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

[bdy0627]

The company itself guided between 90-100k. Then multiple times they re-iterated the guidance. Why is this a bad thing / surprising that the factset estimate is at the lower end of the guidance? It's a conservative estimate based on the information from the company.

Many analysts issued sell ratings on TSLA after Q1 on the basis of demand issues and poor delivery numbers for Q2. Market expectations about 6 weeks ago seemed to be around 75k deliveries. That was the primary basis for downgrading the stock. Now that it looks like deliveries will be much higher than analysts were forecasting, it doesn't make sense that the downgrades remain while the expectation for deliveries has apparently been increased lately to the low end of Tesla's guidance without a corresponding slew of upgrades for the stock due to nullification of the downgrade basis.

 

[urarthur]

So here is the highlight from GS research note.

GS sees 760k units by 2025. how stupid is that? Tesla could make >760k next year if China Giga is at full force.

Someone shared the the note on twitter.

https://pbs.twimg.com/media/D9f2vcFWsAA0_o3?format=jpg&name=large
https://pbs.twimg.com/media/D9f2vcFWsAEHUYY?format=jpg&name=large
https://pbs.twimg.com/media/D9f2vcGX4AA60tL?format=jpg&name=large

 

[StealthP3D]

1. What were the expectations?;
2. What information does he have that demand will decline?
3. How reliable is this information?
4. By what number will it decline so that it will fall below 1?
5. Are there any mitigating factors that would compensate 2?
Etc.

Just stating some opinion without any showing how you come to that conclusion is not even acceptable on a High School project.

You can trust him because he is dressed in a very nice suit and tie and his shoes - the finest Italian leather. He publishes the product of his work for free because he already has enough money and he wants everyone to be as successful as he is. Why would you doubt such a nice man?

 

[SoGA Fan Club]

Yep. Stock tanked on expectation of poor deliveries. Now that delivery expectations are much higher, very little rebound of which to speak.

Because most people think it is a one-time deal where Tesla is again pulling demand forward. Hard to argue that until Tesla is able to have a strong Q3.

There's only a few things that can happen to really push the SP up at this point. 90,000 deliveries won't move it much. That is within the demand pull-forward range. It would take > 100,000 to have an impact. And to make a truly significant impact, it would need to be more than 105,000. Other than that, it's going to take a strong 3rd quarter (to alleviate the pull-forward fears), or a surprise announcement that the Model Y is entering production sooner than later. Remember that Tesla's comment on the Y has been something along the lines that full production will happen late 2020. But, the 3 took a year to 1.5 years to get up to full production. I don't think there's any way the Y will take that long, but 6 to 12 months could be a reasonable guess. That would mean production could start in Oct '19 to January '20. That would be awesome.

 

[izemize]

Seriously??? This whole drop from 300/share was predicated on Tesla falling way short of Q2 guidance.

I thought that the SP drop was mainly because of the weak deliveries in Q1, the 700m GAAP net loss then the raise at $240. Q2 FUD might have been the reason from 210 -> 177, but the SP climbed back nicely since then.

 

[Driver Dave]

Tesla’s second-quarter sales are as good as it gets, Goldman Sachs says

It's amazing how these analysts masquerade random opinions as insight.

Which then gets picked up and reported on as actual news by places like CNBC and put on the live tv crawl.

And then people trade on it.

It is like: "Coming up, Kellyanne Conway says Trump is amazing. How amazing is he? We'll quote Kellyanne's words and then you'll know."

Financial news is the worst.

It is all just one big information racket to move prices around.

 

[Boomer19]

if we eventually find that no one stepped up to the plate and bought/increased stakes during this latest meltdown, i may get a little more worried

 

[CorneliusXX]

The problem is, the analysts got burned by the Q4 demand pull back since the $7500 tax rebate was being reduced to half. The huge quarter set the expectations for future quarters and then a lot of doubt crept in after Q1 was announced. Tesla intensely pushed the tax rebate ending as a demand lever and pulled a ton of demand from 19Q1 into 18Q4. That result was a horrendous Q1. Now, we have a similar thing going on. Not only is the rebate being halved again, but Tesla is giving free lifetime supercharging on inventory X and S models. So, right now, in reality, it's difficult to know what a normal quarter's demand look like. What will it look like in 2020 with no incentives at all? What demand levers does Tesla have left?

Add into this the fact that last year, Musk was saying that Tesla would be profitable going forward. He said that for a company to be sustainable they had to be able to make a profit. After 2 quarters of profits, suddenly the analysts are hit with a near record-loss quarter of $700 million. And Musk's tune changed from "profitable all quarters going forward" to "it's hard to make a profit when you''re trying to grow like this" [I'm paraphrasing BTW]. But, didn't he know in 2018 that Tesla would still be in growth mode in the last 2 quarters of 2019? Why the shift from "profitable all quarters going forward" to "it's hard to be profitable while growing"? Did he fib, or did he not really understand where the company would be in 9 to 12 months?

And I know I'm going to get a ton of Disagrees for this post. But please, tell me where I am wrong factually. You cannot blame people if there interpretation of the facts is different from yours. If the facts are wrong, you can correct them, but not how people feel about the facts.

My hope is that Tesla can ride out the storm until the Y goes into production. I really think any discussion of demand and profit ends when the Y comes out. That's the car people are buying these days. I also think that's when it's lights out for the shorts. I also think that's why they are giving EVERYTHING they have at sabotaging Tesla so Tesla doesn't make it to that point. When it becomes inevitable that the Y will go into production, I think the shorts will give up and you will then see the short burn of the century - at least for those who don't bail out early on.

We said the same thing about the 3. Tesla would lay waste to all that came before it and upstart analysts would lament their previous lack of faith.

We are obviously in a much better position with the 3 selling like hotcakes, and will be commensuratly better with the Y, however there will still be the same FUD and nonsense.

 

[Fact Checking]

So here is the highlight from GS research note.

GS sees 760k units by 2025. how stupid is that? Tesla could make >760k next year if China Giga is at full force.

Low-balling growth and hyperventilating about demand is the only way to justify their low valuation rationally.

 

[SoGA Fan Club]

We said the same thing about the 3. Tesla would lay waste to all that came before it and upstart analysts would lament their previous lack of faith.

I never thought a sedan, which other manufacturers can't even sell, would be the short killer some people were predicting.

But I'm on the record here right now stating that the Y is it. If the starting price is around $45k, it will be Katy bar the door for the shorts. I'm already talking to more and more people who are ignoring the FUD BS and starting to understand Tesla. With more and more 3s hitting the road, thus more word of mouth advertising for Tesla, the mainstream will finally be ready for an EV - and the Y is the exactly the type of car they want. It's going to be a short SLAUGHTER!

 

[mrdoubleb]

Because most people think it is a one-time deal where Tesla is again pulling demand forward. Hard to argue that until Tesla is able to have a strong Q3.

There's only a few things that can happen to really push the SP up at this point. 90,000 deliveries won't move it much. That is within the demand pull-forward range. It would take > 100,000 to have an impact. And to make a truly significant impact, it would need to be more than 105,000. Other than that, it's going to take a strong 3rd quarter (to alleviate the pull-forward fears), or a surprise announcement that the Model Y is entering production sooner than later. Remember that Tesla's comment on the Y has been something along the lines that full production will happen late 2020. But, the 3 took a year to 1.5 years to get up to full production. I don't think there's any way the Y will take that long, but 6 to 12 months could be a reasonable guess. That would mean production could start in Oct '19 to January '20. That would be awesome.

We had the same game last year. When Q3 was as good as expected, the narrative switched to "well we need at least 1 more quarter to accept this". Then Q4 came and the narrative switched again - unfortunately Q1 played right into their hands. They (=analysts) were right about Q1, but not for the reasons they've predicted. Model 3 production was steady and sales were in line with Q4 when you account for the pre-announced 10k en-route to customers. However it was poor Model S/X sales that broke the financials and the stock. Note, that even that could have been in the "they were right" category if it had happened a year earlier, but the "cannibalization" predicted in late 2017 only happened by 2019, and really, mostly in Europe. This was totally logical IMHO as Model S/X were always too big for this market and it wasn't unexpected that Model 3 would be more attractive for Europeans.

 

[MarcusMaximus]

The company itself guided between 90-100k. Then multiple times they re-iterated the guidance. Why is this a bad thing / surprising that the factset estimate is at the lower end of the guidance? It's a conservative estimate based on the information from the company.

Because the same analysts giving these predictions to FactSet have been publicly stating that the company would fall far short of that guidance. The estimate is probably actually reasonable, but contradicts the statements the same people made that originally drove the stock price down.

 

[shrspeedblade]

Wasn't planning a buy today, but dipped my toe in for 3 at 217.

The water was kind of cold and monkeys generally don't like cold water.

 

[heltok]

Now shorts are trying to say that the bear case has always been that Tesla would make a profit in Q3 and Q4 but never again and that demand would increase 100% per year until Q3 2019 where it peaks at 92k/quarter and finally starts to decrease. Like that would have been what they have been forecasting since Tesla went public... Maybe at some point they should evaluate their track record and figure out what kind of confidence they should have for their model to predict the future...

 

[M3Rider]

But, the 3 took a year to 1.5 years to get up to full production. I don't think there's any way the Y will take that long, but 6 to 12 months could be a reasonable guess. That would mean production could start in Oct '19 to January '20. That would be awesome.

This is more likely a cell issue rather than car production issue. Remember the last podcast where Elon said they wouldn't have cells if they wanted to start producing Y today?

Also, he said there that the extra cell capacity will come just in time for Y production.

To me though this seems like a too long of a stretch for regular Pana cells, so I have a very small hope that maybe they are considering something MXWL based. Like 5%.

 

[kengchang]

Now shorts are trying to say that the bear case has always been that Tesla would make a profit in Q3 and Q4 but never again and that demand would increase 100% per year until Q3 2019 where it peaks at 92k/quarter and finally starts to decrease. Like that would have been what they have been forecasting since Tesla went public... Maybe at some point they should evaluate their track record and figure out what kind of confidence they should have for their model to predict the future...

Shorts are all about moving goalpost and throwing shits to see what stick

 

[bdy0627]

Because most people think it is a one-time deal where Tesla is again pulling demand forward. Hard to argue that until Tesla is able to have a strong Q3.

In reality, Tesla had a bad quarter that they did not guide for. That was it. Q2 looks like they are back on track. Yet, the narrative about weaker demand than expected persists. This is really about bearish analysts continuing to move the goalposts wherever they need to in order to support their long term negative outlook on Tesla. These shenanigans are comically predictable and deserve nothing more than to be traded and profited from.

 

[UncaNed]

What if I only have a manly petticoat?

Can I gird my Loins instead?

 

[wipster]

Oh, good catch. So there is prior evidence that Israeli spy / propaganda agencies are out to get Tesla. We still don't know why.

They're subcontracted by the Koch Bros.

 

[Fact Checking]

New Now shorts are trying to say that the bear case has always been that Tesla would make a profit in Q3 and Q4 but never again and that demand would increase 100% per year until Q3 2019 where it peaks at 92k/quarter and finally starts to decrease. Like that would have been what they have been forecasting since Tesla went public... Maybe at some point they should evaluate their track record and figure out what kind of confidence they should have for their model to predict the future...

Yeah, for the past decade this has been the modus operandi of the Tesla shorts that were at least trying to create a self-consistent false narrative:

• Accept the past in the minimum possible way that puts it in the worst possible light: "as good as it gets".
• Insert innuendo that past data has some dirty secret that makes it worse in reality.
  
• Lie about and whitewash their past prediction track record.
• Lie about the future and predict the worst possible outcome.
• Use all of these false assumptions to come up with a "doom is imminent" and "Tesla is overvalued" flawed conclusions.
  
• If new data comes out that falsifies any of this, change the narrative again and repeat.

Then there's the absolute crazy ones that just make up lies.