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

[Curt Renz]

Boeing gonna drop a lot tomorrow trust us

Perhaps, but if it does, and my suspicion is correct, it could be a BA buying opportunity. I find it odd that the Iranian state news immediately blamed a technical problem with no further explanation. Flight data abruptly stopped being sent to the ground. So how could they know something about the cause, unless they knew something not to be expressed?

In the predawn darkness there was seen a glow of light and then a fiery crash to the ground. Possibly the plane was mistakenly hit by an Iranian missile. The Iranian military would have been on high alert for incoming American aircraft or missiles at an airport they might have feared to be a priority target for the Americans. This commercial plane may have been the first one departing the airport in the morning. Jumpy Iranian military personnel or an improperly monitored automated system may have launched a missile at the commercial airplane.

Of course this is purely my conjecture. Hopefully, more is revealed soon.

 

[UnknownSoldier]

Market future recovered from the deep dive
View attachment 497809

If it turns out that this incident was like all the other incidents (US/Israel attacks, Iran retaliates, both sides immediately stop and start talking through 3rd party mediation because no one actually wants a war), then the markets will keep grinding on as if nothing happened.

It's the diplomacy version of the 2nd tier of saber rattling. Instead of just rattling the saber you pull it out and nick your opponent and draw a little blood but then put it away immediately because neither of you want to actually duel to the death.

 

[Evergreeen]

Perhaps, but if it does, and my suspicion is correct, it could be a BA buying opportunity. I find it odd that the Iranian state news immediately blamed a technical problem with no further explanation. Flight data abruptly stopped being sent to the ground. So how could they know something about the cause, unless they knew something not to be expressed?

In the predawn darkness there was seen a glow of light and then a fiery crash to the ground. Possibly the plane was mistakenly hit by an Iranian missile. The Iranian military would have been on high alert for incoming American aircraft or missiles at an airport they might have feared to be a priority target for the Americans. This commercial plane may have been the first one departing the airport in the morning. Jumpy Iranian military personnel or an improperly monitored automated system may have launched a missile at the commercial airplane.

Of course this is purely my conjecture. Hopefully, more is revealed soon.

Pilots could have radio'd back something like the left engine caught fire. Time will tell.

 

[Buckminster]

I don't know if I'll see one in my lifetime.

Apple changed the world. It is arguable whether for the better.
Amazon changed the world. It is arguable whether for the better.
Facebook changed the world. It is arguable whether for the better.

Tesla is changing the world. It is without a doubt for the better.

I don't think most people understand what they're witnessing. Too busy checking social media and shopping on their iPhones.

This looks like an important post. I have saved it and will read later.

 

[Buckminster]

Results from poll:
https://teslamotorsclub.com/tmc/threads/poll-when-will-tsla-be-included-in-s-p500.180708/
When will TSLA be included in S&P500?

1. 
   Feb 2020
   1 vote(s)
   1.3%
2. 
   Mar 2020
   2 vote(s)
   2.5%
3. 
   Apr 2020
   9 vote(s)
   11.3%
4. *
   May 2020
   28 vote(s)
   35.0%
5. 
   Jun 2020
   19 vote(s)
   23.8%
6. 
   Jul 2020
   6 vote(s)
   7.5%
7. 
   Aug 2020
   5 vote(s)
   6.3%
8. 
   Sep 2020
   6 vote(s)
   7.5%
9. 
   Oct 2020
   2 vote(s)
   2.5%
10. 
    Nov 2020
    0 vote(s)
    0.0%
11. 
    Dec 2020
    0 vote(s)
    0.0%
12. 
    2021 or later
    2 vote(s)
    2.5%
    
    
    60% going for May / June. Very few think next year.

 

[RobStark]

EV Sales: Netherlands December 2019

 

[JustMe]

Results from poll:
https://teslamotorsclub.com/tmc/threads/poll-when-will-tsla-be-included-in-s-p500.180708/
When will TSLA be included in S&P500?

1. 
   Feb 2020
   1 vote(s)
   1.3%
2. 
   Mar 2020
   2 vote(s)
   2.5%
3. 
   Apr 2020
   9 vote(s)
   11.3%
4. *
   May 2020
   28 vote(s)
   35.0%
5. 
   Jun 2020
   19 vote(s)
   23.8%
6. 
   Jul 2020
   6 vote(s)
   7.5%
7. 
   Aug 2020
   5 vote(s)
   6.3%
8. 
   Sep 2020
   6 vote(s)
   7.5%
9. 
   Oct 2020
   2 vote(s)
   2.5%
10. 
    Nov 2020
    0 vote(s)
    0.0%
11. 
    Dec 2020
    0 vote(s)
    0.0%
12. 
    2021 or later
    2 vote(s)
    2.5%
    
    
    60% going for May / June. Very few think next year.

I’m sorry but this post is dangerously on-topic. It almost gave me whiplash.

I think S&P 500 inclusion will mark a turning point for Tesla in the way it’s portrayed in the media. It seems like the coverage lately has been more serious and respectful by talking heads on TV. Like it’s not this wacky cult bubble stock, but “the real deal”.

 

[lklundin]

The longer you hold those, the more risk you are exposed to. A lot can happen between now and Sept. 17, much of it beyond TSLA's control. This doesn't bother me as a shareholder too much but it would if I had a significant option position (and it sounds like you do). Was the plan just to ride them up to just before or after Q4 earnings and then take profits (hopefully)?

Thanks.

Euro-wise, the fraction of options have grown from 0.5% to 3% of my portfolio, so while it is not pocket change I will not be too concerned if some or even all of them should expire worthless.

While in general I hope to exercise a fraction of my still OTM call options into shares, I guess the most likely profit-scenario for my 700$ calls is to sell them in anticipation of good news like Q4 ER or maybe even after... decisions, decisions...

 

[Aeon]

Sooo. That rebounded quickly...
~ 464$

My 2020-02-21 500$ Call didn't even drop below my "****-it-let's-get-some-more" Limit..

 

[JustMe]

According to a tweet by Kelvin Yang, there are reports that Tesla is selling 1,000 cars per day in China. No other details. Kelvin Yang on Twitter

 

[CorneliusXX]

I’m sorry but this post is dangerously on-topic. It almost gave me whiplash.

I think S&P 500 inclusion will mark a turning point for Tesla in the way it’s portrayed in the media. It seems like the coverage lately has been more serious and respectful by talking heads on TV. Like it’s not this wacky cult bubble stock, but “the real deal”.

I agree with your post, but the media is notoriously fickle. Just because their positive today doesn't mean they'll do the same tomorrow.

 

[RobStark]

Here is a soft ball for y'all

GM warns of weak China sales this year

 

[Aeon]

What the..?

Craziest spread I've ever seen at Tradegate.de.

The ask would be around 467$

 

[SO16]

He didn't found Tesla. Mark Tarpenning and Martin Eberhard did. Elon was its first investor. Years later he got the lawyers to rewrite the history so he was declared a co-founder. Just sayin'.

True. But I’m willing to let that slide if he wants to be considered a founder. I highly doubt Tesla would be where it is today, without Elon. If even in existence.

 

[WarpedOne]

I highly doubt Tesla would be where it is today, without Elon. If even in existence.

Of course not.
It would also not be where it is today without Mark Tarpenning and Martin Eberhard.
Without a start there is no run.

 

[lklundin]

It may seem like several EVs burned up in the Stavanger fire but without the EV batteries themselves catching fire.


This from this article:

Storbrann i parkeringshus ved flyplass: – Mindre flammer nå

where fire chief Fjellberg says

– There are several EVs who obviously make it more difficult to stop the fire. But all cars on fire here are difficult to put out.

Fjellberg says that if the battery packs in electric cars start burning the job of extinguishing the fire will be more demanding. Then it will be impossible to stop the fire with water.​

Quite impressive IMHO!


Another example of this is from a forest fire where a Leaf burned down except for the batteries:

A Seriously Burned Out Nissan LEAF


Disclaimer: The journalists may have gotten some facts wrong...

The not entirely disreputable Norwegian tabloid vg.no has a photo that appears to show the first burning car in the Stavanger parking garage fire:
Derfor er storbrannen så vanskelig å slukke: – Farlig å sende folk inn

It seems pretty clear to me that this is not a Tesla, nor a Leaf or Zoe. Btw, the airport has resumed operations.

Edit: A few minutes ago police reported that the fire started in a older Diesel car:
Politiet: Brannen startet i en dieselbil

 

[ReflexFunds]

Yes. Pretty much exactly what she said. With the price above $350 they convert to stock shares essentially and they will pay off $4 billion of debt in the next year or two due to this. So if you are worried about the balance sheet this essentially cleans it up a lot!

How does the conversion work? Does the debt convert to stock at the value specified in the loan or at the current market value? So would the new shares issued be 4B / 350 or 4B / current market close price?

Thank you!

I explained the converts in detail a few days ago in the posts below. Its important to note that Tesla can choose to pay the converts in cash rather than new shares if it wants, but if it does choose to pay in shares, not only will it eliminate the $4.2bn debt, but it will also increase its cash position because it bought Tesla call options to hedge potential dilution from the bond conversion.

Tesla can choose to repay the converts in cash (at the value of the equivalent shares) and it has hedged the call option on each bond (by buying call options itself) so it can fund these payments and avoid any new share issuance and dilution. Tesla partly funded buying these call options by selling warrants at higher strikes, so it is only above these warrant strike prices (in the $561 to $655 range) where we will have to see dilution. The call options Tesla owns (and the value of the call option feature on the converts) is currently $2,322m. The value of the Warrants Tesla sold is currently $1,126m.

On the 1.25% $1,380m Mar-2021 converts, conversion price is $360 (3.8m shares). The call option feature on these is currently worth $494m. Tesla owns calls of this value to hedge potential dilution, but it has also sold warrants with a $561 strike (currently worth $193m)

On the 2.38% $978m Mar-2022 converts, conversion price is $327.5 (3m shares). The call option on these is currently worth $518m. Tesla owns calls of this value to hedge potential dilution, but it has also sold warrants with a $655 strike (currently worth $188m)

On the 2.0% $1,840m May-2024 converts, conversion price is $310 (6m shares). The call option on these is currently worth $1,311m. Tesla owns calls of this value to hedge potential dilution, but it has also sold warrants with a $607.5 strike (currently worth $745m)

Converts are generally held by debt funds who delta hedge their bonds. To fully delta hedge all the converts would require shorting 10.2 million Tesla shares currently. If we assume 80% are delta hedged and 20% are held by hedge funds/retail investors who want both the bond and call option exposure, then convert delta hedging accounts for 8.1m of my estimated current Tesla short interest of 25m.

Yes if they choose to pay in new shares they will both eliminate the debt and increase their cash balance.

For example, for the Mar 2021 bonds, if the stock price is at $450 in March 2021, convert holders will choose to convert their $1,380m bond into 3.8 million shares worth $1,725m. Tesla's call option hedge will be worth $345m and the warrant it sold would be worth 0.
Tesla can either choose to pay the bondholders $1,725m in cash or it can issue them 3.8m new shares. If it issues them 3.8m new shares, it will eliminate $1,380m debt off its balance sheet and also close its call options to raise $345m new cash on balance sheet. Alternatively it can choose to pay cash, here it will sell the calls and eliminate the debt and give the bondholders $1,725m, but cash balance would be depleted by $1,380m. Here it is quite likely they issue normal bonds to fund the $1,380m.

Alternatively, if the stock price is $600 in March 2021, the convert holders 3.8m shares will be worth $2,300m and Tesla's call option hedge worth $920m. The $561m strike warrants will also be in the money and Tesla will be required to issue 3.8m shares to the warrant holders at a share issue price of $561.
So here if Tesla chooses to repay the convert in cash. It will sell the calls, pay the convert holders $2,300m and deplete cash balance by $1,380m. It will then issue 3.8m new shares to warrant holders and receive $2,132m cash in return. So overall it will have eliminated $1,380m debt and increased cash balance by $752m while diluting stock by 3.8m new shares.
It can also choose double dilution and repay both the convert holders and warrant holders in new shares. In this case it will see 7.6m dilution, eliminate $1,380m debt and raise $920m + $2,132m = $3,052m cash.

 

[nativewolf]

This looks like an important post. I have saved it and will read later.

just post in on facebook with your iphone while you're shopping on amazon on your ipad. Problem solved

 

[ReflexFunds]

BYD (global EV #2) Q4 sales were: BEV 23.5k (vs Tesla 112k), PHEV 9.9k, Commercial NEV 3.5k, ICE 88.7k, Battery capacity 1.77GWh (vs Tesla likely ~9.5GWh).
For 2019 sales were: BEV 147.2k (vs Tesla 367.5k), PHEV 72.2k, Commercial NEV 10.2k, ICE 232k & Battery Capacity 12.3GWh.

BYD's total 2019 NEV sales of 229.5k were down 7% yoy, relative to initial 2019 guidance for +70-80% growth yoy to 420k-450k and reduced guidance in September to +10% yoy (270k).

There looks to be a good chance Tesla will have the leading BEV market share in China as soon as Q120.

 

[RobStark]

True. But I’m willing to let that slide if he wants to be considered a founder. I highly doubt Tesla would be where it is today, without Elon. If even in existence.

Martin and Mark stated a garage company that would have delivered ZERO cars to the public without Elon Musk.

Elon's Angel investor funding took Tesla out of the garage and into proper offices with proper funding.

It took Elon becoming CEO to get the first Roadster into customer hands.

Essentially, Elon re-founded Tesla as a company that can actually deliver automobiles to paying customers.