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

[StealthP3D]

Just collected the 20:00 hrs data from NASDAQ: they reported 28,484,290 shares traded at an VWAP of $485.59 (exact figures subject to revision over the next 48 hrs).

Yeah, so today's VWAP was just 20 cents less than yesterday's. Of course with today's volume those 2 dimes add up to $284,843.00 or about 587 shares worth...

Cheers!

Thanks for that. Very interesting!

That makes me think we might see one more day of more of the same, ending the day probably a bit higher than today (but below $500) with a small chance of up to around $10 lower.

The question obviously on everybody's minds is when does the second stage get ignited. I'm going with Monday but I would be delighted to see it tomorrow.

 

[StealthP3D]

https://www.gpif.go.jp/en/investment/190905_Esg_Report.pdf
Should a Pension Fund Try to Change the World?

brief google search couldn't find list of their holdings

GPIF held 1,239,724 TSLA shares as of March 31, 2019.

However, I can't find more recent information. I believe this is because they are in 5-year review process of re-formulating their target allocations between asset classes. There has been some concern that the fund will run out of money (much like SS) and there has been a shift in recent years away from bonds into stocks in this new era of lower interest rates. This November 1, 2019 article has a few more details:

Japan’s GPIF posts 1.14% gain in September quarter

Apparently, this latest review of allocations has caused them to stop publishing actual quarterly allocations (which must mean they stopped publishing .holding details as well). The last review of allocations, from 2014, resulted in increasing foreign and domestic equities from 12% to 25% (each) of the fund to boost returns. I'm guessing the recent review has allowed them to boost investment in equities even more (which could cause them to buy more TSLA). That, coupled with their recent decision to no longer loan their shares out for purposes of shorting, could be a component of the recent gains.

It wouldn't surprise me to learn that Elon had some kind of influence here. He's like a magician. As a billionaire, he probably knew the GPIF needed better returns and might have made a few suggestions.

$1500 billion investable dollars is nothing to sneeze at, even if only a small percentage can be allocated to TSLA. I don't think Tesla has to reveal through SEC filings how many shares are held by public pension funds such as GPIF as long as it's below 5% each. And GPIF's holdings as of March 31 were under 1% 1.2 million out of 180 million outstanding shares. So GPIF could increase their holdings by up to 7.8 million shares without triggering the SEC 5% rule. I only mention this because it doesn't look like current public holdings are being published by GPIF, at least for the time being.

 

[mact3333]

just unloaded half my shares...will keep core shares for long term...will buy back in bit......also bought some Feb puts to cover the shares I have left...if my theory is correct, we should see selloff by tomorrow or next day......under no circumstance should people think Im a short and a TSLA non--believer!...this is just a temporary play based on charts and patterns...and yeah I know I won't be a popular guy on here lol....posts like this seem ludicrous during the euphoric bull, but by next week prob won't be...jmho.

TSLA sold off right on cue today...this was a chip shot really...ended up unloading half early yesterday and the rest near the close yesterday...the euphoria of the TSLA bulls and extremely bullish sentiment and the charts say there needs to be a modest selloff and let the stock consolidate and digest this run up.

I see a chop between 450-500 until earnings...I will be re-buying all my shares within the next 2 weeks...after earnings we are either going back under 400 or blasting past 500...I think the latter will happen...earnings will beat estimates this quarter...more people will pile on.


2020 will be a big year for TSLA for these reasons:

1. we will beat earnings this quarter and this will blast the stock price above 500.00....now 1st quarter is always abit shaky but this year will be decent to ok due to china but prob not a disaster like last year.

2. china will be pumping out model 3's at 3000 a week soon...demand is huge there...mkt there is prob 3-4 times higher than US. On side note, I see a smaller newly designed tesla coming form china in 3 years...Elon eluded to this and I bet its a smaller car than model 3...prob model 2....this will start shipping to the rest fo the world in 3-4 years...will be designed from scratch at giga 3.

3. model Y is coming very soon...the mules have been out for 3-4 months now so model Y will prob be rolling out in 2-3 months...yes it will cannibalize model 3 to some degree, but given the enormous size of the small SUV mkt sales will be massive...500-700K units a year by next summer I am guessing....sharing 75% of the parts from model Y will bring efficiencies and higher margins.

4. Tsla will prob be added to the S and P 500 latter half of this year if they can maintain profits for a year straight, which i think will happen....index based funds will be forced to buy Tsla and more shorts will get squeezed....enough said.

5. Tesla Semi will start to be produced in limited number by end of this year...wont add a lot to earnings or revenues at first, but its a very important first step as there are 2.5 million truck drivers in this country alone and most will be replaced within the next 10-15 years and I will guess many of these FSD semi's will have a big T on the grill....will be rough on the truck drivers over the next 10 years...watch for freeway protest blockages within 5 yrs when truck drivers become desperate and angry...some things are predictable.

6. FSD!...they are getting really close...they can now recognize stop signs and etc...the DOJO program tesla is running and cultivating now will be HUGE!...with HW3(20x time sparser than 2.5), they have 2 computer chips running simultaneously and learning and uploading data and if anyone behaves differently than the computer, its gets reported and tesla will learn and evolve...HW 4 chips will be 4 times faster than HW3...they will have logged 3 billion miles of driven data by end of this year, Waymo is so far behind it isn't even funny...Waymo pays people to drive around in those silly LIDAR vans making maps while millions of people pay tesla for the right to report their data every time they get into their car lol....once full FSD released later this year people will line up to pay the 7K to upgrade their cars...in the future FSD will be on all teslas just like AP is right now.

7. Giga Germany...to think Giga 3 was up and running and pumping out cars within 10 months from actual ground breaking is a miracle really...I have a feeling Germany will take at least a full year cause Germany has more rules and regulations than the free for all environment in China....with the Fremont and China experience, Germany roll out should be smooth....prob will have cars rolling out by next summer.



As each of the 7 points get met, the stock will take another jump up and establish a new base at those higher levels....jhmo of course.

 

[printf42]

Sounds like it’s common to expect convertible bonds owners to short the stock to hedge their positions when their converts become in the money.

But that is assuming the holder is only investing a bond and does not hold any bullish view of TSLA, is it?

When the SP cross bond conversion prices, the bond holders effectively start to hold the stock.
If they are bullish they don’t have to secure profit and short to hedge, right?

Doing so will cap potential further upside of SP, does all bond holder really do it?

If yes, why chose Tesla bond then, there could be other bond that give similar returns with much less risks, did I miss anything?

 

[SteveG3]

I think he is a few years off. IMO, the S/X has at least two or three more years of production before the end. Their importance to the company's bottom line will continue to shrink as more 3s and Ys are produced and eventually the Cybertruck.

I think it's not too far off for S/X to rebound to 100k units or more sold annually. Geographical expansion and improvements to the vehicle (i.e. plaid expected this summer), could put us back at those volumes. If ASP nudges back up to $100k, and net margins hit 15% (possibly higher considering that FSD might start selling at considerably higher take-rates as more functionality gets into the public's hands)

S/X could be worth about $1.5 billion to the bottom line, or $7.50 per share, rounding up the share count to 200 million. That's still a considerable contributor, though, of course, less than 3 or Y.

 

[S3XY]

Pfft! @Lycanthrope is building me walls. Big walls. Like King Kong Island of Skull walls. My islands will be just fine.

*note to self: consider adding domed roofing and climate control systems*. *oh! don’t forget to relocate all ant hills*

I would demand some shrubbery around it as well.

 

[Buckminster]

Not much today, early talk of two downgrades and a new investigation into a Tesla crash, then we waited on 500...then fell below 490 then the thread was shut down for 10 minutes allegedly then as we dropped below 480 people considered the best strategy for trading half their shares, then as it hit 475 people considered this a buying opportunity then a couple pages of people complaining about people taking profit, then the rationale hit that we are at 480 which is double what Tesla sold the additional shares for 5 months ago.
Now we realize we’re fine and the best is yet to come.

You should start your own Papafox style thread. Daily update for the time poor.

 

[StealthP3D]

4. Tsla will prob be added to the S and P 500 latter half of this year if they can maintain profits for a year straight, which i think will happen....index based funds will be forced to buy Tsla and more shorts will get squeezed....enough said.

A company doesn't need to maintain profits for a "year straight" to meet S&P 500 Index eligibility requirements. They can have a quarter or more of losses as long as four consecutive quarters add up to a profit and the last quarter is profitable.

Tesla will likely meet those requirements by the end of Q1 (assuming they show at least a small profit). And with all the revenue levers they have to pull that we can't see until they report earnings, we can't completely rule out the possibility that Q4 could do it. We simply have no visibility into regulatory credit sales until they report. And then there is software revenue (the $2000 performance boost and recognition of FSD revenues).

As each of the 7 points get met, the stock will take another jump up and establish a new base at those higher levels....jhmo of course.

That's pretty funny! If only share price movements neatly followed milestones as they were met. That would be nice and orderly! Share price movements in the real world do not behave like that. Investor sentiment drives the price of a stock like TSLA. If you have your pulse on that so well that you can outperform the "buy and hold" investors over the long-term, more power to ya!

I know I can't reliably do that (I would get left behind sooner or later while waiting for a lower price that never came) so I'm not going to try that.

 

[SteveG3]

Video of interview with Oppenheimer analyst Colin Rusch who has an Outperform rating on Tesla

CNBC - hour ago: How to trade Tesla during rebound

thanks for posting this.

Colin was quite bullish. The CNBC programming presenter asked Colin if his current $385 price target means he's going to cut his rating or raise his price target. I found Colin's answer quite interesting. At Oppenheimer this is under review because they need to evaluate where the rest of the automakers are in terms of the operating system of the car, in addition to the drivetrain, to update their valuation of Tesla. So, I not only got the impression that a target price upgrade is more likely than not from Colin near term, but, also that there's a good chance that his report will include a substantial discussion of a critical Tesla lead that incumbents will have a very rough time trying to catch up on, the power of Tesla's software integration in making the product better in many respects. It's a tech lead discussed here with some frequency but little elsewhere. Perhaps Colin's report will begin to change that.

 

[SteveG3]

There's been a fair amount of discussion re buy/sell/hold shares given the fairly dramatic repricing of Tesla's shares recently.

I've taken the same approach now, as I have since getting into Tesla in 2012, including the 2013 run up. It's actually an approach I developed several years earlier with the only other individual stock I've been in the past 20 years (I go heavy concentrated when, after lots of waiting, I see what looks like a fat pitch right in my wheelhouse. Easier and less risk than starting my own business).

rather than rewrite an unchanged approach, here's a summary of this approach I posted on TMC in February of 2017, on a day the stock closed at $269.xx,


"stock is undervalued. it's moving out of the level of being undervalued (over 25%) which I recommend buying [to friends looking to build/add to a core position]. now I advise holding. I surely agree there will be selloffs in the future. I just don't know if it will be from here to $230, or $190, or from $360 to $310.

what to do? for me, hold core position. if the next sell off is to $220, I start picking up trading shares there (continuing to buy in increments spread over the next potential ~25% of continuing selloff, with some dry powder for buying if an off the charts event like the '08 financial crisis happens) and sell them when the stock price moves back in the direction of fair value. if the next sell off is $360 to $310, I'm not sitting here thinking, "why did I ever get rid of my core position, it pains me to even look at the stock." [ie if it turned out that a $310 price was the low of the next selloff, and core shares weren't all still held when the stock rebounded]. (fwiw, do I buy trading shares at $310? if $310 is more than 30% below fair value when it happens yes, if not (as is the case today), no).

I've done this with Tesla since getting in in 2012, as I did it for the other individual stock I've owned (...) MOST IMPORTANTLY, I held my core shares every day from buying Celgene in 1999 to the day I got out in 2007, and TSLA core shares every day since accumulating core position in 2012. none of the days each of these stocks has jumped 5-10%, or month's they've jumped 20-30% was I ever one share short of my full core position.

the key to this strategy is finding a stock that you gives you an ability to model a range of fair value years ahead with a very very high level of confidence that is trading below fair value (fwiw, this is significantly easier to do with Tesla than it was with Celgene). there are only two stocks I've found this to be the case for me. as it turns out, that number has been more than enough."

A few updates...

I find it a little more complex to value Tesla years out now than in years past due to the extremely wide range of potential outcomes for Tesla Energy and the Tesla Network (Robotaxis).

My current rough valuation of the underlying auto business (I find far easier to forecast than Tenergy or Tnetwork) is $600 today. As I can hardly value the Energy and Robotaxi businesses, I go for adding trading shares at 25% the $600 value of the auto business, rather than 30%. This means that below 75% of fair value (under $450) I'm a buyer of trading shares. Above $450, I start unwinding trading shares, which I've been doing. The whole time through... core shares, roughly 85-90% of net worth (started about 30% in 2012) rock solid holding. I let my adding "trading shares" during TSLA selloffs run through my 10-15% cash, and move up to a 10-20% margin position if a selloff gets that far.

With Tesla, my "trading share" activity has added the strategy of selling puts to the mix. If you do this, bear in mind the potential demand on your cash position and use of margin if you are to be assigned shares from those puts. Assignment happened to me for the first time when we swooned to low $200s this past May.


"rewind" quoted section from 2017 from post #5055 found here,

2017 Investor Roundtable:General Discussion

 

[UnknownSoldier]

3. model Y is coming very soon...the mules have been out for 3-4 months now so model Y will prob be rolling out in 2-3 months...yes it will cannibalize model 3 to some degree, but given the enormous size of the small SUV mkt sales will be massive...500-700K units a year by next summer I am guessing....sharing 75% of the parts from model Y will bring efficiencies and higher margins.

I'm going to be completely honest here and say that Y really needs to chew into some of 3's sales because I don't see anyone with an explanation for how they plan to build all those Y's alongside the S/X and 3 in Fremont. The factory is, as Elon once put it, "packed to the gills" which is why they are making 3's in the tent in the first place. Unless they plan on putting up more tents, the best case scenario is for 3 sales to decrease enough that they can decommission an entire 3 line and turn it into a Y line. The Y is reportedly going to be higher margin anyways, so replacing a lower margin vehicle with a higher margin one with the same overall production numbers is a win-win.

 

[NicoV]

Porsche expects to sell 900 Taycans this year in Belgium:
https://www.knack.be/nieuws/auto/po...trends&utm_source=Facebook#Echobox=1578583338

About 30% of the annual sales of Porsche in Belgium, driven by 1.5 year of backorders.

 

[SteveG3]

I realize it's been discussed here that Ihor's numbers are not super reliable... but, would be surprising if directionally, it's not our first data showing there has not been material net short covering during this massive TSLA price surge

Ihor Dusaniwsky on Twitter

$TSLA short int is $13.69bn ; 27.82mm shs shorted; 20.79% of float; 0.30% borrow fee. Shs shorted up +464k shs, +1.7%, over last 30 days as price rose +45% & up +132k shs,+0.5%, last week. Shorts down -$2.02bn in January mark-to-market losses after being down -$632mm yesterday.

Shorts lost $2bn in 9 days and added recently.... even Ihor has nothing seen like that before.

Obviously and most of us watching them know, this is all but normal. Since that behavior does not making any business sense I double down on my assumption that this is money that is not spend to create return as the #1 goal and likely comes from sources that don't want to be names in the context of Tesla.

Ihor Dusaniwsky on Twitter

P.S: clearly bullish

Bingo re the last comment from @avoigt



Just throwing it out there that there's plenty of room in the

"not so quick to call price movement a short squeeze," (slash)

"not so quick to think contemplating a short squeeze coming around the corner is constructive" (slash)

"maybe that giant short position isn't as much about a ton of people making real dumb stock bets as maybe, just maybe, multiple multi-trillion dollar industries are trying to slow down their falling away by attempting to slow Tesla's ascent"

camp

this camp has been in operation here on TMC since at least 2015 and is always open to newcomers.


Of course, at some point in time, this TSLA short position is all but 'certain' to revert to normative levels for US equities... but, if it is about a much bigger game, done by massive big pockets, that reversion to normative levels could have a very idiosyncratic timeline and unwinding process.

 

[kengchang]

New Permit

F19-0017-K - Tesla BD5 Conveyor

Project Description:
F19-0017-K- Overhead conveyor and platform support. MEPs and Fire Protection package are deferred submittals

I'm going to be completely honest here and say that Y really needs to chew into some of 3's sales because I don't see anyone with an explanation for how they plan to build all those Y's alongside the S/X and 3 in Fremont. The factory is, as Elon once put it, "packed to the gills" which is why they are making 3's in the tent in the first place. Unless they plan on putting up more tents, the best case scenario is for 3 sales to decrease enough that they can decommission an entire 3 line and turn it into a Y line. The Y is reportedly going to be higher margin anyways, so replacing a lower margin vehicle with a higher margin one with the same overall production numbers is a win-win.

The Y production line is being set up at another area that does not interfere with current Model 3 line.

 

[Fact Checking]

New Permit

F19-0017-K - Tesla BD5 Conveyor

Project Description:
F19-0017-K- Overhead conveyor and platform support. MEPs and Fire Protection package are deferred submittals

BTW., does "BD5" stand for "Body Line #5"?

This would be an almost 100% automated body/chassis line with welding robots and parts conveyed in to individual welding stations overhead, from either directly the press lines or from a storage/preparatory area, to the welding line.

Similar to this I suspect:

Just with unpainted metal parts.

Or maybe the new conveyor is for finished body-in-white units already, to get them to the paint shop?

 

[JustMe]

According to the Google docs spreadsheet maintained by Franco Mosotto, the first Tesla car carrying ship of Q1 has just departed for Korea.

This shop loaded for 1.95 days. By comparison the previous two ships to Korea in Q4 loaded for 1.56 and 0.91 days.

Two more ships are headed for SFO.

 

[JustMe]

New Permit

F19-0017-K - Tesla BD5 Conveyor

Project Description:
F19-0017-K- Overhead conveyor and platform support. MEPs and Fire Protection package are deferred submittals

The Y production line is being set up at another area that does not interfere with current Model 3 line.

Right. I think they took over some space that was being used for storage.

Let’s also not forget they just started the Model Y project at GF3, and GF4’s first product will be Model Y. That will take some pressure off of Fremont

 

[alloverx]

I can see the Plaid S coming out but would not be surprised if the MX got the chop at end of 2020.
Time for vanity is over now that Tesla is more than real.

Have watched the SP for many years and its been a crazy ride.
I am not invested but I do enjoy the shorts getting burned.
Congrats to the long holders hanging in there to finally reach a point where a reward is surely in order.

For Tesla to go on from here will be super impressive and a real challenge for Elon to manage.
Lets keep pushing the technology as far as it will go.

 

[Fact Checking]

New I can see the Plaid S coming out but would not be surprised if the MX got the chop at end of 2020.

No way in hell.

The reason Tesla didn't even announce a Plaid version for the X yet is because X sales are fine, large SUVs are growing in popularity all around the world, and the equipment to make them already exists. The X might be a Fabergé Egg, but as Elon said it's a work of art - and they already cracked the method of how to make it.

Probably even at the current 16k-18k/quarter sales levels the S/X are already generating a nice chunk of cash, and demand will only increase as the EV transition gets underway.

It is true that the S/X product lines are not key to Tesla's success anymore - they played their role of bootstrapping the 3/Y, but this welcome reduction in strategic importance doesn't mean Tesla will be throwing out cash generating product lines that already paid for themselves, which also happen to be great, beautiful cars.

The fact that the Mercedes-Benz GLC-Class is not critical to Daimler-Benz's survival and that they are selling in comparatively lower volumes doesn't mean they'll stop making those highly successful halo products which they've been selling for decades.

S/X might also be key to continued success in China, where larger/longer cars are sought after more than in say the EU, and where a more expensive status symbol up-sell model is key to the success of premium/luxury carmakers.

Edit:

• @luvb2b is estimating Q4 sales of S/X of $1,589m, on CoGs of $1,223m - so S/X probably generated about +$366m of cash in Q4 alone, and similar magnitude of gross profits.
• Even in the infamous Q1 of 2019, when S/X sales fell massively to 12k units in part due to the discontinuation of the 75kW model, there was $1,219m of revenue from the S/X models on $1,051m of CoGs, so the S/X still generated around +$168m income at 12k deliveries. The break-even point seems to be well below 10k units per quarter - S/X production appears to be pretty scalable both up and down.
  
• There are indirect benefits of the S/X models:
  • They scale up parts and materials purchases, even if few of them are shared with the 3/Y, it will add up and will move Tesla into higher discount tiers at key suppliers. I.e. even at break-even S/X sales help improve margins for the 3/Y through economies of scale.
  • Some customers will come into the showroom for the X and leave with a Model Y or 3. As long as it's a sale Tesla doesn't mind which model they pick, and having broader product lines is generally an advantage to get customers in the door (which is half of the sale), or to get them to a test drive (which in the case of Tesla is 99% of the sale ).
  • Members of the S/X workforce can temporarily be used to fill in gaps in the 3/Y lines. So while the S/X are more labor intensive, they can also be seen as a pool of experts who can help out anytime.

 

[KarenRei]

No way in hell.

The reason Tesla didn't even announce a Plaid version for the X yet is because X sales are fine, large SUVs are growing in popularity all around the world, and the equipment to make them already exists. The X might be a Fabergé Egg, but as Elon said it's a work of art - and they already cracked the method of how to make it.

Probably even at the current 16k-18k/quarter sales levels the S/X are already generating a nice chunk of cash, and demand will only increase as the EV transition gets underway.

It is true that the S/X product lines are not key to Tesla's success anymore - they played their role of bootstrapping the 3/Y, but this welcome reduction in strategic importance doesn't mean Tesla will be throwing out cash generating product lines that already paid for themselves.

The fact that the Mercedes-Benz GLC-Class is not critical to Daimler-Benz's survival and are selling in comparatively low volumes doesn't mean they'll stop making those highly successful halo products which they've been selling for decades.

S/X might also be key to continued success in China, where larger/longer cars are sought after more than in say the EU, and where a more expensive status symbol up-sell model is key to the success of premium/luxury carmakers.

Agreed 100%.

1) Model X is a halo car for Tesla. It's a huge number of people's aspirational vehicle, with its panoramic windshield, auto-opening doors, huge (unmatched) amount of passenger space, and of course the only Tesla with....

In China it appears to have become seen in the way that limos have historically been seen in much of the world. Renting an X for your wedding appears to be the new hot style trend for couples.

2) It's solidly profitable. Why kill a solidly profitable line? Just for more space at Fremont? They can build more space elsewhere, they're not going to throw away a revenue stream just to build "something else" in Fremont.

3) The MS Plaid update will almost certainly be rapidly applied to X as well. No reason not to. Pack changes in particular are just drop-in-and-replace.

4) S/X sales are rising. Who kills a sales-rising product?

5) Tesla has explicitly stated that they have no plans to kill S/X. In both of the last two earnings calls. Now something could have changed, or they could be lying, but... see #1-#4.