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

[Runarbt]

Lol, train horns.

Another train horn video - in a Buddy EV. (Norwegian comedians - Ylvis)

Still not convinced thats the right sound for an EV. ;-)

 

[DrMazeppa]

For a moment, in my trading platform, TSLA was at 280 at opening of pre-market (not a joke).

Probably a glitch. If we get to 280 tonight, I'll start believing this is all a simulation.

 

[FrenchBoy]

Starting to feel the heat from the burning shorts here in Paris.

Note that tomorrow will be the hottest day in decades here, is that a sign about what’s going to happen sometime later today...

 

[Fact Checking]

Hours before ER - quiet before the storm perhaps, but don't recall this forum so muted previously.

Time to warm this thread up:
Super Bulls Only

The sheer amount of material (steak) news that Elon is definitely and probably sitting on is off the charts. TSLA is like a balloon of hydrogen in-between a prototype methalox rocket engine and a 10 year old kid with a flamethrower.

So my thoughts about the non-enthusiasm in the TMC investor thread about today's upcoming Q2 results:

• I think there's still lingering effects of "Q1 Post-Traumatic Stress Disorder": Q1 deliveries and financial results were a gut punch and this year's rapid dive from ~$350 to ~$180 price levels has lasting effects on investors.
• I also think @EVNow's and @luvb2b's estimates of a -$300m or bigger GAAP loss (which estimates are matching the current Wall Street consensus for a change) are a plausible, well supported baseline, and that a +$550m upside from that to reach the magical ~$250m GAAP profit has low probability.
• Uberbulls on /r/wallstreetbets appear to be equating record deliveries with record income - and they might be disappointed when Tesla posts narrowing but still negative results.
• Volume this week has been very low so far: only 50% of the average volume - which suggests both bulls and bears are in a wait-and-see mode.
  
• Ihor reported that about 2.5 million TSLA shares were borrowed this week but not actually used to short. If true then these shares might either be returned unused later today - or they might be used to fake a big price reaction and amplify any selling pressure, should Tesla post "disappointing Wall Street" results, giving the narrative back to the shorts. As @Papafox has documented it extensively, both delivery reports and financial results are commonly used for bear raids and other shenanigans.
• On the upside there are some income wildcards possible, but so were there in Q1...
• There's also the possibility that Tesla will reduce guidance for 2019 - or reaffirm (or raise) it, or disclose new pieces of information - with a matching bullish or bearish price reaction.
• I'd also like to note that Elon has become uncharacteristically quiet about Telsa on Twitter in the past week or so - most of his tweets are re-tweets or SpaceX discussions. His "Twitter mood" before profitable Q3/Q4 results last year was a lot more upbeat. But this is not a reliable indicator...

I.e. IMO the best-case scenario for today are so-so Q2 financial results with a GAAP loss, possible non-GAAP break-even or narrow loss, and healthy cash flow. The usual suspects will mislead and lie about it non-stop, as usual, and it's unclear to what extent they'll be able to dictate the narrative to investors.

Tesla's long term story is IMO healthier than ever - but the short term market reaction is, as always, a big unknown.

Strictly speculation only and not advice in any case.

 

[Cobbler]

Spiegel's TSLA position is probably worth less than ...

This is how Spiegel sees himself:

 

[Fact Checking]

I realize these earnings calls are generally boring but I cant help but have thing nagging feeling there will be big news.

OT:
He did awkwardly delete a tweet from earlier. I’m hoping it’s just to prevent things from distracting from earnings but I really wanted him to answer. Laura J. Nelson on Twitter

Possibly. Also, it's a Tesla quiet period, and he may have had a call from his Twitter warden.

Elon's Tesla tweeting settlement with the SEC has no restrictions on what he can tweet about the Boring Company or SpaceX.

But yes, should Tesla post a loss later today it would be a zinger to reply to his original Boring Company related tweet with: "companies don't work for free, they need to make profits". It's better not to engage in such kind of Twitter discussions: the Boring Company can submit a less expensive bid or can demonstrate superior results. There's a whole planet to bore millions of miles of tunnels into.

There's also a critical SpaceX launch with NASA payload later today, right before the Tesla earnings results.

Plus today's the televised Robert Mueller testimony about Trump's crimes ...

And Boris Johnson became prime minister, and the EU already reminded him to not believe in unicorns such as the re-negotiation of the Withdrawal Agreement which is a non-starter for the EU, or "side deals" with the EU which in reality do not exist yet.

So it's going to be a very busy day all around.

 

[LJS22]

If they post a loss today it should be viewed within Elon’s yearly forecast. He’s said multiple times that Q3 and Q4 would be a return to profitability. If they post a profit in this quarter it just means they are ahead of schedule.

It would be exciting to see the bump that Q2 positive results would bring, but you’ll see that bump in Q3 and Q4 also if it’s not today. It’s important to not jump the gun and expect today’s results to be stunning. Many people said after Q1 that it would just take good Q2 delivery numbers to get people back on board, now the next hurdle will be profitability. That should be crossed in the next 6 months, so in other words, remain calm today! Haha

 

[Artful Dodger]

Well I for one am going to take this as a positive sign:

Tesla President, Automotive Guillen Jerome M excercises received a grant of stock options for 70,186 shares of TSLA: shares become vested and exercisable on December 24, 2019 on a monthly basis over a 4.5 yr period.

SEC Form 4 Filing | Tesla, Inc. | July 23, 2019

P.S. That's $18.1M worth of shares at Friday's closing price. Not a bad bonus for 5 yrs work @ $3M per yr. But that's only if TSLA stays at $258 over the next five years. I think Jerome will do slightly better than that.

H/T @Cherry Wine for the digg.

 

[ReflexFunds]

Another new, interesting Tesla patent that was just granted:

US20190217380 MULTI-DIRECTIONAL UNIBODY CASTING MACHINE FOR A VEHICLE FRAME AND ASSOCIATED METHODS​

This is a unibody casting machine:

View attachment 433152
Note that thing in the center of that machine is a ... car. This is a huge casting machine.

This should reduce the amount of welding robots required ...

Might this huge casting machine be the "giant machine" Jerome was hinting about to @ZachShahan?

Our Interview With Tesla President Jerome Guillen, Part Deux | CleanTechnica

"He also said they are building a giant machine using Tesla’s Grohmann sub-division, something he was clearly eager to share but couldn’t yet talk much about. Hmm. He basically just emphasized that it was a “giant, giant, giant machine” that duplicates everything, is modular, is simple on the modular level, and … is gigantic. We’ll all have to wait a bit longer for more information on that."​

The giant casting machine fits all this: it would be modular (you'd have dozens of such casting machines to scale up a factory), simple on the modular level and put together it is gigantic.

But maybe he was hinting at something else though, covering final assembly as well? In any case it's an intriguing possibility to have full Body In White frames exit this new casting machine.

Thinking more about this new casting machine and Elon and Jerome's comments, I think there is a very high probability V1 of this machine will be used for initial Model Y production.

Evidence:

• The patent filed 18 months ago is for a massive flexible casting machine which could make a car body from 1 - 6 castings. Grohmann has a track record of building new equipment much faster than this with the emergency battery module machine development, production and installation cycle only taking months in 2017/18.
• Elon says Model Y will initially be built from 2 aluminium castings and 2 joiners, down from 70 steel and aluminium parts and weldings for Model 3 (This sounds very much like V1 of the new machine). He says this will move to a single casting in the future (sounds like V2 of the new machine)
• In March Jerome said Grohmann is currently building a massive new modular machine. "He also said they are building a giant machine using Tesla’s Grohmann sub-division, something he was clearly eager to share but couldn’t yet talk much about. Hmm. He basically just emphasized that it was a “giant, giant, giant machine” that duplicates everything, is modular, is simple on the modular level, and … is gigantic. We’ll all have to wait a bit longer for more information on that." This sounds very much like the casting machine and if it was already being built in March it should be ready for Model Y.
• In the ride the lightning podcast "Musk told McCaffrey that the longest lead time items for the Model Y are the stamping dies for the exterior body panels, so those were the highest priority items to get nailed down." Notice he specifically says exterior body panels, suggesting there may be no stamping equipment required for all body panels. Presumably some exterior panels will be manufactured separately from the 2 casting piece unibody frame.

Some consequences of this new machine if it is used for Model Y:

• Much less welding robots. Reduces capex and reduces dependence on external manufacturing equipment suppliers (FANUC and KUKA).
• Much less stamping machines. Reduces capex and reduces lead times for new factories.
• Significantly less space required for future car manufacturing lines.
• Modular design for body production allows easier matching to target production levels and less lumpy capex.
• This new process will add risk to the Model Y ramp.
• The Model Y will likely move to an aluminium body, potentially reducing weight.
• Tesla's castings base is in Lathrop where it has recently built a huge new building. There is a chance that a significant part of the Y production could take place at Lathrop with new Grohmann machines. The 2 castings will then be delivered to Fremont. This will significantly reduce space required for Model Y at Fremont.
• This new body design will probably blow Sandy Munro's mind.

The new wiring design patent seems much less likely to be used for Model Y. Does anyone recall Elon talking about less wiring after changing his mind about building Y on a new platform in August 2017? I think this new wiring will more likely be introduced with the Pickup.

 

[ReflexFunds]

Well I for one am going to take this as a positive sign:

Tesla President, Automotive Guillen Jerome M excercises Options to acquire 70,186 shares of TSLA; disposes of zero (0) shares:

SEC Form 4 Filing | Tesla, Inc. | July 23, 2019

I think this is what Deepak did before Q3. Is this a loophole in insider trading where you are allowed to exercise options before earnings - this can then reduce your tax liability (tax goes up if shares exercised at a higher price tomorrow)

Edit: Looking at the filing I think this is just an award of options to Jerome rather than exercise of any options.

 

[Xenius]

Well I for one am going to take this as a positive sign:

Tesla President, Automotive Guillen Jerome M excercises Options to acquire 70,186 shares of TSLA; disposes of zero (0) shares:

SEC Form 4 Filing | Tesla, Inc. | July 23, 2019

P.S. That's $18.1M worth of shares at Friday's closing price.

This is obviously just Jerome wanting to show how big his balls are and take a HUGE loss after super crappy earnings are released, just because he can take it on the chin. Duh!

 

[Artful Dodger]

Notice he specifically says exterior body panels, suggesting there may be no stamping equipment required for all body panels. Presumably some exterior panels will be manufactured separately from the 2 casting piece unibody frame.

With approx. 76% of its parts shared with Model 3, presumably some of the stamping dies will be reused for the Model Y. It's another sound argument in favor of building both cars at the same site.
Cheers!

 

[elasalle]

Thinking more about this new casting machine and Elon and Jerome's comments, I think there is a very high probability V1 of this machine will be used for initial Model Y production.

Evidence:

• The patent filed 18 months ago is for a massive flexible casting machine which could make a car body from 1 - 6 castings. Grohmann has a track record of building new equipment much faster than this with the emergency battery module machine development, production and installation cycle only taking months in 2017/18.
• Elon says Model Y will initially be built from 2 aluminium castings and 2 joiners, down from 70 steel and aluminium parts and weldings for Model 3 (This sounds very much like V1 of the new machine). He says this will move to a single casting in the future (sounds like V2 of the new machine)
• In March Jerome said Grohmann is currently building a massive new modular machine. "He also said they are building a giant machine using Tesla’s Grohmann sub-division, something he was clearly eager to share but couldn’t yet talk much about. Hmm. He basically just emphasized that it was a “giant, giant, giant machine” that duplicates everything, is modular, is simple on the modular level, and … is gigantic. We’ll all have to wait a bit longer for more information on that." This sounds very much like the casting machine and if it was already being built in March it should be ready for Model Y.
• In the ride the lightning podcast "Musk told McCaffrey that the longest lead time items for the Model Y are the stamping dies for the exterior body panels, so those were the highest priority items to get nailed down." Notice he specifically says exterior body panels, suggesting there may be no stamping equipment required for all body panels. Presumably some exterior panels will be manufactured separately from the 2 casting piece unibody frame.

Some consequences of this new machine if it is used for Model Y:

• Much less welding robots. Reduces capex and reduces dependence on external manufacturing equipment suppliers (FANUC and KUKA).
• Much less stamping machines. Reduces capex and reduces lead times for new factories.
• Significantly less space required for future car manufacturing lines.
• Modular design for body production allows easier matching to target production levels and less lumpy capex.
• This new process will add risk to the Model Y ramp.
• The Model Y will likely move to an aluminium body, potentially reducing weight.
• Tesla's castings base is in Lathrop where it has recently built a huge new building. There is a chance that a significant part of the Y production could take place at Lathrop with new Grohmann machines. The 2 castings will then be delivered to Fremont. This will significantly reduce space required for Model Y at Fremont.
• This new body design will probably blow Sandy Munro's mind.

The new wiring design patent seems much less likely to be used for Model Y. Does anyone recall Elon talking about less wiring after changing his mind about building Y on a new platform in August 2017? I think this new wiring will more likely be introduced with the Pickup.

New Approach, new Production Hell .. cheers!!

 

[Cherry Wine]

Edit: Looking at the filing I think this is just an award of options to Jerome rather than exercise of any options.

Yep.

“Explanation of Responses:
1. Constitutes an option grant with respect to a total 70,186 shares. 1/10th of the total shares subject to the option shall become vested and exercisable on December 24, 2019 and 1/60th of the total shares subject to the option shall become vested and exercisable each month thereafter, until all shares subject to the option become fully vested on June 24, 2024.”

 

[Silentk]

:

• Ihor reported that about 2.5 million TSLA shares were borrowed this week but not actually used to short. If true then these shares might either be returned unused later today - or they might be used to fake a big price reaction and amplify any selling pressure, should Tesla post "disappointing Wall Street" results, giving the narrative back to the shorts.

If that is really their gameplan, is "2.5 million shares" an unusually large amount that could cause a huge drop in share price, or is this their regular modus operandi, hopefully quickly regained by good results/news? It certainly sounds ominous!

 

[Right_Said_Fred]

That the second time an options grant gets misreported here (I believe the other case was Denholm a few weeks ago). Make sure to check and double check before crying wolf.

 

[mongo]

In the ride the lightning podcast "Musk told McCaffrey that the longest lead time items for the Model Y are the stamping dies for the exterior body panels, so those were the highest priority items to get nailed down." Notice he specifically says exterior body panels, suggesting there may be no stamping equipment required for all body panels. Presumably some exterior panels will be manufactured separately from the 2 casting piece unibody frame.

The exterior panels are class A surfaces and are some of the largest stampings with panel gap critical final dimensions over that distance. Those dies would take the longest regardless of the existence of other dies.

Elon says Model Y will initially be built from 2 aluminium castings and 2 joiners, down from 70 steel and aluminium parts and weldings for Model 3 (This sounds very much like V1 of the new machine). He says this will move to a single casting in the future (sounds like V2 of the new machine)

In the podcast he said "rear underbody", not complete vehicle.
Hot: Elon Musk Interview On "Ride The Lightning" Podcast — A Tesla Geek's Dream | CleanTechnica

 

[Silent Ludicrosy]

If that is really their gameplan, is "2.5 million shares" an unusually large amount that could cause a huge drop in share price, or is this their regular modus operandi, hopefully quickly regained by good results/news? It certainly sounds ominous!

Easier to borrow them before the short squeeze

 

[Fact Checking]

This is how Spiegel sees himself:
View attachment 433541

And the ironic thing is, the Big Short movie depicts a "hero" who discovers evidence of a big, impending financial catastrophe, but instead of going public he keeps it private and tries to profit off of it.

A bit like as if in a blockbuster movie Bruce Willis discovered a big asteroid heading for Earth which on impact would fill the skies with dangerous ejecta/debris for years triggering a new ice age as well, but instead of trying to warn everyone and save the planet he'd ... keep quiet and start shorting airline and solar panel companies?

Quite the uplifting, heart warming story of a hero who is very much Spiegel's ... mirror image.

 

[Right_Said_Fred]

If that is really their gameplan, is "2.5 million shares" an unusually large amount that could cause a huge drop in share price, or is this their regular modus operandi, hopefully quickly regained by good results/news? It certainly sounds ominous!

Is this really risk free shorting? Where SP going down provides a big profit and SP going up has no financial impact because they can simply ‘give back’ the shares (except for the low borrowing costs)? I can’t believe such a thing is possible, as everyone would be doing it constantly.