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

[BioSehnsucht]

AFAIK CCS does not allow adapters.

European Model 3s are getting CCS only ports and European superchargers are adding CCS in addition to Tesla standard.

CCS not allowing adapters has been "known" for some time, but Tesla has actually stated they will make Type 2 CCS adapters available for existing Type 2 (non-CCS) S/X vehicles.

Tesla confirms Model 3 is getting a CCS plug in Europe, adapter coming for Model S and Model X

“While Tesla owners already have access to the most convenient and reliable charging solutions available between home charging, Supercharging and Destination Charging, we want to expand their ability to charge at third party fast chargers. In advance of Model 3 rollout in Europe, we will be retrofitting our existing Superchargers with dual charge cables to enable Model 3 which will come with a CCS Combo 2 charge port, to use the Tesla Supercharger network. Model S and Model X customers will continue to have full access to the network and a CCS Combo 2 adapter will soon be available to purchase, if desired.”

So I would gather that Tesla has found away around the restriction, perhaps by getting the rules changed, or perhaps with some novel interpretation of the rules... but in either case, I would no longer be so certain an adapter can't happen when they've officially stated it's coming.

 

[KarenRei]

With a LR RWD w/ stock aero wheels (but the aero caps removed), and doing 80mph highway driving, and usually at least one hard launch per trip, sometimes more, in the "cool" weather ( 35~50F ) I have managed to average in the neighborhood of 300Wh/mi. In warmer weather (50~100F) but otherwise driving the same, I have averaged around 245Wh/mi.

Exactly. And that's more aggressive driving than most of the world does. Where I am, for example, the maximum speed limit in the country is only 56mph Even a performance on 20" wheels would be unlikely to burn 310 Wh/mi over here (unless the driver is fond of tickets ).

 

[FS_FRA]

What’s with all this talk about a lot of EU service centers closing shop and being delisted from the site? Seeing this on Mark Spiegels page, any truth to it?

Nothingburger. “All this Talk” = a couple of twits

Also: why listen to anything that idiot says?

 

[KarenRei]

You need to stop defending the undefensible.

Walk into any dealer,go to their parts department and ask for a fender on a less than 10 year old model.

Good chance they have it in stock or a nearby dealer has it in stock. And they can get it that day.

Meanwhile, my Ford pickup has been in the shop since mid fall, but let's keep pretending that this is a Tesla-specific problem....

The worst sort of delay cases that you hear about are things like what happened with my Ford: 1) Wait for an opening to get the vehicle fix 2) They start working on it, and discover what's broken 3) Wait for hard-to-get parts 4) Parts arrive, but when they start the replacement process they discover something else broken 5) Wait for hard-to-get-parts 6) Parts arrive, but in the meantime one of the shop's employees has quit and now they're overloaded again; wait for another opening 7) They start working on it again and find yet another thing broken 8) Wait for parts (this is where I'm at today).

Tesla may be "worse than average", but delays are hardly unique to them.

 

[EVMeister]

Seeing this on Mark Spiegels page, any truth to it?

I think that answers itself.

 

[KarenRei]

I think that answers itself.

It's always reasonable to check to see if there's anything negative about the company that we've missed. But yes, 95% of the "news" he posts is BS.

Often whenever I visit short-seller pages I click the links on their retweets - whenever they retweet anyone who had any sort of negative experience with Tesla (which is half of what they do, completely oblivious to the fact that there's a quarter million Teslas out there) - and let the person who made the original tweet know that they've been retweeted by the TSLAQ bubble and that the sudden influx of people commenting on their posts aren't "concerned individuals", they're short sellers.

 

[Bet TSLA]

Meanwhile, my Ford pickup has been in the shop since mid fall, but let's keep pretending that this is a Tesla-specific problem....

The worst sort of delay cases that you hear about are things like what happened with my Ford: 1) Wait for an opening to get the vehicle fix 2) They start working on it, and discover what's broken 3) Wait for hard-to-get parts 4) Parts arrive, but when they start the replacement process they discover something else broken 5) Wait for hard-to-get-parts 6) Parts arrive, but in the meantime one of the shop's employees has quit and now they're overloaded again; wait for another opening 7) They start working on it again and find yet another thing broken 8) Wait for parts (this is where I'm at today).

Tesla may be "worse than average", but delays are hardly unique to them.

After each of those discoveries of something else broken they have to stop and wait for insurance company approval to fix it. This is another source of endless delays.

Tesla has opened a number of its own body shops where it has fixed that problem. They don't wait. And they also take things apart enough so they know everything that's broken from the start of work. Tesla fixed both my 3 and my S at one of their body shops.

 

[Singer3000]

Have been clicking about a bit on the Model 3 order page and have gleaned the following in terms of delivery estimates:

Mid Range
USA - Jan
Canada - Jan/Feb
Europe - unavailable

Long Range 4WD
USA - Jan
Canada - Jan/Feb
Europe - Mar

Performance
USA - Feb
Canada - Feb
Europe - Mar

Since we're already 21st of Jan, I guess this means there are no Performance cars in inventory but plenty of MR and LR - in line with prior guidance that the company would be keeping more units for immediate sale. Not sure what this says about European demand, without having a better idea of the transit times.

 

[KarenRei]

Annoying that there's no trading today.... :Þ

Hey, quick question. Assuming that my margin application isn't granted - and thus I have to have all of my cash settled by Thursday (31st) if I want to be "all in" on the stock for the ER - what's the last day I could sell stock? My understanding is that the time limit used to be 3 days, but is now 2 days, no? So, so long as I sold stock before close on Tuesday (29th), I could use the cash to buy options on Thursday, no? Would the cash be available at open, or only precisely 48 hours later?

 

[Fact Checking]

Annoying that there's no trading today.... :Þ

Hey, quick question. Assuming that my margin application isn't granted - and thus I have to have all of my cash settled by Friday if I want to be "all in" on the stock for the ER - what's the last day I could sell stock? My understanding is that the time limit used to be 3 days, but is now 2 days, no? So, so long as I sold stock before close on Wednesday, I could use the cash to buy options on Friday, no? Would the cash be available at open, or only precisely 48 hours later?

Here's a settlement date calendar for NASDAQ:

January 2019 Settlement Date Calendar (NASDAQ)

 

[KarenRei]

Here's a settlement date calendar for NASDAQ:

January 2019 Settlement Date Calendar (NASDAQ)

That seems to confirm that stock sold on Tuesday is available on Thursday. But would it be settled immediately in the morning, or exactly 48 hours later?

ED: Corrected my previous post; I was mistakenly thinking that the 31st was a Friday.

 

[SpaceCash]

I was reloading the premarket tab over and over just now like a dummy until I remembered...

Happy MLK day everyone, I bet SP recovers soon, current action is bogus AF

 

[Fact Checking]

That seems to confirm that stock sold on Tuesday is available on Thursday. But would it be settled immediately in the morning, or exactly 48 hours later

Often depends on the broker - can be during the day. I'd suggest you ask IB to make sure. (Please let us know if you find out.)

31st was a Friday

Why does the 31st matter? The earnings report is scheduled for the 30th of January, which is a Wednesday:

PALO ALTO, Calif., Jan. 18, 2019 (GLOBE NEWSWIRE) -- Tesla will post its financial results for the fourth quarter and full year ended December 31st, 2018 after market close on Wednesday, January 30th, 2019. At that time, Tesla will issue a brief advisory containing a link to the Q4 and full year 2018 Update Letter, which will be available on Tesla’s Investor Relations website. Tesla management will hold a live question and answer webcast that day at 2:30pm Pacific Time(5:30pm Eastern Time) to discuss the Company’s financial and business results and outlook.​

So if you want to trade up to the last minute that would be 15:59 January 30.

 

[SebastianR]

OT - on expectations for a "surprise" higher TSLA

Just a thought on the way that Tesla/Elon Musk communicates:

1) As far as I'm concerned he doesn't lie.
2) BUT he is extremely optimistic - so don't take his time-lines for granted (truly it is a mix: the Australia battery was done before the deadline, the Model 3 ramp was delayed - YMMV)
2) AND he know who he is talking to. So he customizes his message.

With this in mind:

“This quarter, as with Q3, shipment of higher priced Model 3 variants (this time to Europe and Asia) will hopefully allow us, with great difficulty, effort and some luck, to target a tiny profit.”

Musk didn’t need to include this information in his email to employees. He’s purposely setting expectations low. Hopefully we’ll have some luck to only aim for a tiny profit? He’s not lying, he’s bluffing. Look at his most recent retweet. Very telling.

I believe we are not the target audience of the message. I don't think he bluffs. I think he tells it how it is to his employees how he thinks they will need to hear it. I don't think he is currently communicating to Wall St. a lot. So he can focus on building a company that will continue to deliver.

Well, thats the bluff. You believe to have seen his cards as you believe to have seen the message in his mail....

Again, I don't think he bluffs - at least not intentionally. I do believe he has many ideas, I do think that we will continue to be surprised. But I don't think that Investors are currently in his focus. I think that he will try to generate much more buzz around the Tesla brand, I do think we will see even more consumer products, I do think we will have surprise products etc. but I do see the primary focus of communication being on staff (i.e. keeping a work force that went through grueling times engaged despite cuts) and customers (i.e. keeping folks that waited for years for their $35k car and went through service hell happy).

tl;dr: I don't think EM is (intentionally) laying out bear traps. I would not buy options thinking he will get TSLA higher soon. I just don't think he focuses on TSLA. I do think he focuses on staff morale, efficiencies and getting more and more customers.

On topic: Frankfurt up 1.1% (Tradegate Exchange) which is more or less after-hours trading from Friday. For those that would like to buy today, there is always Frankfurt ;-)

 

[KarenRei]

Why does the 31st matter?

Because my memory sucks and I always mix up dates

 

[gora321]

I was reloading the premarket tab over and over just now like a dummy until I remembered...

Happy MLK day everyone, I bet SP recovers soon, current action is bogus AF

Europe: +1,31%

 

[schonelucht]

What’s with all this talk about a lot of EU service centers closing shop and being delisted from the site? Seeing this on Mark Spiegels page, any truth to it?

My guess it's a glitch on the website. The service center in Zaventem, Belgium is one of them not showing up anymore but it's most certainly still there : I called today to make an appointment later this week.

 

[gora321]

Mark McMillen on Twitter

 

[KarenRei]

Loving today's XKCD:

I don't think the resemblance to Tesla's stock graph is a coincidence. It's his second stock-related comic recently (very unusual for XKCD), and the other had to do with.... wait for it... short sellers

Mouseover: "I'm selling all my analogies at auction tomorrow, and that witch over there will give you 20 beans if you promise on pain of death to win them for her." "What if SEVERAL people promised witches they'd win, creating some kind of a ... squeeze? Gosh, you could make a lot of–" "Don't be silly! That probably never happens."

Randall (who won a Hugo award for XKCD's "Time"), has made a number of comments over the years that have made it clear he likes Teslas (both the electric and autonomy aspects), and even worked the original Roadster into one of his jokes years ago:

Mouseover: "The exact cause of the phenomenon is unknown, but it's thought to be linked to atmospheric refraction and you getting a really cool car."

Musk has retweeted Randall in the past:
Elon Musk on Twitter

 

[Fact Checking]

Anyone take a look at Gali’s charts with estimates for upcoming earnings, revenue and cash flow. I think he’s conservative on cash flow and TE, but nice charts.

HyperChange on Twitter

I've transcribed the HyperChange Q4 estimates from the charts:

HyperCharts / HyperChange predictions:

                                Q4   (+-  Q3)

Revenue:                   $6,985m   (+$158m)
Gross profit:              $1,500m   (- $24m)
Earnings:                    $100m   (-$212m)

gross margin:                 21.5%
SG&A:                        $800m   (+ $70m)
R&D:                         $500m   (+ $49m)

operating cash flow:         $800m   (-$591m)
free cash flow:              $300m   (-$530m)
capex:                       $500m   (- $61m)

(Any mistakes in the numbers are mine.)

A couple of comments:

• Firstly, he is using very round numbers which suggests that these are coarse guesses. (Which is fine if all you want is a safely conservative figure.) He doesn't attempt to estimate end of quarter cash equivalents, which is arguably the most difficult prediction to make, it depends on the largest number of moving pieces.
• Not sure what he bases capex reduction on: In Q4 Tesla paid for land in Shanghai and possibly also moved some funds to the China holding company as 'skin' for bank loans. (But maybe these were delayed for Q1.) In Q4 there's also been an uptick in Supercharger expansion.
• There's significant debt schedule for Q4 which drains on cash: on November 1 $230m convertible notes were paid in cash, and there was a ~$185m term loan due in December. (It's unclear whether it was settled in cash or rolled over.) Debt repayments do not decrease free cash flow though.

I think the cash flow numbers might be excessively conservative because the estimate appears to have missed the big increase in 'Accounts receivable' in Q3:

Consolidated Balance Sheets
(in thousands, except for par values)
(unaudited)
                                                September 30,    December 31,
                                                2018             2017

Accounts receivable, net                        1,155,001        515,381

Tesla unambiguously guided that this increase in accounts receivable is temporary, it was caused by Q3 ending on a Sunday, which means customer payments from the busiest weekend of the quarter were not settled yet.

End of Q4 accounts receivable were $499m and $515m in 2016 and 2017 historically - which is a historic end of fiscal year steady state. I don't think the Model 3 ramp-up should increase end of 2018 accounts receivable excessively: all Model 3 automotive customer payments were within the U.S. or Canada, and should be processed quickly - with Q4 ending on a Monday there's maybe $50m of additional Model 3 cash payments not cleared?

I.e. I'd expect the $1,155m accounts-receivable to drop into the $500-$550m historic range in Q4, which should improve (free) cash flow by $605m-$655m.

(Shout-out to @moe.salih, @ReflexFunds and @brian45011: do you concur, or have I missed something?)