.

 

[mongo]

It's curious that they are putting so much effort into games, now porting Unreal and Unity engines. I wonder if this could be preparation for an app store? A few novelty games included at no extra charge seemed reasonable - it's an extra talking point, something else to attract attention to the cars. However, to me it is surprising that they are putting a lot of ongoing effort into adding many more games without some kind of financial return.

Perhaps it's all part of the self-driving strategy - people would likely spend a lot more time playing with the screen if there was no need to pay attention to the road.

It may be integral to the center display experience. A better 3-D render of the AP feeds perhaps. The render engine could also support a 360 camera view around the car via texture mapping. Though that math/ algorithm is not complex to redevelop, it makes sense to leverage a known platform.

Augmented reality headset for FSD testing would be handy too.

 

[JRP3]

What hyperbole?

Using a terrible outdated, (hopefully), burn rate from a previous bad Q. This implies that the burn rate is potentially ongoing and/or could happen again, which is exactly how it was interpreted.

 

[JRP3]

GF3 video

 

[tinm]

Too many folks replying to my questions to answer individually on this iPhone so here’s a general reply.

My Occam’s Razor says reporters write poor/negative stories about Tesla because they don’t care or they’re cynical or they resent the elitist Silicon Valley rich-bro vibe that Tesla sometimes gives off or they’re just sloppy reporters or deep down they’re grizzled veteran Detroit gas-car people who love the rumble of an ICE or they can’t stand billionaire Elon or they’ve read too much of and buy into TSLAQ propaganda, or they believe they could never personally afford a Tesla and maybe resent those who can, or they’re sick of the drama and hype that surrounds Tesla and annoyed that the company’s corporate PR people are impossible to work with and don’t give them any useful info, or they’re stuck in the day-to-day/quarter-to-quarter mindset and can’t/won’t take a longer term view, or they’re just chronically skeptical of anything Tesla claims... or a dozen other similar reasons. Or, likely, often some combination of the above.

Does the legacy auto industry have influence over the media? No doubt. Autos are deeply embedded in the culture especially in the US. Historically the auto industry has been one of the largest advertisers in print and broadcast. But a lot’s changed with the rise of the Web.

A lot of TMC folks here seem to have different Occam’s Razors, ones that tell them that obviously the auto industry is directly influencing/ordering media outlets to be negative on Tesla. I disagree it’s that blatant or simple. I think editors and reporters are fully capable of being negative on Tesla for their own reasons without pressure from execs upstairs. And I base this on conversations I’m having with individual reporters some of whom have written infamously negative stories on Musk/Tesla.

So for me, until hard evidence says otherwise, I’ll continue to place the source for the media negativity on Tesla largely on the reporters themselves.

 

[SO16]

Listen, totally agree with your point. My point is that institutional investors sell their TSLA holdings when there are too many shenanigans. And they sometimes don’t buy back. People that manage billions of dollars start to shy away from someone with damaged credibility. There are many strong hands that would be holding TSLA stock if it hasn’t been for those “Elon” moments.

Let the short sighted institutions give us a prime buying opportunity. They will wake up eventually. I just wish I had more dry powder to buy.

 

[hacer]

My 2018 RWD was $49k + $8k for FSD = $57k
My 2019 DM was $49.5k + $5k for FSD (it’s now $6k). = $54.5k or $55.5k to buy today.

So basically DM is almost same price as the original RWD base price, plus it includes basic Autopilot for free,

So dual motor only cost an extra $2,520 when you figure in the tax credit. Tesla was explicit about lowering prices to compensate for the tax credit reduction.

 

[mongo]

Using a terrible outdated, (hopefully), burn rate from a previous bad Q. This implies that the burn rate is potentially ongoing and/or could happen again, which is exactly how it was interpreted.

I also hope it is outdated, but it does not seem unreasonable from a cautionary point of view.

In millions:
Q1 19: $702 loss
Q3,Q4 profit
Q2 18: $717 loss
Q1 18: $709 loss
Q4 17: $675 loss
Q3 17: $619 loss

This is also P/L not cash flow, but is the thing employees can more easily impact.

 

[SO16]

Shareholders are not happy now !

They should look at this as a prime buying opportunity.

 

[SO16]

In all seriousness, how are other people doing in terms of referrals? I find it ridiculously easy to sell the three. I tell people to hop in and test drive it and they buy it.... instead of moping around the stock price let’s get more members into the Tesla family!

Unfortunately I have a difficult time in Michigan. I have 3 really interested but the no local service centers is a concern for them. And yes, I have explained mobile service.

Tesla also no longer offers the valet service to pick up our cars to bring it to Ohio or Chicago. (Which I can understand.)

 

[hacer]

I do not find evidence for this. It is, imho, a common conspiracy theory that the absence of Tesla advertising is what’s driving what passes for media coverage of Tesla. The reality out in the field suggests other causes. “The media” is a coin the two sides of which are editorial and publishing. In the majority of cases of news-gathering organizations, different people run the two different sides. Publishing owns advertising. What I find repeatedly on the editorial side, when it comes to Tesla, is news gathered with great urgency and as quickly as possible in a neverending race with other news-gathering organizations, and this urgency means reporters have little time for nuance, context, focus on the truly significant meaning, or an appreciation of history, and editors, under pressure from the publisher to generate as many eyeballs as possible, have little patience for the more conscientious of reporters who would very much like to instill more nuance, context, focus on the truly significant meaning, and appreciation of history in their articles.

The lack of those qualities in so many Tesla articles and the sometimes obvious / sometimes subtle trashing of the company and/or Musk stems from incomplete reporting, frequent speculation, and a company that does not care to staff its comms/PR team sufficiently so as to increase the chances that reporters would report with more nuance, context, focus on the truly significant meaning, or appreciation of history. Oftentimes we find reporters following the TSLAQ propaganda foisted upon the Twitter world, and based on my experience talking to Tesla reporters I think they do it because of the dearth of rich information coming from Tesla itself. Reporters, like nature, abhor a vacuum.

Also, many times Tesla reporters are bassd in the SF Bay Area, hundreds or thousands of miles from their media company’s newsroom. There’s little to no interaction between such reporters and their publishers. I do not see an insidious, implied influence of publishers, steaming because Tesla doesn’t pay them ad money, weighing down on the editors or the reporters. The editorial side is fully capable of screwing up the truth on its own, without any kibbitzing by the publisher.

I would have thought that you, having first hand experience with a bonafide conspiracy in your own state to stop Tesla from selling and servicing vehicles, would be able to see the mainstream media conspiracy which is plain as day.

Your assertion that it is because of a lacking of PR from Tesla rings quite hollow. Consider two recent examples where Elon himself provided lengthy interviews to the MSM: 60 minutes and the NYT. Did the "rich information" provided by Elon lead to "nuance, context and focus?" No. It led directly to intentionally misleading hit pieces.

I don't know if advertising dollars from Tesla could diminish the MSM FUD machine. I think it will always pale compared to the total advertising from the many industries that fear Tesla. So I don't think the FUD will ever stop until EVs have widespread adoption. Probably not even then.

 

[mongo]

Unfortunately I have a difficult time in Michigan. I have 3 really interested but the no local service centers is a concern for them. And yes, I have explained mobile service.

There is a new service center in Toledo. It's a bit closer than Cleveland.

 

[jerry33]

A lot of TMC folks here seem to have different Occam’s Razors, ones that tell them that obviously the auto industry is directly influencing/ordering media outlets to be negative on Tesla. I disagree it’s that blatant or simple. I think editors and reporters are fully capable of being negative on Tesla for their own reasons without pressure from execs upstairs. And I base this on conversations I’m having with individual reporters some of whom have written infamously negative stories on Musk/Tesla.

Of course it's never that simple. But that doesn't mean that those who advertise get favoured treatment and those who don't, don't. There are several studies, mentioned in an earlier post that show this happens. No one bites the hand that feeds them without some really large overriding condition. I also don't doubt that media employees have been given hints from above (Individual writers are not generally employees), and I also don't doubt that some positive stories have been suppressed or altered to appear negative. Otherwise there would be a lot more positive articles to balance the negative ones.

The simplest explanation is: advertise and get positive or neutral stories or even no stories about negative events. Don't advertise and get hit pieces regardless of whether the facts are positive or negative.

 

[Dan Detweiler]

Well gang, for better or for worse, I am officially back in the game! Bought in today with more to follow at the end of the week. Going 3/4 Tesla and 1/4 ARK Invest. Don't need the money right away. Not even going to think about trading for at least 5-7 years. Planning on this paying for my Model Y on down the road!

Yes, the guy is obnoxious to watch, but this video sums up why I jumped back in at this point. Love the comparison of what a share bought you in 2014 and what a share (at roughly the same price) gets you now.

Dan

 

[Drax7]

Wire services like Reuters make money by selling feeds to newspapers, but Reuters isn’t going to write as many stories about topics that media outlets aren’t interested in publishing.

A media outlet won’t jeopardize ad revenue by publishing too many stories that harm its clients. Tesla threatens every one of their auto clients, so media outlets have little incentive to post positive news on Tesla when negative news generates just as many clicks.

I guarantee that auto compaies track how often competitors are mentionned favorably by media outlets they advertise with. As long as everyone is advertising and fairly covered, this isn’t an issue. But advertisers will complain if Tesla gets too much favorable exposure, especially when they aren’t advertising.

By no means is this a conspiracy and I don’t think reportrs have anything against Tesla. It’s just how things work out, given that everyone wants to make a buck.

Follow the money, negative news sell, and positives don’t.
Safe landing don’t get reported.
The same logic applies here.

People like to read negative stories about what is good for them.

 

[hacer]

...
A lot of TMC folks here seem to have different Occam’s Razors, ones that tell them that obviously the auto industry is directly influencing/ordering media outlets to be negative on Tesla. I disagree it’s that blatant or simple. I think editors and reporters are fully capable of being negative on Tesla for their own reasons without pressure from execs upstairs. And I base this on conversations I’m having with individual reporters some of whom have written infamously negative stories on Musk/Tesla.
...

So when you speak to the various people in the New Mexico government, do they actually admit to you that they are in the pocket of the auto dealers? Or do they instead spew some BS about protecting consumers or other such nonsense? If it's the latter do you believe them? If not, why would you believe the reporters?

 

[JRP3]

Bought in today

How did you manage that?

 

[Webeevdrivers]

Amusing story. In a recent email with our Tesla rep in Vancouver he explained they are taking 800 orders per week and I assume delivering as many. That’s like 100 cars per day. Pretty amazing for one province. To get the car we would want us 4 to 8 weeks. LR RWD white on white, sport rims, etc. He’s a good rep and keeps us up to date.

Also got an update text from our Nissan rep. We have a Leaf SL Eplus on order. Delivery now expected January 2020. Looks crazy right. 8 month waiting list for our Eplus but only 4 to 8 weeks for a model 3. But here’s the thing. Our dealership is only allowed 18 Leafs per month. Last year they sold close to 250 for the year. My point is it’s the kind of thing that could be spun easy. I can get a Tesla in 4 weeks but because of superior demand it takes 8 months to get a Leaf Eplus.

Just sayin. Things are not always as they first appear.

 

[K_Dizzle]

Amusing story. In a recent email with our Tesla rep in Vancouver he explained they are taking 800 orders per week and I assume delivering as many. That’s like 100 cars per day. Pretty amazing for one province. To get the car we would want us 4 to 8 weeks. LR RWD white on white, sport rims, etc. He’s a good rep and keeps us up to date.

Also got an update text from our Nissan rep. We have a Leaf SL Eplus on order. Delivery now expected January 2020. Looks crazy right. 8 month waiting list for our Eplus but only 4 to 8 weeks for a model 3. But here’s the thing. Our dealership is only allowed 18 Leafs per month. Last year they sold close to 250 for the year. My point is it’s the kind of thing that could be spun easy. I can get a Tesla in 4 weeks but because of superior demand it takes 8 months to get a Leaf Eplus.

Just sayin. Things are not always as they first appear.

800 in just Vancouver or all of Canada? Quebec and BC have some serious incentives right now