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

[EVNow]

How low can she go......

$0.01 above your buy limit.
or
$0.01 below your stop loss.

ps : First time it went below 250, total of 382k shares were dumped. If for next 3 days if we don't fall below 248, I think we are safe. Last 4 ERs when the price went down, SP hit minimums within 3 days.

 

[bramsvs]

Level short interest, ihors3 tweeting:

$TSLA short interest is $8.82 bn; 34.09 mm shares shorted; 26.93% of its float. Shorts were up $179 million in mark-to-market profits after yesterday’s 2% drop in #Tesla’s price & are up another $327 million on today’s 3.7% drop. Shorts are now up $2.40 billion, +24.66%, in 2019
​

 

[TheTalkingMule]

None of these are the reason why Q1 was so bad financially -- that was all down to just plain not manufacturing enough Model 3.

Apologies for not following the site/thread enough to answer this already, but....

Based on this statement, the slowing demand talking points are all entirely horseshit? There was simply too much planned line changeover and/or cell supply issues from Panasonic? This reasons behind the profit tank all still feels very murky to me.

If they'd been running 2000 cars a week faster, they'd have been up by about $400 million relative to where they were. It's all about economies of scale.

Delicious. This is precisely where we want to be and I assume the reason SP hasn't plummeted on earnings. And this is all with purely US manufacturing! AND has still has the inefficiencies of a startup building out infrastructure.

If the above statement is true, I couldn't possibly care less about a $700M+ loss in a single quarter. Tesla still has a multi-year gap to the "competition".....if even half of them survive 2020.

 

[humbaba]

I just bought some more at 249. I had been telling myself I wouldn’t buy any more, but then they had to have a fire sale.

Yeah, I'm actually contemplating digging into some reserves to buy more. Not a good idea (substantially increased risk in the event of unexpected adverse personal financial events), but dang this is a bargain...

 

[CyberDutchie]

Some observations from Adam Jonas, I tend to agree with him this time:

1. A relatively uneventful quarter. Auto gross margin was nearly 200bps better than expected and free cash burn was around $200mm less than we forecasted. Guidance for 2Q deliveries and reiterated FY unit delivery forecast are materially higher than our estimates. Tesla forecasts a return to positive free cash flow by 2Q which is 2 quarters ahead of our forecast. We continue to apply a discount to Tesla forecasts and we expect most investors will too.

2. "Some merit” to raising capital. Elon Musk explained how he resisted the urge to raise equity to create a "forcing function" to accelerate cost cutting actions within the company. Given improvements in efficiency and upcoming expansion plans, Mr. Musk admitted that from today’s perspective there is "some merit" to raising capital. This is consistent with our forecast of a $2.5bn equity raise in 3Q19 which we anticipate may come from strategic sources. We think Tesla is waiting to demonstrate a recovery in demand and cash flow before looking to stabilize its balance sheet.

3. Tesla is trying to showcase its technological advantages while the gap to peers is still extremely wide. Based on our experiences with the company’s autopilot technology this past Monday, we believe Tesla has at least comparable full self driving technology at between 1/100th and 1/200th the cost of many peers demonstrating exquisite, Lidar-encrusted robot taxis. To be clear, we estimate Tesla’s vision based sensor and compute hardware solution costs around $1k/car vs. other L5 autonomous prototypes with $100k to $200k of hardware cost per unit or more.

4. Consensus forecasts unlikely to move significantly following Q1. Demand and liquidity still top investor concerns as we head deeper into 2Q.

 

[MarcusMaximus]

I imagine there’s some day traders out there buying every time it goes to 249 and selling every time it goes to 250 and making a bajillion dollars.

 

[traxila]

250 has to hold, but if is above that end of day I think we will be all right.

 

[humbaba]

$0.01 above your buy limit.
or
$0.01 below your stop loss.

which is why I put my limit order a little high, but the last dip didn't go much below it. Now to dig through the couch cushions...

 

[KSilver2000]

Whoever sold their 50 shares at $251, thank you. Can you now sell some at $245?

Thanks in advance.

Looks like you’ll get your chance at $245 today. Maybe even better tomorrow.

 

[capster]

No - everything that moves together should be viewed as a single object. There should be enough training to differentiate between things moving together vs separately.

Are you going to train all those buses as 21 objects 1 bus + 20 individuals and try to keep track of each of them ?

Humans can focus attention to adjust perception to pick out details salient to a task.

Andrej’s networks are, in effect, inferring what humans decided matters most when driving (among other things). Impressive when you think about it, though maybe counter-intuitive that you can embed so much of the attentional component into the perceptual process. But here you can afford to lose flexibility and generality because you are doing just one task, driving. Clever!

This approach requires an incredibly robust training data set of real-world driving by actual humans. Tesla is in a unique position in having access to a sufficiency of such data. This access is a difficult advantage to overcome for those who would rely mainly on simulations.

BTW, didn’t Elon stress twice on the call that his FSD/robotaxi predictions were for US roads wrt to the 2020 date?

 

[LJS22]

They just need some good news at this point. Everything written about Tesla in the news is doom and gloom. Most people on the fence for a new car will not buy a Tesla if they fear the company is on the verge of a collapse.
There’s a lot of misinformation out there. I think it’s time to look at advertising. Right now CNBC is writing their story. I haven’t met anyone unimpressed by my car and what it’s capable of. The product is there. It just needs to be in the hands of more people. Currently there isn’t much momentum. Hopefully that changes.

 

[anon]

End of quarter cash was $2.2B, but Tesla delivered nearly half of the cars this quarter in the last 10 days, representing over $2B revenue only coming in quite late in the quarter. It might have been that the inter-quarter cash as I calculated it halfway through here was even an overestimation...

Interestingly, interest income rose slightly between Q4 and Q1, more or less in line with a slight increase in returns on safe short term investments. That implies that inter-quarter cash for Q4 and Q1 were very comparable. Yet end-of-quarter cash reported is dramatically different ($3.7B versus $2.2B). Any thoughts on how to square these two facts?

What about the impact of warehouse loans?

 

[MarcusMaximus]

Based on this statement, the slowing demand talking points are all entirely horseshit?

Not entirely. S/X demand was confirmed to have dropped somewhat at the beginning of the quarter because of the tax cliff(I imagine also because of the enormous storms across the US at the time...). But demand seems to have picked right back up by EOQ.

 

[Cloxxki]

Whatever the populations, the RHD premium market sizes are much smaller, and the two largest RHD markets Tesla is already in are the UK (Brexit turmoil) and Japan (dominated by small domestics).

That the UK is likely to be the largest RHD market for Tesla for the foreseeable future, should make it clear why they aren't rushing.

It's worrysome though that other companies can easily launch RHD cars from the get go when Model 3 for instance does see a lot of units per line.
My eternal complaint with Tesla is refusing to offer a wagon S or 3. They may not be demand limited, but a with a wagen they'd not have to offer SR+, just LR AWD and it would sell like made, add really good demand and displace cheaper cars.
Sure, mission is to make BEVs affordable but really most people can't afford Model 3 at all which is why the SR doesn't sell. Those who can afford it, move up.

 

[lklundin]

Just came back from a vacation in France country side. Have been in the U.S. for 20 years, it scared me to death for me to drive on their narrow road.

The narrow roads of Mediterranean Europe is one reason why the smaller Model 3 will replace my Audi A8.

 

[Remus]

Some observations from Adam Jonas, I tend to agree with him this time:

1. A relatively uneventful quarter. Auto gross margin was nearly 200bps better than expected and free cash burn was around $200mm less than we forecasted. Guidance for 2Q deliveries and reiterated FY unit delivery forecast are materially higher than our estimates. Tesla forecasts a return to positive free cash flow by 2Q which is 2 quarters ahead of our forecast. We continue to apply a discount to Tesla forecasts and we expect most investors will too.

2. "Some merit” to raising capital. Elon Musk explained how he resisted the urge to raise equity to create a "forcing function" to accelerate cost cutting actions within the company. Given improvements in efficiency and upcoming expansion plans, Mr. Musk admitted that from today’s perspective there is "some merit" to raising capital. This is consistent with our forecast of a $2.5bn equity raise in 3Q19 which we anticipate may come from strategic sources. We think Tesla is waiting to demonstrate a recovery in demand and cash flow before looking to stabilize its balance sheet.

3. Tesla is trying to showcase its technological advantages while the gap to peers is still extremely wide. Based on our experiences with the company’s autopilot technology this past Monday, we believe Tesla has at least comparable full self driving technology at between 1/100th and 1/200th the cost of many peers demonstrating exquisite, Lidar-encrusted robot taxis. To be clear, we estimate Tesla’s vision based sensor and compute hardware solution costs around $1k/car vs. other L5 autonomous prototypes with $100k to $200k of hardware cost per unit or more.

4. Consensus forecasts unlikely to move significantly following Q1. Demand and liquidity still top investor concerns as we head deeper into 2Q.

yes, someone agree with me that I have at lease 6 more month to slowly accumulate.

 

[MarcusMaximus]

Some observations from Adam Jonas, I tend to agree with him this time:

1. A relatively uneventful quarter. Auto gross margin was nearly 200bps better than expected and free cash burn was around $200mm less than we forecasted. Guidance for 2Q deliveries and reiterated FY unit delivery forecast are materially higher than our estimates. Tesla forecasts a return to positive free cash flow by 2Q which is 2 quarters ahead of our forecast. We continue to apply a discount to Tesla forecasts and we expect most investors will too.

2. "Some merit” to raising capital. Elon Musk explained how he resisted the urge to raise equity to create a "forcing function" to accelerate cost cutting actions within the company. Given improvements in efficiency and upcoming expansion plans, Mr. Musk admitted that from today’s perspective there is "some merit" to raising capital. This is consistent with our forecast of a $2.5bn equity raise in 3Q19 which we anticipate may come from strategic sources. We think Tesla is waiting to demonstrate a recovery in demand and cash flow before looking to stabilize its balance sheet.

3. Tesla is trying to showcase its technological advantages while the gap to peers is still extremely wide. Based on our experiences with the company’s autopilot technology this past Monday, we believe Tesla has at least comparable full self driving technology at between 1/100th and 1/200th the cost of many peers demonstrating exquisite, Lidar-encrusted robot taxis. To be clear, we estimate Tesla’s vision based sensor and compute hardware solution costs around $1k/car vs. other L5 autonomous prototypes with $100k to $200k of hardware cost per unit or more.

4. Consensus forecasts unlikely to move significantly following Q1. Demand and liquidity still top investor concerns as we head deeper into 2Q.

I’m really hoping they look at the capital raise idea floated here by @neroden. A great way to reward investors and, especially with short interest where it is, crush shorts.

 

[LytHka]

They just need some good news at this point. Everything written about Tesla in the news is doom and gloom. Most people on the fence for a new car will not buy a Tesla if they fear the company is on the verge of a collapse.
There’s a lot of misinformation out there. I think it’s time to look at advertising. Right now CNBC is writing their story. I haven’t met anyone unimpressed by my car and what it’s capable of. The product is there. It just needs to be in the hands of more people. Currently there isn’t much momentum. Hopefully that changes.

I agree. I don't understand the ideological apprehension to marketing. It works.

 

[neroden]

Apologies for not following the site/thread enough to answer this already, but....

Based on this statement, the slowing demand talking points are all entirely horseshit? There was simply too much planned line changeover and/or cell supply issues from Panasonic? This reasons behind the profit tank all still feels very murky to me.

The cell supply issues from Panasonic are pretty scary -- this was supposed to be resolved several quarters ago -- but yes, they account for the bulk of the collapse in profit, since Tesla could not make the number of Euro/China cars it was supposed to during Jan and Feb. Add in delivery failures which shoved even more Euro/China deliveries from Q1 to Q2, and it gets worse. The fixed costs don't change, but the marginal profits which are supposed to cover them aren't there if you don't ship enough units.

For S & X, there was clearly some drop in demand (perhaps just the tax credit cliffs in US and, was it the Netherlands?), but an awful lot of it seems to have been the planned line changeover. And there seem to have been Euro/China delivery problems again. It looks to me like the line changeover took longer than it was supposed to.

As far as I am concerned, the biggest miss in recent quarters that Tesla has given up on 10K/week out of Fremont. That was truly bad news and the drop from $360 to $250 is partly justified by that. Getting only 5K/week in Q1 rather than the new target of 7K/week was also bad news and accounts for more of the drop. Our resident institutional investor says that his sources say that production is going up so the battery cell bottleneck hopefully really is fixed.

But essentially the bad news was in the delivery report; the earnings report has a lot of goofy wildcard stuff going on which doesn't matter (they do seem to have thrown in the kitchen sink) but the bulk of the loss is from just not making enough cars. IMO.

 

[neroden]

I’m really hoping they look at the capital raise idea floated here by @neroden. A great way to reward investors and, especially with short interest where it is, crush shorts.

Rights issue, you mean? Please do feel free to communicate it to Musk & Tesla.