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

[CyberDutchie]

Did you really?
Do they really?

Since the second statement is obviously false, well, I’ll let folks draw their own conclusions.

Of course, I’m hurting every day TSLA is down. I’ve never sold any TSLA since investing 8 years ago, just found myself trapped with call options that are way way down because of the manipulation (and the Q1 miss).

Btw I’m posting Adam Jonas notes as soon as I receive them. I’m doing so because looking at history, generally MS downgrades will impact the stock price. So it gives some people an advance warning and they can trade on it in pre-market.

But if you like, I can stop posting them and you can read about it in the market news, like everyone else.

 

[ggr]

The table below that you're referencing, is ~cumulative~, for ALL insiders...
That's why the title is "Total Tesla Insider Sales".... NOT just JB...as your "suspicious" comment infers...

And you said "JB on 4/24"... I presume you meant 4/28...
But yes, as you see, the ~cumulative~ sales (for ALL board members) are now ramping up....
The columns in red are the "scheduled sales" in April/May.... If they don't occur, THEN you can question the chart, but that's what's scheduled for now, according to their individual sales plans... Thru 3/26, that's already happened....

1. Yes, meant 4/28.
2. You say that the columns are the sum of all the previous columns (that's how I interpret what you say). Then how come there are "flat spots" where people sold options (including JB's $4.3M) but the columns don't go up? See, for example, 1/28, 2/1, 2/5. Hmmm?
3. If the table is cumulative, it should say cumulative. Total doesn't communicate the same message, as a number of people have been more than a little confused by this. See point 2.

The moral to me is that the graph is both wrong and intentionally misleading, since the data shows that all the insiders are selling at a constant rhythm. This is perfectly normal (as others have pointed out), and indeed I used the same strategy myself in a previous life. You chose to use the words "It's pretty clear that the largest Board members are getting out as fast as they can, though" (from your original post above the graph). This is simply not true, they could get out a lot quicker if they wanted to, and the data shows they are just monetizing options at a steady rate. Are you claiming that you didn't write those misleading words?

 

[Anstandswauwau]

So that's the gap up the mob has predicted yesterday (and the illusionary delivery numbers before that)?

Spoiler

Groupthink in full effect

 

[jhm]

I’m still interested in trying to crunch some of the numbers involved with the FCA/Tesla pooling deal. I’ve found most of the info I was looking for in this post:
Tesla, TSLA & the Investment World: the 2019 Investors' Roundtable

Reference 1 had:
The FCA 2017 fleet total vehicles = 727,201 (p. 13)
The FCA 2017 fleet average CO2 emissions = 120 g/km (Table 3-1)
The FCA CO2 emission targets (2020/2021) = 91 g/km (Table 3-1)
(Reference 1 already combined all the Fiat components that I listed separately in the linked post.)

The one obvious missing piece is the calculation for the pool average CO2 emission. The post I linked to above assumed it was a “vehicle weighted” average, and I still think that would be right. In fact, Reference 2 specifies the information that pool members are allowed to share and it’s the exact above parameters (Article 7 Paragraph 5). There’s not much more you can do with those than “vehicle weighted”.

Reference 2 (Article 9 Paragraph 2b) gives the post-2018 penalty (“premium”) for missing the emission target: 95 € per g/km per new vehicle. Paragraph 4 states that that penalty goes into the “general budget” of the EU. (!!)

Given that data and assumptions, if FCA pools with a ZEV provider we can compute the pool average emissions given the number of ZEVs, or conversely the number of ZEVs needed to reach a certain emission limit. The equations are given below.

Interesting results:

First the easy one. How much trouble is FCA in? Their 2017 numbers are 29 g/km out of compliance with the 2020/21 limits (120-91).

(29 g/km)( 95 € per g/km per vehicle)(727,201 vehicles) = €2.00 B penalty. Per year.

Ouch, but that’s the number we’ve been hearing. So far, so good.

Second, how many ZEVs would it take to get an FCA/ZEV Pool into complete compliance (91 g/cc)? Plug the numbers into Equation 2 below:

(120)(727,201)/(91)-727,201 = 231,745 ZEVs. Per year.

Ouch again. Obviously, Tesla is not going to get FCA into compliance and eliminate the whole penalty. It can only reduce the pain.

OK, what if Tesla supplies 70,000 ZEVs to the pool every year? How much help is that? From Equation 1:

(120)(727,201)/(727,201+70,000)=109.5 g/km. That’s a reduction of 10.5 g/km which is equivalent to a penalty reduction of (10.5)(95)(727,201) = €725 M.

So how much is that worth to FCA? Suppose they give Tesla a 50% “bounty” (half of the yearly penalty reduction) to join the pool. That’s:
(0.5)( €725 M) = €362.5 M. Per year. Not out of line with “low 100’s of millions of euros” and each ZEV is worth about €5,200 additional profit to Tesla.

In this scenario, FCA would pay the EU €1.275 B penalty, pay Tesla €362.5 M bounty and save €362.5 M over not pooling. Per year. Still really bad, but realistically probably the best scenario they’ve got. All they can do is negotiate the bounty.

Does FCA have any other options? Well, they could try to lower their darn emissions, but Reference 1 Figure 3.8 shows they have made essentially zero progress since 2011. But suppose miraculously they got half way to their target (105 g/km). Then their best option would only pay the EU €648.5 M, but would still pay Tesla €318.5 M bounty for the 70,000 ZEVs (€4550 additional Tesla profit per ZEV).

Those that understand the pooling logic better than me, feel free to correct. I’m still not clear on the 2019 pooling vs. the 2020/2021 targets. It seems like the 2019 numbers are subject to the 2020/2021 targets in some way.

References:

1) https://www.theicct.org/sites/default/files/publications/ICCT_Pocketbook_2018_Final_20181205.pdf

2) https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:140:0001:0015:EN:PDF



View attachment 394958

Nice. So the value to Tesla is in a neighborhood of EUR5000 per vehicle. I should hope that in 2020-21, Tesla can deliver far more than 70k vehicles per year, maybe 4 times as many could be in the cards. If Tesla were to adjust EU prices to net out some of this subsidy, uptake could be quite robust. On the other hand, if much of this is transacted in lump sum at the beginning of the year, maybe investing that cash in EU located manufacturing or networks would be a really nice way to get ahead of the game. Additionally I think an EU Gigafactory could really enhance Tesla's presence and reception in Europe.

 

[green48]

Tesla now has the world's most popular automaker website!

Site traffic jumped 75% in March since they announced a shift to online-only sales.

Kevin Rooke on Twitter

 

[kbM3]

Ironically, the Shortie AirFarce is already using electric motors in their vast fleet of drones, powered by lithium ion batteries.

Because, you know, irony.

Cheers!

Let's again remember that the LA Times is owned by a direct competitor of Tesla, which is developing zinc-air battery technology:



The only surprising thing about this is that the LA Times writing hit pieces about the owner's competition does not count as market manipulation aiding and abetting an illegal 'short and distort' scheme in the SEC's book.

Hmm, I got to wonder if these shorts are so good at sniffing out fraud, why haven't they been shorting and exposing all these automakers colluding on emissions fraud and more? You'd think shorts could basically do some emissions testing of their own to determine who's cheating and then target the cheaters.

Instead $tslaq is a doomsday cult fixated on a single target. You can see in this reporting how members have gone through a sort of conversion experience as they bond with the $tslaq community. They become indoctrinated into seeing Musk as a liar who cannot be trusted as as source of information about Tesla. This creates an intellectual filter where any information contrary to the view of the cult is rejected as an obvious deception by Musk. Also to reinforce this script, their is cultivation of a persecution complex. As long as Musk and Tesla acolytes are seen as persecuting the $tslaq truth speaker, it validates the cults view and radically rejects any information contrary to that view. The cult member feels himself fighting a righteous cause simply by hating and contradicting any who are "persecuting" the cult. The fixation on Tesla's in parking lots reveals this sort of distortive framing. Consider that the average dealership sells only about 10 cars per week, but they've got scores even hundreds of cars on their lots at any point in time. This is just a logistical reality. There is nothing nefarious about that. Now look at the Tesla delivery lot, they are stuffed to the gills just to handle the logistics of delivery. Naturally there needs to be some overflow. Now because the $tslaq cult has framed this all as some great deception, they are predisposed to interpret the observations of Tesla in lots as some sort of deception, rather than simply the logistics of a company that is bursting at the seems more than doubling their deliveries in a single year. The cannot take in such an alternative interpretation because they perceive that they are actively being lied to and personally threatened by Tesla. Growth and logistics, those are exactly the sort of lies they would expect a fraudster like Musk to try to deceive them with!

Philosophically this is why falsifuability criterion of Karl Popper is so important for delineating between empirical though and cultic thinking. The question is, what sort of empirical data would a $tslaq member accept as falsifying or invalidating his investment thesis? The intellectual filters of the cultic mind make it nearly impossible for anything to register as fact that should threaten the cultic view. So we see this over and over again, some information comes out that is consistent with a Tesla grow narrative, and the doomsday cult quickly radically reinterprets as some sort of bad thing or further evidence of fraud or doom. The basic facts that Tesla grew unit sales by 150% last year and finished the second half profitable and cash positive does not register in their think as facts which potentially invalidates their short thesis. Instead they become obsessed with snooping around parking lots hoping to find evidence to buttress their rejection of facts about growth. So many of them do not hold a short thesis that can reasonably be falsified by basic facts. And this is precisely what it means to be caught up in a cultic thinking as a radical departure from empirical thought.

Yes, $TslaQ is a cult.

One should also ask themselves what empirical outcome would cause me to reject my current investment thesis. For me personally, I am looking to see 50% annual growth in revenue through 2025. If Tesla were to struggle to sustain this level of growth, I would become very concerned. As a really basic empirical test, I check to see if y/y reported revenue has actually grown more than 50%. Moreover, I question whether this growth can be sustained over the next year or two. So I need to see that Tesla is continuing to position itself for growth. This outlook is quite open to information which can falsify my thesis. So to the best of my abilities, I am engaged in empirical thinking and not lost in cultic brain rot.

On this topic:

Los Angeles Times

 

[Paracelsus]

What's a qbit?

O.T. - Wonderful allegorical response @jhm - both funny and yet very applicable to my comment (for which I sincerely apologize if it offended anyone) because of a cubit's architectural significance throughout history....there is absolutely no need for it to be of 'standard length' when used properly.....and from it and the use of basic Geometry using a point within a circle and two parallel lines some of the greatest buildings, temples, and cathedrals have been constructed with such accuracy that we still rarely see today..........all prior to a calculator.

 

[AlexS]

I wish Tesla to start ride sharing app before autonomous, this will add some cash and lift value of the company. I think it is few weeks time for software engineers to put app together.

 

[uselesslogin]

@kbM3 Is that actually on the physical front page of the L.A. Times? That is mind blowing. Although lets also add in 'Mexico City piles on the PDA' as an equally mind blowing front page headline then. I guess we live in bizarro world now? Or I guess just the slowest news day ever.

 

[madodel]

Lyft is threatening a suit against Morgan Stanley accusing them of supporting short selling. Maybe TSLA can join in a class action suit?
Lyft reportedly threatens to sue Morgan Stanley, accuses the bank of supporting short-selling

 

[bdy0627]

It's a mix. They were limited by logistics in Europe and demand in the US. The 2/28 SR+ launch (and price cuts) boosted US demand, but probably slowed production.

Tesla ended Q1 with 20k Model 3s in inventory. I'd guess 8k in transit, 12k unsold new inventory. There was no reason to run production all-out and increase unsold inventory from 12k to 15k or 20k.

Where did you get 20k model 3 in inventory from Q1? I see in transit from Q4 2,900 (including S/X), production of 62,950, deliveries of 50,900, in transit from Q1 10,600 (including S/X).

 

[lascavarian]

Investment topic.

I want to pick up 25 long shrs.

Some unsettling events are past - SEC, Q1 numbers. Some possibly good events are in front, MXWL completion, FSD demo, Q1 financials, safety data, GF3 completion in May etc. But uptick restraints come off on Monday so may be some volatiity and perhaps good time to buy.

My order is to buy 1 Jun 21 call at 285 for about $2k. So I am at risk for $2,000. I think that after June the market will see an uncertain Q3 since the tax incentive will be reduced again and there will not be any particulary good news for Q3 about GF3 so I think June will be a little more blue sky since it has the end of US incentives pull forward. So June is my bet for a rising price.

The plan is to hold the June 285 call until the stock hits 381 (up 96 pts from the 285 strike price but not even a new high) and then sell the in the money call for $9,600. I immediately buy 25 shrs at $381 which works out to essentially $9600 call profit. Joy!

Replying to myself here...

So per this plan, my day order put in on (I think) Saturday for the Jun 21 285 call at 20.10 (ask was about 22) executed at 12:02 ET. The excited Sunday discussion of the FCA money did not impact my plan (certainly didn't make it more likely to have my order execute if the market opened up) but my thinking was the removal of the uptick restraints on Monday might open a little downward pressure.

Now I just wait for the stock to rise to 381 influenced by MXWL, FSD orgasm, rosy Q2 demand pull forward, GF3 build out by June and FOMO and bahda bing!, 25 more long shares in the bag

 

[Alphacrux]

With the Fiat-Tesla pooling news, I thought it would be interesting to contrast it with the ever increasing amount of natural gas being burned off in the Permian and North Dakota basins. US energy independence is good, but at what cost?

From today's WSJ:
"Frackers, Chasing Fast Oil Output, Are on a Treadmill: With more oil wells front-loaded to boost output, many companies will have to drill again soon—and find new capital to keep production up"

• Shale companies from Texas to North Dakota have been managing their wells to maximize short-term oil production
• By front-loading the wells to boost early oil output, many companies have been able to accelerate growth.
• Wells are producing oil much faster than just a few years ago—and that means they taper off faster and generate huge amounts of natural gas. That has led to depressed gas prices in West Texas and record volumes of natural gas burned.
• Another side effect of front-loaded wells: They are unleashing enormous amounts of natural gas. That’s because gas escapes more easily than oil from underground reservoirs as pressure falls.
• Large quantities are also going up in smoke, as companies burn gas they cannot move or sell, a practice known as flaring. Operators in the Permian and North Dakota burned more than 1 billion cubic feet of gas daily in October, according to public data and Rystad Energy. The resulting greenhouse-gas emissions are equivalent to the daily exhaust from about 6.9 million cars, according to estimates from the World Bank and Environmental Protection Agency.

Also including Texas light pollution map from gas flares (not in article). Note bright areas near Odessa in north-west Texas and Eagle Ford shale lights south of San Antonio.

Sorry, don't want to bring this too far off-topic, but just want to note the huge impact- equivalent to almost 7 million cars.

 

[hobbes]

Guess what that is?!

A roof on GF3!

 

[Dutchie]

I am a big supporter of Tesla. I own one and bought stock. About 25% of my portfolio is in TSLA. I bought it last year at about $290, believing in the imminent rise of the stock due to increased production. "Short burn of the century"
It didn't materialize and since last quarters deliveries and especially production numbers I am getting cold feet.

My stock are under water and I am at loss what to do. My stock are for a study plan for my kidsI don't need to cash it for another year as my oldest daughter is only going to college next year. Shall I take my loss now before the stock tanks further or is there still hope they will recover. Some things that make me nervous:

- how come that M3 is still not sustainable at 5,000 per week - let alone 6,7, or even 8,000 a week?

- what is it with all these pictures with dust covered cars?

- I see people on YouTube ordering a car only to be called by Tesla within hours that they have a deal for a new 2018 M3. So there is a big stock?

- what is indeed the story with the solar roof? Absolutely nothing is happening there

- suddenly, after years, there is a big push in Software. I don't believe in coincidences. So this in combination with the bad sales and production figures makes me suspicious. Are they trying to change the focus?

-all these restless strategies around pricing of cars and software seems very nervous and not reassuring at all

I could probably think of more.

Am I alone this? Just wondering what other people think and are considering doing

 

[Prunesquallor]

Nice. So the value to Tesla is in a neighborhood of EUR5000 per vehicle. I should hope that in 2020-21, Tesla can deliver far more than 70k vehicles per year, maybe 4 times as many could be in the cards. If Tesla were to adjust EU prices to net out some of this subsidy, uptake could be quite robust. On the other hand, if much of this is transacted in lump sum at the beginning of the year, maybe investing that cash in EU located manufacturing or networks would be a really nice way to get ahead of the game. Additionally I think an EU Gigafactory could really enhance Tesla's presence and reception in Europe.

The €5000 per vehicle assumed a 50% "bounty". I have no idea what that number really is. It was just an example, but the total came out reasonable compared with the "low 100s of millions of euros" comment.

 

[Nocturnal]

I wish Tesla to start ride sharing app before autonomous, this will add some cash and lift value of the company. I think it is few weeks time for software engineers to put app together.

A company just started up to facilitate renting your car out to travelers while you are at the airport. Tesla could do this so easily with their vehicles.

I am a big supporter of Tesla. I own one and bought stock. About 25% of my portfolio is in TSLA. I bought it last year at about $290, believing in the imminent rise of the stock due to increased production. "Short burn of the century"
It didn't materialize and since last quarters deliveries and especially production numbers I am getting cold feet.

My stock are under water and I am at loss what to do. My stock are for a study plan for my kidsI don't need to cash it for another year as my oldest daughter is only going to college next year. Shall I take my loss now before the stock tanks further or is there still hope they will recover. Some things that make me nervous:

- how come that M3 is still not sustainable at 5,000 per week - let alone 6,7, or even 8,000 a week?

- what is it with all these pictures with dust covered cars?

- I see people on YouTube ordering a car only to be called by Tesla within hours that they have a deal for a new 2018 M3. So there is a big stock?

- what is indeed the story with the solar roof? Absolutely nothing is happening there

- suddenly, after years, there is a big push in Software. I don't believe in coincidences. So this in combination with the bad sales and production figures makes me suspicious. Are they trying to change the focus?

-all these restless strategies around pricing of cars and software seems very nervous and not reassuring at all

I could probably think of more.

Am I alone this? Just wondering what other people think and are considering doing

Any individual stock is very risky, Tesla more than most. It all depends on your taste for gambling. Your time horizon for needing the cash is very short. Not financial advice but if I were in that situation I'd consider lightening my stake the next time the stock has a decent upswing.

My decision to invest long in Tesla has not changed personally, but the money I have in it won't be needed for another 15-20 years.

On the points. No, there is not a huge inventory of cars just sitting around. Solar roof was put on the back burner, the Model 3 was Tesla's #1 priority. Now that is slowly shifting, that also explains why you see so many software updates. They can finally take a breath and work on the software roadmap.

The pricing changes are a young company in a new market trying to react to changing tax incentives. They didn't do a great job at dealing with this but marketing is not Tesla's strongpoint. Consider the Chevy bolt. Their tax credit is phasing out just like Teslas but they aren't changing the price. Why? I think it's because they are already loosing money on it and can't afford a bigger hit on each vehicle. Tesla could drop prices and still make margin on each car.

 

[Smokey4141]

1. Yes, meant 4/28.
2. You say that the columns are the sum of all the previous columns (that's how I interpret what you say). Then how come there are "flat spots" where people sold options (including JB's $4.3M) but the columns don't go up? See, for example, 1/28, 2/1, 2/5. Hmmm?
3. If the table is cumulative, it should say cumulative. Total doesn't communicate the same message, as a number of people have been more than a little confused by this. See point 2.

The moral to me is that the graph is both wrong and intentionally misleading, since the data shows that all the insiders are selling at a constant rhythm. This is perfectly normal (as others have pointed out), and indeed I used the same strategy myself in a previous life. You chose to use the words "It's pretty clear that the largest Board members are getting out as fast as they can, though" (from your original post above the graph). This is simply not true, they could get out a lot quicker if they wanted to, and the data shows they are just monetizing options at a steady rate. Are you claiming that you didn't write those misleading words?

Seriously, you're not reading this correctly....

1) Did not JB's sale on 1/28 make the graph go up from the prior column, the 1/16 column??
Roughly about $4 mill.... And it goes up by that amount... If you don't see that, I really don't know what else to say....

2) Linda Rice's option sales (2/5 being one of them) are almost embarrassing, they are so small....
She receives very few, but she sells them immediately...
They have over 2 years to run, and she sells them now?? To collect a few thousand dollars??
If ~that~ doesn't scare you, nothing will... But those sales barely show up on the chart, because they're tiny.... (edit: then again, she sold them at over $300/share, so......respect....)

3) It seemed obvious to me, but apparently not to all... Don't know what else to say....

Please compare this graph, side-by-side, with the matrix with the actual dollar figures, and I think it'll make more sense....
I ~am~ sorry that it seems so confusing.... :-/

 

[bdy0627]

1 Our before TSLA$ is 1.30% UP now 0.40% Down MMD ?

Welcome back shorts!

 

[SO16]

I am a big supporter of Tesla. I own one and bought stock. About 25% of my portfolio is in TSLA. I bought it last year at about $290, believing in the imminent rise of the stock due to increased production. "Short burn of the century"
It didn't materialize and since last quarters deliveries and especially production numbers I am getting cold feet.

My stock are under water and I am at loss what to do. My stock are for a study plan for my kidsI don't need to cash it for another year as my oldest daughter is only going to college next year. Shall I take my loss now before the stock tanks further or is there still hope they will recover. Some things that make me nervous:

- how come that M3 is still not sustainable at 5,000 per week - let alone 6,7, or even 8,000 a week?

- what is it with all these pictures with dust covered cars?

- I see people on YouTube ordering a car only to be called by Tesla within hours that they have a deal for a new 2018 M3. So there is a big stock?

- what is indeed the story with the solar roof? Absolutely nothing is happening there

- suddenly, after years, there is a big push in Software. I don't believe in coincidences. So this in combination with the bad sales and production figures makes me suspicious. Are they trying to change the focus?

-all these restless strategies around pricing of cars and software seems very nervous and not reassuring at all

I could probably think of more.

Am I alone this? Just wondering what other people think and are considering doing

My shares are under. Not selling.