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

[anthonyj]

Shits going to all time highs where it deserves to be by November mark this post

 

[ZsoZso]

"TSLAQ are like pimples."
Not a bad analogy when you think about it. LOL!

Dan

I thought they were barnacles to be scraped off by Elon

 

[wipster]

What, the guy who drove at highway speeds into a tree? There's a normal emergency release inside the car, unrelated to how the handles open from the outside. And as for the outside, accident sensors trigger the doors to unlock, assuming that the mechanism is still functional.

So the door mechanism broke in a highway-speed accident? Yeah, what else is new? People spent years inventing devices to cut away doors because getting stick is what doors do in accidents.

The ironic part of this February accident (the story hit after the lawsuit) is that had he have been driving a normal ICE car, he would have been dead when his car hit the tree and the gasoline in the tank exploded! The model S is probably what kept him from dying to begin with and to expect to open the doors by the handles in any car after an accident this serious is ridiculous.

I hope Tesla has had the ability to thoroughly investigate what happened and doesn't settle because it's obvious the lawyer is chasing the biggest pockets here. Don't get me wrong, I feel for the family and their loss, but to blame the car would just be wrong. Wonder when this is going to trial?

 

[brian45011]

No. Tesla got a loan from the DOE in 2010

The loan was approved in the fall of 2009 after Tesal bunched Roadster deliveries into July 2009 to report "a profitable month" giving the new bureaucrats at DOE a basis for satisfying the "financially viable" requirement, Funding began in early 2010.

 

[Johnny Ma]

Also, why would Tesla management even comment on short sellers in that financing context - whom the SEC considers a protected class of investors.

I.e. Gasparino might just be trying to troll the SEC into investigating or so ...

I agree that Tesla management commenting on short sellers seemed weird, but Gasparino has reported a lot of other bad stuff from his "sources." Bad in way that they don't make a lot of sense but they've been both for and against TSLA. I think he more likely needs new sources...

 

[Thekiwi]

The whole scenario is a bit weird though, with 6+ billion dollars of cash and cash equivalents in the bank and growing, why would banks even approach Tesla?

They don't need the cash and are very capital efficient: they are expanding Model 3 and Y production capacity by ~50% from just $0.5b of capex.

Also, why would Tesla management even comment on short sellers in that financing context - whom the SEC considers a protected class of investors.

I.e. Gasparino might just be trying to troll the SEC into investigating or so ...

At some point perhaps it makes sense for Tesla to refinance its debt at a lower interest rate? Is that a possibility maybe?

On the other hand, If someone was looking at a potential takeover offer, it would make sense to do this before Shanghai, Model Y & solar roof are delivering in volume and leading to big jumps in net income (and one would think big gains in company value). I think the window for a “cheap” takeover of Tesla is rapidly closing (be it for a competitor, a new entrant, or Elon & friends themselves). 6-9 months left probably to get the company for under $100 Billion offer price. 12 months max.

 

[wipster]

Shits going to all time highs where it deserves to be by November mark this post

Did you really mean that?

 

[Singuy]

I probably got slaughtered by saying this: now we're laughing at shorts. But when Tsla sunk below 200 and I was sitting on tons of paper loss, I did double down. That was like throwing good money after bad. When I pressed the buy button I felt like my daughter is accusing me of gambling with her college fund!

I remember telling people to take out their dry powder but everyone was just too poor. I also doubled down trying to catch that falling knife. Glad we are out of the woods.

 

[StealthP3D]

But "Goodwill" work does count as a warranty expense. Wouldn't that (and the time spent stocking the service center and maintaining it's equipment) count as COGS for service, and thus negatively affect it's margins?

Only goodwill work attributable to a warrantied condition would be a warranty expense. And the fact that it is is "goodwill" implicitly implies that Tesla does not think it is warranty work (either due to the warranty being expired or the issue not being covered under warranty).

What you are claiming makes no sense. It wouldn't be called "goodwill" unless you would normally have to pay for it. And warranty work, by definition, is not billed to the owner.

 

[wipster]

...and for reference for those of you not so chronologically challenged...

And now you can't get it out of your head, right?

LOL!!!

 

[anthonyj]

Did you really mean that?

Yeah I’m buying deep OTM calls tomorrow. Elon has all his ducks in a row this time. This is an opportunity to truly screw the shorts. Big Chinese money inbound to force push this puppy back to top of range. Wouldn’t be surprised to see Ellison throw a few bil at $380+ to knock down the wall

 

[dc_h]

The anti Tesla company bias is sometimes hard to figure out. I sort of put it down to a very emotional response to people who are so pro-Tesla, kind of like some sort of college rivalry.

However, according to some basic research, the market cap of some car companies is: VW 97B, Daimler 60B, GM 52B, Honda 48B, Tesla 45B, Ford 36B.

Sales, in cars, for those companies in 2018 are VW 10.83M, GM 8.3m, Honda 4.9M, Tesla 240k, Ford 5.3M

So, putting aside the emotions, isn't the argument that, if market cap is a basic measure of value, that Tesla's stock price already has a premium due to the discrepancy between its sales and market cap.

I can't find a comparable small car company that I recognize. The premium may be justified, but it looks like its there.

In stock school they are supposed to teach you about net present value. The idea that a stock price is not based on inventory and physical assets, but on the risk based (discounted) value of future projected earnings. Based on that, ford can pay dividends for a few more years and cut themselves down to pay the bills and perhaps the same for GM. Both have a lot of sales, but future revenue is likely to decline. For Tesla, sales are small now, but have grown over 6-% for 7 years. Due in part to Tesla’s small stature and to general disbelief that they could have designed anything so superior to their own engineers, legacy auto has spotted Tesla a decade head start. This is allowing Tesla to plan additional years of 60% growth for several more years. It also means their growth will further cut into the fords and go’s cash flow and ability to acquire innovation down the road. The dilemma has been described here as the innovators dilemma. The Kodak’s of the world want to change, but they have too many stakeholders holding them back. Kodak invented the digital camera and even built a strategy to win the digital camera market. Between stockholders, internal engineering, sales etc, they were held back. By the time the stakeholders understood the transition, the game was not only over, but several secondary games had ended. Digital cameras were competing with mobile devices, Cisco paid 360 million for Flip digital video camera in 2007. In 2008 Apple put a camera on the iPhone and Flip, a 3rd generation digital camera, was destroyed. So far, only VW has expressed a willingness to go soylent green and eat their old business to feed their new EV business. The rest or mostly kodaking into the future.
Regarding Tesla itself, it has its own tailwinds. It has approximately doubled its historical production every 18 months or so. Based on Wilson’s law, which ARK has cited, they should see about 15% reduction in production costs every time they double their production experience. Add to this, the heavy upfront investment Tesla made, as a small company, in charging stations and service centers that bug Tesla can spend far less per car and cogs go down further. They also don’t need to spend more on autopilot and full self driving when the fleet is 500,000 or 10,000,000, so the costs decline again. Add to that the engineering army Elon has built for Tesla and SpaceX and boring and neuralink and the AI non profit. He has built an elite engineering team with the best software, material sciences, electrical engineering all helping his mission of creating a sustainable planet with planet faring people.
Anyhow, short version, Ford GM slow and shrinking, Tesla young, fast and growing and led by iconoclastic innovator.

 

[StealthP3D]

His business is providing "real time" short interest information. And, as far as I know, yes, that is mostly of interest to short sellers.

If that's how he makes his living, why would he give the product of his work away for free?

 

[Southpasfan]

Any reason you left out the biggest one, Toyota?



The flaw in your logic is that the gas-car companies you listed are all distressed assets: they have yet to enter the hyper-growth EV market Tesla is competing in exclusively.

99% of their sales are in the dying, increasingly irrelevant ICE market - which business they have yet to wind down, and it's increasingly less certain that they'll be able to handle the transition.

Tesla on the other hand commands a dominant position in a new market, which market is going to grow about 100-fold in the next 10-20 years to a total size of 5-10 trillion dollars of revenue per year. So even with a very conservative 2x revenue multiple method there's still 10-20 trillion dollars market cap to distribute between market participants.

I.e. you are comparing iPhones to Blackberries.

Of course smartphone market valuation carried a growth premium in 2007, compared to flip phone market valuation.

All,

I left out stuff because I was doing it during a work phone call. Hey, I've just missed the investment boat and would like to join in. As a company, Tesla has incredible potential. Not only is no other car company anywhere near them in EV's, but there are millions upon millions of potential EV buyers for Tesla, and they have the solar division, and they produce their own batteries, and they are also years ahead in the race to self driving.

And, forget about me speculating what they are ahead in, I will tell you this that it does not appear to me that any other car maker is anywhere close to the level of over the air software updates which for Tesla is routine.

The only "problem" I see is how long it takes a brand new car company to go from 400,000 units a year to 5,000,000. It seems Tesla needs about 6 new factories, which will just take as long as it takes. But if you ask me, if they could make 5,000,000 next year they would sell them.

 

[mongo]

OT and incorrect, SpaceX does NOT use explosive bolts.
How does SpaceX build its Falcon 9 reusable rocket?

Separating rocket stages can be a tricky business, but the Falcon 9 makes it simpler. While the majority of rockets use a complicated pyrotechnic system of explosive bolts to separate stages, SpaceX uses an all-pneumatic stage separation system. This system can be tested on the ground, and also means staging is less jarring to the rocket.

BTW, speaking of doors getting jammed in accidents, I was wondering if maybe this is somewhere that Tesla could innovate, too. Taking SpaceX's experience with explosive bolts, they could have the door hinges and latching mechanisms physically sever themselves in an accident if the impact force/speed is great enough. Possibly even preemptively, and with a bit of a kick to make sure that the door moves out before the frame deforms in a way that could wedge it in.

Adding explosives to a unknown condition vehicle post accident in an unknown environment seems a bad idea. As does removing any of the protection the occupants have from secondary collisions. Plus the risk to emergency response personnel.

 

[X Fan]

Without seat and door pockets, where are you storing all those in the rear?

2nd row: Center storage area
3rd row: taped under seats

 

[brian45011]

Wonder when this is going to trial?

The Twelfth of Never. Gruesome cases like that are quietly settled after the plaintiff's shark (usually on a contingency) runs up the defense expense during discovery.

 

[Prunesquallor]

These people are so deluded, so out-of-touch with reality, they actually think they are battling evil. It's sad but hilarious at the same time.

The sad thing about this particular story is that the only thing he has left to offer his "fellow" shorts is a beach volleyball lesson! Probably lost the $50,000 inheritance from grandma and grandpa and is *still* living in mom's basement.

Jeeeezus. For the 1000th time I renew my pledge never to take a dip into the toxic waste that is Twitter.

 

[MichaelP90DL]

In stock school they are supposed to teach you about net present value. The idea that a stock price is not based on inventory and physical assets, but on the risk based (discounted) value of future projected earnings. Based on that, ford can pay dividends for a few more years and cut themselves down to pay the bills and perhaps the same for GM. Both have a lot of sales, but future revenue is likely to decline. For Tesla, sales are small now, but have grown over 6-% for 7 years. Due in part to Tesla’s small stature and to general disbelief that they could have designed anything so superior to their own engineers, legacy auto has spotted Tesla a decade head start. This is allowing Tesla to plan additional years of 60% growth for several more years. It also means their growth will further cut into the fords and go’s cash flow and ability to acquire innovation down the road. The dilemma has been described here as the innovators dilemma. The Kodak’s of the world want to change, but they have too many stakeholders holding them back. Kodak invented the digital camera and even built a strategy to win the digital camera market. Between stockholders, internal engineering, sales etc, they were held back. By the time the stakeholders understood the transition, the game was not only over, but several secondary games had ended. Digital cameras were competing with mobile devices, Cisco paid 360 million for Flip digital video camera in 2007. In 2008 Apple put a camera on the iPhone and Flip, a 3rd generation digital camera, was destroyed. So far, only VW has expressed a willingness to go soylent green and eat their old business to feed their new EV business. The rest or mostly kodaking into the future.
Regarding Tesla itself, it has its own tailwinds. It has approximately doubled its historical production every 18 months or so. Based on Wilson’s law, which ARK has cited, they should see about 15% reduction in production costs every time they double their production experience. Add to this, the heavy upfront investment Tesla made, as a small company, in charging stations and service centers that bug Tesla can spend far less per car and cogs go down further. They also don’t need to spend more on autopilot and full self driving when the fleet is 500,000 or 10,000,000, so the costs decline again. Add to that the engineering army Elon has built for Tesla and SpaceX and boring and neuralink and the AI non profit. He has built an elite engineering team with the best software, material sciences, electrical engineering all helping his mission of creating a sustainable planet with planet faring people.
Anyhow, short version, Ford GM slow and shrinking, Tesla young, fast and growing and led by iconoclastic innovator.

Well said, great analysis. There used to be a lot of Internet search engines out there. Then Google tried an approach that dramatically improved the relevancy of search results (citation-related links). And the competition did not understand the threat until it was too late. I wonder what GM, FCA (Chrysler) and Ford will look like in 10 years.

 

[StealthP3D]

What, the guy who drove at highway speeds into a tree? There's a normal emergency release inside the car, unrelated to how the handles open from the outside. And as for the outside, accident sensors trigger the doors to unlock, assuming that the mechanism is still functional.

So the door mechanism broke in a highway-speed accident? Yeah, what else is new? People spent years inventing devices to cut away doors because getting stick is what doors do in accidents.

Boy, that first responder must be low IQ or something. I mean, look, right underneath that heavy unnecessary contraption he's using is the rear door handle. All he needs to do is pull it because, unlike dangerous Tesla's, it's *always* ready to open the door!