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

[humbaba]

Alphabet's self-driving car project Waymo is shuttering its Austin operations

so... occasionally Waymo's valuation is brought up here in relation to Tesla. Apparently I'd missed the news where Morgan Stanley reduced Waymo's valuation from $175B to $105B. Still too high for a company that only has a proof of concept, but closer to being reasonable. Despite the cut being due to Waymo being farther away than Morgan Stanley initially thought (cue shock and amazement), I'm expecting the lower valuation to be used as a limit to how valuable FSD could be for Tesla.

Although ostensibly only ten employees will be affected -- and they will be offered relocation to Detroit or Phoenix -- the reality is that businesses like Waymo rely on contractors exactly for situations like this: they can cut them loose without the repercussions of employees and don't even have to disclose how many are getting axed.

I find it interesting that the Waymo spokesperson tried to spin it as "we're not downsizing, we're consolidating" but the writer wasn't having any of it. Waymo's "expansion" in Detroit and Phoenix wouldn't require closing Austin and relocating employees if they had money. The budget belt is clearly tightening.

Looked at in the light of "Waymo operates in 19 locations" (IIRC the number correctly) this isn't exactly a big change, but it does appear that they are giving up on a location. This suggests that the lack of progress is not only reflected in the valuation, but also by the lack of self confidence. If Waymo was actually close to offering a true robotaxi they would not be shuttering operations in a major urban center.

Compare this to Tesla's approach where FSD is beta-tested as driver assistance. While I think it is probable that Waymo will be the first company to operate an "autonomous"* (true robotaxi) vehicle in some jurisdiction, when Tesla is ready they will have an easy time convincing auditors that Tesla's FSD is sufficient based on the data from the driver assistance program.

Put another way, while Tesla may have difficulty with regulators in some jurisdictions with getting FSD approved as a driver assistance, they have a clear path to doing so. First, it will be beta-tested as driver oversight. Second, it will be beta-tested as hands-free driving. After that, the incremental of convincing regulators to allow it to transport paying customers is fairly minimal.

Waymo's approach could be viewed as the same steps, substituting the safety driver for the owner. However, they simply don't collect enough data and do not operate in enough areas to be half as persuasive as Tesla. So while Waymo may be able to convince regulators in Phoenix, or some place in California, or Florida (which is trying to attract robotaxis) I think they will have to sweat for it, and will lack data to support moving into additional markets.

Also note that California is requiring free rides and Waymo is balking at that. This is another sign of budget belt tightening and again illustrates Tesla's inherent advantage as customers are paying Tesla substantial sums of money in order to become beta testers.

---
As an aside, I also noticed Waymo's recent insistence that they were going to remove the safety driver. What they didn't make clear is that they employ remote monitoring for remote driving. While I don't expect it would have the ability to handle situations that a safety driver is expected to, it is still something important to keep in consideration. For example, the current approach with autonomy is to "fail safe" as in "stop the car." In that scenario, remote driving is only used to recover the vehicle in the event it can no longer drive itself despite being drivable.[/hr]

 

[StealthP3D]

Wow, he is asking for 1 sentence that is false and to refute it with facts, THEN he goes on to make the false claim about Tesla receiving billions of dollars in subsidy. AFAIK, Tesla received half a billion dollar LOAN which they paid back early full with interest. All the EV tax incentives go directly to customers, not to Tesla. So what other "subsidy" did Tesla ever get from the government ?

Tesla has tax breaks in Nevada that are tied to performance metrics like employment, etc. I'm not sure how much they amount to but I believe most of it is still unrealized.

 

[mongo]

Tesla has tax breaks in Nevada that are tied to performance metrics like employment, etc. I'm not sure how much they amount to but I believe most of it is still unrealized.

I'd argue a tax credit/ abatement for new development is different that a taxpayer paid subsidy.
Less tax revenue is different than more tax spending.

 

[StealthP3D]

Drama aside, do we have a good answer for the question Einhorn poses about why Tesla's accounts receivable are so high? E.g. time lag involving line of credits? Delayed payment for energy products?

Don't we have a dedicated thread somewhere for posts that are on-topic?

 

[Dan Detweiler]

Seems this 3 o'clock fight to the final bell is on again. Somebody really doesn't want to see the stick pushed down for the weekend!

Dan

 

[Nocturnal]

Wow, he is asking for 1 sentence that is false and to refute it with facts, THEN he goes on to make the false claim about Tesla receiving billions of dollars in subsidy. AFAIK, Tesla received half a billion dollar LOAN which they paid back early full with interest. All the EV tax incentives go directly to customers, not to Tesla. So what other "subsidy" did Tesla ever get from the government ?

He is undoubtedly adding the EV tax credit to this. Typical anti-Tesla crap where you claim that credits are a subsidy (you can certainly say that is the case) but ignore competitors receiving the same or similar. I really can't understand how a fund manager who handles billions of dollars writes like this. This could have been something some regular idiot on Facebook posted.

I'd argue a tax credit/ abatement for new development is different that a taxpayer paid subsidy.
Less tax revenue is different than more tax spending.

From a micro-economics perspective that isn't an important difference. ​

 

[StealthP3D]

I'd argue a tax credit/ abatement for new development is different that a taxpayer paid subsidy.
Less tax revenue is different than more tax spending.

Generally speaking, not having to pay a tax that other businesses are expected to pay is considered a subsidy.

Einhorn can be philosophically opposed to that if he wants but there is nothing nefarious about it. He's just using it to try to give people a "dirty" feeling when they hear "Tesla".

 

[Mike Smith]

Monday is the 11-11 Model 3 event announced in Shanghai, whatever it is.

 

[jerry33]

Seems this 3 o'clock fight to the final bell is on again. Somebody really doesn't want to see the stick pushed down for the weekend!

Dan

2@~72K share sales (green) in a row.

 

[humbaba]

Wow, he is asking for 1 sentence that is false and to refute it with facts, THEN he goes on to make the false claim about Tesla receiving billions of dollars in subsidy. AFAIK, Tesla received half a billion dollar LOAN which they paid back early full with interest. All the EV tax incentives go directly to customers, not to Tesla. So what other "subsidy" did Tesla ever get from the government ?

Although @StealthP3D has a point, this is a long standing #TSLAQ talking point referring to vague federal handouts. I shocked someone who used it on me by pointing out that Tesla paid off the loan early and that the tax break was for the customer. Now, I say "shocked" because I really think they were.

The obvious come back to the latter is that "well, its just a Tesla subsidy in disguise because it lets them raise their sticker price" and since they didn't have any comeback (they just switched talking points, to "Tesla's are bombs, they literally explode" IIRC) and are quite intelligent in the general sense I think it shocked them. How could that be? Despite the individual's intelligence they completely disengage any critical thinking when it comes to EVs. (They also had nothing more intellectual than "nu uh, you stoopid" when I pointed out gasoline, combustion, rates thereof, BMW, etc.)

So Einhorn could even be someone that, outside of Tesla, would be considered intelligent -- and not be the first to check that intelligence at the door when it comes to EVs in general or Tesla in particular. When you just parrot what other people say because it supports your own sentiment it can be difficult to engage the noggin to actually think. He wouldn't be the only one.

 

[TradingInvest]

The way this letter is written shows David Einhorn is a true idiot, an arrogant one. Of course he doesn't need this proof. His shareholder letters and his investment actions in the past 10 years already showed what he is.

If Einhorn has any sense, he should make the letter short and sincere, use this opportunity to learn a lot from Musk and the tour. If I were Elon, I wouldn't treat him nicely based on his letter. He has a lot to lose from shorting Tesla, it's not a time to be arrogant and waste the opportunity. Elon knows the stock will go a lot higher, many fold higher. He is just trying to help out a short (ultimately to reduce drag and noise on Tesla going forward). But this short is too arrogant to understand the situation.

I found the whole Wall Street is pretty arrogant and stupid. They think they are creating value. In reality they are just a bunch of blood sucking parasites sucking blood from the society.

Farmers grow food; teachers teach students; doctors treat patients; Costco helps to distribute products with a small profit; Tesla builds nice products and making the world a better place...

Blood sucking is fine, because the society has set up to treat that as a legal activity. But suck quietly. Einhorn is comparing his stuff with what Tesla is doing, unbelievable.

 

[Curt Renz]

Why 335? Max pain is 320.

The MaxPain posted each day is based on the previous day's closing open interest. The real time effective MaxPain can fluctuate throughout a trading session.

 

[Swampgator]

Tesla has tax breaks in Nevada that are tied to performance metrics like employment, etc. I'm not sure how much they amount to but I believe most of it is still unrealized.

I hate calling tax breaks based on bringing jobs to a state a "subsidy"
Tesla could have picked another state and I wonder what Sparks Nev would look like today in that event?
At any rate, paying taxes, but just less of them, as incentive to create jobs is not taking money from anyone, so how is this a "subsidy"?

 

[Tslynk67]

Why 335? Max pain is 320.

It's not always very up to date - @Curt Renz explains this better

In any case, the ammo they would have needed to shift it down $15 would have been immense and likely cost them more

 

[Nocturnal]

So Einhorn could even be someone that, outside of Tesla, would be considered intelligent -- and not be the first to check that intelligence at the door when it comes to EVs in general or Tesla in particular. When you just parrot what other people say because it supports your own sentiment it can be difficult to engage the noggin to actually think. He wouldn't be the only one.

Cognitive dissonance. He has lost a sh%t-ton of money on his ideas that Tesla is a fraud and will crash. His mind is protecting itself by blocking out any information that disputes this. Even intelligent people can fall victim to this.

 

[mongo]

Generally speaking, not having to pay a tax that other businesses are expected to pay is considered a subsidy.

Einhorn can be philosophically opposed to that if he wants but there is nothing nefarious about it. He's just using it to try to give people a "dirty" feeling when they hear "Tesla".

Yeah, he is trying to spin. "billions of dollars of taxpayer subsidies" makes it sound like Tesla was getting money from taxpayers (taking money from people's pockets). Whereas the reality is that taxpayers kept more of their money (EV tax credit) or the government did not get additional monies for new Tesla development.

If you stop paying a tax that you were paying, there is a loss to the budget. If you continue not paying a a tax you never had, the budget stays the same (ignoring impact to infrastructure costs due to the new development).

 

[Krugerrand]

And it looks like the TSLA manipulators just had to give up their line in the sand and start buying again.

I believe they make small trades back and forth to hold down the price, they couple this with short-selling at opportune times but they eventually have to give up and start over when they run out of powder.

Or Tesla just moved with the rest of the market at end of day - everything went green.

 

[TradingInvest]

What matters is IMHO not just Goldman Sach's own proprietary trading and positions, but that of their clients: big hedge funds, pension funds, sovereign funds, high net value private banking clients, etc. These can often dwarf an investment bank's own positions.

Also, maybe this detailed expose about Goldman Sachs analyst David Tamberrino by @ZachShahan, and the TipRanks chart from @shrspeedblade, earlier this summer, played a role as well:

Historical Tesla [TSLA] Forecasts From Goldman Sachs, David Tamberrino | CleanTechnica​

Tamberrino basically had a permanent "sell" rating for TSLA no matter how well Tesla did, and his last TSLA price target of $158 was outright disastrous:

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

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

"Second-quarter deliveries ‘fine,’ but there’s nothing more to stoke demand this year, analyst says"

"The analysts, led by David Tamberrino, are known Tesla bears. They kept their rating on the stock at sell with a price target of $158, a 30% downside from Thursday’s price."​

Ouch - Q3 results basically annihilated Tamberrino's bearish thesis.

If I was an influential Goldman Sachs client affected negatively by his advice I'd be mighty pissed off and would be pressuring GS management to launch an internal investigation into David Tamberrino: were there any unethical links between him and the TSLAQ scammers? How come he only ever had a sell rating on Tesla? Why were there often suspiciousTSLA stock price movements shortly before his latest ratings were released?

I refuse to believe that all relevant Goldman Sachs personnel and management was involved in those (alleged) shenanigans (including their market making/dealing desk): if true then these actions would be illegal AF, and GS, having won the race for dominance in global investment banking, doesn't have to play dirty all the time anymore.

Btw., @ZachShahan also wrote an expose about Morgan Stanley analyst Adam Jonas as well:

Remember, Morgan Stanley's Adam Jonas Predicted In 2016 Tesla Would Sell Only 246K Cars In 2020 — Just Sayin' | CleanTechnica​

Jonas toned down his bearish rhetoric after Q3 and was recently defending Tesla on CNBC - so maybe shining sunlight on Wall Street auto analyst shenanigans really helps!

David Tamberrino and Adam Jonas are tools. Elon knows how to deal with it. Tamberrino is out. I guess Jonas will stop covering Tesla. Someone else from MS will start to cover Tesla, the excuse will be Tesla is not a car company.

 

[Beltsbear]

Why 335? Max pain is 320.

It changes, that was yesterday. But also sometimes it is not achievable, and another number like 335 may be better for the MM then a number like 325. That’s because the second to max pain may not be sitting next to max pain.

 

[dww12]

Cognitive dissonance. He has lost a sh%t-ton of money on his ideas that Tesla is a fraud and will crash. His mind is protecting itself by blocking out any information that disputes this. Even intelligent people can fall victim to this.

And now he has an open invitation to every channel to go spread his lies because Elon put him in the news. Guess who’s going to be the guest on CNBC on Monday to talk Tesla instead Kathy to talk about GF3 starting production.