If trade war intensifies, all bets are off.
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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
If trade war intensifies, all bets are off.
The one time I used a loaner last year (when my 3 was in for a few hours) it was an AP1 S. At first I was like "ooh, an S" and then I was like "meh, everything is ancient and terrible" LOL a pre-Raven AP2.x S would be an improvement!
not one questions on Maxwell...that was what I wanted to hear about.
At the moment they're probably more worried about a piecemeal implementation by cities and states, since that may happen on a timeframe faster than the next inaugeration.
Won't happen. World exponential growth curve with doubling every two years is solid until 80% adoption at least -- which means 2030, which is only 11 years away.
Tesla, BYD, BAIC, and Geely will all do great, as will some other companies. But at this rate Tesla will be the volume leader and the lowest-cost producer.
And what if we invent teleportation, or Star Trek's transporter? Won't happen.
I actually *know* of a far better battery design but it won't make it out of the lab within 11 years, and neither will anything else which could seriously disrupt Tesla's lead on battery costs.
And what if we invent Iron Man's Arc Reactor or Stargate's "Zero Point Energy Modules"? Won't happen.
I know enough science to know that this one is actually thermodynamically impossible. It's always cheaper to just not emit the CO2 in the first place.
The lead was actually Nissan's originally, and they made heroic efforts to squander that lead. GM got Bolt to market before Tesla, and squandered it.
BYD had a huge lead, and yet they are making shorter-range cars than Tesla and their cost structure is worse. BAIC made a great effort and *almost* caught up with BYD.
You don't have to run faster than the bear, only faster than the other guys. Tesla is still in the lead because everyone else is squandering their leads *more*. At this point it's getting extremely hard to catch up. I wish Rivian the best and I think they'll succeed. But they won't have a single product out for at least two years, probably more like three or four. By that time Tesla will be making a million cars a year.
Tesla might be overpriced, but they'll do better than anyone else in the sector in the 5-year time horizon, barring certain serious mistakes which they might make like unlimited liability exposure for robotaxi crashes.
I don't think anyone can take a clear lead in lithium. Even the cheapest lithium area, in Chile / Argentina, already has multiple companies.
There is one aspect to the 75 discontinuation that really confused me, so I'd be interested to hear anyone's thoughts. They clearly had a lot of 75s in inventory (and still have some old ones now), so why discontinue it from the main website and not just restrict the available options to match most of those on existing inventory? Customers ordering from the main custom order page could still have received one from inventory, and perhaps they could have still produced a few extra if necessary. A lot of people probably go straight to custom order and don't look at inventory for different options, and formally discontinuing a model probably makes it harder to sell the inventory anyway, as it's obviously a bit demotivating to buy an older discontinued model than one that's still current.
It could have been an effort to push more people to high-trim Model 3s instead, or perhaps to upgrade to the higher-trim S/X, but it doesn't seem to have worked out too well with so many old S/X remaining unsold until the recent price reductions and free unlimited supercharging on old inventory.
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Is Wall Street Clueless On Tesla [TSLA]? | CleanTechnica
The most material tweet of 2018 was not the supposedly infamous “funding secured” tweet. It was the April 13, 2018, tweet that Tesla would be profitable in Q3 and Q4, that Tesla would not need to raise any money in 2018.
But it was not in line with the analysts’ views, so it was ignored, ridiculed, and considered a poor stock-pumping attempt. What all the analysts missed was that Tesla CEO Elon Musk’s Twitter account is an official Tesla publication channel, giving that tweet the status of an official press release to the financial community.
The Economist
✔@TheEconomist
· Apr 12, 2018
Tesla will need to raise $2.5bn to $3bn this year, according to Jefferies, a bank https://econ.st/2GKub8z
Tesla is heading for a cash crunch
The road ahead for Elon Musk’s car company is looking more perilous
economist.com
Elon Musk
✔@elonmusk
The Economist used to be boring, but smart with a wicked dry wit. Now it’s just boring (sigh). Tesla will be profitable & cash flow+ in Q3 & Q4, so obv no need to raise money.
18.5K
10:11 PM - Apr 12, 2018
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At the conference call about the Q1 results on May 2nd, 2018, a number of analysts kept asking about the money Tesla needed to raise — in their view. It was implied repeatedly that Tesla absolutely had to raise more money, despite Musk repeatedly saying they didn’t. This cumulated in an analyst insisting that Elon disclose how much money Tesla was going to raise, despite those repeated previous denials for the need to raise any money at all. It was very embarrassing, an analyst essentially telling the CEO to stop lying and tell everyone what the analyst wanted to hear.
A little lesson for analysts: CEOs and CFOs try not to lie to the financial press in official statements, press releases, quarterly financial reports, and press conferences. They can go to jail for doing that. And if you, great journalist or analyst, have a strong suspicion backed up by some evidence that one of those two is lying, call the SEC. The SEC loves to know about it, as long as it is about Tesla.
Worth noting here is that there was no slip in wording. Elon repeated many times that Tesla wouldn’t raise money in the rest of 2018, and would show profits in Q3 and Q4.
A year later, it is not much better. The current confusion on material info is about demand this time, instead of production capacity and profits. While demand for fully electric vehicles outside the USA is rising at a speed that carmakers can’t match, the American analysts show again that they don’t know the difference between sales and deliveries, or how the car market functions outside the USA. Or they pretend not to know.
They tell baseless stories about Tesla, embarrassing themselves by showing their lack of knowledge and ruining their credibility among those who can put 2 + 2 together.
Last week, a Tesla store in Vancouver, BC, reported selling 800 cars in a week. They will likely be delivered in Q3. Those boneheaded analysts will most likely report a surge in demand in Q3 and an “alarming drop” in Q4, while all that is likely to happening is a rush in Q2 that turns latent demand into actual sales because of a local incentive at the risk of running out. That is going to create what looks like a wave in demand, or roller coaster with a hard fall at some point, instead of steady-state demand. Is demand really going to fall off a cliff? Or is there simply going to be an unbalanced expression of consistent demand?
It is not really difficult when you have your facts straight.
So, here is a short tutorial for analysts:
There are two types of sales.
For various reasons, only type 2 sales are communicated to the financial press and the public at large. Type 1 sales are often shared with trade associations and government statistical bureaus. They are not shared with the competition and outsiders. Car journalists and financial analysts in Europe don’t pay attention to the numbers of a single month. Only when a pattern emerges over several months is it time for conclusions. Even when there is a likely cause and effect, as with the arrest of Ghosn in Japan, conclusions are very carefully made (in this case, mostly after confirmation by Nissan).
Tesla’s Vehicle Delivery Expectations (FactSet) Are Being Artificially Inflated. Image by Michael Grinshpun
People Repeatedly Claim Tesla Demand Is Falling When Data Shows Tesla’s Demand Is Rising. Image by Michael Grinshpun
In data sciences, you learn that pure data is meaningless. The process of giving meaning to data transforms it into information. To give meaning to data, one has to know the rules that apply to the data. When not knowing the rules, and therefore applying a wrong set of rules, the result is gibberish. Not recognizing the gibberish is as big an error as applying the wrong rules in the first place.
The information of Tesla having a demand problem is actual gibberish, but not recognized as such.
Recently, we have had two other examples of Wall Street not turning data into factual, correct information. Both were “leaked” internal emails from Elon to Tesla personnel. The first contained hyperbole about the burn rate the newly acquired capital could be exposed to. The second was about receiving many orders for cars.
Many articles are written about the question of how those highly paid Wall Street analysts lack basic reading comprehension to interpret the emails so wrongly. The best is “Some Thoughts On Elon Musk’s Emails To Employees — & The Media + Wall Street’s Response.” There is no reason for me to repeat what is in this article — just read it if you haven’t. Elon’s response to the article was, “Yup.”
The SEC is very critical about releasing material information that might not be 100% accurate. Elon Musk uses sometimes a big brush to paint the future he expects. Elon is not “scripted.” Other CEOs can give verbatim, years later, the same generic answer to a question they haven’t received in years. Elon will give two different answers when the same question is asked in the same conversation. He is responding in a human way to the question in the moment and going off of a memorized script checked obsessively by lawyers.
The SEC is right in asking for more accuracy in the communications, but the SEC shares the same handicap as much of Wall Street — it is apparently not able to recognize material information.
Last year’s April 13 tweet was not recognized for what it was, a very important public release about the Model 3 production problems being solved, and implications for the productivity and profitability of Tesla in the rest of the year.
The first letter this month was thought to contain the prediction that Tesla would run out of money in 10 months. It did no such thing, and if thinking about it for a few seconds, the numbers would not add up. When you have a cash position of $4B and you burn $2B in 10 months, you are not out of money — you still have $2B in cash. Also, Elon was not making a prediction or forecast — he was simply illustrating that $2B didn’t mean they had no cares in the world. There was no material information in that letter. It was a normal internal communication to employees like every company makes regularly — be frugal, don’t waste money.
The second letter did contain important information — about order intake, production volume, and production goals — exactly the kind of information Wall Street is always asking about and not getting, because they routinely interpret it incorrectly, just as happened this time.
And last but not least, there’s the complete misunderstanding of the difference between orders, logistics, deliveries, and demand. Wall Street analysts we are supposed to trust produce wild fairytales many conspiracy websites would be jealous of, joining a cult of “demand truthers” that until recently was only really present on #TSLAQ.
Let’s make a note about exceptions in the financial industry. Bank of America did state that the current Tesla stock price was the result of short seller manipulations, not the fundamentals. The expected messiness of the first quarter was, for Oppenheimer and ARK Invest, not a reason to revise their analyses and their long-term projections. Kudos to those three, which used their brains and facts instead of reproducing the reverberating sound in the echo chamber of Wall Street analysts, pundits, and $TSLAQ.
The effect of the other’s failures are $billions of lost value by real investors, the people the SEC was created to protect. And then there’s possibly $billions in profits for illegally manipulative, destructive short sellers, one of the market-disturbing groups the SEC was created to prosecute. The success of these short sellers is made possible by the Wall Street crowd of analysts, pundits, and mainstream financial journalists aiding and abetting them. It is their shortsightedness and echo chamber culture that mislead investors who are reallyinterested in how the company is doing.
To recapitulate, here are four examples of Wall Street completely missing the meaning of the data it receives:
Okay, accurate information is important for us, specialized electric vehicle and renewable energy news outlets, compulsive Tesla followers, and Tesla investors. We need the information. Thus, I have a request.
At the end of the quarter, two numbers are published, production numbers and deliveries. Production tells us how well the factories are performing. Deliveries are about financial results, but a bit meaningless without the average sales price and gross margin.
I have a request for Tesla: Can you replace the delivery number with the net order intake number. Then the first quarterly report covers both production and sales. That would then be followed 3–4 weeks later by the normal report about the financial results that are achieved thanks to those performances.
Wall Street won’t understand the numbers, or will pretend not to, but hey, that is nothing new.
The most material tweet of 2018 was not the supposedly infamous “funding secured” tweet. It was the April 13, 2018, tweet that Tesla would be profitable in Q3 and Q4, that Tesla would not need to raise any money in 2018.
But it was not in line with the analysts’ views, so it was ignored, ridiculed, and considered a poor stock-pumping attempt. What all the analysts missed was that Tesla CEO Elon Musk’s Twitter account is an official Tesla publication channel, giving that tweet the status of an official press release to the financial community.
The Economist
✔@TheEconomist
· Apr 12, 2018
Tesla will need to raise $2.5bn to $3bn this year, according to Jefferies, a bank https://econ.st/2GKub8z
Tesla is heading for a cash crunch
The road ahead for Elon Musk’s car company is looking more perilous
economist.com
Elon Musk
✔@elonmusk
The Economist used to be boring, but smart with a wicked dry wit. Now it’s just boring (sigh). Tesla will be profitable & cash flow+ in Q3 & Q4, so obv no need to raise money.
18.5K
10:11 PM - Apr 12, 2018
Twitter Ads info and privacy
2,549 people are talking about this
At the conference call about the Q1 results on May 2nd, 2018, a number of analysts kept asking about the money Tesla needed to raise — in their view. It was implied repeatedly that Tesla absolutely had to raise more money, despite Musk repeatedly saying they didn’t. This cumulated in an analyst insisting that Elon disclose how much money Tesla was going to raise, despite those repeated previous denials for the need to raise any money at all. It was very embarrassing, an analyst essentially telling the CEO to stop lying and tell everyone what the analyst wanted to hear.
A little lesson for analysts: CEOs and CFOs try not to lie to the financial press in official statements, press releases, quarterly financial reports, and press conferences. They can go to jail for doing that. And if you, great journalist or analyst, have a strong suspicion backed up by some evidence that one of those two is lying, call the SEC. The SEC loves to know about it, as long as it is about Tesla.
Worth noting here is that there was no slip in wording. Elon repeated many times that Tesla wouldn’t raise money in the rest of 2018, and would show profits in Q3 and Q4.
A year later, it is not much better. The current confusion on material info is about demand this time, instead of production capacity and profits. While demand for fully electric vehicles outside the USA is rising at a speed that carmakers can’t match, the American analysts show again that they don’t know the difference between sales and deliveries, or how the car market functions outside the USA. Or they pretend not to know.
They tell baseless stories about Tesla, embarrassing themselves by showing their lack of knowledge and ruining their credibility among those who can put 2 + 2 together.
Last week, a Tesla store in Vancouver, BC, reported selling 800 cars in a week. They will likely be delivered in Q3. Those boneheaded analysts will most likely report a surge in demand in Q3 and an “alarming drop” in Q4, while all that is likely to happening is a rush in Q2 that turns latent demand into actual sales because of a local incentive at the risk of running out. That is going to create what looks like a wave in demand, or roller coaster with a hard fall at some point, instead of steady-state demand. Is demand really going to fall off a cliff? Or is there simply going to be an unbalanced expression of consistent demand?
It is not really difficult when you have your facts straight.
So, here is a short tutorial for analysts:
There are two types of sales.
- The commercial sale — the customer deciding to buy and signing the sales contract. This is important for judging demand, and for a salesperson’s bonuses.
- The delivery and final payment. This is important for the accounting department and for allocating profit to the right period.
- Factories that are being upgraded have temporarily less production, less production implies fewer deliveries. (type 2 sales)
- Ships (not) arriving in overseas export markets dictate the logistics flow and spikes/drops in deliveries. (type 2 sales)
- Incentives being changed can cause spikes and drops in customer decisions to (not) buy a certain car. (type 1 sales)
- Incentives that are tied to date of delivery can spur before-deadline deliveries. (type 2 sales)
- Ad campaigns and media attention can increase the number of customers deciding to buy. (type 1 sales)
- Seasonality because of license plate series. (type 2 sales)
- Spikes after bonuses are being paid. (type 1 sales)
For various reasons, only type 2 sales are communicated to the financial press and the public at large. Type 1 sales are often shared with trade associations and government statistical bureaus. They are not shared with the competition and outsiders. Car journalists and financial analysts in Europe don’t pay attention to the numbers of a single month. Only when a pattern emerges over several months is it time for conclusions. Even when there is a likely cause and effect, as with the arrest of Ghosn in Japan, conclusions are very carefully made (in this case, mostly after confirmation by Nissan).
Tesla’s Vehicle Delivery Expectations (FactSet) Are Being Artificially Inflated. Image by Michael Grinshpun
People Repeatedly Claim Tesla Demand Is Falling When Data Shows Tesla’s Demand Is Rising. Image by Michael Grinshpun
In data sciences, you learn that pure data is meaningless. The process of giving meaning to data transforms it into information. To give meaning to data, one has to know the rules that apply to the data. When not knowing the rules, and therefore applying a wrong set of rules, the result is gibberish. Not recognizing the gibberish is as big an error as applying the wrong rules in the first place.
The information of Tesla having a demand problem is actual gibberish, but not recognized as such.
Recently, we have had two other examples of Wall Street not turning data into factual, correct information. Both were “leaked” internal emails from Elon to Tesla personnel. The first contained hyperbole about the burn rate the newly acquired capital could be exposed to. The second was about receiving many orders for cars.
Many articles are written about the question of how those highly paid Wall Street analysts lack basic reading comprehension to interpret the emails so wrongly. The best is “Some Thoughts On Elon Musk’s Emails To Employees — & The Media + Wall Street’s Response.” There is no reason for me to repeat what is in this article — just read it if you haven’t. Elon’s response to the article was, “Yup.”
The SEC is very critical about releasing material information that might not be 100% accurate. Elon Musk uses sometimes a big brush to paint the future he expects. Elon is not “scripted.” Other CEOs can give verbatim, years later, the same generic answer to a question they haven’t received in years. Elon will give two different answers when the same question is asked in the same conversation. He is responding in a human way to the question in the moment and going off of a memorized script checked obsessively by lawyers.
The SEC is right in asking for more accuracy in the communications, but the SEC shares the same handicap as much of Wall Street — it is apparently not able to recognize material information.
Last year’s April 13 tweet was not recognized for what it was, a very important public release about the Model 3 production problems being solved, and implications for the productivity and profitability of Tesla in the rest of the year.
The first letter this month was thought to contain the prediction that Tesla would run out of money in 10 months. It did no such thing, and if thinking about it for a few seconds, the numbers would not add up. When you have a cash position of $4B and you burn $2B in 10 months, you are not out of money — you still have $2B in cash. Also, Elon was not making a prediction or forecast — he was simply illustrating that $2B didn’t mean they had no cares in the world. There was no material information in that letter. It was a normal internal communication to employees like every company makes regularly — be frugal, don’t waste money.
The second letter did contain important information — about order intake, production volume, and production goals — exactly the kind of information Wall Street is always asking about and not getting, because they routinely interpret it incorrectly, just as happened this time.
And last but not least, there’s the complete misunderstanding of the difference between orders, logistics, deliveries, and demand. Wall Street analysts we are supposed to trust produce wild fairytales many conspiracy websites would be jealous of, joining a cult of “demand truthers” that until recently was only really present on #TSLAQ.
Let’s make a note about exceptions in the financial industry. Bank of America did state that the current Tesla stock price was the result of short seller manipulations, not the fundamentals. The expected messiness of the first quarter was, for Oppenheimer and ARK Invest, not a reason to revise their analyses and their long-term projections. Kudos to those three, which used their brains and facts instead of reproducing the reverberating sound in the echo chamber of Wall Street analysts, pundits, and $TSLAQ.
The effect of the other’s failures are $billions of lost value by real investors, the people the SEC was created to protect. And then there’s possibly $billions in profits for illegally manipulative, destructive short sellers, one of the market-disturbing groups the SEC was created to prosecute. The success of these short sellers is made possible by the Wall Street crowd of analysts, pundits, and mainstream financial journalists aiding and abetting them. It is their shortsightedness and echo chamber culture that mislead investors who are reallyinterested in how the company is doing.
To recapitulate, here are four examples of Wall Street completely missing the meaning of the data it receives:
- FUD-induced rumors about falling demand combined with misunderstood European sales numbers.
- Ignoring the April 13 tweet about profitability and the following shareholder letter and verbal explanations.
- Seeing alarming financial forecasts where there is only motivational hyperbole in a normal letter to employees, a letter in which there isn’t any forecast whatsoever.
- Concluding lack of demand when there is actually a message of high order intake and possible record deliveries.
Okay, accurate information is important for us, specialized electric vehicle and renewable energy news outlets, compulsive Tesla followers, and Tesla investors. We need the information. Thus, I have a request.
At the end of the quarter, two numbers are published, production numbers and deliveries. Production tells us how well the factories are performing. Deliveries are about financial results, but a bit meaningless without the average sales price and gross margin.
I have a request for Tesla: Can you replace the delivery number with the net order intake number. Then the first quarterly report covers both production and sales. That would then be followed 3–4 weeks later by the normal report about the financial results that are achieved thanks to those performances.
Wall Street won’t understand the numbers, or will pretend not to, but hey, that is nothing new.
Sitting tight. I have no dry powder.
I have a lot of money in Tesla -- and I have 2021-dated short puts secured by the margin capacity which I get from stocks *other* than Tesla. That's my limit. I could sell some of the other stocks for cash to increase my margin capacity, but I really don't want to -- one of them has the potential to go up 81% within the year, or maybe within the month, on a merger. The other one is nearly entirely capital gains, having a basis less than 10% of the current value. (If the puts are executed, I will go ahead and sell part of it to eliminate the resulting margin loan.)
I previously rolled all my puts out to 2021 and rearranged my positions to make sure my non-Tesla margin capacity was in the correct account to easily cover the worst case of executing all the puts.
Could be Q2 deliveries, but I doubt it. Could be Q2 earnings, but might not be (really could go either way). Could be Q3 deliveries, but I doubt it. Could be Q3 earnings -- I think that's fairly likely -- but might not be. Could be Shanghai factory production. But it might be Q4 earnings.
In a bear market, I suppose it could be as late as Q2 2020 earnings. Things would have to go really badly in really unexpected ways to avoid profit in Q3/Q4 2019 + Q1/Q2 2020 -- more wrong than in Q1 2019. So that would be the S&P 500 addition.
I suppose Trump could embargo all goods going in and out of the US, that would make everything crash more -- in that case, or something similar where Trump *really* messes the economy up *even worse than he already has*, Trump's removal would be the catalyst to get out of the hole.
Or the stock could start rising totally at random.
Their website isn't that good.
:-(
I wish that their databases were good enough to automatically handle "We have that in inventory for you" / "That option has run out so stop offering it on the website" / etc. Like Amazon does. But Tesla's website and databases are quite incapable of it.
Frankly, their IT is weak on the customer facing end. The car UI is the most infamous mess (v6 good, subsequent versions bad), but the website is poor too.
Heh. Yeah. If the Tesla stock price *really* got low enough (it won't), one of the companies which isn't making enough EVs could eliminate its regulatory burden by taking over Tesla.
Carl Raymond
Active Member
And nothing on GF3 timelines, unless I missed it.
There’s a mention of China and the forthcoming “levelling of the market” at 13:00, but that was it.
Maybe certain topics were deemed off limits at the outset.
I have, although it's just leaks related to the "factory reconfiguration" which ended factory tours for a while. I expected it a long time earlier, of course.
Perhaps the leaks were incorrect.
LIDAR is a dead end.
Humans basically have 2 cameras, although we have *very good* cameras (electronic cameras are still worse at automatic adjustment to light levels than human eyes -- just try to photograph fireworks).
Musk is right that if you're gonna use radar, use non-visible-wavelength radar.
Adam Jonas organised a falcking conference call to spread FUD about Tesla, including saying Apple isn’t interested in buying Tesla. This call was supposedly invite only to investors/customers, but every click bait reporter worth their salt attended the call, for crying out loud.
$10 story is just CYA.
EVNow
Well-Known Member
I’ll add a fifth.
In order to beat the quarter end deadline Tesla spent a ton of money on logistics. When people are told to get things done, no matter the cost, they will do just that. Last minute truck hires, lots and lots of overtime etc. That can’t be cheap. We should pay attention to that hird email where he talks about delivery costs.
This is part of the wave cost, I guess. If they aren't in a mad dash to deliver ("all hands on deck") - they would have solved at least one problem, even if partially.
Carl Raymond
Active Member
My suspicious nature is triggered by the use of the words “cash burn” in that email. Musk knows it’s a favourite expression of trolls. It’s a phrase always corrected by somebody patiently pointing out that investment is not cash burning. Burn cash and it’s gone. Invest and you have a cash generating asset.
Musk may have realised that his tweeting power to lift the stock had gone, and yet his yearning to burn the shorts was as strong as ever. It doesn’t matter from what base a short squeeze starts, it’s the delta that hurts. So maybe he drove the price down... awaiting a beat to suddenly reverse course.
This is not the basis of my investment, but is nevertheless an intriguing possibility.
It's a good thing that Tesla competes against the companies it competes against. I remember once trying to get BMW's pricing and options and when I got redirected to BMW USA it just 404'd... for like a week.
I always get disagrees when I'm right about something fundamental so I will here again, but Tesla's main meta-problem is focus. Case study #1 is SolarCity but even Tesla Energy more broadly.
Elon being a software developer should know that complexity is the biggest challenge, and the best way to solve complexity is not through better design/architecture or 'trying really hard to be smart' but by reducing the requirements itself. All of the efforts for Semi, Roadster, Tesla Energy and other examples have distracted from core execution through direct or indirect ways. That's fine so long as you have room to fail on execution but this being the car industry, as China says 'don't say you haven't been warned'.
Take "sleep" out of the level bucket and think through the use case.
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