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

[FrANce]

A less generous reading of your experience would be that the confusion and disorganization @schonelucht reported isn't limited to the Benelux delivery centers.

Except that my service centre handles calmy delivery truck after delivery truck

 

[Dan Detweiler]

I need to get a job as an analyst. I can be wrong most of the time (it seems this is the most stringent requirement) And still be "respected" as an authority.

How do these people sleep at night...or look in the mirror?

Market analyst is the only job worse than a weather forecaster when it comes to accuracy and assumed credibility!

Dan

 

[Tslynk67]

My car will be delivered in the Ghent SEC. That is the closest SEC to Zeebrugge. Less than an hour drive, even for a car carrier. A single car carrier can probably deliver 50 cars a day from Zeebrugge to Ghent, maybe double that if they can switch drivers. Maybe I should already block sunday 31 march in my calendar for a possible delivery.
The other service centers near Zeebrugge are a 1.5 or 2 hours drive away, so really, everything that’s still in Zeebrugge the last weekend of March will be dumped in Ghent.

Don't you DARE defer delivery to April!

 

[TradingInvest]

Did you guys see this!?! Finally! Should have been the new Roadster though.....

James Bond to drive electric Aston Martin in new movie

Elon said Tesla doesn't do product placement. Aston Martin probably has to pay quite a bit in order to have their car featured in the movie.

 

[KarenRei]

Fresh in, just before market open:

Goldman Sachs analyst David Tamberrino reiterates a Sell rating and $210.00 price target on Tesla (NASDAQ: TSLA).​

• Believes the new information points to declines in demand for the company's high priced vehicle variants.
• Unveiling of Model Y may drive incremental reservations and help cash balances due to deposit collection.
• Expects intro of $35K variant to weight on overall automotive GMs which should be sown about 2% in 2019.
• International deliveries are not professing without some delays and there may be meaning working capital headwinds in Q1 2019.

Notes:

• "New information" might be a calendar showing that we are in the first quarter of the year, when sales are softer seasonally, every single year since cars have been sold?
  
• 2% automotive margins ... I think he typo-ed that number and left off a zero? This must really mess with his model, and not in a good way.
  
• International delays: such as 10k 'in-transit' vehicles ... like Tesla guided and like absolutely everyone is expecting?
• $210 price target: now I see why he had to assume 2% automotive margins!

I think I know what happened, David Tamberrino has read Adam Jones's downgrade yesterday, and said "hold my beer!".

Stock price reaction: TSLA sharply up. Are financial markets rational after all, or did a trader enter a fat finger trade as he was laughing about Tamberrino's report?

Every time I see one of his sell ratings I automatically think of this version:

Someone should totally do a "Hey Mr. Tamberrino Man" version re: Tesla

 

[Fact Checking]

Goldman: Tesla's earnings and deliveries likely to disappoint this quarter, so sell the stock

Well.. I mean... reading traditional medias, is there anything that's not disappointing regarding Tesla ?

Here's the meat:

"After looking through our typical monthly delivery indicators, we are lowering our Model S and Model X forecasts for 1Q19 to an aggregate 17,300 vehicles (from 20,700) — as we believe International demand headwinds and Model S cannibalization (from Model 3 vehicles) will likely weigh," Tamberrino wrote. "However, we are maintaining our current Model 3 forecast for 57,500 deliveries in 1Q19 — despite estimating only approx. 21k through February — as we believe the company has the potential to deliver at least 10k more Model 3s in each region with vehicles produced/already shipped Internationally and as Model 3 production in March was re-directed back toward the US market."

The analyst noted that his forecast for 75,000 vehicle deliveries this quarter is 8 percent below the Wall Street consensus. His first-quarter EPS estimate is for a loss of 87 cents, compared with a consensus Wall Street estimate for a 37 cent profit, according to FactSet.​

We now have a March 13 snapshot of FactSet expectations and consensus:

• 81,510 total deliveries. This is too bullish at the moment I think, perfect setup for a Q1 deliveries 'miss'...
  
• EPS of -$0.37.
• I think this maps to about a Q1 GAAP loss expectation of about -$70m. (@brian45011 or @ReflexFunds might have a more accurate interpretation.) Actual losses could be deeper: if Tesla realizes it's a loss they might front load some expenses and shift income to Q2.

 

[AndyH]

Estate cars are generally just sedans with the rear adapted. Cross-overs are like mini SUV's, they're not as long as estates and tend to be higher, higher seating position too. They give the "impression" of off-road capability, but they have none.

Cross-overs are in Sweden most bought by older pensioners who like them for the easy ingress. The design, model names and commercials with surf boards of the crossovers are all directed at a younger demographic but that doesn't matter at all.

If the Model Y is small, funky and targeted at generation Y like the Volvo XC40 by the same designer then it will be like catnip for our Swedish pensioners. Not that it's anything wrong with that.

 

[ggies07]

Elon said Tesla doesn't do product placement. Aston Martin probably has to pay quite a bit in order to have their car featured in the movie.

haha, yeah, but come on....Bond is supposed to have the best car....no other EV out there can compare to the new Roadster....#moviefail already before movie is out.

 

[madodel]

Market analyst is the only job worse than a weather forecaster when it comes to accuracy and assumed credibility!

Dan

And the ability to keep the job no matter how absolutely bad they are at it.

 

[Pras]

Market analyst is the only job worse than a weather forecaster when it comes to accuracy and assumed credibility!

Dan

But weather forecasting has improved over years. You are being too harsh against the weathermen.

 

[schonelucht]

There's only two things that I want to hear in the Model Y reveal:

• Deliveries will be starting in either Q4 '19 or Q1 '20, with full production by ~Q4 '21.
• Any evidence that tooling progress is in a much more advanced stage than the market believes.

What evidence could they give? Obviously Elon is going to say they are well on their way etc... just like he said in July 2017 when they hand assembled 30 cars. But evidence?

 

[Chop110]

Come on MMD, we know you are coming. Jonas and Tamberrino have said you need to come out and play...

 

[RobStark]

I just don't think the volumes are there to justify the investment in having two separate manufacturing sites. Plus there has got to be some penalties associated with not meeting certain volume at Magna Steyer.

There isn't investment by Jaguar in two sites.

Magna is a subcontractor that is bursting at the seems.

The original goal was 13k units for Ipace per year.

I think Jag can sell that inside the EU, tariff free from Austria.

And Jag can manufacture the balance in England for RoW.

 

[Artful Dodger]

Isn't FSD revenue deferred for the time being?

Tesla is changing the feature matrix, moving some EAP features (autopark, NoA) into the FSD option. This has the effect of allowing Tesla to actually book as revenue that portion of FSD assets.

 

[jerry33]

But weather forecasting has improved over years. You are being too harsh against the weathermen.

Depends on where you are.
If Vancouver:
Look outside. Is it raining? Yes, predict rain for tomorrow. No, predict no rain for tomorrow. You'll be wrong between two to four times a year.
If DFW:
Use the computer forecast, then add 12-36 hours.

 

[KarenRei]

What evidence could they give? Obviously Elon is going to say they are well on their way etc... just like he said in July 2017 when they hand assembled 30 cars. But evidence?

Things like:

• "The cars you will be riding in today were in part produced on [some statement about some or all of the tooling being close to or the same as what will be used to produce the final vehicles]"
• "We've already begun work on final tooling at [location]" Bonus points if it includes pictures and/or videos.

Etc.

As for "Just like he said in July 2017" - if we're currently where Tesla was in July 2017, then we're WAY ahead of market expectations for the Model Y. A lot of analysts think that the Model Y right now is where Model 3 was in mid to late 2015.

 

[CorneliusXX]

BTW., there's a lot more depth to it, and Elon's lawyers added those layers for an entirely different purpose than just layered defense:

• The reply by Elon's lawyers cites strong precedents that compells the settlement to be narrowly interpreted not just for this case, but for similar future cases as well. I.e. it's an attempt to de-fang the settlement permanently - this protects Tesla shareholders even if the constitutional aspects are not decided.
• Expert opinion from MIT accounting professor establishes facts not just for materiality, but documents the economic harm of the SEC's erroneous interpretation of the settlement caused to shareholders: 1.1 billion dollars.
• Elon volunteered a full sworn testimony of what happened, but his testimony (affidavit) is not just covering the tweet, but is carefully outlining the harm the SEC's erroneous interpretation does and did, which prepares the next step:
• Their constitutional arguments are not primarily defense (the SECs case fails robustly on the facts and on established law already), but offense: Elon's filing is an attempt to strip the SEC's power to harrass Tesla through contempt of court proceedings permanently, by setting a precedent that raises the bar for the SEC significantly.

Basically Tesla is using the fact that the SEC is wrong on the facts and is harming both investors, Tesla and Elon for a legal attack to attempt to strip the SEC of several key powers. About 75% of the filing lays the groundwork for that.

It's a rather ingenuous approach, which even you as a lawyer missed.

The SEC certainly didn't miss it: this attack is why IMO the SEC panicked yesterday and asked not for a contempt hearing but for a reply brief, which is not the usual procedure of contempt proceedings AFAIK.

So it's not just legal mumbo jumbo:



It's highly unlikely that she will skip the details, because this is not a usual judge: the federal judge hearing Elon's case, Judge Alison Julie Nathan, is a top lawyer and judge with an outstanding background, she clerked on the 9th circuit and on the U.S. Supreme Court, then she worked as White House counsel and assistant to Barack Obama:

Judge Alison Julie Nathan (S.D. New York) – CourtListener.com

• She was clerk to the 9th Circuit, one of the most important circuits in the U.S. (2000-2001),
• She was a clerk to Justice Stevens at the U.S. Supreme Court (2001-2002),
• She was associate White House counsel and special assistant to President Barack Obama (2009-2010)

Her ruling yesterday (adding two more rounds of filings and adding an evidentiary hearing before the contempt hearing) suggests that she wants to approach this case methodologically and broadly.

A broad case is absolutely not what the SEC wanted: they wanted a quick ruling holding Elon in contempt, then they wanted sanctions ... (I expect the SEC's reply brief to attempt to narrow the case back on various procedural grounds.)

(BTW., you heard it here first: I believe if there's a Democratic victory in 2020 Judge Alison Julie Nathan will be one of the candidates to be nominated to the Supreme Court.)

I believe she was waiting for a high profile case with constitutional arguments like this, which case has the potential to set important precedents.

So Teslas lawyers are playing the man (So to speak) not just the field.

 

[Remus]

Regarding Elon changes his mind a lot thus he doesn't know what he is doing:

Bezos went on to explain that the smartest people he's observed were always "revising their understanding, reconsidering a problem they thought they'd already solved. They're open to new points of view, new information, new ideas, contradictions, and challenges to their own way of thinking," Fried recalls.

In short, smart people (a.k.a. those who are "right a lot"), change their minds — a lot.

Nothing is definite

​

Jeff Bezos: People who are 'right a lot' make decisions differently than everyone else—here's how

 

[SebastianR]

Off Topic

Actually she is a very intelligent lady and a fantastic teacher. She just doesn't know any better and all she hears is the BS. The experience really kind of shocked me.

Had a similar experience yesterday: a colleague, smart, media competent (so I thought), tells me that Elon Musk is not fit to be a CEO since he read about parking lots full of Teslas in the NYT and watched the video about Rick Rebuilds and his struggle to get a used Tesla. When I carefully tried to argue that there are no parking lots full of unsold Model 3s I was told I'm part of the Elon Cult...

I do think the constant FUD campaign is leaving long-term damage. So while I disagree with Tesla to start marketing, I do understand where the impulse for suggesting marketing is coming from.

If you reflect on the mission (also going back to the issues VW, Audi etc. face, the collapsing sedan sales in markets where Tesla operates, the success they celebrate in Norway and other countries etc.) - I feel the FUD right now achieves that many legacy car makers don't take Tesla serious as competition.

My key argument with doubters is always: what makes Tesla so special that what they achieve is OK? What if Tata (outside of Jaguar) would enter the US & European market, grow the way Tesla grows, take the revenues they take and destroy demand for flag-ship cars they way Tesla does it?!? All hell would break loose. But since it is Tesla it somehow is ok since they are "different".

No idea how we can fix that. The Legacy guys are behaving like the Black Knight:

On topic:
As long as the legacy folks behave like the Black Knight and lazy/incompetent analysts don't get it, TSLA will remain depressed

Further on topic: what caused this spike? Green? I like it. Let's hope it stays for the day...

 

[Fact Checking]

But weather forecasting has improved over years. You are being too harsh against the weathermen.

That's actually true, short term weather forecasts are amazingly accurate in many regions:

24-hour weather forecasts are almost at Back to the Future levels these days:

Tesla stock price forecasts, not so much.