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

[KarenRei]

You know, I've realized something.

Some people are acting like Tesla has burned through demand levers (I've already pointed out why this is sorely wrong, in particular to how little of the world they're actually selling in, and only expensive variants in most of the world, but that's neither here nor there). But in actually, precisely the opposite happened in one regard:

Tesla is resetting a previously pulled demand lever to a no-longer-pulled state: stores.

Stores are a demand lever. The logic here is of course that the increase in sales that they're getting by decreasing prices more than offsets the decrease in sales they get by decreasing the number of stores and leaving only the most "advertising-effective galleries".

In this regard, they didn't pull the demand lever labeled "stores" - they reset it.

If at some point in the future, Tesla decides that they want that lever pulled again, they can do so. Now, they'll have to correspondingly pay for said stores if they do so, but then note the key phrase: in the future. By the time they'd even think about pulling this lever - if they ever do - this would be after X quarters of further margin improvements, offsetting the reimposition of the operating costs.

Tesla pulled one lever, but reset the one right next to it.

 

[Toumal]

Anyone have a link to what a presume is the simultaneous Chapter 14 1/2 bankwuptcy filing?

If you're waiting for some of the people who have been spewing this story to say "Ok I guess I was wrong then", I think you'll have to wait until the heat death of the universe. It's not gonna happen.
The new narrative will be that the SR Model 3 is losing money and will bleed Tesla dry.

They'll keep peddling this in the hope that they can buy enough time for one of the other manufacturers to get their sugar together.

EDIT: Oh and of course nobody will buy a car for 35k that's just to expensive, so bankwupcy. But hey the 80k e-tron will surely be a huge hit. etc. etc. etc.

 

[mblakele]

You know, I've realized something.

Some people are acting like Tesla has burned through demand levers (I've already pointed out why this is sorely wrong, in particular to how little of the world they're actually selling in, but that's neither here nor there). But in actually, precisely the opposite happened in one regard:

Tesla is resetting a previously pulled demand lever to a no-longer-pulled state: stores.

Stores are a demand lever. The logic here is of course that the increase in sales that they're getting by decreasing prices more than offsets the decrease in sales they get by decreasing the number of stores and leaving only the most "advertising-effective galleries".

In this regard, they didn't pull the demand lever labeled "stores" - they reset it.

If at some point in the future, Tesla decides that they want that lever pulled again, they can do so. Now, they'll have to correspondingly pay for said stores if they do so, but then note the key phrase: in the future. By the time they'd even think about pulling this lever - if they ever do - this would be after X quarters of further margin improvements, offsetting the reimposition of the operating costs.

Tesla pulled one lever, but reset the one right next to it.

You could say something similar about the referral program. Stores and referrals share certain qualities: they cost money, and they can generate leads and help close sales. That's one kind of demand generation. As demand levers, I think these help the most at the margins of existing demand. But they may not be very cost-effective. Sometimes it's like pushing on a string.

Reducing manufacturing costs and product prices seems much more cost-effective, if it can be done. In Tesla's case that's probably the right choice. When people want the product, reducing costs is like pulling on a string.

Maybe this ties back into what Musk meant in the Q4 call, that (paraphrasing) demand exceeded people's pocketbooks. By reducing costs Tesla can bring supply to where it can meet this latent demand, and margins will stay healthy. Spending more money on stores, referrals, or other forms of marketing might have some effect — but it's a whole different kind of lever.

 

[Zaxxon]

“Tesla's stock hasn't traded at or above $359 in weeks, which meant the company had to pay in all-cash rather than half-stock and half-cash as it previously intended.”

CITATION NEEDED. Last I heard, this claim effectively came from nowhere at all.

That was the plan, but I don't have the citation handy.

 

[KarenRei]

TSLAQ is hilarious

HyperDiaperChange TV on Twitter

 

[John W. Ratcliff]

There hasn't been much discussion about the price drop on the Model-S and X which is kind of insane. I bought mine just a little over a year ago. I just went to the website and configured more or less the same car, and it's like $30,000 less! I bought a Model-S 100D.

My $117,000 car is now like $86,000!

If Telsa wasn't hurting BMW, Audi, and Mercedes before, they are gonna be killing them now, because this is extremely price competitive with their top tier cars.

 

[Papafox]

Here's the TSLA short percentage of selling graph from volumebot for today's trading. While Ihor Dusaniwsky said that most selling was by longs, he's almost certainly correct when we see doublecheck his work on Monday with his short sight newsletter. What he didn't say, however, was that shorts were manipulating the hell out of TSLA today. Don't believe me? Look at 10:13am when over 157,000 shares traded hands in one minute's time.

The problem the shorts encountered today was that TSLA didn't want to stay much below 295, despite the bad ole wolf huffing and puffing and trying to blow the house down. Longs, today was a max-effort assault by the shorts.

For the week, TSLA gained 8 cents. Personally, I hope the next time I earn 8 cents it's a tad less dramatic than this week.

 

[KarenRei]

There hasn't been much discussion about the price drop on the Model-S and X which is kind of insane. I bought mine just a little over a year ago. I just went to the website and configured more or less the same car, and it's like $30,000 less! I bought a Model-S 100D.

My $117,000 car is now like $86,000!

If Telsa wasn't hurting BMW, Audi, and Mercedes before, they are gonna be killing them now, because this is extremely price competitive with their top tier cars.

Now try rewriting that post as Fred:

"Tesla is pissing me off! They better come clean and refund that $31k I'm owed, or there's going to be hell to pay in the editorial section!"

 

[anthonyj]

There hasn't been much discussion about the price drop on the Model-S and X which is kind of insane. I bought mine just a little over a year ago. I just went to the website and configured more or less the same car, and it's like $30,000 less! I bought a Model-S 100D.

My $117,000 car is now like $86,000!

If Telsa wasn't hurting BMW, Audi, and Mercedes before, they are gonna be killing them now, because this is extremely price competitive with their top tier cars.

Tesla is readying to release a 420 mile range Model S with the new interior refresh. I’m willing to bet a paperclip and a shoestring

 

[brian45011]

Maybe Dwdnjck has $100 million in investments held through a special-purpose one-owner corporation created to make these investments, but that seems like the only legal way to buy these Rule 144a securities.

Or maybe Dwdnjck is just an Accredited Investor who used a Section 4 (1 1/2) exemption to purchase in a private sale brokered by ML from a QIB that had held the bonds for longer than the holding period (usually 6 months or 1 year ( not disclosed by Tesla)). The bonds were initially marketed in August 2017.

 

[anthonyj]

For the week, TSLA gained 8 cents. Personally, I hope the next time I earn 8 cents it's a tad less dramatic than this week.

This week, the beast was awakened only to be put back to sleep

 

[MarcusMaximus]

This tragic death would be the first Model 3 fatality, or no?

I know of at least one other: a woman who got in a major crash(as I remember, her car split in half) and her Model 3 caught fire. She died a month later. Don’t have the article handy though.

EDIT: Apologies, I had the story wrong. It was a Model X, not Model 3.

 

[wipster]

Raise your hand if someone you know has said to you, "Hey, I'm thinking about buying a Tesla" and your response was, "Great, let's go drive to the Tesla store."

I mean, seriously, that's not how it works.

No, you throw them into your car and make their eyes bleed with acceleration. You turn on auto-pilot for them. You go through every cool bell and whistle on the console.

Tesla's will be sold by other Tesla owners. At car shows. At meetups.

I really don't think not having a show-room is some kind of deal breaker.

Moreover, if this lets Tesla undercut the price of all of their competitors, so much the better.

The days when someone would point and gasp on the freeway going, look, it's a Tesla, oh my god, are over. They are ubiquitous. They are everywhere. How hard is it, really, to just ask someone else who owns a Tesla to show off their car?

This doesn't really seem like the giant huge big deal that people are making it out to be.

Just go hang around the Superchargers and beg! Heck, half of the owners would probably ask you if you wanted to take it for a drive...

 

[KarenRei]

I know of at least one other: a woman who got in a major crash(as I remember, her car split in half) and her Model 3 caught fire. She died a month later. Don’t have the article handy though.

I don't recall this one.

 

[sundaymorning]

demand for everything but the 35k version is dead. Tesla does not earn money and may even lose a lot on the 35k version. Go figure

That’s funny, my order for the mid range with white extra 2k, autopilot extra 3k, and white interior extra $1k is still on order. For perspective, that’s $46k.

We are only scratching the surface of demand for the $37k Model 3. Months ago I was considering a bare bones base model and tried to order it in store. Tesla employees had to turn me away as they basically stopped taking orders for the base model a long long time ago. Now that reservations are reopened, demand is going to be huge for the $37k version. With the take rate of autopilot rumored to be around 30-40% since the price drop, the average selling price will be higher. And guess what, we’re still delivering to Europe and China, then the fun will start again with Midel Y reservations.

It’s rumored that Roadster 2 will be out around summer next year.

 

[KarenRei]

I know of at least one other: a woman who got in a major crash(as I remember, her car split in half) and her Model 3 caught fire. She died a month later. Don’t have the article handy though.

I'm searching and drawing a blank. I find two cars that were split in half: one Model X containing three teens (split through a tree), and the other was a stolen Model S that split through a light post during a police chase.

 

[EVNow]

The reason for price cuts on S & X is to make them competitive with 3. Otherwise too many people will settle for 3.

 

[AcesDealt]

Another thing to think about here is that with pricing set to induce demand that far exceeds production, the cannibalization concern from a model y is lessened. I am slightly more optimistic they go for a cash grabbing extravaganza now.

 

[Curt Renz]

Over the last 24 hours, Tesla should have hugely benefited from a mountain of free advertising due to a torrent of click seeking media stories. With all of the mention of online ordering, I imagine that a massive army of curious folks googled for Tesla, and then found its website and learned about its cars. A great many of them will be turning into pleased owners, who proudly show off their new Teslas to friends and allow them to take test drives. Let's hope the factory can pump out cars fast enough to keep up with what should become exponentially growing demand.

 

[Artful Dodger]

I really wish a someone or a company to take a 5-10% share to wipe out the available float.

That won't help when market makers are naked short selling the stock. They create stock, then selling it short to either cap the price or drive it down. Then after volume stabilizes, they buy back slowly at the suppressed price in order to cover their tracks. It's the dirtiest secret on Wall St.

Only the company should be allowed to issue stock. Naked short selling by market makers is an abuse which is harming investors and damaging the company.