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

[Right_Said_Fred]

Elon did say that the second building at GF3 is for battery production. But that’s about all they said about battery production. No mention of the previously announced battery investor day.

I believe he also said there will be a separate building for Model Y.

 

[EVNow]

Childish but bullish.

Calf-ish ?

 

[woodisgood]

Now I'm laughing. Low $200's without a negative development in the fundamentals??

Where can I lobby for a "hilarious" emoticon rating?

Yeah it doesn't feel like it's going back there...

 

[SMAlset]

Huh? How does that figure??? You think people won't replace ICE with EVs, rather just buy both?

What possible reason could they have to purchase both?

People new to Tesla maybe initially hesitant to go all EV with both cars in a two-car family. I know we were after my husband bought his and I knew my car would be replaced at some point soon. We had his MS long enough and I enjoyed driving it and figured out range anxiety wasn't worth thinking about plus it offered all the maintenance pluses and wasn't polluting the air driving around and super loved just plugging in at home and skipping a gas station. At that point of living with the first one for a period of time, it was a no brainer that we'd be a two Tesla family.

 

[kbM3]

Such great news all around. Loved how Zach said such good things about SX demand after Elon downplayed their importance.

 

[SMAlset]

Can't wait to see how the shorts try to spin today's results and you know they will. I think someone should do a series of articles highlighting the "insight" some of these hedge funds and analysts have had into the stock and how far they fell short and needed to cover. Bet a lot of their customers aren't too happy with their advice as of today.

 

[jerry33]

People new to Tesla maybe initially hesitant to go all EV with both cars in a two-car family. I know we were after my husband bought his and I knew my car would be replaced at some point soon. We had his MS long enough and I enjoyed driving it and figured out range anxiety wasn't worth thinking about plus it offered all the maintenance pluses and wasn't polluting the air driving around and super loved just plugging in at home and skipping a gas station. At that point of living with the first one for a period of time, it was a no brainer that we'd be a two Tesla family.

But you didn't purchase two cars at once, which was the premise as I understood it.

 

[Mike Smith]

And Softbank just made a massive investment .. in WeWork

 

[GOVA]

So, I take after work nap and this happens. I'll take it.

 

[BornToFly]

Regarding Wash Sales. I think I'm ok to sell one option at a loss, and a different one I already owned with a gain. It sounds like the point of the rule is to not sell at a loss, and THEN repurchase the same/similar within 30 days, to fake a loss.

This is what I read at Scwab:
Key Points

• The wash-sale rule was designed to discourage people from selling securities at a loss simply to claim a tax benefit.
  
  
• A wash sale occurs when you sell a security at a loss and then purchase that same security or “substantially identical” securities within 30 days (before or after the sale date).
  
  
• If you end up being affected by the wash-sale rule, your loss will be disallowed and added to the cost basis of the securities you repurchased.
  

The wash-sale rule was designed to prevent investors from selling a security at a loss so they can claim tax benefits, only to turn around and immediately buy the same security again. Even investors who have no intention of breaking this rule can get tripped up by it if they use an automatic investment strategy, such as reinvesting dividends, potentially costing themselves some tax benefits in the process.

Does this sound right to anyone (that I'm safe selling my 2021 calls at a profit in the next 30 days after selling my 2020 at a loss today)?

 

[SMAlset]

But you didn't purchase two cars at once, which was the premise as I understood it.

We didn't but then we didn't have any exposure really to Tesla before buying. Hadn't even test driven the car before the first one was ordered. A number of TMC members however did buy multiple cars at the same time. Some holding off for a different trim or a Model Y to be built but all the same put in their orders at the same time. A large group of people now have seen and read about owning driving a Tesla or know someone that has one. They see them all the time where I'm at. If you are in the market for new vehicles and you are already installing charging at home and you like the car, why would you want to commit to spending extra money on fuel and maintenance and gas station trips if you don't see you have to.

 

[Antares Nebula]

So does anybody have a breakdown of the earnings? How did we get such a big beat? 30M from enhanced summon is not much. But anything else from FSD (or other) deferred revenue? How much from credits? And how much due to fundamentals (gross margin, improvements in production efficiency, lower fixed costs, etc.). Would love to see a breakdown of this.

 

[Cosmacelf]

Alright, so, call over.

I have questions: how exactly does a margin call work in this scenario (huge event triggering the margin requirement after-hours)?

Would the shorts typically get the margin call before open (tonight/tomorrow morning), upon/shortly after open, near close, or after close tomorrow?

And, don't they have a couple days to resolve the margin call after they get it?

Different brokers have different rules regarding when a margin call gets triggered, but people could be getting them right now, and also early tomorrow before market open. Typically you do not have several days for a margin call. Often, margin calls will be settled automatically, ie. The broker will simply sell stock to satisfy the margin requirements without your involvement. But each broker, each account, is different,

 

[SMAlset]

So does anybody have a breakdown of the earnings? How did we get such a big beat? 30M from enhanced summon is not much. But anything else from FSD (or other) deferred revenue? How much from credits? And how much due to fundamentals (gross margin, improvements in production efficiency, lower fixed costs, etc.). Would love to see a breakdown of this.

Q3 report: https://ir.tesla.com/static-files/47313d21-3cac-4f69-9497-d161bce15da4

 

[pz1975]

DON'T LOOK!

(am I too late?)

 

[Fact Checking]

If they manage GAAP profit of at least $1 in Q1'2020, then the S&P 500 inclusion rule after Q1 looks like this:

-$408m + $143m + Q4 > 0​

I.e. if Q4 GAAP profit is higher than $265m, then Q1 inclusion (in May-June 2020) will happen if Q1 is GAAP profitable: which looks possible with FCA credits, GF3 deliveries and FSD deferred revenue recognition even if Q1 is seasonally weaker.

I.e. if my math is correct then the chances of May-June 2020 S&P 500 inclusion of TSLA looks higher than 50% to me.

Not advice.

Post ER call update of my S&P 500 inclusion probability estimate:

• Order rate is even stronger so far, and they said they'll be production constrained in Q4: 100k deliveries secured IMO.
• S/X demand is stronger and they are increasing production in Q4: this is a very good source of margins.
• There's a few other things as well (FSD, pickup truck, GF3 rampup) - but just these two factors ensure $265m Q4 GAAP profits IMHO.
• Q1 is less certain - will GF3 have ramped up by then? If yes then small profits look possible.

So I'm increasing the odds of Q1 S&P 500 inclusion in the May-June 2020 timeframe to about 70% - it will mainly depend on GF3 ramp-up progress.

Not advice.

 

[canoemore]

Not a drinker now, but many cheers and beers to the workers at Tesla who made this possible. Hope you hang onto your stock and options. Well earned and deserved. What is it Churchill said about victory, something like this is the end of the great beginning.

This is not the end. Nor is it even the beginning of the end. It is, perhaps, the end of the beginning.

Or something like that. Congrats everyone!

 

[mikevbf]

Elon did say that the second building at GF3 is for battery production. But that’s about all they said about battery production. No mention of the previously announced battery investor day.

His answer to this question had more hidden between the lines than I detected in other answers. He exhaled quickly before answering batteries as well as battery packs would be produced in the expansion building then quickly tried to get our attention on the expansion being part of eventual Y production as well. What was interesting is the reluctance to admitting cell production where he wouldn't even use the word cell. I think Elon is frustrated with how hard it is to keep a secret

 

[Electroman]

So does anybody have a breakdown of the earnings? How did we get such a big beat? 30M from enhanced summon is not much. But anything else from FSD (or other) deferred revenue? How much from credits? And how much due to fundamentals (gross margin, improvements in production efficiency, lower fixed costs, etc.). Would love to see a breakdown of this.

The shorts are saying that 75% of the profit is directly attributable to ZEV credits. So according to them Tesla is still not convincingly structurally profitable.

 

[Fact Checking]

So does anybody have a breakdown of the earnings? How did we get such a big beat? 30M from enhanced summon is not much. But anything else from FSD (or other) deferred revenue? How much from credits? And how much due to fundamentals (gross margin, improvements in production efficiency, lower fixed costs, etc.). Would love to see a breakdown of this.

Biggest factors:

• S&P ASP actually increased,
• opex reduction,
• Model 3 cost of goods reduction,
• some ZEV credits, deferred revenue and lack of one time expenses which burdened Q2.

Very robust quarter, and Q4 should be even better.