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

[Quesder]

Firstly, federal law preempts state law, there's nothing to "defy" if federal law treats automakers as critical infrastructure - which it does.

Secondly, even on the state level the ultimate local authority ought to be Alameda county district health officials, who are working with Tesla to define the scope of the essential business definition:

Scott Haggerty on Twitter

"We’re working with staff at Public Health & Tesla to determine if Tesla’s definition of “essential business” applies, or not. We’ve been working on this all day & will continue to work until its resolved. The safety of the public is our highest concern."​

Btw., Alameda County District 1 Supervisor Scott Haggerty is getting a taste of the journalistic ethics of Russ "TSLAQ supporter" Mitchell:

Russ Mitchell on Twitter

"The Alameda County supervisor who represents the district where the Tesla factory sits - @scott_haggerty - has not yet responded to repeated requests for comment."

Scott Haggerty on Twitter

"With all due respect, I ask that you please not spread false information. I have confirmation that my staff responded to you yesterday & provided proper contact information for the Director of Alameda County Public Health Agency. Please do not add to the chaos with false claims."​

The TSLAQ criminals are working the referees hard, all in an attempt to prevent Americans from receiving their essential means of safe transportation during a pandemic: their cars.

It's disgusting, please everyone help out on Twitter and elsewhere to counter their machinations.

​

I am sorry, but you probably missed this post?
i feel really bad that we are going to see low 3xx
“Ultimately, the offices of Alameda County Administrator Susan Muranishi, County Counsel Donna Ziegler and County Public Health Officials made the decision about Tesla, Kelly said. The company was not alone in questioning the order, although it appears to be the largest employer to have done so.

Tesla, like other Alameda County businesses, can maintain basic functions under the shelter-in-place order, Kelly said. Those functions include maintaining the factory’s infrastructure and office work such as payroll but do not not include the manufacturing of electric cars.“

 

[mongo]

I’m not sure where everyone seems to be understanding this Bay Area Edict runs for only 2 weeks. Try 3 weeks.

“This Order shall become effective at 12:01 a.m. on March 17, 2020 and will continue to be in effect until 11:59 p.m. on April 7, 2020, or until it is extended, rescinded, superseded, or amended in writing by the Health Officer.”

Right, but only 2 weeks of that are in Q1.

 

[S3XY]

Yes, and it almost killed him when he had malaria and two medical doctors, with proper academic credentials, at two different hospitals, misdiagnosed his malaria and failed to give him the life-saving medicine. His life was saved only because a third doctor happened upon his chart and recognized malaria as malaria and prescribed him the life-saving anti-malarial drugs. The one doctor who knew how to diagnose malaria told him the medicine would likely not have worked if he had gone one more day without it.

I can hardly blame him for not taking the word of every "professional" with proper academic credentials! In my life, I have numerous experiences of being more competent than the credentialed professionals who gave poor advice. Needless to say, I will question idiots every time they say something that flies in the face of reason, even if they have the proper academic credentials.

There's always someone who got the lowest passing grade in the class.

 

[MC3OZ]

I think the negotiation is still in progress. We might wake up tomorrow morning finding out the factory will keep running.
To me, this highlights the risk that tesla relies solely on one factory for most of its production. We need more factories in case some disasters hit. Tesla Fremont sits right on top of Hayward fault. When the inevitable major quake hits, it would be way devastating than the current virus situation.

Yes, Shanghai GF, Berlin GF and somewhere-central-US GF are vital..

The factory might not be closed, if it is closed who knows the duration.. but IMO 2-4 weeks is much likely than any longer duration.. eventually commonsense has to prevail..

But they may close factories to ensure all necessary tests, procedures and training are in place before they reopen.. or maybe they can do all that without closing..

 

[Fact Checking]

Tesla, like other Alameda County businesses, can maintain basic functions under the shelter-in-place order, Kelly said. Those functions include maintaining the factory’s infrastructure and office work such as payroll but do not not include the manufacturing of electric cars.“

I didn't see this - if federal law preempts state law here I'd expect Tesla to contest parts of this order in court.

 

[KSilver2000]

Yes, Shanghai GF, Berlin GF and somewhere-central-US GF are vital..

The factory might not be closed, if it is closed who knows the duration.. but IMO 2-4 weeks is much likely than any longer duration.. eventually commonsense has to prevail..

But they may close factories to ensure all necessary tests, procedures and training are in place before they reopen.. or maybe they can do all that without closing..

Ive responded to one of your similar posts previously. I don’t think you understood. So, let me ask you, what is a common sense situation look like that you refer to?

2-3 weeks is the very minimum. The shutdown doesn’t work when not everyone buys in. There’s a large population in America that still doesn’t understand the situation. Majority of places across the country have yet to even issue shutdown recommendations. This isn’t going to work if we have exceptions here and there everywhere. Why do you think European countries have had to finally resort to national lockdown at this point.

And tests are not expected to be even readily available at every major hospital network until next week at best. Then you have to run the tests, which is not something that’s done before the next commercial like CSI.
This includes all the hospitals in the greater San Francisco Bay Area.

 

[PeterJA]

looks like most of people here had already sold their shares when Curtis (sorry I don't spell right, but you know, the long term bullish master) sold at 5xx?
Some of you might remember my post about "didn't sell at 7xx and my parents are going to rebuke me".
At that time some people encouraged me. To be honest I have some complain about that now, but, I should have sold my shares when I saw Curtis sell all his shares.

Now what should I to do? It is a torture to see the SP goes down everyday, no decent rebound at all. Only some short intra-day rebound that lasts for 5 minutes. And in after hours, another 5%. The next day, another 13% if macro is bad, or 5% if macro rebound.

My average cost was $234, but I don't think I can sustain the torture if the price goes below $350.
When I see some people are adding more shares along the way, I really think : " are you sure? Curtis has sold"

My cash can support my family for roughly 5 months; I may sell my MSFT stock to get another 12 months of living expense. But my job and my wife's job are not very stable. Should I keep holding and maybe in 2022 the SP could go back to $500?

When I recall one of you said he sold at $557 because of panic, I really wish I was panic enough and did that.

My reply is the same as last time when you asked for good news: You lose nothing if you hold your shares, because this stock is gonna go back up... way way up. I consider it a safe haven in the long term, because of the extraordinary excellence and massive profit potential of the company.

Of course you wish you had sold at $7xx or $5xx, i.e., you wish you could time the market. Well, I wish I could guess a winning lottery number. But I can't and you can't. If you had sold and the stock shot up, you would wish you held. And it could have done that. It could do that tomorrow.

The people who sold must now decide when to buy back in, if they understand the company's potential. Are you ready for that "torture"? If the stock gaps up overnight, which it will at some point because many people now understand the company's potential, will you complain about the members who convinced you to sell? The farther down it goes, the tighter the spring is being compressed, and when it blows it's gonna blow fast and big.

In short, decide if you want to be a gambler or an investor. Investors are rejoicing at the bargain price, as Warren Buffet is said to do when a stock he believes in goes down.

That's my "bullying" advice.

PS: I sold only a few shares, to make sure I won't get a margin call if the stock goes to $180 again, which is extremely unlikely. Now I'm relaxed.

 

[Thekiwi]

Right, but only 2 weeks of that are in Q1.

It’s concerning for Q2 as well, as each week production lost at the start of Q2 is one less weeks worth of European shipments that can be delivered in the quarter.

 

[SMAlset]

Firstly, federal law preempts state law, there's nothing to "defy" if federal law treats automakers as critical infrastructure - which it does.

Secondly, even on the state level the ultimate local authority ought to be Alameda county district health officials, who are working with Tesla to define the scope of the essential business definition:

Scott Haggerty on Twitter

"We’re working with staff at Public Health & Tesla to determine if Tesla’s definition of “essential business” applies, or not. We’ve been working on this all day & will continue to work until its resolved. The safety of the public is our highest concern."​

Edit: as pointed out below they have apparently decided against Tesla, so if federal law allows them to operate as critical infrastructure I'd expect Tesla to contest the order in court.

Btw., Alameda County District 1 Supervisor Scott Haggerty is getting a taste of the journalistic ethics of Russ "TSLAQ supporter" Mitchell:

Russ Mitchell on Twitter

"The Alameda County supervisor who represents the district where the Tesla factory sits - @scott_haggerty - has not yet responded to repeated requests for comment."

Scott Haggerty on Twitter

"With all due respect, I ask that you please not spread false information. I have confirmation that my staff responded to you yesterday & provided proper contact information for the Director of Alameda County Public Health Agency. Please do not add to the chaos with false claims."​

The TSLAQ criminals are working the referees hard, all in an attempt to prevent Americans from receiving their essential means of safe transportation during a pandemic: their cars.

It's disgusting, please everyone help out on Twitter and elsewhere to counter their machinations.

​

I don’t read many posts on Twitter but are these guys like Mitchell going after the likes of GM, Ford and FCA on Twitter too as their plants are still running? Or it solely a Tesla attack?

 

[Thekiwi]

I don’t read many posts on Twitter but are these guys like Mitchell going after the likes of GM, Ford and FCA on Twitter too as their plants are still running? Or it solely a Tesla attack?

The other car companies plants are not located in a shelter in place location. Tesla is in one and should abide by the local health authorities rules to prevent the spread of the virus. I would expect the other car companies will follow suit if there locations enter a shelter in place order.

 

[NicoV]

It’s concerning for Q2 as well, as each week production lost at the start of Q2 is one less weeks worth of European shipments that can be delivered in the quarter.

On the other hand, this may be the ideal time to stop the wave delivery mechanism.

 

[Thekiwi]

Tesla will have to release a statement before market open I imagine, given the material impact the factory closure will have.

 

[MC3OZ]

Ive responded to one of your similar posts previously. I don’t think you understood. So, let me ask you, what is a common sense situation look like that you refer to?

2-3 weeks is the very minimum. The shutdown doesn’t work when not everyone buys in. There’s a large population in America that still doesn’t understand the situation. Majority of places across the country have yet to even issue shutdown recommendations. This isn’t going to work if we have exceptions here and there everywhere. Why do you think European countries have had to finally resort to national lockdown at this point.

And tests are not expected to be even readily available at every major hospital network until next week at best. Then you have to run the tests, which is not something that’s done before the next commercial like CSI.
This includes all the hospitals in the greater San Francisco Bay Area.

By commonsense I mean they have to phase from closing, to more testing and precautions..

Closing is fine and necessary as a short term measure if necessary, while you put other measures in place, or until the risk moderates.

Maybe the risk moderates to the point where they don't need as much testing, but testing is needed to get the confidence to reopen.

I see a high level of targeted testing is much better than shutdowns, provided they can do the testing, that is for schools and factories that we want to keep open if necessary..

So commonsense might be that Tesla has to close the factory for now if that is the best option... But the next step is work on how to re-open the factory.

But maybe Tesla can implement work practices or safety equipment which mean the factory can remain open, if that is possible that makes even more sense.Again they may have to close, until that can be worked through and agreed,

Why it is commonsense is we don't want to inflict economic pain when it isn't necessary, and we should try to minimise it.

Commonsense also says some types of activities like crowds at sports matches or rock concerts have an out-sized risk in relation to their economic benefit. It is pointless trying to find ways they can be done safely. Factory work is different, lots of variables are under control or can be controlled.

 

[Fact Checking]

Here is the most important bit about how Tesla is talking with the local authorities and the reasoning:

In the email, the automaker laid out the argument that they are exempt from the recently announced shutdowns as “a national critical infrastructure”:

“National Critical Infrastructure are business sectors crucial to the economic prosperity and continuity of the United States, and includes auto manufacturing and energy infrastructure as defined by the Department of Homeland Security. People need access to transportation and energy, and we are essential to providing it. We have also been in close communication with the State of California, Alameda County, and the City of Fremont, regarding the federal government’s guidance.”

As a result, Tesla and our supplier network will continue operations that directly support factory production, vehicle deliveries, and service. If you work in these areas, you should continue to report to work, and if you don’t you should work from home until further notice."​

Indeed Tesla is part of U.S. "Critical Infrastructure", as defined by the Cybersecurity and Infrastructure Security Agency (CISA), who got this authority via the following federal law:

H.R.3359 - 115th Congress (2017-2018): Cybersecurity and Infrastructure Security Agency Act of 2018​

CISA maintains a list of industries they consider critical infrastructure:

Critical Manufacturing Sector | CISA

"Critical Manufacturing Sector"

"The Critical Manufacturing Sector is crucial to the economic prosperity and continuity of the United States. A direct attack on or disruption of certain elements of the manufacturing industry could disrupt essential functions at the national level and across multiple critical infrastructure sectors."
Transportation Equipment Manufacturing​

• Vehicles and Commercial Ships Manufacturing
• Aerospace Products and Parts Manufacturing
• Locomotives, Railroad and Transit Cars, and Rail Track Equipment Manufacturing

Products made by these manufacturing industries are essential to many other critical infrastructure sectors. The Critical Manufacturing Sector focuses on the identification, assessment, prioritization, and protection of nationally significant manufacturing industries within the sector that may be susceptible to manmade and natural disasters."​

Here's the "sector-specific plan" for vehicle manufacturing, maintained by the DHS:

Critical Manufacturing Sector-Specific Plan - 2015 | CISA​

While neither Tesla nor other automakers are listed by name, the map in "Figure 5b" specifically shows Tesla's concentration of vehicle manufacturing output in California:

So yes, Tesla's vehicle manufacturing operations are specifically treated as U.S. critical infrastructure on the federal level.

The statute (42 U.S. Code § 5195c. Critical infrastructures protection) itself is unambiguous:

42 U.S. Code § 5195c - Critical infrastructures protection

(c) Policy of the United States - It is the policy of the United States—

(1) that any physical or virtual disruption of the operation of the critical infrastructures of the United States be rare, brief, geographically limited in effect, manageable, and minimally detrimental to the economy, human and government services, and national security of the United States;
(2) that actions necessary to achieve the policy stated in paragraph (1) be carried out in a public-private partnership involving corporate and non-governmental organizations; and
(3) to have in place a comprehensive and effective program to ensure the continuity of essential Federal Government functions under all circumstances.​

(Critical infrastructure might have other federal legal protections as well - I haven't researched this in detail and I'm not a lawyer in any case.)

Shutting down Fremont is obviously not "minimally detrimental".

 

[PeterJA]

...So commonsense might be that Tesla has to close the factory for now if that is the best option... But the next step is work on how to re-open the factory....

They've already done it in Shanghai. They know how to do it.

 

[Ellec]

I sold all my shares at open yesterday. With Fremont shutting down for indeterminate period I think we are going to see the stock drop. Will slowly buy back in as it hits lows.

 

[StealthP3D]

I’m not sure where everyone seems to be understanding this Bay Area Edict runs for only 2 weeks. Try 3 weeks.

We were discussing the impact to Q1 production. So it's exactly 2 weeks. The last week is the beginning of Q2.

 

[ProfTournesol]

I sold all my shares at open yesterday. With Fremont shutting down for indeterminate period I think we are going to see the stock drop. Will slowly buy back in as it hits lows.

In my opinion, it's not far from the bottom, 300-340 range. Freemont might close, but it's not long, we're absolutely sure Elon will do everything to get the factory running again (IF it closes). Also note that legal action will occur afterwards, if the closing was not "really" needed. If Tesla offers Tests, separates employees, lower the speed of production to give more time for distance etc. etc. they will certainly request/force to have the factory reopend. Also if employees may work voluntary, it should be possible.

 

[Ellec]

We were discussing the impact to Q1 production. So it's exactly 2 weeks. The last week is the beginning of Q2.

If the factory is still closed when they release Q1 p&d it will have a huge dampening effect even if they are above expectations, is my worry.

 

[lklundin]

Naked short selling means short selling without actually borrowing the share - creating a share out of thin air. They have to eventually get one, though, or they have to report the failure.

We won't know if this happened unless they fail to deliver within... 13 days I believe? And in this market, I doubt that'll be the case.

Naked short selling with subsequent covering at a lower price will work, until the SP bottoms out. Then it will work very badly.