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

[gene]

The anti Tesla company bias is sometimes hard to figure out. I sort of put it down to a very emotional response to people who are so pro-Tesla, kind of like some sort of college rivalry.

However, according to some basic research, the market cap of some car companies is: VW 97B, Daimler 60B, GM 52B, Honda 48B, Tesla 45B, Ford 36B.

Sales, in cars, for those companies in 2018 are VW 10.83M, GM 8.3m, Honda 4.9M, Tesla 240k, Ford 5.3M

So, putting aside the emotions, isn't the argument that, if market cap is a basic measure of value, that Tesla's stock price already has a premium due to the discrepancy between its sales and market cap.

I can't find a comparable small car company that I recognize. The premium may be justified, but it looks like its there.

Company's stock is valued on future expectations and expected growth, not on historical performance.

 

[StarFoxisDown!]

Gasparino reporting that in a meeting with bankers after the meeting, Tesla's management told the bankers that they have the short sellers right where they want them and are going to squeeze them dry. No interest in cash from banks whatsoever; they're fully content with the position they're in.

Tesla puts the brakes on short sellers

My frustration at someone spouting misinformation couldn't let me enjoy the funny parts of that video

Literally every negative he brought up against Tesla while talking was either false or grossly outdated. He brought up the SEC for crying out loud and made it seem like Elon was still under investigation by the SEC

To add on to this...…..here's my reaction when anyone brings up the SEC

 

[SteveG3]

My frustration at someone spouting misinformation couldn't let me enjoy the funny parts of that video

Literally every negative he brought up against Tesla while talking was either false or grossly outdated. He brought up the SEC for crying out loud and made it seem like Elon was still under investigation by the SEC

yes, and he may have just made up or distorted any of that talk re shorts just to stir the pot

 

[Johnny Ma]

Gasparino reporting that in a meeting with bankers after the meeting, Tesla's management told the bankers that they have the short sellers right where they want them and are going to squeeze them dry. No interest in cash from banks whatsoever; they're fully content with the position they're in.

Tesla puts the brakes on short sellers

Watched this earlier.

For those not on Twitter, Gasparino has been a thorn in the side of TSLAQ for saying things like (paraphrasing, going from memory), "I personally see some problems with Tesla's financials but according to my sources they're turning down banks offering financing options for their debt."

Many shorts on Twitter become infuriated with anyone suggested anything other they DOOM for the company, so they've attacked him personally many times. Gasparino hates TSLAQ. The fact that he's not bullish on the company almost makes me like him more. I feel like he's trying to be objective on the company, even though I disagree with views on it.

 

[brian45011]

Furthermore, used vehicle sales are also service revenue: this might be a channel where trade-in and lease return vehicle related losses are recognized. This too is going to be something that Tesla will probably grow out, as they gain more experience with used car sales and leasing.

Tesla, TSLA & the Investment World: the 2019 Investors' Roundtable Tesla has been taking in trade-ins for seven years and lease returns for four years. For whatever reason, unlike "stealerships," Tesla does not view used vehicles as a profit opportunity.

 

[Pras]

I have played “back in black” like 5 times since morning.

 

[KarenRei]

Any reason you left out the biggest one, Toyota?



The flaw in your logic is that the gas-car companies you listed are all distressed assets: they have yet to enter the hyper-growth EV market Tesla is competing in exclusively.

99% of their sales are in the dying, increasingly irrelevant ICE market - which business they have yet to wind down.

I.e. you are comparing iPhones to Blackberries. Of course the smartphone market carried a growth premium in 2007, compared to the flip phone market.

There's tons of other things one could mention, like the fact that most car makers are not even remotely vertically integrated (they don't even own their own sales networks, for crying out loud), and so give up large chunks of their profits to third parties. Or the fact that sales volume does not linearly equate to revenue. Or the fact that vehicles are just one of Tesla's revenue streams, and while currently the largest, each of their other growth areas (rooftop solar & home storage, grid-scale storage, autonomy) has the potential to become just as huge. Let alone anything else Tesla leverages its manufacturing base into.

 

[Remus]

BTW, speaking of doors getting jammed in accidents, I was wondering if maybe this is somewhere that Tesla could innovate, too. Taking SpaceX's experience with explosive bolts, they could have the door hinges and latching mechanisms physically sever themselves in an accident if the impact force/speed is great enough. Possibly even preemptively, and with a bit of a kick to make sure that the door moves out before the frame deforms in a way that could wedge it in.

Nooooooo!
The door structures need to be super strong to protect the precious cargo inside. Last thing you want is to compromise that during an accident

 

[SteveG3]

re tomorrow’s solar event

Elon further tweeted that it is 5 Pacific Time and that there will be an “open Q&A call.”

 

[Fact Checking]

However, according to some basic research, the market cap of some car companies is: VW 97B, Daimler 60B, GM 52B, Honda 48B, Tesla 45B, Ford 36B.

Sales, in cars, for those companies in 2018 are VW 10.83M, GM 8.3m, Honda 4.9M, Tesla 240k, Ford 5.3M

Any reason you left out the biggest one, Toyota?

So, putting aside the emotions, isn't the argument that, if market cap is a basic measure of value, that Tesla's stock price already has a premium due to the discrepancy between its sales and market cap.

I can't find a comparable small car company that I recognize. The premium may be justified, but it looks like its there.

The flaw in your logic is that the gas-car companies you listed are all distressed assets: they have yet to enter the hyper-growth EV market Tesla is competing in exclusively.

99% of their sales are in the dying, increasingly irrelevant ICE market - which business they have yet to wind down, and it's increasingly less certain that they'll be able to handle the transition.

Tesla on the other hand commands a dominant position in a new market, which market is going to grow about 100-fold in the next 10-20 years to a total size of 5-10 trillion dollars of revenue per year. So even with a very conservative 2x revenue multiple method there's still 10-20 trillion dollars market cap to distribute between market participants.

I.e. you are comparing iPhones to Blackberries.

Of course smartphone market valuation carried a growth premium in 2007, compared to flip phone market valuation.

 

[KarenRei]

Nooooooo!
The door structures need to be super strong to protect the precious cargo inside. Last thing you want is to compromise that during an accident

Are doors actually loadbearing structures in a frontal collision? (If so, then that would encourage them to deform and get jammed). If so, then only detonation after collision forces are absorbed. Wouldn't guarantee that the door wouldn't get jammed in, but it'd certainly help to have the hinges and latch mechanism physically severed.

 

[MikeC]

Watched this earlier.

For those not on Twitter, Gasparino has been a thorn in the side of TSLAQ for saying things like (paraphrasing, going from memory), "I personally see some problems with Tesla's financials but according to my sources they're turning down banks offering financing options for their debt."

Many shorts on Twitter become infuriated with anyone suggested anything other they DOOM for the company, so they've attacked him personally many times. Gasparino hates TSLAQ. The fact that he's not bullish on the company almost makes me like him more. I feel like he's trying to be objective on the company, even though I disagree with views on it.

Agree, it’s funny to see him rag on TSLAQ on Twitter. I think his odd susceptibility to FUD gives him more credibility when he gives a positive report like this. Seems like he has a few banker contacts who let him know when Tesla rejects their offers.

 

[humbaba]

There's tons of other things one could mention, like the fact that most car makers are not even remotely vertically integrated (they don't even own their own sales networks, for crying out loud), and so give up large chunks of their profits to third parties. Or the fact that sales volume does not linearly equate to revenue. Or the fact that vehicles are just one of Tesla's revenue streams, and while currently the largest, each of their other growth areas (rooftop solar & home storage, grid-scale storage, autonomy) has the potential to become just as huge. Let alone anything else Tesla leverages its manufacturing base into.

What I can't believe is that no one noticed his market cap valuation numbers. Whenever the "basic research" was done it certainly wasn't today.

 

[Causalien]

I probably got slaughtered by saying this: now we're laughing at shorts. But when Tsla sunk below 200 and I was sitting on tons of paper loss, I did double down. That was like throwing good money after bad. When I pressed the buy button I felt like my daughter is accusing me of gambling with her college fund!

No, what you did was the TSLAQ equivalent of shorting more at $370.
What the bull's equivalent of what TSLAQ did was buying more at $370 as opposed to prudent bankroll management of lightning up at $370.

 

[dc_h]

Resd

Gasparino reporting that in a meeting with bankers after the meeting, Tesla's management told the bankers that they have the short sellers right where they want them and are going to squeeze them dry. No interest in cash from banks whatsoever; they're fully content with the position they're in.

Tesla puts the brakes on short sellers

the replies to Charles g tweet. Expect the shorts to load up! Q4 could be delightful!

 

[SteveG3]

The anti Tesla company bias is sometimes hard to figure out. I sort of put it down to a very emotional response to people who are so pro-Tesla, kind of like some sort of college rivalry.

However, according to some basic research, the market cap of some car companies is: VW 97B, Daimler 60B, GM 52B, Honda 48B, Tesla 45B, Ford 36B.

Sales, in cars, for those companies in 2018 are VW 10.83M, GM 8.3m, Honda 4.9M, Tesla 240k, Ford 5.3M

So, putting aside the emotions, isn't the argument that, if market cap is a basic measure of value, that Tesla's stock price already has a premium due to the discrepancy between its sales and market cap.

I can't find a comparable small car company that I recognize. The premium may be justified, but it looks like its there.

looking at delivery volume and market cap without considering growth rate and ASP is of nil value.

consider this, using the market cap/units sold approach in your post for Tesla vs Ferrari would tell you Tesla is deeply undervalued at roughly 1/20th of what it should be.

 

[Remus]

Are doors actually loadbearing structures in a frontal collision? (If so, then that would encourage them to deform and get jammed). If so, then only detonation after collision forces are absorbed. Wouldn't guarantee that the door wouldn't get jammed in, but it'd certainly help to have the hinges and latch mechanism physically severed.

There may be another impact coming, you never know.

This idea is very dangerous

 

[tinm]

If you noticed, they're ALL reporters/anchors on set. ZERO analyst or company reps. I think/hope that most people realize that these TV "personalities" are just giving their opinions. You know, the English and Journalism majors...

You got something against English and Journalism majors?

Signed,
English / Journalism Major
TSLA shareholder since 2012

 

[Fact Checking]

Gasparino reporting that in a meeting with bankers after the meeting, Tesla's management told the bankers that they have the short sellers right where they want them and are going to squeeze them dry. No interest in cash from banks whatsoever; they're fully content with the position they're in.

Tesla puts the brakes on short sellers

The whole scenario is a bit weird though, with 6+ billion dollars of cash and cash equivalents in the bank and growing, why would banks even approach Tesla?

They don't need the cash and are very capital efficient: they are expanding Model 3 and Y production capacity by ~50% from just $0.5b of capex.

Also, why would Tesla management even comment on short sellers in that financing context - whom the SEC considers a protected class of investors.

I.e. Gasparino might just be trying to troll the SEC into investigating or so ...

 

[Chickenlittle]

The TSLA trading today was pretty much as many here might have expected. After the big opening jump following the earnings report, it followed the macro market down for an hour, with expanded effect apparently due to profit taking by weak longs. Of course short sellers may have been among the usual suspects. Then buying interest led to a rise for the remainder of the session. Much of that could have been some institutions resuming belief in the prospects for Tesla. The hop during the final half-hour may have involved short sellers covering in advance of margin calls. Then a bit of weakness during after-hours appears in sympathy with the Nasdaq being dragged down in response to the earnings report from Amazon.com.

Margin calls coming?