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

[neezer]

Darn, so close to a +$86 increase at the close. So close to a Gordonian 87.

 

[Mo City]

Tomorrow last day you can buy before that almighty dividend.

Up or down?

Come on now, everyone thinks will be up.

So must go down, right?

Check USA futures late tonight or very early a.m. tomorrow before you go to bed.

TSLA will open and finish the opposite direction.

 

[smorgasbord]

Your original thesis that TSLA could stay down for years like AMZN is reasoning by analogy, not first principles. The first principles of TSLA are that Tesla is a historic company with unprecedented advantages and market opportunities. Yes, I believe "this time it's different," because Tesla is different. There has never been a company like them. Things change, with enough human intelligence and determination. Rockets land on barges now.

I'm not saying that because it happened to Amazon it will happen to Tesla. I'm saying that a multi-year depression of TSLA's stock price could happen, and pointing out that something pretty similar happened to Amazon under rather similar market perception conditions.

Henry Blodget told a story about Amazon's CFO, Joy Covey, after she tragically died in a car to bicycle accident :

"By 1998, when I picked up coverage, Amazon was already a big success story, and Joy had become a celebrity in the Internet analyst community. When Joy got on the phone that night, she was, once again, terse and polite. She was also livid.
My new price target had triggered another spike in Amazon’s stock price, and for the first time in my experience as analyst, a company was angry about that.
Amazon’s spiking stock price, Joy explained, was causing problems at the company. It was distracting employees, who were spending their days obsessing about the stock price instead of Amazon’s customers. It was making recruiting difficult, because Amazon stock options were losing their attractiveness to would-be employees as the stock shot ever higher. It was focusing the press on the stock when Amazon wanted the focus to be on Amazon. It was, in short, making everything all about the short term, when Amazon’s whole business strategy and philosophy were about the long term.
I protested to Joy that I had merely said what I had thought we both agreed on — that Amazon was a great business that would be worth a whole lot of money some day.
“Yes,” I remember Joy saying. “Someday. But now all anyone is thinking about is today.”
Joy Covey, 1963-2013

 

[dl003]

Tomorrow last day you can buy before that almighty dividend.

Up or down?

Come on now, everyone thinks will be up.

So must go down, right?

Today we saw about 10M volume by the time it'd slowed down significantly at halftime. As soon as it crashed, volume spiked up again and we ended with 23M for the day. Tells me that it was a massive buy the dip and momentum will carry on to tomorrow.

 

[Favguy]

Tomorrow last day you can buy before that almighty dividend.

Up or down?

Come on now, everyone thinks will be up.

So must go down, right?

At this point I'd hardly be surprised if it goes down and finishes the day on $ 2103.45

 

[Zero CO2]

so when do we officially start using post split SP I am noticing a lot of folks quoting SP sometimes pre-split and sometimes post-split ... so we closed today at

$2,238.75 /$447.75... thats better now the $500-$550 projections make more sense

i have to adjust my mind to the new SP ... i am starting now ..i am pretty slow to adjust

 

[StarFoxisDown!]

Q2 results and outlook were outstanding, yet TSLA fell $200 over the following 3 weeks until the split was announced.

At these levels, I'm not so sure Battery Day and Q3 deliveries / results will provide much, if any, boost to TSLA.

Your response is exactly what I'm talking about. That's what I'm banking on. Q2 results were outstanding...... but again Tesla's potential was masked because of Covid, which limited production from taking that next leg up. Production was largely even from Q1, Q2, Q2/Q3/Q4(2019) where production has been in this range of 90k-110k per quarter. Tesla did an amazing job continuing to leverage operations and continue efficiency gains during Q1 and Q2 this year(which is why I call Q1/Q2 earnings outstanding), but if you're just looking at the quick figures(which Wall st and investors mostly do), you're seeing a company that's making strides but not fundamentally taking a next level stage in it's growth and it's earnings potential/power.

What Q3 represents is that substantial next level step of production that will unlock that earnings potential/power. Practically every analyst, even the bullish ones, are underestimating Q3 and Q4 this year.

Battery Day I have no opinion of when it comes to stock action and what will happen.

 

[smorgasbord]

See, this is why VW's ID3 has a superior architecture. It is impervious to OTA updates. /S

From Volkswagen ID3 has 'massive' software problems, as company begins year of EV introductions - Electrek

unfortunately, the fix is cumbersome. Thousands of ID3 cars will be parked in dedicated rented spaces until the spring when service teams will be deployed with mobile computer stations.

New software will be manually installed in this manner for the first 10,000 or so ID3s. A total of 20,000 ID3 vehicles will need to be reworked until the second wave of production begins in May. At that time, further software updates can be deployed over-the-air.

 

[agastya]

Be fearful when others are greedy

https://twitter.com/AmandaCerny/status/1299068574330355713

 

[M|S|M MYP]

Tomorrow last day you can buy before that almighty dividend.

Up or down?

Come on now, everyone thinks will be up.

So must go down, right?

Either $2249.98 OR $2299.98 give or take a few pennies

 

[wipster]

Which is strange. My best friend paid me a visit. He has a new VW Passat and he told me it had automatic over the air updates.

You sure he didn't mean for the temperature? Heck my 2003 E320 did that!

 

[Nocturnal]

Train with "100s" of model 3s and Xs spotted heading toward Denmark/Sweden. Are the shorts....Finnish(ed)?

https://twitter.com/mortenlund89/status/1298706950922874880?ref_src=twsrc^tfw|twcamp^tweetembed|twterm^1298706950922874880|twgr^&ref_url=https://www.tesmanian.com/blogs/tesmanian-blog/a-train-with-hundreds-of-tesla-model-3-and-modelx

I'm not saying that because it happened to Amazon it will happen to Tesla. I'm saying that a multi-year depression of TSLA's stock price could happen, and pointing out that something pretty similar happened to Amazonunder rath
er similar market perception conditions.

TSLA did have a long period where the stock was basically flat. I think if Tesla were to stall or growth not be obvious that would be possible/likely but hard to imagine if they keep up this growth.

 

[dl003]

Be fearful when others are greedy

https://twitter.com/AmandaCerny/status/1299068574330355713

somebody needs to tell her to get 5 more so she can sell weeklies once it splits. @Lycanthrope

 

[woodisgood]

Be fearful when others are greedy

https://twitter.com/AmandaCerny/status/1299068574330355713

I’m supposed to know who this is, aren’t I.

sigh

 

[Dancing Lemur]

Let me clarify. I don't believe a short-term severe TSLA drop is impossible, just unlikely now for the reasons I stated. If it happens, it will not be a "downside," but a buying opportunity that will make me ecstatic.

However I do believe a years-long severe drop, analogous to AMZN, is extremely unlikely.

Your original thesis that TSLA could stay down for years like AMZN is reasoning by analogy, not first principles. The first principles of TSLA are that Tesla is a historic company with unprecedented advantages and market opportunities. Yes, I believe "this time it's different," because Tesla is different. There has never been a company like them. Things change, with enough human intelligence and determination. Rockets land on barges now.

I was surprised that my post on “what are the major risks to Tesla achieving its goals by 2030” turned into a discussion on “how AMZN got destroyed by the dot com bubble”. But such is the interwebs.

I agree that “this time is different”. It’s often pointed to as an investors’ fallacy, but it’s true every once in a while. I get chills every time I watch a booster land.

But turning to the shorter term, things sure look rosy. Heavy buying pressure all day on strong volume. Tesla far outperformed the FAANGs, who collectively had one of their best days I can remember yesterday and struggled today.

I expect more of the same tomorrow, and then I have no idea what will happen Monday. A blow off top and 15% drop wouldn’t shock me. But with S&P still looming, I don’t know. The screenshot below is an article (not an “ad”) from AppleInsider today; I know there’s lip service paid to the splits making shares more affordable for retail, but how much of an effect is this actually going to have? I think this accessibility to markets is changing how retail influences things, so looking at how historic splits have performed is not necessarily as relevant.

I’ll definitely have some popcorn ready Monday morning.

 

[vikings123]

Today we saw about 10M volume by the time it'd slowed down significantly at halftime. As soon as it crashed, volume spiked up again and we ended with 23M for the day. Tells me that it was a massive buy the dip and momentum will carry on to tomorrow.

Good point, looks like it will be another nice gap up tomorrow. The Upper BB also should be higher as we continue to be in a bullish trend. And then Mayhem on Monday.Remember no trading AH on Friday or pre market on Monday. This weekend is going to suck lol.

I do think there will be some more shenanigans tomorrow so if anybody is looking to play options for next week you might get a very good opportunity. Just know the key support levels etc. Like @Artful Dodger pointed out earlier, they took it all the way to upper BB and then brought it all the way down to fill the gap. So predictable.

 

[pdwitt]

Good point, looks like it will be another nice gap up tomorrow. The Upper BB also should be higher as we continue to be in a bullish trend. And then Mayhem on Monday.Remember no trading AH on Friday or pre market on Monday. This weekend is going to suck lol.

I do think there will be some money re shenanigans tomorrow so if anybody is looking to play options for next week you might get a very good opportunity. Just know the key support levels etc. Like @Artful Dodger pointed out earlier, they took it all the way to upper BB and then brought it all the way down to fill the gap. So predictable.

Good point, looks like it will be another nice gap up tomorrow. The Upper BB also should be higher as we continue to be in a bullish trend. And then Mayhem on Monday.Remember no trading AH on Friday or pre market on Monday. This weekend is going to suck lol.

I do think there will be some more shenanigans tomorrow so if anybody is looking to play options for next week you might get a very good opportunity. Just know the key support levels etc. Like @Artful Dodger pointed out earlier, they took it all the way to upper BB and then brought it all the way down to fill the gap. So predictable.

 

[pdwitt]

But the volume was high through the decline, then dried up on the recovery.

 

[dc_h]

Edit: to be clear, these are what FrankSG is predicting as ultimate production capacity, not next years production.

My take on production next year is this:

Bear case (no increase in production)

• 600k Fremont (Includes S&X)
• 200k Shanghai

Assuming 570k production this year, this is a growth rate of 40%, about the historical average

Edit: most people seem to be predicting between 800k and 900k production next year

Base case
This assumes that production starts ~10 months after construction start, and that production ramp up is similar to MIC model 3.

• 600k Fremont (Includes S&X)
• 400k Shanghai (250k Model 3, 150k Model Y)
• 150k Berlin (Model Y)
  
• 100k Austin (Model Y)

Assuming 570k production this year, this is a growth rate of 120%

Bull case
Aggressive ramp up in all locations enabled by simpler production (e.g. casting) of Model 3/Y and model S/X refresh

• 700k Fremont (Includes S&X) - further efficiencies due to simpler production process, plaid a success
• 500k Shanghai (250k Model 3, 250k Model Y) - still ramping up to 750k per year total production
• 250k Berlin (Model Y)
  
• 250k Austin (200k Model Y, 50k Cybertruck )

Assuming 570k production this year, this is a growth rate of 200%

Hyper-Bull case
Aggressive ramp up in all locations enabled by simpler production (e.g. casting) of Model 3/Y and model S/X refresh

• 750k Fremont (Includes S&X) - further efficiencies due to simpler production process, plaid a success (second shift)
• 550k Shanghai (300k Model 3, 250k Model Y) - still ramping up to 750k per year total production
• 350k Berlin (Model 3/Y) - phase 2 start soon for second production area (tree clearance September)
  
• 400k Austin (280k Model Y, 100k Cybertruck, 20k semi ) - multiple production areas built over the next 10 months
  
• 50k GF6 (ground breaking this year)
• 50k GF7 (ground breaking this year)

Assuming 570k production this year, this is a growth rate of 277%

Edit: my prediction for next year is the base case, although I see considerable up-side. The hyper-bull case would probably need a major capital raise and perfect execution, so very unlikely.

It starts getting harder to breakout growth drivers, but this is great. If it were in Excel or Google docs, you could create bear case scenarios by site or vehicle. I’m not asking or criticizing, just noting the format. I do think there are two other growth engines, with the Semi beginning to scale up and energy likely up over 100% next year. Solar and batteries are both on track for 100% growth and GWh battery sites going up. If we do grow over 100% in 2021, the discounted value of TSLA will only need 30-35% growth to justify the current valuation. Barring COVID 2.0 or some other global disaster, I don’t see growth below 50% on average until 2027.

Great post.

 

[ZsoZso]

Another fun video from Steven to get your day started.

That was a great video. So much good info.

Indeed. If you pay attention to what Chanos is saying (no, not the FUD BS "thesis", just the facts about his own TSLA short position and their policy about it) in the two separate interview segments and then connect the dots, you can come to the following conclusions:

1. Chanos has already covered about 90% of their initial TSLA short position
2. They have already lost so much money on TSLA shorting that they can never recover, even if Tesla were to bankrupt tomorrow

Let's see how we arrive to these conclusions:

• As far as I know from earlier appearances on CNBC etc, Chanos had a "max short" position already around $200 SP.
• In the first segment in the above video from April, Chanos stated they are still "max short" at $470s and explains that is 5% of their fund as that is the max allowed in a single position by their rules
• In the later (this week) segment he explains, they are still short but only within the rules of their fund, explains when the price hikes up they must trim their position to stay within the 5%.
• So, if they shorted ~$200 and now the price is over $2000 and they keep trimming to stay within 5%, that means they already had to cover over 90% of their short!
• That covering just from the 400s to now required them to pay more than twice the price for 80% of the position between 400-2000, therefore they had to lose more than 1.6x the money they got from the short sale. So even if Tesla goes bankrupt and they can cover their remaining 10% shorts at zero cost, they are still forever deep in the red!

TLDR: Chanos has already lost more money than he could ever make back on shorting TSLA and he already covered most (~90%) of his shorts, so his position is rather insignificant now.