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

[Causalien]

Tesla CEO Elon Musk launches new ‘hardcore’ cost-cutting effort, will review all expenses

Musk made the announcement in an email sent to all Tesla employees and obtained by Electrek.

In the email, the CEO argued that it is “extremely important” to “examine every expenditure at Tesla, no matter how small.”

He referenced Tesla’s last quarter during which the automaker lost $700 million.

Even Tesla still had a $2.2 billion cash position at the end of last quarter, Musk said that it wouldn’t last that long with their burn rate:

“This is a lot of money, but actually only gives us about 10 months at the Q1 burn rate to achieve breakeven!”

In order to stop the bleeding, the CEO is implementing a new cost-cutting initiative that will see all the teams examine every payment, including “parts, salary, travel expenses, and rent.”

The CEO added that Zach Kirkhorn, Tesla’s new CFO, will review and sign every page of outgoing payment while Musk himself will review and sign every tenth page.

Musk described the effort as “hardcore”:

“This is hardcore, but it is the only way for Tesla to become financially sustainable and succeed in our goal of helping make the world environmentally sustainable.”

He said that employees have a few weeks to take ownership of expenses and find ways to make improvements.


Déjà vu

Good, getting ready for a long trade war and potential recession.

 

[dc_h]

Tesla Registration Stats

What's going on in Norway with S/X? The last 4 days they have registered 58 S/X (combined) after registering a total of 101 for the entire month of April. Also, 15 of the registrations between yesterday and today have been 75D variant (out of 41 total)

First ship of Q2 has arrived.

 

[RobStark]

California Regulator Threatens Trump With `Extreme' Auto Rules

(Bloomberg) -- A top California environmental regulator is threatening to enact tough, new pollution rules -- including an unprecedented ban on cars burning petroleum-based fuels -- in response to a Trump administration plan to relax vehicle emission standards. California Air Resources Board Chairman Mary Nichols said the state would be forced to pursue “extreme” requirements to offset the uptick

 

[Artful Dodger]

Correction: All shares will be swapped for shares. The only cash payments will be for *fractional shares* -- so basically, take the number of MXWL stockholders and multiply by the price of 1/2 share of TSLA for the "leftovers". I have no idea how many distinct stockholders MXWL had, however.

Maybe, but I don't think so: Tesla wrote this in today's Press Release:

"As a result of this merger, all shares of Maxwell stock that were not tendered in Tesla’s exchange offer were cancelled in exchange for the right to receive the same consideration paid for Maxwell stock in the exchange offer."
​

I read the above to mean that MXWL shares not tendered (the outstanding 21%) will receive the amount of cash specified in the final offer ("same **consideration paid") instead of being exchanged for TSLA shares, like tendered MXWL shares.

Why would Tesla cancel untendered MXWL shares (clear from above statement), but then dilute TSLA by issuing more shares to people who clearly don't want them?

Cheers!

**consideration (noun)

1. a payment or reward.

"you can buy the books for a small consideration"​

 

[RobStark]

Nissan spurns lidar tech, siding with Musk

 

[shootformoon]

This is something I think tesla is too naive. Most of the other cars manufacturers started to produce 2019 model in the middle of 2018, if not earlier. The only reason they started producing after July is because they are way behind the schedule. If tesla plays with the "industry stardards", no inventory cars should be labeled 2018 model. They are all 2019.

Not much choice other than discounting for "last year's model", when there have been major changes.

Tesla will have to keep doing this kind of clearance of obsolete inventory on a regular basis, as they make major product changes.

But the quarterly rush thing has to end.

 

[SPadival]

Anybody seen what the production Porsche Taycan looks like...?

Holy sugar, Porsche needs to fire whoever turned that concept into that monstrosity.

Me in 2017..

2017 Investor Roundtable:General Discussion

 

[Solar Aussie]

I actually don't agree with this when Elon knows damn well his emails will leak to the media. Every communication of his will have multiple effects, well beyond the direct recipient. He would do well to consider that and use that power to improve perception of Tesla's financial condition rather than actually fanning the fire. I already have a couple of friends who have driven my model 3 and love it, but expressed major reservations, not about the vehicle, but about buying it from a company they perceive to be in dire straits financially. They don't spend time trying to find forums to dig up information about Tesla like we do. They just hear that Tesla is burning massive amounts of cash and may run out soon, possible bankruptcy, yada yada. It makes them extremely hesitant to buy a Tesla. I can't say I blame them for being gunshy about buying a vehicle with technology that is already quite unknown to them when the company producing them, by all apparent accounts, appears to be on the verge of financial collapse. Elon continues to help foster that narrative. It's great to keep trying to cut costs and control expenses, but it's damaging to the public perception of Tesla to over-dramatize the challenging financial situation it is in.

Next we will have a complaint to the SEC about Elon making materially significant statements to employees and a case.
ie how can a CEO manage a company under the stupidity of leaks from employees - maybe director of communications sees the catch 22 and got out.

 

[Carl Raymond]

California Regulator Threatens Trump With `Extreme' Auto Rules

(Bloomberg) -- A top California environmental regulator is threatening to enact tough, new pollution rules -- including an unprecedented ban on cars burning petroleum-based fuels -- in response to a Trump administration plan to relax vehicle emission standards. California Air Resources Board Chairman Mary Nichols said the state would be forced to pursue “extreme” requirements to offset the uptick

Fight dirty tricks with clean tricks. Love it.

 

[EinSV]

Fight dirty tricks with clean tricks. Love it.

Headline is powerful but it turns out she backed off from that in her speech.

But if Trump tries to force CA to allow too much fossil fuel pollution, all bets are off ....

 

[capster]

Agree it's for melodramatically justifying any and all cost cuts to Tesla employees, but Elon also knows this will leak. From that perspective, isn't he also trying to signal extremely low Q2 expectations for the market? The email conveys a strong sense of urgency to improve the financials, as if to say they have not improved from Q1 yet. This suggests a worse Q2 financial expectation than he guided for a few weeks ago.

Or he’s applying Colin Chapman’s edict to his whole enterprise: "Simplify, then add more lightness."

Speed, as they say, is of the essence.

 

[Zero CO2]

The e-mail wasn’t for ‘us’ or the media. It was for employees. Clearly nobody outside of Amazon cared what Jeff Who had to say to his employees.

Elon doesn’t have to and shouldn’t keep his mouth shut. He should convey whatever message he deems necessary to his employees, whenever and however he pleases.

It's called running the business ... "its not how much you make it... its how much you keep"... any other company focuses on cost cutting is a positive thing ... somehow for Tesla = running out of capital, too high cash burn, weak model 3 demand , etc

 

[AcesDealt]

neal boudette's tweet today

'Dominion CrossSell says
@Tesla
$tsla $tslaq YTD registrations in Calif were 28,304. If calif is 41% of US, that’s 71,000 for 4 months. Annualized for full year, you’re looking at US registrations of ~212K for full year'

Would be a good number if true, but I am unfamiliar with the quality of any of the assumptions there. Sorry if this was somewhere in the last 50 pages.

Tesla's future turns on how many cars they are selling right now and it feels like an abstract number with little way to support it at this point and God knows we cant trust guidance.

 

[Thumper]

I was a presenter last night at an EV "house party" sponsored by the local sustainability coalition. One prospective buyer said he was reluctant to buy a Tesla because of uncertainty about its future. This is a narrative that has at least some traction. Tesla needs to fight this perception. I believe it is depressing demand.

 

[Webeevdrivers]

I was a presenter last night at an EV "house party" sponsored by the local sustainability coalition. One prospective buyer said he was reluctant to buy a Tesla because of uncertainty about its future. This is a narrative that has at least some traction. Tesla needs to fight this perception. I believe it is depressing demand.

We hear it everyday at both a personal and professional level. It’s hard to ignore and hard to counter when that is the only thing in the news. And with no PR department or strategy it won’t get any better. If Tesla fails it won’t be because of poor products or technology. It will be because anybody can say anything at anytime about them...and no one will say anything to the contrary....right to the end.

 

[DocZ]

I think it’s very clear to me that Tesla will not meet Q2 guidance and the stock will slide even more.

In light of this, I think the obvious moves are:
1. Stop with silly overly optimistic timelines. Robotaxis are an example. Complete nonsense that Elon tried to spin this in a manner that was clearly aimed at inflating market cap. Nobody believes robotaxis are actually coming next year, and rightfully so.
2. Market is punishing Tesla hard for missing on execution. Get back to executing.
3. With the stock being $160 off from all time highs, it’s time for a major company to back you financially. Whether that be a 10% stake, buyout, etc.
4. Tesla needs to bring the magic back. People used to be so excited about this company. Now it’s all doom and gloom BS on a daily basis, with the general public thinking Tesla is gonna die.

It’s clear to me that the stock isn’t going up anytime soon with continued delivery misses in Q2, and then who knows what’s gonna happen in Q3/Q4. Having a major company like Apple or Amazon back Tesla would be huge and would kill the shorts.

Anyway, as a long bull it’s been super disappointing to watch.

 

[Artful Dodger]

OFF-PLANET:

@SpaceX 2 hours ago​

"Standing down to update satellite software and triple-check everything again. Always want to do everything we can on the ground to maximize mission success, next launch opportunity in about a week."​

Reminds me of pilot training:

"I'd rather be on the ground wishing I was flying, than flying wishing I was on the ground." ​

Cheers!

 

[EVDRVN]

I was a presenter last night at an EV "house party" sponsored by the local sustainability coalition. One prospective buyer said he was reluctant to buy a Tesla because of uncertainty about its future. This is a narrative that has at least some traction. Tesla needs to fight this perception. I believe it is depressing demand.

I know many people that have said that but if you bring it up here you will get bashed and many disagree posts. Few buyers come to Tesla forums and they consider stability in a company important when making a major purchase. I have friends I can't sway because they have too much concern about future service and parts. Musk is the poster child for these concerns, valid or not he does not instill stability in this childish actions and comments. There is a huge market of sheepish Tesla prospects.

 

[MarcusMaximus]

Next we will have a complaint to the SEC about Elon making materially significant statements to employees and a case.
ie how can a CEO manage a company under the stupidity of leaks from employees - maybe director of communications sees the catch 22 and got out.

Good luck to ‘em. Gonna have to prove simple arithmetic on known and publicly stated past numbers is “material”. In front of a judge who appears to be done with their *sugar*

 

[Carl Raymond]

I know many people that have said that but if you bring it up here you will get bashed and many disagree posts. Few buyers come to Tesla forums and they consider stability in a company important when making a major purchase. I have friends I can't sway because they have too much concern about future service and parts. Musk is the poster child for these concerns, valid or not he does not instill stability in this childish actions and comments. There is a huge market of sheepish Tesla prospects.

Do they have concerns BMW will stay solvent? They concern issue will flip soon, from EV to ICEV makers.