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

[davecolene0606]

It’s now well known that Tesla is attracting an unprecedented percentage of mid priced car owners to trade up to a luxury priced vehicle. This is great news for future M3 demand, but it’s a cause for caution for future MS demand. The ratio of MS to M3 is likely to be lower than the historical ratio of higher priced to lower priced cars of other luxury brands.

This partially explains the dramatic falloff of MS sales in Q1 beyond even the expectations of management. Q1 is the first quarter when just about anyone in the world who wants a Tesla could buy an M3; they didn’t need to stretch further to an MS.

Management’s projections of MS sales for 2019 may be too rosy, which will negatively impact profitability and cash flow from what they are projecting.

That said, the sky is not falling. The M3 and MY are the future of the company. The worst case implication of a bit less MS demand is a need for a modest capital raise.

Other than that, Tesla looks in good shape. It will continue to make mistakes typical of any early stage high growth company, but its large moat and sandbox gives it a wide margin of error.

And that’s just looking at Tesla as a car manufacturer. If robotaxis come to pass in the next few years (and that now seems more likely than not), Tesla blasts off to truly uncharted territory.

So ur sayin BMW should be terrified that the 5/7series sales will be canbalized by the 3 series? MS/MX sales prey on competition from all vehicles in their class. This is not Tesla against Tesla. Tesla has been very specific that they are comfortable with 100K annual demand for S&X and they have right sized for that number and that has been very consistent historically. They will continue to update the vehicles as always to keep them fresh.

Fire Away!

 

[neroden]

Agreed.
BTW, Canadian government answer this morning was to increase limit to CAD55K unconditionally, so Tesla will likely scrap that 150km SR- offer

Ha! Cool. That's a reasonable response by the Canadian government.

 

[reardencode]

OT solar

Thanks for the heads up!
While 30% is coming to an end, the credit enters a phase out period.
Residential Renewable Energy Tax Credit | Department of Energy
Solar-electric property

• 30% for systems placed in service by 12/31/2019
• 26% for systems placed in service after 12/31/2019 and before 01/01/2021
• 22% for systems placed in service after 12/31/2020 and before 01/01/2022
• There is no maximum credit for systems placed in service after 2008.
• Systems must be placed in service on or after January 1, 2006, and on or before December 31, 2021.
• The home served by the system does not have to be the taxpayer’s principal residence.

Edit: direct link to DoE.

FWIW, the extension/phase out law also change the deadlines to start of construction/purchase, instead of enter service, as long as continuous progress is documented.

 

[Chickenlittle]

Suspect stock price will increase during bond sale period then drop after the its complete. Look at previous convertible. The participating brokers will make that happen its in their interest. I am long on tesla but would urge those who buy in rising price now to be wary

What I meant by this was not to not buy but after 3 to 5 days you should hold off and at that point you may get a lower price post offering than at the end of offering

 

[KarenRei]

Nice find.
I think important to tweet this. Lot's of shorts thinking EM would get margin called at $213 etc. So atleast that FUD is over

Tweet secured

Nafnlaus on Twitter

 

[Chickenlittle]

Waiting for Goldman upgrade now to support offering. How many times has this occurred

 

[kakamora]

Please post the URL without HTTP so it won't auto-link to the video.

FMHR-chamath palihapitiya - Streamable

 

[larmor]

Jim Cramer on CNBC just basically capitulated regarding Tesla With respect to their constant super negative bias that is commonly found.

Among the commnents from Jim Cramer said, (roughly) 'there were stories of demand issue, but (pauses) there are always two sides to a story'-- and if your a body language expert he wasnt or was not able to look directly into the camera saying this....

 

[ReflexFunds]

That's not Musk's style. I expect them to immediately plow $1 billion into unwinding the "wave" by building inventory, and then whatever it takes to get Model Y going (which honestly might be more like half a billion).

Maybe, though I think unwinding the wave is already factored into their guidance for positive free cash flow in Q2. I expect the wave unwind/higher in-transit inventory to largely be funded by positive cash flow, reduced unsold inventory and reduced receivables.

If they make the GF1 vs Fremont decision for Model Y, they could accelerate external construction on the GF1 extension. All the Model Y equipment is already ordered and payment is likely not due until 4Q19/1H20, so I don't think equipment capex can really be accelerated from here.

 

[schonelucht]

Oh, the loans are constantly increasing in size. Not a safe way to live, really. Most super-rich people do it, though.

The disclosed margin loans this time are actually lower than previously. So either he's got a funder that is not one of the well known banks or he paid down a significant chunk.

 

[Dutchie]

It’s now well known that Tesla is attracting an unprecedented percentage of mid priced car owners to trade up to a luxury priced vehicle. This is great news for future M3 demand, but it’s a cause for caution for future MS demand. The ratio of MS to M3 is likely to be lower than the historical ratio of higher priced to lower priced cars of other luxury brands.

This partially explains the dramatic falloff of MS sales in Q1 beyond even the expectations of management. Q1 is the first quarter when just about anyone in the world who wants a Tesla could buy an M3; they didn’t need to stretch further to an MS.

Management’s projections of MS sales for 2019 may be too rosy, which will negatively impact profitability and cash flow from what they are projecting.

That said, the sky is not falling. The M3 and MY are the future of the company. The worst case implication of a bit less MS demand is a need for a modest capital raise.

Other than that, Tesla looks in good shape. It will continue to make mistakes typical of any early stage high growth company, but its large moat and sandbox gives it a wide margin of error.

And that’s just looking at Tesla as a car manufacturer. If robotaxis come to pass in the next few years (and that now seems more likely than not), Tesla blasts off to truly uncharted territory.

"Every advantage has its disadvantage" (proverb from famous Dutch football player Johan Cruyff)

 

[lklundin]

As much as I love elon, he is not savvy at the game of wall st.

Yes!

I finally found something I have in common with Elon Musk.

 

[anthonyj]

@ihors3 updated short interest in $TSLA


Ihor Dusaniwsky on Twitter

Super high intelligence

 

[MarcusMaximus]

Agreed.
BTW, Canadian government answer this morning was to increase limit to CAD55K unconditionally, so Tesla will likely scrap that 150km SR- offer

BUT NO, GUYS, THEY DEFINITELY WERENT SPECIFICALLY TARGETING TESLA WITH THAT REQUIREMENT

 

[Muaddid]

Agreed.
BTW, Canadian government answer this morning was to increase limit to CAD55K unconditionally, so Tesla will likely scrap that 150km SR- offer

source ?

 

[Causalien]

Oh, the loans are constantly increasing in size. Not a safe way to live, really. Most super-rich people do it, though.

It's better than paying 25% of it in taxes. And you get to deduct interest from it.

The disclosed margin loans this time are actually lower than previously. So either he's got a funder that is not one of the well known banks or he paid down a significant chunk.

I was thinking he should take advantage of the high housing price and sell a few of those mega mansions he probably bought 10 years ago and not using.

 

[neroden]

The disclosed margin loans this time are actually lower than previously. So either he's got a funder that is not one of the well known banks or he paid down a significant chunk.

Well, he did refinance all the houses (mansions) he owns and pay off margin loans using the proceeds from the mortgages. That probably accounts for some of it.

 

[Remus]

That's not Musk's style. I expect them to immediately plow $1 billion into unwinding the "wave" by building inventory, and then whatever it takes to get Model Y going (which honestly might be more like half a billion).

Then after Q 2 there will be another wave of "analysts" attack saying "the ballooning inventory clearly shows no demand"

 

[Beaver]

I had to look at the short subreddit to see their reaction. "This gives them two more months with the lights on." "Still bankrupt by Q3." "They couldn't even get more than 2B." They just don't stop.

 

[bdy0627]

Waiting for Goldman upgrade now to support offering. How many times has this occurred

I don't think I've ever seen Tamerbino issue a buy rating. Is this what it takes?