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

[mrdoubleb]

Just guessing here like all of you, but I don't expect any meaningful recovery until

• either the rate of infections goes down on its own due to successful city and country wide quarantine measures, or
• one of the already FDA approved drugs being tested proves successful.

For the first one, it appears to me, the only way it becomes successful if people take it seriously and for that they need to panic a bit. I was little dismissive / in denial about the extent of this pandemic until it really started to hit close to home with close by Italy showing the worst case scenario. That's when i also started to see some politicians in Europe taking this more seriously and working up the courage to make the necessary steps. We are still not there fully, I still see some people not taking it seriously on the streets/in shops, but as the case number rises this changes as seen elsewhere. I don't think the US is there yet mentally, so as things escalate (e.g. it starts hitting NYC, the home of Wall Street) this will change and then there will be more panic and possibly more stock market drops.

For the second one, there are Ebola and HIV meds being tested, with the earliest results expected in April/May. If any of them prove effective and they can boost production, we could see countries lifting the ban and businesses returning to normalcy. This is kind of a best case scenario as a vaccine is like a year away at best. Any news like that may start a stock market rally even before the economy recovers as a lot of cash on the side will move in to try and buy in cheap.

PS: I sold my shares last week. I don't expect to fully time the market successfully, but wanted to be in cash in case I lose my job, but need to continue paying my mortgage, get by until I find a new one (together with tens of thousands of people in a similar situation and companies not hiring...).

 

[electracity]

I cancelled my model Y order this morning (the $2500 variety) because I believe I will not be willing to be the guy with the new car while family, friends and family are scared about money and the future. Most people don't do public display of new luxury goods during troubled times.

I expect Musk is thinking about what his companies can make to respond to the coming medical crisis.

 

[ev-enthusiast]

BMW stops car production in Europe and South Africa (link)

BMW is stopping car production in Europe and South Africa until mid-April due to the pandemic. "As of today, we will shut down our European automotive plants and the Rosslyn plant in South Africa," said CEO Oliver Zipse at the online annual press conference.

The production interruption is expected to be until April 19. A company spokesman added that motorcycle production in Berlin would continue until further notice.

 

[Causalien]

I'm wondering when global macro will bottom out - because I think with the Fremont shutdown out of the way and getting priced in today TSLA will largely be a function of macro forces going forward. There might be a bit of a 'sell the rumor, buy the news' mechanics to TSLA today as well. Trading volume was already elevated this week, with 21m and 24m shares trading volume on Monday and Tuesday, which suggests good buying interest at these price levels. ARK bought 30k more TSLA shares yesterday.

Infection numbers from many countries in Europe are showing early signs of successful containment efforts, but the U.S. is probably still going downhill, especially with more testing capacity becoming available which will show an increase beyond the true spreading speed, just due to more cases now getting diagnosed and reported.

I have a substantial chunk of dry powder set aside for such black swan events, but I'm a bit hesitant to utilize it until the U.S. bottom is clear - as U.S. sentiment tends to drive macro sentiment to a large degree. What do others think, what will be signs of the bottom of the U.S. panic?

This one looks worst than 2008

 

[WarpedOne]

In 2008 the WallStreet panicked, this time governments are in panic.
Next time it will be ... who?

 

[Johan]

One thing that mustn't be underrated is what happens when we see the real effect of this in poorer countries in Africa, in India, Bangladesh, Pakistan etc. etc. The effect on the world economy will be more prolonged than most seem to expect. I sold part of my holdings in TSLA three weeks ago and last week (but as it turns out kept "too much") and thus have a sizeable cash position, but I'm going to be very patient to buy back in to TSLA or any other stock frankly for quite some time. Patience grasshopper.

Edit: Saying this as an MD in Norway, where we have very tight restrictions and it seems to me are doing well in flattening the curve (schools closed, lofty quarantine rules, closing of many types of shops and businesses and far reaching limitations on social gatherings). Most of these measures are going to be completely lacking in poorer countries and also they have no capacity what-so-ever to treat that "tip of the iceberg" population of mostly elderly who fall very ill.

 

[davecolene0606]

Diviersification

IMHO, Shanghai will be the determinant in keeping our noses above water, China has its act together and now has an opportunity to lead the world economy to recovery as well as support the recovery medically of hundreds of thousands of people world wide.

They will fully embrace Tesla and make it their own if the US is stupid enough to let it falter here and so will Europe. If Fremont stops (looking likely) Tesla can shut down cash bleed very quickly with layoffs and perhaps use the down time to fine tune the machine.

It appears that the Feds are leaderless, I think this also is presenting itself as an opportunity for China as well. China is now in the cat bird seat economically I think. It’ll be interesting to see if ownership of many companies changes hands to China interests. (Recall the offer of citizenship at the Giga Shanghai groundbreaking)

Fascinating to see people indiscriminately screaming about shutting everything down due to Corona now screaming for rational approaches to maintaining economic activity on a “safe” basis.

Tesla’s mission remains intact and will have been set back a bit. If the US is not careful, the epicenter of the next economic revolution will not be here and the US will be relegated to second banana status for decades.

I felt just fine hanging in watching TSLA dump into the $180’s (JUNE 19!!) as we watched the pain from the M3 ramp up. I had no doubt in the ultimate future and thought of lofty $420 levels as being 1 or 2 years off. I added to my position on the 420 tweet and have some around 360 or so and of course 1 @ 420.69 and was a bit concerned about my 360 level always, but Tesla has really matured into an excellent company managed by highly skilled and competent folks from production up to senior management. Every single quarterly letter has the part in the back with all the “risks” to business so it’s not as though planning for the unexpected is... unexpected.

Tesla is, perhaps, the most nimble and adaptable company the world has seen in recent history and it has already put down the foundations of diversification worldwide. It’s gonna be a struggle but at the very least, but I think of the capital markets in China as being more than willing to embrace it. I see European markets eager to propel themselves to a sustainable future and generally feel like Tesla will fewer issues than many of companies accessing adequate capital to stay afloat long enough to see Giga Shanghai and Giga Berlin to full build out and production.

We will have been set back some (at this point) some undetermined period of time, but not shut out. Again, I jumped in on the premise that Tesla was and is a giant piece of the solution to building a sustainable equitable world economy and if it failed, that would be the least of problems for survival of Homo sapiens as a species.

Still believe that...

Still long and will hold on to this buckin bronco till my arm gets ripped out of its socket.

Fire Away!
(It’s (STILL) the batteries, Stupid!)

 

[X Fan]

If the shut-down order isn't amended then Tesla gets 14 days less production this quarter. That's 15% of the quarter but the impact on Q1 might be a bit less since it's impractical to deliver the cars made the last few days of the quarter anyway. This might allow them to clear out the inventory in the delivery pipeline. And any North American who has been eyeing a Tesla, take note, you might want to act fast if you want one now!

Hopefully, the ramp in Shanghai is spectacular and can make up for some of the lost production at Fremont.

Good points.

3 Things matter to me right now:

1) Impact of Shutdown on Cash Position ( will Q1 be accretive? ).....Tesla is OK right now
2) Impact of Covid on Global Production & Suppliers....negative
3) Impact of Covid on Tesla Buyers....possibility to be very negative

Last two are very worrisome and if unemployment goes to double digits, even wealthy buyers will refrain from new/high ticket purchases (financially conservative + in a time of high unemployment not wanting to look out of touch).

btw: SE Asia is becoming a hot spot and even S. Korea has seen a re-spike upwards. Also, even though China has stabilized, their economic output is highly impacted by the Global Economy (which is going to be the pits for 60 days or more).

 

[Tslynk67]

Part (99.99%) of me wishing Elon is fighting tooth and nail to secure SP inclusion this Q.
A guy can only hope.

I tend to agree and I would imagine that it's not necessary to fight the authorities to keep the factory open, but rather just recognise some ZEV credits, some deferred revenue or deferred losses. Now would be the time to play these cards if necessary.

 

[Sancho]

If we are making our guesses, I think we already hit market bottom with Dow 20000. If the DOW goes lower than that, it should recover to that quickly. TSLA may go lower briefly but should mostly swing with the broad market now.

Because the death toll will continue to rise for awhile, I don’t see a v shaped recovery happening soon. But assuming Europe starts to see a slowing of cases first, and Asia continues to rebound, as soon as there is the slightest slowing of new cases in the US, the market recovery should start in earnest.

When TSLA went from 3xx to 9xx, I thought we were experiencing a once-in-a-lifetime opportunity. Once again, I was wrong.

 

[Fact Checking]

btw: SE Asia is becoming a hot spot and even S. Korea has seen a re-spike upwards.

Sorry, but that's false - South Korea has seen small fluctuations below 100 new infections a day:

Feb 18:     1 new cases,     30 total cases ( +3.2%) 
Feb 19:    27 new cases,     57 total cases (+46.5%) 
Feb 20:    53 new cases,    110 total cases (+47.7%)  #
Feb 21:    96 new cases,    206 total cases (+46.3%)  ###
Feb 22:   232 new cases,    438 total cases (+52.8%)  ########
Feb 24:   397 new cases,    835 total cases (+47.4%)  #############
Feb 25:   144 new cases,    979 total cases (+14.6%)  #####
Feb 26:   284 new cases,   1263 total cases (+22.4%)  #########
Feb 27:   505 new cases,   1768 total cases (+28.5%)  #################
Feb 28:   571 new cases,   2339 total cases (+24.4%)  ###################
Feb 29:   815 new cases,   3154 total cases (+25.8%)  ############################
Mar 01:   586 new cases,   3740 total cases (+15.6%)  ####################
Mar 02:   599 new cases,   4339 total cases (+13.8%)  ####################
Mar 03:   851 new cases,   5190 total cases (+16.3%)  #############################
Mar 04:   435 new cases,   5625 total cases ( +7.7%)  ###############
Mar 05:   467 new cases,   6092 total cases ( +7.6%)  ################
Mar 06:   505 new cases,   6597 total cases ( +7.6%)  #################
Mar 07:   449 new cases,   7046 total cases ( +6.3%)  ###############
Mar 08:   272 new cases,   7318 total cases ( +3.7%)  #########
Mar 09:   165 new cases,   7483 total cases ( +2.2%)  #####
Mar 10:    35 new cases,   7518 total cases (  +.4%)  #
Mar 11:   242 new cases,   7760 total cases ( +3.1%)  ########
Mar 12:   114 new cases,   7874 total cases ( +1.4%)  ###
Mar 13:   110 new cases,   7984 total cases ( +1.3%)  ###
Mar 14:   107 new cases,   8091 total cases ( +1.3%)  ###
Mar 15:    76 new cases,   8167 total cases (  +.9%)  ##
Mar 16:    74 new cases,   8241 total cases (  +.8%)  ##
Mar 17:    84 new cases,   8325 total cases ( +1.0%)  ##
Mar 18:    93 new cases,   8418 total cases ( +1.1%)  ###

Growth rate is very low, around 1% of all cases, which suggests that it's under control. The fluctuations are roughly in line with what China has experienced at a similar stage.

China has seen near zero new infections this week, even in Hubei, and they are a country of 1.3 billion people.

 

[Pras]

Good points.

3 Things matter to me right now:

1) Impact of Shutdown on Cash Position ( will Q1 be accretive? ).....Tesla is OK right now
2) Impact of Covid on Global Production & Suppliers....negative
3) Impact of Covid on Tesla Buyers....possibility to be very negative

Last two are very worrisome and if unemployment goes to double digits, even wealthy buyers will refrain from new/high ticket purchases (financially conservative + in a time of high unemployment not wanting to look out of touch).

btw: SE Asia is becoming a hot spot and even S. Korea has seen a re-spike upwards. Also, even though China has stabilized, their economic output is highly impacted by the Global Economy (which is going to be the pits for 60 days or more).

What are talking about South Korea ? For last 3 days the new cases have been under 100. What is respiked means?

 

[Fact Checking]

China's economy is apparently rebounding:

Jonathan Ferro on Twitter

China getting back to work FedEx says...

• Demand rebounded more than expected
• 65-70% of small business operating again
• 90-95% of large manufacturers operating

Tesla could send GF1 battery output to China and ramp up GF3 even faster: three 12-hour shifts with near zero downtime.

There's light at the end of the tunnel, and it's not a train.

 

[AlexS]

In my case I wouldn't say 90% sure, but I also wouldn't be surprised if I had it too.

I had to visit the ENT specialist at the hospital last Monday for an ear infection. Wore a mask everywhere, but from Thursday to Tuesday I had some very mild symptoms. Had a bit of a sore throat, coughed a few times a day, felt a bit warm/sweaty for 15-30 minutes a few times a day (but body temp normal), and I felt something in my chest/lungs that wasn't 100% normal. Today (Wednesday) I feel 100% normal again.

Nonetheless, I was able to work just fine (self-employed, so at home) and it was pretty much business as usual. Honestly a stuffed nose/allergies are more annoying than this was.

Same here, but also i had small fever 37.1C, crappy feeling and fatigue. Now only abnormal feeling/some pain in chest remaining. Symptomps started last friday. Heard more or less same symptoms same recovery from positively tested people in Estonia. I think we have in Estonia more than 10% of population already infected. Maybe more, as there are crazy amount of asymptomatic cases actually. Keep in mind antibodies apearing in 6-10 days, that is why quarantine period is two weeks.

 

[Causalien]

Good points.

3 Things matter to me right now:

1) Impact of Shutdown on Cash Position ( will Q1 be accretive? ).....Tesla is OK right now
2) Impact of Covid on Global Production & Suppliers....negative
3) Impact of Covid on Tesla Buyers....possibility to be very negative

Last two are very worrisome and if unemployment goes to double digits, even wealthy buyers will refrain from new/high ticket purchases (financially conservative + in a time of high unemployment not wanting to look out of touch).

btw: SE Asia is becoming a hot spot and even S. Korea has seen a re-spike upwards. Also, even though China has stabilized, their economic output is highly impacted by the Global Economy (which is going to be the pits for 60 days or more).

SE asia is seeing wave 2 spike due to america and europe. Ppl got complacent and went to those countries instead of asia. Lityle did they know that it was a trap.

Interestingly, tourist who went to turkey are showing 80%+ infection rate. That country is most likely suppressing info and is going to see Iran 2. If greek let the migrant through.... Get ready.

 

[Dr. J]

There are two types of people in a crisis:

1. Those that slap
2. Those that get slapped

Confirmed.

 

[lascavarian]

CNBC video screen crawl is stating CA county will not allow TSLA to run normally.

 

[Fact Checking]

Just as a small cheer-up, here's a time-lapse movie of a SpaceX Falcon 9 launch as seen from LA:

Also a reminder that the next Starlink mission is scheduled to launch in less than an hour. (And I'm wishing @BenPrice all the best.)

A successful (or unsuccessful) Starlink launch might have an effect on TSLA price action. If this Starlink launch is successful then I believe the Starlink fleet is going to have enough satellites to start initial service in North America and parts of Europe.

 

[HG Wells]

There are two types of people in a crisis:

1. Those that slap
2. Those that get slapped

Third type
3. Those that sue.

 

[ev-enthusiast]

BofA analyst John Murphy upgraded Tesla to Neutral from Underperform with a $500 price target. The stock closed Tuesday down $14.87 to $430.20. The analyst upgraded the shares based solely on valuation. Tesla shares went from $900 a month ago to the current $400 level, Murphy tells investors in a research note. While the analyst continues to view Tesla as a "trailblazer" in the electric vehicle market, he believes investor optimism around the company and its financial future remains "overhyped" and that its risks remain underappreciated. These keep Murphy "relatively cautious" on the stock despite the upgrade to Neutral.