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

[AcesDealt]

I thought the secondary was gonna be a strong floor for this stock because it bought quite a bit of security but something triggered this followup collapse. Is it China trade worries or is there info about sales this quarter? I don't buy it being the NTSB investigation, the fires, or the email. Those are all relatively trivial.

 

[bdy0627]

Is "Many Think" the cousin of "Some Say"

Yes. And many hope that this is actually the bottom (me included)!

 

[oneday]

Generally I agree with you, but someone who followed this advice since the first downtrend this year would be severely in the hole.

Raises hand. Yeah this has not worked very well in 2019. My SO told me she wants to call our brokerage and have them remove option trading from our account. She has not been very happy with my *intuition* this year. Have some more calls expiring worthless today.

Anyways, just initiated another transfer of funds into my brokerage. Something something definition of insanity.

If you’re buying options, be prepared to lose it all no matter your confidence level.

 

[Bobfitz1]

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

It seems that, like Elon, you don't understand that the perceptions of those with less information (than those who follow Tesla closely and know better) are still very important to the success of the company. BMW has fostered a reputation as a stable, high end car company for decades. It's perfectly rational to hold off on a huge investment in a product made by a company whose financial future is still uncertain. Good luck explaining all this to a friend who hears what Tesla's CEO just said about only having enough cash to last for 10 months if the last quarter's loss continues. You'd need a 1/2 hour Power Point presentation to convince the friend that BMW isn't as solid as they imagine and another to explain why the CEO didn't factor in all the reasons the Q1 level loss was due to several one time expenses that won't recur in the remaining quarters in speaking to his employees. It would be great if the Board would ask a few of the top people (Zack, JB, etc) to review and raise any concerns with Elon's communications to employees.

 

[Tslynk67]

Yes. And many hope that this is actually the bottom (me included)!

To be fair, someone has posted "I think we've found a bottom", nearly every day for the past three months

 

[AlMc]

Our current dip, based on the low today, is already nearly to -16% from the recent short-lived high of $258. We are now down -44.2% from the ATH. Many think we are likely to see a 50% retracement from that ATH. That would take us down to $195.

Is "Many Think" the cousin of "Some Say"

Yes. And many hope that this is actually the bottom (me included)!

Opinion of one here (not many): We are back in the $180-280 range that we languished in for quite some time a while back. So, my 'bottom' is $180. I will add more there IF we see it.

Good luck my brother and sister longs...Rough road recently. Hope we start to see some good news soon (not EM soon..AlMc soon...like yesterday!)

 

[Matias]

Raises hand. Yeah this has not worked very well in 2019. My SO told me she wants to call our brokerage and have them remove option trading from our account. She has not been very happy with my *intuition* this year. Have some more calls expiring worthless today.

Anyways, just initiated another transfer of funds into my brokerage. Something something definition of insanity.

If you’re buying options, be prepared to lose it all no matter your confidence level.

Are you gaming with your own money, our your common money?

 

[bonaire]

I hear you. I think after the profitable Q3 surprise and Elon promising cash flow positive from now on, many here (including me) got fooled into believing we would see $400 before end of the year. Then came the $420 private tweet and everyone was upset they would be forced out of the opportunity to see TSLA in the $1000-$1500.

The SEC problems and roller coaster that followed in December, in hind sight, had a few good selling opportunities, but the sentiment here was still buy on the dip.

Today, many, including myself, are deep underwater because of this. As someone who had faith in the company from the very beginning and supported the mission, it is easy to feel let down by Elon.

Do you have a Covered Call selling strategy while holding shares of a stock? You actually could have recouped income along the way even in a sideways or slightly higher market.

 

[oneday]

Are you gaming with your own money, our your common money?

My income, her money. It’s all her money, she just let’s me play with some of it. Though my privileges might be revoked.

 

[EVNow]

Or in my case, bought because of after Tesla"s going private, I would not have any opportunity to buy. Wanted to own shares of the private company and have an increased opportunity of buy additional shares in the future.

But for those of us who bought after Private tweet, we had ample opportunity to sell when the SP was near ATH in December.

 

[hershey101]

interesting take on the recent bond offering: Tesla raises $2.4 billion in capital; Is Tesla desperate?; Taking a closer look at the deal - Empire Financial Research

 

[StarFoxisDown!]

Just wanted to point out how clear it's become over the past 2 quarters now about how much the US Tax credit system F'd over Tesla's organic growth and especially us investors. I can't really be that mad at Elon for the logistics woe's over the past 2 quarters because he and Tesla tried to the right thing by getting as many Model 3's to US customers as they could before the US tax credit got cut in half.

The issue is that it has completely screwed any chance at doing the Model 3 ramp organically and more importantly......correctly. They essentially completely focused on US logistics during Q3 and Q4 and actually overdid logistics for US. They spent and wasted money that should have been spent getting logistics ready for 2k/ week in Euro and in China. Here's how the process went:

Q3 - Only focused on US variants, enough demand for only high end US variants for that quarter. Didn't give ANY focus to getting production or logistics ready for overseas. Posted big profit because logistics is much more simple but also wasted money on things like overtime for delivery employees, re-touch up of cars, etc...

Q4 - Not enough organic demand for only high end variants, so they introduce Mid-Range, probably earlier than they would have wanted to. Only focused on US production to maximize how much customers get cars before tax credit gets cut in half. Again, no focus on overseas production variants or overseas logistics preparation. Again, wasting money on the end of quarter rush. No inventory to act as buffer financially to start overseas production and shipping. Posted profit, but smaller because of wasted logistics money and sales to try and get as many cars into customers hands.

Q1 - US demand is still not organic yet because of how much production they gave US in Q3 and Q4. Tesla had really high goals of being able to start overseas production and get overseas logistics figured out...….all in in quarter. No inventory buildup at all for overseas and limited inventory for Model 3. Cell production still constrained so can't make up the difference in volume. Add on that they decided to the Raven update for S/X which further eliminates any financial buffer.

Q2 - Still dealing with the ramifications

Now here's how it should have gone down...….organically:

Q3 - Model 3 High end variants only....with 60-70% for US markets. The rest for overseas. Allows them to get their logistics figured out without wasting money. No 300+ million profit....more like break even because they have to fill inventory for overseas.

Q4 - Model 3 high end variants only, 50/50 split between US and overseas. Logistics increases as ramp increase for both US and overseas. Prob a profit of about 50-100 million or so

Q1 - Introduce Mid-Range across all territories, increase production as Mid-Range uses less cells. Prob profit of 50-100 million

Q2 - Introduce SR, increase production as SR uses less cells. Logistics increases organically as production volume increase. Profit stays stable at 50-100 million.

Q3 2020 - Profits start to grow organically much quicker as production ramp continues.

This is how it should have gone. If you're mad at Elon right now, you're mad at him for doing the right thing for customers. That has obviously blown up in Elon and Tesla's face. If I have any blame for someone, it's actually probably Deepak. Like come on man, you should have been able to forecast how the non-organic approach was going to be an issue.

 

[Right_Said_Fred]

Why do so many people think they can do better at running a company that is at the cutting edge of technology, when most of them are probably already having a hard time running a household or marriage? Elon is upsetting several global industries at the same time, but dozens here think they can do a better job...

Elon, with all his quirks, is one of a kind and anyone else would have run Tesla or SpaceX into the ground a long time ago. Simple question: would any of us have decided to equip every single Tesla with a full camera suit without knowing if people would actually be paying for them? No, we wouldn’t. We would have only installed the cameras in cars of people who ordered and paid for them. Because we lack Elons capacity for unorthodox thinking.

 

[sundaymorning]

Im getting ready for a model 3 delivery, had the sales rep on the phone yesterday and the individual tells me sales have been crazy lately. He’s definitely seen an uptick in new buyers since the standard was announced. The sales rep also explained that lots of buyers are walking into the shop ordering Tesla’s because of gas prices lately, it’s above $4.00 in California right now. I don’t see gas prices dropping anytime soon due to the Iranian and Saudi disagreements...If anything gas will continue to rise with summer approaching and travel season kicks in. The sales rep confided that “Tesla will be okay” the individual was quite confident with his job security.

I was also at my bank preparing the loan, my banker tells me he’s seen a lot of orders for Tesla’s. This is of course just two data points. On days like this, I just drive my Tesla and watch all the other Tesla’s on the road. Most buyers I know don’t read into news like we do, cheer up everyone.

 

[anthonyj]

Why do so many people think they can do better at running a company that is at the cutting edge of technology, when most of them are probably already having a hard time running at a household or marriage? Elon is upsetting several global industries at the same time, but dozens here think they can do a better job...

Elon, with all his quirks, is one of a kind and anyone else would have run Tesla or SpaceX into the ground a long time ago. Simple question: would any of us have decided to equip every single Tesla with a full camera suit without knowing if people would actually be paying for them? No, we wouldn’t. We would have only installed the cameras in cars of people who ordered and paid for them. Because we lack Elons capacity for unorthodox thinking.

No one here thinks that they can run the company better. Elon is the man for the job. He doesn’t do shareholders and favors with his wildly optimistic timelines and guidance. That’s the problem and the market is sick of it. The market is blind without guidance and will just assume the worst

 

[bonaire]

The camera set and wiring is pretty cheap. The computer on the other hand isn't.

 

[tschmidty]

Exactly. Except that Brad Apelgren guy from bsaelectronics seems to not know how to ramp up or hire help, so he stopped responding to emails and now takes smth like 2mo to ship the thing. So, if somebody else can make this in volume, in a nicer package and deliver quickly, there should be a market for it.

Sure, many will install HPWCs, but a splitter can potentially be acquired and put to use much quicker, so there should be a market for it considering that Tesla sales will only grow going forward. The main difference is 'UL listing pending'. When that's done, electricians won't be able to say "it's unsafe for you".

Hopefully, more companies will make these and prices go down to some $200-300. Also, when somebody comes to a store and asks what would it take to get the home charging set up, it'd be nice to point them to a $200 solution that doesn't make a big dent in a budget.

There are already splitters available now though, I have one on my 14-50 splitting my range and charger. <https://www.amazon.com/gp/product/B07D4PT7T6/ref=ppx_yo_dt_b_asin_title_o04_s00?ie=UTF8&psc=1>

 

[bonaire]

Im getting ready for a model 3 delivery, had the sales rep on the phone yesterday and the individual tells me sales have been crazy lately. He’s definitely seen an uptick in new buyers since the standard was announced. The sales rep also explained that lots of buyers are walking into the shop ordering Tesla’s because of gas prices lately, it’s above $4.00 in California right now. I don’t see gas prices dropping anytime soon due to the Iranian and Saudi disagreements...If anything gas will continue to rise with summer approaching and travel season kicks in. The sales rep confided that “Tesla will be okay” the individual was quite confident with his job security.

I was also at my bank preparing the loan, my banker tells me he’s seen a lot of orders for Tesla’s. This is of course just two data points. On days like this, I just drive my Tesla and watch all the other Tesla’s on the road. Most buyers I know don’t read into news like we do, cheer up everyone.

California is doing ok, but I track the CRVP rebate applications (extrinsically) and I still see a 20% decline over April here in May. Either buyers are wealthy and cannot apply, or don't know about it, or sales are good in certain areas of CA only (where gas prices are indeed higher). You don't buy a *NEW* car to save a bit on gas prices. Especially if noticing the SuperCharger per-kWh prices that would follow. Having an at-home tiered rate or an EV second meter is essential to beating gas prices in CA.

 

[StockCynic]

interesting take on the recent bond offering: Tesla raises $2.4 billion in capital; Is Tesla desperate?; Taking a closer look at the deal - Empire Financial Research

The cost of that convertible debt all-in when factoring the offsetting hedge and warrant transaction was ~8% which is in the ballpark of the current YTM on the unsecured bonds Tesla issued back in August of 2017. There is no "free lunch" so to speak, people see 2% coupon and think wow what a fantastic deal! The true cost is much higher, and the hedging transactions required the underwriters to soak up a huge portion of the ~$800m equity offering. The cost of capital is rising dramatically, not just for Tesla but for most businesses, these are classic end of cycle dynamics.

 

[Zero CO2]

I am happy to see so many Tesla’s on the road. But by no means does that indicate that we are in great shape. Every layperson I talk to thinks Tesla is going bankrupt. To us who love Tesla and see plenty of Tesla’s - we are simply reinforcing our own personal bias. The reality is the general public has a very negative perception of Tesla due to the FUD you cited.

To respond to some of your other points, Maxwell acquisition is great but will likely have a 1-2 year period of R&D and then implementation. Nothing imminent happening here. Tesla insurance is unlikely to be a money maker for Tesla, I’m not even sure it will be a compelling usable product. I do agree with your Canada, sentry mode, FCA points.

Remember the old saying "It's the economy, stupid" from the Clinton days....
For Telsa "its the car stupid" every time i get back in my model S after driving my 4 runner (which i was a huge fan had 3 of them from 1998-today) it reinforces my conviction to this car brand and the stock the long run ...