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

[Lessmog]

I've been thinking a bit about our mystery stock buyer or buyers, who made the stock surge into the $290s yesterday and provided unexpectedly strong, consistent price support today. And I'm wondering if it is a Chinese entity.

What is it that China has consistently tried and failed to achieve with its auto industry? Answer: a brand that westerners will buy. Tesla is such a brand - and one consistent with their cleantech policy goals. And its stock can be bought up, either to take private or simply to have a large ownership / voting stake. Tesla in effect being a Chinese-American multinational (lots of examples of that sort of thing in the automotive world)

We've also talked a lot about how wonderful it is that Tesla has gotten such favourable treatment in China. But it's also rather... well, weird. Musk treated like a dignitary? Ridiculously good loans? Hugely accelerated schedule on everything? Fully owned by Tesla? I've heard some people find it so suspicious that they assume GF3 is a ruse for China to steal Tesla's tech. If, however, those who've been so supportive of Tesla are also connected to those acquiring the stock, suddenly it makes a ton of sense.

When did all of this refocus on China start? Fall of last year. Right after Musk's privatization attempt failed.

Just throwing out a random conspiracy theory I have absolutely zero evidence behind this.

Well, in this quarter economy, I think that is worth more than Ten Cents?

 

[Ratanpara]

S/X sales were, in fact, massively down. But S/X production was also massively down. They produced ~2000 more than they sold, with somewhere between 0 and all of the remaining in transit(imo, this is likely much closer to 0, but bears keeping in mind, regardless).

And, of course, that “pitiful” 63,000 was more than double that of the same period last year. Q1 is, and always has been, seasonally weak. You don’t get many people buying cars in devastating blizzards.

I’m not saying this quarter was good(it wasn’t), or even that it hit expectations(it didn’t). Just that I see nothing in these results that look in any way bad for future results. Model 3 looks to be doing just fine to me(I expect somewhere near 100% of those 10,600 cars were 3’s). S/X will need a substantial refresh ASAP to keep up sales(right now unless you absolutely need the bigger size, I can’t understand why anyone would buy either over the 3), but I think we all knew that time was coming.

 

[ClownMouth]

Thinking out loud here - and considered waiting to post until my thought is better developed but figured the input from people here might result in a better thought than on my own:

Short version: In the absence of Tesla advertising, is there a way we could get people currently looking to buy a new ICE vehicle (those actively looking online or visiting dealerships) to learn a little more about Tesla before making their decision?

Longer: There are thousands of young people who believe in the cause/tech who have already decided they will buy a Tesla when they are old enough. There are thousands of people like myself who have decided that whenever their current vehicle needs to be replaced it will be with a Tesla. These people don't need to be sold, they just need time. BUT then there are all the people who (insert feedback cited in posts on this forum all the time - think Tesla's catch on fire too often, think they don't have sufficient range, think Tesla is going bankrupt, don't know where to charge, etc). Some of these people would be converted if they had the facts, let alone sat in a Tesla for even a few minutes.

The first thing I mention to friends replacing a vehicle is to seriously consider how long they plan to keep whatever new vehicle they choose and what they expect the resale value to be given the transition to electric taking place. By considering electric they may be able to save money while eliminating gas stations from their lives (convenience & environmental benefits). I don't really try to push Tesla, maybe they get a Leaf or Bolt - if they listen at all we know the chances are they will end up with a Tesla - great.

Perhaps I am being naive and the answer is Tesla stepping in with advertising. I don't expect people to stand outside dealerships and hand out pamphlets they printed at home. But I know there was an interesting conversation taking place between some people with advertising/targeting experience and perhaps they know of ways to get some FAQ type info in front of people AT THE EXACT time they are ready to buy. The future is bright, but every conquest sale for Tesla right now not only benefits quarterly performance but more importantly serves the mission of accelerating the transition.

 

[Lessmog]

While I like this idea I think the judge may feel if she throws out the contempt case Elons team might feel too confident and strong arm the SEC into a completely pointless settlement and we will be right back to tweet crazy world. I think Elon's tweets lately have been fine but you have to admit they are tame as compared to last year.

Some how they need to find a way to word the settlement so if a market moving tweet that was not approved moves the market then Musk gets in trouble with a penalty at a certain percentage of what the market moved. That should keep his fingers in check yet not tie his hands. Plus eliminate the need to see a judge every time because it would be pretty obvious. A plus 2 billion market cap tweet at a 10% penalty would cost him 200 million or 200 days in jail, whichever he could afford. Some threshold for the move would have to be defined too. 5% gains or losses can be common place with Tesla. Maybe any tweet that causes more than a 5% move?

No, SEC needs to be made to back off. Seriously. But that takes more firepower than can be easily applied to a U.S. Federal Entity. And I am not Emperor of this planet. Oh well.

 

[Ratanpara]

It is clearly a mistake on Tesla part not upgrading S/X but I am sure it’s in the work, If I want to look at this in glass half full, lost sales are due to Model 3 not because prospective buyers went to competition.

 

[MarcusMaximus]

Yeah that level 2 charger thing has just got to be more than just a 220v outlet in your garage, doesn’t it?

Ron Traver on Twitter

Honestly, the multi-thousand dollar level 2 charger would seem to work more in Tesla's favor. They sell one for $500 right on their website. Looks to me like only a fool would buy one of these other cars that requires you to spend thousands.

(Yes, that whole argument is just wrong on its face, but I’ll roll with it)

 

[Doggydogworld]

I thought all the produced-but-not-yet-delivered cars were on their way to customers.

Can't tell if that's snark, but answering straight up anyway. Tesla had 20k Model 3s in inventory on 3/31. They had orders for roughly 7k of those (the "in transits"). The in transits can be anywhere - on a truck, at a store or storage lot or even at the factory. The other 13k were inventory for sale. That 13k includes 1k or so demos and loaners with a few miles on them that you can buy at a discount.

There are also around 3k S/X in transit plus something like 7k in unsold inventory (don't quote me on that 7k, it's from memory).

 

[MP3Mike]

There was a weird 2.5M shares spike/trade at around 10:40 earlier today.

Speculation: big short might have been posting very large sell limit orders to cap the price - without any true intent to sell. Algos will generally recognize a 2.5 million shares barrier in the book and will not trade against it - few algos will trade 600 million positions in a single stock - way too risky and way too illiquid. In fact algos will interpret this as a sign to sell.

But, if the spike is real then someone called that bluff and picked up 2.5 million shares ...

Super bullish if true.

So you think that short interest went up 2.5million shares in that instant? I guess it will be interesting to see Ihor's report on Monday as well as the shooting percentage this evening.

 

[Curt Renz]

Barron's - 7 minutes ago: Congressman Jim Langevin Is Buying Tesla Stock and Selling Alibaba

 

[EVNow]

Sorry, but bears were right and we were wrong about much of Q1.

Not really. Why the delivery was low matters.

Bears said things that were clearly wrong.
- No demand in EU/China
- Tesla will run out of cash

 

[electrichapp]

Wow there's a lot of FUD out there.
I guess it's because there are still a lot of apr18 options out there that are going to expire worthless soon!

 

[EVNow]

.


SP on Feb 19th (day of EM's SEC #2 tweet ) was 305.xx at close ... how long before we get back there ...

+ Q2 starts with a 10K cushion of inventory for deliveries.

I posted before last quarter that we have had now some 10 quarters where on the day of ER, the SP is around $300. So, this is going to be one more

 

[MarcusMaximus]

Take into consideration that Tesla decided to discontinue the 75d version of the S and X model.
That probably had the most significant impact on the sales volume for those models
This last quarter as opposed to loss of sales due to the lack of a refreshed S version.

Notably, 100% of the inventory S available currently in my area are 75D’s. I think they’re having trouble getting rid of the rest of those...

 

[anthonyj]

Lol ok......people can question plenty here. Valid questions would be model sr margin, production constraints still visible and ongoing, clear s/x demand issues and the effects of the tax credit reduction. If you think its valid to question demand for model 3 when they only just started making the low cost version in only one market out of 3, then yes you're trolling with dumb demand fears.

And yeah anthony, either you're bi polar as an investor or you're deliberately trying to come off as a long investor with "valid" concerns when in reality you're just trying to instill doubts in other investors

You’re the one making baseless claims and calling people trolls. Questioning is an important part of investing. Trolling would be saying that Elon is a fraud, Gigglefactory is a Potemkin village, competition is coming, blah blah blah. Questioning demand, cash on hand, store opening/closing/reopening is not trolling.

I used to be a superbull too. Tivoboy, Zhelko, etc warned me in December to be cautious and take some gains on my calls, and in my head I thought they were trolls. I sold a tiny bit to cover my initial investment, but lost the rest of my call gains (almost $100k)

Early January when we were at $350 I warned people that we might see $270 again soon based on chart technicals, I was called a troll, 1 week later we bottom at 280 after Tesla said they would try to make a tiny profit.

A lot of people here play with leverage/options and add to our core because it is so lucrative. So we discuss, short and medium term investing strategies in addition to the long 10 year term. I’ve always said, I am long term bullish on my 420 core shares until Larry Ellison sells his stake. I will not touch those shares. The rest of my position is for swinging.

 

[RyanT]

I think Tesla just needs to add a bigger/better battery to the model s and x. Maybe just the new cells. Model S looks better than the model 3 and has more features. Model X had the falcon wing doors and more seats. Both of them have decent interiors considering that they are minimalist and tech focused. The slower charging rate and less range compared to model 3 are holding them back now.

 

[copyhacker]

All this talk about the SEC and the judge. Does all that REALLY matter if there is not enough demand to sustain Tesla short or long term?

I like to play this game whenever I find myself questioning demand. Feel free to play along and add your own observations:

• The most popular episode of the most popular podcast is the one with Elon Musk but no one wants a Tesla.
• My kids' friends look forward to the one day a week we have carpool duty, but no one wants a Tesla.
• My neighbors, friends, and running buddies ask me about my Model 3 constantly but no one wants a Tesla.
• At Drive Electric Week events every year, the dealers' Bolts and Leafs are abandoned while everyone watches the Model X light show, but no one wants a Tesla.
• Twice in the last couple weeks I went out to my garage and my car had magically obtained 5% more power and the ability to change lanes on its own, but no one wants a Tesla.
• The Model 3 has lower TCO than a Camry, and better performance than a 3-Series, but no one wants a Tesla.
• I see more Model 3s every day in little Columbia SC but no one wants a Tesla.
• Tesla will move on the order of half a million cars this year with zero advertising budget and no leasing, but no one wants a Tesla.

 

[Sean Wagner]

In terms of comparing Model 3 to Porsche look at this chart and search for Porsche

And I might add that Switzerland has no incentives for EVs on the Federal level. Nada. Gopferglemmi.

Also, Ferdinand Dudenhöffer, one of Germany's most highly regarded experts on the automotive industry, actually referred to Tesla's Swiss sales some years back when he wrote his urgent missive regarding the rise of attractive EVs. Due to high disposable income and the absence of domestic players, it's considered something of a bellwether.

 

[Compton]

S/X will need a substantial refresh ASAP to keep up sales(right now unless you absolutely need the bigger size, I can't understand why anyone would buy either over the 3), but I think we all knew that time was coming.

People keep on repeating this point so I guess I have to quote myself and explain why I ordered a P100DL instead of an M3P a few weeks ago. More storage, more pull on higher speeds (eg when overtaking at 60-75 mph), HEPA filter (*really* can't stand the smell of exhaust fumes), better winter equipment (eg heated wipers, door handles that push through ice) and better sound isolation. I also prefer the exterior look of the car - which is of course subjective.

And finally, I wanted a car that no ice vehicle can match. Performance wise, a P100DL puts to shame almost any ice muscle car in existence and also takes the family on a holiday safely. There's nothing like it.

Do you disagree with these points regarding M3P vs top-end S?

 

[Antares Nebula]

Cramer throwing shade at the judge now (after baiting her to throw Musk in jail last week). Now I know this guy is scum. I had some respect for him earlier, but no more. No longer listening to him.

 

[MarcusMaximus]

People keep on repeating this point so I guess I have to quote myself and explain why I ordered a P100DL instead of an M3P a few weeks ago. More storage, more pull on higher speeds (eg when overtaking at 60-75 mph), HEPA filter (*really* can't stand the smell of exhaust fumes), better winter equipment (eg heated wipers, door handles that push through ice) and better sound isolation. I also like the new matte black design inside the car. No longer chrome decor all over the place; see 6:42 in this video. I also prefer the exterior look of the car - which is of course subjective.

And finally, I wanted a car that no ice vehicle can match. Performance wise, a P100DL puts to shame almost any ice muscle car in existence and also takes the family on a holiday safely. There's nothing like it.

Do you disagree with these points regarding M3 vs top-end S?

Don’t necessarily disagree(I did cite size as the exception), but I think for many/most people the apparently superior charging capability, better efficiency, apparently better degradation of the battery so far, more foreword looking features(internal camera and landscape screen making it clear it’s better tailored for FSD), track mode, etc. would scare them off an S/X for now.

Don’t mean to disparage your purchase(congrats on that, btw), just saying that the level of advancement of the 3 vs the S/X makes it seem like most would want to wait for similar/better advancements in those.