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

[jbcarioca]

Yeah, "deferred sales" being one of the main drivers of the EV conversion is actually one of my pet peeves!

...So I'd expect such market movements to happen - but there's very little data about this so I'm cautious about extrapolating and speculating too much. I'm already way too bullish about Tesla.

It is a bit frightening how much I agree with you!

It seems we have only anecdotes and a steady apparent decline in ICE sales in several countries and market segments. I wish there were an easy way to quantify this trend; if that is what it is.

edited to exclude details per participant preferences

 

[Open Interest]

Shorts like Times Editor:

PROOF of worker abuse. TSLA to operate in house coffee manufacturer to provide round the clock coffee IV drips to workers who are working feverishly to build Model 3s for ocean dumping.

 

[gora321]

Earl of Frunkpuppy on Twitter

 

[gora321]

Vincent‏ @vincent13031925

Avg car sales was dropped 4% in January. And we have a winner here! @Tesla sales was up 314% in January according to http://autonews.com $TSLA #Tesla https://www.autonews.com/video/first-shift-january-us-sales-winners-losers …

 

[ZachF]

Uh oh, a real Tesla killer has arrived!

 

[gora321]

Greg Wester‏ @gwestr

Seeing truck caravans of fully loaded P3D $70k leaving Fremont. International demand problem!

 

[gora321]

Andre Lev‏ @AndreyATC
NY to Florida round trip with 4 kids in an amazing car. Thank you ⁦@Tesla⁩ and ⁦@elonmusk⁩ for making 27 hour ride a breeze. Supercharger network is a great convenience and really under appreciated. Can’t wait for another road trip! #Tesla #ModelX #TeamElon

 

[shrspeedblade]

Andre Lev‏ @AndreyATC
NY to Florida round trip with 4 kids in an amazing car. Thank you ⁦@Tesla⁩ and ⁦@elonmusk⁩ for making 27 hour ride a breeze. Supercharger network is a great convenience and really under appreciated. Can’t wait for another road trip! #Tesla #ModelX #TeamElon

Great pictures, but you know, the baby technically still doesn't meet the requirement for when AP is activated!

 

[TheTalkingMule]

As noted, TSLA was the #1 stock bought on Robinhood the day we dipped. Just saw video from last week of a TD rep pointing out TSLA as the #1 purchased stock by millennials on their platform.

Obviously SP movements are dictated by institutional investments, but this is yet another indicator that speaks to the 18-34 crowd being fully behind the mission. They understand and will be purchasing when the price point hits their range(or their range hits Tesla's).

 

[ZachShahan]

We do not know whether they have an editorial process or not... their explicit policy, at least when I joined as a contributor several years ago, was to not fact check the blogs. This may actually be a tool to have a stealth editorial process (a commercial one, not a journalistic one).

Some who've written on SA in the past, including Galileo, have said they left SA because their bullish blogs were turned down for various reasons, yet, the flood of incredibly obvious nonsense blogs from bears continued to be approved (near utterly obviously intellectually dishonest gibberish like we've seen so many times from Anton Wahlman among many others).

We've all seen that Jim Cramer stock manipulation video, right (if you haven't, strongly encourage you to put the 10 minutes in to watch it on YouTube)? It's all about hedge funds creating false narratives and using the media as a tool to leverage those false narratives into market moving forces.

People playing shady games within hedge funds, or other WS orgs, by use of "bozo" reporters (Cramer's term in that video) at the WSJ, CNBC, etc (outlets he explicitly named).

You know what these guys have in common?

Jim Cramer
Henry Blodget

They both left the WS/hedge fund side of that 'game' to found "news organizations" that utterly seem as if they custom tailored to create play the other side of that 'game.' Cramer founded TheStreet.com and Blodget, Business insider. In Blodget's case, he was banned from the securities industry prior to his move to the media.

I looked a little into the background of Seeking Alpha's founders, but, did not find anything as obvious of having been part of the other side of that game before starting SA, as what we see with Cramer and Blodget. That said, their format looks even more custom designed to play the "news organization" end of that game. Show up on google, etc., as if you are "news," but, actually be a blog site with an explicit policy of not fact checking. Plausible deniability that Street.com & Business Insider don't even have. Speaking with Tesla's VP of Investor Relations a few years back, he gave me some indication that Tesla's lawyers had looked at SA, and thought they had a plausible deniability strategy (didn't take the phone call to the point of a discussion of stock manipulation).

tl;dr I see a reasonable chance that Seeking Alpha's "they're blogs, we do no fact checking" policy is not the removal of an editorial process, but, rather an editorial mechanism custom designed to provide essentially a safe haven for the pumping out of utterly false nonsense designed to move the markets created by cronies and/or the highest business among those looking to play the sort of games Cramer discussed. If their is a bigger game in the Tesla short position than betting the stock is overvalued, Seeking Alpha seems like a platform designed for running the plays of such a game.

What Jim Cramer video? Link?

 

[ZachF]

What Jim Cramer video? Link?

 

[ReflexFunds]

Tesla guided for 'tiny profits' in Q1, but I believe that constraint necessarily results in free cash flow north of $500m, even if they make a small GAAP loss.

They guided for 10,000 vehicles in transit. In Q1 2018 they had 4,060 S+X vehicles in transit, so if in Q1'19 S+X in-transit levels are roughly similar, this means that there are going to about 6,000 extra Model 3's in transit, about 1,000 in the U.S. similar to Q4, and about 5,000 high ASP configurations en route to Europe and China - about ~2 GLOVIS ships worth of Model 3's.

So the differential increase in inventory in Q1 is going to be about 5,000 high-ASP cars: at an ASP of $60k that's about $300m reduction in revenue and an about $100m-$150m reduction in profits (hence the 'tiny profits' guidance).

But the impact to free cash flow should be similar: at most $300m of cash income "missing", all other things equal. Q3 and Q4 had FCF of $881m and $910m, so Q1 would map to $580-$610m of FCF, very roughly estimated.

Lower FCF would only be possible if other parts of the business are shrinking in an unexpected fashion, or if there's some unexpected delay in European and Chinese Model 3 deliveries, increasing "vehicles in transit" to well beyond 10k units. More than 20k undelivered units would be required to wipe out all FCF I believe.

Also, if Tesla slows down production in March then there might be a further 'accounts payable' compression effect from January and the first couple of weeks of February payments becoming due before end of Q1. This shouldn't go beyond $200m-$300m even in the worst case I believe.

(Maybe @ReflexFunds can point out which assumptions are correct or false.)

I think Q1 cash flow will be a bit weaker than that (I have $252m FCF on Tesla's definition), this likely corresponds to a $500-600m decrease in cash position vs Q4 after other cash flow adjustments, the $920m convert payment and potentially c.$300m debt issuance on the inventory credit lines. Cash balance may be closer to flat if new China debt is signed during Q1. Q1 in-transit guidance is for production 10k above deliveries, which means the incremental increase in inventory is 10k cars rather than total in-transit (this has c.$600m revenue impact, c.$120m profit impact and a further c.$300-400m inventory impact). I think Tesla likely paid suppliers early in Q4, so there is room to generate cash from payables, but this may be cancelled out due to the lower Auto revenue QoQ on the 3 timing & S/X seasonality. Expansion capex should also start to increase vs 2H18.

My full 2019 model is in the quarterly projections thread:
Near-future quarterly financial projections

 

[ZachShahan]

As noted, TSLA was the #1 stock bought on Robinhood the day we dipped. Just saw video from last week of a TD rep pointing out TSLA as the #1 purchased stock by millennials on their platform.

Obviously SP movements are dictated by institutional investments, but this is yet another indicator that speaks to the 18-34 crowd being fully behind the mission. They understand and will be purchasing when the price point hits their range(or their range hits Tesla's).

Got a link to that video?

 

[wipster]

Interesting...
As mysterious BMW fires continue, calls for investigation into possible causes grow

 

[Curt Renz]

Florida Today - 27 minutes ago: Could Tesla equipment be coming to a home near you? Maybe, the PSC has ruled

This is in regard to Florida solar leases.

 

[AlMc]

Got a link to that video?

Millennials buying Tesla dip

 

[FrANce]

Communication is really bad in France. A lot of FUD, or even worse, they're just ignorant about Tesla. They simply don't know what Tesla is. It's the same in most other countries, but at a larger extent in France.

I suspect because most of the unbiased Tesla information is in English, there's possibly a language barrier as well:

List of countries by English-speaking population - Wikipedia

Netherlands: 90%
Germany: 56% (much higher in younger generations)
France: 39%​

If I was Tesla I'd try to invest some extra effort into the most popular French speaking YouTube "influencers".

I'm wondering how "southern" the driving style is in southern France? I really wouldn't want to drive a Tesla in places where roads are narrow, where driving is weighted towards early in the morning or late in the evening, and small bumps and scratches are often not even worth stopping for.

I've been living in the South of France since 16 years and couldn't agree more with both of you. Practically no one knows what a Tesla is (except for pre-teen and teenage boys). Once a month someone might stop and ask me about my Model S, but that's as far as it goes. It's a little bit different at the Côte d'Azur, but even in Paris you can hardly spot a Tesla on the streets.

Education about the brand is very important and I agree that the language barrier is huge deterrent. The real percentage for English speaking French people is probably far lower than 39%. So for Tesla to invest extra effort into French YouTube influencers is a great idea!

Personally I love driving in the South of France. The motorways are amazing and so are most country roads. Always beware of the other drivers though, some like to overtake in blind curves, and then there is always the possibility of wild boars crossing the road (but only at dusk).

 

[EVMeister]

They understand and will be purchasing when the price point hits their range(or their range hits Tesla's).

Correct in my case. Also when it's (Model 3) actually available here, would be a nice start.

 

[Curt Renz]

FreightWaves - today: Impact of Tesla’s Maxwell Technologies acquisition uncertain on existing Maxwell fleet business

 

[SW2Fiddler]

then there is always the possibility of wild boars crossing the road (but only at dusk).

Is that a dig at The Boaring Company? Dusk Tusk Musk?