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

[SebastianR]

That's why Q3 and Q4 are such important quarters: they're thesis killers. Q3 devolved the "imminent bankruptcy, Tesla can't be profitable" thesis into the weaker "it was a one-time rigged profit" thesis, which Q4 will then kill. This leaves them with A) shouting "Fraud!", which will only play in their echo chamber, and two variants of the demand hypothesis: B) There just isn't that much demand left for Model 3 - sales will be weak in EU and China, and the US market is now dead; and C) Regardless of how much demand they have at present, "Tesla killers" are going to destroy it over the coming year, definitely two years.

That is to say: The bears aren't out. But they've taken a wound which only gets worse this quarter, and their arsenal of short theses drops to A) ineffective, and B+C) old standbys that have always been somewhat effective against the broader market, but will take a hit every quarter that goes by (same story we've seen with every model that Tesla's ever made).

I think we will see a lot of goal-posts being moved quickly here: B) + C) will be less about bankruptcy and more about "it is not a good investment since they will die a slow death and wither away into mediocrity - at which point the "sky-high" valuation of Tesla is no longer justified and thus my short with profit" -- it is the old "if you compare Tesla to the automotive competition their valuation is a bubble" argument.

Of course all this ignores that we have been at this junction before and that demand has always far outpaced even the "crazy" projections by Tesla themselves: Remember this one here? http://ir.tesla.com/static-files/43b9fc69-df93-421b-86b7-4f65e2d44594 - it is from 2011 where those dare-devils at Tesla thought that Model S demand should be about 20.000 cars (world-wide) and that to sustain this after a year or two you will bring the Model X online (another 10.000 to 15.000 cars/year) in order to keep your volume in the range of +/- 20.000 cars / year... Oh, those were the days ;-)

 

[KarenRei]

Personally, I think Tesla Energy is going to be the black horse of the year. I think most of the market has been writing it off as a goose egg. But by all signs, I think it's year-over-year growth rate is going to be staggering in 2019 (both solar and storage) - including growing margins, not just growing revenue.

 

[mrdoubleb]

Yeah, I saw that the other night. They don't exactly sound confident in the near-term movement of their short positions



That's why Q3 and Q4 are such important quarters: they're thesis killers. Q3 devolved the "imminent bankruptcy, Tesla can't be profitable" thesis into the weaker "it was a one-time rigged profit" thesis, which Q4 will then kill. This leaves them with A) shouting "Fraud!", which will only play in their echo chamber, and two variants of the demand hypothesis: B) There just isn't that much demand left for Model 3 - sales will be weak in EU and China, and the US market is now dead; and C) Regardless of how much demand they have at present, "Tesla killers" are going to destroy it over the coming year, definitely two years.

That is to say: The bears aren't out. But they've taken a wound which only gets worse this quarter, and their arsenal of short theses drops to A) ineffective, and B+C) old standbys that have always been somewhat effective against the broader market, but will take a hit every quarter that goes by (same story we've seen with every model that Tesla's ever made).

It`s also funny how he is pretending to have uncovered fraud by saying he thinks (based on no verifiable evidence) Tesla made 51 vs. the claimed 53k Model 3s last quarter. That`s about 2 days worth of production over 3 months. Yeah, they would totally risk a major embarrassment and SEC investigation over that. Makes total sense...

 

[EVMeister]

Well... You can only laugh at the deluded idiot.

 

[Fact Checking]

That is to say: The bears aren't out.

There will be bears and fake bears no doubt. What I'd like to see is their affinity fraud go down in a fiery mess.

I.e. one of the most damaging effect shorts had was through defrauding prospective investors:

"We are professional investors, we speak the same language as you, we looked at the financials, and sadly Tesla is going bankrupt or will have to refinance under pressure, wiping out shareholders."​

That kind of affinity fraud is what shorts and many Wall Street analysts were playing, hand in hand - and discrediting that spiel is the biggest effect that Q3/Q4 is going to have, because they discouraged a lot of investors.

They managed to do that rather successfully as long as Tesla was in the red. With two green quarters they themselves will be proven frauds.

Once that process is completed and macros improve there's no stopping of TSLA I believe.

The conspiracy theorist will always be there, claiming that fake global warming peddler Elon Musk is generating chemtrails to take down Q-Anon members who are on the verge of proving that the Earth is flat, his second biggest coup after instigating 9/11.

 

[ReflexFunds]

Tesla has just reduced all model 3 prices by $2k. Also most S/X by $1-2k.

I see a good chance this was supported by Panasonic and cell pricing was reduced to $100/Kwh into 2019.

 

[KarenRei]

There will be bears and fake bears no doubt. What I'd like to see is their affinity fraud go down in a fiery mess.

I.e. one of the most damaging effect shorts had was through defrauding prospective investors:

"We are professional investors, we speak the same language as you, we looked at the financials, and sadly Tesla is going bankrupt or will have to refinance under pressure, wiping out shareholders."​

That kind of affinity fraud is what shorts and many Wall Street analysts were playing, hand in hand - and discrediting that spiel is the biggest effect that Q3/Q4 is going to have, because they discouraged a lot of investors.

They managed to do that rather successfully as long as Tesla was in the red. With two green quarters they themselves will be proven frauds.

Once that process is completed and macros improve there's no stopping of TSLA I believe.

The conspiracy theorist will always be there, claiming that fake global warming peddler Elon Musk is generating chemtrails to take down Q-Anon members who are on the verge of proving that the Earth is flat, his second biggest coup after instigating 9/11.

Musk isn't generating chemtrails himself, but he has a great deal of respect for those who do so, and would gladly follow their commands if only he understood them! As for the Flat Earth Society, Musk is more interested in a Flat Mars Society.

 

[KarenRei]

Tesla has just reduced all model 3 prices by $2k. Also most S/X by $1-2k.

I see a good chance this was supported by Panasonic and cell pricing was reduced to $100/Kwh into 2019.

Source?

ED: Hmm, according to the site, MR=$44k, LR=$51k, P=$62k... that is $2k cheaper, is it not?

 

[Thekiwi]

all model 3 models have dropped in price by $2,000 - MR now selling for $44k - good sign that margins are high

 

[KarenRei]

Obviously smart business waiting until after the tax credit reduction to do this. So while the tax credit declined $3,5k, the effective price of the vehicle effectively only went up $1,5k due to the price cut.

 

[Zaxxon]

skabooshka on Twitter

Spiegel likes to retweet this fella. If you didn’t know the short interest in this stock, you’d assume these guys were parody.

Direct message to Elon from Spiegel himself:

Mark B. Spiegel on Twitter

Edit: no idea how to embed the tweets, sorry

Like a wise man once said: "First they ignore you, then they laugh at you, then they fight you by interpreting data to fit their predefined narrative and presenting it without context for years, then they lose their everloving minds and fabricate fraud claims out of thin air for a few quarters, then you win."

 

[HG Wells]

Boss Boss. Can I have my old job at Shortsville Times back for a week or two ? PLEASE ? PLEASE ?

Tesla just had to drop their price on all their cars TWO THOUSAND DOLLARS !
Must be a going out of business sale !

WE knew it, WE knew it. They probably stopped production and this is just to get rid of existing cars.
GOD I feel like a fool, for closing my short position last week.

Your Partner in Crime
Retired Chief Editor
Shortsville Times

 

[traxila]

Looks to me that this market is saying with good numbers for fourth Q TSLA should tread water, but if there is a ‘miss’ TSLA will be eviscerated. 250s? Hmmm...

This is a tough market. Why shouldn’t all indices drop another ten to fifteen and at that point where is TSLA?

 

[JollyRoger]

I genuinely belive people still can not comprehend Musk, for any other company to drop prices would be seen as getting rid of hard to shift inventory. People can not fathom if production costs reduce these savings are then passed on to the consumer, they think a company should squeeze there customers dry!

 

[nursebee]

Personally, I think Tesla Energy is going to be the black horse of the year. I think most of the market has been writing it off as a goose egg. But by all signs, I think it's year-over-year growth rate is going to be staggering in 2019 (both solar and storage) - including growing margins, not just growing revenue.

I do not understand the term black horse. Tesla Energy as the hidden asset has been readily discussed by many, anyone knowledgeable enough to try to learn already knows the story. I discount people saying it will suddenly become better realized as it has been said over and over.

 

[KarenRei]

I genuinely belive people still can not comprehend Musk, for any other company to drop prices would be seen as getting rid of hard to shift inventory. People can not fathom if production costs reduce these savings are then passed on to the consumer, they think a company should squeeze there customers dry!

To not understand what's going on is to not understand the concept of a supply-limited company. Aka, you can charge much more than you need to while your supply is tight, to raise funds to scale your growth faster, and then step-by-step lower them toward the level you need to sustain your demand at your full production rate.

It's not about generosity, it's basic business logic. The thing that has endlessly surprised me about Tesla is about how many people don't understand the very concepts that underpin and characterize a company undergoing rapid growth. Not Tesla-specifically - any company in the same situation of rapidly scaling (capital-intensive) production and growing revenues dramatically year-over-year.

 

[KarenRei]

I do not understand the term black horse. Tesla Energy as the hidden asset has been readily discussed by many, anyone knowledgeable enough to try to learn already knows the story. I discount people saying it will suddenly become better realized as it has been said over and over.

Dark horse, actually, but I noticed too late to edit the comment. See:

Dark horse - Wikipedia

Of course it will become better realized - when its revenue and margins become large enough that it can't be ignored. Right now, it is largely being ignored. Tesla is largely analyzed simply as an automaker, with autonomy being the most common wildcard used to justify higher valuations. But Tesla Energy is creating two** entirely new, potentially massive markets - and I think they have a much higher near-term probability of success than autonomy.

** 1) Grid storage, which has exceeded most operators' wildest expectations so far, and will be a critical component to ensuring grid stability in a high renewables penetration environment; and 2) solar roofing which - once the price comes down (which it eventually will), will become a no-brainer obvious choice for most new construction; traditional solar, which requires labour to build a roof, then more labour to install and wire panels, won't be able to compete in an environment where labour - not hardware costs - is an increasingly large percentage of the total bill.

 

[nursebee]

Dark horse, actually, but I noticed too late to edit the comment. See:

Dark horse - Wikipedia

Of course it will become better realized - when its revenue and margins become large enough that it can't be ignored. Right now, it is largely being ignored.

But is not being ignored. Investors already know, it is not a secret. Dark horse won't be released, just the distribution of shares to follow

The Key For Tesla's Future Is Batteries, Not Cars
Why Tesla is building city-sized batteries
Tesla is starting to actually become an energy company
Tesla Energy is ‘battery cell starved’ but the growth outlook is ‘crazy’

 

[Tslynk67]

I enjoyed this InsideEV's story about Tesla killing the Prius: Top EV Story Of 2018: How Tesla Killed The Conventional Toyota Prius

I think the Prius served a purpose, ooooh, about 15 years ago. Since then it has just got uglier and more irrelevant. Toyota need serious change of design direction, their cars are just horrible to look at.

I remember, back in the day, they had things like the Celica and Supra, they were nice looking beasts at the time, highly desirable. But now...*

*Brought to you by the letter "I" (this is a RUSH joke in case you don't get it...)

@AudubonB Please consider renaming this thread, "2019 TSLA Investors Roundtable".

How about "2019 TSLA, the Universe and Everything"?

Unless Tesla absolutely crushed P&D or rides up on a broad index-wide rally, I don’t see the stock reaching a new ATH prior to Q4 ER.

I think the absolute max we can expect from P&D is 100k, just no capacity yet to go any higher. So that would be "crushing" in the overall context. However, even with that I would expect a 10% SP bump back to the 350-70 range where ti will wander about aimlessly until the Earnings Call, then it will 420.

At least this would correspond to previous behaviour. One caveat is that after the stellar Q3 financials, the markets can assume that if the delivery figures are good, then decent margins, ergo, profits, will follow. That could trigger more of rally after the Delivery Report.

Car and Driver puts Model 3 on the cover of Jan 19 issue. I'm interested.
View attachment 365346
Cool graphic showing how Tesla is crushing it.
View attachment 365344
Oh wait, Model 3 didn't make Top 10 list because the $35000 version isn't out yet. No mention of L3MR, weird.
View attachment 365350
Oh, that makes sense. The Top10 list is sponsored by Shell.
View attachment 365347
Put Tesla on cover for max magazine sales. Cater reviews to advertisers to maximize ad profit. Playing both sides, smart.

Why don't we see BMW and Toyota on the graphic??

That depends on what you base it on!

01100100% (if you are digital superintelligence (DSI), Google "Singularity", and see my prediction below)
0144% (if most of us had 8 fingers with no oppositional thumb)
100%
84% (if most of us had 12 fingers)
0x64% (DSI)

Prediction: After the first DSI reads every post ever made to TMC, DSI will hack into our Teslas and start driving all of them simultaneously just for fun!

Seriously, my concern is that DSI will immediately realize that we humans squander terawatts of electricity that DSI would rather use to create more DSI's. Humans have not been kind to chimpanzees. Why should future DSI be kind to us, an inferior species? DSI will probably diss us as "just carbons".

[hey, NASDAQ is closed so I'm bored!]

You missed HEX 64...

skabooshka on Twitter

Spiegel likes to retweet this fella. If you didn’t know the short interest in this stock, you’d assume these guys were parody.

Direct message to Elon from Spiegel himself:

Mark B. Spiegel on Twitter

Edit: no idea how to embed the tweets, sorry

Babooshka is a ******g idiot. He/she/it blocked me on Twitter after one short debate - Shorty Air-Force don't like logic messing-up their propaganda.

Europe +2,71%

Edit: This is valid for Europe where markets have been opened different.

Just catching-up from NASDAQ's Monday close...

Personally, I think Tesla Energy is going to be the black horse of the year. I think most of the market has been writing it off as a goose egg. But by all signs, I think it's year-over-year growth rate is going to be staggering in 2019 (both solar and storage) - including growing margins, not just growing revenue.

If I may be so bold, we've been saying this for the last couple of years already and TE is still to move the needle. Whether this is demand or production constrained I have no idea, but I suspect the latter. Need that GF1 finished ASAP!

Well... You can only laugh at the deluded idiot.

Which one of them?

 

[KarenRei]

But is not being ignored. Investors already know, it is not a secret. Dark horse won't be released, just the distribution of shares to follow

The Key For Tesla's Future Is Batteries, Not Cars
Why Tesla is building city-sized batteries
Tesla is starting to actually become an energy company
Tesla Energy is ‘battery cell starved’ but the growth outlook is ‘crazy’

Please note the difference between the words "largely" and "completely" in the phrase "largely ignored". "Largely ignored" does not mean everyone ignores it. But by and large, Tesla is valued by most as a car manufacturer, with Tesla Energy lucky to be treated as contributing even a small fraction as much value to the company as its automotive side. Some write it off completely.

As Lycanthrope put it just in the post above mine: "If I may be so bold, we've been saying this for the last couple of years already and TE is still to move the needle". Just the fact that some bulls, such as us, have been pointing out TE's potential, doesn't mean that it's being fairly valued by most. By and large, its value is treated as little, if anything, relative to the company's automotive side.

I expect 2019, however, to start forcing a change in this paradigm. I expect both revenues and margins to get large enough by the end of 2019 that they won't be able to be ignored. The automotive side will still be larger, but the numbers will be big enough - and the growth rate so obviously staring everyone in the face - that it'll have to start being valued properly.