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

[SteveG3]

yes they are starting up. I already mentioned it on Wednesday, as employees were working on starting up the factory.

I don't think this is a decided matter. I think Elon/Tesla is just marching forward in the hopes that Alameda County relents, either without any pushback, or after some back and forth between Tesla and the county in the coming days. We'll see.

 

[Christine69420]

Guidelines for manufacturing in California: https://covid19.ca.gov/pdf/guidance-manufacturing.pdf

 

[CorneliusXX]

When I was 6 years old my dad was busy harvesting some vegetables from our family's garden for dinner. I will never forget this as it made a lasting impression on me. I had recently been granted a small allowance and was learning about money and what it was and wanted to know more. I was asking my dad how much different items were worth. He gave me approximate dollars/cents answers on the first couple of things I asked him about. Then I asked him how much a cow was worth. He stopped working, thought a minute and then looked me right in the eye as he said "Son, it's just like anything, it's worth exactly as much as someone is willing to sell it for and someone is willing to pay for it."

Now here was a smart answer I thought. It even allowed for the value of the same item to change over time depending upon how badly someone needed the money or how much someone wanted the item. All of a sudden the world of dollars and cents made a lot more sense.

And understanding this one principle that stuck with me over the years is what I attribute the fact that I became a millionaire at age 36. Because if the answer to that question didn't stick with me, if I didn't understand that reality, I would have sold my stock when I thought it was over-valued (but before it appreciated another 10 fold).

Elon doesn't value TSLA stock, investors with real money do. And there's a lot of money out there looking for the most productive place to be.

Did he then go on to tell you how an enterprising hedge fund went on to borrow a herd of cattle from a farmer then sell them at the market before launching a covert disinformation campaign to lower the value of cattle before buying back another herd of cattle at a lower price to return to the farmer.

Everyone is going vegan, cattle are worse for the environment than sheep, chicken is the superior meat, leather is ugly, farmers are frauds.

 

[Dan Detweiler]

So...judging from pre markets, is it going to be this kind of day?

 

[ProfTournesol]

Somebody living in Fremont? Can you head to the factory and make a picture from the first car rollin’ out of da factory? Then we send it to bloomberg ‘Tesla abruptly and unexpected starts production again while Dana Hull is still at home’

 

[Christine69420]

Tesla Aims to Restart Fremont Plant Friday After Green Light

Bloomberg - Are you a robot?

The implications of the announcements are clear for Detroit, with General Motors Co., Ford Motor Co. and Fiat Chrysler Automobiles NV now having a green light to restart North American plants starting May 18. Tesla’s position is murkier, with California still allowing counties to remain more restrictive and potentially block Musk from reopening his assembly plant in the state.

 

[dgodfrey]

Nice points. Apple is not growing revenue all that much.

In 2015, revenue was $234B, EPS = $9.22, and div = $2.03 for a year-end price of $105.26.
Four years later, 2019, revenue was $260B, EPS = $11.89, and div = $3.04 for a year-end price of $293.65.

On an annualized basis, revenue grew 2.67%, EPS 6.56%, and div 10.62%, while the share price grew 29.24%.

So none of these metrics by themselves seem to explain why the share price tripled in 4 years. Someone more knowledgeable about Apple may be able to explain how shareholders gained so much value, but the high P/S valuation does seem to be motivated by more than just growth in revenue. Dividend growth and stock buybacks may be the most compelling driver.

Getting back to Tesla, I also expect Tesla to grow revenue about 50% per year. But I also expect cash generation, profitability, market share and cost of debt to improve. I also expect the public reception of EV generally and Tesla in particular to improve. This is not just a demand issue, but rather it is cost of capital issue. When all these metrics are improving, Tesla gets to a much more defensible valuation. Right now, however, the stock price is largely driven by all these expectations of future improvements. This is why Tesla is volatile, so susceptible to mood swings in the market between bullish and bearish sentiment. Longer-term, all these improving fundamentals will undergird higher valuations, but in the shorter term traders are trying to predict (or provoke) market mood swings.

This is why I am a long-term bull. I can't predict the mood swings, but I can use them opportunistically. I have become proficient at accumulating when market sentiment is sour. Now with covered call, I'm attempting to harvest some of the excess when sentiment is sweet. Through it all I am hold or accumulating shares for the long-term. Good luck.

I assume you are selling covered calls as am I. I try to pick a 4-6 week expiry at a price that I would be okay with letting them go that has about a 5% chance of hitting based on the options analyzer expected probability. I also factor in upcoming announcements that I feel can effect the SP and am a bit more conservative e.g. these next few weeks due to Battery Day.
Based on the Super Bull Long membership handbook, 2017 edition, that still allows me to keep my Super Bull membership card. Which BTW, I noticed at this weeks SBL luncheon, about a 40% drop-off in membership after last weeks shakedown. Role call took all of 4 minutes.
Anyway, what criteria and theories do you use to determine your expiration dates and strike prices? As much as I think I'm okay letting them go for 25% more than the current price, I still don't like the possibility of FOMO. My last one was a $960 5/15 which had me nervous last Thursday when it was in the high $800's. Was able to capture 60% of it's value though on Friday so if it gets back in the $800's, I'm thinking about a $1,200 expiring late July after the ER.

 

[Green Pete]

Question, given the insane number of calls at 800, if we close above 800 is that a mini short squeeze? The call volume at 800 feels unprecedented. It's 700,000 shares worth of calls. If they aren't mostly covered calls someone is going to need to buy a ton of shares to sell to the holder of the option at expiry no?

 

[vikings123]

Tesla's Fremont plant will resume 'limited operations' on Friday

 

[LN1_Casey]

Question, given the insane number of calls at 800, if we close above 800 is that a mini short squeeze? The call volume at 800 feels unprecedented. It's 700,000 shares worth of calls. If they aren't mostly covered calls someone is going to need to buy a ton of shares to sell to the holder of the option at expiry no?

I would think the MM's who sold those shares, were selling covered ones. They've been burned a few times in recent history, and I'd be surprised if they immediately went back to it.

However, that being said, I'd be surprised if we closed above 800 today. Fremont opening for limited productivity probably won't overcome the Market Manipulators.

 

[Reductionist]

Tesla's Fremont plant will resume 'limited operations' on Friday

This article contains a fairly detailed email from Teslas head of HR. The full article is well worth a read. Some highlights:

• Additionally, Alameda County, where the Fremont factory is located, states in its shelter in place order FAQs that distributed energy resource manufacturing, which includes electric vehicles, solar, and battery storage, is permitted to operate.
  
• At all facilities, we’ve enhanced our already robust safety strategy in accordance with our Return To Work Plan, which we have reviewed extensively with Alameda County [...] .
  
• Starting tomorrow, May 8, 2020, limited operations will resume at the Fremont factory starting at 30% our normal headcount per shift.
  
• Our Gigafactories in Nevada and New York have also begun limited operations as approved by their respective states. Similarly, Sales, Service and Delivery as well as Energy operations have been gradually coming back online on a state-by-state basis.

It looks like they have been able to sort everything out with Alameda County, which would be fantastic. This seems like a reasonable compromise all around, and hopefully indicates a gradual return to normal.

​

 

[hobbes]

Found a twitter thread by carsonight from 3 days ago, has this been discussed? He says Panasonic is making cells at GF1 and he thinks they are going to storage while Tesla cannot make cars in the US, so Q2 results might be not as bad as feared as there is pent-up demand in the storage sector. Anectdotal data of accelerated delivery of power walls seems to support this thesis.

Carsonight on Twitter

Before someone asks, carsonight is a well-known credible source with good connections to GF1.

 

[hobbes]

This article contains a fairly detailed email from Teslas head of HR. The full article is well worth a read. Some highlights:

• Additionally, Alameda County, where the Fremont factory is located, states in its shelter in place order FAQs that distributed energy resource manufacturing, which includes electric vehicles, solar, and battery storage, is permitted to operate.
  
• At all facilities, we’ve enhanced our already robust safety strategy in accordance with our Return To Work Plan, which we have reviewed extensively with Alameda County [...] .
  
• Starting tomorrow, May 8, 2020, limited operations will resume at the Fremont factory starting at 30% our normal headcount per shift.
  
• Our Gigafactories in Nevada and New York have also begun limited operations as approved by their respective states. Similarly, Sales, Service and Delivery as well as Energy operations have been gradually coming back online on a state-by-state basis.

It looks like they have been able to sort everything out with Alameda County, which would be fantastic. This seems like a reasonable compromise all around, and hopefully indicates a gradual return to normal.

I think what Tesla wrote in the Email does not really mirror the contents of the actual FAQ:

My business installs distributed solar, storage, and/or electric vehicle charging systems – can it continue to operate?
Yes, this is permissible construction activity and must comply with the Construction Project Safety Protocols in Appendix B of the Order. Businesses may also operate to manufacture distributed energy resource components, like solar panels.

https://covid-19.acgov.org/covid19-assets/docs/5-4-20 Alameda County SIP Order FAQ 5.6.20 1 PM.pdf
COVID-19 FAQ's | Alameda County Public Health Department

 

[Reductionist]

I think what Tesla wrote in the Email does not really mirror the contents of the actual FAQ:


https://covid-19.acgov.org/covid19-assets/docs/5-4-20 Alameda County SIP Order FAQ 5.6.20 1 PM.pdf
COVID-19 FAQ's | Alameda County Public Health Department

Yeah, certainly seems less clear to me than the email. I guess we'll just have to wait and see, there should be more info in a couple of hours.

 

[Artful Dodger]

Only 17% think V2G will be supported by Tesla. I'm in the 17%. it supports the mission.

V2G is not a function of the battery; its done by the power electronics. Cybertruck will have the hdw req'd for V2G (110/220v inverters). The two are complimentary, separate.

So its fair to say the new bty architecture will support long life in V2G applications, but it is NOT the droid you're looking for...

Cheers!

 

[Singuy]

MM will do everything possible to get someone, anyone in the county to pour cold water on this reopening.

Hoping that Tesla actually got the green light with the county internally unlike last time. Seems like they did and not just going off the governor's tweet.

 

[Snerruc]

You're right! But I think he had a chauffeur... Abrams wasn't quite that prophetic was he?

Nope, there is a shot of the empty drivers seat and the steering wheel turning.

 

[elasalle]

Factory opens, so now let's talk logistics. How many Cars can be delivered to EU by end of June?
I hope Tesla figured out other routes from East Coast which might shorten the time, or at least increase volume. cheers!!

 

[mongo]

OT

V2G is not a function of the battery; its done by the power electronics. Cybertruck will have the hdw req'd for V2G (110/220v inverters). The two are complimentary, separate.

So its fair to say the new bty architecture will support long life in V2G applications, but it is NOT the droid you're looking for...

Cheers!

I think V2G would happen through the vehicle charger and use the wall connector as a communication gateway. The standard user facing inverter would not have the synchronization and other UL requirements for grid connection. Plus, it's an extra connection to make.

 

[MABMAB]

I was checking to see if Munro had been on to talk about the Y yet and came across this...