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

[Fact Checking]

This week, Monday opened super weak, and with below average trading volume many days, it was hard to cover the hedge need of nearly 14 million shares. Luckily, as the stock stabilized, thru end of day Wednesday, the deficit was absorbed.

Trouble started Thursday as stock fell another 80 points or so, triggering another 13 million or so shares to be sold. And total volume was light. So that couldn't happen. Friday AM looked like it was almost a premarket pump to help short at higher prices. But the huge hedging appetite pushed it down quickly. So here we are, with lot of good news re the Y, but at distressed levels.

Note that there were also two pieces of well-placed disinformation on Friday: the SolarCity trial FUD and the Fremont coronavirus FUD, distorted and magnified by the usual suspects. Judging by past (alleged) patterns of criminal short-and-distort behavior by Lora Kolodny, I suspect the release of the article was calculated and coordinated with put option buying and short selling.

Lora in particular seems very invested in her Tesla and Elon hate, and will eventually commit a mistake and might go to jail or at minimum face significant legal expenses. That's the thing with criminals, a single mistake per lifetime can sink them.

If the current TSLA price is right for you, just use it as a discount offered by the shortz.

Be mindful of the U.S. still apparently underestimating the extent of the coronavirus damage though, and this might negatively affect Tesla as well. See my next post about the macro scenario, which doesn't look good IMO. Not advice.

 

[Fact Checking]

Macro news and analysis.

More details have emerged about the bipartisan coronavirus "stimulus" bill in the U.S. that the House has passed yesterday:

House passes bill to help prop up economy from coronavirus

"The measure, which passed 363-40, includes provisions that would ensure that workers can take paid sick or family leave, bolster unemployment insurance, and guarantee that all Americans can get free diagnostic testing for the coronavirus."
​

The Senate will likely not oppose it, now that Trump has endorsed it too.

But I expect markets to eventually look into the details, which suggests that the stimulative effects of the bill are at most a few ten billion dollars:

Factbox: What's in the coronavirus U.S. stimulus bill?​

Even accepting the 50 billion dollars figure Trump mentioned at face value (which we should not), that's only 0.2% of the 21.4 trillion GDP of the U.S. - likely significantly less.

It looks likely at this point that much more will be needed: the 2008 stimulus was $1 trillion when $2 trillion and 2007 GDP was $14.5 trillion, so these were stimulus measures of ~7% of GDP.

How much does the coronavirus impact the global and the U.S. economy? Goldman Sachs is estimating -5% and -2% in Q1 and Q2, a drop of U.S. GDP growth to 0.7 in Q1 and to 0% in Q2 - bordering on recession territory (if I'm reading the numbers correctly):

https://www.goldmansachs.com/insights/pages/top-of-mind/coronavirus/report.pdf​

I.e. the demand/sales shortfall in Q1 is going to be -$260b in Q1 and -$374b in Q2. I.e. to counter this policymakers will have to stimulate in the opposite direction - half a trillion dollars would be the rough ballpark measure - but that assumes a good pandemic containment response in the U.S. which I don't think is guaranteed ...

Even China, with a very focused policy response, isn't back up running:

The GOP and Trump will ask for tax cuts as a stimulus measure, an order of larger in size than current measures, but are unlikely to get it from Democrats until the election. With the two phases of coronavirus bills Democrats have demonstrated bipartisan support to fight the coronavirus, while only injecting up to $50b into the U.S. economy.

Democrats successfully fought off a "payroll tax cut" to be included in the Phase 2 bill, which would have had a stimulative effect of around $650b, or about 3% of U.S. GDP.

The 'Phase 3 coronavirus stimulus package' that Trump wants will IMO come at a significant political price, if it comes at all. Exactly what political payment will Democrats accept to hand Trump a recovering economy and a chance for reelection?

TL;DR: Next week might feature a macro bounce, but buckle up...

 

[chrsk]

Investors who sold ... any info how many shares Elon sold ?
Daytraders are not any better than shortzies... same animals, different color.

Elaborate please?

 

[WarpedOne]

What is there to elaborate on?
Had company's prospects deteriorated? No.
Had some part of the business plan been canceled? No.
Had any major future projections been changed to the worse? No.

So, why sell? To step in back at lower price?
That's a definition of day-trading.

Those who believe in the company did not sell. Those who believe in share-price, did.
It's your money, do what you will. I just don't like pretenders...

 

[Fact Checking]

On a brighter note, @verygreen is reporting that the latest FSD firmware is showing actual stopping on red lights and stop signs logic emerge:

green on Twitter

"re 2020.12 release [...] also what looks like preparations to enable actual stopping for stop signs/traffic lights (I am not 100% sure on this point, but I think this is what the changes are shaping out to be)"

​

The first icon is the visualization of when a red light has been detected, and I believe the second icon will signal when the car has stopped on a red light.

There's also an anonymous leak that suggests that the earliest, employee version of this firmware already has this feature activated.

I suspect it's going to roll out to EAP within a few weeks, with wider release sometime in Q2: June would be my guess, to maximize the Q2 delivery push?

 

[T@oo]

What is there to elaborate on?
Had company's prospects deteriorated? No.
Had some part of the business plan been canceled? No.
Had any major future projections been changed to the worse? No.

So, why sell? To step in back at lower price?
That's a definition of day-trading.

Those who believe in the company did not sell. Those who believe in share-price, did.
It's your money, do what you will. I just don't like pretenders...

Word.

Every sell helps shorts and hurts the longs. Some of the reasons I have seen on this board for selling or cashing out are unconvincing to say the least. If not outright dumb. And don’t tell me about personal levels of risks. If you’re so risk-averse you have to sell the stock right now, your money shouldn’t have been in the stock market at all to begin with. I have lost a lot of respect for some of the “personalities” on this board. I don’t get at all why you need to come here and proudly state that you have sold. Whats to gain?

We have a nice word here for people who ride their bikes only on Sunday with clear sky and warm temperatures. It called “Schönwetterfahrer”. A lot of people here seems to be Schönwetterfahrer on TSLA. Makes me sad and angry.

 

[aubreymcfato]

Man, you gotta love this guy. Right or wrong, he tells it like HE sees it. I'm willing to bet time will prove him right.

Elon Musk Told Workers They're More Likely To Die In A Car Crash Than From Coronavirus

It saddens me that this board thinks that Musk SpaceX's letter is "bold".
I understand that this virus clashes with his OCD and supertight schedule at Tesla and SpaceX,
but I'm quite confident he's underestimating the virus, the scar lungs it can leave in young patients even after they healed, the simple fact that if you are positive (even if young and asymptomatic) you're likely to infect all your loved one, including your parents and elders.

A car crash can kill you instantly, a disease like this drains resources out the health system.
In Italy, where the system is public, this increases the mortality rateeverywhere because sanitary services are lower standard if the system is on the verge of collapse. Everything spirals downward.

In UK they will likely let everyone get infected, and see what happens. It baffles me to see that, right now, Musk thinks like Johnson. Like the super-elite-ivory-tower-billionaire a lot of people think he is.

Musk is nothing without his workers, Tesla and SpaceX wouldn't exist.
I'd love to see some respect for them and their families here.

 

[Fact Checking]

It saddens me that this board thinks that Musk SpaceX's letter is "bold".

I'd like to urge caution, the article was written by 'Ryan Mac' - the Buzzfeed "journalist" who tried to entrap Elon, coordinated with Unsworth's lawyer secretly and published confidential emails sent to him "on background" to create a manufactured injury for Elon to be sued over... Unsworth was forced to drop those claims due to the 'unclean hands' displayed by his lawyer and Ryan Mac.

If the allegations unearthed during the Unsworth trial are true then Ryan Mac is a dirty trickster and an unethical, dishonest journalist of the highest degree, and since he doesn't quote the full SpaceX email from Elon, I will, without contrary evidence, assume that it's selective quotes to put it in the worst possible light.

Elon could be wrong about the coronavirus, but it's not Ryan Mac's article I'll use to form that opinion.

 

[FrankSG]

Investors seem to have this inexplicable and unholy fixation with the share price at all times. I've said this before, the share price is not a good proxy for the company's prospects, especially with a maligned company like Telsa. In this sense, the share price just doesn't matter at all and it does no good to focus on it. Focus on the company and their execution, investing becomes a whole lot easier when you stop worrying about (or celebrating) the share price. It is at wherever it's at. Always focus on the company and its current execution.

Mostly I agree with this. Especially when I talk to less investing-savvy people, it's often apparent that they take a low SP as a signal that a company is doing bad and therefore are more tempted to sell, and a high SP as the opposite. This is of course ridiculous, and far from the truth. If stock prices always perfectly reflected how a company is doing, nobody could make money in the markets.

However, there are some instances where SP does mean something, and should perhaps influence one's investing decisions. I think TSLA SP action a few months ago is a perfect example of this. I think that when TSLA broke through $450-500 at the start of this year, it became apparent that the market, or at least certain players within it, were ready to value TSLA differently than it had in the past, give it proper credit for some of its future potential, and attach a higher valuation multiple to it going forward.

 

[UCF3]

It saddens me that this board thinks that Musk SpaceX's letter is "bold".
I understand that this virus clashes with his OCD and supertight schedule at Tesla and SpaceX,
but I'm quite confident he's underestimating the virus, the scar lungs it can leave in young patients even after they healed, the simple fact that if you are positive (even if young and asymptomatic) you're likely to infect all your loved one, including your parents and elders.

A car crash can kill you instantly, a disease like this drains resources out the health system.
In Italy, where the system is public, this increases the mortality rateeverywhere because sanitary services are lower standard if the system is on the verge of collapse. Everything spirals downward.

In UK they will likely let everyone get infected, and see what happens. It baffles me to see that, right now, Musk thinks like Johnson. Like the super-elite-ivory-tower-billionaire a lot of people think he is.

Musk is nothing without his workers, Tesla and SpaceX wouldn't exist.
I'd love to see some respect for them and their families here.

Sounds like you should be more worried about Italy. Musk doesn’t have elderly employees who make up a supermajority of the people being hospitalized by the virus. Young people in 90% of cases only feel like they have a cold. In my part of the US, people have stopped visiting grandparents for the next month whether we feel sick or not. Musk’s responsibility should be to provide additional ways for employees to clean their hands and to have staff clean the facilities more often.

 

[samppa]

Mostly I agree with this. Especially when I talk to less investing-savvy people, it's often apparent that they take a low SP as a signal that a company is doing bad and therefore are more tempted to sell, and a high SP as the opposite. This is of course ridiculous, and far from the truth. If stock prices always perfectly reflected how a company is doing, nobody could make money in the markets.

However, there are some instances where SP does mean something, and should perhaps influence one's investing decisions. I think TSLA SP action a few months ago is a perfect example of this. I think that when TSLA broke through $450-500 at the start of this year, it became apparent that the market, or at least certain players within it, were ready to value TSLA differently than it had in the past, give it proper credit for some of its future potential, and attach a higher valuation multiple to it going forward.

Yup. Stock price in absolute dollar amounts, without even any relation to amount of shares of a company, influences people's investment decisions.
It's more tempting to buy lots and lots penny stocks, than a single tsla share..

 

[Krugerrand]

Musk is nothing without his workers, Tesla and SpaceX wouldn't exist.
I'd love to see some respect for them and their families here.

If you think he doesn’t know this and doesn’t respect them, then you’ve not been paying attention at all.

 

[avoigt]

Investors seem to have this inexplicable and unholy fixation with the share price at all times. I've said this before, the share price is not a good proxy for the company's prospects, especially with a maligned company like Telsa. In this sense, the share price just doesn't matter at all and it does no good to focus on it. Focus on the company and their execution, investing becomes a whole lot easier when you stop worrying about (or celebrating) the share price. It is at wherever it's at. Always focus on the company and its current execution.

I could not agree more.

If you focus on the true value its not only that you will benefit on the long run, regardless of the volatility more compared to investors who try to sell high and buy low its also a much more relaxed sentiment you operate in and less stressful which over time may even add to your health.

 

[mars_or_bust]

OK, probably will get disagrees, but Elon should (like in the case of the cave rescue) stay out of this corona virus public debate. Especially as, as seems to be indicated from his tweets and perhaps internal emails (to be verified), he is underestimating the danger, ignoring expert opinion from around the world, and ignoring the dramatic evidence of the correctness of the expert opinions (large scale isolation measures are crucial to enable the health systems to handle the sudden influx of cases). This could also be one reason the stock dropped - it makes him and thus Tesla look unscientific.

I suspect Elon is beyond pissed off for the delays to Tesla this all caused: Giga Berlin postponed, hopefully only for a month or two but could be more, I suspect problems in deliveries and supply chains are cropping up all over the place, cancellations are also likely happening or there are at least fewer new orders, etc. Similar problems, and probably with much larger negative effects, are of course faced by all the other car companies, and many other companies, but that does note make the situation nicer.

I also suspect Elon knew that the *sugar* was hitting the fan a couple of weeks or so ago, when he removed that bag of money from his twitter page - he anticipated his pay day for crossing 100 billion Euro valuation will be delayed... Hopefully not very long though

I hope Elon makes this weekend a grownup comment on this matter.

One thing which puzzles me is why there is no p.r. blitz regarding the Y model? Or perhaps it will come in the coming days...

 

[hacer]

It doesn't take anywhere close to 2 1/2 weeks to send cars to the east coast and distribute them, so I would indeed take this as a good sign.

When I bought my S in 2016 it took 6 weeks to be delivered in Maryland after it left the factory. They sent it on a train and man was it slow.

 

[mongo]

I also suspect Elon knew that the *sugar* was hitting the fan a couple of weeks or so ago, when he removed that bag of money from his twitter page - he anticipated his pay day for crossing 100 billion Euro valuation will be delayed... Hopefully not very long though

His comp plan is in stock that he can't sell for 5 years. It is not a big payday, just more collateral for his loans. An 8% stock price bump does more for his fiscal situation than an award level.

(100 billion US$, plus revenue or EBITDA target)

 

[FrankSG]

I could not agree more.

If you focus on the true value its not only that you will benefit on the long run, regardless of the volatility more compared to investors who try to sell high and buy low its also a much more relaxed sentiment you operate in and less stressful which over time may even add to your health.

Yeah, I always tell people:

1) Figure out what you believe a stock is worth. (and update this as time goes on)
2) Buy the stock when it is below that value, as long as buying it is within your risk tolerance.
3) Sell the stock when it is at or above that value.

That's all there is to investing.

So with all that being said, I haven't sold anything in the past few weeks. I believe Tesla will be worth between $2-10T in 2030 for a SP of $10,000-50,000, so I see no reason to sell at $900, $700, or $500. I don't believe I can reliably time the market and buy back in at a lower price.

 

[Fact Checking]

I also suspect Elon knew that the *sugar* was hitting the fan a couple of weeks or so ago, when he removed that bag of money from his twitter page - he anticipated his pay day for crossing 100 billion Euro valuation will be delayed... Hopefully not very long though

The row of symbols on Elon's Twitter page is a list of the companies he founded:

Those Unicode characters represent the following companies: SpaceX (rocket), Solar City (sun), Tesla (car), Neuralink (brain) and the Boring Company (hole).

The "money bag " Unicode character:

Unicode Character 'MONEY BAG' (U+1F4B0)

Likely represented the 6th company Elon founded: Paypal, and he probably removed it because of the ambiguous meaning.

Can we stop the conspiracy theories that it's about something else? Please?

 

[Prunesquallor]

On a brighter note, @verygreen is reporting that the latest FSD firmware is showing actual stopping on red lights and stop signs logic emerge:

green on Twitter

"re 2020.12 release [...] also what looks like preparations to enable actual stopping for stop signs/traffic lights (I am not 100% sure on this point, but I think this is what the changes are shaping out to be)"

View attachment 521628
​

The first icon is the visualization of when a red light has been detected, and I believe the second icon will signal when the car has stopped on a red light.

There's also an anonymous leak that suggests that the earliest, employee version of this firmware already has this feature activated.

I suspect it's going to roll out to EAP within a few weeks, with wider release sometime in Q2: June would be my guess, to maximize the Q2 delivery push?

I just got that update, but am out of town. I’ll report tomorrow on what I see.

 

[ByeByeJohnny]

OK, probably will get disagrees, but Elon should (like in the case of the cave rescue) stay out of this corona virus public debate.

This is the only part I really agree with. There's not really any upside. It's one of those debates that even if you turn out to be right most people will see you as being a bad guy.

Just stay out of it and start posting about model Y. I can't even phantom what reason they can have for making model Y deliveries a non event.