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

[gringotuanis]

You have exactly as many followers as Elon Musk, just 21 million fewer?

I think it's about 26.4999 million fewer these days!

 

[neroden]

Similarly, the USA developed (for a lot of money) a pen that could work in zero gravity. The Russians just used a pencil.

Reminds me of the flufferbot issue. Removing the fluff altogether is a very Russian way of dealing with the problem.

Perhaps it's worth remembering that in the early days of SpaceX, Musk intensely studied lots of old Soviet-era engineering manuals for rockets and spacecraft. He's very much inclined to use the "Russian way" of cost engineering. And I think this is a good thing.

Several of the changes made to the Roadster to make it manufacturable at reasonable cost were very "Russian style" in this regard, too.

 

[EVNow]

I'm going to repeat my theory, since everyone missed it the first time.
We know China factory is only making *SR* cars (maybe SR+).
We know that there's a lot of worry about theft of IP in China.

My theory is that the SR cars coming out of China will use inferior battery cell technology -- always one generation back from Tesla's cutting edge which will be used at the Gigafactory. For the purposes of protecting IP. Each time the cutting edge moves forward, China will get the older tech.

I could be totally wrong but it's a theory.

Makes some sense- could be why Tesla just wants to procure cells locally.

One thing though is, if the newer tech is cheaper would Tesla still prefer to use older costlier cells in China ?

 

[gringotuanis]

I'm not seeing the difference. Crossover == station wagon.

Are you saying that it's a higher seating position, basically?

I would say generally yes CUVs sit higher and often have a little more ground clearance as well I think. Plus many CUVs are larger than the pic posted and would not look so close in size to a hatchback.

 

[Silent Ludicrosy]

Would Tesla owners be outraged if Tesla pushed an alert to the Tesla app and car screen advising of the FSD deal currently available? Would seem like an obvious way to inform owners.

A few months ago they offered free autopilot trial on the car screen. The concept was fine, but the execution was botched. The window would freeze and block the Nav screen until a steering wheel reboot was accomplished. I think a pop-up on the car screen will only be welcomed if it’s tied to a free trial. Otherwise it’s an annoying pop-up ad.

 

[Krugerrand]

Will Tesla allow Model Y reservation at stores like they did with Model 3? Starts at Thursday morning? I haven't heard anything about this.

Isn’t the new Tesla policy that all orders are online? You could go to a store and they would simply help you order on your phone. That’s what has been said, no?

 

[neroden]

OT

It's a myth. A pencil would produce large amount of tiny graphite particles floating everywhere (due to zero G) which is a hazard to the health of astronaut, and to the electrical system (random shorts).

Interesting to dig into this further:

The Americans started with ordinary pencils, then expensive mechanical pencils, then the space pen.

The Soviets started with grease pencils, which are actually a pretty elegant solution, before using the space pen.

The Russians Didn't Just Use Pencils in Space

 

[Todd Burch]

Cruise across the Evergreen Point floating bridge or I 90 to Mercer Island and beyond and you are literally swimming in Teslas. Well, almost swimming.

 

[neroden]

I'm hearing that some large institutional investors have been given leaked info that Q1 will be slightly profitable. The last two crazy rumors that I posted here came out to be true, but still not an advice.

OK, guys, let's be clear on this: all guidance since last July or so has been that Q1 will be more or less breakeven on a GAAP basis. Does it really *matter* whether it's slightly above the line or slightly below it ? Either way free cash flow should be positive.

 

[Zhelko Dimic]

Ok after hours SEC talk. I have reviewed the pleadings so far and I was about to post that the Judge will permit a Reply Brief by the SEC when someone posted the Order. You guys are incredible. The Local Rules govern the proceeding here. I believe Rule 83 covers civil contempt. Basically there will be wide open briefing and exchange of legal and factual arguments. In Federal Court affidavits are called declarations and they set forth the facts and the briefs argue the application to and of the law. I was surprised by the burden of proof, clear and convincing. This is a much higher obligation on the SEC.
Lets talk procedure first. The Judge has offered both parties the opportunity for an evidentiary hearing. This is a right under the Local Rule. An evidentiary hearing is only necessary if the facts are in dispute. I am interested in whether the SEC points out disputed facts and asks for a hearing. EM may also request a hearing if the SEC alleges facts he believes are incorrect. Lets be clear facts are much different from opinion, interpretation and application of law. If no one requests an evidentiary hearing it is a sign that they all believe the facts are not in dispute significantly. I suspect that the tweets, the public disclosures the effect on the market, Tesla Policy and most other facts are not in dispute but the interpretation of them is as is the law.
I can also see a hearing in which evidence is not taken but each side argues the law. The Court has discretion to hear argument of counsel in order to ask questions and clarify the positions in the briefs.
I found EM's brief exceptional. I appreciated the way that the First Amendment argument was raised even though it can only be applied under a particular interpretation of the SEC's position. With all I have seen thus far I see a difficult hill to climb for the SEC on Tesla policy, prior release of information, materiality and motive. I think I said previously that I would never take a case before a Judge with this level of minimal level of potential contempt. So far I would not expect a dramatic victory for either party even though EM deserves it. Frankly I wouldn't be surprised if the Court said no contempt was shown but cautioned EM and Tesla about the seriousness of the Agreement. I could also see an interpretation that there was no harm but EM is lectured about tweeting. Both of these should be seen as victories for EM but saving face for the SEC. So far I have seen nothing that shows a clear and convincing proof of contempt but hey I am just one person and obviously the SEC disagrees

I'm not sure SEC disagrees. They may have brought this case in order to lose, but warn Elon, before he screws up something bad.

I am sometimes naive in a sense that I believe in good intents in others, so be it...

And honestly, Elon needs warning. I could have gone as far as 'gag order' instead of 'warning'. However, I too am human, and prefer likes over dislikes; so not gonna go there

 

[neroden]

No, an cross-over/CUV looks like this:

Versus an estate car / break:

I'm still not getting it. Is it that the crossover has a smaller third-row window, less cargo space, and less practicality? :looks puzzled:

 

[Carl Raymond]

Would Tesla owners be outraged if Tesla pushed an alert to the Tesla app and car screen advising of the FSD deal currently available? Would seem like an obvious way to inform owners.

Maybe a [Current Offers] button with a tiny red counter displaying (1).
At least give the user the option to not drill down. Of course, everybody will.

 

[Remus]

Leaked email reveals Elon Musk must approve every person Tesla hires - Business Insider Leaked email reveals Elon Musk must approve every person Tesla hires — Business Insider

The article talks about EM needing to approve every headcount, but the reporter interprets as he needs to actually approve the person being hired. Different things.

At least a year ago, at least in their software teams, every single hire has to be approved by him. The hiring manager has to give him the person's resume with the manager's pitch for the person.

 

[anthonyj]

OK, guys, let's be clear on this: all guidance since last July or so has been that Q1 will be more or less breakeven on a GAAP basis. Does it really *matter* whether it's slightly above the line or slightly below it ? Either way free cash flow should be positive.

Wouldn’t it mean S&P inclusion?

 

[neroden]

Unique. Yep. I’ll go with that. I would think that some of this is pent up demand. Otherwise Tesla should consider building a factory there. Wow.

Pretty soon every car on the road in Norway will be an EV. The market's a bit small to build a factory there, though, isn't it?

 

[neroden]

OT

After reading this https://www.courtlistener.com/recap/gov.uscourts.nysd.501755/gov.uscourts.nysd.501755.27.0.pdf 3-1 team EM!

I suspect Elon's attorneys maybe among us TMC??? all points were brought up here TMC.

OT -- I love some of the old customs case citations.

"62 Cases, More or Less, Each Containing Six Jars of Jam v. United States, 340 U.S. 593 (1951)"

I don't quite understand why the tradition in customs cases is to sue in the name of the PRODUCT, which isn't done in most contexts.

 

[Carl Raymond]

Makes some sense- could be why Tesla just wants to procure cells locally.

One thing though is, if the newer tech is cheaper would Tesla still prefer to use older costlier cells in China ?

Think it’s more about volume. Every cell produced in Nevada has a US product destined to mate with it. Tesla energy roadmap is to double every year. None spare for crossing the Pacific.

 

[CyberDutchie]

A pre-emptive strike attempt by Morgan Stanley with a note about “what to watch for with the Model Y unveil”. In other words: he’s saying to his clients: don’t believe what you are going to see. This guy Adam Jonas is really pathetic.

Be prepared for a short term ‘pop’ that may not last, he writes

1. Will it be beautiful and fast? Probably and yes, he thinks

2. When will it launch? Some investors heard end of 2019, MS of course believes very late 2020 or early 2021 with only slow ramp to start
(Note a sloppy mistake in this paragraph where he writes Model 3 launching instead of Model Y)

3. Could it cannibalize Model 3, S, X? He believes very likely, and also that the excitement from the unveil will put pressure on near term results

4. Will there be a teaser? (E.g. one more thing...) He thinks no

5. Will Elon update the market on Q1 deliveries? Not sure but he should, according to Adam Jonas, who adds that he’s seen a clear negative sentiment amongst the large community that is trying to figure out Q1 deliveries

There you have it, MS believes we are all incompetent

 

[neroden]

Quite a celebratory mood from this group on Musk's SEC rebuttal letter. To add another data point for everyone, the summary view from a lawyer friend (financial rather than constitutional law) with no financial or emotional skin in the game: It's a nice try but pretty sure he'll be held in contempt. Resorting to the first amendment argument seems a bit desperate.

Yeah, I don't think your friend is right. I don't have a solid read on the judge, but it looks like the SEC did a bad and sloppy job, and the repeated points that this would set new precedent are designed to wake up the judge.

Most judges really dislike it when one side rushes the other, which is probably why the SEC's aggression was emphasized in the brief.

Interestingly, the brief leaves a very clear path for the SEC -- it practically invides the SEC to "go through normal enforcement proceedings under rule 10b-5 targeting specific communications that the SEC contends are actionable" (page 21).

Basically leaves an opening for the judge to say "You used the wrong procedure", refuse to find Musk in contempt, and tell the SEC that they're free to come back with a normal proceeding under rule 10b-5.

I would be extremely unsurprised if that's exactly what happens; if this contempt case is dismissed, and then the SEC digs up some other tweet they don't like and starts another 10b-5 case. If so, you heard it here first.

 

[neroden]

The First Amendment is one of the strongest enforced constitutional protections, it's one of the steepest constitutional barriers for a U.S. Government agency such as the SEC to cross. I believe the SEC is going to regret the day they filed the September lawsuit. Back then Tesla and Elon was essentially coerced into settling by the daunting prospect of 3-5 years of civil litigation which the SEC could have dragged out by a few more years once they realized that they were losing.

*cough* I actually believe the SEC had a case in September -- not over "funding secured", which was definitely defensible, but rather over Musk's claim that he could let all existing investors stay in Tesla after going private -- that was something where he absolutely should have known better, since anyone can look up the rules, and it's just not possible. He clearly believed what he was saying, but in that case IMO it wasn't a reasonable belief and IMO it was reckless to say that without looking the rules up. The SEC settlement covered those comments, however, so they can't open a case over that any more -- they've shot their wad as far those tweets are concerned.

The SEC is not competent. They've been making weak arguments prosecuting weak cases while missing strong arguments and ignoring strong cases. Sigh. But we knew they weren't competent.