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

[Krugerrand]

Goldman is great vampire squid wrapped around the face of humanity.

Not vampire squid, baby Alien. It’s an honest mistake.

 

[Antares Nebula]

Tesla's Model S And X: Demand To Rebound
https://seekingalpha.com/article/4271260-teslas-model-s-x-demand-rebound

 

[dc_h]

In reality, Tesla had a bad quarter that they did not guide for. That was it. Q2 looks like they are back on track. Yet, the narrative about weaker demand than expected persists. This is really about bearish analysts continuing to move the goalposts wherever they need to in order to support their long term negative outlook on Tesla. These shenanigans are comically predictable and deserve nothing more than to be traded and profited from.

The quarter was made worse by declining SX sales, made worse by declining model 3 prices and rumors of coming upgrade of the S and X. The inventory write down associated with dropping prices to the long term. Moving forward the inventory write down won’t recur. Q3 will benefit from the Raven and the SR hitting Europe and RHD sales plus Canada, where buyers will be racing the depletion of incentives. USA may have some drag after incentives shrink, but price cutting shouldn’t t be needed, just some incentives. Exports should be up at least 15,000 prior to q4 when shanghai comes online. I’d guess SR+ will be a higher percent of sales, but word of mouth will be breaking down FUD as people are directly exposed to more cars and exposed to cost of ownership.

 

[izemize]

SoGA Fan Club recently posted a quote from EM which basically promised profitability from Q3-4 on. I don't recall that because I thought it was cash flow positive but i may be wrong. One of you surely can provide the accurate language. I realize Q1 was likely an anomaly for many reasons but cash flow positive seems more likely than a profit prediction for the growth Tesla is expecting. Thanks

Here you go:

"So, we're working every aspect of that logistics chain. And I think we've -- I think it's going to be good. I would say at this point, I'm optimistic about being profitable in Q1. Not by a lot, but I'm optimistic about being profitable in Q1 and for all quarters going forward."
​

Source (2018 Q4 ER transcript): Tesla (TSLA) Q4 2018 Earnings Conference Call Transcript -- The Motley Fool

 

[Krugerrand]

Not vampire squid, baby Alien. It’s an honest mistake.

View attachment 421481

This is a vampire squid. Totally innocuous.

 

[SoGA Fan Club]

Did the Model X give you any trouble during that 2 weeks? or you just think lots of things could go wrong? I don't own a Model X. My friend has been driving one for more than a year, towing boats, he said everything has been perfect. Tesloop has 8 Model X, most of them passed 300,000 miles. You can read their blog about these cars. They wrote a detailed blog about their oldest Model X, it's for commercial use, those falcon wing doors are used many times everyday, based on their blog, never had a problem.

Yes, one of the windows wouldn't go up. After a while we got it back up and left it up. When I returned the car, I lowered it and tried to raise to see if it was just a fluke thing, and it wouldn't go back up. The car had 84 miles on it when we got it. Also, below is an owner who bought their X this past December and states the following:

The FWDs failing to go up all the way or open at all is one. Another is the car locked up on an off ramp a month ago. Eg No accelerator or turn signal. It has intermittently failed to go into AP and cruise control recently, on the highway and expressway under ideal conditions. Front windows have failed to roll up many times. Other smaller issues. These have all happened over the last few months. We didn’t run into this many problems with our Lexus 400h over 15 years, much less in 3 months.

I didn’t know the 400h was on the top 5 for unreliability, but it’s completely deserved. I just never imagined that a car this day and age could be so flaky.

Did you mean 400h in the last paragraph?

 

[Antares Nebula]

Seeking Alpha is run out of Israel, of all places; founded by David Jackson, now run by Eli Hoffman. Glassdoor has complaints of racism in both hiring and article publication. (Perhaps unsurprising when it's run out of one of the most racist countries on Earth by owners who seem to be totally OK with their government's racism.) And it seems to be absolutely clear from Seeking Alpha employee reviews that Seeking Alpha is not an open forum, but a heavily edited site which is specifically pushing the views of its editors.

I do wonder why its Israeli owners & editors hate Tesla; the best I can come up with is Israel's alliance with Saudi Arabia, but that seems like a stretch. Neither of them appears to have Russian connections.

It may be a case of enemy of my enemy. SA has strong connections with hedge funds, which are predominately short Tesla. If big oil, and in particular, Russia is also willing to help out, then more the merrier. So essentially collusion between hedgies, big oil, big auto and big media (since Tesla does not advertise, but its competitors do, and auto ads constituting approx 30% of media ad dollars).

 

[Oil4AsphaultOnly]

I'd assign something like <1% chance of Seba's prediction being true. There is no way world can produce that many EVs by 2025. Essentially the demand has to increase 10x+ (from 3M to 40M) in 6 years. Current EV share is about 2 or 3%. I expect it to be about 15% to 25% i.e. 10M to 15M by 2025, which is quite bullish by itself at 3x growth in 6 years.

I mean, do you think all these OEMs the world over that produce <1% of EVs now, will suddenly produce 100% of EVs in 6 years, when the design of a new car takes 5 years ?!

ps : Goldman thinks in 2025 EVs will sell about 4M (from current 2M).

You're forgetting about the osbourning of the entire ICE industry. It's not so much that production needs to scale up to match current capacity, but that demand for ICE will also fall to whatever EV production levels are in 2025. South America and Africa might be the only places left that would still want/allow ICE sales. Norway, UK, and China will have banned ICE sales by then. In which case EV sales (at 10M-15M per year) could easily be over 50% of automotive sales.

Looked at another way, the proof of EV demand isn't the number of EV's sold, but rather how much fewer ICE vehicles are sold each year (relative to their peak). Those lost sales are people buying or waiting to buy an EV. So although Seba's prediction might be a little agressive, I don't think he's too far off.

 

[EVNow]

In which case EV sales (at 10M-15M per year) could easily be over 50% of automotive sales.

That works only if we have FSD by then. FSD will wipe out the ICE auto industry - something I've been saying for a long time (this is what auto industry fears most as well).

BTW, there is a big difference between 50% & 100%

 

[Antares Nebula]

Interesting comment by user Quark Star on recent SA news article:

Tesla 'throws in the towel' on growing residential solar, report says - Sunrun Inc. (NASDAQ:RUN) | Seeking Alpha

"It seems to me that a lot of user accounts here were created for the sole purpose of only posting bearish comments about Tesla. First, many of these users only post comments about Tesla articles. Second, many of them have screen names that seek to mock Tesla/Musk or praise bearish critics. Witness the various permutations of "Montana Skeptic" that abounds. And witness Tesla/Musk mocking names such as "flufferty the gigabit", "Yambol-Musk isn't a genius, people are just stupid.", "VIN Electric II", "Dansplans where we build our Tesla shorts with Love and sport Alien Dreadlocks", and so on.

Because of this, I question the motive of many of these users. Are they paid trolls? Do they work for outside interests that benefit from a potential Tesla failure? Such interests could be the many hedge funds that short Tesla, or large oil interests, be it in the US, Middle East, or Russia.

In regards to the latter, it is well known that Putin interfered in the 2016 election via a vast social media campaign targeting Facebook, Twitter, etc. (Many now also believe that Putin similarly interfered in the Brexit election, and perhaps even other elections.)

Now, oil represents 50% of Russia's exports. If Putin was willing to interfere in the 2016 election, logic dictates that he and his oligarchs would also use social media as a weapon to protect their oil interests. Shaping a negative public opinion on Tesla and EVs more broadly is one way to do this. And, in addition to Facebook and Twitter, Seeking Alpha would be a prime social and financial media target. Just observe the plethora of bearish articles on Tesla here, as well as the mind numbing amount of bearish comments on each and every Tesla article and news story. I'm not saying that this is all due to propaganda or trolls, but the quantity certainly seems well out of proportion compared to other stocks, past and present. And this ill proportionality has been well pointed out by other media observers, with the result that most bulls don't even bother reading SA anymore.

Whether it is Russia, US oil interests, or Wall Street hedge funds, it is clear that there is large social media smear campaign targeting Tesla. With this awareness in mind, it is ever more important for retail (mom & pop) investors to be vigilant about what they read online and to critically assess articles and comments for their authenticity, truthfulness, and motives. I hope, as well, that the SA editors take notice and heed this warning. But in all likelihood, I expect this comment to be deleted. Tesla bulls simply don't have a voice here at SA."

I noticed that user Quark Star again posted this comment on the Seeking Alpha story on the Goldman downgrade this morning. And again, and within minutes, it was deleted. There is definitely something going on here.

 

[kengchang]

We are reluctantly selling our MX because my wife finds the gullwing doors to be a nuisance. We will lease an ICE car for a few years until MY is available.

So, we stop by a Lexus dealership, and when we tell the salesman we currently have an MX, he says: "yeah, we've had several Tesla owners trade theirs in for a Lexus. Tesla seems like a good car at first, but then the kids get older, and the parents discover they don't have enough range to take their kids to college." When I described how superchargers work, he pretended not to know anything about them.

In our little bubble on this thread, we react in a tizzy to each new FUD spun on a daily basis by the foolish and the manipulators. But in doing so we lose sight of what people are really concerned about: range anxiety.

So here's the advertisement I want to see: Parents take kid to college in their Tesla. As the car pulls up to the dorm, it stops just in front of a recruiting table for the Environmental Action Club. Hugs all around.

They will tell you people trade in Ferrari for Lexus if you told them you drive Ferrari.

 

[Spacemanspliff]

Boat went to Benicia, remains to be seen if it will head to Pier 80 after.

GMT Astro is now docked at Pier 80 after making stops at Benicia and Richmond. Twitter had Pier 80 with only 1k cars waiting and no activity as of today at 1:10pm. Additionally Morning Cornelia is en route to Benicia, should arrive 6/21, has delivered Teslas before so we will see if that ends up at Pier 80 as well.

 

[Electroman]

Here you go:

"So, we're working every aspect of that logistics chain. And I think we've -- I think it's going to be good. I would say at this point, I'm optimistic about being profitable in Q1. Not by a lot, but I'm optimistic about being profitable in Q1 and for all quarters going forward."
​

Source (2018 Q4 ER transcript): Tesla (TSLA) Q4 2018 Earnings Conference Call Transcript -- The Motley Fool

^^ This.

The gap between Elon's optimism and reality can't be this wider. I mean a CEO says we may squeeze some profit, but just 7 weeks later ended up with one of the largest losses in its history - how is that possible?

- Could be that Elon has no clue on sales pipeline and delivery logistics on sending large volumes to Europe and China, and he so makes up whatever comes to his mind.

- he was just lying.

Take your pick. But there is no acceptable reason to the gulf between what Elon said and what happened in Q1.

Now remember: If Q2 ends up with around 80k deliveries - which IMO is not a bad at all - Elon will be rightly criticized as untrustworthy on his knee jerk adhoc statements. He could have very well not given any hint at all, and set these expectations for Q2. But now those expectations are set, there will be a severe backlash if they are not close to 90K deliveries.

If investors - retail and institutional - lose their trust on Elon's promises, then TSLA becomes a fundamentals play and not a massive growth play anymore. It will be traded on pure P&L and not on future growth and products, because no one will pay attention or believe what Elon says.

 

[kengchang]

^^ This.

The gap between Elon's optimism and reality can't be this wider. I mean a CEO says we may squeeze some profit, but just 7 weeks later ended up with one of the largest losses in its history - how is that possible?

- Could be that Elon has no clue on sales pipeline and delivery logistics on sending large volumes to Europe and China, and he so makes up whatever comes to his mind.

- he was just lying.

Take your pick. But there is no acceptable reason to the gulf between what Elon said and what happened in Q1.

Now remember: If Q2 ends up with around 80k deliveries - which IMO is not a bad at all - Elon will be rightly criticized as untrustworthy on his knee jerk adhoc statements. He could have very well not given any hint at all, and set these expectations for Q2. But now those expectations are set, there will be a severe backlash if they are not close to 90K deliveries.

If investors - retail and institutional - lose their trust on Elon's promises, then TSLA becomes a fundamentals play and not a massive growth play anymore. It will be traded on pure P&L and not on future growth and products, because no one will pay attention or believe to what Elon says.

Elon assumed flawless delivery in China and Europe, in reality China had labeling issue and Europe had logistic issue.

 

[ggr]

SoGA Fan Club recently posted a quote from EM which basically promised profitability from Q3-4 on. I don't recall that because I thought it was cash flow positive but i may be wrong. One of you surely can provide the accurate language. I realize Q1 was likely an anomaly for many reasons but cash flow positive seems more likely than a profit prediction for the growth Tesla is expecting. Thanks

You're right, he's wrong.

 

[MP3Mike]

How are the comparative sizes between the GF being built in China over the one in Nevada? The Nevada one is much bigger I suppose?

Actually GF3 should be bigger than GF1 since GF3 is a combination of GF1 and Fremont. (Unless they have designed a way to use space much more efficiently.)

 

[Papafox]

I've been giving some thought to today's trading. Macros were positive, so TSLA really should have been positive too. The Goldman note came out before market open, affected pre-market trading, and so was obviously digested by investors. Nonetheless, TSLA recovered to the green (barely) after shrugging off the mandatory morning dip and then it traded with minimal loss until 10:30am when it started its dip. My feelings are that the shrugging off of the Goldman note and the rather benign trading until 10:30am suggests that the market really didn't take the Goldman note too seriously.

Why did we dip nearly $9 deep at one point? I see some huge selling sprees such as 55K shares between 2:50pm and 2:51pm, so I think the shorts were certainly manipulating today. The quadruple witching close of options tomorrow might be the incentive for the pushdown, which could include a combination of new positions opened short as well as day-trader type shorting. Check out tomorrow's open options:

Every put to the right of closing price tomorrow will be in the money and every call to the left of closing price tomorrow will be in the money as well. If you sold calls or bought puts (and didn't delta hedge) you're going to want the stock price to be as low as possible. Look at all the puts that will be in the money tomorrow if we close below 220. Most are already in the money, it's just a question of how much. That's a lot of incentive to push the SP lower before Friday's close. While some investors buy puts as a hedge, others buy puts to enhance their short position and it's this second group that has the inspiration to manipulate.

Will Friday signal an end of the mischief? Well, of course not. Check out the open interest chart for next Friday:

Looks like bears are hugely focused on getting TSLA below 210 next week. What on earth could lead so many traders to bet so heavily on a TSLA dip by next Friday if even Goldman is grudgingly suggesting Tesla might very well deliver 90K+ vehicles in Q2?

Let's see if we can gauge just how significant manipulations are on Friday and the coming week so that we can understand their affect upon the TSLA stock price. Also, please speak up if you see patterns of manipulation from specific individuals.

 

[Ohms Andwatts]

Actually GF3 should be bigger than GF1 since GF3 is a combination of GF1 and Fremont. (Unless they have designed a way to use space much more efficiently.)

Here is the overlay of GF1 and GF3:

Tesla Gigafactory 1 vs. Gigafactory 3 Overlay : teslamotors

 

[schonelucht]

GMT Astro is now docked at Pier 80 after making stops at Benicia and Richmond. Twitter had Pier 80 with only 1k cars waiting and no activity as of today at 1:10pm. Additionally Morning Cornelia is en route to Benicia, should arrive 6/21, has delivered Teslas before so we will see if that ends up at Pier 80 as well.

Maybe Australian cars? Or does that not work out for their supposed first deliveries timeline? Regardless, it would be the first tangible sign of the wave unwinding.

 

[MP3Mike]

Here is the overlay of GF1 and GF3:

Tesla Gigafactory 1 vs. Gigafactory 3 Overlay : teslamotors

Of course building footprint isn't all that matters. Number of floors inside can make a big difference.