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

[tinm]

Fun Fact: I know a lot of Amazon and some Microsoft employees including some that have been there for 10+ years. If they had held on to their shares, they would be millionaires....as in above 10+million net worth. They sold their shares every year or every other year not because they didn't believe in their company......but because they bought into the Wall St crap of the stock has gone up 100% this year, it's going to go back down or "this is good as it'll get". Some of them thought they could time it and sell and back buy at a lower price. I still to this day give them a hard time for continuing to sell their shares in the 300's, 400's, 500's, etc....

I'm not perfect btw. It still pains me that I got impatient with OLED and sold in the high 30's after a 50% return upon which the stock then shot up to 150. Ah my younger investing self

I once worked at a famous Silicon Valley company. Got copious stock options. Loved the job, hated the toxic boss. Finally told the CEO one day, pre-vesting, I could not stand working for this guy anymore, and was leaving. CEO begged me to stay but I left. Within 6 months they booted out my boss, and I guess word got out as he has never worked as an employee at a company since, only as a consultant.

I did the math the other day. Had I stayed and vested my options before leaving, then over the years watched the stock split a few times, those shares would now be worth about $40 million.

That old saying is true: people often don’t quit their jobs, they quit their bosses.

 

[RobStark]

General Motors and Ford Can Juice Profits by Shedding Models | Trucks.com

Morgan Stanley Research says 88% of GM-Ford model lines don't make any profit.

In dollar terms, the Detroit automaker’s (GM) top 5 revenue vehicles ( Chevrolet Silverado, Tahoe and Equinox, the GMC Sierra and the Buick GL8 Chinese minivan) make about $5,300 per unit. The bottom 60 models, on a combined basis, lose $1,100 per unit. That grows to a loss of $3,600 for the bottom 30 vehicles.

Ford offered 47 vehicle models globally in 2019. The Dearborn, Mich., automaker’s top five models by revenue are the F-150 SuperCrew, the F-250/350 Super Duty, the Ranger, the Transit and the Focus. All but the Focus are trucks. Those vehicles account for 43 percent of Ford’s revenue and 101 percent of its automotive operating income.

Excluding the Focus, which Morgan Stanley says loses money, Ford’s top four products by revenue account for 120 percent of its global profit.

Trucks make Ford tick. Morgan Stanley estimated that the profit from all F-Series lines, Expedition, Transit, Ranger and Explorer makes up 160 percent of its global profit. That means those trucks are offsetting significant losses elsewhere.

 

[StarFoxisDown!]

I once worked at a famous Silicon Valley company. Got copious stock options. Loved the job, hated the toxic boss. Finally told the CEO one day, pre-vesting, I could not stand working for this guy anymore, and was leaving. CEO begged me to stay but I left. Within 6 months they booted out my boss, and I guess word got out as he has never worked as an employee at a company since, only as a consultant.

I did the math the other day. Had I stayed and vested my options before leaving, then over the years watched the stock split a few times, those shares would now be worth about $40 million.

That old saying is true: people often don’t quit their jobs, they quit their bosses.

Coincidentally, I had a long time friend and former colleague ask me to join their team/company a bit over a year ago. The company made me an incredible offer with a combination of options and RSU's now that the company is a year or two away from IPO'ing. I've looked at other publicly traded company's in the same sector as this company and can compare key metrics and when I did that, it kinda of dawned on me that my options have a pretty decent chance of being exponentially more valuable than the Tesla position I've spent years accumulating

I'm definitely blessed at knowing the right person and being in the right place at the right time.....but it's a bit bittersweet that I got this opportunity towards the end of my "career" part of my life. Why couldn't these types of things happen when I was in my 20's

Needless to say I'm definitely going to stay at this company for the next 3 years to collect all of my options and RSU's(luckily I very much enjoy my team and the work I do)

 

[Mo City]

General Motors and Ford Can Juice Profits by Shedding Models | Trucks.com

Morgan Stanley Research says 88% of GM-Ford model lines don't make any profit.

In dollar terms, the Detroit automaker’s (GM) top 5 revenue vehicles ( Chevrolet Silverado, Tahoe and Equinox, the GMC Sierra and the Buick GL8 Chinese minivan) make about $5,300 per unit. The bottom 60 models, on a combined basis, lose $1,100 per unit. That grows to a loss of $3,600 for the bottom 30 vehicles.

Ford offered 47 vehicle models globally in 2019. The Dearborn, Mich., automaker’s top five models by revenue are the F-150 SuperCrew, the F-250/350 Super Duty, the Ranger, the Transit and the Focus. All but the Focus are trucks. Those vehicles account for 43 percent of Ford’s revenue and 101 percent of its automotive operating income.

Excluding the Focus, which Morgan Stanley says loses money, Ford’s top four products by revenue account for 120 percent of its global profit.

Trucks make Ford tick. Morgan Stanley estimated that the profit from all F-Series lines, Expedition, Transit, Ranger and Explorer makes up 160 percent of its global profit. That means those trucks are offsetting significant losses elsewhere.

This is one of the main reasons why I've believed Ford would probably not file for bankruptcy. Instead, sometime down the line they would make a good acquisition. The acquirer could shed all models except the trucks that are very profitable.

 

[Artful Dodger]

When you are scripting theatre you have to have ups and downs...

It's not good theatre but it is theatre.

Lol, yeah it's not all good, but it sure enuf is all theatre, fo'sho'...

↑ (from the Left): MM; HODLer; Shortzai; Bear hunter

Cheers!

 

[Joesantelli]

This whole s&p thing has been air tight it's so shocking that there is no news leaks. Part of me is scared there is no S&P inclusion even being worked on

 

[Runarbt]

Just read that a judge in germany demands more button in our Teslas?

Anyone have a take on this?

https://twitter.com/DerekViita/status/1289215587999072256?s=20

 

[Joesantelli]

Also I read on twitter from some people that their expecting China tesla deliveries number on Monday can anyone confirm?

 

[Joesantelli]

Just read that a judge in germany demands more button in our Teslas?

Anyone have a take on this?

https://twitter.com/DerekViita/status/1289215587999072256?s=20

All I know is these German courts are starting to push my buttons!

 

[Big Time]

Coincidentally, I had a long time friend and former colleague ask me to join their team/company a bit over a year ago. The company made me an incredible offer with a combination of options and RSU's now that the company is a year or two away from IPO'ing. I've looked at other publicly traded company's in the same sector as this company and can compare key metrics and when I did that, it kinda of dawned on me that my options have a pretty decent chance of being exponentially more valuable than the Tesla position I've spent years accumulating

I'm definitely blessed at knowing the right person and being in the right place at the right time.....but it's a bit bittersweet that I got this opportunity towards the end of my "career" part of my life. Why couldn't these types of things happen when I was in my 20's

Needless to say I'm definitely going to stay at this company for the next 3 years to collect all of my options and RSU's(luckily I very much enjoy my team and the work I do)

What do ya do? I work in entertainment as a lighting designer and audio engineer....industry destroyed. Always looking forward to the future.

 

[Curt Renz]

Jeff Roberts - Friday:

 

[Davidzhao365]

Is this a way to defer tax?

Here is an example

Assuming it is Jan 1 2020 today, start of the year, and we have $100k cash in the broker account.
Assume Tesla stock is $1000 today.

Step 1
On Jan 1 2020, sell a call, say Jun 2022 $100 call, and collect $900 premium (we ignore the time value for now), then we have $900 * 100 shares = 90k proceed. We call this trade A.

At the same time, use the 90k proceed to buy another call, Jun 2022 $110 call. Assuming this strike is available. We call this trade B.

so after trade A and B, we should still have the original $100k cash left or slightly more, since B is cheaper than A.

Step 2.
Use the $100k buy a few OTM calls, say Sep 2020 $1500 call. This is trade C.

Step 3.
wait from Jan to Sep. and now trade C is about to expire, and we assume the stock price is $2000 now and we sell the call for a gain/profit.

Assume we sold the call for $300k, so we have 300k-100k= 200k gain from trade C.

Step 4
In Sep 2020, after we close trade C, we close trade A. Now trade A should realize $100k loss.

So in total we reduce the taxable gain from $200k to $100k now, and we keep trade B open for 2021 or 2022.

Essentially we transferred shorted term gain from trade C to long term gain in trade B.

 

[kengchang]

Also I read on twitter from some people that their expecting China tesla deliveries number on Monday can anyone confirm?

Too early, later this week or next

Is this a way to defer tax?

Here is an example

Assuming it is Jan 1 2020 today, start of the year, and we have $100k cash in the broker account.
Assume Tesla stock is $1000 today.

Step 1
On Jan 1 2020, sell a call, say Jun 2022 $100 call, and collect $900 premium (we ignore the time value for now), then we have $900 * 100 shares = 90k proceed. We call this trade A.

At the same time, use the 90k proceed to buy another call, Jun 2022 $110 call. Assuming this strike is available. We call this trade B.

so after trade A and B, we should still have the original $100k cash left or slightly more, since B is cheaper than A.

Step 2.
Use the $100k buy a few OTM calls, say Sep 2020 $1500 call. This is trade C.

Step 3.
wait from Jan to Sep. and now trade C is about to expire, and we assume the stock price is $2000 now and we sell the call for a gain/profit.

Assume we sold the call for $300k, so we have 300k-100k= 200k gain from trade C.

Step 4
In Sep 2020, after we close trade C, we close trade A. Now trade A should realize $100k loss.

So in total we reduce the taxable gain from $200k to $100k now, and we keep trade B open for 2021 or 2022.

Essentially we transferred shorted term gain from trade C to long term gain in trade B.

You cannot defer tax if it is straddle trade.

 

[StealthP3D]

Only, this is not accurate. You can configure a car, place an order for a car, and plunk down money for the reservation fee, sure, maybe in 2 minutes.

Then Tesla’s website has a whole set of forms you go through, especially if you’re trading in a car. Then you run into a situation where you have a question.

Wait a minute! Elon didn't say you can order a Tesla AND trade in your old car in two minutes. Or that you wouldn't want to read the fine print - simply that you could literally order your new Tesla in 2 minutes flat! People are not used to buying a car this way - it seems too easy and removed from how they think it must work. That has to stoke a few potential buyers imagination...

What he's really doing is keeping demand high. He's an expert at getting people interested in buying Tesla's without running fancy (and expensive) ads.

Word of mouth from other Tesla purchasers? Excellent!
Elon at the helm stoking demand by telling people how quick and easy it can be? Priceless!

 

[LN1_Casey]

Just read that a judge in germany demands more button in our Teslas?

Anyone have a take on this?

https://twitter.com/DerekViita/status/1289215587999072256?s=20

A commentor down the line says that it was an individual driver's fault, maybe it was more along the lines that an individual driver tried to blame the set up for their ticket. I can't read German, so I can't confirm one way or another. https://twitter.com/costa11235/status/1289258911774789633

 

[StealthP3D]

Just read that a judge in germany demands more button in our Teslas?

Anyone have a take on this?

https://twitter.com/DerekViita/status/1289215587999072256?s=20

The government has already approved and homologated the cars that are on the road. Even if they change their mind for new model years, Tesla would probably just add another stalk on the steering column or button on the wheel for that market. It would add $100 or less to the price of the car and life would go on. Before that happens Tesla would likely contest the ruling.

 

[CorneliusXX]

I haven't heard Elon weigh in on his thoughts on S&P 500 Index inclusion. But if his views on this are consistent with what I know about him, he would welcome inclusion is but is ambivalent enough about it that he's not going to do anything he wouldn't normally do in order to be included. It's not really his thing and since Tesla is probably self-sustaining from here on out, it doesn't really directly impact his business.

The S&P 500 sorely needs Tesla, Tesla doesn't need the S&P 500. And I can't for the life of me figure out why a capital raise is such a big topic. I haven't seen one person make a good case that Tesla could effectively deploy more capital than they have available for deployment. Remember, the additional capital has to grow at a faster rate than the business would grow without that capital in order for it to benefit long-term shareholders. Anything less would be a net detriment.

Additionally, If Tesla did want to deploy more cash they could easily just raise more debt. They're not very leveraged and money is basically free at the moment. Why give away the goose when there is no need?

 

[RobStark]

This is one of the main reasons why I've believed Ford would probably not file for bankruptcy. Instead, sometime down the line they would make a good acquisition. The acquirer could shed all models except the trucks that are very profitable.

You just have to sell enough BEVs to meet CAFE/CO2 compliance to cancel out the trucks.

Otherwise Ford would love to shed all the cars.

 

[UnknownSoldier]

Only, this is not accurate. You can configure a car, place an order for a car, and plunk down money for the reservation fee, sure, maybe in 2 minutes.

Then Tesla’s website has a whole set of forms you go through, especially if you’re trading in a car. Then you run into a situation where you have a question. So you email or call the Tesla rep. Assuming you don’t get an immediate reply, you wait. Then you wait some more. Then there’s delivery. Inevitable new questions arise. From either party. On it goes.

I just traded in an old S for a new S and I must have spent 10 total hours over the course of a week in email or on the phone getting the transaction done. Since delivery I’ve already had one service visit requiring a follow-up with warranty replacement parts. Love the car, but there’s always a surprise.

Elon lives in a perfect world.

If you're just paying cash for the car, and the cash is ready to go, I think 2 minutes is reasonable...

 

[EdKan]

Wait a minute! Elon didn't say you can order a Tesla AND trade in your old car in two minutes. Or that you wouldn't want to read the fine print - simply that you could literally order your new Tesla in 2 minutes flat! People are not used to buying a car this way - it seems too easy and removed from how they think it must work. That has to stoke a few potential buyers imagination...

What he's really doing is keeping demand high. He's an expert at getting people interested in buying Tesla's without running fancy (and expensive) ads.

Word of mouth from other Tesla purchasers? Excellent!
Elon at the helm stoking demand by telling people how quick and easy it can be? Priceless!

There's another aspect to this that I think is of significance. I've always found that buying a new car has an inbuilt element of stress: am I paying too much? If I was a brilliant negotiator could I get more deducted from the sticker price? Am I looking too enthusiastic when I walk into the showroom? Are other people getting a better deal than I am? Perhaps very strangely, knowing that Tesla cars are so incredibly popular and the demand is so high, it totally takes away that stress: you're paying the sticker price period. No negotiations, no games, no wondering if you could have done better. So it's like buying an iPhone or a microwave cooker: if it's the one you want and you can afford it, you buy it. Simple! Less stress, no buyer's remorse about having paid more than you might have. Then you get to enjoy a really great purchase without those niggling thoughts in your head. And nobody can ever say "You paid how much?". Because they paid the same as you did