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

[bhtooefr]

By the way, something we all missed in the midst of the coronavirus panic, NASDAQ released updated short interest.

As of 2/28, 16,680,531 shares shorted, $11,142,427,902.69 at risk. Down 9.3% in shares shorted, down 24.2% in value at risk.

Ihor didn't post on the 28th, but his tweet from the 2nd was mid-day, where he reported 16.52M shares shorted - meaning the shorts behaved in line with his model. That tells me that his model may be able to pick up the coronavirus behavior accurately, but not normal TSLA trading.

 

[myt-e-s-l-a]

Tesla's stock sinks 7.5% premarket, on track to open at lowest price since Jan. 29

China automakers seek policy relief after Feb sales plunge on coronavirus
BEIJING/SHANGHAI, March 12 (Reuters) - Automakers in China are calling on the government to help after industry-wide sales plunged 79% in February to mark their biggest ever monthly decline, with demand pummeled by the coronavirus outbreak.
...
Sales of new energy vehicles, which include battery-electric cars, contracted for an eighth month in a row, also hurt by a rollback in government subsidies.

Auto sales are likely to drop by more than 10% in the first half of this year as travel and quarantine restrictions continue to play havoc with demand.

​

 

[KarenRei]

In February for every car sold for €50,000 Tesla would receive $54.000 (€1 = $1.08). Now it's more like $57,000 (€1 = $1.14)

Okay, that would be the opposite of a rally in the dollar. That would be a crash in the dollar, if the dollar is worth less.

(Which does seem to be the case)

 

[jdw]

In February for every car sold for €50,000 Tesla would receive $54.000 (€1 = $1.08). Now it's more like $57,000 (€1 = $1.14)

That's backwards ... using CAD, a month ago it took $1.32 CAD to buy one USD, now it takes $1.38 CAD. A Tesla CAD sale used to provide 5% more USD to Tesla than it does now. Expecting a price increase any day ...

 

[KarenRei]

BTW... although I haven't seen anyone else say it, I assume I'm not the only one who's been thinking that the reason for Tesla's sudden about-face on raising capital might have been to internal concerns about the virus?

 

[avoigt]

I do hear a lot about uncertainty, speculation and not knowns which is no surprise so lets try to sort this out.

The uncertainty is of course poison for a stock market as people fear the unknown and assume it's better to sell to be what they may call for a period, the better side. The question is of course how long they feel it was a wise decision.

The situation will go in some regions and set ups worse in others it already gets better. The damage done due to irrational fear and caused lost sales in some industry with its impact on the economy is more severe than the true direct impact the virus has on the economy. At the end that does not matter because it's an impact on the economy and it will take time for some industries to overcome.

So, if we talk about the situation I believe we should differentiate 3 different aspects that are to a certain extend but not fully tight together. Most people throw all of that in one and I have the feeling that is causing a lot of misunderstandings.

Right now I do see 3 areas to assess

1. The Pandemic itself (global & local)
2. Economical impact (global , local, industry)
3. Impact on Tesla in that context

Each of those points somehow relate to each other and have influence but it depends on various factors including which region of the world we talk about. IOW, they don't relate 1:1.

I feel in this forum most put all this points in one basket right now and extrapolate on a situation in some places without differentiation. The more close cases come the more uncertain people feel. To be clear I don't underestimate what is happening but also try to not overestimate.

If you get a report out of a hospital in Lombardy, Italy you may feel we are in our worst nightmare for the long run but if you read from the only 18 new cases with shrinking deaths in China the country with the most profound experience about the virus it looks very different. You may want to take South Korea as another example and there are more out there. I use the China example while I could use examples from many countries who have minor impact because people fear it will get everywhere as severe as in China but even if it does, China has shown us how you can get out of the mess.

About:
1) Its bad in some countries but China, South Korea and other show us it can be managed and its not the end of the world. What measures needs to be taken is known as well and there is proof that they work. It would be extremely bad if the health authorities would not know what needs to b done but thats not the case. So there is no reason for any panic and the death rate is falling further. In Germany they talk now about .3% - .5%, further falling and if I am not mistaken a normal flue has .1% while most affected are the elderly which is still bad but lets not forget they are usually in pension and not working in the economy any more. Don't get me wrong any lost life is bad but I try to investigate the economic impact on Tesla here. Some countries acted in time, other have been surprised or missed to take the actions which is just as it is but even if a country is late it can be managed. This is of key importance! What is left if the death toll is falling further near normal to flue levels? A highly infective virus with mostly mild outcome.

2) The economic impact is hard to comprehend, calculate and everybody is trying to assume he/she knows. Some believe in the worst, others it will be mild but in both cases is not clear. China is ramping its business up again and the Chineses governor senior advisor said yesterday the Pandemic will be over in June. China coronavirus adviser expects global pandemic to be over by June

Also many industries will actually even benefit from what is happening like for instance Netflix to mention one of many and although the markets may pull them down for a period they will likely be in relation the winner over time.

Having people at home does not mean goods are not moving so we don't have a total collapse. It's bad in some regions like Italy but is a smaller part of the global economy. Will it be bad in the US? We don't know yet and it needs to be seen. The deaths in the US given the size of the country are really low and we would see much higher numbers if many infected would infect others and we would have an exponential growth. No one knowns if that still will happen and to claim it will be is right now pure speculation not supported by numbers and facts. In Germany we have some restrictive measures but business goes on as normal with no real visible impact.

3) Some industries and companies will be hit hard other less hard by the impact on the economy and I believe for many reasons that Tesla will be in the ladder group. Not sure how many of you went through a real recession but I did more than one time and can testify that if your impact is less than your peer group once the economy is doing better again those companies are the front runner. Once the downturn is over the usually growing faster more profitable than the competition. I believe that will happen to Tesla. When that will happen I don't care simply because I am invested for the long run. I don't believe in a long downturn as monetary policies learned a lot how to avoid those.

Again I don't take the virus and the impact lightly but believe that if you are convinced about Tesla as an investment you should disregard what is happening to the stock market is doing right now and just sit and wait if you have the time. If you want to go in or have cash you may want to do it in portions and a sequence as no one ever knows where the bottom is and you may be lucky but the likelihood that you miss it is higher.

All in all I am more relaxed then ever with my investment.

Think about the Roadster 1 in space: Don't Panic!

 

[phantasms]

Agreed. I went full cash, including TSLA, a few weeks back, other than inverse ETFs [yay]. Seeing how well it was performing compared to macros I picked up 40 shares. Sadly, I don't expect to hold them for long. There's beginning to be obvious patterns to this roller coaster.

Sigh. So what’s the best way to treat a falling knife wound?

 

[chrsk]

With the increased value of the dollar there will be a loss of cars that already sold internationally. My Model Y now cost 57400$ at the Norwegian page. In the US the same cost 60990$. However, since I ordered a few months ago I have a fixed price at 53930$...

This will have some kind of impact on the results going forward. I guess Tesla still does not do any currency hedging...?

 

[Sean Wagner]

BTW... although I haven't seen anyone else say it, I assume I'm not the only one who's been thinking that the reason for Tesla's sudden about-face on raising capital might have been to internal concerns about the virus?

Also capitalizing on an excellent opportunity.

Boeing conversely couldn't resist paying out a dividend - and has now drawn down a new 11 or 13 billion USD [can't recall] credit line in one fell swoop. The obvious inference is they'll be needing more money.

 

[myt-e-s-l-a]

BTW... although I haven't seen anyone else say it, I assume I'm not the only one who's been thinking that the reason for Tesla's sudden about-face on raising capital might have been to internal concerns about the virus?

As anyone who has ever lost a job knows, you can only raise money when you don't need it. It is far better to sell stock, or borrow money, from a position of strength.

 

[Fact Checking]

BTW... although I haven't seen anyone else say it, I assume I'm not the only one who's been thinking that the reason for Tesla's sudden about-face on raising capital might have been to internal concerns about the virus?

Yeah, that's my thinking too - they prominently warned about coronavirus risks in the Q4 call, so it must have been at the top of their minds.

 

[scubastevo80]

Tesla's stock sinks 7.5% premarket, on track to open at lowest price since Jan. 29

China automakers seek policy relief after Feb sales plunge on coronavirus
BEIJING/SHANGHAI, March 12 (Reuters) - Automakers in China are calling on the government to help after industry-wide sales plunged 79% in February to mark their biggest ever monthly decline, with demand pummeled by the coronavirus outbreak.
...
Sales of new energy vehicles, which include battery-electric cars, contracted for an eighth month in a row, also hurt by a rollback in government subsidies.

Auto sales are likely to drop by more than 10% in the first half of this year as travel and quarantine restrictions continue to play havoc with demand.

​

Starbucks is down 7% pre-market too, but I'm still going to grab a coffee there later. There will be real economic impacts across the board, and Tesla will not be unscathed. I think we all need to focus on our health and look at the longer term (more than 6 months out) potential of our investments. For the active traders here - I wish you the best of luck navigating this situation and volatility.

 

[StealthP3D]

The tricky thing to judge is why markets moved so strongly in response to the virus, if that is under-pinned by true fundamentals which will show up in company balance sheets, if there is an element of an over priced market being corrected and when the cycle will break.

IMO no one has provided compelling answers to these questions as we don't yet have the data, and part of it is a physiological human reaction that is very hard to judge..

Very good points. And by reading this thread this morning I would say we are very near max fear. Markets are naturally forward-looking but, as they bottom, they tend to over-react to the fear. Then they start looking forward. I think TSLA will escape the worst of it and they have already shown well-above-average resilience.

There is a lot of fear out there (and also evidenced by some right here in this thread). It is always darkest before the dawn. It's always better to take advantage of the fear rather than succumb to it.

 

[ByeByeJohnny]

The virus scare is coming at a very inconvenient time for Tesla. Last year 50% of all Q1 deliveries happened during the last two weeks of the quarter. This quarter it will be less concentrated because China deliveries are more evenly spread, but the deliveries in Europe and the US could suffer somewhat if places go in lockdown. And if people have other things on their mind there may not be enough takers for the cars in inventory.

Small ray of light: now that the dollar has rallied it will provide some forex tailwind for the earnings report. Every car delivered in Europe in March (and that is the big delivery month) brings in a few thousand more dollars than if it had been delivered in February.

True but aren't we now at a point were everyone is expecting most any companies Q1 numbers to be bad? So it'll make sense to not worry about that and just work on Q2 sending a positive signal.

Also, how genius was that 2.3B stock sale Tesla did a few weeks back. Without that extra cash on hand I'm sure the SP would be down another several percent.

 

[Fobble]

With all the panics out there, we should also look at the bright sides:
- China has started to allowe Wuhan businesses to start open their doors and offices
- S Korea had the spread in control within 2-3 weeks of intensive efforts

US still has a chance to take control of the spread if Chimpanzee Head stops pretending his is an expert of all things and the virus it's no big deal, and starts listening and allowing his expert lieutenants to do their jobs instead of telling them what to do as what he's been doing in politics.

The Western countries need to learn from the Asian countries like Singapore, Hong Kong, Japan, ... on how to limit the virus spreads. Now that it's kind of late, we need to learn from S Korea on how to slow down and control the damage. If US can slow down the rate of spread in 2 weeks, the stock market will come alive again. The problem with the panics right now is that no one can tell where the whole thing will end.

 

[neezer]

The virus scare is coming at a very inconvenient time for Tesla. Last year 50% of all Q1 deliveries happened during the last two weeks of the quarter. This quarter it will be less concentrated because China deliveries are more evenly spread, but the deliveries in Europe and the US could suffer somewhat if places go in lockdown. And if people have other things on their mind there may not be enough takers for the cars in inventory.

Well, also you have to think of the awesomely-timed stock sale in Feb @ $767, that gives them such a sweet sweet cushion to lean on during such times, and also will very much help the narrative when Q1 ER comes. So there's that.

As for the sales of vehicles and deliveries, I think the entire world, even the idiotic TSLAQs are going to think of themselves and their loves ones and say "well, no s___, who hasn't gotten their sales down hard, other than toilet paper and sanitizer makers". So it won't hit so hard like prior Q1's IMO.

 

[neezer]

With all the panics out there, we should also look at the bright sides:
- China has started to allowe Wuhan businesses to start open their doors and offices
- S Korea had the spread in control within 2-3 weeks of intensive efforts

US still has a chance to take control of the spread if Chimpanzee Head stops pretending his is an expert of all things and the virus it's no big deal, and starts listening and allowing his expert lieutenants to do their jobs instead of telling them what to do as what he's been doing in politics.

The Western countries need to learn from the Asian countries like Singapore, Hong Kong, Japan, ... on how to limit the virus spreads. Now that it's kind of late, we need to learn from S Korea on how to slow down and control the damage. If US can slow down the rate of spread in 2 weeks, the stock market will come alive again. The problem with the panics right now is that no one can tell where the whole thing will end.

This includes providing folks in China and S Korea with Chloroquine & Zinc Treatment Combo (which AFAIK has had zero usage in Italy, for example, thus far, surprisingly):

 

[KarenRei]

With all the panics out there, we should also look at the bright sides:
- China has started to allowe Wuhan businesses to start open their doors and offices
- S Korea had the spread in control within 2-3 weeks of intensive efforts

US still has a chance to take control of the spread if Chimpanzee Head stops pretending his is an expert of all things and the virus it's no big deal, and starts listening and allowing his expert lieutenants to do their jobs instead of telling them what to do as what he's been doing in politics.

The Western countries need to learn from the Asian countries like Singapore, Hong Kong, Japan, ... on how to limit the virus spreads. Now that it's kind of late, we need to learn from S Korea on how to slow down and control the damage. If US can slow down the rate of spread in 2 weeks, the stock market will come alive again. The problem with the panics right now is that no one can tell where the whole thing will end.

That's the frustrating thing. It is possible to respond properly to the disease without choosing to throw all elderly/sick people to the wolves and without sacrificing the global economy. Really, only some specific sectors need to shut down due to this, and only for a limited period of time. But my god, the bungling because nobody wants to have to make a hard decision...

 

[Eugene Ash]

On one hand, I have the immediate reaction of: what price tag am I supposed to put on my mother with chronic lymphoma? My uncle with a severe heart condition? My elderly grandmother? My cousin who has so little immune system that she was already wearing a mask when going out in public, on doctors' advice?

On the other hand, I fully realize that there is a price tag on everyone's head. That everyone could have better medical outcomes if spending was unlimited (hey, get your weekly MRI!), but it can't be, so it isn't. Everything must be cost-justified. And the money for these costs comes from the global economy. Hurt the global economy, that dollar figure on everyone's head goes down, and more people die, from all causes.

And ultimately, in the longer term, the global economy will be made stronger by this. The elderly and people with chronic health conditions will die early, saving medical insurance from having to pay out a fortune in long-term costs. But at the same time... "the elderly and people with chronic conditions" includes my mother, my uncle, my grandmother, and my cousin. And I don't want that to happen, for really obvious reasons.

I disagree. You might be viewing older/retired people as an economic burden, but the other side of the coin is they are also a source of GDP. Depends on the country, of course. US: long-term care, healthcare, harley davidsons, cruises, specialty real estate (active retirement community). That's a lot of services and jobs. It is not like in slavic cultures that just go die quiet in a country house. Plus benefits don't stop if a spouse dies, the other one still is receiving government social security.
So economic impact is highly dependent on cultures and retirement lifestyles & systems.

 

[Webeevdrivers]

That's backwards ... using CAD, a month ago it took $1.32 CAD to buy one USD, now it takes $1.38 CAD. A Tesla CAD sale used to provide 5% more USD to Tesla than it does now. Expecting a price increase any day ...

And let’s hope Tesla honours pricing to those of us who have already ordered, Any history on this? according to the confirmation delivery 2 to 3 weeks away.