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

[Intl Professor]

Tesla is definitely constrained by capital (and other resources). Otherwise they could be developing and producing multiple vehicles at once. They don't have to make S - wait for 2 years - make X - wait for 3 years - make 3 - wait for 2 years - make Y - wait … you get the picture. Look at the legacy OEMs, they create dozens of new models at the same time.

If Tesla wasn't constrained by capital - they would be building multiple factories, bringing all these products to production much faster and even eat some money to produce base models quickly.

Tesla with $20B in the bank would behave very differently.

Not completely true [edit: about capital]. They may be constrained by number of critically important engineers and other technical talent. (Notice how I covered my ass with "critically.") They save capital by sharing parts in new products yet advance as fast as they can the technology within each using the available talent. The same with each new factory or line. Tesla and even cognate companies grow like a maturing organism. That kind of innovation across all green industry may be required to save civilization. Lucky for me I won't live to see it but some readers will know how it will turn out.

 

[EVNow]

They may be constrained by number of critically important engineers and other technical talent.

That was my "other resources" part.

But hey - Capitalism says, all you need is Capital. Rest you can hire/buy !

 

[Tslynk67]

Would you mind posting a pic of the buy transaction?

Edit: actually don’t worry. I’ve just read your recent post history and decided you are trustworthy. Apologies.

And look at it now - already >4x - has to be the best trade you ever did, @gene ?

 

[30seconds]

Yes, they’ve been able to sell a lot of Model 3s, but I suspect they’ve hit a demand ceiling or more likely a demand drop at the current price point in the US. They are now selling to Europe and China, but I think they’ll only have 6 months of demand at current price points before those markets get saturated at current price as well. Hopefully by then US demand picks up again after the tax credit pull forward hangover dissipates.

Sounds like what we used to hear about the Model S being capped at 20,000 units a year.

Worldwide the sales of 3-series like luxury sedans is like 1 to 1.5m.

Plus we have seen lots of trade-ins from cars like the Prius, which is definitely an econobox, indicating that people who would usually pay $20-$25k will pay substantially more for the Model3. Again this reminds me of the fears on Model S demand.

And Tesla doesn’t really advertise.

 

[Intl Professor]

That was my "other resources" part.

But hey - Capitalism says, all you need is Capital. Rest you can hire/buy !

Sorry, I didn't catch your nuance until later. Really appreciate your posts. Your clarifications have convinced me to shut up about health care; I really don't know enough about that too!

 

[gora321]

Vincent‏ @vincent13031925
Vincent Retweeted Club Tesla España

The first ever @Tesla Model 3 delivered in Spain

!! Congratulation

$TSLA #Tesla #Model3 #Spain

Vincent added,

Club Tesla España @ClubTeslaES
Asistimos a la entrega del primer #model3 de @tesla matriculado en #españa.

! The first #tesla Model3 in Spain! Primera entrega del Tesla Model 3 en España. Hablamos con el propietario. …
9:29 PM - 13 Feb 2019
Vincent on Twitter

 

[gora321]

Tesla Owners Taiwan‏ @TeslaOwnersTwn
Tesla Taiwan testing out new supercharger ground locks solution to fix ICE issues. A camera identifies the Tesla via plate number as the car backs up and unlocks accordingly. @elonmusk @tesla

Tesla Owners Taiwan on Twitter

0:17
4,169 views
4:53 PM - 13 Feb 2019

 

[gora321]

Washington bill would require state, local fleets to be 100% electric

 

[Tslynk67]

You’re right, it came from Yogi....

Damn, never marked him down as the philosophical type, just doesn't seem to match his look:

 

[schonelucht]

Someone can correct me if I'm wrong, but once Tesla pays off the 920 million it'll reduce the amount of interest they're paying on debt on a quarterly basis right? I can't remember the interest rate they're paying. Might be a small amount but it would still go straight to profit?

IIRC interest was capitalized.

 

[schonelucht]

Well, not on public roads in CA, at least

....

@verygreen I believe you investigated and have found no evidence of "shadow mode" actually running on the cars, right?

Obviously, the current hardware in user cars is computationally not able to run their FSD network. At best they run it off-site on the snapshots captured by the vehicle and sent over the internet. But the evidence suggests it’s more for classification than validation.

 

[schonelucht]

No, that's wrong, in two important ways:

• Firstly, while Tesla indeed purchased 'hedges' (glorified options contracts with a $360 strike price), those only cover dilution beyond the $360 default conversion price. The dilution caused by the $360 base portion was fully intact in case of a conversion event.

Sure? Maybe I am missing something but here is my reasoning. In a conversion event Tesla needs to pony up 2.7788 shares per $1000 of principal. For the $800M due now that's 2.2M shares for the $1.2B due in 2021 that's 3.3M shares or a total of 5.6M.

In connection with the offering of these notes in March 2014, we entered into convertible note hedge transactions whereby we have the option to purchase initially (subject to adjustment for certain specified events) a total of 5.6 million shares of our common stock at a price of $359.87 per share.

So looks like they have hedges in place for the full amount of 5.6M shares?

 

[schonelucht]

Yeah, you do not recall correctly. That was a BS story cooked up by Dana Hull on Bloomberg. Elon said no such thing.

Tesla Is Said to Plan Using Stock-Cash Mix to Pay March Debt - Bloomberg

Where was this story refuted?

 

[Fact Checking]

I don't think Dana is a shill. I think she is a good reporter in an age when very few reporters, or people in general, are able to think critically. From what I have read she is smart, thoughtful, but overtly susceptible to emotional reasoning. Probably a wonderful person to know. Like most of us. No, not a Glen Greenwald critical thinker, but very, very few reporters are.

That's a possibility - if so then I really hope one day Tesla and Elon will get on the good side of Dana and then enemies of the EV conversion, beware! ...

 

[verygreen]

I thought I remember that the evidence came from actually monitoring what was going on in the APE directly. @verygreen / @BigD0g to confirm?

disengagement events are always sent ,but by default only include coordinates of when it happened and some other stuff like speed.

Certainly no camera images.

That said, Tesla often gives triggers to (some?) cars to record various events, and disengagements are amongst those. in those cases camera feed is asked for in addition to radar data and such, but it typically limits it to one or two snapshots per disengagement type per instruction (that might be refreshed daily, weekly or not at all). These uploads do show up as huge uploads on your wifi stats the moment car connects to a wifi after driving, if you monitor car wifi activity.

 

[schonelucht]

@bonnie endorsed Dana here and she wouldn't do that if Dana was a paid shill or dishonest reporter.

 

[Fact Checking]

Now - wait a minute! Time out.

Although I know I was very much supremely incommunicado with the universe, and it with me, through most of this millennium's first decade, still....

...can someone come up with just how much commerce DID exist on the internet in 2004? I ask out of sincere curiosity. Sure, the promise was there and the paths had been laid, but was Mr Gates truly wrong?

Fair question - I think this graph tells it best:

That peak around 2000 was almost exclusively due to the dot-com bubble. These are quarterly investments, i.e. we are talking about just venture capital of about half a trillion dollars moving on this whole Internet thing by 2004...

Which investment cycle included our very own Elon Musk who gave up his PhD position at Stanford (he'd have worked on super-capacitors) in 1995 to work on an Internet firm that was bought by Compaq and funded the firm from that which later became Paypal, etc. The Internet was the blatantly obvious thing to be for Musk in 1995, and he chose it over what I'm pretty certain would have been a stellar career in material sciences.

For Gates, already a billionaire well connected to the VC scene of the software economy, to say this in 1994:

"I see little commercial potential for the internet for the next 10 years," Gates allegedly said at one Comdex trade event in 1994, as quoted in the 2005 book "Kommunikation erstatter transport."...​

... was incredibly tone deaf, and was IMO the main reason Microsoft missed the whole Internet thing, which mistake they only managed to survive by doing various illegal things they were later found guilty of in the antitrust trial.

 

[bonnie]

@bonnie endorsed Dana here and she wouldn't do that if Dana was a paid shill or dishonest reporter.

Thanks

(Nor would Elon read her feed and like some of her tweets if he thought she was a paid shill or dishonest reporter - though I'm sure he's not always pleased with what she writes.)

 

[KarenRei]

Don't worry: it's pretty much garbage right now (though I do still want it). As mentioned in the blog, Sentry Mode must be activated every time you want to use it and is buried in the controls (eg not in the quick controls page). Oh, and it records to the USB drive which any thief could easily grab.

The mobile notification of an incident is nice, tho.

Sentry mode should be cool in v 2.0, for sure.

It is certainly the required first step. Next step is for the alert to trigger the video upload to a cloud server (in reverse chronological order, in case it gets cut off), and the app to be able to download data from said server. Shouldn't be too much of a data expense for Tesla, so long as the rate of false alarms isn't too high. They could always limit the number of minutes sent to the server.

Always-on might be trickier; I don't know what the power consumption is. If they have to do motion detection to choose when to wake the system, that'd complicate the programming (absolutely doable, of course).

 

[Tslynk67]

Wow! That graph along with the corresponding share price movement (brownian motion without any net effect change) pretty much settles the whole "Short Squeeze" theory. As in places it in the same category as tales about flying unicorns...

If over 1/3 of the shorts can close without any lifting effect on the share price, I do not see any realistic chance of a squeeze.

I tend to agree, but it's been with a backdrop of strong downward macro pressure, plus the infamous email about staff cuts and Q1 maybe negative threw a spanner in the works when it dropped the SP around 50 points...

So I'm of the opinion that the shorts got very lucky with opportunity to get out with not too much loss.