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

[Silentk]

While he, and you, are right in principle you're missing the actual point of my observation: a short position has an infinite potential loss, a long position can only ever go to $0. If short interest has increased as the price of TSLA has fallen then - on the whole - it means the shorts are positioning themselves for a continued drop in stock price. Now, if short interest had in fact been falling during the drop that would be bad indeed for those of us playing the long long game - it would mean shorts were unwinding their positions as the stock price fell taking their profits, but in stead it would seem they've doubled down on their bet creating the spring effect I was imagining. You see, in the same way the short sellers as a whole haven't profited $4,5 Bn (because they haven't exited their postions, on a whole) I haven't "lost" a cent yet compared to last year's highs because I haven't sold a single share…

Agreed. The mind boggles why they are not taking profits, especially when it was at 175. Do they ALL think it is going to zero?! Their risk appetite seems incredibly high.

Can anyone explain why Ihor thinks it is so unlikely?

 

[SPadival]

Scott is not happy with Tesla, starts 9min in:

I didn’t make the connection earlier that the NYU professor frequently quoted in clickbait media and this Kara Swisher co-host dude are the same guy.

Maybe he is just pissed that Kara gets all the limelight and he is (relatively speaking) just a random dude that nobody recognised .. actually, that explains everything

 

[MarcusMaximus]

One more thing I will


Good Point - make it whatever the lowest price available on the website is. $39,900?

Or, don't even put the starting price. Only reason I mentioned that is because another thing most people ask me is, "Don't those things cost about a hundred grand?". All are shocked when I say they start around $37,000 (or whatever).

My mother-in-law recently went into a Tesla showroom and was told by a store associate that the Model 3 starts at $57,000. Even Tesla salespeople seem to be confused on that point.

 

[neroden]

Re, mining... it looks like two realistic possibilities:

• Lithium carbonate / chloride - the obvious one. Rather expensive, and while only needed in relatively small quantities, you can't eliminate it, and there's physical limits as to how far you can reduce it (can only reduce Li which doesn't take part in reversible intercalation, and even that is extremely difficult).

I'm pretty sure it'll be lithium, partly because there has been a bizarre failure of financial funding to miners to ramp up lithium production. I don't see this for other mining situations. Some of the other raw materials bottlenecks would be classified as processing, not mining. (There's not that much synthetic graphite manufactured, but there's plenty of petcoke to make it from; there may not be that much nickel sulfide, but there's plenty of nickel to make it from).

 

[neroden]

• Also note that Tesla is in a significantly worse tactical situation than Apple was: Apple basically only had Microsoft as a major source of FUD, so their ad campaign could single out Windows as the antagonist and defuse much of the FUD. Tesla on the other hand has ICE incumbents (the largest advertisers in the world), old energy companies, wide swathes of Wall Street and the mainstream media against them.

You could in fact take most of them on simultaneously with attack ads about gasoline cars catching on fire all the time, like they do. Just a thought, not necessarily a good idea.

 

[neroden]

I think tsla could create a JV with panasonic in the short term to attack the cell scarcity problem. Panasonic's current equipment can be counted as a minority stake in the JV so their investment will be compensated. And in the long term, tsla can buy out the JV when cash on hand is not a problem.

A while back, I said I thought Panasonic was angling for Tesla to merge with their US operations -- i.e. Tesla would buy out the Panasonic operations in the Gigafactory with *Tesla stock* rather than with cash, and Panasonic would end up with a bunch of Tesla stock. Panasonic might not be planning that, it was just a hunch.

 

[neroden]

Does anyone know why Democrat controlled states are now seemingly anti-EV?

Look at auto dealer donations to the state legislature. Bigger in some states -- which pass taxes on EVs -- smaller in other states -- which have incentives for EVS.

Are Dems either THAT desperate for revenue or just simply getting paid off by big oil, dealerships, and legacy car manufacturers - similar to what happened in all the Republican states?

Paid off.

 

[joefee]

I didn’t make the connection earlier that the NYU professor frequently quoted in clickbait media and this Kara Swisher co-host dude are the same guy.

Maybe he is just pissed that Kara gets all the limelight and he is (relatively speaking) just a random dude that nobody recognised .. actually, that explains everything

@SPadival Love your avatar!!!

 

[neroden]

According to Ihor there are only around 48-49 million shares readily available to short. They've nearly run out..

Dammit, gotta get my shares transferred back over to the account where I can lend them out. Rrrrgh...

 

[neroden]

In that latter scenario, consider what happens if A recalls all their shares.

You get what's called a "corner", such as Cornelius Vanderbilt did.

Vanderbilt and the Greatest Corner Never Told

In the Second Harlem Corner, Vanderbilt owned more than 100% of the shares outstanding and the short sellers had nobody to buy stock back from except him.

 

[neroden]

There are many things Tesla should be doing better, especially customer support. They should understand better how to handle delivery and customer support. As for marketing and/or advertising they're pretty close to optimal except for surmounting political and legal opposition from fossils. That, sadly, will not fade for a very long time.

I think Tesla could produce substantially better press releases and informational packets for lazy journamalists to use. This is quite different from paid advertising. They may even be doing it, hiring the "absolute unit" guy and so on.

It's really communications and is not so different from customer support.

I am against paying for advertising placement.

 

[Artful Dodger]

https://electrek.co/2019/06/12/tesla-battery-cell-production-maxwell-tech/

Tesla all but confirms it's going to make own battery cells… from archive.is

 

[dakh]

it still amazes me that people just will not accept how advertising works, or even be so convinced it doesn't work at all (normally on *them* because they are *smart*). Please read 'the advertised mind'. Do people REALLY think that hundreds of billions of dollars get spent every year globally without anybody ever looking into it whether or not it works?

Can you give a short summary? No question advertising is effective. I'm currently quite convinced of the following though:

1. it is not obvious if spending on advertising is going to be the best use of Tesla's limited resources at this time
2. most advertising is trying to either artificially create demand, or increase market share vs. competitors. one is of questionable morals and I'm glad Tesla is not engaged in it, the other is not that relevant to Tesla due to lack of direct competition.

 

[neroden]

Put me in the "in favor of some informative type advertisements" column.

Every single person I talk to about my Tesla (and yes, I'm pretty freaking bold about finding a way to tell people about Tesla) says the same exact thing to me - "yea, but where do you charge when you go out of town"?

Interesting. People around here must not do as many road trips -- first question I get is "where do you take it to get it fixed?" (Winter is hard on cars, so maybe there are more service needs up here.)

Just that one piece of information would be HUGE for Tesla's market. In Cali, sure, everyone knows Tesla and almost everything about it. But, in the Southeast, and most of Florida and Texas (and several other states surrounding the SE), there is a HUGE market of potential buyers that know NOTHING about Tesla. I still get this quite often - "Tesla? Who makes it?"

Yeah, that one's funny, isn't it? A "Tesla: all-American all-electric cars" slogan campaign might go a long way. Rather than paid spots, perhaps selling a lot of T-shirts with that meme would be the profitable way to promote that information.

A simple commercial detailing the basics about the range, charging in your garage, the supercharger map, a blip about the performance, etc - and ending with a picture of the Model 3, and then lastly under the car - "Starting at $35,400 www.tesla.com".

Forget paid commericals. Find a way to make people pay to spread the commercials. T-shirts. T-shirts, I tell you...

 

[SO16]

I'd reply something like this:

Russ, you are a JOURNALIST, Tesla's Autonomy Day was a 4 hour long presentation with a lot of ad-hoc moments. It is your JOB to report the truth, to examine the full context and to not come to nonsensical conclusions, and it's your JOB to ask for clarification if there's any ambiguity. It is your JOB not to report falsehoods, and it is also your job to inform your readers if a particular (mis-)statement by Elon Musk is in direct contradiction with what he said just seconds before...

Please correct your misleading article that quotes Elon Musk out of context.​

Maybe also ask him whether the editorial board of the LA Times considers it proper, ethical and legal to write misleading articles about Tesla, who happens to be in direct competition with "NantEnergy", a zinc-air startup owned by Dr. Patrick Soon-Shiong, the current owner of the LA Times:





I'd not expect any substantial replies though.

Thanks for your help once again! I ended up replying with the following:

If a journalist thinks that something doesn't pass the “smell test”, what would be the next course of action? Should that journalist ask more questions to clarify the situation and present to their readers a more complete and accurate story? Or should journalists run with a sentence that would make great clickbait?

When taken in full context, Elon may not believe it is worth clarifying. When I listened to his presentation (and probably most shareholders who know anything about Tesla), probably thought nothing of what he said there because we know the situation. We knew that AP 2 cars and above will hopefully be capable of FSD which can in turn be used as a Robotaxi. After all, this was a presentation meant for investors who probably know a bit about the company.

I am for the media and journalism. In fact, the public needs good journalists now more than ever. But when questionable tactics are taken or a rush to print without due diligence is done, people lose faith in the reporting. Journalistic integrity needs to be there. Unbiased and fact based is all an article should be about. If the media wonders why they are being attacked, they really don’t need to look very far to see why.

 

[neroden]

Just ran into this again:
Tesla's going to have to restructure, says Blaine Capital

CNBC lets short say "Model 3s can't go through a car wash, blow up all the time"

You borrow a stock, sell it, then go on TV to tell absolute lies about it to drive it down.

Seriously, how is this legal?

It's not. It's illegal market manipulation. I believe there is a private right of action to sue over it, too.

Where is the SEC protecting shareholders?

AWOL

 

[anthonyj]

Interesting. People around here must not do as many road trips -- first question I get is "where do you take it to get it fixed?" (Winter is hard on cars, so maybe there are more service needs up here.)


Yeah, that one's funny, isn't it? A "Tesla: all-American all-electric cars" slogan campaign might go a long way. Rather than paid spots, perhaps selling a lot of T-shirts with that meme would be the profitable way to promote that information.


Forget paid commericals. Find a way to make people pay to spread the commercials. T-shirts. T-shirts, I tell you...

You know what actually pisses me off? That Tesla doesn’t sell merch at the damn showrooms/service centers. Why? Seriously wtf? Merch is an impulse purchase.

 

[neroden]

Agree. What surprised me was that Elon wasn't very firm about cash flow positive this quarter. I really have a hard time seeing how they can be cash flow negative (net of new investment) while selling a record number of cars.

I can think of three ways:
- Inventory buildup (to unwind the "wave")
- Parts inventory buildup (to address service problems)
- Massive expansion of service centers (this actually happened)

All are neutral on the P&L statement, all use cash

 

[neroden]

Cash flow negative this quarter at 90k+ deliveries will be more devastating to the stock than having 75k deliveries. Investors will flock if an annualized 400k cars can't even remain cash flow positive. Also it damages credibility even more since q1 guided for cash flow positive.

Disagree. As long as operating cash flow is positive, serious investors won't worry about capital expansion, which should eat cash.

 

[EVNow]

I can think of three ways:
- Inventory buildup (to unwind the "wave")
- Parts inventory buildup (to address service problems)
- Massive expansion of service centers (this actually happened)

All are neutral on the P&L statement, all use cash

There can't be much of an inventory buildup if orders > production (he misspoke saying sales > production). There is also no evidence of the wave unwinding - and with another "beat the record at any cost" quarter, they will try to deliver as much as possible. This means wave good bye to wave ending plans

While the other 2 consume cash - it would be $600M+ big.

I think its ok for EM to be somewhat circumspect, after Q1 may be he learnt a lesson.