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

[Artful Dodger]

Not sure why people are voting this funny? Does no one understand how working capital works? And why Elon was so keen to minimize days of inventory?

It's funny because Tesla has $8B in cash and the FED just lowered interest rates to zero.

If Tesla needed money (which for the forseeable future they don't), they'll get it for free along with every other multi-billion dollar enterprise suffering from the downturn.

Oh, it's also funny because you really, REALLY seem to want another Cap raise. Let's wait and see what Bty Day means for their future capital requirements.

Cheers!

 

[Singuy]

Um, it's a vaccine. You have to give it to the exposed to determine efficacy. It would be unethical to expose someone to the virus to determine efficacy.

I'm pretty familiar with FDA processes and timelines, and let's put it this way: if they rush a vaccine out without longitudinal testing, there's NFW I would take it nor recommend it to patients.

Finally, what does a vaccine ready by "winter months" have to do with novel coronavirus? Are you claiming it's a seasonal virus?

Vaccines usually have deactivated or fragments of the virus injected in the body so the anti bodies can form for future immunity. A positive tested pt has the virus in them already so they will build their own anti bodies without the vaccine. You are talking about a cure, not a vaccine.

 

[Pras]

On coronavirus, just in the news that nearly 1.5 million tests have been shipped off to different labs and soon ramping to 2 million a week. This is just from one lab and I guess other labs are working on their own tests.

In the other news Dow futures are up 800 points so rebound is possible.

s&p just closed below 30% and hit December 18 lows. This was a key level many were looking for.

stay strong, we will weather this, and unlike last time I am not selling covered calls in the run up.

 

[Artful Dodger]

But seriously though... Is making workers just wear tyvek suits dumb?

Yes. Every try installing a wiring haress while wearing a full body condom?

I'm not sure folks on this forum will let TSLA price go down to $276 level, before you can buy. lol

My DCA is $270 right now. If the SP goes South of that, I won't just back up the truck; I'll clear a forest in Grünheide, and live in a bat cave...

 

[Cupidchild]

Who has a crystal ball? What will happen tomorrow with the market and with TSLA?

What are the chances that the market will be shut down for a longer period of time? Do I need to worry about my SPY puts because of this risk?

If Market say shuts down for say a week or two weeks. How does it effect the market? I think news is negative at first but I see that it basically freezes more downside. And when Market resumes and CV is more contained than it will open up with biggest gain in the history. So perhaps buy before the market is shutdown?

 

[Stretch2727]

The Fremont line worker workforce is generally very young - and quarantining based on age might be age discrimination.

But Tesla should give all workers who feel at risk the option to not go to work though.

We are in a partial work at home mode at my employer. Marketing, Customer Service, Finance, etc all at home. Operations is still working including me. We looked at sending home anyone over 60 home and the lawyers recommended against it. We now have split shifts and have half the people working midnight to 8:30. Next shift comes in at 9:30am to 6:00pm. Normally we just have a day shift. Less people the more we can space them out.

 

[anthonyj]

Imagine owning Boeing. Holy moly the chart looks like Enron

 

[⚡️ELECTROMAN⚡️]

We are in a partial work at home mode at my employer. Marketing, Customer Service, Finance, etc all at home. Operations is still working including me. We looked at sending home anyone over 60 home and the lawyers recommended against it. We now have split shifts and have half the people working midnight to 8:30. Next shift comes in at 9:30am to 6:00pm. Normally we just have a day shift. Less people the more we can space them out.

Except working the graveyard shift most likely lowers your immunity. I know it does mine. So maybe not the best solution.

 

[UnknownSoldier]

Imagine owning Boeing. Holy moly the chart looks like Enron

I own Boeing

Spoiler

puts

Serious reply now. Boeing has had this coming a long time. There are a lot of stories coming out now about how Boeing's corporate culture was completely obliterated when they acquired McDonnell Douglas in a reverse merger that put the bankrupt McDonnell Douglas's management in charge of Boeing. One day they will write books about how Boeing was destroyed from within, turning from a company which had one of the most legendary safety records in any industry into a company which was so obsessed with beating Airbus to market with a new product that they basically built a plane with a computer that literally flew said planes straight into the ground just so they could pretend it was a revision of an old plane instead of a substantially new one. By all rights, Boeing should be taken over by the Federal government and the entire management of the company put into prison for killing hundreds of people in the name of profits and share price.

 

[bobinfla]

So does delivery of a Model Y (or any Tesla for that matter) count as essential travel or services? Hope so...

I think delivery of my Roadster should be counted as essential, but I may be biased.

 

[Artful Dodger]

Closing for foreign travellers, not goods. Exemption for US Citizens.

Canada closing its borders to foreigners, with exception for US citizens - CNN

 

[abasile]

I'm pretty familiar with FDA processes and timelines, and let's put it this way: if they rush a vaccine out without longitudinal testing, there's NFW I would take it nor recommend it to patients.

I am not a lawyer nor am I particularly familiar with FDA processes. From a practical standpoint, however, I would expect most high risk individuals (age 65+ and/or existing, serious medical conditions) to eagerly accept a vaccine that has been expedited, is highly likely to work without adverse affects, and has not had time to be tested with the rigor of the full FDA process. That would be a worthwhile tradeoff that could substantially reduce overall medical risk. World leaders are keen to put the worst of this crisis behind us as quickly as possible. For this reason and others, the stock market and TSLA in particular may rebound more quickly than many might expect. An expedited vaccine doesn't need to actually be available for a market rebound to occur - it just has to be judged by the market as a highly probable outcome.

 

[MC3OZ]

Watch for the anti-malaria drug and HIV drugs to be possible cures. Then we're off again to the Stars.

Yes that is the 2nd research path, better treatment while we work on a vaccine..

Better treatment doesn't need to be perfect, and can use existing drugs....

Once the Coronavirus bad news settles down, we are back to valuing companies on future earnings...

In the meantime having a hefty pile of cash in the bank to ride out the storm helps...

I still think it is technically possible for Tesla to not overly deplete cash too much while making a moderate loss...

Q4 2019 - $930M increase in our cash and cash equivalents in Q4 to $6.3B,
$359M GAAP operating income; 4.9% operating margin in Q4

Q1 2019 - We ended the quarter with $2.2 billion of cash and cash equivalents, a $1.5 billion reduction from the end of 2018.
- This reduction was driven by a $920 million convertible bond repayment and an increase in the number of vehicles in transit to customers at the end of Q1.
- GAAP operating loss of $522M, GAAP net loss of $702M, including $188M of non-recurring charges

So for Q1 2020, I don't think there is any convertible bond that needs repayment?

Vehicles in transit will increase as inventory was low at the end of Q4 and virus shutdowns will complicate delivery logistics..

It helps to put down some numbers otherwise it is all "the sky is falling".....

So 500M cash reduction is about of the worst I expect for Q1 2020, unless there is a significant increase in Capex.
Capex was $280M Q1 2019..
I would suggest keeping Capex in a separate category, as Tesla can slow that a bit if needed.

So in round terms with $8B in the bank and cash reducing by .5B per quarter even this negative scenario gives Tesla 16 quarters of survival so some insurance if future quarters are even worse.

If people are expecting worse than 0.5B cash reduction each quarter, it would be good to know why...

 

[KSilver2000]

The problem is, the Phase I tests are in a limited number of healthy volunteers to establish safety, not efficacy. They plan to follow the Phase I volunteers for a year. Then, Phase II (actual patients or persons exposed) trials to establish efficacy and dosage (and safety). Then, Phase III trials with exposed persons given the dosage determined in earlier phases.

We're talking many months. The actual vaccine isn't imminent.

Give vaccine to pts that's positive for COVID? What kind of crazy town trial is that? Vaccines are not cures, they are suppose to make people who were not exposed immune.

Also FDA fast track drugs all the time. I would say vaccine by end of summer/early fall for the winter months.

Vaccines usually have deactivated or fragments of the virus injected in the body so the anti bodies can form for future immunity. A positive tested pt has the virus in them already so they will build their own anti bodies without the vaccine. You are talking about a cure, not a vaccine.

There’s so many trials of different vaccines going on around the world. So, let’s be a little more specific than broadly just saying things in general since every trial has different inclusion criteria and procedural criteria of getting it approved in their respective countries.

One specific example, the Moderna mRNA vaccine trial conducted in association with Kaiser Washington just started phase 1 about two weeks ago. During this initial trial, they will be testing the safety, reactogenicity and immunogenicity. They will be following these healthy, non-pregnant participants, who were sequentially enrolled and non-randomized for 14 months. (BTW, each participant will be electively to receive up to $1,100 by the end). Even to expedite the process, Moderna will be concurrently conducting animal tests, which is something companies rarely ever do (just think about that).
Moderna isn’t using the traditional method of implementing a weakened pathogen or proteins from the pathogen. They’re using a synthetic, which helps them to accelerate developing a vaccine candidate.

Interesting fact: Moderna has yet to have commercialized a successful vaccine using their mRNA technology.

There is little chance that a vaccine will be approved by end of the year.

 

[Artful Dodger]

Imagine owning Boeing. Holy moly the chart looks like Enron

Wuddya mean? That *sugar*'ll buff out. (Sep 16, 2016)

 

[Thekiwi]

It's funny because Tesla has $8B in cash and the FED just lowered interest rates to zero.

If Tesla needed money (which for the forseeable future they don't), they'll get it for free along with every other multi-billion dollar enterprise suffering from the downturn.

Oh, it's also funny because you really, REALLY seem to want another Cap raise. Let's wait and see what Bty Day means for their future capital requirements.

Cheers!

Eh? Where did I imply that I want a cap raise??? (I just bought some $1000 TSLA calls for heavens sake).

I merely pointed out that if the factory does indeed close for an extended period that Teslas working capital requirements might end up in a debt or equity raise, which will be a risk to the share price. Just like I pointed out last week that the factory was in real risk of closing (Not that I wanted it to happen).

 

[TheTalkingMule]

So in round terms with $8B in the bank and cash reducing by .5B per quarter even this negative scenario gives Tesla 16 quarters of survival so some insurance if future quarters are even worse.

Wasn't it $8B in cash prior to the $2.5+B raise?

 

[Maitri982]

Geez... You Got got two disagrees for citing facts. Official quotes are around ~18 months from now for whioe process too vaccine approval Maybe they speed it up a few months but no matter what its not imminent.

The problem is, the Phase I tests are in a limited number of healthy volunteers to establish safety, not efficacy. They plan to follow the Phase I volunteers for a year. Then, Phase II (actual patients or persons exposed) trials to establish efficacy and dosage (and safety). Then, Phase III trials with exposed persons given the dosage determined in earlier phases.

We're talking many months. The actual vaccine isn't imminent.

 

[davecolene0606]

Repost

Credibility

Amongst the issues brought up in recent posts, the US has the above problem. For over 2 decades the message that government is the problem has been hammered into the minds of boomers. They are the “vulnerable” age group and will continue their myopic self preservation trajectory without regard to effect on their offspring.

Primarily, when it comes to economic stimulus, it appears that protecting “legacy” industry is on the agenda and from a macro perspective, this IMHO will be the ultimate “Futile and stupid gesture”

Obviously, there is a significant probability that outbreak in the US is quite large and certainly not on a down curve like China/ South Korea. As a result, there is a chance we will experience an acceleration of the impending demographic shift and generational transfer of wealth. Coming out the back side of this event offers a distinct possibility of a spring loaded recovery fueled by China.

The US blew its QE, Fed rate and other bullets in 2009 and it appears never to have recouped the ammo. It sure seems pretty feckless now watching a buncha WS guys begging for even more largesse.

IMHO, Tesla is in position to break out better than ever before:
1. Ops in the first economy recovering from the outbreak.
2. Vertical integration.
3. Offers products that are the antithesis of the rapidly failing legacy energy/transport model.
4. Healthy cash.
5. Non boomer work force right into Senior management.

This basis of my investment in TSLA from the beginning was that if Tesla failed in its mission, nothing much mattered anyway in terms of a healthy thriving planet. This remains and maybe this macro event will be the straw that breaks in favor of a Sustainable Energy world economy rising from the ashes with Tesla being positioned perfectly surf a giant wave.

In between now and the declining infection curve it’s gonna be a rough ride that we have all ridden to this point.

Hang tight so you can hang ten out the other side...

(Wash ur hands, don’t touch ur face and cough/sneeze into ur arm)

Fire Away!
(It’s (STILL) the batteries, Stupid!)

 

[Artful Dodger]

Eh? Where did I imply that I want a cap raise??? (I just bought some $1000 TSLA calls for heavens sake).

I merely pointed out that if the factory does indeed close for an extended period that Teslas working capital requirements might end up in a debt or equity raise, which will be a risk to the share price. Just like I pointed out last week that the factory was in real risk of closing (Not that I wanted it to happen).

Why are you trying to make this about you? Tesla does NOT need a Cap raise. You've avoided that point in your response (and Zero Interest Loans), while again trying to represent yourself as somehow more aware of risks than others on this forum. Not cool.