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

[bdy0627]

So far, the stock is trading today in a similar fashion to January 2nd, the first trading day after the Q4 2018 deliveries report. The uptick rule was triggered that day as well. The stock gapped way down with a low that was down 10.2% from the closing price the day before. It then crept up to close down 6.6% from the closing price the day before. That was a much more positive report but the market reacted very negatively to the announcement of price cuts. This report is much more negative but we are also much lower in the trading range. We opened with a gap down 10.4% from the close yesterday and have crept up from there. We'll see how it finishes the day but I wouldn't expect much drama for the rest of the day. On the next trading day in January, with the uptick rule still in place, the stock hit a low of -4.2% from the prior day close but ended up closing down 3.2%. After that, the stock climbed.

 

[Nocturnal]

It also has less passenger volume than the Model 3, accelerates and recharges slower.

But there's one parameter where the E-Tron has beaten Tesla: with a $74,800 entry price it's more than twice as expensive as the Model 3!

Yeah, well, uhhh, I heard some Teslas had panel gaps!

 

[shlokavica22]

I would disagree with this. Azaz was specifically referring to brand marketing. It is of long-term strategic value to cultivate and defend the Tesla brand. Not all advertising is about short term demand response, but if we look at the ebb and flow of demand over the whole year, there are definitely times like Q1 Model S/X deliveries when a little advertising pulse to boost net order rates would be beneficial.

Brand marketing is not isolated in vacuum though, is it? It will create interest. it will lift demand. Demand that at this point of time can't be met. Why spend the money then? Why now? Why not allocate the funds once they have enough supply? How are the potential customers going to react if there is a product they want to buy, but it's either out of their price range, or the waiting time for the product is way too long? If hard core TSLA fans got frustrated by the ~2 year wait for Model 3 SR, what will be the reaction of "mild" new fans?

Besides- there is an angle to TSLA's marketing strategy. When existing customers are their market people, they end up with stronger customer base. Base that is more loyal and more "invested" in the brand.

Bottom line- frustrated investors try to think of short term solutions to short term stock downfall.

 

[Nocturnal]

Very heavy volume today and very little price movement (well after open)

So bots are just trading amongst themselves with little effect?

I suppose the bots, like myself, are just pretending to look busy in case their boss is watching.

I’m not sure if anyone has pointed out a fantastic marketing tool soon to be available to Tesla.

Providing they get Enhanced Summon working very well, it will draw an immense amount of attention. No one driving by you can tell that you’re driving on Autopilot, but I guarantee everyone in a parking lot will have their jaws drop as people Summon their cars to them. It seriously looks like magic.

Yup. Social media will blow up.

 

[stretchsje]

It's a stock for stock value instead of cash purchase (not a direct stock to stock ratio). Having TSLA down is in MXWL holder's best interests (above 247 or whatever) due to greater profit from the future rise in price. Just like you would rather buy TSLA today than yesterday.

FUD's the issue now. Price wasn't enough 1-2 weeks ago when TSLA was at current levels. Tesla doubled Q1 deliveries since then with that final 10 day push but I don't think the MXWL holders would've known that. So if not then, why now? FUD isn't enticing except to bulls trying to buy the dip. It's a shame, I thought this looked like an excellent acquisition for Tesla.

 

[Wnuk]

Michael Sheetz on Twitter

.@Lebeaucarnews: "What about the SEC?" @elonmusk:

Didn't think Elon was going to be there.

 

[sundaymorning]

Why did Tesla register 140,000 vins but only produced about 60k Model 3?

The vins could have been for standard/plus, where they’re ready to make a big badge to deliver 2nd quarter.

 

[EVNow]

If US folks paid UE gas prices ~3x more, people would quickly look for alternatives to ICE cars. As we all know Tesla is the only solid one so the situation would look different.

Depends. Folks in Vancouver, BC pay a lot more for gas. But lot more EVs are sold 100 miles south in Seattle.

 

[PhaseWhite]

And that's how people learn. If she doubts you, she may end up googling the statistics, wherein she'll find that you're correct.

She might just be closed-minded to EVs and have latched onto that as an excuse, of course. Wherein she'll never change her mind. But people with a genuine interest in EVs will check the numbers.

(I like to mention to ICE drivers that they're sitting beside a big tank of gasoline, a fuel specifically chosen for its ease of ignition and high energy content, which contains no fire suppression system and is plumbed up to a hot engine block)

No people do not learn that way. They become defensive and entrenched.

With Tesla I think the best thing to offer is a ride.

 

[Fact Checking]

Didn't think Elon was going to be there.

I thought it probable - this shows the judge that he is respecting the court and the judicial system.

He probably won't testify, but by being present he is demonstrating that the process is important to him.

Good optics towards the judge.

 

[Esme Es Mejor]

Does nobody else have a tax credit hangover model? Mine said 0 S/X sales in Jan and Feb in the US, back to normal in Mar... A rough approximation but it did fairly well

Actually the model also says 0 US Model 3 in Jan/Feb, back to normal in Mar, but I can't check that due to confounding factors

I modeled 2/3 of US Q1 Model 3 demand pulled forward into Q4, as well as 1/3 of Q2 demand pulled forward into Q4. I’m sure that wasn’t precisely correct, but it seems to fit the delivery numbers reasonably well.

I didn’t model a specific fraction of S/X demand pulled forward into Q4, other than that it would be smaller than the pull-forward on Model 3, since the tax credit was a smaller percentage of the purchase price. So, say, 1/2 of Q1 demand pulled forward into Q4.

 

[KSilver2000]

I’m not sure if anyone has pointed out a fantastic marketing tool soon to be available to Tesla.

Providing they get Enhanced Summon working very well, it will draw an immense amount of attention. No one driving by you can tell that you’re driving on Autopilot, but I guarantee everyone in a parking lot will have their jaws drop as people Summon their cars to them. It seriously looks like magic.

My concern with Enhanced Summons is in a crowded parking lot. I mean that’s the biggest use case right? (No need for summons in an almost empty lot). How will it know the right of way with cars continually driving by, people walking by, and cars going in/out of parking spaces. As it is right now, I have a feeling it will not be able to come out of a space while trying to avoid accidents, or driving to destination with pedestrians. I can’t imagine Summons working flawlessly at a place like a shopping mall, Costco, event venue.

 

[W84M3]

Do we have someone on the inside? Didn't it start at 2 PM? I'll take it the SP will respond immediately.

 

[ItsNotAboutTheMoney]

My concern with Enhanced Summons is in a crowded parking lot. I mean that’s the biggest use case right? (No need for summons in an almost empty lot). How will it know the right of way with cars continually driving by, people walking by, and cars going in/out of parking spaces. As it is right now, I have a feeling it will not be able to come out of a space while trying to avoid accidents, or driving to destination with pedestrians. I can’t imagine Summons working flawlessly at a place like a shopping mall, Costco, event venue.

The biggest use case is heavy rain and wind or no umbrella.

 

[pyromatter]

Bloomberg - Are you a robot?

bloomberg.com/news/live-blog/2019-04-03/elon-musk-judge-hears-arguments-in-sec-contempt-fight?srnd=premium

 

[RobStark]

2 honest questions here...

1) Regarding Model S and X refresh. Are the Model S and X even relevant to the success or failure of the company anymore? Seems like with the advent of the 3 and soon, Y they occupy more and more a small niche market anyway. Would a refresh just be a waste of resources?

1) ~$2.5B in gross profits from refreshed Gen II vehicles is highly relevant.

2) Vacating premium sedan and CUV segments gives quarter to the Germans plus Lexus. They would be popping champagne bottles in Germany if this were to happen because their most profitable vehicles would no longer face serious competition.

3) From a PR POV it would be worse than closing all stores. There would be a sense in the general public that Tesla is careening toward bankruptcy and you should stay away from buying a Tesla.

In short it would be extremely stupid to cancel S and X.

 

[Doggydogworld]

ZEV sales - but it's unclear whether the market still exists.

I usually guess 50m so I can't be more than 50m too high

Model Y deposits would improve net cash flow - every 10,000 orders by $25m

I may have this wrong. I said they'd be offset by drops in Model 3 deposits. But relative to Q4 results the Y deposits are an incremental source of cash. I'll have to think on that more.

In China Tesla has apparently called $500m of the total $2b loan offers, for phase 1 of GF3. It's unclear whether this can be commingled with general funds though.

I'm 99.9% sure it cannot. Some say Tesla had to move 600m into China as the "equity" portion of their $2b overall deal. I question that, they should have already had cash in China. Maybe the 10-Q will shed some light.

Capex outflow has been going down, and Model Y outflow is still discretionary.

Guidance is 600m/quarter. My 200m is pretty bare bones. They can't keep starving capex if they want a growth company valuation. Unless they ditch Musk's whole dreadnought fantasy and go capital-light. Which I absolutely think they should, but do not expect.

They stopped the sales commissions and the referral program - both of which would have some cash effects.

I read they reinstated it, but more team based than individual.

Storage and non-warranty service are mouse nuts. Though storage could help fulfill their Panasonic obligation, as you note. But I didn't deduct anything for a possible take-or-pay shortfall, so it doesn't add to my numbers.

My larger concern is Model 3 margins. It sounds like 75% of deliveries were after they slashed prices on 2/28. I figure ~5k were 37.5k SR+. 20k AWD/P in Europe helps, but not enough to hold ASP steady per the original plan. Production was only +2.5%, so fixed cost absorption didn't improve and overseas cars don't generate margin-boosting GHG credits. If Model 3 gross margin dropped to 15% vs. 20%+, that's another ~150m of cash drain I didn't count.​

 

[bdy0627]

Do we have someone on the inside? Didn't it start at 2 PM? I'll take it the SP will respond immediately.

Respond to what? This is a hearing. The judge is not expected to instantly provide a decision.

 

[W84M3]

Respond to what? This is a hearing. The judge is not expected to instantly provide a decision.

Oh okay, not familiar with US Court and legal system

 

[Sean Wagner]

As it is right now, I have a feeling it will not be able to come out of a space

Now you know what fart mode is all about. Speeds in this environment are reduced, and the car will be signaling intent by moving slowly in the desired direction - so long as bioware is there to parse, it should work.

I like to point to one of the budding rival systems for illustration [yes, I am aware of all the differences].
Check 1:07 - it looks hair-raising to any human driver, but is not really all that difficult for an AI to manage: