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

[TradingInvest]

I didn't read it all, but this is my question:
why Elon did not wait a week for this news?
He would have hurt the shorts with all the puts expiring worthless today... instead he hurt the (gambling) longs, probably pissing off some major investor who wrote those puts.
I don't know nothing, but it seems bad timing and self-inflicted.
There is something I don't understand?

PS: of course, I'm sorry for the people who got fired, but doing it today doesn't do them any good.
Next monday after burning the shorts would have been better.

I had the same thought. It would be better if they delayed this announcement to the next week. I think Elon just does what needs to be done. They didn't think much about how many Puts are expiring today. Another possibility is that they view this as something positive. I personally view the report as positive. Today shorts prepared ammunition to attack anyway, this report just becomes an excuse.

 

[Fact Checking]

With no new products likely in 2019,

That's false:

• FSD based on HW3 could come in Q1 or Q2 - this also unlocks deferred revenue of past FSD purchases - over half a billion dollars of profit.
• Shanghai Gigafactory will begin production this year, in the fastest growing EV market in the world.
• Gigafactory is ramping up as fast as they can, which will reduce the ridiculously long Tesla Storage order book.
• Further ramp-up of the Model 3 and efficiency improvements.
• Seasonally slow European sales will further accelerate.

Lots of potential areas of growth. Don't be misled by Elon's tone in the email - he was mainly addressing employees who just got laid off.

 

[jhm]

Tesla has a staff reduction?

 

[myt-e-s-l-a]

I had the same thought... overstated the news as if a BT.
I was about to buy more just now at $305, then it looked like it was going through that so lowered it to $301.
The only question for me is when to buy and how much. What a sale this is!

U Dont want to buy a falling knife. Use options to hedge your entry price.

 

[MarcusMaximus]

Do you mean consensus for Q4 is 3/5 (actually ~3/4) of Q3 EPS? If so, agree that there's some room for SP to go up and that's helpful to place Elon's email in context.

Yes. And no, 3/5. Consensus is on non-GAAP profit(I clarified this with the person who posted the current estimates here specifically). As I remember, consensus was around $300 million in non-GAAP and non-GAAP for Q3 was $511 million.

 

[mrwuffles]

I had the same thought... overstated the news as if a BT.
I was about to buy more just now at $305, then it looked like it was going through that so lowered it to $301.
The only question for me is when to buy and how much. What a sale this is!

My thoughts exactly, though I'm waiting to see if we break below $300, in which case my target is ~$290

 

[mongo]

The longer you wait to fire someone, the longer it has been since you should have fired them.
-Elon Musk

It also may be ending of contract worker jobs.

 

[adaptabl]

Have problems with comprehension? You think 20k cars being transported for weeks is making Tesla any money? This week long shipment time is just growing pain but only happens once. Further shipment are constant so cars being delivered right now will be making money while new cars are being delivered. This 2-3 weeks lag have to filled some how.

But you can keep spitting out nonsense to continue your short narrative. People like you instill nonsense into people's head when you know exactly what is going on.

I agree the real issue is the demand problem. There are only so many buyers of 70K+ Tesla's. This is why the reservation system collapsed so quickly if North America and even faster in Europe. Tesla over promised and under delivered on the 35K model 3. Going forward they better figure out how to produce a much larger number of cars at a far smaller margin. That's just how the auto industry works. Add the poor customer service and quality issues those high end buyers expect far more than Tesla is delivering right now. Then the decreased government incentives. I can see demand continuing to fall for high margin Tesla cars.

 

[SOULPEDL]

To quote the late John Bogle of Vanguard...

"Buy the company, not the Stock"
​

I own just as much of Tesla as I did yesterday, nothing has changed for me (except I'm about to own a little more).

 

[CuriousSunbird]

My thoughts exactly, though I'm waiting to see if we break below $300, in which case my target is ~$290

Yes, $300 may trigger a lot of stop loss orders - people like round numbers.

 

[MarcusMaximus]

There are only so many buyers of 70K+ Tesla's

Thank you for letting us know you aren’t serious.

 

[j6Lpi429@3j]

There are only so many buyers of 70K+ Tesla's.

Seriously?
You do realize this is a company with zero advertising spend, who offer a very limited range of options on the car, and who literally cannot make the things fast enough as it is. A friend of mine just *today* sold his jaguar to buy a model S.
Demand problem? you have got to be kidding me.

 

[thx1139]

I get that... but the tiny profit, maybe, bit... I just don’t see Tesla/Elon going that far with the downbeat unless it’s pretty much a lock that Q1 won’t be nearly as good as Q3 or Q4.

Q1 is going to be lower no doubt, some of it is one time events. So how long does it take for 3s going to Europe and China? This means more in transit at the end of the quarter. Also the $2000 price cut in US will have a negative effect. Also SuperCharger construction likely starts ramping up again this quarter.

 

[KarenRei]

Uh oh, that's it, everyone - under $300! That's game over, Tesla is now officially going bankwupt. We had a good run of it, but.... clearly we can never recover from this.

I'd like to thank everyone for all of the great times here. Sad we'll never meet again, being all scattered among poor houses across the world. It sure seemed like Tesla was going to change the world, but then, out of the blue, the CEO tried to comfort laid-off employees by reiterating Q4 expectations that were already in line with analyst expectations... and then the company suddenly became doomed.

We gave it a good run! Now if you excuse me, I'm going to go sell all of my assets and check into the local homeless shelter...

 

[SOULPEDL]

It also may be ending of contract worker jobs.

No, I think he said it was permanent employees.

Folks, I was in the service center 2 days ago and there were no customers likely because of the retooling or "Engineering Upgrades" as I read. He just doesn't need that many people right now, make perfect sense.

Also, it now costs $50 to rotate tires (vs free) and my rental car managed to get a few dollars out of me. So I asked "Is Service Profitable Yet? Ans: "Almost." (Although doesn't address the accessibility of service concerns mentioned as they ramp M3, but you can't have it both ways either.) Tesla is clearly focused on profits and ramps... still.

 

[Krugerrand]

After review of the past 8 pages of comments, I don't believe anyone has asked the obvious question...

Why did he announce this now, just 2 weeks before ER? Why not wait for ER?

IMO, some really good news is about to come out in ER and they don't want it buried by this.



Disagree, employees need this to stay and he needs a solid pop this quarter for convertible notes. He knows they are trying to cut this off so he has to pay in cash vs stocks. Folks, this is all about making sure SP get's back well above $360.

And again, as some have said, it's more about cash flow. Possibly a bear trap as well. SP might even go lower before Feb to catch even more bears.

You can’t see it, but I just pushed the ‘that’s an interesting theory’ button.

 

[Remus]

Next week will be interesting. Some of the convert holders will be buying back their hedges and some people (full disclosure, including me) will find themselves unexpectedly short and will have to cover positions - those are positives. On the other hand, with a heavily retail stock like this you are likely to see a lot of margin calls, so that will be negative. At the very least we can predict a lot of volume!

Margin calls, when last month we were below 300?

 

[CyberDutchie]

MS Adam Jonas has an opinion out, which is (predictably) predicting a raise:

“Our ‘5 Stages’ of Tesla outlook included the Ramp, Raise, Payback, Landing, and Potential Resolution. Elon Musk’s letter suggests to us a preemptive warning of a movement to Stage 4 ‘the Landing’ before executing Stage 2 ‘the Raise.'”

And expectation that the stock price will drift lower till earnings call:

“While it’s appropriate to see Tesla expectations being managed downward (and consensus should fall), we see Elon Musk’s letter as giving Tesla bears a platform to dominate sentiment until the company reports 4Q results expected in February (date TBD).”

 

[SOULPEDL]

U Dont want to buy a falling knife. Use options to hedge your entry price.

I have ALWAYS lost money on Options. No more. Buy and hold the stock because I also have cash for the sales.

When has this strategy changed, "Buy more as it drops more." As if you can tell when the knife is hitting the floor or something?

 

[adaptabl]

Seriously?
You do realize this is a company with zero advertising spend, who offer a very limited range of options on the car, and who literally cannot make the things fast enough as it is. A friend of mine just *today* sold his jaguar to buy a model S.
Demand problem? you have got to be kidding me.

If that was the case there would be no need to produce lower cost versions of the models 3. Even at the end of Q4 with the tax incentives falling buyers were getting cars in days. Oh yes there is a demand problem. You can keep saying that over and over but it doesn't change the facts. Tesla desperately needs to produce low cost versions to open new market segments as the current market is getting saturated. Did you miss Elon's latest tweet?