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

[Todd Burch]

Nobody mentioned this news here?
Wonder how is it gonna impact tomorrow’s SP
Tesla temporarily closes Shanghai factory over coronavirus concerns – TechCrunch

Anyone know if “Quesder” is Spanish for “goat” or “bird”?

 

[Cosmacelf]

Be careful. Tesla did not guide anything for Q1 other than a statement that it will be challenging due to the usual seasonality in sales and a China ramp that might not be perfect. Remember how much the market freaked out after Q1 last year? We've got 2 months before these bad sales numbers are disclosed. It almost has to take the stock price down, doesn't it? At some point between now and then the market will figure this out...

 

[ByeByeJohnny]

Pana just recently got to 35 GWh I believe? Did they hit that number yet? And their ramp to 54 GWh won't happen overnight. Which means they won't produce 54 GWh in 2020.

Yeah it won't be 54 the whole year but it wasn't 35 the whole year either so I think the +58% might be valid. And if the number of cars from Freemont 3+Y goes from 300k to 360k this year that is only 20% more. So there should be extra battery capacity if they are able to ramp up to 54. That capacity should go to semis or energy.

 

[mongo]

Be careful. Tesla did not guide anything for Q1 other than a statement that it will be challenging due to the usual seasonality in sales and a China ramp that might not be perfect. Remember how much the market freaked out after Q1 last year? We've got 2 months before these bad sales numbers are disclosed. It almost has to take the stock price down, doesn't it? At some point between now and then the market will figure this out...

Sure, but on the other hand...
Q1 deliveries were wack

 

[anthonyj]

Be careful. Tesla did not guide anything for Q1 other than a statement that it will be challenging due to the usual seasonality in sales and a China ramp that might not be perfect. Remember how much the market freaked out after Q1 last year? We've got 2 months before these bad sales numbers are disclosed. It almost has to take the stock price down, doesn't it? At some point between now and then the market will figure this out...

Tesla will realize FSD profits/sell those call options and join the S&P500 after Q1. People with billions of dollars understand this and will drive the stock higher. No one truly cares about Q1 fluctuations. Last year Tesla had $2b cash in Q1

 

[FrankSG]

Be careful. Tesla did not guide anything for Q1 other than a statement that it will be challenging due to the usual seasonality in sales and a China ramp that might not be perfect. Remember how much the market freaked out after Q1 last year? We've got 2 months before these bad sales numbers are disclosed. It almost has to take the stock price down, doesn't it? At some point between now and then the market will figure this out...

It's unlikely to be an exact repeat of Q1'19. I haven't re-run the exact numbers yet with updated information from Q4'19 earnings, but at the very least revenues should be solid, and possible up QoQ. Demand this quarter appears to be very strong, and we should see Giga Shanghai contribute a fair amount. Deliveries and revenue should be alright.

The only concerns in my opinion are temporary automotive and operating margins hits, due to Giga Shanghai and Model Y ramps. I'll have to re-run the numbers soon to form a better opinion on the range of possibilities, but I highly doubt Q1'20 will be the same as Q1'19.

 

[Highway2Heel]

I’m loving The Beatles reference.....swinging a silver hammer, indeed...

 

[dakh]

yeah of course, but it was weird hearing Elon say they couldn't ramp Semi up sooner because there wasn't enough battery supply, and in the next breath saying they can't spend money faster as there was nothing to spend it on (when obviously more battery supply is something they could be spending it on).

Almost seems like they are paying an opportunity cost to wait while Maxwell tech is ready (otherwise they would have invested more last year in battery lines)

Looks to me they are pretty set on taking battery production in-house (which is very logical), and they haven't gotten the whole end to end story figured out quite yet. It is going to be a much more integrated system with batteries inseparable from the pack itself, with advanced "recipe" for what's inside the cells, and advanced cell and pack production lines. The whole enchilada. It's a big undertaking to figure all this out, prototype, do long haul tests, etc. Once they have the overall design, they'll build one at GF1, test&tune it there, then replicate a version with improvements in China and Germany

 

[davepsilon]

I woke up this morning with the goal to read the ER before checking the SP movement, and then making up my own opinion of the results before looking at how the market interpreted things.

Excluding the expenses on the CEO award and a few other small hard-to-predict line items, the ER was very close to what I expected, and slightly higher than Wall Street expectations. Considering a lack of real surprises, and (in my eyes) quite conservative 2020 guidance, I expected the SP to move very little, and probably be somewhere in between $500 and $600 (keep in mind it was at $560 when I went to sleep).

Therefore, I was very surprised to see it at $650. Although I thought the report was good enough to maintain the SP or maybe continue a slight further run up (macros-allowing), I definitely did not expect it to be up this much. I wonder if I underestimated the amount of funds waiting to buy, and the amount of shorts waiting to cover, if Q3 turned out to not be a one-time thing.

I also did not expect sentiment on this forum to be this positive. I'm now wondering if people here are just excited by the market's reaction to the ER and the money they made, or if I'm missing things. Don't get me wrong, the ER is good, but is this not pretty much what we expected?

The biggest positive for me was the lower than I expected capex. Only $412M in capex while ramping both Giga Shanghai and Model Y is insanely impressive. Especially looking at $1.3B for the year after guiding $2B (or was it $2.5B even?) in capex at the start of 2019.

One other positive point that stood out to me and that I haven't seen mentioned anywhere yet, is the "Service and other" margin that continues to improve. Up from -18% to -14% QoQ, and from -38% to -14% YoY!

A short term slight negative point is the hit to GAAP income due to the CEO performance grant. $105M in net income and Tesla's conservative Q1 guidance, has changed S&P 500 inclusion from a near certainty after Q1, to a lot more uncertain for me. It doesn't impact the business much, but the individual/fund betting $2M on the $800 Jun'20 options is not going to be happy about this.

Energy margins were also disappointing. However, like somebody else mentioned I suspect this is due to Solar Roof ramp. This could very well continue to negatively impact Energy margins for another quarter or two.

It would've also been fun to hear more hype about 2020 and the next five years on the conference call, but I think it was probably wise to guide conservatively. I reckon that SP should continue to run up steadily as Tesla meets its own conservative targets for the year, and potentially spike a few times as it exceeds these (in my opinion) very conservative targets. Under-promise and over-deliver appears to be the name of the game going forward.

I was not overly impressed with the financial results as I read the letter compared to all the surprise excursions discussed here. But when I scrolled onto the model Y pictures I was much happier - they hit one of the surprises. All the potential other positive surprises like s&p inclusion, tax allowances, FCA environmental credits, and deferred FSD revenue recognition remain coiled like a compressed spring. We haven’t missed them only delayed them to a future period.

 

[Eugene Ash]

I think you do, someone with a lot of shares put a limit sell order out at that price. Clamped.

It would be fascinating to see what happens once the lid off that blows off...

 

[dl003]

Seeing as Tesla is still sold out for Q1, what's our opinion on delivery? Even without GF3, I don't imagine they'll have any problem doing 100k-110k. I mean, that's what sold out means right?
Without another massive stock option expense, shouldn't be hard to turn a profit even with product ramp, right?

 

[SMAlset]

I am almost certainly such a person. I ordered one of each trim level the moment Elon said "You can order now if you want." ...and I don't have room for even one. I did this because the deposit was small and refundable, and I thought maybe I could somehow sell my place in line, or that I might acquire an "early and rare" unit and sell it profitably.

My apologies to any who feel this is dastardly. I just figured "why not" and got caught up in the moment.

On-topic, I think it's likely there are a lot of folks like me. The 250K+ orders surely won't result in as many actual deliveries. I hope they are doing their best to determine how many of those who ordered actually want one, and planning accordingly.

Off-topic, since I am unlikely to actually be able to keep a Cybertruck, any advice on what should I do with these 3 orders?

A convoy of Cybertrucks comes to mind

 

[Artful Dodger]

Option prices are moving in sync with the share price too much considering earnings and associated earnings call will dwarf any trading movement right before the call.

With this in mind I just sold 25% of my 2/7/2020 $650 calls. The proceeds paid for all of them. I'm no less bullish than I was 10 minutes ago, I just liked the price I was offered. But I didn't like it enough to sell them all. Go figure.

I still have all of my 2/21/2020 $620's.

Doh! 30 min b4 u wrote this you were all like "I wunna bought'em if I wasn't prepared to lose it all". REALLY faked ur self out on that 'un!

LOL, now you have to console urself with >75% of the profits tomorrow or Friday. Well, BUSSING!

Cheers!

BTW, BIG CONGRATS on today! Thx for all you contribute around here. That's the REAL GOLD!

 

[Nocturnal]

Nothing like a nice rise in stock prices to get the old men's blood racing. Can you save the sexism for another forum? Or at least comment about how Gali looked hot with that cute little laugh in those glasses? /s.

That's not sexism, although your post is a bit ageist if we are throwing darts (I'm not old though so it doesn't hit me) I don't lean that way but yes, I could see Gali being described as cute.

Tesla will realize FSD profits/sell those call options and join the S&P500 after Q1. People with billions of dollars understand this and will drive the stock higher. No one truly cares about Q1 fluctuations. Last year Tesla had $2b cash in Q1

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MOD Edit: And this unsavory and uncalled-for string of posts ends right here.​

 

[Maitri982]

Looks to me they are pretty set on taking battery production in-house (which is very logical), and they haven't gotten the whole end to end story figured out quite yet. It is going to be a much more integrated system with batteries inseparable from the pack itself, with advanced "recipe" for what's inside the cells, and advanced cell and pack production lines. The whole enchilada. It's a big undertaking to figure all this out, prototype, do long haul tests, etc. Once they have the overall design, they'll build one at GF1, test&tune it there, then replicate a version with improvements in China and Germany

whatever impressive battery thing they are going to do, I feel it isn’t imminent as it appears they will be battery constrained for all of 2020.

I look forward to learning more, but am prepared for perhaps slower ramp than I hoped for with maxwell tech.

 

[keydiver]

It was mentioned in the Conference Call that it would be closed for an additional 1.5 weeks as a precaution.

And this is not Tesla specific. According to my contact in Shenzhen, EVERY factory in China has been requested/ordered to remain closed until after February 9, instead of January 31.

 

[Silent Ludicrosy]

 

[EV forever]

So now it is decision time

when is the best day to sell my call options expiring on Feb 7? Should I just sell tomorrow or on Friday? Or should I be greedy and wait till next week hoping for a good squeeze to set in?
Any and all ‘Not an advice’ from this group is most welcome.

 

[Eugene Ash]

I thought it an interesting comment that the take rate for China for FSD is expected to be lower. I guess each market will have an individual response to that feature. Something to think about there.

Coming from Ukraine, there are barely any lane markings, so yes, fsd is useless, real chauffeurs are employed. Thus a long base would make more sense for lifted margins.

 

[Curt Renz]

My conjecture is that an advanced battery and swifter production method might be introduced on Battery Day, and that battery may be entirely produced by Tesla. For now Elon may be saying that battery constraint is pushing back the ramp of proposed models, so as not to osborne potential car purchases before any new battery type is introduced and proposed models become available. I wouldn't be surprised if after Battery Day, the projected ramps for seemingly delayed models are moved to much sooner dates.