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

Mar 17, 2019
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6,334
EU
Headed in the right direction. Each notch upward would lower borrowing costs, and should bolster the share price. :)

Curt, can you clarify for the uninitiated what it takes for Moody to consider Tesla investment grade, and how long it takes to climb the next 5 notches?

More importantly, does it involve sacrifice of goats at full-moon?
 
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MC3OZ

Active Member
Jul 25, 2019
2,651
14,898
QLD Australia
This table from Troy gives an insight into what is probably happening at Fremont:-
https://twitter.com/TroyTeslike/status/1285960958498820102

Elon seems fairly positive about California in the earnings call so it is unlikely that the paint shop expansion (might be an additional rebuilt paintshop) has hit any issues.

Assuming there are no issues, the expansion seems to have been in the works for at least 6 months, so it may not be far away.

If the paintshop expansion does happen there is no urgent need to move some Model 3/Y production to Texas...

However if they can build a paintshop in Texas, moving the one or more tent based GAs, (GA4/GA4.5) to Texas makes some sense or they may just start with a new tent/building in Texas.

The only real reason to move/re-purpose a tent may be to make room for the Roadster...
 

Curt Renz

Well-Known Member
Mar 5, 2013
7,204
102,945
USA
Would we not expect to see a glimmer of upward movement AH due to the Moody's upgrade?

Margin calls or anticipation of them may be taking place. Once past 20 minutes after the close, almost all of the trades appear to be for less than the number of shares I own. Many of them may involve sidelined sports bettors who've become newbie day-traders. :rolleyes:
 
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smorgasbord

Active Member
Jun 3, 2011
3,235
5,516
SF Bay Area
Moody's upgrades Tesla's ratings including CFR to B2 and senior unsecured to B3; the outlook is stable.

Moody's upgrades Tesla's ratings including CFR to B2 and senior unsecured to B3; the outlook is stable.

7db08c1f37ea8d91b9410bc9d45d3d28.png

Moody's is still years behind the reality of BEVs over hybrids. For instance, they actually said:
"Tesla does not compete in what will be the much larger hybrid electric vehicles [market], nor does Moody's anticipate that Tesla will develop products in that market."

Even the other legacy OEMs, except Toyota, admit that BEVs, not hybrids, are the future.

Moody's also underestimates Tesla's sales growth:
"[Moody's] anticipates Tesla's 2020 sales growth will be in the mid-to-high single-digits -- considerably outperforming the industry, but significantly lower than the company's historic pace."

Tesla delivered 367,500 vehicles in 2019, and we just heard them affirm they still think their goal of 500,000 is achievable. That would be 36% growth. Even if Tesla only delivers 450,000 vehicles, that's more than 22% growth. To only grow 9% (the high end of Moody's estimate), Tesla only needs to sell 400,575 vehicles. That appears to me to be a slam dunk.


And, of course, they can't resist disliking how Musk operates:
"However, important additional risks are posed by Tesla's governance structure. There is considerable latitude to the company's CEO, Elon Musk, with a board that has a mix of inside and outside directors. In addition, Mr. Musk's executive responsibilities with outside ventures such as SpaceX could tax his ability to adequately focus on Tesla's challenges..."

In other words, they're worried about the one thing that has made Tesla successful so far - Elon Musk.

Crazy stupid if you ask me.
 
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smorgasbord

Active Member
Jun 3, 2011
3,235
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SF Bay Area
True. And there is another index to which TSLA might be added soon afterward: The Dow Jones industrial Average. It's oddly contained no automakers since the bankruptcy of General Motors in 2009 (unless we count bulldozer-maker Caterpillar). :cool:

Frankly, I wouldn't be surprised if by the time they add Tesla it's more of an Energy company than an Automaker, anyway.
 

Curt Renz

Well-Known Member
Mar 5, 2013
7,204
102,945
USA
Curt, can you clarify for the uninitiated what it takes for Moody to consider Tesla investment grade, and how long it takes to climb the next 5 notches?

More importantly, does it involve sacrifice of goats at full-moon?

Moody's - this afternoon: Moody's upgrades Tesla's ratings including CFR to B2 and senior unsecured to B3; the outlook is stable.

Germane Excerpt:

FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS

The stable outlook reflects Tesla's progress in establishing a more profitable and competitively sustainable position in the BEV market, balanced against the challenges of: a global economic slowdown due to the coronavirus; increasing competition in the BEV space from established OEMs; and the need to transition profitability away from the heavy dependence on the sale of regulatory credits and toward the sale of vehicles.

Tesla's rating could be upgraded if the company continues to make operational progress through the ramp-up of its Shanghai facility and new operation in Texas, continues a successful launch of the Model Y, and continues steady progress towards making the Tesla product lineup more affordable and profitable.

Metrics that would support an upgrade include: EBIT margin that can be sustained above 5%; debt/EBITDA approximating 4x; and EBITA/interest above 2x.

The ratings could be downgraded if, as occurred during 2018, the company begins to encounter operational problems managing its aggressive global manufacturing and product expansion. Metrics that would contribute to a downgrade include: EBITA margin being sustained below 4%; debt/EBITDA approaching 6x; and EBITA/interest below approximating 1.5x.
 

PlaidCPA

Member
Dec 19, 2019
115
1,356
tampa
Volume is ridiculously low today. What gives?
Moody's - this afternoon: Moody's upgrades Tesla's ratings including CFR to B2 and senior unsecured to B3; the outlook is stable.

Germane Excerpt:

FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS

The stable outlook reflects Tesla's progress in establishing a more profitable and competitively sustainable position in the BEV market, balanced against the challenges of: a global economic slowdown due to the coronavirus; increasing competition in the BEV space from established OEMs; and the need to transition profitability away from the heavy dependence on the sale of regulatory credits and toward the sale of vehicles.

Tesla's rating could be upgraded if the company continues to make operational progress through the ramp-up of its Shanghai facility and new operation in Texas, continues a successful launch of the Model Y, and continues steady progress towards making the Tesla product lineup more affordable and profitable.

Metrics that would support an upgrade include: EBIT margin that can be sustained above 5%; debt/EBITDA approximating 4x; and EBITA/interest above 2x.

The ratings could be downgraded if, as occurred during 2018, the company begins to encounter operational problems managing its aggressive global manufacturing and product expansion. Metrics that would contribute to a downgrade include: EBITA margin being sustained below 4%; debt/EBITDA approaching 6x; and EBITA/interest below approximating 1.5x.
This is a slap in the face. Really? Ford still has higher credit rating than Tesla! Ridiculous
 

MP3Mike

Well-Known Member
Feb 1, 2016
17,201
41,711
Oregon
Tesla's rating could be upgraded if the company continues to make operational progress through the ramp-up of its Shanghai facility and new operation in Texas, continues a successful launch of the Model Y, and continues steady progress towards making the Tesla product lineup more affordable and profitable.

They don't even mention GigaBerlin? o_O
 

adiggs

Well-Known Member
Supporting Member
Sep 25, 2012
5,269
17,522
Portland, OR
True. And there is another index to which TSLA might be added soon afterward: The Dow Jones industrial Average. It's oddly contained no automakers since the bankruptcy of General Motors in 2009 (unless we count bulldozer-maker Caterpillar). :cool:

Being added to DJIA - that'd be wild.

And for those that don't like the high share price as it locks them out of smaller transactions that they could make, my understanding is that index is a share price weighted index, and that TSLA shares will need to be under $100 on inclusion. Sounds like a 20:1 split, give or take, to make that happen. That could be fun :)

From Dow Jones Industrial Average (DJIA) Definition
  • The DJIA is a price-weighted index that tracks 30 large, publicly-owned companies trading on the New York Stock Exchange and the NASDAQ.

Even though I consider the DJIA to be irrelevant for actual investing, it carries a lot of social weight. I'd love to see TSLA added!
 

smorgasbord

Active Member
Jun 3, 2011
3,235
5,516
SF Bay Area
After Tesla’s first profitable quarter, there was six month consistent increase in the share price. I envision the same thing with Tesla’s first profitable year.

More important, is Tesla performance contrasted against the automotive industry. My view is that, that stark contrast, will be a greater catalyst than S&P 500 inclusion.

I disagree with this, respectfully.

We all here recognize what's going on, but most of the market does not. I do not fool myself that Tesla's 50% run since Q2 deliveries were announced (and a profitable quarter thus seemed likely) is actual acknowledgment of what only the analyst outliers like Cathie Woods and Chamath Palihapitiya have been saying. I fear TSLA's rise is mostly due to that S&P dynamic.

Battery Day, for instance, may help, but it's unlikely to move Mr. Market the way it should.
 
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Don TLR

Active Member
Jul 27, 2017
1,446
5,599
Apache Junction AZ
When Elon talked about marketing fact this was something that should be brought up and based on this fire that happened hours ago near the house, I’m near the water tank top right. But it got me thinking.
The last huge fire we had was an auto accident that burned 195,000 acres and took 30 days to control shutting down a major highway causing millions of $ in damages. They’re still fixing the guardrail posts that burned out or just finished. The sooner we get rid of ICE cars we will all be a little safer. That is some of the info about how much safer the cars are
50A9C038-0EF1-48D6-BAC6-4A5B941B2B3C.jpeg
293F480D-08CD-4A51-B727-88B77957D88F.jpeg


I hit my goal a bit ago and just like the shorts I moved my goalpost, so now closing in on that new goal. It’s going to make retirement a whole lot more fun. At time it was tough listening to all the FUD even from friends but it’s good to hear those old CNBC pieces now laughing.

One comment from here stands out along the way. Roughly quoted saying I have money coming tomorrow and I don’t care if it’s 3** or 3** I’m buying, I used that one lately when I missed a small dip recently, in the end it’s not going to matter and only moved my share price a few pennies each so I’m just going to keep accumulating. Congrats to all the HODL Longs.
 

ggr

Expert in Dunning-Kruger Effect!
Moderator
Mar 24, 2011
7,053
28,863
San Diego, CA
This board sure likes a conspiracy theory. It’s one thing to blame manipulation for nearly every stock drop (as if a stock can only go up). But believing that the big guys are tanking the whole tech sector to make TSLA go down... that’s pretty far out. I’m waiting for someone to predict that Putin will start a war to sink the share price.
From yesterday's close, TSLA was down 5%, while NASDAQ (represented by QQQ) was down 2.6%. This is "business as usual", with Tesla just 2x. My own call-heavy portfolio was hit pretty hard by the IV crush, but I'd sold all the short term calls (except for one that I want to be exercised for the relatively low cost basis) on Tuesday for a decent profit. The mid- and long-term ones will all build back up over the next few months, hopefully along with the price of TSLA going up too. I'm not worried, it was all part of the plan.
 
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