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

[EVNow]

So, just announce signature series and take orders at high premium over M3, don’t announce when base trim would be available and for how much. This way there is no danger of deferring Model 3 orders.

That can still delay higher optioned 3. Not a good idea - esp. because who knows when Y can actually made in volume.

Unless you mean, announce the signature series 6 weeks before delivery.

 

[Beltsbear]

And they know the demands are there, and since it shares most resources with Model 3, they don’t have to announce the base price to gauge/pump up demand.
So, just announce signature series and take orders at high premium over M3, don’t announce when base trim would be available and for how much. This way there is no danger of deferring Model 3 orders.

Tesla can’t play that game on every car. Not saying they will produce base right away but it leaves a sour taste.

 

[Carl Raymond]

This post is either confusing to read (for me lol) or indicates an extreme lack of knowledge about shorting.
Of course Tesla short positions would increase on a day the stock rises 3.5 percent. You increase a short position when you think the stock will go down in the future. So as it rises, naturally more shorts would start to add to their positions. If it rose to new highs tomorrow, you would again see huge short interest numbers. They cover when they think it's bottomed and lock in their gains. Not all of them are Chanos and Spiegel who started shorting at $200 SP.

Depends on whether you believe that the shorts are dictating the share price, or if you believe that shorts are responding to the share price. My observations suggest the former, with only the small time shorts* falling into the latter category.

*Edit - those without a Big Oil sponsor.

 

[sundaymorning]

Audi's Electric E-tron Is Real, And Coming Soon

Is this why shares dropped today?

No it’s this. Competition is real.

This $15,500 Electric Three-Wheeler Is Tesla's Latest Competitor

 

[SteveG3]

It's quite possible the dip today was a coordinated short attack that coincided with wider distribution of Niedermeyer's attack on Tesla's autopilot safety stats. Niedermeyer is a longtime foe of Tesla and ran the "Tesla Death Watch" back in the company's early days. He was the primary force behind the now debunked suspension crisis for Tesla. See Tesla's explanation of that attempted scam here. Looks like he's trying to generate another hit piece on a day which is critical for TSLA, because the shorts had three days of potential downtrend, yesterday threatened that trend, and today's good macros could have led to a big up day for TSLA. Thus the need for a bear attack on this pivotal day to determine SP tend.

Niedermeyer's ally in this attack on Tesla's autopilot safety is Quality Control Systems Corporation . The company offers a variety of services but it's clear that one of those services is providing data that supports plaintiffs in automobile safety lawsuits. In other words, the company is an ambulance-chasing statistician as part of its business model. Anything that gets the company's name in the headlines is free advertising and so of course the Tesla autopilot safety issue appealed to them. Here's an example of how they use the media for advertising their company:
View attachment 376644

Just a heads up about Niedermeyer,

This is just a small sampling of the book-full of falsehood squawking nonsense we expect, likely at some point this year. Do not expect the media to offer the context Papafox has about his long history of falsehoods re Tesla. Instead, I think we are likely to see most of the media giving whatever nonsense narratives he's crammed into his new book the equivalent of a police escort through their platforms and into the public consciousness.

E.W. Niedermeyer on Twitter

 

[sundaymorning]

Just a heads up about Niedermeyer,

This is just a small sampling of the book-full of falsehood squawking nonsense we expect, likely at some point this year. Do not expect the media to offer the context Papafox has about his long history of falsehoods re Tesla. Instead, I think we are likely to see most of the media giving whatever nonsense narratives he's crammed into his new book the equivalent of a police escort through their platforms and into the public consciousness.

E.W. Niedermeyer on Twitter
View attachment 376818

Another day another self proclaimed Tesla short legend comes to town.

 

[SteveG3]

This is my sentiment too. I’m really frustrated that TSLA staying so low after all they’ve accomplished these last two years.

I’m starting to lose faith, not in the company, but in the stock ever reaching $400 or higher levels.

Media and analysts have been successful at moving the goal post so that no matter how huge Tesla’s achievement will be, it will be made to look like an underperform.

And the narrative that the competition is catching up will only get louder as time goes by.

Maybe it is time to look at alternative high-growth stocks...

Yes, this extraordinarily massive, many years long, misinformation campaign has had an impact, and it can be hard to be patient.

fwiw, to manage expectations, in my own mind, and in what I've shared here a number of times on TMC, I take it as very likely Tesla will to continue to trade at 10-50% below fair value until about 2022 at the earliest. That is about the soonest I see the misinformation campaign largely falling away.

There's a second reason I say 2022. Just think how absurdly backwards that competition argument, pounded over and over again for several years already, will look in 2022 to even casual observers when Tesla not only still has about 50% of long range EV market share, their products are clearly better vs. EV products already out at that point from the so-called big boys, and clearly better than their ICE products when a 2022 Tesla is looked at vs. a 2022 ICE. By 2022, I think it will become widely appreciated that we are going to nearly 100% EVs, and Tesla's financial/strategic position is almost certain to look dramatically better than any global OEM (perhaps excepting some Chinese automakers moving into global markets).

All that said, I think even if TSLA does indeed trail fair value by 10-50% for several more years, it will still imply roughly 20% annual returns as the nonsense continues, simply based on Tesla's demonstrated growth put in the books each year.

Finally, I find these words from Warren Buffett helpful to bear in mind (and to avoid being pulled into intellectually disingenuous arguments w/FUDsters)

“What investors then need is an ability to both disregard mob fears or enthusiasms and to focus on a few simple fundamentals. A willingness to look unimaginative for a sustained period — or even to look foolish — is also essential.”

 

[SteveG3]

And, we wonder why Elon wanted to go private! The guy cannot win. He has done everything the markets asked of him: mass produce the Model 3, create efficiencies in the production of the Model 3 so that he could move the price down, get the Model 3 to Europe and China, negotiate a deal with China to produce cars in China but not give away the company, slow-down cash burn, get cash-flow positive, earn a profit, focus on the company rather than Twitter, etc. I for one am amazingly impressed by the company and Elon - he and his team are changing what was thought to be an unchangebale industry (actually, he is changing more than one industry thought to be unchangeable). The short-term manipulations of this stock should be irrelevant when we look back five years or so from now. As the true believers in this company, we all need to keep helping Elon with his mission and his message by dispelling all the FUD through facts. The shorts must be thrilled that their FUD seems to actually be negatively influencing some of those who have been true believers. I for one will not be swayed, and I will remain a long-term holder in what I believe to be one of the most important companies to come along in a generation.

Appreciate your post... but, why use the FUDsters "true believer" framing. Generally what we have on TMC, and longs beyond are logic and fact driven analysis. Maybe some people taken by Elon's persona are getting lucky as well... but, the "true believer" ad hominem is a heavily marketed ad hominem from those posing as naysayers lacking a fact based bear case.

 

[Buckminster]

I do think that based on my own theory about the way the stock is being traded and has been over the past year....that we need someone or a company(ahem...Apple...) to take a pretty decent stake in the company (like 5-10%) or have insiders coordinate to buy more shares. I know it's not my money, but it'd be great to see Elon and Larry up their stakes in the company even more. Elon knows lot of billionaires...come on guys, how bout you all get together about buy up 10% of Tesla shares.

Pretty much we need a good amount of shares to be bought up and taken out of Wall St's hands. I do find it hard to believe that there's no one out there(individual or company) that wouldn't be interested in taking a large stake in Tesla at it's current valuation considering how it's positioned for future industries (EV Cars, Tesla Energy, Autonomy)

Absolutely, how can 99.9% of the world be this dumb and not buying? Are we the DumDums?

Should I be concerned that "naked short selling" made him think of me?

One of my influences:

 

[Fact Checking]

Audi's Electric E-tron Is Real, And Coming Soon

Is this why shares dropped today?

No, I believe it was the other Wired article that caused the drop:

"Watch Out, Tesla, Audi's e-Tron Is Coming"​

 

[Fact Checking]

TSLA was at 376 as recently as 13th Dec. It all looked very jolly for Christmas. It then got dragged down by the Index and hasn't enjoyed the subsequent rally.

There's two main forces dragging down $TSLA right now:

• It got dragged out by the NASDAQ Index correction and general macro woes, which has recovered only about 50% of its drop from the peak around September.
• The other problem is that Tesla got the "tiny profit" Q1 warning from Elon, which the FUDsters took and ran away with, ignoring Jim Chanos's "Tesla turned from a cash burning operation into the most profitable carmaker" admission.

 

[gora321]

Tesla Family always willing to help

Dana Hull‏Verified account @danahull
Replying to @MacGyver_BE @EcoHeliGuy
How do you all know that this is the ship that Model 3s bound for China are on? Not doubting you, I'm just not clued into to these marine traffic sights

9:14 AM - 7 Feb 2019

1. 1. Bark‏ @BarkMSmeagol Feb 7
      Replying to @danahull @MacGyver_BE @EcoHeliGuy
      From above
      
      
      
      
      

Dana Hull on Twitter

 

[avoigt]

What's more devastating is that if you read between the lines, the current e-tron, which is not based on the PPE platform, is essentially its french meaning of the word - a substandard product hastily put together.



EQC is another massive compromise, hastily put together. A Daimler exec, who shall remain unnamed, admitted that the EQC is not meant for the autobahn!! Can you believe that, a German luxury SUV that is not meant for the autobahn!!



While the above is not good news for accelerating the pace of sustainable transportation , this and the Maxwell acquisition is super bullish for Tesla.

Unfortunately, Mr Market probably won't realise it for another couple of quarters. Mr Market is busy navel gazing (exec departures, "quality" issues, cold weather range pwoblem, NHTSA autopilot nothingburger, sales staff cut) with the help of babyboomer media like BI, BBG, Reuters & CNBC

Do you have sources from the Daimler Autobahn statements?

 

[dgatwood]

How would you execute a song?

By killin' it.

FSD won’t work in New Jersey because of massive potholes. Unless it’s able to detect potholes at 65mph (I doubt it).

It sure doesn't detect them in California at 20 MPH....

 

[gora321]

Ford told Britain's May it is preparing alternative factory sites

Ford advised British Prime Minister Theresa May that it is stepping up preparations to move production out of Britain, The Times reported. Ford, which operates engine plants in Britain, faces a bill of up to $1 billion if Britain leaves the Europe Union without a deal.

 

[RobStark]

Well, $450M raised in their history. And at least $200M was debt (not sure of the repayment schedule). I don't mean to play them down too much, but that's not "start a car company" money. $3B, however, is.

Rivian's existing financial backers include Saudi auto distributor Abdul Latif Jameel, Sumitomo Corp. of Americas and Standard Chartered Bank. ALJ has agreed to provide almost $500 million in funding, Sumitomo invested an undisclosed amount, and Standard Chartered provided debt financing of $200 million.

GM, Amazon in talks to acquire Rivian stake, report says

Not $450M Total according to trade journal Automotive News. That is just ALJ.

The seeding money, not mentioned above, came from the incubator lab at M.I.T.

I don't know why you feel a need to crap on Rivian every time their name comes up in the Investor Forum.

 

[Fact Checking]

Three updates from Carsonight, who is local to the Nevada Gigafactory and is regularly talking to Tesla and Panasonic factory workers:

• Current Model 3 battery pack production rate: "From the Tesla side I hear 6k+ per week sustained. I am also told Tesla might crack the 7k per week barrier, but anything more requires CapEx."
• Cell supply capacity from the Panasonic side: "I can tell you that Panasonic stands ready to double production when Tesla can handle that volume."
• The assumed new Standard Range Model 3 battery pack Grohmann assembly line: "The Grohmann machine that is being assembled now is on the third floor, where Model 3 battery packs are assembled. My sources tell me that a Grohmann machine is really a series of machines that cover an area roughly the size of a football field. There was not room for the new one going in, so they created a "fourth floor" to install it."

My take:

• The current Model 3 battery module production rate is comfortably beyond 6k/week, 7k/week possible. Since he's been reporting 6k+ for all of Q1 so far, with no downtime whatsoever, that's 36k-39 Model 3's already produced in Q1, extrapolated to 78k-84k Model 3's made in Q1, assuming no further improvements in battery pack manufacturing speed during the quarter. This is remarkably in line with my VIN numerology estimate, which is 80-84k units.
  
• The new Grohmann assembly line is huge and could churn out a large number of Standard Range battery packs.
  
• There's no Gigafactory space to quickly build Model Y lines. They'll first have to dig and pour foundations, build the factory, wait for it all to set, etc., before they can even begin Model Y tooling - i.e. I'm pretty certain the first Model Y's will roll off the lines next year.
  
• Cell supply from the Panasonic side is available once Tesla can make modules fast enough.
• I only cited statements from Carsonight which he believes to be facts, not inference or speculation. While he is a Tesla fan, he has a very good track record of separating facts from advocacy so far.

While Q1 is only halfway through, I'm getting cautiously optimistic about a Q1 Model 3 production surprise, with 25%-35% more Model 3's made than in Q4, and a hit-the-ball-out-of-the-park Q2. Assuming the macro gods cooperate.

This matters quite a bit to valuation and risk perception as well: if production goes comfortably beyond 5k/week and the $920m convertibles are repaid in cash, then all formal conditions of a Moody's upgrade of Tesla's debt are met.

 

[SPadival]

Just a heads up about Niedermeyer,

Tweety Niedy is a 24/7 lurker (or one of the trolls?) of this very thread.

E.W. Niedermeyer on Twitter

Hey tweety, can you give us a TLDR of your fantasy fiction novel?

 

[RobStark]

BTW, I also don't agree with your characterization of Rivian. Even though they have prototype fiberglass bodies, their two prototype vehicles work, and are production intent.

Only the SUV is fiberglass. The truck(s?) they are showing around the country are mixed metals.

 

[Fact Checking]

BTW., I was re-reading the Q4 ER conference call transcript, and these two statements stuck out:

Elon Musk:

"Three quarters of the Model Y is common with the Model 3, so it's a much lower CapEx per vehicle than Model 3. And the risk is also quite low."

"This is in contrast to Model S versus Model X where the theory was - I think Model X, we just - it's sort of Model X to be like the sort of the Fabergé egg of cars. It's an incredible vehicle and probably one - probably nothing like it will ever be made again, and maybe it shouldn't. But it is a work of art. It's a special work of art."

"But the commonality with the Model S is limited. It was only about maybe 30% in common with the Model S, whereas Model Y is, I think, 76% was what it got in common with the Model 3. And we're most likely going to put Model Y production right next to - in fact, it's part of our main Gigafactory in Nevada."

"So it will just be right there. Batteries and powertrains will come out and go straight into the vehicle. So that also reduces our risk of execution and reduces the cost of having to transfer parts from California to Nevada. It's not a for sure thing, but it's quite likely, and it's our default plan."

"I would expect Model Y will probably be - the [sales of] Model Y will be maybe 50% higher than Model 3, could be even double. The - as I understand it, the mid-sized SUV segment is the - worldwide is the most popular type of vehicle. So we'll probably see a higher volume of Y than 3."

"And earlier this month, we saw the construction of our Gigafactory in Shanghai, and by the end of this year, we expect to be producing Model 3s using a complete vehicle production line. That's body paint, final assembly, general assembly and module production."

"So it basically would be - this will be extremely fast. I get like daily updates of progress of the Shanghai Gigafactory, and those factories are going to go up like lightning."

"So we do feel quite confident at this point, at least for the factories that are in our control, that we can achieve volume production in Shanghai by the end of the year. And that should allow us to get to the 10,000 vehicles a week rate or very close to it by the end of the year."
​

Two notes:

• The main design complexity of the Model X is the Falcon Wing Doors. These recent statements from Elon IMO make it abundantly clear that the Model Y won't have Falcon Wing Doors - just in case there was any doubt remaining about it.
  
• Another thing Elon mentioned is that they are aiming for 10k/week by the end of 2019. That's more confident guidance than their Q4 update letter, which mentioned 7k/week by the end of 2019.

It's all subject to the Elon Time Dilation factor of course - but if the Shanghai Gigafactory is "just" a clone of existing lines, the usual R&D risk and uncertainty that normally applies to Elon's predictions doesn't apply here.

Edit: re-posted the comment after significant edits.​